Market Giddy as China Cuts, Fed to Signal Easing

Markets are rallying this morning after a surprise cut by the Chinese Central Bank. The 25 basis point cut is their first cut since the 2008 crisis. The move is meant to jolt China's manufacturing sector which is expanding at a slower rate then government officials are comfortable with.

Investors in China have felt the pain of the slowdown as markets there tumbled. The Hang Seng Index is lower by close to 10 percent in the past month, as investors in the US and abroad opt for the safety and shun risk assets in international and emerging markets.

In addition to the China rate cut news, Federal Reserve Chairman Ben Bernanke will be testifying before Congress today and could indicated the Fed is willing to do more to bolster growth. A number of fed members have indicated additional quantitative easing is on the table as the situation in Europe worsens and threatens to bury the nascent U.S. recovery.

iShares FTSE China 25 Index ETF (NYSE: FXI) is higher by 2.4 percent in pre-market trading on Thursday. In the US, SPDR S&P 500 (NYSE: SPY) is expected to open higher by 0.9 percent. United States Oil ETF (NYSE: USO) is higher by 1 percent.

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