I don't know what's going to happen long term. Every time I've gotten into or out of the market because I knew what was going to happen, I was wrong. I've even gotten lucky and got out at the right time and avoided some big losses - only to not get back in at the right time and I missed some big wins. I would have been better off doing nothing - so that's what I do now. Set it and forget it.
I'm down 0.96% today. Less than 1%. 1% loss sucks but I'm going to stick it out and see what tomorrow brings.
Futures are already in the green..but only about a quarter percent. Could go either way tomorrow.
I don't see a real comparison between the Evergrande situation and the Lehman Brothers collapse that triggered the Great Recession. The debt of Lehman Bros was spread around to multiple other large US banks. That was the contagion factor.
Evergrande's debt is mostly backed by the PBOC..People's Bank of China ......China's 'federal reserve'. Blackrock, in the US is the only major US player involved in Evergrande's debt.
I suspect China will at some point step in and stabilize Evergrande because they do not want a domino effect among Chinese banks...............BUT......they might let this go a while to send a message to other Chinese firms that have a capitalist leaning. Look what they did to Alibaba, and Ant Financial in the last 12 months. I think this may be part of Xi reasserting communist first principles. ( do communists have principles ? )
Today's market drop could be just using Evergrande as an excuse to take some profit. We have another fed meeting this week, debt ceiling battle in Congress, increasing inflation, the Delta variant, an additional 5 trillion in proposed spending......what could go wrong ?
The dollar also strengthened today. That will put additional pressure on China.
Seemed like some screaming buys out there today. I guess we'll find out in the future if that's true.