Tag Archives: xinhua-china

Red Chips vs. Blue Chips: Mega Cap China and U.S. ETFs Head-to-Head

Michael Johnston submits: From an investment perspective, the U.S. has historically been the dog and the rest of the world the tail. Global equity markets have taken their cues from Wall Street, and economic developments in the U.S have rippled throughout the world. The U.S. remains a very important part of the global economy, but the last few years have seen a meteoric rise of emerging markets, the new drivers of global economic growth. China in particular has become a critical economy to watch, as evidenced by the intense focus of investors on the government’s plans for unwinding the stimulus plan. While both the U.S. and Chinese economies offer numerous investment options, most investors tend to gravitate towards large firms with established track records. Two of the most popular ways to access these markets are with the Dow Jones Industrial Average ETF ( DIA ) and iShares FTSE/Xinhua China 25 Index Fund ( FXI ) representing the “blue chips” and “red chips” respectively. Complete Story

An Update on 10-Year Treasury Yields

Calafia Beach Pundit submits: (Click to enlarge) As 10-year Treasury yields work their way slowly higher (first chart), I thought it would be appropriate to revisit the long-term context (second chart). Yields are up almost 200 bps from their lows, but they are still very low by historical standards. To think that yields of 4% or even 5% pose a threat to the economy seems rather farfetched, when you consider that the economy grew strongly in the 1980s despite yields of 8% and higher, and despite yields being significantly higher than inflation. Similarly, it’s hard to see how the recent emergence of trillion-and-a-half dollar deficits has had any meaningful upward impact on yields. Complete Story