China Driving the Growth Bus

With the rally on Friday and continuing today, Chinese stocks are now at the highest level since Aug 20th. Optimism that their economic stimulus program is taking hold was highlighted in a weekend speech by Chinese Premier Wen. There is also talk of another stimulus plan in the works.

A key aspect of China’s signs of hope has been a resurgence in bank lending which is obviously being encouraged by authorities as opposed to lenders seeing a sudden slew of opportunities. Hopefully though it can sustain itself as it will not only provide hope for the region but also keep a bid under commodities, which is a boost to many natural resource dependent emerging markets.

Crude is lower though after the IEA on cut its ’09 demand estimate by 1mm barrels partially offset by a 300k cut in non OPEC supply. On the heels of the WFC news, GS, JPM and Citi report this week with talk that GS is set for a secondary to pay back TARP money. Kudos to them if they do.


See also:
China Slows Purchases of U.S. and Other Bonds

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