Premier Wen Jiabao made comments to reassure investors that the nation will meet 2012 economic and social development targets. He also said that declining inflation gives them room to modify monetary policy, as we noted last week when the lower CPI figures for China were released.
Separately, China's foreign direct investment fell -3.6%, which is the largest decline since November 2009. The Ministry of Finance warned that corporate profits may slow heading into year-end as exports are likely to weaken. (maybe he didn't get the memo from the Premier)
In the US, the Philly Fed survey came in below expectations at -7.1 for August, but that is still higher than last month's reading of -12.9. Overall this is still a weak reading for manufacturing activity.
The dollar is lower today which is helping boost commodities. Oil prices have risen to $94.87 and gold prices are higher near $1619. Copper and silver prices are higher also.
The 10-year is up a bit higher today to 1.81%. And the VIX is also higher, despite the gains in the stock market so far, bouncing from its recent multi-month lows to 14.91.
Trading comment: The slow grind higher continues. Cisco's strong earnings reaction is helping boost sentiment in the tech sector and boosting the Nasdaq. CSCO also raised its dividend dramatically which speaks to the notion that company's are generating good cash flow but not seeing good opportunities to reinvest it in their businesses so they might as well return more cash to shareholders. The S&P 500 is working on its 6th straight weekly gain, which is a pretty long streak. With investor sentiment growing more bullish and complacency rising, I wouldn't be surprised to see a short, sharp pullback to keep investors on their toes.
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