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“What is time? Swiss manufacture it, French hoard it, Italians squander it, Americans say it is money. Hindus say it does not exist. Know what I say? I say time is a crook.” – Truman Capote

Below is a snippet of commentary from today’s Morning Lineup. Start a two-week trial to Bespoke Premium to view the full report.  

US equity futures are modestly in the red to kick off the week. That follows a poor start to the week for European markets as well. In Asia, most major benchmarks were also lower to start the week with one big exception. Chinese stocks have continued their gangbusters rally ahead of the week-long holiday where markets will be closed until October 8th, and it appears as though a rush to cover shorts ahead of that closure sparked a frenzy in that country’s stock market.

Look at the chart below because you may not see one like it again, at least for the stock market of the world’s second-largest economy. As we noted on Friday, China’s Shanghai CSI 300 went from a 52-week low to a 52-week high in less than two weeks, and as unbelievable as that rally was, it followed through on that run with a gain of over 8% to kick off the week. Again, charts like this may not be impressive for an individual small-cap stock, but the CSI 300 has a market cap of over $7 trillion.

Last night’s gain in the CSI 300 was the largest in more than 15 years, and there have only been three other days since China entered the WTO that the index had a larger one-day gain.

As mentioned above, last night’s rally capped off what had already been an impressive run for the CSI 300, and the index has now traded higher for nine straight trading days.  That’s tied for the second-longest streak of daily gains on record trailing only the 12 gain in December 2014.

This next chart could be the most unbelievable of them all. The CSI 300 has surged just over 25% in the last five trading days.  No other five trading day period since 2002 even comes close.

What’s most ironic about the last five days of gains is how much Chinese stocks still are in the hole. From the post-COVID high in February 2021, the CSI 300 remains in a drawdown of over 30%, and the index is still down modestly relative to where it was two years ago and essentially unchanged over the last five years.