https://www.zerohedge.com/news/2019-08-08/its-not-yuan-stability-its-more-buybacks-stupid
This one might be a good one to file under dumb shit machines do:
Apparently, the talking heads are attributing it to China "stabilizing" the peg. Which it isn't doing, it's just incrementally devaluing to not shock markets outside of the US, but it looks like corporate buyback orders were sent through as the markets dropped (surprisingly they didn't buy at the peaks like usual) setting off the machines. Examples like Apple and it's large component in indices tracked by the machines likely set off the buying today along with the PPT. But bonds aren't buying it.
And the US economy's problems are far from over.
The consensus narrative is that China has stabilized its yuan (based on the fact that it hasn't drastically shifted the fix lower - which it has), but there is another far more important driver of this rebound.
We know the PPT is in chaos currently as they seek new leadership but what we hear from Goldman Sachs is that, perhaps someone whispered in various CEOs ears as Bloomberg reports that Corporate America bought back shares at a furious pace as the S&P 500 plunged 3%.
“On Monday when the market dropped, the Goldman Sachs buyback desk saw executions increase dramatically,” David Kostin, the firm’s chief U.S. equity strategist, said on Bloomberg TV with Alix Steel and David Westin.
“Companies are sensitive to the level of stock prices.”
A similar surge in buybacks during May’s rout helped establish a market bottom.
