By James Rickards
China is reopening.
The China reopening story is the most powerful market narrative going on today. At least for now, it’s more powerful than any Fed analysis, the prospect of a recession, and even lower energy prices in terms of what’s driving investor behavior.
Of course, the key word is “narrative.”
It’s a powerful story but that does not mean the story is true. If it affects investor behavior, then investors have to pay attention to avoid getting run over by bull market sentiment. It can take time, but whenever a narrative diverges from reality, the reality always wins.
That will prove true with China.