Credit union investments in 2016: Many happy returns?

The key question about the U.S. economy entering 2016 is whether China and other emerging economies will export their woes to the U.S. It’s a reasonable question because they generate a larger percent of global gross domestic product (GDP) than ever before.

But first, a review of 2015.

By the second quarter of 2015, it seemed clear the U.S. stock market’s higher-than-average valuations left it vulnerable to a correction.

Lofty valuations don’t generally trigger a selloff by themselves—they often need a catalyst, like, say, China abruptly devaluing its currency. That’s exactly what happened in August.

In response to a steep decline in its own economy, China’s policy makers moved to shore up its capital markets and stimulate exports by devaluing its currency.

Around the world, stock markets slid. When analysts see nations devalue their currency, they consider the tactic “hitting the panic button” because it is usually a last-resort attempt to rescue a declining economy.

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