Overnight, we saw economic data out of China that showed a contraction in economic activity for the first time in over seven years...as I've written several times one of my biggest concerns going into 2014 has been a slowdown in Chinese manufacturing and overall consumer spending. Well every once in a while a blind squirrel finds a note and sure enough that is what we are seeing. Because of the slowdown we were expecting, we've been moving money out of our China mutual funds (mainly Mathews Asian Growth and Income Fund) and reallocating that money into Europe where we are seeing somewhat strong and consistent growth. The European mutual funds we've been moving money into are the Artisan International Fund and the Oberweis Overseas Fund.
Generally speaking, we've seen the U.S. stock market perform pretty poorly so far in 2014; while I was premature in calling for a selloff, we are currently seeing it happen. Corporate profits have for the most part been dissapointing so far with the retail sector being the worst. While we haven't been moving money into U.S. stocks yet, we will be once we see some more consolidation (selloff).
Going forward, my concerns continue to be the Chinese economic woes as I wrote about above, consumer spending and manufacturing (both of which should be hurt by the extreme weather we've seen), and overall corporate profits which are vulnerable to below consensus earnings.
Btw the name of this blog "Trouble In Chinatown", is a reference to a random movie with Kurt Russell...FYI
