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Markets look to continue their trajectory off one-month highs reached last week, closing at session lows this Monday on a dollop of uncertainty out of China and perhaps a sense of hitting their head on a temporary ceiling in market gains. The Dow lost -497 points, -1.45%, and it was the outperformer among major indices. The S&P 500 dipped -1.54% and the Nasdaq was -1.58%. The small-cap Russell 2000 dropped -2.05% on the day.
It had looked for a while that the indices would push through mid-August highs, but seemed to get cold feet toward the end of the holiday-shortened trading week last week. We have many potential market catalysts in play in the coming next few days, including two big monthly jobs reports from ADP (ADP - Free Report) and the Bureau of Labor Statistics (BLS). Perhaps these amounted to too much static in the near-term to put down the throttle.
Add to this the “White Paper Revolution” happening in China’s capital Beijing and the world’s third-largest city Shanghai — where protests against the authority of the central government is leading to broader unrest and generating some more question marks in relation to China’s post-pandemic economic growth — and we now add an unforeseen headwind to the global economy. Especially considering China’s track record on dealing with protestors is infamous, it’s not easy to see a silver lining developing from this issue.
Reports are referring to the demonstrations as the White Paper Revolution due to the use of blank white paper as protest “messages” — citizens’ concerns are being wiped clean by a strong authoritarian government, thus the people are protesting they have no say. These protests emerged after an apartment fire in Xinjiang killed 10 residents rather than break with the government’s zero-Covid policies. The blank squares are also carried over from the pre-pandemic protests in Hong Kong, where protest slogans were banned.
For now, we’re winding down the “Black Friday” to “White Paper Revolution” trade ahead of a slew of economic data over the next few days. Aside from labor force reports, we’ll get data on home prices, consumer confidence and a revision to Q3 GDP. With markets still up double-digits quarter-to-date — with an increasingly widening inverted yield curve between 2-year and 10-year bond yields, by the way — we see today’s trade as a slight hedge against worsening news domestically and abroad. Questions or comments about this article and/or its author? Click here>>
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From "Black Friday" to "White Paper Revolution"
Markets look to continue their trajectory off one-month highs reached last week, closing at session lows this Monday on a dollop of uncertainty out of China and perhaps a sense of hitting their head on a temporary ceiling in market gains. The Dow lost -497 points, -1.45%, and it was the outperformer among major indices. The S&P 500 dipped -1.54% and the Nasdaq was -1.58%. The small-cap Russell 2000 dropped -2.05% on the day.
It had looked for a while that the indices would push through mid-August highs, but seemed to get cold feet toward the end of the holiday-shortened trading week last week. We have many potential market catalysts in play in the coming next few days, including two big monthly jobs reports from ADP (ADP - Free Report) and the Bureau of Labor Statistics (BLS). Perhaps these amounted to too much static in the near-term to put down the throttle.
Add to this the “White Paper Revolution” happening in China’s capital Beijing and the world’s third-largest city Shanghai — where protests against the authority of the central government is leading to broader unrest and generating some more question marks in relation to China’s post-pandemic economic growth — and we now add an unforeseen headwind to the global economy. Especially considering China’s track record on dealing with protestors is infamous, it’s not easy to see a silver lining developing from this issue.
Reports are referring to the demonstrations as the White Paper Revolution due to the use of blank white paper as protest “messages” — citizens’ concerns are being wiped clean by a strong authoritarian government, thus the people are protesting they have no say. These protests emerged after an apartment fire in Xinjiang killed 10 residents rather than break with the government’s zero-Covid policies. The blank squares are also carried over from the pre-pandemic protests in Hong Kong, where protest slogans were banned.
For now, we’re winding down the “Black Friday” to “White Paper Revolution” trade ahead of a slew of economic data over the next few days. Aside from labor force reports, we’ll get data on home prices, consumer confidence and a revision to Q3 GDP. With markets still up double-digits quarter-to-date — with an increasingly widening inverted yield curve between 2-year and 10-year bond yields, by the way — we see today’s trade as a slight hedge against worsening news domestically and abroad.
Questions or comments about this article and/or its author? Click here>>