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T3's Take 3: China Spike Brings the Bulls Back to the Party One More Time


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

Today on T3 Live

They say volatility is a traders best friend -- but like so many adages it's hard to put into practice. The last week has more than a few traders thinking, 'be careful what you ask for'. You've got to have a method to take advantage of volatility. Whether we like it or not, we're in a pattern recognition game. Nothing's changed economically from Monday's 600 point down day Wednesday's 600 point up day. There are no fundamental metrics one could have used to trade these moves....

Click here to read more from Jeff Cooper

US Economic Numbers

Investors were on their toes this morning as revisions of second quarter US GDP data was released, and the numbers were much0 better-than-expected.

The US economy grew 3.7% in the second quarter, a major improvement from the initial 2.3% estimates. Economists surveyed by Bloomberg expected an increase of just 3.1%.

Consumer spending received an upward revision to 3.1% from 2.9% for Q2. This was a big improvement from the first-quarter, when growth came in at 1.8%.

Jobless claims data released this morning was also strong.

World Equity Markets

China roared back today, delivering a healthy dose of confidence to traders today.

The Shanghai Composite jumped up 5.34%.

Bloomberg, citing unnamed sources, reported that the Chinese government secretly intervened in the market to prevent any possibility of a decline today, and the government bought massive amounts of stock in major companies. The source also claimed that the reason for the secret government intervention is the upcoming September 3 military parade. Surrounding Asian markets also rallied, with the Nikkei finishing up 1.1% while the Korean Kopsi gained 0.7%.

Europe also got a boost as lll major indices in Europe finished higher than 3%.

In the US, the S&P 500 reacted well to the GDP data and the rebound in China.

Markets opened higher and rallied as the day progressed, with the S&P finishing up 2.4% after an acceleration into the close. 

Crude oil's 11% rally was a major factor in the US rally, as investors have been troubled by downward volatility in oil prices. As a result, energy stocks led the market with a 5% gain.

Fitbit Slumps

Fitbit (FIT) shares slumped 8.9% today after IDC Research data indicated a rapid increase in Apple (AAPL) Watch sales. Apple had reported strong Watch demand on its last earnings call, and yesterday, Best Buy (BBY) stated that it will be aggressively rolling out the Watch in its stores.

Therefore, investors are increasingly concerned that FitBit demand will be hurt by the Apple Watch.

Friday's Financial Outlook

US economic data for tomorrow will feature personal income & spending, PCE data, and the University of Michigan sentiment report.

Overseas data will feature British GDP and German CPI.

Big Lots (BIG) and Scotiabank (BNS) will release earnings tomorrow before the open.
No positions in stocks mentioned.
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