Futures and commodities are sliding on the latest fears: There is widespread speculation that to quell its rising inflation, China will raise interest rates.

Asian markets were down: The benchmark Shanghai Composite Index fell 5.2% Friday, erasing nearly a quarter of the country’s three-month market upswing in a day. European Bourses slipped 1%. SPX Futures (see table below) are off nearly 3/4 of a percent.

Trading in the US the past few months has been very resilient. Despite numerous opportunities to go into a deep slide, equities have traded back to from the depths. We have not had a very negative day in some time — intraday lows are appreciably worse than closing prices.

The market is trading poorly, yet refuses to go down. There seems to be a firm bid beneath.

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Category: Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

18 Responses to “Futures Pressured Lower; Shanghai Down 5.2%”

  1. philipat says:

    HFT or PPT?!!

  2. itsme says:

    POMO…

  3. Petey Wheatstraw says:

    Get ready for the train wreck (this might not be it, but that it’s coming is a certainty), followed by a shoot out.

    Might go something like this:

    http://www.youtube.com/watch?v=nZzOfpsqeys

  4. Chief Tomahawk says:

    Maybe bigger news: tried to visit Michael Shedlock’s blog and discovered this…

    “Blog has been removed

    Sorry, the blog at globaleconomicanalysis.blogspot.com has been removed. This address is not available for new blogs.”

    Did Obama dump Mish into North Korea on his recent trip???

  5. torrie-amos says:

    the tell for downside is if oil breaks down 5 bucks on monday imho

  6. NoKidding says:

    “Fed’s Lockhart Says Tax, Regulatory, Fiscal Uncertainty Hurts Employment “

  7. Lugnut says:

    Time to revert back to cash? Rhetorical question in my case. I have been.

  8. rdhall3637 says:

    Yes, your last statement, “There seems to be a firm bid beneath.” is absolutely correct. There are a number of supports below this level, in the form of 3 uptrend lines and the 200MA on Weekly chart. Anything can happen, but this is where we are now. Take a look…

    http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3274981

  9. machinehead says:

    China and India both are in inflationary overheating mode, and already have been raising interest rates and reserve requirements.

    China doesn’t want to repeat Japan’s post-Plaza Accord experience of letting the yen strengthen. But there’s another analogy they might consider: after the BOJ hiked rates three times in late 1989, the Nikkei promptly began its epic tumble in the first days of 1990.

    Three strikes and you’re out? We’ll see — stay tuned.

  10. carleric says:

    Of course there is a bid under the market…it is clled “money printing with promisies of more to come”….will artifically inflated asset prices end badly? Probably so……

  11. ashpelham2 says:

    I personally think we are running late on this upward run now. Of course, no one really knows for sure, except Goldman. I’ll have to call my girl over there and see if she’ll tip her hand…

  12. rktbrkr says:

    This is Day 1 of QEII?

  13. cfischer says:

    Barry, agreed with you on the firm bid underneath this market. It’s actually amazing that after this run, and some legitimate bad news: earnings misses, issues in Europe and China, and the market still refuses to go down significantly.

    This strangely reminds me of early/mid 2008, when the bond market was imploding but the equities market kept crusiing right along for a while..

  14. cfischer:
    Isn’t this the first day of QEII? And isn’t it going to last 6 to 9 months? I wouldn’t be suprised if we muddled along till QEII ends.

    NoKidding:
    Is Lockhart a voting member this cycle? I pray he isn’t. At any rate, he just outed himself as a clueless hack.

  15. nofoulsontheplayground says:

    The USD:EUR at 1.36 means the SPX should be at about 1185. It’s just a little late in getting there.

    The beat down at EUR 1.405 was a clue a correction was coming on the US indexes.

  16. cfischer says:

    Calvin,

    Certainly possible, except I wouldn’t even give it that long. I think somewhere in the February/March timeframe we head back downwards in anticipation of QE2 ending, until QE3 is announced, at which point we start going back up..

  17. Are you sure some Chinese state insiders privy to a strategic dumping of Treasuries are not capitalizing on the likelihood hot money flows into China bolstering stock prices likely will reverse as a consequence? Treasuries were mighty soft this week in the face of Benito Bernanke’s backstop!

    I believe you are confusing “a firm bid beneath [the market]” with a solidly entrenched complacency among concentrated, vested interests who simply are failing to connect the dots between a hyperinflationary flood of liquidity circulating globally and the accelerated shutdown of physical economy this course already has precipitated, as well as further assures.