The first trading day of the year was marked by red arrows, with the markets down sharply after weak Chinese data stoked investor fears. Bobbi Rebell reports.
The 2016 trading year started out deeply in the red, triggering worries about a global slowdown around the world. The first big number the markets had to digest: factory activity in China. The world's second-largest economy saw it shrink sharply in December. But Chris Rupkey, the chief financial economist at MUFG Union Bank, thinks the markets overreacted, arguing the weakness in the Chinese manufacturing sector won't do as much damage to the global economies as some fear. SOUNDBITE: CHRIS RUPKEY, CHIEF FINANCIAL ECONOMIST, MUFG UNION BANK (ENGLISH) SAYING: "The markets reacted in a way that suggests that it was panicky and a one-off and will recover." But it adds a layer of worry. U.S. data on manufacturing also came in weaker than expected. And construction spending fell for the first time in 1-1/2 years. Russell Investments' Stephen Wood is also optimistic about the global outlook as the year begins: SOUNDBITE: STEPHEN WOOD, CHIEF MARKET STRATEGIST, RUSSELL INVESTMENTS (ENGLISH) SAYING: "Our base case scenario is that the United States does not go into recession, that Europe does not go into recession either, and that Japan continues to, albeit in a limping way, improve. So that's the base case scenario. The Fed, we think, is going to be very glacial and take a long time to raise rates." Investors will get the first check on that when the Fed embarks on its two-day policy meeting on interest rates January 26th.