Greek stocks led European and U.S. markets lower today after the latest setback in the country's financing talks. Analysts are warning to expect volatility until the Greece debt crisis is resolved and increased possibility of a September rate hike. Indicators are showing further market losses ahead.
Here is the current market situation from CNN Money
North and South American markets are lower today with shares in Brazil off the most. The Bovespa is down 0.87% while U.S.'s S&P 500 is off 0.65% and Mexico's IPC is lower by 0.07%.
U.S. consumer confidence surged in early June on expectations that a tightening labor market would spur big wage raises, which could further stimulate spending and overall economic growth later this year.
$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.
MILAN/HONG KONG (Reuters) - Italian luxury goods group Prada warned on Friday its profit margin could fall this year if weak consumer spending in Asia persisted, after posting a 44 percent drop in net profit for the three months ended April.
TORONTO (Reuters) - BlackBerry is considering equipping an upcoming smartphone with Google Inc.'s Android software for the first time, an acknowledgement that its revamped line of devices has failed to win mass appeal, according to four sources familiar with the matter.
WASHINGTON (Reuters) - U.S. consumer confidence surged in early June on expectations that a tightening labor market would spur big wage raises, which could further stimulate spending and overall economic growth later this year.
ATHENS/BRUSSELS (Reuters) - EU officials revealed on Friday that they had held their first formal talks on the worst-case scenario for Greece, but the darkening outlook failed to fluster Prime Minister Alexis Tsipras, who holed up with his negotiators after proclaiming his optimism at an open air concert.
You know it's bad when on an illiquid Friday, a Greek Deal Rumor headline only manages a measly 5pt ramp in the S&P 500... Wolf cried just one too many times? Wednesday saw 25 point vertical ramp on the same headline...
Same old same old...
*GREEK OFFICIALS TO BE SENT TO BRUSSELS SATURDAY FOR TALKS: GOVT
*GREEK GOVT SAYS DEAL WITH CREDITORS IS CLOSER THAN EVER
Submitted by Salil Mehta via Statistical Ideas blog,
As markets continue at a high level, volatility falls and their associated ETF products drop to record lows. As tempting as it is to use such products for hedging or for large gains, the probability of making any ?gain with them is very low (we cite an article below that this some to ~5% through skill.)? This article here is now the 3rd installment of the "Volatility-product(s)" series of research, focusing on the meaning of these high and low records (the prior articles were on failed strategies from even god-like clairvoyance, and the other article was on probability and typical performance.)?
First, let's explore the various records that have occurred using the VXX over history. We notice that in the past ~3.5 years (890 days), there have been 163 250-day lows, and 0 250-day highs. One year is ~250 trading days, and there has ??never been such a period when one could have profitably bought and held such a product? (not even if we stretched back the VXX data the 2 additional years it has.)? And even if we move to semi-annual periods, there still has been 0 125-day highs (or 0% of the 890 days).
We also notice in the earlier article that only 10% of any 125-day periods in recent years have resulted in a gain, so it only makes directional sense that virtually none of the 10% would be both a gain and a 125-day high, jointly.
Now, one might state that part of the reason for this asymmetry in records is that because over ...
Yesterday, after the impressive 30 Year auction which as we explained performed as well as it did, due to a persistent short overhang resulting in a -0.35 bps repo rate, we noted something concerning: using SMRA data, we showed that benchmark 10Y has been trading negative in repo virtually all of 2015.
10Y is negative repo pretty much constantly now pic.twitter.com/TBrcfZ4b97
zerohedge (@zerohedge) June 11, 2015
One day later, the shortage has gotten out of hand as following the Wednesday 10Y auction and ahead of its Monday settlement, there is not an On The Run cash bond to be found as all of them have been either removed from the repo market, or have been shorted.
The 10-year note is trading even tighter today than it was yesterday. At -220 basis points, this is the tightest that the 10-year note has been since April. After the auction settlement Monday, the current 10-year note will become the off the run 10-year note. If it maintains this much pressure it result in an extremely tight off the run 10-year issue again. The new 10-year note will likely trade near the GC rate.
Indicatively, today's shortage is massive, and putting it in context, there have been only two previous comparable squeezes in the repo market: one year ago, and in April when the 10Y was trading at its tights of the year well under 2%.
While talking heads have proclaimed any Grexit contagion will be contained... it appears they are wrong (surprise!). The last 2 days have seen sovereign bond spreads soar 25-35bps for Spain, Portugal and Italy. On the yield side, Spain 10Y spread to Bunds is at its highest since August 2014 and Portugal at its highest since Feb 2015.
Preliminary June UMich consumer sentiment data rose from 90.7 to 94.6 as respondents appear very excited about soaring gas prices and far more excited abiout stocks than every other confidence survey recently. Current conditions soared from 100.8 to 106.8 as expectations only rose from 84.2 to 86.8. Where does the hope come from? Simple... income expectations are the highest since 2008 and the most divergent from reality ever.
Are we still rolling over?
Hope triumphs over reality...
As hopes for houshold finances remain mired in total farce...
* * *
Alternatively - Is The Fed already FAR behind the curve on tightening as wages are set to soar?
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