CHINA CENTRAL: The correlation between earnings per share growth in the US S&P 500 and Chinese economic growth has surged from zero in 2010 to 90%, exceeding the importance of US GDP for US-listed stocks. Picture: Bloomberg/Yan Cong
CHINA CENTRAL: The correlation between earnings per share growth in the US S&P 500 and Chinese economic growth has surged from zero in 2010 to 90%, exceeding the importance of US GDP for US-listed stocks. Picture: Bloomberg/Yan Cong

Up to a quarter of the revenues generated by the constituent companies of exchange-traded funds focused on US stocks are derived from sales to China, according to research by Bank of America. This demonstrates how difficult it is for investors to avoid the fallout from Beijing’s crackdown on a swath of private sector activities. "What happens in China doesn’t stay in China," says the bank.

Financial Times

The 60:40 blues

An important relationship between equities and government bonds broke down last month and inflicted the largest losses for diversified investment portfolios since the pandemic market rout of last year. Signs that inflationary pressure may become more entrenched have weighed on consumer and business sentiment. The Financial Times calculates that losses in the two major asset classes resulted in a drop of 3.5% in September in a portfolio containing US equities and government bonds in a typical 60:40 ratio.

Financial Times

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