The stock market is all-in on the soft landing narrative but that’s not the only driver

Good news is good news again.

The S&P 500 is roaring today, up 43 points, or 1.0% to 4512. That’s a one-week high and an impressive performance despite rising Treasury yields.

It’s getting tough to pin down exactly what this market is trading around. In late August, there was a ‘good news is bad news’ theme for a time as the market fretted about inflation and higher rates. Now the market is increasingly convinced that rates are peaking despite rising oil prices and better economic data.

It’s all tough to square but it underscores that most market narratives are flimsy anyway.

One distinctive change in the past few weeks is China. We got an RRR cut today and I suspect that’s putting to bed some of the fears about a disorderly unwind in China’s financial sector related to bad loans. It also shows that China really does want to stop the bleeding in its economy.

At the best of times, China is an economic black box but it’s particularly tricky right now. After some worries though, the market is happy to go back to not worrying about Beijing.