1. Markets were worried about Fed.
2. Markets were worrying about Greece.
3. Markets were worried about Puerto Rico.
4. And hey, China came in calling!
What is Mr. Market Missing:
The fall in Shanghai composite & Shenzhen has a hidden positive for the U.S. Stock markets. Wondering how?
Let's all agree that Europe worries are a temporary sentiment-changer and Chinese economy doesn't affect all US stocks. Also with the Chinese correction having more to do with the stocks correcting rather than a recession appearing, What is central to our markets is the Fed and interest rates.
The fall in Chinese markets have created an environment of Chinese economy slowing down. This has led to a sharp decline in commodity prices (Hey, that's why Alcoa is battling to stay in double digits!), including the second leg of oil slump. While the Chinese local economy is only "slowing down" and government is fully committed, hopefully Chinese economy would do alright. However, the global fear of demand will push commodities down..suppress inflation further..and guess who'll take a breather? Fed. And with it, all of us.