Archive - Jul 2015 - Story

EURO AREA, ECB SAID TO DISCUSS GUARANTEE AS HUMANITARIAN ACTION

The US stock market may be in shambles and the Mahwah Stock Exchange is offline for nearly 2 hours now, but that had no impact on demand for US paper, in fact moments ago the US Treasury just sold $21 billion in 10 Year paper without a single hitch. With a When Issued of 2.233%, the bond priced 0.8% through at 2.225% showing that when one can't buy anything else, one buys what one can, in this case 10 Year paper.

Over the course of the last few years one thing that has been prevalent more than nearly any other time we can recall is just how many so-called "experts" have lined up to proclaim how their prognostications "were surely sound." The rationale? They must be correct in all their assumptions for – "Just look at these markets!" Well suddenly when one looks at these markets – it's not for the reasons the "experts" wanted. Now it's: "What in the world is going on in these markets!?"

... if and when the central banks can no longer trade E-Minis with each other, we suggest you panic.

Facing an acute cash shortage and a worsening credit crunch which together threaten to leave government employees in the lurch and cut off the flow of imported goods, Kathimerini says Greece is preparing for the launch of an "alternative currency." 

After valiantly defending the 121 level, moments ago what is perhaps the most important carry currency for the US stock market dipped below and is now trading at fresh lows not seen since May. What happens next: "A break below that point will further imply that the decline since June isn’t actually corrective at all but rather something more impulsive. If this is true then the next likely target should be down at ~118.96; a 1.618 extension from the June high."

"With this brewing crisis around Greece, the fact the Shanghai stock market is exposing all kinds of uncomfortable truths about China, (for instance, the lack of competitiveness, overleverage, massive over-expectations in valuations, the failure of the stock market as “bread and circuses” for the middle classes, and the fears of the party at a troublesome time), and the big bond reversal in the last quarter… and its perhaps surprising that things aren’t a whole lot worse. It’s no wonder global commodity markets are flimsier than a chocolate tea-pot. The first half of the year was pretty torrid… but it could still prove pleasant  compared to what may be coming. I’m wondering if Global Markets are poised on the edge of the precipice about to take a step forward?"

For the 2nd week in a row, crude oil inventories saw a build (after 8 weeks of draws) albeit a modest 384k barrels. Cushing also saw an inventory build. At the same time, production rose very modestly back to near cycle record highs (thouygh we note an extremely small drop in Lower 48 production). Crude prices have tumbled on the news as apparently yesterday's exuberance over better demand data from EIA has been long forgotten...

It has been almost exactly one year since Micorsoft announced it would fire a record 18,000 people (surpassing the previous all time high layoff round of 5,800 in 2009) form a company that one upon a time seen as infallible as AAPL. So perhaps in order to release more funds with which to buy back its struggling stock, moments ago Microsoft did what it had to do to make corporate executives richer, and reported it would lay off another 7,700 workers.

This morning we experienced an unprecedented surge in traffic which brought our servers to a grinding halt. We are happy to announce that we are now back up. In the meantime... a pre-emptive attempt at plunge protection (by breaking NYSE just like on Monday) failed as NYSE re-opens and stocks slumped. Seeing this, the NYSE decided to break again and stocks ripped...

Seems like 'glitches' are becoming a little too common...

*UNITED AIRLINES U.S. FLIGHTS GROUNDED, FAA SAYS IN NOTICE, CITES 'AUTOMATION ISSUES' IN UNITED AIRLINES STOPPAGE

This is the 2nd such setback in six weeks!

"At the moment and in principle we see, as the chancellor said expressly in her press conference in Brussels, no occasion at all to discuss this issue - there is no leverage or basis for that," Martin Jaeger said at a news conference. "That refers to a haircut in the classic sense but I explicitly add we also take that to mean measures that aim to bring about a reduction in the cash value of debt - those are things that you hear in discussions under profiling, restructuring and similar things."

At around 645ET, EURCHF suddenly took off out of nowhere. This instantly lifted European stocks off new post-Greferendum lows, slammeds EU credit risk lower, lifted US equity markets, and drove Treasury yields higher. The SNB has declined to comment on whether it intervenened but we ask in all frankness, have we become so divorced from 'free markets' that China can blatantly enter markets to save them (and fail) and European markets can mysteriously go bid and no one bats an eyelid that this is all rigged.