Deep breaths, market, deep breaths

The five-hour time difference between New York and London allows you to chase a Wall Street crash with a nice whisky. If you’re still eating dinner, a bottle of Malbec makes almost any stockmarket rout more bearable. Such was the case on Friday.

The Dow Jones Industrials were down as much as 500 points during the session. “Bartender, I’ll have another”. They trimmed the loss by the close. But at 15,988, it was the first close under 16,000 since August of 2015. UK futures were up this morning. The sun is out. The world hasn’t ended.

But did you see that retailing giant Walmart announced the closure of 267 stores on Friday? 154 of those are in the US, with another 60 in Brazil. And to put things in perspective, the big-box discount retailer still has over 11,000 stores around the planet. Amazon hasn’t crushed it just yet.

Still, now you know how China’s stockmarket and the rest of the planet are linked. If China’s slow-down is more like a debt-deflation/depression, then the entire world is going to grow less fast (if at all). That’s why equity markets freaked out. They are pricing in much slower global growth—or even the end of the globalisation as we know it. More on that tomorrow.

SpaceX setback

Meanwhile, in the world of exploration and opportunity, Elon Musk pushes the envelope. Last month it was the Falcon rocket delivering a payload to space and then safely returning to a landing pad. The company upped the ante over the weekend.

The first part went okay. The Falcon delivered a payload into orbit. But this time it tried to land on a barge in the ocean. If it were a figure skating move, the degree of difficulty would have been “very high”. One of the struts on the rocket failed. It tilted over and exploded.

That may not seem like it has anything to do with the price oil or the level of the FTSE or the vote to leave the European Union. It doesn’t. But that’s my point. And that’s the reason Nick launched Exponential Investor last week. There’s a whole other world out there.

Category: Market updates

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