China is struggling. For years the world's locomotive, it is now a mere shadow of its former self. Without going back over all the reasons that have driven it into the ditch, we'll just mention an oversized construction market, a policy of keeping its tech flagships out of the spotlight that is, to say the least, questionable, and lastly, a trade war with the United States. In the end, industrial production came out at +3.7% in July, against +4.3% expected, while retail sales dipped to 2.5%, against a forecast of 4%. The real estate sector is in a state of collapse, and deflationary pressures are mounting. To stimulate growth,  the People's Bank of China lowered its short- and medium-term interest rates by 10 and 15 basis points respectively. However, this is clearly insufficient to achieve the revised 5% growth target for the year.

(Source: Bloomberg)

In the developed economies, the question is quite different. After the publication of the Fed's minutes, investors seem to be realizing that the US central bank may not be finished with its monetary tightening cycle. On the inflation front, the good times seem to be over: the base effect is no longer favorable, while inflation has risen steadily in recent months, to the point where the next statistics are likely to show a recovery at annual rates. And that's without taking into account the recent rise in oil prices, which has not yet been taken into account in the latest statistics... A further rise in bond yields, which are currently testing their October highs of 4.33% on the US 10-year, should legitimately weigh on equities. September could well confirm its status as the worst month of the year in terms of stock market performance.