Another exciting day in the markets!
We have lots of data including the GDP and Jobless Claims at 8:30, the Chicago PMI at 9:45 followed by Construction Spending and oil inventories at 10:30. I’d say by 11 am we should have a pretty good indication of which way we’re going from here.
Asia didn’t need to wait for our data, the Hang Seng shot up 340 points while the Nikkei rose 287 points but South Korea is the month’s hottest market, breaking the 1,700 mark today, up 10% for the very merry month of May. Shanghai A shares rose 1.4% after taking a 9% plunge the day before and my regular readers will take note that this is less than a 20% bounce, leaving us unimpressed. The B shares dropped another half a point but made a strong recovery from an 8.5% drop at the open – possibly a bottom test over there. From our list of "Duh" stocks (stocks you can just buy based on the name): China Petroleum & Chemical and Shanghai Pudong Development Bank rose the daily 10% limit. Industrial & Commercial Bank of China gained 3%, while Aluminum Corp. of China (huge Duh) jumped 7.4%.
The World Bank, in an incredible (as in NOT credible) case of fortunate timing, picked this morning to raise its forecast for China’s growth this year to 10.4%, from 9.6%, down slightly from last year’s 11.1% rate. Moody’s said it may raise China’s credit rating (now A2), which would be a big stamp of approval for the government. The World Bank expects China’s exports to rise 20.6% this year. It also raised its projection for China’s current-account surplus to $340 billion, or 10.8% of GDP. White House economists have assured the President that running a country with a surplus is a fairy tale, much like evolution, and should not be taken seriously.
The World Bank said the current-account surplus continues to boost China’s foreign-exchange reserves, and it raised its end-2007 foreign-exchange reserves forecast to $1.389 trillion, from $1.066 trillion at the end of last year. In February, its forecast was $1.334 trillion. The bank said growth in M2, China’s broad gauge of money supply, will likely be 17% this year, compared with its previous forecast of 16%. While saying that inflationary pressure isn’t an imminent problem, the bank raised its forecast for consumer prices to a 3.2% increase this year from the…