Markets dipped into the red at the opening and then started to melt up on falling volume. Oil stopped its decent as the dollar's rally eased on reports that Greece would avoid a default.
The averages have recovered 75% of yesterday's losses as skeptics warn there are more losses to come. Many more 'stable' analysts write off yesterday's losses as simple number crunching withing the market system.
Here is the current market situation from CNN Money
North and South American markets are higher today with shares in U.S. leading the region. The S&P 500 is up 0.76% while Mexico's IPC is up 0.48% and Brazil's Bovespa is up 0.02%.
$NYA200R chart below is the percentage of stocks above the 200 DMA and is always a good statistic to follow. It can depict a trend of declining equities which is always troubling, especially when it drops below 60% - 55%. Dropping below 40%-35% signals serious continuing weakness and falling averages.
ATHENS (Reuters) - Greece's government on Wednesday said it is starting to draft an agreement with creditors that would pave the way for aid, but European officials quickly dismissed that as wishful thinking.
(Reuters) - U.S. stocks were up in late morning trading on Wednesday, rebounding strongly from their steepest fall in three weeks on Tuesday, as the dollar's rally eased on reports that Greece would avoid a default.
When companies have a burning need to boost their stock price and/or have no organic growth opportunities requiring fresh investment, they do one thing: engage in stock buybacks (usually funded with recently issued bonds). We first warned about the dangers of such a "strategy" in 2012, and most recently, earlier today the WSJ once again noted that "U.S. Firms Spend More on Buybacks Than Factories."
The reality is that stock buybacks are great... as long as the stock price keeps rising. They are also great as long as the stock isn't so illiquid that once the sole buyer withdraws, be it the company itself or its CEO (in the case of Hanergy using corporate funds) the stock crashes.
The real problem emerges when after sinking hundreds of millions, or more, in stock buybacks, the stock no longer keeps rising.
This is precisely what happened to KORS stock. As Dominique Dassault points out, earlier today Michael Kors reported abysmal earnings which have lobbed a whopping 23% off the stock price and the market cap of KORS just today.
But it was not KORS' operational issues that were troubling: it is how much the company burned on stock buybacks. In KORS' earnings release we read:
(Reuters) - Luxury jeweler Tiffany & Co reported better-than- expected quarterly sales and profit as it benefited from higher spending by tourists in Europe and growing demand for its Tiffany T line of fashion jewelry.
While careful to 'remain optimistic' KPCB's Mary Meeker warns that "growth rates for leaders... are slowing," and warns that global tech puiblic/private financings are now 17% above 1999 levels and "there are pockets of Internet company overvaluation but there are also pockets of undervaluation," as she unveils her latest (record-breaking) 197-page epic chartapalooza on Internet Trends...
Meet Martin "The Hammer" Mallett, chief currencies dealer at the Bank of England in 2007, and, as WSJ reports, recipient of emails that were part of an alleged campaign to rig benchmark interest rates, according to evidence presented in a London trial Wednesday. Remarkably, as we have detailed extensively, the emails were sent out with daily suggestions for where a variety of banks should set Libor. Mallett was later fired for what the central bank described as "serious misconduct," although the bank said his departure wasn't directly related to the currencies-rigging investigation.
As The Wall Street Journal reports, Martin Mallett, who at the time was the chief currencies dealer at the Bank of England, was among a couple dozen recipients of emails sent in 2007 by brokers allegedly working at the behest of former bank trader Tom Hayes. The recipients were blind carbon-copied on the messages...
In the emails, the brokers sent out daily suggestions for where a variety of banks should set the London interbank offered rate, or Libor. Mukul Chawla, the prosecutor trying Mr. Hayes, said those emails ...
(Reuters) - McDonald's Corp said it will stop reporting monthly same-store sales after June, becoming the latest major U.S. retailer to stop reporting the closely watched indicator to gauge overall spending trends and a company's financial health.
DUBAI (Reuters) - Abu Dhabi's Etihad Airway's contribution to the U.S. economy will almost double to $6.2 billion by 2020, it said on Wednesday, in an apparent counter to allegations that government subsidies gave it an unfair edge over competition.
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