David Fry's Market Outlook for Thursday

You're reading everywhere about how U.S. stock markets weren't about to be Shanghaied twice. The above cartoon says as much.

Notwithstanding the ADP jobs report [somewhat weaker] and Fed minutes [housing troubles could linger longer] was news that the S&P hit a record high.

As for China, below is a chart of a relevant Shanghai Index [CSI 300--which is made up of 300 A shares trading in both Shanghai and Shenzhen]. The chart is courtesy of Bloomberg, and shows the market sharply affected overnight. Most Chinese investors respect authorities and yield to their desires, if only temporarily -- "you can't stop em'; you can only hope to contain em'!"

Meanwhile iShares Trust FTSE-Xinhua China 25 Index Fund (FXI) is the most popular, but it hasn't been moving along with market indexes like the CSI 300. After all, FXI contains only 25 of the largest Chinese companies.

Let's look around at some other U.S. sectors.

Overseas we'll check on the usual suspects.

We set some records and avoided the Shanghai contagion. But, we have two important days ahead with Friday's jobs number looming large.

Pundits struggle to find words to describe market action. The dollar's action was funny and, not to single-out anyone in particular, but this comment attracted my attention: "The FOMC discussion leaves a tangential impression that growth prospects have softened slightly going forward, while inflation remains stubbornly above comfort levels." Balderdash!!!

Disclaimer: Among other issues, the ETF Digest maintains long or short positions in: S&P 500 Index (SPY), iShares Trust FTSE-Xinhua China 25 Index Fund (FXI), iShares Russell 2000 Index ETF (IWM), MidCap SPDRs ETF (MDY), NASDAQ 100 Trust Shares ETF (QQQQ), First Trust DJ Internet Index ETF (FDN), streetTRACKS Gold Trust ETF (GLD), PowerShares DB Energy Fund (DBE), Rydex S&P Equal Weight Consumer Discretionary ETF (RCD), streetTRACKS KBW Bank (KBE), iShares MSCI EAFE Index Fund ETF (EFA), iShares MSCI Emerging Markets ETF (EEM), iShares S&P Latin America 40 Index Fund (ILF), iShares MSCI Australia Index Fund (EWA), iPath MSCI India ETN (INP), iShares MSCI Germany Index Fund (EWG), iShares S&P Europe 350 (IEV) and iShares MSCI South Korea Index Fund ETF (EWY).