EM ASIA CREDIT: Greentown China: Monthly sales strong

The S&P(ESU5) overnight range was 6490.25 - 6516.50, SPX closed +0.21%, Asia is currently trading around 6510. The S&P is consolidating around 6500 as the market contemplates what the next potential driving factor will be, interest rate cuts or the slowdown in growth that leads to the cuts. This morning US futures have opened slightly higher, E-minis +0.05%, NQU5 +0.05%. The stock market looks well overdone and is in what is supposed to be a difficult seasonal period, but it remains in an uptrend and there does not look to be any imminent signs of a correction yet.

• Lance Roberts on X: "Funding spreads are improving as portfolio managers begin to re-risk portfolios. The improvement should continue to provide a bid underneath stocks as we head into year-end.  That doesn't mean markets won't experience a pullback here and there, though.” See Graph Below.
• Wei Li(CIS BlackRock) on LinkedIn - “We just might buck the September bad seasonality trend : Fed now has enough macro justification for near term cuts; Earnings holding up, mostly by tech+. Mag7 expected to grow 25% this year vs 4% for the rest. I of course worry about labour market deterioration - 3m average job creation of 29k is just over 1/10 of Jan's 3m average of 232k - but for now at least, the above mix supports markets.”
• RenMac on X: "Job finding is the risk in the labor market. According to the NY Fed SCE, the probability of losing a job remains relatively low. However, the mean probability of finding a job if you lose one today plunged to 44.91%, a level never before seen in the history of this survey.”
• Daily Chartbook on X: "Contrary to consensus, we think September is going to be an up month, and that's because the Fed's been on hold all year and it's going to cut for the first time in September. That's only happened twice in the last 50 years ... and markets did well both times" - @fundstrat.

Fig 1: Equity Funding Spreads

Source: MNI - Market News/@LanceRoberts/Goldman Sachs

President Xi Jinping urged BRICS countries to remain committed to building an open global economy, emphasising the need to share opportunities and pursue win–win outcomes through openness. Speaking at a virtual BRICS Summit chaired by Brazilian President Lula da Silva, Xi said economic globalisation is “an irresistible trend of history,” stressing that countries cannot prosper without an open international environment and that “no nation can afford to retreat into self-imposed isolation.”

China’s imports and exports totalled RMB3.87 trillion in August, up 3.5% from a year earlier but 3.2 percentage points slower than July’s pace, Yicai reported. Exports and imports rose by 4.8% and 1.7%, marking the third straight month of gains in both, Yicai noted. Wang Qing, chief macro analyst at Oriental Jincheng, said the export slowdown from July's 8% growth was largely expected, citing last year’s high base and weaker shipments to the U.S. Wang estimated U.S. exports shaved 5.1 percentage points off overall export growth in August, a 1.8 point larger drag than in July.