12/12/2023 0 Comments Shanghai indexIt shows that the S&P 500 retested that July high in October and November while the Shanghai Composite was unable to recoup much more than half of its decline. It shows that when the Shanghai Composite fell 25% through late-August, the S&P 500 fell less than half as much. The starting point is the same-six months ago. ![]() Here is what the two-time series really look like. In effect both are turned into an index and start at 100. To look at the data more rigorously, which as investors we want, the two-time series ought to be normalized. This is not a particularly robust argument. In this display of the data, which is used to make an argument, it appears the moves are of the Chinese and US stocks are similar. Sometimes it is helpful to have two scales for two time series. The two different scales can distort what is actually taking place. It does look like a good fit, but do not be misled. I have tried to recreate the Great Graphic on Bloomberg. It shows the S&P 500 moving in tandem with the Shanghai Composite. There is a chart that is making the rounds. I cursed to myself and quickly pulled the oar from the water. It wasn't my equipment, and I am a novice. When I looked that oar in the water, it looked bent.
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