On news that Merkel and Sarkozy agree to agree (with details provided at the end of the month), US futures are in the green. Asia is pretty much flat. China is the interesting market.
The Chinese stock market had been closed for a week-long holiday. In that period there were significant rallies in Europe, US, and in general Asia-Pacific. China had some catching up to do. Instead it hit a new low for the move.
Asia Pacific Equities
click on chart for sharper image
All eyes are on Europe (as they should be) but China is slowing much more than anyone thinks for this reaction to take place.
Merkel Promises Plan by the “End of the Month”
Please consider Merkel, Sarkozy Pledge Bank Recapitalization
Angela Merkel and Nicolas Sarkozy, racing to stamp out the euro debt crisis threatening to engulf the financial system, gave themselves three weeks to devise a plan to recapitalize banks, get Greece on the right track and fix Europe’s economic governance.
“By the end of the month, we will have responded to the crisis issue and to the vision issue,” the French president said in Berlin yesterday at a joint briefing with the German chancellor before they dined at her office.
Why the market would do anything but spit in Merkel’s face over this silly announcement is somewhat a mystery. Regardless of the reason, (and most likely it is still technical), it’s just another in a long series of patches that will not solve a thing.
Mike “Mish” Shedlock
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