Where is Germany and China driving the world economy now?

Germany and China have been the acclaimed heroes of global growth coming out of the last recession. It is significant to note then that both of their stock markets-leading indicators of their economy–are now in the midst of downturns which has the Dax back to where it was in October 2009 and the Chinese market 19% lower than it was in October 2009. Bottom line: more than 2 years of gains have been wiped out in the last three months…and both are still in a downtrend. All of this before the next recession has been officially declared. This suggests that still more elevated markets like the S&P and TSX have some further downside work to do in this contraction cycle.

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