The Market On Monday

Hey. welcome to the Summer! Today is the very first day of Summer and if you are like me, summertime is fantastic. How can I count the ways?

At 7:20 a.m. futures are significantly higher, the dollar is mixed, and oil is up per barrel.

Ordinarily I would not make a bold statement here, especially considering how volatile the market has been lately, but I will go out on a long limb and say the markets will advance today and close higher. Now how is that for being FOS. (Addendum - I was wrong. The market closed relatively sideways.)

Essentially I cannot recall too many days when the news has set investors so intensely aflutter. They are resonating to the molecular hum of the dollar, its practically orgasmic.

China has cut its currency free from severe state control guidelines and is now allowing it to float against the world. That's the news. Its huge news and for the time being it might even keep the market buoyant through the summer. How do I know that - well I don't know that. I'm just aping what I read but I do know this. This is big news and it will have a positive effect on equities. When the yuan is stronger, guess what China can buy a whole lot more of. That's right, they can buy more of the USA. We are so owned.

CNN: Stocks set to surge

Investors became more confident in the global economy following news that China will let its currency trade more freely.


"The thinking is that a more flexible Chinese currency will help exports, and that means it will help the global economy, too. So in the short term this is positive for global markets and commodities..."

Reuters: China unshackles yuan ahead of G20

Asian currencies and stocks rose and U.S. Treasuries fell on expectations that China's promise to give the currency new room to move would ease political tensions with the West and encourage investors to snap up riskier assets.


Commodities and oil also surged, as a stronger currency would give the world's third-biggest economy more purchasing power to buy foreign goods, which would be positive for world trade, especially for commodity exporters such as Australia, Brazil, Canada and New Zealand.