(AS of 7:15 am PST)
US stocks opened in an eerily
similar fashion to yesterday’s session, with the major benchmarks rallying from
the open. The DJIA is up 30 points at this writing, while the S&P500 and
Nasdaq are also trading above 2%. The ‘dead cat bounce’ played out just as
suspected yesterday, with gains dissipating as the day wore on resulting in the
sixth consecutive session of steep losses for US stocks. Today’s rally once
again came on the heels of further Chinese stimulus and positive economic data.
China announced a fresh round of stimulus Wednesday, with the PBOC telling
markets it would inject $21.8 billion into the financial system as a part of a
new easing effort. Chinese and European stocks finished the day lower despite
the stimulus announcement which doesn’t bode well for US markets sustaining
their early morning rally. On the economic front, a strong reading on durable
goods orders helped lift confidence early, as business investment rose to its highest
reading in 13 months. Gold and other precious metals are lower this morning,
again seeing outflows from the early surge in stocks. Oil prices are stable
this morning but trade just shy of $40 per barrel. Interest rates are higher
while the US dollar index continues to recover from losses earlier in the week.
With yesterday’s 600 point intra-day swing fresh in investor’s minds, it’ll be
impressive if today’s early rally can hold throughout the session.
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