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New Reason For S&P To Climb?

A critical piece of economic data comes out overnight and investors are eager to see how it impacts stocks.

We’re talking about China PMI.

Wall Street expects China's official PMI to rebound slightly from July’s 7-month low largely because Beijing refrained from further tightening.

According to Thompson Reuters the median forecast is for 51.8 – a few notches higher than 51.2 reported in July.

Market Impact:

A rebound in the PMI would help instill confidence in the market that the Chinese economy remains robust despite a months-long campaign by the government to crack down on property speculation and slow the pace of bank lending.

A downside surprise, especially a drop below the boom/bust threshold of 50, would be a bitter pill for investors to swallow and could add fuel to recent selling in global stocks.

The PMI has done a good job of foreshadowing China's economic data, and a drop would suggest that the giant economy is slowing more sharply than expected.






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Trader disclosure: On August 31st, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Seymour owns (AAPL), (BAC), (EEM), (INTC), (POT); Adami owns (AGU), (BTU), (NUE), (C), (GS), (INTC), (MSFT); Adami’s wife works at Merck; Grasso owns (ASTM), (BA), (BAC), (C), (CSCO), (JPM), (LPX), (MO), (MOT), (NDAQ), (PFE), (PRST); Terranova Owns (AXP), (GS), (IBM), (QCOM), (AAPL), (GOOG), (BRCM), (TER), (MSFT), (C), (MRVL), (BMO), (V), (POT), (OXY), (GLD), (SU), (FCX), (APA), (XBI)

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