The markets have “reached some kind of tipping point,” according to Gloom, Boom & Doom Report publisher Marc Faber.
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“The markets have moved sideward for essentially the last 12 months and this year, when the crash really happened, we were 2% lower on the S&P year-to-date…we were down 13% for the transportation index, so the internal of the market has been weak,” Faber said during an interview on FOX Business Network’s Cavuto: Coast to Coast.
He added that global markets have realized deceleration in China’s economy is worse than “optimistic” fund managers and strategists predicted.
Faber said it would not be easy for China to get its economy growing the way it once was.
“An economy like China is not like a car where you just drive around the corner,” he said. “The Chinese economy cannot be stimulated meaningfully for the time being—it will take time."
Recently, China’s stock market troubles hit U.S. markets. Faber explained why Wall Street is impacted by negative news out of China.
“You look at announcements of Hewlett-Packard, United Technologies, car manufacturers… they have a large exposure to China, and when the Chinese economy slows down, what really drove the growth, namely capital spending in China, and consumption in China slows down, so in July, car sales in China were down 7% year-over-year,” he said.