While the U.S. markets were closed for the Labor Day Holiday, China’s central bank was once again busy.  In an effort to support Chinese stock prices that have plummeted over the past few months, the People’s Bank of China once again implemented a sizable stock-buying program, reversing intraday losses of -2.0% and finishing the session +2.9%.  That’s a big turnaround! Our best estimate is that China’s central bank has already pumped more than $230 billion into their markets, working to support prices from falling further as they work to engineer slower, more sustainable economic growth.

We’ve been saying for a while that without more stimulus, global markets will have a hard time moving higher.  And today’s action is proof positive.  We continue to see negative trends everywhere, and while today’s bounce is certainly meaningful it isn’t yet enough to change our significantly defensive cash position.