AUTOREFRESH 
S&P flirts with 1100 again
By Jamie Coleman || November 11, 2009 at 14:51 GMT
|| 12 comments || Add comment
The S&P is testing the 2009 highs at the 1100 level once again. If that level cannot be cleared, the market may decide that 1.5060 (EUR/USD) and 1100 failures in the S&P are reason enough to book some profits. Small stops are clustered below 1.5000 while bids lie at 1.4970 and 1.4920/30. We trade now at 1.5017.
I agree with that other poster, I found your site thru FX Street also and love it!! Funny, when the China Economic Data broke last night Shanghai sold off cuz they focused in on the future of the decrease in lending….While today, it appears, that the US Indicies are just looking at the production and sales numbers, which happened cuz of the increase in loans. Wonder why?
Aladin!!!!!thanks!!!
Chinese banks usually have yearly targets and will slow down lending when targets are met. So traditionally lending at year end periods would be lower because targets have already met. Chinese equities have already gone up 10% in November to welcome the data. So yesterday was only a mild correction to the continued rise in past trading days.
kwplam…Very true about the yearly targets. But the Govt had targets on Stimulus Money in total and of course have been talking about having to change the type of Stimulus cuz of the problems it is facing with current stimulus programs of property valuation and fear of equity bubble….also did you notice the current rise in the Indices were not followed by the same movement in the Shanghai Copper Futures…..
Kwplam..Also Obama in China this week will be VERY interesting to watch. Obama appears to want to talk about Chinese buying USA goods and China is very upset by the Tariffs esp cuz Exports are so weak and they feel they have been doing everything to help global economy by spending money building way too many cars and this is our thanks to them….that’s the take I am getting from reading the chinese papers online…is that your take too??
Recently I have heard a numbers of theoretical demands from Obama government asking other countries to comply. For instance, Geither asked Japan to export less and the Japanese to consume more. Japan is an exporting country with scarce resources. How can it survive without export?
Many manufactures have already moved their production facilities to China and actually Chinese are buying lots of US goods that produced in China. I do not know what Obama are asking China to buy. Demands are determined by market not by government. So asking China to buy more US good might only be a theoretical demand only.
The issue, kwplam, is even more macro than that…the west, not just the US, has been asking China to consume more for years. If they consume more, they save less, so there is less capital that has to be shipped overseas for investment.
They want the current account surplus to shrink to that the world is not awash in Chinese excess reserves. Many, including me, think that the credit crisis was a result of excess capital trying to find a return which led to banks and others to lower lending standards to try and find a home for those funds…
Take away that capital imbalance and the US will have no choice but to save more, which will strengthen dollar, lower consumption here and put the system on a more sustainable footing…
That’s the academic notion, anyway, though I buy it…
It is a mission impossible. If you look at the list of top foreign reserve countries you would find that Asian countries are majorities with China and Japan on the top. Even Singapore and Thailand rank higher that US. High saving rate is the Asian’s culture .I think nobody can change this, not even Obama.
Jamie on Asian Bloomberg, time after time I heard that it would take almost a generation to move the Chinese Citizen to a consumer….it’s not their nature at all..fwiw….USA seems to believe it’s an overnight thing sometimes.
That is undoubtedly true, but we are talking at a national level. By revaluing the currency dramatically (40-50% is what most observers think is appropriate), China would no longer need to intervene to weaken the Yuan, the source of much of the reserves. Also, as China shifts from an agrarian to a manufacturing economy, the middle class will grow and consumer more, by definition…
I agree, it will not happen overnight, but it will happen eventually, so they may as well take advantage of their strong economic framework to make it happen on their own terms than have it happen overtime.
The demographic argument is that China will grow old before it grows rich since the population has stopped growing at its replacement rate…40 years goes by faster than you think…
It’s an endless debate, but a fascinating one because the stakes are so high…
You can’t fight demographics. Just like a punter can’t fight the market…
Jamie, China’s Manufacturing economy is dependant on Exporting…will be an economic framework that will be diffcult to change….maybe that is the reason why they are focused on M and A of resources outside of China to build that new model?