Chinese stocks lower again

Responding for a 2nd day to its Christmas day interest rate hike, the Shanghai index fell for the 9th day in the past 10, lower by 1.7% and is now near a 3 month low. The Hang Seng index, closed on Monday, fell almost 1% and also is near a 3 month low. China faces both a consumer price inflation problem and a property bubble and the action in their markets is clearly signaling doubt that a soft landing can be achieved. For the sake of global growth, fingers crossed that they do. Turning to currencies, while the focus of markets is usually DXY (dollar index) in gauging the strength or lack thereof for the US$, its missing $ weakness against other currencies because its heavily weighted to the Euro. The Swiss Franc is rising to a record high vs the US$, the CAD is back to parity and the AUD is now worth more than the US$. Also, the Taiwan $ is at a 13 yr high vs the US$ and the Yuan is a hair off its high.

These stats are from Thursday so sorry if you saw already but in case you missed it due to the holiday and weather, the AAII measure of individual investor sentiment was worth noting. Bulls rose 13 pts to 63.3, the highest since Nov 2004 while Bears fell 11 pts to 16.4, the lowest since Nov 2005.

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