That didn’t last long–yesterday’s relief rally collapses around the globe
Yesterday’s rally–call it relief, or oversold or a dead cat bounce–ended with a loud thud today. And I don’t think this is a(nother) one day sell off.
It’s way worse than a shocking 7% drop in 29 minutes: China looks to be headed to Stage 2 in a long-term crisis
To subscribe to JAM you need to fill in some details below including, ahem, some info on how you'll pay us. A subscription is $199 (although if you're subscribing with one of our special offers it will be lower) for a year for ongoing and continuing access to the...Back from a holiday, China’s government resumes buying stocks
The People’s Bank and the rest of the Chinese government has come back from its holiday ready to buy stocks and buy some more in Shanghai. And the buying is going to be conducted on the same very obvious end-of-the-day pattern as before last week’s break. Goldman Sachs today put the total buying by the government in the Shanghai bear at $236 billion
Saturday Night Quarterback says, For the week ahead expect…
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China gives global stocks a break by going on a two-day holiday
Yesterday and today, I think it was the impending holiday closure that prevented really, really bad news on the Chinese economy from turning into another selling spree. The official Purchasing Managers Index for the manufacturing sector fell to 49.7 in August from 50 in July. Any reading below 50 indicates that the sector or the economy is contracting. The August read of 49.7 is the first time the index has been below 50 since February
Beijing is still putting cash into Shanghai stocks but only after 2 p.m. and only into the biggest of big caps
Today it’s clear that that the government’s new policy of no direct purchases really means no direct buying for most of the day and then direct buying of shares of only the biggest companies on the Shanghai exchange in the last hour or two of trading.
Chinese regulators change course again–now it’s arrests to stop China’s stock market bear
A week after China’s financial market regulators sent the Shanghai and Shenzhen markets tumbling by announcing that they were ending their direct buying of shares on those exchanges, and days after those same regulators sent shares climbing again by announcing that they would reverse that decision and resume direct purchases, today the Chinese government has indeed decided to end direct share purchases.
Why profit taking in Shanghai turned into panic selling
What seems to have pushed the markets from profit taking to panic? Speculation that the Chinese government was about to reduce cash support for equity markets. Some traders decided that the China government had targeted 3,800 (or was it a nice round 4,000?) on the Shanghai Composite as sufficient to permit a reduction in government cash
Are promises enough to end the bear in Shanghai and Shenzhen?
The government has arranged for state-run margin fund—China Securities Finance—to have access to 3 trillion yuan ($483 billion) in margin power in its own stock market version of Mario Draghi’s 2012 “whatever it takes” to defend the euro pledge to restore confidence in the Shanghai and Shenzhen markets. Today it’s working with the Shanghai market up 3.51%
The People’s Bank says stability has returned to the Shanghai stock market–but this could be just another set up for a further market retreat
To me the People’s Bank has misread what the markets were afraid of. The markets weren’t afraid that the Chinese government wouldn’t pull out its usual bag of tricks to prop up stock prices. Instead financial markets were afraid that the usual tricks wouldn’t work. And those fears haven’t been removed by the July 15 report of 7% economic growth
Sector Monday (on Wednesday): Will China’s bear market lead to an end or acceleration of the anti-corruption campaign–with its huge effect on sales of luxury goods?
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