China's Financials ETF—SPDR® S&P China ETF (NYSE:GXC)—has plunged dramatically since January of 2021, in contrast to China's Shanghai Index, SSEC, which is teetering on the brink of a downdraft, as shown on the following monthly comparison chart.
Extreme volatility began in GXC in March of 2020, relative to the SSEC, when the WHO declared COVID-19 a "pandemic" (Mar. 11)...following its declaration of the virus as a "public health emergency of international concern" on Jan. 30.
This dramatic and volatile trend reversal in China's financial sector may signal forthcoming weakness and produce problems, in the near term, and, possibly in the long run, for its equity sector, namely the Shanghai Index.
By the way, my post of Sept. 15, 2021 described financial weakness in GXC pertaining to China's second-largest property developer, Evergrande Group (HK:3333) (and its major debt obligations and defaults) thereby, possibly triggering a negative event in China's Shanghai Index, and, even, other world markets.
Combine those issues with:
- skyrocketing global inflation and parabolic commodity prices,
- Europe's financial weakness,
- weakness in U.S. and Chinese Technology Sectors, and
- the invasion and war perpetrated by Russia against Ukraine,
and you have a world-wide financial catastrophe waiting to happen.
Keep an eye on this comparison for clues on a weakening SSEC, as well as the above global issues.
