7,364 Miles From Wall Street, A $114 Billion Stimulus Set Off the Biggest Market Surge Since 2008

Here in the US, we tend to focus on Wall Street when it comes to the stock market. Surprisingly, our readers don’t really care about the Tulip market in the Netherlands. 

But let’s take a second to look way beyond Wall Street—7,364 miles to be exact. That's where some serious history is being made, with Chinese stocks experiencing their best week since 2008. Yes, you read that right, since 2008. Beijing decided it’s time to let the money printer go BRRRRR, and they’re making it rain—with a $114 billion war chest aimed squarely at their flailing stock market.

Let’s put this into perspective: if you’d been invested in Chinese stocks over the past three years, congratulations—you’ve probably lost about 10% of your money. Yep, Chinese stocks have shed $6 trillion in value. That’s the equivalent of the UK’s economy... times two. 

Basically, they’ve been in freefall, but Beijing’s new "stimulus blitz" has turned the tables. Cue the CSI 300 index, which shot up 15.7% this week, its best performance since the financial crisis in 2008.

So what’s in this $114 billion war chest? Well, the People’s Bank of China whipped up an Rmb800 billion ($114 billion USD) lending pool that’s essentially giving companies a blank check to buy back their own stock. They’re also funneling money to non-bank financial institutions like insurers so they can start snapping up local equities. 

Imagine if the Fed handed over truckloads of cash to American corporations and said, “Go ahead, treat yourself to a shopping spree,” but that’s exactly what’s happening—just on the other side of the world.

The markets reacted in a big way. On Friday, the CSI 300 index rose 4.5%, bringing its total gain for the week to 15.7%. Hong Kong’s Hang Seng index followed suit, climbing 3.6% and finishing the week with a 13% increase. This rally has caught global attention, extending beyond China. European markets also benefited, with the Stoxx 600 hitting record highs, while industrial metals like copper and aluminum saw significant gains. When China injects $114 billion into its economy, the effects are felt worldwide.

The fear of missing out is real right now. Investors are jumping in, worried they’ll miss out if the rally continues. Trading was so intense that it even caused some glitches on the Shanghai stock exchange. 

It seems like everyone suddenly remembered China’s stock market and wants a piece of the action before things really take off. There are already whispers of a potential 20% upside in Chinese equities, and when someone like billionaire investor David Tepper is on CNBC saying he's buying more of everything related to China, it’s hard not to take notice.

The stock we alerted on Wednesday has already rocketed up 56%, and with latest data showing $3,000,000 still short, the pressure is building for another big move. It’s not over yet—this setup could gap up before the market closes today. Click here to become a premium member and get in on the action with over 2,000 other traders today.

Stock.News does not have positions in companies mentioned.