QuiCQ 27/09/2024
“He suffers more than necessary, who suffers before it is necessary.”
— Seneca
European and US markets rallied yesterday, partially due to a good earnings report and great AI outlook from Micron Technology (MU), but probably mostly due to the template set for once by the Chinese stock market, which also continues to power ahead this early Friday morning.
In Europe, it’s been a while that we have seen France’s CAC-40 leading the rally, but this week this has been mostly the case. Why? Of course due to the indexes high exposure to luxury stocks (LVMH, Hermes, Kering et al.) and their performance undeniably related to the fortunes of the Chinese economy/stock market.
On Wall Street the rally was broad, with 8 out of 11 sectors higher on the day, led by Materials (+2%) and lagged by Energy (-2%), which seems an widely odd spread between two sectors threading usually similar cycles.
One culprit for the week energy sector performance is clearly another slump in the price of crude oil, which has retread by well over five percent over the past two sessions. The slump in price follows fears over higher production output, especially by Saudia Arabia and Libya, as a Financial Times report showed earlier this week.
Gold in the meantime continues to jump from record to record, ticking in a new intraday ATH at 2,685 yesterday.
But back to Wall Street for another moment, where the S&P 500 closed yet another record high. Of course, this was not only due to MU and Chinese stimulus, but also a stronger-than-expected GDP report and lower-than-expected jobless claims. Add the easing financial conditions to that … et voila!
The equity fireworks continue this morning in Asia, of course led by China. It may be time to take partial profits though if you followed our buy advice in Monday’s Quotedian (click here), as today we saw kind of an upside crash, as futures on the CSI 300 traded intraday up more than 8% and leaving a big gap to the cash index.
Chinese stock markets are putting in an epic week of positive returns following the PBOCs stimulus bazooka. Alibaba is US-listed one of the most widely traded Chinese stocks. Everything else, explained below:
Madness of the crowds.
