China Betting Consumer Slowdown Not Global
Active trading today in NASDAQ big caps (Google , Apple , Amazon ), international oil companies, and Chinese stocks. Chinese stocks? Chinese Communist Party holds their annual meeting next week (no I'm not going), Hang Seng in Hong Kong and Shanghai index hit historic highs yesterday.
Asian game here is that the slowdown in the U.S. consumer is not going to dramatically infect the global growth story. Remember the bear argument: slower U.S. consumer will translate into slower global economic growth. This means Asian stocks slow down, stunting demand for oil stocks, other commodity stocks, and industrial production. Wrong so far.
Battle over Q3 earnings is over: bulls lost, since earnings growth for the S&P 500 is now NEGATIVE. Bulls insist Q4 will have big, double digit move up (11% is the bet right now). It had better: the whole game is now riding on the idea that earnings will improve in Q4.
Major indices mostly flat this week; energy the big gainer.
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