The Chinese mainland market may have suffered its biggest loss on Monday, but rebounded on Wednesday. 2015 is set to be the first of what is likely to be a three-year bull run for Chinese equities.
Chinese households have for the most part preferred physical property, not A-shares, to house their savings or investments. But over the past year or so, price expectations on physical property have dimmed because of rising supply and declining prices in many parts of the country. As such, physical property is more prevalently viewed as an alternative to savings where people are unlikely to lose money, rather than an investment to make money.
Anyone that pays attention to the market probably noticed just how boring it had been during the five trading days before today’s session. In those five previous trading sessions, S&P 500 did not climb or fall greater than a meager 0.1% each day on a closing basis. Digging through our S&P 500 database that starts in 1930, only three other times in history has this occurred; July 1956, January-February 1965 and January 1969. No streak lasted longer than the current five days. Given this is just the fourth time in over eight decades of trading; it goes without saying that this is a rare occurrence. The 30 trading days before and 60 trading days after the previous three streaks ended have been combined into the following chart.
