Here we go again. For what could possibly be the 100th time in the last two years now, futures are rallying on positive news regarding trade negotiations with China. The President tweeted last night that the US would be delaying planned increases on Chinese goods that were set to take effect on 3/1. Chinese stocks also had a monster night rallying over 5%. Now that China is out of the penalty box for the time being, though, it looks like the President is moving on to OPEC and telling the cartel that oil prices are too high and that they should “relax and take it easy.” Read all about overnight events around the world and this morning’s news in today’s Morning Lineup.
While Chinese equities rallied overnight for reasons related to trade and other developments (see the commentary section of our Morning Lineup), the long-term chart of the Shanghai Composite is currently at an interesting juncture. Looking at a chart of the index going back to 2015, last night’s rally sets the stage for a test fo the long-term downtrend starting at the 2015 highs. If bulls can take the Shanghai above this downtrend line, Chinese stocks could be off to the races.
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