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Even Mr. Scrooge could not put a dent into the holiday spirit on the first Monday after Christmas. Over the weekend, the Chinese government acted like the cold hearted, tight fisted man by raising interest rates for the second time in 2 months. 

http://www.fx360.com/commentary/kathy/4667/why-forex-traders-shrugged-off-chinese-rate-hike.aspx?num=1293480416401

JamesGRickards 

This weekend the Chinese central bank called the 'Peoples Bank of China' raised interest rates by 25 basis points. This move by the central bank was expected weeks ago as the consumer price index was indicating high inflation for the Chinese economy. The Chinese economy has been known to be the growth engine of the world. Should the Chinese take further steps to cool off its hot economy this action could effect many of the leading commodity stocks in the United States and around the world.

Freeport McMoRan Copper & Gold Inc.(NYSE:FCX), and Southern Copper Corp.(NYSE:SCCO) are two of the leading copper producers in the world and this interest rate increase by the Chinese could effect these stocks in the near term. This morning Freeport McMoRan is trading higher by 0.37 cents to $118.54. Southern Copper stock is trading lower by 0.20 cents to $48.46. While these leading copper stocks are not being effected just yet this morning other commodity stocks are under pressure. BHP Billiton Ltd.(NYSE:BHP) which is a leading mining company that mines a diverse group of natural resources is trading lower by $1.22 to $91.10. It would be prudent to look at more leading commodity stocks to see if they are trading lower today due to the Chinese interest rate hike. These stocks may react more severely to rate increases by the Chinese.

The markets opened lower only to move higher as expected. The SPDR S&P 500 ETF (NYSE:SPY) opened just above the 200 moving average support. In addition, the light volume and Federal Reserve propping appears to be good enough to push the markets higher for a majority of the day. The light volume should continue until the new year. Small caps continue to roar with micro biotechnology leading the charge. In addition, small regional banks seem to be hot too. Join the Research Center to gain access to the most exclusive analysis, guidance, swing trade and education group.

Gareth Soloway
Chief Market Strategist
www.InTheMoneyStocks.com
#1 Rated

Mark Pervan, senior commodities analyst at ANZ said.

http://www.cnbc.com/id/40810967

very good article to read folks 

Knowledge is power 

Promptly after those two cuddly bears explained how the JP Morgue is manipulating the silver market, and the xtranormal video went viral,forcing the FT to release an indemnification that "according to sources"JPM had covered a major portion of its silver short (only tosubsequently end up with 90% control of other metals markets), here theyare back, explaining in Part 2 of the series just what the next stepsin the unwind of the biggest metal manipulation scheme will look like.The kicker: a JPM insider has told one of the bears that there is nocommercial silver left, "it's all smoke and mirrors, and the CFTC can donothing about it other than pray." Other topical items explained:silver backwardation, that there are two commissioners at the CFTC onthe JP Morgue's payroll, the BIS' fractional gold system and the usageof side pockets for sovereign gold, and pretty much everything that tiesthe loose odds and ends in the PM manipulation story.

As the rest of the world celebrates Christmas, blissfully pretending all is good, and the Fed can manipulate markets to infinitywithout at least one of the numerous violated laws of physics beingreasserted in the process, things in China are once again remindingthose who care that just as liquidity giveth, so does liquidity taketh away. We pointed out a week ago that the 7 day Reporate in China recently hit a post-Lehman high, as banks areincreasingly concerned that following 3 RRR hikes, the PBOC has nochoice but to resort to some tightening measure that actually works. As aresult excess liquidity has suddenly become rares than hen's teeth. Today we get a first hand lesson of why this was material: Dow Jones reports that the Chinese MoFhas failed to attract sufficient interest in its 3 Month 20 billion CNYauction. The result: SHCOMP is now down 1.2%. Bottom line: as the worldis sleeping, China just had a failed bond auction. If news mattered,this would be a very disturbing event. Luckily for Ben, it doesn't. Forthe time being. It will soon. Then Montier's mean reversion meme may just strike with great deferred vengeance and furious accrued anger.

From the Dow Jones:

China shares extend their falls following news the Ministry of Financefails to attract enough bids to sell all of its planned CNY20 billion3-month bills in an auction. The Shanghai Composite Index is now down1.2% at 2819.72 and analysts peg support at 2800. The MOF'sunsuccessful bill auction is fresh evidence of tight liquidityconditions in the market, due to China's three RRR hikes since Novemberand rising cash demand near the year-end. "Institutions are inclined toexpedite pocketing in some profit," says China Post Securities, adding"the situation will increase the likelihood of a bearish market in theshort term." Banks continue to fall on various news reports that Chinais likely to use new measures, such as special RRR hikes, to rein incredit expansion next year.