On Monday, S&P 500 closed down 1.7%, its largest drop since May. The consequences of a restructuring or default of China Evergrande Group this week are likely to largely be confined within China, but global investors could see some effects, strategists at Charles Schwab report.
Could Evergrande’s troubles reverberate to the rest of the world?
“While the primary impact of Evergrande’s problems is likely to be felt within China, its fortunes are of interest to global investors due to the impact on emerging market bond funds, commodities and equipment related stocks.”
“China’s economic growth could take a hit and hurt demand for companies globally, but downside risks to growth could prompt Chinese policymakers to add stimulus and result in a rebound for Chinese stocks, with the MSCI China Index off nearly 30% from the 2021 high.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.