Earlier in the week I posted that the $SPX has started the year on virtually the same pace that it started last year. It turns out that Chinese equities are on a similar path as well, but a slightly less favorable one.
Even though China and the US both got off to fast starts in 2012, the Chinese markets (represented here by $FXI) started to roll over in February. This year $FXI tracked the $SPX rise through January but has diverged since the beginning of February once again. Since US stocks ended up giving up almost all of their gains in April and May of 2012, one could argue that Chinese markets sensed economic weakness before US markets did. Let’s hope that this year doesn’t continue to repeat. Last year Chinese equities and many US listed stocks sympathetic to the Chinese markets (e.g. metals and mining companies) didn’t really find their footing until September.