After FOMC minutes, China/Japan/earnings/Greece

Following further confirmation from most members of the FOMC in yesterday’s minutes that they will respond to an economy that is not getter better from current levels rather than wait for a move lower in activity, global stocks are being further buoyed by Chinese Sept bank loans that were almost 100b Yuan above expectations, Aug Japanese machinery orders that rose 10.1% vs the forecast of -3.9%, earnings beats from CSX and JPM (INTC just beat the guidance that was lowered in Aug), and a rally in the Greek 10 yr note for the 17th day in the past 18 (yield now below 9%). From the perspective of the US$ based investor however, the $ index is back to the lowest since Jan and gold is rising to near a fresh record high. The Yuan is rising to a fresh record even though the Sept Trade Surplus was almost $1b below expectations. China’s Sept FX reserves rose by another $100b to a new high of $2.65T.

With the average 30 yr mortgage rate falling to a new low at 4.21%, the MBA said refi’s responded positively, rising 21% to just below the highest since May ’09 but purchases fell by 8.5% after last week’s highest level since May. ABC confidence rose by 2 pts to -45 and is 1 pt above the one yr average. II: Bulls 47.2 v 45.6 Bears 24.7 v 28.4, both at levels last seen in May.

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