China’s Property Stocks Rally On easing of borrowing Rules

In his Daily Market Notes report to investors, Louis Navellier wrote:

Nervous September

Investors are nervous about the seasonally weak September, stocks are modestly down this morning. Crude oil is at the high for the year.

Stocks are trending lower this morning, with the VIX higher and interest rates higher across the yield curve. Yields are taking the US dollar index to the high since March, and taking gold down.

Energy is having a good day as crude oil is above $87/bbl, the highest in a year, as Saudi Arabia officially extended their 1 million barrel-a-day production cut through the end of the year. Previously they had made cuts on a month-by-month basis.  The XLE (energy) ETF is up 1.2% on the news (+8.8% YTD), and the OIH (oil services) ETF is up 2.5% (+23.8% YTD).

China’s Property Stocks Rally

We got more news of weakness out of China on the services side, but also more monetary support as the Bank of China eased some borrowing rules and cut the reserve ratio requirements materially for foreign exchange deposits. Interest rates for Yuan deposits were also cut. These moves have created a rally of the property stocks which have been under a lot of pressure.​​​​​​​

Earnings Estimates Inching Higher

In the bigger picture, earnings estimates are inching higher, which is the most important longer-term metric.

It’s not likely that September will be a strong month, but if we can make it through and largely hold on to year-to-day gains, we should be in a good position for a good 4th quarter as the strong earnings estimates for 2024 get closer. 

Coffee Beans: Home Alone

North Wales Police warned citizens of gnomes being left in people’s front gardens, in what is thought to be a “calling card” for burglars. If the gnome is not collected by the resident, the property is likely to be empty and burglars could view it as an easy target. Source: Sky News. See the full story here.