U.S. News: Why China's Market Woes Will Hurt Some Emerging Markets

By SIMON CONSTABLE

Ouch! China has unleashed a financial typhoon on world markets. 

It's true that U.S. stocks got broadly hammered. But the real issue won't be how China's slowing economy affects the U.S. – because it likely won't.

Rather, the big impact will be felt by emerging market economies that have historically relied heavily on commodity exports, as well as some non-emerging markets that bet big on the materials business. 

Read more here.

OZY: How China's Money Mess Helps the U.S.

By SIMON CONSTABLE

Assuming he wasn’t much of a markets investor, baseball great Yogi Berra might have taken some odd pleasure in watching the financial markets unfold lately if only to repeat his famous goofy line: It was “déjà vu all over again.” We are talking, of course, about the recent meltdown in China, followed by a pretty nasty start to the year on Wall Street, where investors couldn’t have been pleased by an apparent repeat of August’s China-led stock pullback.

But investors are always looking for silver linings, and some may yet find theirs. At least some folks are promising, hoping and praying as much — that roiling markets in China might make for hay in the United States and elsewhere. What’s more, they could be right. Read more here.

Photo by Christian Lue on Unsplash

WSJ: What Is a Reversal vs. Correction?

By SIMON CONSTABLE

What is the difference between a reversal and a correction? 

It could matter a lot if you are trading.

By Wall Street’s rule of thumb, a correction is generally defined as a pullback in a market or index of 10% or more. More colloquially, it means that the underlying trend, either up or down, remains in place. In short, a correction is a temporary blip. Read more here.

WSJ: Commodity Funds Fall Short, Study Says

By SIMON CONSTABLE

Sobering news for investors in specialty-commodity mutual funds: On average, they fall short on key measures, new research has found.

“These categories of funds have not been able to consistently create positive net alphas for their investors over longer time periods,” the report states. Alpha is a measure of the value fund managers add to the investment process when adjusted for risk factors such as volatility.

Read more here.

TheStreet: Mom and Pop Dumped $100 Billion From Stock Mutual Funds Starting Last April

By SIMON CONSTABLE

Mom and Pop investors are dumping stocks in a way not seen in years. It's probably a bullish sign for the major market indices, if history is anything to go by.

Every month from April through Dec. 30 last year, mutual fund investors yanked money from mutual funds focused on foreign and domestic stocks, according to the latest estimates from the Investment Company Institute.

The total outflows over that period adds to a hefty $98.1 billion, a total which is unlikely to being meaningfully changed when the final day's trading (Dec. 31) is added in. 

Read more here.

OZY: The Good-Bad-Ugly Of The Global Economy

By SIMON CONSTABLE

Picture yourself at the racetrack, where two vehicles drive past you. One is a monster-size truck moving along at a steady and measured pace, gently accelerating. The second is a small sports car, which appears to zoom past at high speed. But, as you watch more closely, you begin to notice the car is actually slowing down compared with the truck — so much that you wonder whether it’ll go into reverse. That scene of an acceleration on the one hand and a slowdown on the other is similar to how the global economy will move this year, as far as economists can tell, and there’ll be a world of difference economically depending on where you are. Read more here.

Photo by The New York Public Library on Unsplash

U.S. News: Why the Dollar Will Surge Again

By SIMON CONSTABLE

Get ready for another rally for the U.S. dollar. It's what economists call "policy divergence," and it means investors will pour their money into greenbacks. Here's how it will work and how investors could profit. 

The Federal Reserve, which is the central bank for the U.S., is expected to have policies that will increasingly diverge from those of the world's other major central banks, such as the European Central Bank and the Bank of Japan. 

In the simplest terms, the Fed will continue to increase the cost of borrowing money, while most of the rest of the world will either lower their short-term lending rates or leave them unchanged. Read more here.

Photo by Avinash Kumar on Unsplash