New York… Shanghai… a true tale of two cities.
In late 2007, U.S. and Chinese stocks peaked at the same time.
In early 2009, these stock markets also bottomed together.
And for a while, heading into 2010, both U.S. and Chinese markets moved higher in a surging, V-shaped recovery.
But that’s where the correlation ends. Take a look…
Since the beginning of 2011, U.S. stocks, as measured by the popular S&P 500 ETF (NYSE: SPY), have gained about 23%.
Over the same time, Chinese stocks are down 28%.
That’s a whopper of a performance gap!
For everything China has going for it in the economic growth department, investors have clearly shunned Chinese stock investments. U.S. stocks, especially in these “new normal” times, seem far more stable.
Watch for this trend to continue. Until investors are convinced that U.S. stocks are a good buy… don’t expect buyers to take the bait on China’s volatile, underperforming stocks.