Tuesday saw huge gains for the Dow Jones industrial average, with 416.66 point gain–the largest in nearly five years. This came after the Federal Reserve released $200billion in “liquidity,” in an effective buyout, to raise hopes on the market.
The Asian markets followed, but the Shanhai Composite Index declined, on supposed concerns that China’s $1.5 trillion worth of U.S. Treasuries may see substantial price declines as a result of the buyout.
The Chinese markets are not the only nay-sayers, however.
“It wouldn’t surprise me today to see a 200-point drop, and another 200-point drop by the end of the week,” says Andrew Clarke, a trader for Societe Generale in Hong Kong. “The news yesterday was not meant to make a rally, but rather an organized stampede for the door.”
So much for the happy spirits.
Read the rest of The Street’s analysis here.