US equities keep on adding to gains. What's driving the rally
It's turning into a banner day
The S&P 500 has extended today's gain to 67 points, or 1.53%, to 4463. It opened the month at 4522 so we're another 60-point rally from extending the monthly streak of gains to 8 with a week of trading to go.
I believe this is all about the abundance of signals that China is on the case in regards to Evergrande, not the Fed. That's a playbook I outlined early yesterday, just as this move was getting underway.
So while markets have offered some positive ticks, there's still a considerable way to go here. Obviously, there's going to be some waiting until after the Fed, but assuming no big hawkish surprise, we'll see a flood of buying in risk assets afterwards
Last week's high of 4485 is the next level to watch, but it's a minor one.
Another area to watch is bonds, if yields keep on rising they could put a damper on stocks. But I don't see that as a problem until 10s get to 1.6% or 1.7% at the very least.