Major averages barely budged yesterday on lower volume. The tight trading range observed across the major averages is constructive. That said, stock futures are down sharply after China announced they would allow fund managers to lend stocks for short selling. This will boost the supply of shares, thus the selling in world markets on this news is not due to any economic issue. Chinese markets have soared 33% year-to-date so the decision was potentially motivated by China attempting to cool down the buying frenzy due to their relaxed monetary policies. Hong Kong's Hang Seng index HSI, fell nearly 6% on the news taking down other world markets along with it. The reaction should be short lived since central banks who attempt to slow markets using such tactics ultimately fail. In addition, European markets are down sharply this morning on more fears of an impending Greek default and exit from the Eurozone. The DAX is down -1.76%, the FTSE 100 - 1.00, and the CAC 40 -1.26% at the time of this writing.
Audio manufacturer Harmon International (HAR) had a pocket pivot yesterday. Earnings are accelerating, group rank 40. HAR had a gap up on its prior earnings report.
Gil Morales will be in the VoSI chatroom today at 7:00 AM Pacific, 10:00 AM Eastern.
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