The Olympics are finally over, and with a spectacular ending that reportedly had Jimmy Page performing “Whole Lotta Love”.  I didn’t see the performance – I was in a part just south of the Olympic Stadium with three friends, trying to get a glimpse of the fireworks – but I am definitely curious to know what the very prim leadership were thinking as the guitar chords crashed about and as someone (presumably) screamed out “Wanna give you every inch of my love” (although perhaps in deference to the local leaders they skipped the vocals). 

Whatever the fate of the Olympics, the up-and-down struggling in the stock markets that characterized the Olympic period is certainly not over.  On Friday, the last trading day of the Olympic period, the SSE Composite declined by 1.1% to close at 2405, which brings a net loss of just over 11.8% for the SSE Composite since August 8, the day of the Opening Ceremonies.

Today, the market bucked the trend (sort of).  After a quick downward break in the first half-hour of trading, the market recovered and was pretty strong for most of the day.  The best performers were the banks, who have been reporting good earning growth.  In the last hour of trading, however, on admittedly weak volume, the market suddenly gave up most of its gains, with the SSE Composite closing the day at 2414, up by just under 0.4%.  The Shenzhen markets did not do as well, and most Shenzhen indices ended the day down by 0.4-0.5%.

I spoke to various friends in the market to get information on what has been driving trading, but it was hard to get a sense of strong conviction either way.  Economic numbers are ambiguous, and I think most participants are hoping for some sort of fiscal stimulus, while at the same time dreading that it won’t make much of a difference anyway.  I think there is also a lot of nervousness about a psychological post-Olympic let-down.  After all the anxious excitement of the Olympics, with the constant, non-stop coverage in the press and on television, there will be little left of the color and excitement and a lot of work repairing the disruptions.  I don’t know when and how the many migrants and poor who were ejected from the city will return, but I would guess that their welcome will be muted.  Meanwhile we have been getting sporadic press reports about the cost to farmers within the region of the Olympics water policies.

The main thing is that now that the Olympics are finally over, we should quickly return to a less colorful reality, and policy-makers and analysts will get back to trying to figure out what the next few months are going to look like.