This is Tracey Ryniec filling in for Steve again.
“Just when I thought I was out…they pull me back in.” – Michael Corleone, Godfather III
Overnight, the Shanghai Composite fell 8.5% as panic selling hit the Chinese stock market in the last hour of trading. 1700 stocks hit the maximum limit down of 10%. Even the large cap, government controlled entities like PetroChina, sold off nearly 10%.
And that’s WITH government backing and massive insider buying to try and prop up the shares.
Just when investors thought the issues surrounding Greece and China were “contained”, China has to go and spoil it. It’s the year of the great Chinese stock market illusion.
The Chinese government has pumped over $200 billion into the stock market and is ready to pump even more in, probably starting with tonight’s session, to halt the slide. But it’s clearly not working. Just a few weeks after the Shanghai appeared to stabilize, the bears are back out in full force. We’re all being pulled back in.
Earnings Are Still Important
It’s easy to get distracted by world events but this week is another busy one on Wall Street, as over 800 companies, including 25% of the S&P 500, are set to report. Keep an eye on what companies are saying. It’s not all gloom and doom despite weakness in China. Tim Horton’s, for instance, just reported 7% same-store-sales in the United States last quarter. That’s a fantastic number.
With recent stock weakness, look for values. I don’t know about you, but I’m seeing a lot of opportunities that weren’t there just a few months ago. Now is the time to get your favorite stock on sale.
Stock Strategist at Zacks Investment Research , Zacks Investment Research