When Markets De-Risk, But Not Decouple (from China)

A lousy Manufacturing PMI reading out of China pulled the Hang Seng index officially into bear market territory, sent the yuan crashing through 7.10, and seemed to have set off a broader, risk-off market move that reverberated across asset classes globally.  But, did yet another piece of weak economic data from China really spook global markets - particularly the previously China-resilient DM equity indices such as Japan? After all, Asia equities ex-China have been leading the world higher for several weeks, ignoring one disappointing data release out of China after another. What (else) actually happened to stop the market momentum today?  Weston Nakamura points to technical market mechanics that are also behind the selling activity - namely, month-end portfolio rebalancing flows and activity on outperforming Japan and A.I. related equities as a primary culprit for the market reversal. Weston notes that without recognizing such market mechanics, we may be mistakenly attributing market behavior to China, when in reality, equity market price action may have very little to do with a weak data print out of China all along. -- Follow Market Depth On Spotify: https://spoti.fi/3mVTs9U Follow Market Depth On Apple Podcasts: https://apple.co/40dA2vm Follow Weston: https://twitter.com/acrossthespread Follow Blockworks: https://twitter.com/Blockworks_  Get top market insights and the latest in crypto news. Subscribe to Blockworks Daily Newsletter: https://blockworks.co/newsletter/ -- Disclaimer: Nothing discussed on Market Depth should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.