Global Markets Rebound On China Stimulus Hopes
Boeing Stock Pre-market
381.02 -41.52 (-9.83%)
After a weekend with relatively few news besides another deadly crash involving Boeing's new 737 Max which prompted China to halt usage of the airplane and sent Boeing shares plunging and dragging Dow futures lower (Boeing is the biggest member of the Dow), all eyes were on China to see if Friday's rout when the Shanghai Composite plunged nearly 5% following a key downgrade by a state-owned brokerage, would persist. It did not, and instead the Shanghai and Shenzhen Composites both closed at their highs, up almost 2% for the day following talk of more stimulus from Beijing.
China’s main bourses made back almost half the 4% they lost in Friday’s mauling as the country’s central bank chief pledged more support. The blue-chip CSI300 index jumped 1.9% after Friday’s 4.0 percent fall, which followed poor trade data and a major local bank issuing a rare “sell” rating on a major insurer. China’s central bank on Sunday pledged to further support the slowing economy by spurring loans and lowering borrowing costs after data showed a sharp decline in lending data due to seasonal factors. Furthermore, PBoC Governor Yi Gang stated there is still some room for a RRR cut although the amount of room is less compared with a few years ago and there were also comments from PBoC Deputy Governor Pan that they will keep liquidity ample and set up counter cyclical adjustments, while a central bank official also noted that February money supply data is normal and inline with historical trends. The central bank pledge came as data showed new bank loans in China fell a far more than expected in February, while money supply growth also missed forecasts.
This helped set the mood across both Asia and Europe, where stocks climbed, while S&P futures advanced even as Dow futures tumbled on the previously noted plunge in Boeing shares, while the dollar nudged higher after Fed Chairman Jerome Powell reiterated patience on rates during his first "60 Minutes" appearance, while Treasuries fell.
European banks helped push the Stoxx 600 Index to its first advance in four sessions, with Commerzbank AG among the biggest winners on reports it’s getting closer to a merger with Deutsche Bank. London’s FTSE made a more impressive 0.8% but that was partly the flip side of a near three-week low for the pound as the chances of Prime Minister Theresa securing support for her Brexit deal at home this week looked increasingly dim. Britain is due to leave the EU in 18 days.
Kallum Pickering, an economist at Berenberg, said a delay to Brexit would be modestly positive for sterling as it would cut the near-term risk of the UK leaving without a transition period in place to minimize economic disruption. “However, it would not completely eliminate the hard Brexit risk which could still come at the end of a delay or as a result of a second referendum,” he added.
In the US, Boeing’s shares were down more than 9% in pre-market trading as China grounded flights involving the model.
https://www.zerohedge.com/news/2019-03-11/global-markets-rebound-china-stimulus-hopes
https://www.bloomberg.com/markets/stocks/futures
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