Here We Go Again: Chinese Stocks Plunge, Give Up Early Gains Despite Yuan Fix Unchanged

Update: *SHANGHAI COMPOSITE INDEX FALLS 2.04%(AFTER BEING UP 3.2%)

And CSI Futures are tumbling...

Not a pretty week...

Shifting notavkly from the opening color that we detailed earlier..

With all eyes on Chinese FX and equity markets, following the worst start to a year for US (and Chinese) stocks in history, PBOC decided (after 7 straight days of devaluation and 7% devaluation since August) to halt the run and increase Yuan fix by a paltry 0.01% to 6.5636 (notably below yesterday's 6.5939 CNY close). Offshore Yuan is strengthening and US equity markets are jumping. Chinese equity markets (now theoretically unhampered by their circuit-breaker panic switch) are far less impressed.

PBOC fixes the Yuan a tiny bit stronger...

Offshore Yuan roller-coastered through the US session as Reuters headlines sparked selling pressure after some Treasury-selling/Yuan-tervention...but is rallying on the not bad news...

Onshore-Offshore spread has tumbled to 900pips from over 1500...

Asian stocks are set for their worst week since 2011 with some notable names in big trouble:

• *NOBLE GROUP TUMBLES 10%, EXTENDING LOSS, AFTER S&P DOWNGRADE

While China ETFs trading in US markets signal notable weakness to come for an-"limited" Chinese stock market...

Chinese stocks look set for a positive open:

• *CHINA SHANGHAI COMPOSITE SET TO OPEN UP 2.2% TO 3,194.63
• *CHINA'S CSI 300 INDEX SET TO OPEN UP 2.4% TO 3,371.87
• *FTSE CHINA A50 INDEX RISES 2.17%

And Dow Futures love it... for now...

Some context:

So no news is good news for now...

Charts: Bloomberg

Comments

[Fuku Ben]

+1.11% Looks like the best and right call as anticipated.

http://www.zerohedge.com/news/2016-01-07/china-suspends-circuit-breaker-...

https://www.youtube.com/watch?v=C7WeZbRbxwg#t=28

[Yen Cross]

 There's actually some arbitration in the Hong Kong_vs mainland trade. The mainland markets consist of [3] trades, so it does make sense.^{vs The SSE Composite.}

 Loophole closed as I speak?

 If you rotate trades, and cover, they all look the same?

[Haole]

ROR

[CHoward]

9:32pm EST - China markets are back UP! 

[Brooks_Orpington]

Funny, when you take out the motivation for everyone to sell before the breakers kick in, that you'd get a rally.  Who'd have thunk it.

[WorkingClassMan]

I am relatively new here but I love your avatar of that rooster for some reason!  Nothing perverted, just my odd sense of seeing things!

[captain-nemo]

The ever flowing stream of bad news will be ignored and supressed as usual , and the buying spree will continue as normal. Friday (or last days before holidays) are the days the central bangsters always use to prop up the markets so it can start up fresh after the weekend and when it happens the mainstream media immediately produces articles how awesome the market is (as it always do).

After more than seven years of absorbing daily bad news these bangsters still cling to the hope that former greatness will return. The denial is absolute and they don’t seem to understand that it is the entire economic system that is broken. Meanwhile they keep on robbing us (as usual).

The only solution is now a global zero’ing out of all depth.  

[FreeNewEnergy]

I am sure there are cops with guns pointed at the heads of traders at this very moment. Sell and BANG! You dead, Joe.

You all knew this would happen. Besides, there's the MOST-IMPORTANT-NFP-DATA-EVAH™ tommorow before the opening bell.

200,000,000,000,000.07 New jobs created in December. Gimme dat CNBC signed tote bag, bitchez!

Gotta admit, all kidding aside, the last few days have been fun. Dow down over 900 points in four days. Worst start to a year ever. Ya gotta like our odds going into the next 11+ months. US markets are dead.

BTW, both the NAZ and Dow ended the day in correction territory, i.e., off 10% from highs, though that was all the way back in May.

Safe to say the bull market is over. 83 months is a little long, even for old Yellen. It's all bear food from here until the crash finally happens. Thanks to T.S. Eliot:

Last four lines of The Hollow Man:

This is the way the world ends
This is the way the world ends
This is the way the world ends
Not with a bang but a whimper.

[Brooks_Orpington]

Well written and very engaging.  But a little premature, in my opinion.  To my judgement, this is just the first convulsion of the seizure that is still quite a ways away.

[wizteknet]

Drops of 100pts since start of high's...

[atthelake]

It's 10 pm the night before and Yahoo Finance has Dow, S&P 500 & Nasdaq Futures up. Third night in a row Yahoo Futures are turned on the night before. New feature or something afoot?

[IridiumRebel]

Yahoo has a finance section? I thought they just covered celebrity bullshit.

[maxamus]

And it is back up.  Stop watching minute by minute.

[Yen Cross]

JFC! I gave you the trade of the day. Gold is down $10.00 and I telegraphed the trade.

[jcdenton]

The solution to all this is to purge ..

You must purge some 2 to 5 quadrillion in toxic derivatives ..

Any suggestions here on how best to do just that?

That is without blowing up the planet ..

http://www.veteranstoday.com/2014/07/30/the-coming-return-of-the-real-us...

[Automatic Choke]

purging:      try a smoothie made from nonfat yogurt, tequila, and mackerel.   it should clean you out.  if you want more, add some drano.

[blue51]

THAT .. Is Funny!

[tarabel]

Well, first off, you cannily withdraw all of your own assets from out of the Jenga pile without anybody else noticing.

After that, who fucking cares what happens.

Need I say that I copied this plan from off the page of someone else?

[conraddobler]

If they really let go of this and just let it be then it would all vaporize everything as the derivatives all go off and then we'd find out no some hedge fund can't payoff then boom the whole thing would vortex into nothingness.

This WAS going to happen in 2008/2009 but didn't because it was stopped.

They can stop anything they want for a while but they can't do so without damanging the real economy in the process.  

[The Dogs of Moar]

repost

It's more than likely that the turmoil we've seen in the Chinese markets for the last year and a half is the handiwork of the Chinese government through the PBOC.

They are not concerned about all the myths in the Bloomberg/ZH article, as they only serve to make American investors even more panicey than they already are.  Which is exactly what China wants. To slow down the American recovery (if it's possible for it to go any slower) 

Will the suspension of circuit breakers make for a greater sell off?  What if the PBOC devalues the yuan even more?

Wake up Wall Street!

China is giving you a dose of your own medicine.  The Shanghai Composite is costing the markets money in England, France, Germany, etc.

What about China too?  What did the PBOC learn from the Fed?

The PBoC action is aimed squarely at the stock market.

“If the PBoC does buy stocks from investors, that definitely injects money to the real economy and is essentially QE for sure,” said Larry Hu, China economist at Macquarie Securities.

“In that case, what’s in PBoC’s mind is to save the market, rather than stimulate the economy as [then-Fed chair Ben] Bernanke did with QE.”

Maybe the PBOC is selling into the bloodbath.  Or maybe they are picking up shares on the cheap to sell them later, after they raise the value of the yuan and rally the market.

The Fed has been doing versions of that for years, so no complaints.

Hey, Tyler! what's with a whole article based on Bloomberg?   Bloomberg is the shyster mouthpiece of Goldman Sachs.  If GS wants you to mislead you about something, but doesn't want the bullshit seen coming out their front door, they call Bloomberg who is very happy for the scoop even though it doesn't pass the smell test.

[RadioFlyer]

This was not the crash you were looking for.