Despite all the hopes and prayers of illiterate farmers everywhere, Chinese stocks refuse to hold a bid and down 3-4% at the open amid suspension of around 160 individual securities. In the pre-open to open, Shanghai Composite is down 3.2%, Shenzhen is off 3.5%, and China's Nasdaq - ChiNext is down 3.8%. This leaves ChiNext down over 40% from its highs as the cost of insuring downside in Chinese stocks explodes to record highs. As China goes through the 1929 playbook to save its 'market', it appears "momentum" has shifted.
Forget the mad spinning. Here it is, in a nutshell, what it really takes for Iran and the P5+1 to clinch a game-changing nuclear deal before the new July 7 deadline.
Earlier this month, news emerged that the US government had suffered its worst cyberattack ever. There’s a good chance the attack is even worse than what we've read about. So what does the Obama administration want to do to solve the problem? For starters, it’s proposed “economic sanctions” against China, which it holds responsible for the attack. And only a few days after the OPM hack, Senate leaders tacked on the Cybersecurity Information Sharing Act (CISA) - which creates a back-door channel for government agencies to retrieve, analyze, and store enormous volumes of personal data - to a defense bill to avoid debate on the measure. It didn’t work – the Senate failed to advance the legislation for now... but it is a good time to begin securing your electronic life. The US government certainly isn’t going to do it for you.
As the strong dollar prices out the South American buyers who have been largely responsible for Miami's booming condo market, developers look East for a savior.
“I don’t really follow news on stocks that closely. My hairdresser said it was still a bull market and I needed to get in”...
China's PBoC-assisted plunge protection program got off to a rather inauspicious start on Monday after an early bid to ramp the SHCOMP fizzled fast.
Perhaps the more important catalyst for asset price changes of late is Chinese economic slowing rather than fears of Grexit?
"Wake up people of the world and investors. Greece will come to your neighborhood very soon, maybe not this year, but next year or whenever it is, because the world is over infected," Marc Faber warns, in an interview on Bloomberg TV. Faber also discusses the collapse in Chinese equities and the prospects for a Fed "liftoff."
The Fed understands that economic cycles do not last forever, and we are closer to the next recession than not. While raising rates would likely accelerate a potential recession and a significant market correction, from the Fed's perspective it might be the 'lesser of two evils. Being caught at the "zero bound" at the onset of a recession leaves few options for the Federal Reserve to stabilize an economic decline. The problem is that they may have missed their window to get there.
Earlier today we commented that while stock markets across the globe, heavily influenced by central bank intervention from the PBOC to the SNB, are doing everything in the central planners' power to telegraph just how irrelevant Greece is, other indicators are far less sanguine. One example was copper, which plunged to a level not seen since February, and was in danger of breaching its 15 year support level. The commodity weakness today has persisted and is now crushing both WTI crude and Brent, both of which are in freefall, and WTI is now down over $3 on the session, or 6%, to a $53 handle, the biggest one day plunge since February to a level last seen in early April when there was much hope that the dramatic plunge in December and January was finally over. Turns out it wasn't.
"My concern is not just that markets are mis-pricing Greece contagion, mis-pricing deflation, mis-pricing street liquidity and mis-pricing the (now negative) trend in corporate (US) revenues and earnings (Q2 earnings season is upon us and may well show year-over-year earnings down 5%/5%+). My concerns are also that markets are way too optimistic about global growth (especially the US), about China, about the ability of policymakers to do anything new and/or effective to alter things meaningfully to the upside,"
What do you do when two policy rate cuts, $19 billion in committed support from a hastily contrived broker consortium, and a promise of central bank funding for the expansion of margin lending all fail to quell extreme volatility in a collapsing equity market? You ban selling.
"After the Greeks voted against accepting the latest demands from its creditors, Merkel is facing her worst nightmare: a possible Greek exit from the euro, a possible exit from the EU completely and loss of confidence in the currency itself. Half of her was Merkel — the pragmatic economist, the other was Merkel — the great European. She has now discovered, in her vacillation, she has not shown the leadership expected of the most powerful woman in the European Union."
- Greece Bailout Referendum: They Voted ‘No’. Now What? (BBG)
- Varoufakis Quits as Greece Enters New Showdown With Europe (BBG)
- Merkel to Meet Hollande as Greece Told to Make Next Move (BBG)
- German line hardens after Greek referendum 'No' (Reuters)
- BOJ keeps rosy view of regional Japan, watching markets after Greek upset (Reuters)
- Oil falls on Greece vote, China stock market turmoil (Reuters)
- China Urges U.S.-Iran Compromise 36 Hours to Nuclear Deadline (BBG)
- U.S. and Iran: the unbearable awkwardness of defending your enemy (Reuters)