Everyone knows about the weather, mediocre economic data and overvalued tech stocks. What makes today different?

Here’s a recap of the relevant market news in the US today:

  • Initial jobless claims at the best levels since 2007
  • Weak reports from Dollar General and Bed, Bath and Beyond

It’s early in earnings season so results from those companies might have a larger effect than normal but, c’mon, not enough to knock the S&P 500 down 30 points.

For the answers, don’t look to the US, look abroad. To the East, to the Far East. Here are the two reasons:

  1. Chinese trade data was soft. There were some massive skews in the numbers due to fake invoicing at this time last year but the market doesn’t care.
  2. Second, Chinese Premier Li Keqiang ruled out a major fiscal stimulus program to cover short-term economic volatility. That’s the equivalent of the the Fed or ECB saying “you’re on your own”.

Here’s what Li said:

“We will not take, in response to momentary fluctuations in economic growth, short-term and forceful stimulus measures,” he said. “We will instead focus more on healthy development in the medium to long-term.”

“We have set our annual economic growth target at about 7.5 per cent. As it is an approximate figure, it means there will be fluctuations.”

“It does not matter that economic growth is a little bit higher than 7.5 per cent, or a little bit lower,’’ he said. “As long as we can ensure relatively sufficient employment and do not have relatively big fluctuations, then economic growth will still be in a reasonable range.”

This is another signal that Chinese leaders want a shake out the excesses from the economy. The Chinese view is long and unlike the US, leaders won’t panic if stock markets fall 10-20%.