A continuation of the sell-off in Chinese shares, worries about bearish commodities markets with crude oil at $40/barrel and a dash of Federal Reserve rate-hike fear, made US equity investors throw in the towel in August.
US stocks suffered their worst losses in four years.
We recently analyzed the fall in US shares and how both stocks and commodities markets seem to be linked now that all eyes are on China.
Chinese Sentiment Still Bearish
It looks like, for the coming weeks, investors’ sentiment will be driven by what comes out of China.
Interestingly, both commodities and US stocks bounced last week after the big drop. These rallies are normal price fluctuations after a sharp drop.
However, this rally doesn’t look convincing, making us suspect that the fall in U.S. equities and commodities might not be over.
Meanwhile Chinese shares keep making new lows and nothing suggest that we’ve reached a bottom.
What This Means For Metal Buyers
China’s stock market crash doesn’t look like it’s over yet. Further declines in Chinese shares could propel more price declines in commodities and US stocks as China seems to be driving investors’ sentiment at this moment.