• Shanghai Index shrugs off rate hike
• Stock, Bonds, take separate paths

Friday, after the markets closed, the Chinese central bank raised interest rates for the fourth time in a year and also ordered banks to set aside more reserves, reducing the amount of money available for lending (AP). I was certain that this would be the catalyst to start a worldwide market sell off.

On Monday, the Shanghai Index opened down 3.2% and then rallied to finish the day up 1%, a record high. Excuses for this irrational behavior vary but fall along the line that the retail investor is controlling the Chinese Market. The retail investor is not as concerned about rising interest rates as the institutional investor.

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Posted by Michael Chapman at 9:48 AM PDT