"Rabobank: The Key Question Is Why China Decided To Jump-Start Its Stocks Now?"

The answer is pretty damn obvious to students of the grassy knoll theory of investing.
To get the biggest worldwide crash going into September - October* you want stocks up, not down. Duh.
And, as laid out in late May:

...As for how to bet:

It looks like we're going to have a second wave.

And perhaps Ruth Bader Ginsburg has to get deathly ill to mobilize the base.
And a market crash.
Hurricane season looks to be above average.
Maybe Iran is convinced it might help to shoot at something. 

Now on to ZeroHedge:

Submitted by Rabobank's Michael Every
At time of writing the Shanghai stock exchange was up merely 1.8% on the day, quite disappointing after the 5.8% leap yesterday, but still meaning it has gained nearly 14% in just a few of sessions. That’s the best performance since late 2014, just before the same market went on its dizzying 2015 run. The same dizzying run that was overtly and blatantly a state-led bubble: and one that ended in a disastrous crash with all manner of nasty recriminations, including ‘don’t sell!’ off-the-record instructions, and apparent threats of arrest for those short-selling, or even writing negative research reports.

One wonders what the decision-makers at MSCI, who in the total absence of any comprehensive reforms in Chinese stock regulation post-2015 nonetheless decided to increase the country’s global portfolio weighting, are thinking right now. More so with hawkish US politicians already talking about the dangers of US capital being pumped into Chinese markets - and that US rhetoric is not going to get any less hawkish as Hong Kong CEO Carrie Lam introduces sweeping new police powers including warrant-less searches, property seizures, online surveillance, and not allowing people to leave the territory. That as Trump tweeted: “China has caused great damage to the United States and the rest of the world!” yesterday, and as a White House aide stated an executive order on China is apparently imminent.

While this is not an equity-focused, nor specifically China-focused Daily, this scale of market move needs some examination. What is going on? Let’s run through the options quickly:

• Is it led by Chinese demand? The data say no. We aren’t even back to the pre-Covid trend, and that would not justify a 14% gain.
  
• Is it led by Chinese supply? Much more likely – but is there any global demand for that supply? Not at the moment, and increasingly less so going forwards if you listen to the talk about shifts in supply chains out of China. So it’s stock-piling or product-dumping ahead, perhaps.
  
• Is it led by lower interest rates? No. There hasn’t been any major easing in China to generate the same lower rates/higher stocks knee-jerk response seen elsewhere. It isn’t able to ease so overtly because it needs to stop capital outflows.
  
• Is it led by QE? No. Yet even though Bloomberg today says China isn’t doing QE, look at a country with a 10-12% consolidated fiscal deficit pre-Covid, and perhaps nearer 20% at the moment; ask how it’s being funded (by the PBOC), and how much of that deficit spending flows into infrastructure; and consider that what one sees is quasi-MMT. Which is why China cannot afford to run a current-account deficit without losing control of its quasi-currency peg, or at least needs a net inflow of USD.
  
• Has this been a net-inflow/foreign-capital driven rally? No. This is a domestic story…so far – and one that seems engineered in the hope that it will become a foreign-driven rally. In all fairness, it’s not as if other major markets are not seeing blatant ramping from authorities one way or another --Trump uses Twitter to the same effect-- or fundamentals-defying trends.
  

Yet the key question is why China has decided to jump-start its stocks now? Why, when locals will act accordingly and listen to the authorities when they tell them where they are about to get their “guaranteed” minimum 20% annual return; and they follow that smooth, paved path through the financial jungle;…until it all ends in 2015 chaos again. Moreover, why given bond yields are spiking as a result, which a debt-laden economy cannot afford? Why, as punters walk away from Wealth Management Products, pulling the funding rug out from under the feet of many property projects as a result?
Perhaps to jump-start consumption? Yet property is more widely-held than stocks. Perhaps to stop the property bubble getting out of control? If so, stocks are hardly a less dangerous tiger to ride. Perhaps to swap debt for equity? Except bond yields are rising, which hurts most borrowers more than some can gain through stocks...

....MUCH MORE
 *June 22
Wolf Richter: " I, Who Hates Shorting, Just Shorted the Entire Stock Market. Here’s Why":

....Either way though, he also gifted us with this lovely little Easter Egg:

Fed Ends QE, Total Assets Drop. Liquidity Injection Ends
by Wolf Richter • Jun 18, 2020

That reduction in support for risk assets will take a will to play out, maybe August which would set up first a bond and then an equity decline going into September - October.
Something that some very big money wishes to see happen.