At the time I am writing this article the Dow Jones industrial average is up 150 points.
So, has the stock market given an all clear signal on ANY good news with regard to the US economy?
Have Geo political pressures subsided?
No...
In my opinion the reason why the US stock market is rallying in early trade is because the worlds second largest economy, China, just reported a slew of bad economic data pointing to a slowdown in economic activity.
The economic slowdown in China is simply sending a message to the markets that the Federal Reserve is again going to put any meaningful rate hikes on the back burner, although I do expect one more "token" hike later this year.
Moreover, the China slowdown means that the Federal Reserve will have to leave their balance sheet untouched for the foreseeable future.
It should be clear to anyone reading this article that world central banks will continue to run this comedy act known as the markets...
Gregory Mannarino @marketreport
