A dramatic upward revision from 0.8% MoM to 1.8% MoM (after March's biggest jump since 1998), may be a small silver lining in the rear view mirror as construction spending growth tumbled to just 0.1% in May - the weakest since Nov 2014. It seems the climactic malinvestment boom in the last 3 months is faltering fast and is entirely unsustainable.
Here is the Clinton family's adjused gross income since 2007. The summary: $139.1 million in income since 2007, most of it thanks to speeches starting at $225,000 and going much higher. And that is your "everyday Americans."
"President Barack Obama has authorized using air power to defend a new U.S.-backed fighting force in Syria if it is attacked by Syrian government forces or other groups, raising the risk of the American military coming into direct conflict with the regime of President Bashar al-Assad," WSJ reports.
It appears ISM Manufacturing data has been 'leaked' early and is reportedly printing 52.7 in July, down from 53.5 prior and missing expectations. This is the weakest print since March as the Q2 bounce is now officially dead. Both imports (lowest since Jan 2013) and new export orders (lowest in 3 years) declined as employment tumbled. In fact every subcomponent fell aside from new orders, production, and supplier deliveries with order backlogs at their lowest since Nov 2012.
Amid the collapse in coal prices, not helped by the 'China situation' and President Obama's nudge, WSJ reports that the ailing US coal just got another black eye as Alpha Natural Resources is expected to file for chapter 11 bankruptcy protection early Monday to cut its more than $3 billion debt load. After four straight annual losses, Alpha - one of America's largest coal producers - has secured $692mm in DIP financing as it prepares its restructuring plan expected to sell some of the best mines and shutter others. It appears the Arch Coal's CEO's ominous words last week were prophetic - “Coal markets are as difficult as I’ve seen them during my 30 years in the industry."
Spending and Income data appears to have been the trigger sending WTI and Brent crude prices dramatically lower. WTI has now broken to a $45 handle, its lowest since mid-March..
The good news, personal income rose a better than expected 0.4% MoM (flat to the previous month's revised lower growth). The 'meh' news, personal spending rose just 0.2% - meeting expectations - but slowing its growth dramatically from the 0.7% revised May data. And the bad news, real personal spending was unchanged in June, its weakest growth (or lack of it) since February. This means the savings rate rose from 4.6% in May to 4.8% in June - its second lowest in 2015 (but increasing just as The Fed hopes for excape velocity consumption confirmed by their rate hikes in a circular logic fallacy).
One would think contrived confidence would lead to more confidence, and manipulated market record highs would lead in abundant euphoria and market bullishness, a traditional reflexive feedback loop used and abused by central banks the world over over the past century. One would be wrong.
If last week's shocking crash in the Employment Cost Index (ECI) to the smallest increase on record, was enough for some to seal the deal that the Fed will not hike rates for the balance of 2015 (and perhaps ever), here comes the Fed's unofficial mouthpiece, WSJ's Jon "Stingy Consumers" Hilsenrath, to debunk any such speculation with a note which likely came straight from the Fed titled the "Fed Doesn’t Demand Wage Growth Before Increasing Interest Rate."
The Athens Stock Exchange reopened on Monday after a five-week hiatus. Stocks fell nearly 23% out of the gate with the country's insolvent banks trading limit-down. Meanwhile, Markit confirmed that the Greek economy has for all intents and purposes collapsed, with Greece's manufacturing PMI printing at 30.2. New orders plunged to just 17.9, betraying a contraction of unprecedented depth.
- Deadline Draws Near for Puerto Rico (WSJ)
- U.S. to defend Syrian rebels with airpower, including from Assad (Reuters)
- Alpha Natural Resources to Seek Chapter 11 (WSJ)
- Iran’s Rouhani Says Nuclear Deal ‘More Than What Was Imagined’ (BBG)
- Cables Show Hillary Clinton's State Department Deeply Involved in Trans-Pacific Partnership (IBTimes)
- Win or Lose, U.S. Stocks Get Biggest Earnings Bang Since ’12 (BBG)
- Weaker China factories argue for more policy support as stocks swoon (Reuters)
Chinese Stocks Slide Again, Copper Tumbles To 6 Year Low; Greek Market Crashes After One Month Trading HaltSubmitted by Tyler Durden on 08/03/2015 - 06:57
If China had hoped it would root out intervention by eliminating Citadel's rigging algos, and unleash a buying spree it was wrong: the Shanghai Composite opened negative, and never managed to cross into the green, despite the usual last hour push higher, ending down -1.1% and down for 6 of the past 7 days. The real action, however, was not in Asia but in Europe, and specifically Greece, where the stock market finally reopened after a 1+ month "capital control" hiatus. Despite the attempt to micro manage the reopening, the result was not pretty, with stocks crashing 23% at the open and staging barely a rebound trading -17% as of this moment, even as banks promptly traded down to the -30% limit as the realization that an equity-eviscerating recapitalization (or bail-in) is now inevitable.
It appears that the recent spike in shipping rates was analogous to the dead cat bounce in crude oil prices: a speculator-driven anticipation for a sustainable rebound that never took place. And now, just like with crude prices, it is all crashing down.... again. According to Reuters, shipping freight rates for transporting containers from ports in Asia to Northern Europe dropped 22.8 per cent to $400 per 20-foot container (TEU) in the week ended last Friday, data from the Shanghai Containerized Freight Index showed.
Yet again the endless reasurance from the talking heads of the world is proven fallacious as the crash in China's stock market has apparently crashed its economy. China's Manufacturing PMI final print for July collapsed to 47.8 - its lowest since July 2013. The reaction is not pretty. China is down 4-8% from Friday's highs (led by high beta high-flyers in ChiNext), most Asian markets are down 2-3%, and the broad MSCI Asia Ex-Japan index is once again testing the lowest levels of 2015. But apart from that, China is contained...