European investors decided Asia’s problems are Asia’s problems and rallied at the open after, another terrible trading day in the Far East.
The Nikkei was hit 4% to 17,806. The Shanghai Composite collapsed another 7.6% to 2,065 on its way toward zero. The Hang Seng was up 0.7% to 21,404.
At the open, the FTSE rose 2.4% to 6,043. The DAX was up 3% to 9,928.
The Europeans must believe that China’s economic problems may be internal to its manufacturing and consumer segments and will not race around the world to damage its trading partners. Or, they may believe a weaker China will pose less of a trade and military threat if its economy goes into recession.
Low oil prices also benefit Europe, which has virtually no crude production of its own.
And then there is the United States, the largest trading partner of the eurozone. It remains economically healthy.
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