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T3's Take 3: Chinese Markets Skyrocket on Orders From the Government


Today's financial recap and tomorrow's financial outlook.

Today on T3 Live

Daily Market Report author Jeff Cooper initiated multiple short swing pilot positions today.

The stocks he targeted were (SOHU), Sina Corp (SINA), and Synaptics (SYNA).

Click here to learn more about the Daily Market Report

Fed Rate Hike

Many investors are still questioning when the Fed will gear up for lift-off. Up until the past few weeks, the consensus was that September will see the first rate hike, but recent economic turmoil has called into question the possibility.

Comments from Fed officials today indicate that the Fed is not dead-set quite yet.

Fed Vice Chairman Stanley Fischer stated that the US is heading in a direction towards higher rates as recent economic data has been impressive. However, he added that the Fed is watching international issues like the drop in the Chinese yuan, and admitted that market action can affect rate policy.

President of the Atlanta Fed, Dennis Lockhart said that the chances of a September rate hike are about 50-50, and that the Fed is closely eyeing volatility in the markets.

This means that next week's NFP report will be even more important than usual.

World Equity Markets

Amid all the disucssions, the US markets opened lower. Trading was flat until lunchtime when there was a small rally, but gains were quickly given up and the indices fell back into the red. The S&P 500 closed up 0.1%. The Russell 2000 outperformed its major counterparts, closing up 0.8%.

European equities finished the week mixed. The German DAX closed down 0.2%, while the French CAC gained 0.4%. UK GDP data was released today, showing 0.7% growth for Q2.

Chinese markets continued their gains from yesterday as the Shanghai Composite closed up 4.8%. According to Bloomberg, unnamed sources claim that government has intervened in the market, buying up large portions or major companies to make markets rally ahead of a September 3 military parade.

The Hong Kong Hang Seng fell 1.0%, Investors in Japan saw that the country's inflation fell back to 0 in July, which was actually above expectations.

Japan's Nikkei rallied 3.0%.

The bullish action in Asian markets helped push the price of crude oil up 6.5%.

US Economic Data

PCE deflator data, which is closely watched by the Fed as a measure of inflation, was released this morning. The deflator rose 0.1% month-over-month, which was in-line with expectations.

Personal spending increased by 0.3%, while economists were expecting an increase of 0.4%. Last quarter's data was revised upward to 0.3% from 0.2%. Personal income rose 0.4% as expected.

Monday's Financial Outlook

US economic data for Monday will include ISM Milwaukee, Chicago purchasing manager, and Dallas Fed manufacturing acitivity.

Overseas economic data will feature Japanese housing starts, Euro-zone CPI, and German retail sales.

Matrix Service (MTRX) will announce earnings after the close on Monday.
No positions in stocks mentioned.
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