Asian markets closed higher. The Shanghai Composite reversed a -0.7% loss in the last hour to close up +5.40%. Participants believe the rally was instigated by direct buying of equities by the Chinese government. The Nikkei 225 added +1.08%.
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A snapback in mining and energy stocks boosted equities across Europe. 10-yr. Bund yields moved back up to 0.741% and the DAX added +3.18%.
On the back of the rally in China, U.S. equities were already poised for a higher opening. Initial Claims for the week of 8/22 were 271K. Q2 GDP was revised from +2.3% to +3.7% and the Q2 GDP Deflator was revised from+2.0% to +2.1%. July Pending Home Sales, +0.5%, were less than expectations.
Crude rallied more than +10% and settled at $42.56. Yields on the 10-Year Note were slightly higher, but the US$ had another strong rally. Gold was slightly lower, settling at $1,122.60.
Volume has begun to recede, but is still heavy. Momentum drove the averages sharply higher into the afternoon. Then, in the final two hours, markets faded hard but rebounded to finish strong.