China Rally Fades as News Flow Slows For a Day

Yesterday’s China stimulus rally continued though Asia Pacific markets overnight where Shanghai gained 1.1% and Hong Kong climbed 0.7%. The rally has faded this morning, however, particularly in commodities, where US Crude Oil is down 1.9% and Copper is down 0.01% amid questions over how much stimulus may be needed to get China’s economy going again.

US index futures are trading flat to down 0.2%, digesting yesterday’s US market gains of 0.2%-0.6% which included new all time highs for the S&P 500 and the Dow Industrials. The US 10-year treasury note yield continues to creep back upward, trading above 3.75% today.

European market action is mixed with the Dax down 0.25%, and the FTSE up 0.25%. Gold is up 0.25%, while cryptos and major currencies are quiet.

It’s a light day for business news with the main events being US new home sales at 10:00 am EDT and Micron Technology reporting earnings after the close. Things pick up again tomorrow with US Durable Goods Orders, Swiss National Bank President Jordan’s final meeting and interest rate decision, nine Fed speakers, including Chair Powell, ECB President Lagarde speaking, and Costco* earnings.

*Shares of Costco are held in portfolios managed by SIA Wealth Management.  

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