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Why stock investors are suddenly so scared
  + stars: | 2023-08-18 | by ( Nicole Goodkind | ) edition.cnn.com   time to read: +6 min
That means that if China’s economy slows down, global economic growth slows down. “When global economic growth slows down, that tends to be negative US equities. But a string of strong economic data has challenged those notions. Russia’s invasion of Ukraine continues to stoke fears of rising commodity prices, global economic instability and uncertainty around security. It’s been chock full of economic data and big corporate reports.
Persons: That’s, Lehman, , Alex Etra, Bond, Jamie Dimon, JPMorgan Chase, hasn’t, Banks, Michael Burry, Fitch, It’s Organizations: New, New York CNN, Nasdaq, Dow, CNN, country’s National Bureau of Statistics, Apple, Intel, Starbucks, Nike, Federal, Federal Reserve, Atlanta Fed, JPMorgan, CNBC, First Republic Bank, Huntington Bank, PacWest, Western Alliance, Bank Locations: New York, China, Ukraine, Beijing, stoke, Huntington
Why it matters: “For most of the last two decades, China’s economic growth has been a major driver of the global economy,” said Alex Etra, a strategist at data analytics firm Exante. That means that if China’s economy slows down, global economic growth slows down. ExxonMobil (XOM) may not be doing too much business with China, said Etra, but if Chinese growth slows, that means oil prices go down. Earlier this year, Bank of America compiled a list of the S&P 500 companies with the highest exposure to China. The grand total of all the private wealth in the world fell 2.4% to $454.4 trillion last year, according to the annual Credit Suisse and UBS global wealth report.
Persons: Joe Biden, BlackRock, , Alex Etra, Michael Burry’s, Allison Morrow, That’s, Jason Hart, Winn, ” Hart, , Ramishah Maruf Organizations: CNN Business, Bell, New York CNN, country’s National Bureau of Statistics, ExxonMobil, Apple, Intel, Starbucks, Nike, Bank of America, Las, Qualcomm, Nvidia, Wynn Resorts, WYNN, MGM Resorts, MGM, Funds, PitchBook, Michael Burry’s Scion Asset Management, Moore Capital Management, D1 Capital, Tiger Global, Securities, Exchange, Credit Suisse, UBS, Millionaires, Aldi, Dixie, Winn, CNN Locations: New York, Beijing, China, Ukraine, United States, Aldi, Winn
HONG KONG, March 21 (Reuters Breakingviews) - The crisis at Credit Suisse has traders wondering who’s next. Japanese lenders, with their staid depositor bases, look like unlikely targets for bank runs. Yet the rising cost of short-term dollar and euro credit, combined with extreme yen volatility, have made hedging much more expensive. Domestic commercial lenders alone held $600 billion of international debt securities at the end of 2022, and some look overexposed. Take Japan Post Bank (7182.T), a $32 billion institution whose parent is partly owned by the Ministry of Finance.
Japanese investors hold a lot of foreign bonds - some $4.3 trillion in various debt instruments, of which $2.085 trillion is "portfolio investments." Around half of that is in U.S. assets such as Treasuries, agency debt and corporate bonds, and around a third in euro zone securities. Wholesale liquidation of Japanese investors' foreign bond holdings is unlikely barring a "very substantial" rise in Japanese yields from here. chartLast year, Japanese investor selling picked up pace as U.S. and euro zone borrowing costs rose. Hedged investors have cut back their exposure to foreign bonds, particularly banks and now life insurers, according to Setser and Etra.
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