China just announced its biggest economic stimulus since the pandemic.
Yahoo Finance’s Jared Blikre breaks down what the stimulus means for stocks and commodities worldwide:
After the details of the monetary stimulus and support for the stock market were announced Tuesday by the People’s Bank of China (PBOC), the nation’s benchmark index, the CSI 300 (000300.SS), surged 4.3% — its largest jump since July 2020.
The country’s currency, the renminbi (CNH=X), dropped 0.6% — the most since the Japanese yen imploded in early August.
In the US, stocks rose, but the biggest effect was felt in commodities. Silver futures (SI=F) skyrocketed over 4.5% to a decade-plus high. Copper futures (HG=F) — already on a nine-day tear — notched a 10th straight win as it surged to a two-month high.
The stimulus, China’s latest attempt to pull its economy out of a slump caused by a shaky property market and deflationary pressures, includes over $325 billion in measures, mostly via monetary — as opposed to fiscal — channels.
On Wednesday, Chinese shares extended their rally, with the Shanghai Composite (000888.SS) finishing up 1.2%. However, there remains growing skepticism about whether the steps will successfully turn around its economy.
