“In an increasingly correlated and interconnected global marketplace can you quantify and comment on China's, as well as other growth Asian markets, degree on non-correlation?” 

David Fuller's view

Thanks for a question which is also likely to be of interest to some other subscribers. 

First, you will be able to check correlations and relative performance in the Chart Library, over the short, medium or longer term, probably before the end of August.  We have more software time commencing next week and this task is a priority.

While there are inevitably correlations and non-correlations, we should never assume that these are constant factors.  They are not, because markets are influenced by wide ranging events, expectations, policies and perceptions.  Additionally, extremes of sentiment such as we last saw in 2008 on the way down, and in 2009 as stock markets entered recovery periods in response to lower valuations and accommodative monetary policies, increase the number of correlations. 

So, why has China not been correlated to Wall Street since mid-2009?  Different monetary policies were a huge factor, in my opinion.  Also, China is a command economy which was addressing emerging market growth problems of corruption, overbuilding and property speculation.  These problems are seldom fully resolved but they can be addressed sufficiently to enable governments to move on in pursuit of GDP growth, as I believe we are beginning to see in China.  Today, China’s stock markets are undervalued while those of the USA are somewhat overvalued.  Also, sanctions against Russia are a Western matter and have little to do with Asia.  I could go on and on but I have probably covered the main points.