Posted on 09/02/2015 5:38:17 AM PDT by blam
Akin Oyedele
September 2, 2015
US stocks are rebounding after a very ugly start to the month.
Near 7:50 a.m. ET, Dow futures were up 109 points, S&P 500 futures were up 12 points, and Nasdaq futures were up about 28 points.
Stocks had the worst start to September in 13 years, and this is historically the weakest month of the year for US equities. On Tuesday, the three major indexes fell nearly 3%, and the S&P 500 dropped back into correction, defined as a 10% decline from recent highs.
Experts pointed, again, to concerns that the world economy is slowing down and what this means for US stocks. We got ISM manufacturing data from China and the eurozone, showing that the sector is softer in both regions. Meanwhile, we learned that Canada entered a recession after its economy shrank for a second straight quarter.
In a morning note to clients, Deutsche Bank's Jim Reid wrote of the volatile market environment: "One of the biggest problems we face is that there is no historical template for current global market conditions so we’re all flying blind to a large degree. Never before have so many of the most important countries in the world printed so much money and left base rates at near zero for so long. Also never before has the largest economy in the world tried to start a slow process of reversing said extraordinary policy."
(snip)
(Excerpt) Read more at businessinsider.com ...
Chinese Stocks Just Staged A Dramatic U-turn
"...the government, along with the so-called “national team”, were actively intervening in the market to ensure large cap stocks finished higher..."
The Chinese go on a 3 day “ banking holiday” starting tomorrow
Shutting down factories etc
Ostensible reason given is a “ military parade” celebrating the end of WW2
So,the Ho Lee Zhit after hours banking team will be on break
Interesting to see what happens
( if they wanted a meaningful,celebration of ending WW2 they’d blow up Japan)
Stock price “corrections” are just the symptom of a much more serious disease. Government interventions to “reverse” these supposed inequities only puts the problem off until later.
P/E ratios are about as unfavorable to actual value as the government interventions. When P/E ratios are at reasonable levels, the market becomes MUCH less volatile.
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