New Year, Old Struggles

摘要

We like to think of the new year as a time of new beginnings-a fresh start, unencumbered by the mistakes of the past. This time around, someone forgot to tell Mr. Market. Financial markets seem set to finish January with the most bearish startto ayear indecades. As I write, the S&P 500 index is down 7 percent for the year and off 11 percent from its May 2015 high-an official correction. German stocks have entered abear market, down more than20 percent from their highs, with Japan and the U.K. not far behind. And China? The good news is the market now stays open all day, since Beijing pulled the plug on its circuit breakers. The bad news is Chinese stocks keep heading south, having given up all their 2015 gains and then some. Explanations for the sell-off range from plunging oil prices to fears of a Chinese hard landing to faltering growth in the U.S. None of these factors is new, but perceptions of the risks have taken a dramatic turn for the worse, posing a challenge for investors.