Stock markets in Europe are higher after China revealed a record trade balance in August, and the good news was that even though the level of imports declined, it still managed to beat estimates. Chinese economic data has been so disappointing lately, dealers will jump on any remotely positive news to justify their bargain hunting. Today’s rally will be a real test, as any big upward moves we have witnessed have been short-lived, and the underlying confidence just wasn’t there.
Traders have a spring in their step today because it’s the first trading session in nearly one week that all the major markets are open after being closed for holidays in China and the US. The commodity-related companies are enjoying their time in the sun, but the question is how long it will last? Some buyers have come back into the arena on the back of the better-than-anticipated Chinese imports numbers, but the big picture is still poor for the sector.
We are expecting the Dow Jones to open 270 points higher from Friday’s close at 16,370. The US market is following Asia’s lead higher, and a quiet day of economic data is insured as there are no roadblocks to the rally. China is still the dominant force in the financial markets at the moment, and the rest of the world buys and sells in reaction to its move.