The major real estate companies in China are under a lot of pressure, which now has moved into the bond prices too. The pressure is not seen in the equity market yet. The index is likely to rise to at least 4,300. If the crisis in the real estate market continues or escalates, then the equity market will be hit too and renewed downside pressure towards 2,800 should be expected.
Everybody is focused on China at the moment. This is a black swan moment despite the fact that everybody is aware of the problem. We should instead look for a black swan moment either in another sector (the banking sector maybe?) in China or outside China.
