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Two Ways: Green Shoots in China

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Strengthen your portfolio in good times and bad.

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Bulls Rise on China

Economic data from China is giving a boost to the global equity markets. The Financial Times reports China's official purchasing manager's index pulled back slightly to 53.1 last month from 53.3 in April. But the figure still marks a third consecutive month that the number came in above 50, the dividing line between a contraction and expansion.

Historically, the index has shown to be seasonally weak in May over April. Goldman Sachs said in a research note that the fact that May PMI held up despite the seasonally weak period means fears are unfounded and expects strong growth in domestic demand, especially in fixed-asset investments. Elsewhere, Jing Ulrich, head of China equities at JP Morgan, also said manufacturing in the country is likely to continue expanding, supported by more of the roll-out of the government stimulus.

From the Bull Pen: Could the better plays lie in the business partners of China? Consider Brazil and the iShares MSCI Brazil ETF (EWZ). One can set an initial position here with a sell stop near $53-54.

From the Bear Cave: For a downside play, one can look to Alaska Air Group (ALK). The stock as well as the sector has displayed poor relative strength. Consider entry on a rally back to its 20 DMA ($16.50), if and when.

Quick Check Around the World

Asian trading closed with the Hang Seng 3.95%, India 1.47%, Shanghai 3.36%, Nikkei 1.63%, and Taiwan 0.92%.

Glancing towards Europe, we see the CAC 2.08%, DAX 3.18%, FTSE 1.62%+

As of 8:05 AM EST, S&P Futures are trading +12 to 930.00, and Nasdaq futures are +12 to 1447.00.

A Look at Commodities

Over in commodities, crude oil is trading +1.52 to 67.83 while gold is +7.10 at 985.90 this morning. Silver is +0.260 to 15.87 and copper +6.35 to 226.10.

The dollar index is -0.5550 to 78.8750.

On the Radar

Economics

08:30 Personal Income -0.2% Cons.
08:30 Personal Spending -0.2% Cons.
10:00 Construction Spending -1.8% Cons.
10:00 ISM Index 42.00 Cons.

Click here for the full trading radar.

Welcome back, Minyans. Good luck today!
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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