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Investing Specialists

Will China's Malaise Spread to the U.S. Economy?

Strong U.S. employment growth stands in stark contrast to Chinese market woes.

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This week's market action was really all about China. The pain was widespread, as most equity markets were down 6%-9% since Dec. 31, 2015--drops that look more like monthly or even annual data.

As one might guess, China problems had the most knock-on effect on other emerging markets, which were down 9%. Europe and the U.S. were both down about 6%. With new fears out of the Middle East and colder weather in the central U.S., commodities did the best of a very bad lot, falling "just" 4%. Of course, safe-haven bets and slower world growth outlooks drove the interest rate on 10-year U.S. Treasuries down from 2.27% to 2.13% since the end of 2015, making bonds the only real winner this week.

Robert Johnson, CFA does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.