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US stock markets continue to fall – Evergrande in focus

Picture of Drew Meredith, CFP
Drew Meredith, CFP
Picture of Drew Meredith, CFP

Drew Meredith, CFP

Drew Meredith is one of the founders of Wattle Partners. He is an experienced financial and investment adviser with expertise in self-managed superannuation funds, superannuation strategies, investment analysis and portfolio construction. Drew is a Partner at Wattle Partners.
More analysis

Both the Dow Jones and S&P 500 staged late recoveries to finish 1.7% lower as a mounting wall of negative sentiment hits global sharemarkets. The Nasdaq suffered the biggest fall, tumbling 2.2% as the likes of Tesla (NASDAQ: TSLA) were hit by supply issues.

Evergrande woes

But it was all about China’s Evergrande (HKG: 3333), which fell another 10% as fears of default continued to grow. The largest developer in China continues to face liquidity and debt pressure with expectations it will default on a number of loans as early as today.

The group offers both property development services and ‘wealth management’ products used to fund its operations, with the latter frozen.

Despite the concerns, S&P suggests the issue, if not addressed by the government, will end up some way between ‘a tidal wave of defaults’ and ‘ripples in a pond’, with comparisons to Lehman Brothers likely overdone.

There was positive news on Pfizer’s (NYSE: PFE) vaccine treatment of children between 5 and 11, sending the share price 0.7% higher, whilst investors await more news on the ‘tapering’ program this afternoon.

US stock market movers

Here’s how other popular US stocks fared on Monday.

Following this negative lead from US markets, the S&P/ASX 200 (ASX: XJO) is set to face another red day on Tuesday. For all the latest, check out Rask Media’s ASX 200 morning report.

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We might be experts in retirement, but with combined financial advice experience of 35+ years, we’ve nearly seen it all. 

In mid-2023, our senior team at Wattle Partners Financial Planning put the finishing touches on a brand-new report “The Golden Rules of Investing“.

In this free report, we outline the key principles that determine all of the portfolio construction and investment decisions of Wattle Partners. Collated over decades, this paper should be seen as a work-in-progress, constantly under review in light of the ever-evolving nature of markets. 

You’ll find the free report on my Author page. Simply click the button below to view the Golden Rules.

Get the golden rules

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At the time of publishing, the author of this article does not have a financial or commercial interest in any of the companies mentioned.

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Wattle Partners is a financial advice firm, servicing clients around Australia, specialising in retirement planning (pre and post retirement). 

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