Stock Market Today: China in Trouble

July 6, 2021, 2:06 pm EDT

China in Trouble

China stock market may be in trouble (ETF: FXI) -3% as shown. Didi GLobal Inc (DIDI), which is a delivery service company in China,  is down more than -20% after its IPO last week. China Communist Party (CCP) government decides to crack down on DIDI for data security concerns. This action shows China wants to fully control all private enterprise companies in China. It is another step closer to North Korea. 

Needless to say, state-own companies do not have the motivation and efficiency like provide-own entities. Thus, the future of the economy in China could be in big trouble. 

Technically, we can see a head-and-shoulders pattern appears when looking at a chart of China’s large-cap ETF FXI. 

US stock market pulls back a bit. It does not show major problems yet at this moment. But US-China relationship in the area of trading, politics, military is worth attention.

At this moment, China’s weakness benefits US companies like Amazon (AMZN) +4 because of the outflow of capital from China to the US. However, it may not be true in the long term. 

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