I can't really take credit for the 6% morning session rally in H-shares (HK listed China domiciled shares... as opposed to red chips, which are HK listed China companies domiciled in HK) with yesterday's not terribly sturdy "analysis" of forecast earnings deceleration and a PEG under 1... UBS and steamy US overnight markets aside (forecast earnings deceleration and also a PEG under 1!) performance is more likely down to this, which should help give it some real legs (as reported by a smart Merrill sales-trader):
"LOST IN THE NOISE: CHINA State Council changes macroeconomic policy stance to now include "averting an economic slowdown as a top priority" alongside PREVENTING OVERHEATING and CURBING INFLATION. Spec INFRASTRUCTURE & ENERGY spend on the way. Markets rallying on this front." (Also here.)I continue to be bearish, but I would participate in the market rally this time, and be greedy for a few days before locking in gains (we hope) and then sitting back. Bottom of the markets? (From MS: "SO BANKS OK, WHAT ABOUT THOSE WHO HAVE MORTGAGE PAYMENTS TO MAKE?" And worse, actually.) So probably not, in my view, but getting there - maybe more than halfway, but only just.
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Meanwhile, the Agri nightmare continues to unfold:
FT: "Governments across the developing world are scrambling to boost farm imports and restrict exports in an attempt to forestall rising food prices and social unrest... economists warned that such actions risked provoking an upward spiral in global food prices, which have already been pushed higher by rising demand from emerging markets like China and India and pressure on land from the growing production of bio-fuels."China says it'll be OK for rice, though... which is a statement you'd expect given the piece mentioned above.
Stumble It!
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