by Chris Becker
Its a divergence of risk story last night as Chinese stocks swoon, US stocks lift to a new daily high as oil rebounds. In economic news, the UK GDP came in as expected, a little under 2% but exports slumped amid falls in investment, but no comparison to the year on year slump in Australian capex. More on that later. The other big print last night was US durable goods order which exceeded all expectations and was possibly the catalyst for the moves on Wall Street. Tonight we might get a follow through and a decent bear market rally if the US GDP print has a similar outcome.
The Shanghai Composite was sliced to ribbons yesterday, falling more than 6% taking out the lower short term moving average and almost back down to terminal support. This price action is supposedly due to the upcoming G20 meeting, but I did not recently that: “this is for now only a bounce, not even a bear market rally and could reverse very easily on weak conviction” – indeed!
