The recent Shanghai rally is off again today, up 1.4% and pushing new highs in the rebound:
There’s not a lot of sense to it but as I noted this morning the Shanghai crash seems to have played a leading role in disseminating bearish thinking about China among global fundies through the August equity shock, from BofAML:
When China closed for Golden Week, markets bottomed and rebounded strongly and sentiment has lifted along with them.
Now we’re back Shanghai is up and so, it seems, are S&P500 futures:
This is all circumstantial and could be entirely unrelated (correlation not being causation and all of that) and I rather hope so. Yoking global movements to the deeply busted communist casino is a very bad idea on the way up, down and around.
Perhaps a better, or at least associated explanation is the increasingly universal assumption that Fed rate hikes are off for 2015, from Zero Hedge:
That, in turn, could be lifting Shanghai, along with all other EM forex and the Aussie.
Something of a pause in our Chimerican unwind.