"Now, let me be honest with you," Obama said. "I am in my second term. It has been an extraordinary privilege for me to serve as the President of the United States. I cannot imagine a greater honor or a more interesting job. I love my work. But under our Constitution, I cannot run again." He then added: "I actually think I’m a pretty good president. I think if I ran, I could win. But I can’t. So there’s a lot that I’d like to do to keep America moving, but the law is the law."
"Look at the data, and you’ll realize that our present concerns are not hyperbole or exaggeration. We simply have not observed the market conditions we observe today except in a handful of instances in market history, and they have typically ended quite badly..."
The Conference Board just reported that US Consumer Confidence, having bounced in June, has collapsed in July (and saw the bounce revised drastically lower). At 90.9, this is the lowest since September 2014 and is below the lowest economist estimate. More worrying is the crash in "hope" - as consumer expectations plunge from 92.8 to 79.9 (lowest since Feb 2014). This should not be a surprise since Gallup has been indicating fading confidence in its weekly survey for a while. 57% of Americans believe the US economy is "getting worse," which has left Gallup's Economic Confidence Index tumbling to its lowest in 10 months.
It all looked so awesome in the pre-open... thanks to the overnight PPT. But as soon as US equity markets opened, the selling began as Biotechs were hammered lower sending Small Caps plunging and Nasdaq into the red...
Anyone tempted to gamble on buying the proverbial dip in Chinese equities after Monday’s dramatic 8.5% sell-off probably shouldn’t, says Tom DeMark, who called a top and shortly thereafter, a bottom, in the SHCOMP back in 2013. "The die has been cast. You just cannot manipulate the market."
The 0.18% month-over-month decline in Case Shiller home price index is the biggest since July 2014 which confirms the David Blitzer's view that "over the next two years or so, the rate of home price increases is more likely to slow than to accelerate." His biggest fear is that "first time homebuyers are the weak spot in the market," adding that prices are increasing about twice as fast as inflation or wages. Moreover, other housing measures are less robust - housing starts are only at about 1.2 million units annually, and only about half of total starts are single family homes. Sales of new homes are low compared to sales of existing homes.
"Greece is playing it correctly. Agree to everything. Give Germany no excuse to do what they want. Get the money. This is why France, among others, want this all agreed as quickly as possible, because they know this deal is not how it will end, but an end that keeps the EUR together must be found. The Germans know it too. They also know that they have been had and it is their own fault."
The U.S. E&P industry is really good at spending other people’s money to increase production. It doesn’t matter if there is a market for the oil and gas. As long as the capital keeps flowing, they will do what they do best. Don’t be distracted by the noisy chatter about savings through efficiency or re-fracking. Just look at the income statements and balance sheets from first quarter and it’s pretty clear that most companies are hemorrhaging cash at these prices. The U.S. rig count increased by 19 this week as oil prices dropped below $48 per barrel – the latest sign that the E&P industry is out of touch with reality.
The Bloomberg Commodity Index tumbled once again today, hitting its lowest level since 2002. Stocks did not. We have seen this kind of 'deflationary' boom before... and it did not end well...
The German Council of Economic Experts is out with a new report on euro area crisis management which backs state bankruptcies and euro exits for governments deemed "uncooperative." "A permanently uncooperative member state should not be able to threaten the existence of the euro. In view of this, the Council of Economic Experts recommends that the withdrawal of a member state from the currency union must be possible as an utterly last resort," the council says.
- Fed Officials May Offer More Clarity on Rates (WSJ)
- Stocks rebound, shrugging off volatile and weak China (Reuters)
- Three-Day Selloff Knocks 11% From China Shares (WSJ)
- China shares fall again as Beijing scrambles to calm markets (Reuters)
- VAT hikes to make Greek destination less popular (Kathimerini)
- Varoufakis - Something is rotten with the eurozone’s hideous restrictions on sovereignty (FT)
- EU denies Varoufakis 'tax control' claims (FT)
For the first half an hour after China opened, things looked bleak: after opening down 5%, the Shanghai Composite staged a quick relief rally, then tumbled again. And then, just around 10pm Eastern, we saw a coordinated central bank intervention stepping in to give the flailing PBOC a helping hand, driven by the BOJ but also involving NY Fed members, that sent the USDJPY soaring which in turn dragged ES and most risk assets up with it. And while Shanghai did end up closing down -1.7%, with Shenzhen 2.2% lower at the close, the final outcome was far better than what could have been, with the result being that S&P futures have gone back to doing their thing, and have wiped out all of yesterday's losses in the levitating, zero volume, overnight session which has long become a favorite setting for central banks buying E-Minis.
The trend is your friend... until it ends...