Dec 23, 2018

Chinese stocks are outperforming U.S. markets

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Data: FactSet; Chart: Chris Canipe/Axios

In a reverse of expectations of how each country would fare in a growing trade war, China's market has significantly outperformed the U.S. benchmark.

By the numbers: Investors betting on the Shanghai composite since the S&P's most recent peak in September have lost only 7% compared to a nearly 16% decline in the S&P, per FactSet. The U.S. benchmark is on pace for its worst fourth quarter since the financial collapse, and the worst December since the Great Depression.

Yes, but: China’s economic data still show signs of serious stress, while U.S. data — with the notable exception of housing — continue to be strong. But as the stock market is generally considered a forward-looking indicator, that could soon change.

The bottom line: The International Monetary Fund warned of exactly this possibility in July as President Trump ramped up his trade war rhetoric against China as well as Canada, Mexico and the European Union.

“As the focus of global retaliation, the United States finds a relatively high share of its exports taxed in global markets in such a broader trade conflict, and it is therefore especially vulnerable,” IMF chief economist Maury Obstfeld said in a statement.

Editor's note: This article has been clarified to remove a sentence incorrectly suggesting that Chinese stocks have doubled the performance of U.S. stocks. Both have gone down over the interval period.

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Coronavirus dashboard

Illustration: Aïda Amer/Axios

  1. Global: Total confirmed cases as of 3 a.m. ET: 1,484,811 — Total deaths: 88,538 — Total recoveries: 329,876Map.
  2. U.S.: Total confirmed cases as of 3 a.m. ET: 432,132 — Total deaths: 14,817 — Total recoveries: 23,906Map.
  3. Federal government latest: Top Trump administration officials had been developing a plan to give cloth masks to huge numbers of Americans, but the idea lost traction amid heavy internal skepticism.
  4. States latest: New York has reported more cases than the most-affected countries in Europe. Chicago's Cook County jail is largest-known source of coronavirus in U.S.
  5. Business: One-third of U.S. jobs are at risk of disappearing, mostly affecting low-income workers.
  6. World: WHO Director-General Tedros Adhanom Ghebreyesus urged countries to put politics aside "if you don’t want to have many more body bags.”
  7. Environment: COVID-19 is underscoring the connection between air pollution and dire outcomes from respiratory diseases.
  8. Tech: A new report recommends stimulus spending to help close the digital divide revealed by social distancing.
  9. What should I do? Pets, moving and personal healthAnswers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
  10. Other resources: CDC on how to avoid the virus, what to do if you get it.

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