US stocks closed Wednesday after a 619 point gain to reach historic Monday afternoon highs, and yet some analyst are giving the all clear.
The last rate-raise bull at the Fed, NY chief Bill Dudley said in a speech Wednesday morning that he thought September rate hike was off the table.
This after his trading desk presumably worked through the night Monday and Tuesday buying Dow and S&P futures in the Asian markets to bolster the US open.
The pronouncement from Dudley — formerly of Goldman Sachs — sent stocks higher on a day dominated by a live news broadcast murder here in the US.
So you can see that this dead-cat bounce rally is not based on growth, it’s based on such a lack of economic growth that the Fed can’t move off zero rates after six years and $4.2 trillion in bailouts.
And certainly you can’t look to China for an all-clear signal, since the central planners in the government are rigging market through policy and/or direct intervention in buying stocks.
The thought in the market is that China is a big seller of US Treasuries to partly fund its interventions, which raises rates here.
Now that can create a fabulous negative feedback loop, which would have made Jimi Hendrix jealous. Truly a purple haze transparency.