Entries filed under 'China'

    A Volatile Start to 2016

    January 8, 2016 4:00 PM by Timothy Paulson

    Here are some insights on the January market turmoil—and its implications for investment managers.

    As we pointed out in our year-end U.S. fixed-income market preview, 2016 held the prospect of continued volatility in financial markets, with flare-ups of risk and other uncertainty a likely feature of the post-rate hike world following the U.S. Federal Reserve’s policy tightening on December 16.  

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    China: Doing What They Said They Would

    January 8, 2016 2:43 PM by Harold E. Sharon

    Developing its own independent monetary policy means China no longer has to hitch its currency to the strong U.S. dollar. And that should be a positive, not a negative.

    Once again, China's currency and its stock market are dominating the financial news as we start the new year. Will this, as it did back in August, set the tone for the next six months? Or is this just the ongoing story of China following through with its announced plans to allow more currency flexibility and mobility, thus allowing it to finally have its own monetary policy rather than being beholden to the U.S. Federal Reserve’s interest rate policies? 

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    U.S. Stocks: Keep Calm and Don't Sweat the Yuan

    January 7, 2016 5:40 PM by Zane Brown

    Investors may be overreacting to economic and currency developments in China. Sound familiar?

    The new year certainly has been less than happy thus far for U.S. equity markets, but it appears that just as investors did in August 2015, they may have overreacted to recent developments in China.

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    The Chinese Correction: The Case for Calm

    August 26, 2015 10:20 AM by Zane Brown

    Investor fear recently reached levels not seen since 2008. That’s not justified by current U.S. economic conditions.

    In an earlier blog post, Milton Ezrati, Lord Abbett Partner, Senior Economist and Market Strategist, addressed current investor fears about China’s slowing economy, and why those fears are overdone. We thought it would be worthwhile to look at recent history to put those fears into context.

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    Equities: A "China Syndrome" Sequel? Not Quite

    August 24, 2015 10:12 AM by Milton Ezrati

    The sell-off in U.S. stocks in response to reports of a weakening Chinese economy shows that investor emotions have gotten ahead of reality.

    The U.S. equity market's recent selloff seems to have its roots in an exaggerated, indeed panicked, response to negative news out of China. A recent Economic Insights on the Lord Abbett website explains in detail why such interpretations are erroneous. The equity rout in China, though severe, is an entirely unsurprising response to the market's previous and unsustainable run-up during the previous year.

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    Emerging Markets: Reading the Tea Leaves on China's Currency Moves

    August 14, 2015 1:18 PM by Leah G. Traub, Ph.D.

    China first devalues—then supports—its currency.  What exactly is going on?

    After two days of depreciating its currency, the yuan (or “renminbi”), and effectively sending global currency markets into turmoil, China’s policymakers apparently decided late Wednesday (August 12, Shanghai trading time) that the currency had fallen far enough, at least for now.  

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    China's Devaluation Calculation

    August 11, 2015 4:38 PM by Milton Ezrati

    Beijing is betting that lowering the value of the yuan will help its faltering export sector. But the move may not immediately produce the desired economic boost.

    In a move to shore up its flagging export sector, China lowered the yuan’s value against the U.S. dollar by 1.9% on August 11, the biggest such move in nearly 20 years. This action, which essentially is a devaluation of the Chinese currency, sent the U.S. dollar and other currencies sharply higher in response.

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