Key Takeaways:

  • Markets hit hard by China concerns in steep selloff
  • Slight rebound from lows, slip in volatility from earlier highs, could be supportive
  • Fed meeting tomorrow in focus as near-term taper fears may be starting to ease

It was “manic Monday” on Wall Street.

In a blunt and unpleasant reminder of how crises thousands of miles away can puncture the heart of the U.S. markets, a real estate crisis in Hong Kong took much of the blame for the sharpest daily losses in more than two months for the major U.S. indices. The so-called “horsemen of risk” like bonds, volatility, the U.S. dollar, and “defensive” stock sectors climbed back into the saddle after months of lazing around the corral.

While analysts mainly cited the issues around Hong Kong-listed Chinese developer Evergrande Group and whether Beijing will let the debt-laden firm fail, that…

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