“China’s Intervention Sends Stocks Soaring. Powell’s Unlikely to Make That Big a Splash,” Barron’s declared yesterday morning three hours before the opening bell.

And then, an hour and a half after the closing bell, The Wall Street Journal published this: “China Shares Soar After Beijing Signals Support; Alibaba Jumps 37%.”

As some of you may know, Chinese stocks weren’t faring well for a bit there. And earlier this week was especially rough. To quote the Journal:

Investors are concerned about a range of issues, including U.S. delistings, tensions with the U.S., China’s intensifying battle with Covid-19, and Beijing’s long-running series of regulatory crackdowns.

Yet apparently all they needed was some nice words of reassurance from the country in question. The result was “Hong Kong’s main benchmark staging its biggest single-day rally since the global financial crisis.”

In case you did what I did and misread that the first time around, that’s not referring to the 2000 shutdowns. That’s as far back as 2008.

So what exactly did Beijing do to cause such a rally – both there and elsewhere, including in the U.S. –especially with tech stocks like Alibaba (BABA)?

Among other things, Chinese officials said they would introduce market-friendly policies and keep the capital market running smoothly, said Xinhua, China’s state news agency. Participants at a meeting chaired by Mr. Liu also said any policy that could move markets should be developed in coordination with financial regulators, Xinhua reported.

As for the other part of that Barron’s headline – the second half that diminished the Fed’s influence – that’s a bit trickier. Because the Fed has massive influence over the U.S. and other markets. Yet…

I would agree that could very well be waning.

More Non-REIT News You Need to Know About

The current market situation is complex regardless. It’s really only safe to say that investors are acting off momentary emotions instead of long-term mindsets.

Consider yesterday’s action, as summarized by Yahoo Finance:

Stocks rose Wednesday afternoon as traders considered the Federal Reserve’s latest monetary policy decision, in which the central bank hiked interest rates for the first time since 2018 in a move matching market expectations.

This implies that the major indices’ bullish morning moves were all due to China’s influence. Yet we also want to consider this:

The S&P 500, Dow, and Nasdaq rebounded in the final 30 minutes of trading after declining in the immediate aftermath of the Fed’s latest policy decision released at 2 p.m. ET. Treasury yields built on earlier gains. The yield curve inverted at one point as the yield on the shorter-duration and more policy-sensitive [five-year] note jumped above that on the 10-year note.

That’s a very mild summary for this kind of S&P 500 activity:

(Click on image to enlarge)

(Source: CNBC)

The Dow even went red for a moment before everything shot right back up. So it seems safe to say the Fed did influence the markets after all – despite doing nothing unexpected.

I do also want to mention the enormously overlooked news that Saudi Arabia is considering ditching the so-called petrodollar. Maybe not altogether at first, but a Saudi official reportedly told the Journal that:

The dynamics have dramatically changed. The U.S. relationship with the Saudis has changed. China is the world’s biggest crude importer, and they are offering many lucrative incentives to the kingdom… China has been offering everything you could possibly imagine to the kingdom.

If that deal goes through, the repercussions would be intense, to say the least. And we have to acknowledge it as a factor behind China’s rally yesterday already.

The World According to REITs

Moving right along to the so-often comforting real estate investment trust (REIT) sector, here are your three updates for today:

• Retail Value (RVI) announced it can move forward with its previously announced sale of Crossroads Center in Gulfport, Mississippi, for $38.5 million. If/when that deal closes, RVI will then voluntarily delist from the New York Stock Exchange early next month. Where it will go from there is currently unknown.
• Medical Properties Trust (MPW) finalized its partnership with Macquarie Infrastructure Partners V. The private fund will now hold a 50% interest in eight of MPW’s Massachusetts-based general acute care hospitals. All eight are operated by Steward Health Care System.
• DiamondRock Hospitality (DRH) debuted Hotel Clio in the Denver, Colorado-area’s Cherry Creek. This is its third Luxury Collection asset now.

Oh, and before I move on to the graphic below, I want to make sure to say a giant happy St. Patrick’s Day! Here’s hoping it’s so much more than lucky for you all…

And definitely filled with green.

(Source: The Daily REITBeat)