Evergrande’s default incidents continue to increase.
U.S. bond yields hit record highs.
ETF traders are fleeing China.
Evergrande’s crisis further intensifies
Evergrande's crisis intensified after its mainland unit defaulted on 4 billion yuan ($547 million) of bonds, adding new uncertainty to restructuring plans with its offshore creditors. According to Caixin, Evergrande’s former CEO Xia Haijun and former financial director have been detained by Chinese authorities.
As the Federal Reserve's long-term high interest rate policy continues to ferment, U.S. bond yields have hit multi-year highs. The yield on the 10-year U.S. Treasury note jumped to levels not seen since 2007, with Bank of America Merrill Lynch predicting it could reach 4.75%.
The European government bond interest rate curve is steep, with Christine Lagarde reiterating that rates will remain elevated for as long as needed. Chicago Fed President Austan Goolsby said "a soft landing is possible, but there are many risks and the road will be long and winding." He cited the fact that the unemployment rate is low and close to last year's inflation rate, which was more than twice what it is now. He told CNBC the discussion will soon turn to whether to hold on for how long.
The crisis at Evergrande deepened, causing ETF traders to withdraw their capital and leave China. Last week, money managers pulled more than $180 million from U.S. ETFs tied to Chinese stocks. Investors have withdrawn money from the iShares MSCI China ETF five times in the past six weeks, pointing to rising concerns about China's prospects.
Vice Prime Minister He Lifeng expressed "strong concern and dissatisfaction" with EU chief trade negotiator Valdis Dombrovskis, objecting to the EU's countervailing investigation into Chinese electric vehicles. Nonetheless, the two sides reached agreements in areas such as macroeconomic policy coordination and supply chain cooperation during the Beijing talks.
Other news:
Moody's warned that the U.S. government shutdown would be detrimental to its credit rating.
Short sellers are jumping into environmental, social and governance (ESG) stocks driven higher by the green craze.
Outside 20% of U.S. residents have exhausted their extra savings.
North Korea will allow foreigners to enter the country for the first time since 2020.
Nio is considering raising $3 billion from investors despite continuing losses.
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