One of the big themes of late has been the correlation of markets, and the end of variety.
Stocks within the US market trade in unison, though even beyond that, global stock markets are increasingly correlated, trading in predictable manners when the mood is either “risk on” or “risk off.”
For years, the Shanghai market was the ultimate un-correlated market, not trading like the US, or even like its Asian counterparts.
Then earlier this year, it kind of made a nod towards correlation, as investors began to see it as a leading indicator for US stocks (whether that was voodoo or tea leaves is not the point really… the point is that people were starting to suspect a connection).
Now Shanghai seems to be matching the US tick-by-tick. Well, almost. Below is the Shanghai Composite and the S&P 500 (in the box below the main box), and since the (possible) bottom in early July, their moves have been nearly identical. The leading indicator is no more, and neither is the disconnect. Shanghai has apparently succumbed.