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  • STOCKS JUMP ON SYRIA AND CHINA - By WSS Research Desk 0 comments
    Sep 10, 2013 2:26 PM | about stocks: MCD

    By Carlos Guillen

    Stocks made a very encouraging jump at the start of today's trading session and have been able to hold on rather steadily as there now appears to be another option to avert military action in Syria and as better than expected Chinese data has brought a new sense of vigor to equity trading.

    Clearly, the main driver today has been the new alternative to averting military conflict with Syria. As it stands, Syria has agreed with a Russian proposal to put its chemical weapons under international control. This rather surprising turn of event has given the U.S. an opportunity to refrain from military actions while not looking weak on the matter. At the moment a bipartisan group of influential senators is drafting a new resolution that would postpone a military strike against Syria to give the United Nations time to pursue a diplomatic alternative; however, it should be noted that this would also authorize the use of force if those efforts fail.

    Earlier today data from China was also a market driver as it showed its output grew at the fastest pace in 17 months in August; in addition, its broadest measure of new credit almost doubled from July, demonstrating that China's economy is gaining some momentum once again. According to China's central bank, factory production rose 10.4 percent from the year-ago period, landing above economists' forecasts of 9.9 percent. Moreover, aggregate financing was 1.57 trillion yuan, well above forecasts calling for 0.95 trillion. The news is certainly encouraging as it is apparent that the credit slowdown in China is now over. Of course, there is a slight downside to this, and that is much less stimulus, which may not assist stocks this time around; more on this below

    On some other noteworthy items, McDonald's Corp MCD gained mildly after the fast-food restaurant chain reported a better-than-expected 1.9 percent increase in global sales at established restaurants in August. Also worth noting is that Bank of America, Alcoa and Hewlett-Packard will be dropped from the Dow Jones Industrial Average and replaced by Nike, Visa and Goldman Sachs. The change will take place on September 20 and will be the most significant change in the last 10 years.

    China Production Affirms Rebound
    By David Urani

    HSBC gave the global markets a breath of life last week on the release of their Chinese manufacturing PMI index. It wasn't spectacular at a reading of just 50.1 (50 is the threshold between growth and contraction) but it was a big improvement from the decline in July. As we noted yesterday, a strong exports number out of their official trade data reaffirmed the improved reading on the PMI index.

    Today we got one more piece of affirmation for the Chinese industrial sector in August industrial production. The National Bureau of Statistics in Beijing puts activity for the month up 10.4% year over year. That's up from 9.7% in July and possibly reflects some of the government's efforts to reduce taxes for small businesses, railway spending, and more lending.

    China Production Affirms Rebound
    David Urani

    HSBC gave the global markets a breath of life last week on the release of their Chinese manufacturing PMI index. It wasn't spectacular at a reading of just 50.1 (50 is the threshold between growth and contraction) but it was a big improvement from the decline in July. As we noted yesterday, a strong exports number out of their official trade data reaffirmed the improved reading on the PMI index.
    Today we got one more piece of affirmation for the Chinese industrial sector in August industrial production. The National Bureau of Statistics in Beijing puts activity for the month up 10.4% year over year. That's up from 9.7% in July and possibly reflects some of the government's efforts to reduce taxes for small businesses, railway spending, and more lending.

    So between the PMI, trade, and industrial production readings we've got confirmation of a good month in Asia, which had question marks previously as there had been a clear slowdown in the few months prior. And when China is growing again that's good for all of us. Additionally with this improved production figure, there's a growing sense that the government can actually hit its 7.5% GDP target for this year.
    So between the PMI, trade, and industrial production readings we've got confirmation of a good month in Asia, which had question marks previously as there had been a clear slowdown in the few months prior. And when China is growing again that's good for all of us. Additionally with this improved production figure, there's a growing sense that the government can actually hit its 7.5% GDP target for this year.
    https://www.wstreet.com/user/register.asp?source=3

    Stocks: MCD
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