TIME Markets

Chinese Markets Continue to Fall Following Worst Single-Day Drop in 8 Years

Shanghai Composite Index Slumps Below 3,500 Points On Wednesday
ChinaFotoPress—Getty Images An investor observes stock market at a stock exchange hall on July 8, 2015 in Fuyang, Anhui Province of China

Market interference by state regulatory officials has yielded ambiguous results

China’s stock markets continued their precipitous slide on Tuesday, falling almost two percent despite state regulators’ frantic attempts to stabilize the country’s volatile indices.

Tuesday’s rout came a day after the Chinese bourse’s worst drop in eight years, sending tremors of apprehension across markets worldwide. At market close on Tuesday, the Shanghai Composite Index sat at 3,663 points — more than 600 points lower than where it was just four weeks ago, illustrating the volatility of these markets and Beijing’s failure to stabilize them.

A surge that began earlier this year came to a dramatic turn last month, prompting state regulatory officials to enact drastic policies ranging from interest rate adjustments to stringent restrictions on the selling of shares.

“With Chinese markets heading further south on Tuesday after yesterday’s plunge, the question whether Beijing’s intervention is working gets louder,” market strategist Bernard Aw told the Associated Press.

TIME Markets

Worst Chinese Share Drop in 8 Years Spooks Global Markets

Chinese benchmark index dived 8.48 per cent
Woo He—EPA A stock investor checks prices in a brokerage house in Huaibei, central China, on July 27, 2015

It was the fifth straight loss for the U.S. market

(NEW YORK) — The worst drop in China’s stock market in eight years helped drag down other markets around the world Monday.

The tough day follows declines in U.S. markets last week, when the three major indexes fell more than 2 percent as a number of big companies reported disappointing earnings.

Faced with a drop in stock prices in Asia, Europe and the U.S., investors moved into traditional safe havens. The yield on the 10-year U.S. Treasury note fell to 2.22 percent from 2.26 percent on Friday. The price of gold rose 1 percent.

Dividend-heavy stocks, like utilities, also gained. Investors favor high-dividend companies during times of volatility because they provide a reliable income stream.

“There remain very few buyers out there and there are some growing concerns that we’re looking at a slowdown in global economic growth,” said Sean Lynch, co-head of global equity strategy with the Wells Fargo Investment Institute.

The Dow Jones industrial average lost 127.94 points, or 0.7 percent, to 17,440.59. The Standard & Poor’s 500 index lost 12.01 points, or 0.6 percent, to 2,067.64 and the Nasdaq composite lost 48.85 points, or 1 percent, to 5,039.78.

It was the fifth straight loss for the U.S. market. The S&P 500 is still up about half a percent for the year. The Dow is down 2 percent and the tech-heavy Nasdaq is up 6 percent.

ASIA

The worries for investors this week started with an 8.5 percentage point plunge on the Shanghai market, the biggest one-day decline since February 2007. It was the latest big drop in the Chinese stock market, which has slumped since early June.

Some analysts said Monday’s dive was set off by brokerages restricting credit used to finance stock purchases, also known as margin trading. Chinese authorities took aggressive steps to stabilize the market after it tumbled last month.

“The continuous check on margin trading by security companies has triggered today’s sell-off,” said Xu Xiaoyu, a market strategist at China Investment Securities. “In addition, the recent economic data shows it still takes time for the economy to recover from its sluggishness.”

The precipitous rise and fall of the Chinese stock market has been one of the bigger topics of conversation for investors this summer.

By the time China’s Shanghai benchmark index peaked in early June, it was up 150 percent in the last year. The gains were originally driven by commentary in state media that called the stock market undervalued. That led investors to believe the government would ensure that stock prices gained.

When the Chinese stock market started falling, many investors felt the decline would bring a much-needed correction to that country’s stock market bubble. But many small Chinese investors jumped into the market near its peak and are now sitting on significant losses.

There are now concerns the 30 percent decline in the stock market is starting to do damage to China’s economy. A closely watched Chinese purchasing manager’s index fell to a 15-month low over the weekend, with analysts blaming the drop partly on the market.

“Rightly or wrongly, people are concerned about a global economic slowdown,” said James Liu, a global market strategist with JPMorgan Funds.

The Chinese sell-off ruffled other markets in Asia, though the scant amount of foreign investment in Chinese shares limits the ripple effects outside of Hong Kong, a semiautonomous Chinese territory that is also a financial center.

Hong Kong’s Hang Seng shed 3.1 percent and Japan’s Nikkei 225 dropped 1 percent. South Korea’s Kospi fell 0.4 percent.

EUROPE and the U.S.

In Europe, which has already had a volatile summer because of worries about Greece’s precarious finances, also fell broadly on Monday.

The Euro STOXX 50 index, the European equivalent of the Dow 30, fell 2.4 percent. Germany’s DAX lost 2.6 percent, France’s CAC-40 lost 2.6 percent and the U.K.’s FTSE 100 lost 1.1 percent.

Elsewhere, traders were turning their attention to the U.S. Federal Reserve as they try to assess when the central bank will start raising interest rates. The market appears split between those who think it will happen in September or December. The central bank will also meet this week, but few expect it to begin raising rates.

Traders also have the busiest week for second-quarter earnings reports this week, with 174 members of the S&P 500 as well as six members of the Dow average reporting their results.

BIG PHARMA GETS BIGGER

Generic drug giant Teva Pharmaceuticals jumped $8.76, or 14 percent, to $70.61 after it announced it would buy Allergan’s generic drug division for $40.5 billion in cash and stock. Allergan’s shares also rose, up $19.01, or 6 percent, to $327.19.

CURRENCIES AND COMMODITIES

The price of oil fell to the lowest point since March as another steep drop in Chinese stocks caused concerns that demand from the world’s second biggest oil consumer would slip. Benchmark U.S. crude fell 75 cents to close at $47.39 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, fell $1.15 to close at $53.47 a barrel in London.

In other futures trading on the New York Mercantile Exchange:

— Wholesale gasoline fell 0.8 cent to close at $1.820 a gallon.

— Heating oil fell 3.4 cents to close at $1.596 a gallon.

— Natural gas rose 1.3 cents to close at $2.789 per 1,000 cubic feet.

In currency trading, the euro strengthened 0.9 percent to $1.1092 while the dollar fell 0.4 percent to 123.28 yen.

___

AP Business Writer Youkyung Lee contributed from Seoul, South Korea and researcher Yu Bing contributed from Beijing.

TIME Markets

Asia Stocks Fall Amid China Sell-Off

China Stock Market
Imaginechina/Corbis A concerned Chinese investor walks past a screen displaying prices of shares at a stock brokerage house in Huaibei city, China on July 27, 2015.

Asian stocks had already started the week on a dour note

(SEOUL, South Korea) —The Shanghai share index dived more than 8 percent Monday as Chinese stocks suffered a renewed sell-off despite government efforts to support the market.

Other Asian markets also were lower. The Shanghai Composite Index closed down 8.5 percent at 3,725.56.

Chinese shares fell dramatically in June after a sizzling yearlong rally took the market to unsustainable heights.

A period of stability was achieved after the government announced draconian support measures including forbidding major shareholders from selling any of their shares.

Monday’s fall was the biggest one-day decline since Beijing began its intervention.

The Chinese sell-off rattled other markets in the region. Hong Kong’s Hang Seng was down 3.1 percent and Japan’s Nikkei 225 dropped 1 percent. South Korea’s Kospi fell 0.4 percent.

Asian stocks had already started the week on a dour note, rattled by a last week’s report on Chinese manufacturing that sparked a sell-off in gold as well as copper and other commodities.

TIME Economy

Fed’s Yellen: Brace Yourselves, a Rate Hike Is Coming

US-POLITICS-FINANCE-YELLEN
Mandel Ngan—AFP/Getty Images Janet Yellen smiles after taking the oath of office as Chairman of the Board of Governors of the Federal Reserve System February 3, 2014 at the Eccles Building in Washington, D.C.

"The economy has made further progress"

You heard it from the Federal Reserve Chair herself: interest rates will soon go up.

In prepared testimony to the House Financial Services Committee on Wednesday, Federal Reserve Chair Janet Yellen will say that as the U.S. economy continues to improve, “conditions likely would make it appropriate at some point this year to raise the federal funds rate target.”

Appropriate or not, there is no guarantee rates will rise this year, and it may take until 2016 for it to happen. If and when rates go up, it will be their first rise in nearly 10 years.

The increases would be gradual, coming as a result of overall economic improvement and the falling unemployment rate.

“The economy has made further progress toward the Federal Reserve’s objective of maximum employment,” Yellen will say, adding that the unemployment rate of 5.3% is “slightly below its level at the end of last year.” And there’s more good news from Yellen: “Other measures of job market health are also trending in the right direction, with noticeable declines over the past year in the number of people suffering long-term unemployment and in the numbers working part time who would prefer full-time employment.”

Yellen’s outlook won’t be all roses. Separate from her prediction of a federal rate hike, Yellen will say there are still “uncertainties in the economic outlook. Foreign developments, in particular, pose some risks to U.S. growth.” She will call out the current situations in Greece and China as examples of such uncertainties.

TIME energy

Oil Prices Slide on Iran Nuclear Deal

The end of sanctions means new investments in Iran's oil production

Crude oil prices are testing three-month lows after Iran struck a deal that will lead to the lifting of international sanctions on its struggling economy in return for curbs on its nuclear program.

The benchmark futures contract for U.S. crude fell by over a dollar a barrel in early trade in Europe Tuesday after negotiators confirmed that they had struck an agreement after years of fraught talks.

The gradual end to sanctions foreseen under the deal will allow Iran, which has the world’s third-largest oil and gas reserves, to attract investment into its long-isolated energy sector, adding to world oil supplies at a time when the market is already “massively oversupplied”, according to the Paris-based International Energy Agency.

The Financial Times reported in June that European oil majors such as Royal Dutch/Shell [fortune-stock symbol=”RSDA”] and Italy’s Eni SpA [fortune-stock symbol=”E”] have already visited Tehran, with a view to clearing old debts and paving the way for new deals.

That’s bad news for U.S. shale oil producers, which have struggled to adapt to a world of lower prices since Saudi Arabia pushed the Organization of Petroleum Exporting Countries into a fight for market share at the end of last year.

However, it’s not the Iran deal per se that’s the bad news, but the fact that it adds to a list of factors that have stopped the rebound in oil prices in its tracks in the last couple of weeks.

“Onshore storage space is limited. So is the tanker fleet. New refineries do not get built every day. Something has to give,” the IEA wrote in its latest report on the world oil market. That something, it added, is most likely to be U.S. light, tight oil.

Analysts at Wood Mackenzie estimate as a base case that Iran will only add 120,000 barrels a day by the end of the year to the 2.7 million it currently produces. That’s little more than a drop in the bucket next to the surge in output that’s already happened this year as Saudi Arabia, smaller Gulf producers, Russia and Brazil have pumped furiously to ensure they keep their share of the pie.

WoodMac reckons that it could add a total of 600,000 b/d by the end of 2017, with 260,000 b/d coming next year and another 220,000 b/d the year after. That’s based on the assumption that sanctions are fully lifted by the middle of 2016.

Iran itself wants to increase its oil output to 5 million barrels a day by the end of the decade. That may seem ambitious, but Iraq has managed a similar increase since the toppling of Saddam Hussein despite having to cope with the constant chaos of civil war and, more recently, the rise of Islamic State.

If the deal holds, and Iran can overcome its diplomatic isolation for good, then it seems destined to have a major impact on global supplies in the long term. Over three-quarters of its recoverable reserves are still to be developed–and most can be developed without the state-of-the-art technology required in most new oil producing regions, whether in shale formations or offshore.

That can’t help but have an impact on the math for the U.S. shale industry. So far, the weaker companies in the sector have relied largely on new stock issuance and drastic cutbacks in investment spending to ride out what they hoped would be a temporary setback. If Iran ever starts to realize its full potential as a producer, the sector will have to accept that prices are going to stay lower for longer.

TIME Markets

Apple Makes Nearly All the Smartphone Money

Mobile Deivices Users In Tokyo
Atsushi Tomura—Getty Images A man uses his smartphone on July 16, 2014 in Tokyo, Japan.

It has 92% of the total operating income of smartphone makers

Is there a more lopsided market that the market for smartphones?

Of the total operating income of the eight largest manufacturers, Apple took 92% last quarter—a remarkable achievement, as the Wall Street Journal notes, given that less than 20% of smartphones sold last quarter were iPhones.

That 92% share is down a hair from the 93% Apple grabbed the previous quarter, according to Canaccord Genuity’s T. Michael Walkley. But it’s up sharply from last year, when Apple and Samsung split the profits 65/35.

That was last summer. In the fall, Apple introduced the iPhone 6 and 6 Plus, stealing market share—and operating income—directly from Samsung’s most profitable smartphones.

The situation is not quite as untenable as it appears in Walkley’s reports. He’s looking at only the eight largest manufacturers. There are hundreds of companies making Android phones, and many of them are doing just fine.

This article originally appeared on Fortune.com

TIME China

Chinese Markets Continue to Recover, but Uncertainty Remains

China Stock Market
Pan Yulong—Xinhua Press/Corbis An investor walks at a securities firm in Shenyang, northeast China, on July 10, 2015.

Analysts are in disagreement about both the causes and implications of the surge

After nearly spending nearly a month in an unprecedented tumble, China’s stock markets enjoyed a second consecutive day on the rebound on Friday, at least temporarily assuaging fears of an impending economic crisis.

The Shanghai Composite Index climbed 4.54 percent to sit at 3,877.8 points, its highest value in a week. By midday, sixty companies had resumed trading their shares in the Shanghai and Shenzhen markets, though 1,340 — 48% of the markets at large — remain voluntarily suspended.

“#ChinaStocks declines over? Joy time in the air,” China Xinhua News, state-owned media outlet, tweeted as the markets closed, accompanied by a photo of hot air balloons against a blue sky.

Still, the jury is out on what the end-of-week surge indicates — if it indicates anything at all. Those analysts who suggest the panic could be over are keen to cite Beijing’s interventions in the markets as the catalyst for the recovery; others are more reticent.

“Short and powerful rallies during bear markets are normal,” Tom Elliott, an international investment analyst at the financial consultancy deVere Group, told TIME on Thursday. “It was possibly triggered by government-encouraged buying by state-controlled companies, but in the absence of dramatic and substantial intervention by the authorities I wouldn’t read too much into it.”

State intervention, Elliott noted, may have in fact contributed to the market’s plummet over the past few weeks. The panic came only after three months of rampant growth, spurred by an epidemic of margin spending — essentially spending on a loan — that came to a screeching halt in June, when state regulators suddenly tightened policies on margin financing in June. Those Chinese investors who found themselves in dire straits had little choice but to sell their shares as a means of staying solvent.

In the weeks since, Beijing has desperately attempted to curb the sell-off it triggered, enacting a litany of interventionist measures ranging from cutting interest rates to banning major shareholders from disposing of their stocks.

“The Beijing authorities are determined to demonstrate that they can control this slide in prices,” Elliott said. “Chinese and global policymakers are only too aware how a market collapse could damage Chinese banks and household savings.”

TIME stocks

NYSE Explains Why It Went Down Wednesday

NEW YORK, NY - JULY 08:  Traders work on the floor of the New York Stock Exchange (NYSE) at the close of the day after trading was resumed an over three hour closure of the market due to a "technical glitch" on July 8, 2015 in New York City. Trading was to resume in the afternoon.  (Photo by Spencer Platt/Getty Images)
Spencer Platt—2015 Getty Images Traders work on the floor of the New York Stock Exchange (NYSE) at the close of the day after trading was resumed an over three hour closure of the market due to a "technical glitch" on July 8, 2015 in New York City.

It all comes down to a botched software update

The New York Stock Exchange crashed Wednesday at 11:32 a.m. ET and remained down for exactly 3 hours and 38 minutes. It caught many traders off guard and raised concerns of what was happening behind the scenes that might have caused the “technical glitch,” the company said it encountered.

The NYSE now has a detailed explanation and it all comes down to the rollout of a new software release. (The one that was referenced in Fortune‘s interview with trading systems expert Scott Hunsader yesterday.)

The exchange was prepping for a July 11 industry test that’s on the horizon, which will test the platform’s SIP timestamp requirement. The software update was rolled out to one trading unit–the standard practice. But, as investors started logging on Wednesday morning, a series of communications issues popped up between customer gateways (what investors use to connect to the NYSE) and the trading unit using the new software.

It turns out that those gateways were not loaded with the proper information needed to work in tandem with the release, so the NYSE updated the gateways with the correct version of software and opened for trading as usual at 9:30 a.m.

However, the update didn’t go as planned and the communication issues proliferated, causing the exchange to send out a message that a technical issue was being investigated at 11:09 a.m. ET before suspending all trading at 11:32 a.m. ET.

The NYSE then went about canceling all open orders as well as working with customers to reconcile orders and trades, all while restarting all customer gateways and implementing a complete system restart after consulting with regulators and industry peers. After that, the NYSE got everything back up and running by 3:10 p.m. ET.

TIME Markets

Here’s Why Summer Earnings Season Might Not Be Such a Bummer This Time Around

A trader works on the floor of the New York Stock Exchange shortly before the closing bell, June 29, 2015. U.S. stocks fell sharply in heavy trading on Monday and the S&P 500 and the Dow had their worst day since October after a collapse in Greek bailout talks intensified fears that the country could be the first to exit the euro zone.
Lucas Jackson—Reuters

Greece a wreck? Check. China in trouble? Check. But there're reasons to hope

It’s here again. The quarterly financial reality show that Wall Street calls earnings season. And for technology companies, it seems like an especially precarious time to talk to investors about their financial health.

The last earnings season in April was a dicey one for all but a few tech companies. If anything, the overall environment has grown even more uncertain, if not gloomier. And if there is anything that tech giants learned during the April earnings season, it was that storms in the global economy beyond their control are beginning to have a very real—often deleterious—effect on their bottom lines.

Are things as grim as they look? The expectations say so, but these expectations have been weeks in the brewing. Here are five clouds that are sure to hang over the summer season for technology earnings, along with one silver lining that could redeem of the concerns.

Greece is the word. Corporate executives love a scapegoat. Especially during earnings season. And even more so when they know that their reported earnings are likely to disappoint. This summer, there is no scapegoat more primed for sacrifice than Greece. Expect to hear how an imminent default will curtail revenue and profit growth, even and particularly among companies that have little if any business in Greece.

In some cases, this may not be as lame as it sounds. The concern about Greece all along has been what a default and subsequent exit from the Eurozone would mean for larger economies such as Italy and Spain. Beyond that, will growth slow in Europe’s broader economy, a key market for many multinational tech firms? And more immediately, will the US dollar remain strong? Recall that a strong dollar dented the revenue growth of many US tech companies last quarter, notably Facebook.

Tech companies can hedge against currency fluctuations, but this works better when things aren’t as volatile as they are right now. The dollar has remained strong against the Euro and other currencies between April and July. If anything, the recent turmoil in Europe has added to dollar strength that few companies had been expecting.

And the next few months could be just as uncertain, if not as tumultuous – which could lead many tech companies to be cautious when they offer guidance for earnings and the rest of the year. If so, expect a lot of conservative earnings estimates coming from companies as they hedge their forecasts into year that is becoming even cloudier and more unpredictable as it progresses.

A China meltdown. In a global economy where being successful increasingly means being multinational, the exposure to bonfires that are burning 6,000 miles away from Silicon Valley can deliver some blowback onto US companies. The crisis in Europe and the result is one example. Another, perhaps bigger threat emerged in June in a much larger market: China.

Over the past year, a stock bubble has been building on exchanges inside the Chinese mainland. Chinese markets rebounded nearly 7% Thursday after losing more than 30% of their value in the previous month. But what if this is just the proverbial dead-cat bounce? The concern for US tech companies has been what the fallout of the bursting of the Chinese stock bubble means for consumer spending on things like smartphones and online services.

A prime example is Apple. After being written off as an aging tech company, Apple once again revived its growth on the iPhone 6. Much of that growth came from China, where iPhone sales topped those in the US for the first time ever. But what happens when personal discretionary spending dries up in China? Is the iPhone seen as a necessity, or a luxury? We will find out when Apple – still as close as Silicon Valley has two a bellwether for the entire tech industry – reports earnings on July 21.

The fall and fall of the PC. When the iPad emerged five years ago, it precipitated a decline in PC sales. But a year ago, when iPad sales began to plateau themselves, the sales of PCsbegan to stabilize. That gave some hope to companies like Microsoft, Intel, AMD that they had more time to respond to the death of the PC and come up with alternative revenue streams.

In recent weeks, it’s become clear that PC sales are once again slumping, not just in spite of – but in part because of – the release of Windows 10. AMD warned investors this week tobrace for disappointing revenue. Analysts of Intel’s stock are urging its shareholders lower their expectations. Consumers may have written off the PC a few years ago, but this quarter may show that companies that relied on the laptop and desktop for decades continue to bleed out.

Smartphone sales aren’t what they used to be. Hardware manufacturers looking for growth has been focused on smartphones for the past several years. The feature phone of yore quickly became a relic of the aughts, while the functionality of smartphones quickly replicated when PC or laptop could do (see above).

In 2014, smartphone users grew 25% to 1.6 billion users, according to eMarketer. But sales growth is slowing. This year, smartphone users will grow by 16.8%. And IDC expects an even slower growth rate of 11.3%. As a rule, larger market penetration means slower revenue growth. And smartphone makers are finally hitting the diminishing returns of expanding into the largest market on the planet.

The catch for US investors is, even the growth happening now is going to companies that aren’t traded on US exchanges. Xiaomi, which has garnered a $45 billion valuation in private markets, sold 35 million smartphones in the first half of 2015 and plans to sell even more by expanding from China into India and Brazil.

Now look at the older, publicly traded smartphone makers. Samsung Electronics warned this week that its revenue would fall 8%, well below investor expectations. Microsoft laid off 7,800 jobs, largely because of its ill-considered purchase of Nokia and take a $7.6 billion charge against the 2013 acquisition. BlackBerry disappointed again on the back of poor smartphone sales. More phones around the world may not be translating into accelerating profits for US tech companies.

The valuation conundrum. Say what you will about the dot-com boom. Tech stocks then may have been grossly overvalued, but at least they were uniformly overvalued. Today, things aren’t so simple. The S&P 500 has a forward PE ratio of 16.5, while the tech portion of that index has a slightly lower PE of 15.5.

That’s thanks to aging giants like HP, with its forward PE of 8.3, and Intel (13.9) and IBM (10.3). But the flashier names in tech are much more expensive: Facebook is trading at 42.9 times 2015 earnings (while its revenue growth is slowing from above 60% a year to around 35% a year). LinkedIn is at 100 times estimated 2015 earnings, Netflix is at 500 times earnings, and Amazon is at 1,100%. Invest in a tech winner this month and you have to pay a rich premium.

The silver lining. There is, however, a wildcard inside the earnings season. It’s that, as a rule, much of the bad news has been evident for a while. And because investors have seen it coming for a number of weeks, they’ve had a chance to prepare for the worst. This leaves a significant potential for surprise. So you might look at the bearish mood and think things could get better.

So here’s what tech investors can reasonably look forward to opening several weeks. Like last quarter, if a company shows signs weakness, a selloff will likely ensue. But on the other hand, expectations in general are so low that any sign of surprising strength – even in an overvalued stock like Netflix or Amazon – will likely push share prices higher.

In other words, we’re in a stock-picker’s market. You’re either hero or a goat, and you’re only as good as your last quarter. Overall, given the bearish sentiments that the market has going into this tech earnings season, there seems to be room for positive surprises. But if many tech company earnings come in below expectations, there is also no shortage of scapegoats to go around.

TIME China

Volatile Chinese Markets Climb on Thursday Afternoon

State media was quick to celebrate the day's gains

Chinese stock markets surged on Thursday after state regulators enacted further drastic measures to offset an economic crisis.

When the markets closed at 3 p.m. local time, the Shanghai Composite Index sat at 3,709.33 points, up from 3,432 at market open. The lion’s share of the 5.76% jump came in the afternoon, following the announcement that the state would ban major shareholders — those with shares of more than 5% — from selling their stocks for the next six months.

State media was quick to celebrate the day’s gains. Xinhua News Agency tweeted that the jump was “long awaited” following “repeated supportive measures,” likely referring to Beijing’s recent efforts to stymie the massive sell-off in the markets of Shanghai and Shenzhen.

The recent volatility, however, suggests that Thursday’s triumphs could be temporary — one oscillation in a rapidly fluctuating system.

“Short and powerful rallies during bear markets are normal,” Tom Elliott, an international investment analyst at the financial consultancy deVere Group, tells TIME. “It was possibly triggered by government-encouraged buying by state controlled companies, but in the absence of dramatic and substantial intervention by the authorities I wouldn’t read too much into it.”

Elliott says that state interventions might eventually stabilize the market, but in the meantime, the current situation “absolutely” qualifies as a crisis. In spite of Thursday’s jumps, confidence in the market appears to remain sparse. The South China Morning Post reports that 128 additional companies suspended the trading of their shares in China’s two stock markets, bringing the total number of suspended companies to 1,400 — half of all companies listed on these markets.

Read next: Why China’s Stock-Market Meltdown Could Hurt Us All

Your browser is out of date. Please update your browser at http://update.microsoft.com