 It looks like the rally could run for another day.
Overnight Asian stocks moved up in reaction to rising prices in the U.S. markets on May 12 and to good earnings news from technology bellwethers IBM (IBM) and Cisco Systems (CSCO) after the close of U.S. trading.
The MSCI Asia Pacific Index was up 1.8% as of 2 a.m. in Tokyo. Chinese stocks showed their biggest gain in three weeks. The Shanghai Composite Index was up 0.8% as of the mid-day trading break.
Technology stocks led the MSCI Asia Pacific Index after both IBM and Cisco Systems beat earnings estimates.
Strong earnings reports from Tokyo Electron, the world’s second-largest maker of semiconductor manufacturing equipment and Elpida, the No. 3 maker of memory chips in the world, added to sector momentum. Shares of Tokyo Electron were up 6.7%.
 Shares of Asian exporters were helped by the earlier report that the U.S. trade deficit had climbed to its highest level in more than a year as U.S. imports grew faster than exports.
Chinese stock market is in bear market territory. If Shanghai Composite goes below 2600, increases risk of going down much further. Shanghai Property Index is down 45% and inflation is on the score card. So when will they unpeg the yuan?
Back in the USA Cisco beat the Street’s expectations for earnings with 65% gross margins and with good but mild projections. John Chambers said “It doesn’t get any better than this.” And the stock went down 4.5%! WOW! Where are the Pollyannas?
Just bought some Cisco. Quarter after quarter they beat estimates and are sold on the good news. That’s a psychological motif I can’t figure out. I know that Cisco is always cautious looking forward but………I agree with JJ analysis and still see $29.00-$30.00 in the near future.
“Stocks could have another good day.” Then what? I can feel a shift in sentiment here. I think folks are dubious after the brief correction or “glitch” as I guess they call it now. I can’t imagine why since everyone was expecting a correction. Anyway, Jim, you posted a blog several months ago, about how you were bullish on the market short term, but then you expected problems in the latter half of 2010. Well, we are fast approaching that mark. Could it be that the hiccups have arrived a little ahead of schedule? When I have more time I will try to find that. Could you update us in the coming weeks about the problems the market might encounter in the fall.
More RIG info:
http://www.smartmoney.com/investing/stocks/the-oil-industry-parsing-the-damage/
Off topic… RIG files to limit its liability to $27M:
http://online.wsj.com/article/SB10001424052748704635204575241852606380696.html
Apologies… try this link:
http://www.dailyfinance.com/story/investing/chinese-file-for-divorce-to-purchase-second-homes-stocks-climb/19475567/
Run26.2,
It may be true and good for now…watch out! The Chinese government will come up with a fix for that loop hole.
Run,
I’ve tried both real estate speculation and ‘fake divorces’……….neither worked out too well
A work-around to the Chinese govt restrictions on 2nd homes (and continue to inflate the bubble):
“Property prices in many Chinese cities are still rising, according to some studies, and determined investors are seeking ingenious ways to get around the new regulations. According to an article in China Daily, divorce is one way to skirt the rules and reduce costs. Down payments on second homes have been raised to 50% of the value. In contrast, first-time buyers must put down a 30% down payment. “After we get divorced, my wife will claim our house, so that I can apply for a mortgage as a first-home buyer,” a man told a Xinhua reporter. One real estate agent said “fake divorces” were becoming more and more common.
See full article from DailyFinance: http://srph.it/a0CfRS