The 3 high profile earnings reports last night, NKE, ORCL and RIMM, all provided positive surprises and they are the main catalyst for the pre opening rally. Today is also quad witch expiration and the S&P quarterly rebalancing.
China is taking another step forward in cooling their property mark set by requiring at least a 50% down payment on any purchases of land. This follows a tax on the sale of homes made within 5 yrs of purchase. Also, late yesterday Fitch said that Chinese bank’s have off balance sheet transactions that are masking the true credit condition of their financials.
In response to both, the Shanghai index closed down 2% to a 3 week low and has now corrected 10% from its ’09 high. Dec German IFO business confidence rose almost 1 pt to 94.7 which was a touch above estimates. Greek bonds are lower again with their 10 yr yield rising another 6 bps, up 45 bps on the week and is again keeping a lid on the euro.