China taketh and China giveth. After Friday’s selloff was caused by some tightening lending standards and increased short opportunities in the Chinese market, we saw a role reversal as China’s central bank acted to ease. In now normal knee jerk reaction markets jumped when any central bank in the world says jump. The S&P 500 gained 0.92% and the NASDAQ 1.27%. On Sunday, China’s central bank lowered the reserve requirement ratio for all banks by 100 basis points.
Fun fact: Of the 59 S&P 500 companies that had reported by last week, 75 percent had topped profit expectations, above the 70 percent average for the last four quarters. However, only 45 percent of companies beat revenues estimates, compared with 58 percent in the last four quarters.Continue reading