– China surges after intervention. Less than an hour before the close today the Shanghai Composite Index turned negative, dropping almost 1 percent before going on an astonishing rally in the last 45 minutes of trading to finish the session 5.3 percent higher. According to people familiar with the matter, the late-day rally was sparked by Chinese government intervention, which aimed to stabilize the equity market ahead of a military parade on September 3.
– Jackson Hole. The Federal Reserve Bank of Kansas City’s annual conference kicks off today in Jackson Hole, Wyoming. This year’s conference, titled «Inflation dynamics and monetary policy» will focus on feeble inflation globally. Investors will be watching for any hints from the conference on the timing of the Fed’s next move.
– European stocks rally. The Stoxx Europe 600 Index climbed 3.2 percent by 10:30 a.m. in London as stocks across Europe rallied this morning. This relief rally follows from China’s strong equity performance and yesterday’s biggest advance in U.S. stocks in four years, a climb that seems set to continue today with S&P futures pointing higher.
– ECB M3. The European Central Bank released its latest monetary developments data this morning and it shows continuing good news for the euro-area economy with broad-money (M3) growth rising to 5.3 percent in July. Importantly, the data shows that the annual growth rate in lending to nonfinancial corporations grew at 1.9 percent, up from 1.7 percent in June, the third month of growth following almost three years of declines.
– Spanish growth. Spanish GDP expanded 1 percent from the previous quarter and 3.1 percent from the same period last year, the National Statistics Institute said Thursday. This eighth consecutive quarter of growth, at the fastest pace in eight years, was driven by the Spanish consumer. The government reiterated its 3.3 percent growth target for the year earlier this week.
– Good news: U.S. economy grew faster than expected. The U.S. economy grew 3.7% in the second quarter, a very big upward revision than the first official estimate, 2.3%, according to the Commerce Department’s measure of gross domestic product, the broadest measure of economic activity. Economists projected the new number to be 3.2%.
Thursday’s upward revision is welcome news as China’s slowing economy is sparking volatility in stock markets, plunging currencies in emerging markets and potentially delaying a rate hike from the U.S. Federal Reserve.
– Dow up 200 points as calm returns to U.S. stocks. After several volatile days with huge swings in both directions, the Dow opened up a relative tame 200 points while the S&P 500 and Nasdaq both posted gains above 1%.
U.S. energy stocks were some of the biggest winners in the morning as oil prices gained close to 5%. There was also good news about the U.S. economy, which grew 3.7% in the second quarter of this year (…)
– Ukraine dodges default with $3.6 billion debt deal. Western investors have thrown Ukraine a financial lifeline worth $3.6 billion by agreeing to write off some debt and delay bond repayments. The restructuring applies to about $18 billion worth of bonds. It means Ukraine will avoid a costly default.
A haircut of 20% will be applied to debt covered by the agreement, yielding relief of about $3.6 billion, the finance ministry said in a statement. That could rise to $3.8 billion if bonds issued by the city of Kiev, and other international loans, are restructured along the same lines.
The International Monetary Fund agreed to lend Ukraine $17.5 billion over four years, while the European Union and United States also pledged substantial financial assistance.