Market opens higher to begin a new week in the wake of an explosive move in China overnight. The Shanghai Composite was up 4%, leading Asian equities. Global markets were largely in the green overnight. China has been absolutely clobbered and begin the day at 4-year lows, a stark contrast from the US. The trade war and slowing global growth has put a major dent on the second largest economy which has been struggling with slowing growing and rising debt. The overnight rally brings into question the Chinese government’s role in manufacturing a recovery. October has been a tough go for pretty much everyone. It’s the worst month for the S&P in 2 years. Earnings have not come to the rescue like many had hoped. It’s still early and big Tech is on deck. Microsoft, Amazon, Google and Intel all report this week. It will be Market moving. The selloff has shaken investor confidence and many are questioning whether this Bull Market has come to its end. Higher rates and slower growth are at play. Earnings and economic growth will peak in pace this year and very well might end in 2019. The Market is trying to sniff this out right now. The Saudi summit has come under scrutiny under the scope of the Khashoggi coverup. Italy’s credit rating got knocked again. British Prime Minister continues to fight for her job and Brexit. President Trump caught many off-guard by stating last night that another tax cut is being worked on ahead of the midterm elections. Geopolitics are getting more and more challenging and complex. Oil is flattish in early trading while the 10-Year Treasury yield continues to back off the 3.25% level. Stocks continue to be in correction mode.
Have a great morning,