Asia Rallies as Beijing Prepares For Another Fiscal Bonanza and Chinese Data Surprise to the Upside

Beijing is hinting at another large stimulus package

Highlights

• Beijing is hinting at another large stimulus package

• U.S. officials keep refusing to rule out a recession…

• … as the domestic-heavy Russell 2000 hits a 7-month low

• Central bank and ETF buying drive gold to new record highs

Key Takeaways

• China Prepares to Stimulate (Again): The big news overnight was the series of hints out of Beijing that another stimulative measure is about to be announced — aimed at boosting consumer spending and, once again, an attempt to put a floor under the fledgling real estate market (equities as well). The headlines have already moved markets across Asia, with impressive broadly based stock market advances.

• The “Trump Put” is a Myth: Scott Bessent’s comment that stock market corrections are “healthy” and “normal” on NBC’s Meet the Press yesterday (while not pushing back against a question on recession) has caused the U.S. major averages to woefully underperform. While true, this is another sign that there is no “Trump put” or if there is, the strike price is a lot lower than what had previously been anticipated.