Global Market Rally Triggered by U.S. and China Policy Moves

In a week marked by global market turbulence, both the U.S. and China implemented substantial economic measures. The Fed slashed rates by 50 basis points, igniting risk appetite. China followed suit with a series of policies: a 50 basis point cut in the reserve requirement ratio, a 20 basis point reduction in the policy rate, and measures to lower mortgage rates and facilitate stock buybacks.

The market reacted positively. Chinese stocks soared, with the Shanghai Composite rising 4.15%, its largest daily gain in over four years. Hong Kong's Hang Seng Index broke through 19,000, up 4.13%. U.S.-listed Chinese stocks also rallied, with the Nasdaq Golden Dragon China Index jumping over 9%.

Emerging markets also benefited, with the MSCI Emerging Markets Index reaching a two-and-a-half-year high. The surge was driven by expectations of stronger Chinese growth supporting commodity prices in Latin America.

Meanwhile, weak U.S. economic data—a 6.9-point drop in consumer confidence—fueled speculation of further Fed rate cuts, pushing gold prices to new highs. The COMEX December gold futures hit $2,689.40, while spot gold surged past $2,660.

Investors flocked to Chinese assets, betting on continued growth and policy support. The iShares China Large-Cap ETF (FXI) and KraneShares CSI China Internet ETF (KWEB) both saw significant gains.

In summary, coordinated policy moves by the U.S. and China sparked a global market rally, with Chinese assets and gold leading the charge. Investors are betting on sustained growth and further monetary easing, but risks remain.