Petrobras Soars, General Electric Gains as China's Easing Sinks Dow

Michael Haddad

China Syndrome. The Dow Jones Industrial Average was sliding on Monday, but don’t blame the bond market—it is closed Monday. Look overseas instead, where China’s decision to cut its banks’ reserve-requirement ratios sent its market sharply lower on concerns about its economy. General Electric was rising after receiving an analyst upgrade. In today’s Morning Movers, we…

…offer potential reasons for why China’s stock market sank on Monday; …dig into the Culp effect at GE: …and highlight two investor meeting later this week. Barron’s Briefs The Chinese loosened credit again. Surely that’s a good sign? Not quite, as Chinese markets dropped about 4%. Is it because of decelerating economic data, alleged device hacking, trade wars, or election meddling? Yes to all the above. China’s troubles, meanwhile, are spilling over into the U.S. S&P 500 futures have declined 0.2%, while Dow Jones Industrial Average futures have dropped 90 points, or 0.3%. Nasdaq Composite futures have fallen 0.2%. The Culp effect. General Electric (ticker: GE) was upgraded at Barclays with a $16 target. There is a positive trading scenario that can develop where Street analysts attempt to be early, taking more positive views on the beleaguered conglomerate ahead of the new GE CEO Larry Culp’s introductory remarks. When the news comes, analysts will view the expected kitchen-sink cut to earnings guidance and asset sales positively. GE’s stock has been its own thing for a while now—detached from the rest of the market. It is the only stock with a large aerospace franchise in the S&P 500 that is down year to date. Of course, it is the power business, and the asset writedowns in that operation, that are behind the negative sentiment. Power competitors Cummins (CMI), Wartsila and Siemens are all down year

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