Hollande Vows "All Out War" Against ISIS After Priest Killing

After the latest terrorist attack on French soil, President Hollande vowed to wage war against ISIS "by every means". "We are confronted with a group, Daesh, which has declared war on us," Hollande said, using an alternative name for Isis. "We have to wage war, by every means, (but through) upholding the law, which is because we are a democracy."

New Home Sales Rebound To Highest Since 2008 As Median Home Price Rises Back Over $300,000

Moments ago the latest data from the Census Bureau shelved any lingering concerns about a sharp slowdown in the US housing market, when it reported that in June new home sales surged 25.4% from a year ago and up 3.5% from the upward revised May print of 572K to 592K, above the 560K expected, and the highest number reported since 2008, even if still well below half of the peak hit before the recession struck.

Tuesday Humor: Richmond Fed Survey Beats Expectations By 7 Standard Deviations

Aginst expectations of a -5 print, July's Richmond Fed printed +10 (up from a revised lower -10 in June). This is the 2nd biggest MoM spike since 1998 (the biggest being March's insane spike). This beat is a 7 standard deviation beat over expectations among the 9 economists tracking it with none of them forecasting a gain at all. Across the board components improved with a surge in employees, workweek and the biggest jump in new orders since 1998!

US Services Economy 'Bounce' Dies - PMI Tumbles To 5-Month Lows

Despite an excited bounce in US Manufacturing PMI's preliminary print (and ISM Services last month), Markit reports a disappointing drop in US Services to a 5-month low. New business slowed but that did not deter hope as business confidence rebounded (albeit from record lows). However, as Markit notes, "The U.S. service sector remained stuck in a low gear at the start of the third quarter of 2016..."

A "Cautious" JPM Warns That Apple "Expectations Are High"

"We remain cautious heading into Apple’s FQ3 results as we believe that iPhone expectations are still high for the second half of CY16. Our revenue estimate for the September QTR (FQ4) is 1.5% below sell-side consensus as we remain concerned about weaker consumer demand driven by macro conditions. We believe this could be exacerbated by consumers delaying upgrades this Fall in favor of a reported large form factor change in 2017."

RBS Warns Clients May Face Negative Interest Rates

In another reminder that monetary unorthodoxy in the face of NIRP is coming to a savings account near you, overnight the RBS banking group warned 1.3 million customers they could be charged negative interest rates if the Bank of England cuts base rates below zero. As seen in the letter posted below, the bank warned that: "Global interest rates remain at very low levels and in some markets are currently negative. Dependent on future market conditions, this could result in us charging on credit balances."

Case-Shiller Home Prices Drop Most In 2 Years

Despite its supposed seasonal adjustment, Case-Shiller home price growth in May tumbled for the 3rd year in a row (in fact, with revisions, the 0.23% drop since March is the biggest drop since June 2014). This is the first consecutive home price drop since 2012. The almost unbelievable 'stability' of the 5-ish percent growth in Case-Shiller home prices for the last 2 years is impressive if only for its historical lack of precedence but May's 5.24% YoY rise in the slowest since Sept 2015.

Crude Carnage Continues: WTI Hits $42 Handle On Inventories, Dollar

With WTI now down over 17% from its mid-June highs, and energy stocks just beginning to wake up to the 2015-analog collapse, fears are rising that once again low oil prices are not 'unequivocally good' for stocks or the economy. Between record speculative long positioning in futures, the fundamental strength of the dollar and surge in gasoline inventories remain the big overhangs (along with rising storage levels at Cushing as demand begins to fade seasonally).

Frontrunning: July 26

  • Priest killed in French church before police shoot dead hostage-takers (Reuters)
  • On raucous opening night, Democratic stars make a pitch for Clinton (Reuters)
  • Sanders Backs Clinton After Fractious Opening of Convention (BBG)
  • Some in Sanders' army seem determined to march on without him (Reuters)
  • Yen hits two-week high as Japanese stimulus expectations dialled back (Reuters)

USDJPY Plunges On Japan Stimulus Concerns; US Futures Flat With As Fed Begins Meeting

In a turbulent session for FX, the Yen soared as much as 1.4%, the most in three weeks, after Finance Minister Aso says the government will "leave actual policy measures to BOJ", sending the Nikkei lower by 1.4%. European stocks and U.S. equity index futures are little changed despite the slide in the key carry pair as the Fed starts its two day meeting.

Islam Vs The West - Has A Neo-'Operation Gladio' Been Started?

The “Islam versus the West” meme is filled with lies. In much of the post-war 20th century period, the CIA and other intel agencies prosecuted Operation Gladio, which manufactured terror incidents purportedly generated by left-wing forces. Has a neo-Operation Gladio been started?

"Bigger Than Brexit?"

Following Brexit's apparent "storm in a teacup," it seems there is a new narrative to worry about...