By Chris Becker
Good news everybody! Its bad economic news so let’s buy stocks and sell bonds! That’s the narrative of the evening with US advanced retail sales and industrial production prints both surprising on the downside, particularly manufacturing. This sent expectations for a rate hike tomorrow from the Fed to the floor and Treasuries on the short end of the curve sold off spectacularly, the contagion spreading to the long end with 10 years off a full 10 bps and other sovereign bonds sold off as well. Stocks automatically rose on the rate relief so we stand at a precipice of a Fed that could poleaxe stocks if it even hints at a rate rise!
Recapping Asia’s session, where it was a torrid day for Chinese stocks, as the Shanghai Composite may have been left to its own devices for once, falling on the open and not interfered with after the lunch session, down nearly 3% to 3114 points and still above terminal support at 3000 points but looking very very weak here:
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