Stock markets around the world have been rallying overnight and into this morning after Chinese President Xi and the country’s Politburo indicated that not only do they support the PBOC’s recent monetary stimulus moves, they also support using fiscal stimulus to support China’s economy and real estate market.
On this news, Hong Kong rallied 4.2% and Shanghai soared 3.6%. In Europe today the Dax is up 1.2% and the FTSE is up 0.2%. In early US trading, Dow Futures are up 0.4% and S&P futures are up 0.7%.
Commodity action is mixed. Copper is up 2.0% on the China news, but US Crude Oil is down 2.9% on reports that Saidi Arabia has dropped its $100/bbl price target and is preparing to ramp up production to regain market share lost in the cutbacks of recent years. In currency action, Gold is up 0.5%, trading at record levels near $2,700/oz.
NASDAQ futures are up 1.4%. Tech stocks appear to be getting a boost from chipmaker Micron Technology, which is up 16.9% in premarket trading after the company beat the street on earnings, sales and sales guidance. Southwest Airlines, meanwhile, is up 4.8% after increasing its Q3 revenue forecast. Costco* reports earnings after the close today.
In economic news, the Swiss National Bank cut its benchmark interest rate by 0.25% to 1.00% as had been widely expected. Eight Fed officials, including Chair Powell, plus ECB President Lagarde are speaking today. US Durable Goods orders crushed expectations (+9.9% vs street -2.6%). US initial jobless claims also beat expectation (218K vs street 225K).
*Shares of Costco are held in portfolios managed by SIA Wealth Management. nt.