China has world's worst stock market and it could remain weak until trade fight with U.S. ends

collected by :Molly Tony

The world's second largest economy rapid decline from a trade war could impact all the countries that trade with it. Donisanu said while the Chinese stock market has been losing ground because of trade war fears, the canary in the coal mine for a trade war that slams global growth would come if the U.S. stock market breaks down. The direction and tone of where we can go with this trade war or no trade war…is being driven by the U.S.," he said. "We think the fundamentals remain intact for emerging markets in Asia and for emerging markets as a whole," said Donisanu, adding Wells views emerging markets more favorably as valuations have declined. "Instead, we see recent RMB weakness as a reversal of excess strength, with perhaps a side-signal that recent trade tensions are unwelcome."

MORGAN STANLEY: The stock market is taking a major turn for the worse, and it's bad news for tech stocks

For many months, the bank's equity strategists have written to clients about a forthcoming rotation toward defensive sectors, which investors prefer during downturns. They recommended utilities as the best defensive sector as the broader stock market risked losses. Since June 18, defensive sectors like utilities and real estate have outperformed cyclical sectors like tech and financials. Analysts project 25% earnings growth for tech companies, which will report second-quarter results shortly. On a technical note, Wilson observed that fewer stocks were trading below their 200-day moving averages.

One consistent pattern in the stock market

As it stated in There's a consistent pattern that occurs in market sentiment. When the market starts to pull back, many sentiment measures move to bearish extremes. During the second half of June, the market started to decline and many momentum leaders experienced profit taking. I have two theories: 1) the majority of market participants feel this current stock market rally is about to end any day now. I constantly hear that the market and the economy are in "late stages" so this consistent rush for the exit makes sense if most people feel this way.

Dow industrials aim for first 4-day rise in about a month as stock market extends gains

Market PulseDow industrials aim for first 4-day rise in about a month as stock market extends gainsU.S. stocks opened higher Tuesday, setting the main indexes up for a fourth straight advance on the back of strong economic data that have thus far offset a recent bout of trade-related jitters. The Dow Jones Industrial Average DJIA+0.38% climbed 100 points, or 0.5%, at 24,884, a day after it rallied by 320 points. the S&P 500 index SPX+0.11% advanced 0.2% at 2,790, while the Nasdaq Composite Index COMP+0.03% rose 0.1% at 7,767. In corporate news, PepsiCo Inc.'s PEP+1.04% posted better-than-expected earnings before the open Tuesday, sending its stock up. On the data front, a May reading on job openings is scheduled for release at 10 a.m. Eastern Time.