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01Jul2015 Pre-Market Commentary: Greece Does About-Face And Accepts Bailout Deal Pushing U.S. Futures Up 0.9%

Written by Gary

U.S. stock futures were up almost one percentage point this morning after it was announced the Greek government made an about face and was ready to sign on to a bailout package it threw out just days ago

China brought the Shanghai Composite 5.2% lower today, wiping out all yesterday's rebound gains and back to the Monday post-PBOC crash level.

Markets are expected to open higher


Here is the current market situation from CNN Money

European markets are sharply higher today with shares in France leading the region. The CAC 40 is up 2.74% while Germany's DAX is up 2.41% and London's FTSE 100 is up 1.40%.

What Is Moving the Markets

Here are the headlines moving the markets.

European Stocks Surge on Greek Hopes

European stocks surged on renewed optimism about a possible deal between Greece and its creditors.

No Easy Way Forward for Markets

The stock market has shifted to neutral, and investors don't expect the rest of 2015 to be a joy ride.

June 2015 ADP Job Growth at 237,000 - Above Expectations

Written by Steven Hansen

ADP reported non-farm private jobs growth at 237,000. The rolling averages of year-over-year jobs growth rate for the last year has been has been marginally declining for the last 5 months suggesting there is seasonality issues.

ADP Rises To Highest Since 2014 Despite Challenger Job Cuts' Surge To Highest Since 2010

As the shortened week continues ahead of tomorrow's payrolls print, and amid chaotic Greek headline-hockey, ADP and Challenger jobs data gives us a glimpse of what volatility lies ahead. After jumping a little last month, but remaining in weak territory, ADP printed 237k for June (beating expectations of +217.5k) in line with estimates for nonfarm payrolls. This is the best print since Dec 2014 but is dominated by small businesses with large companies lagging. Job gains were dominated by Services (+225k) with goods-producing fiorms gaining a mere 12k jobs. This comes after Challenger-Gray showed job cuts increasing 42.7% YoY in June and are at the highest level for June since 2009.

Bounce back... good for the economy - bad for the market?

As ADP reports,

Payrolls for businesses with 49 or fewer employees increased by 120,000 jobs in June, the same as May. Employment among companies with 50-499 employees increased by 86,000 jobs, up from 63,000 the previous month. Employment gains at large companies - those with 500 or more employees - increased from May, adding 32,000 jobs in June, up from 19,000. Companies with 500-999 employees bounced back to 27,000 jobs added after shedding 1,000 jobs in May. Companies with over 1,000 employees added 5,000 jobs, down from 21,000 the previous month.

Goods-producing employment rose by12,000 jobs in June, after adding 11,000 in May. The construction industry had another solid month in June adding 19,000 jobs, down from 28,000 last month. ...

Tsipras Signals Greece May Accept Bailout Terms

In a letter to the country's creditors, the Greek prime minister said Athens was "prepared to accept" a deal with some modifications on contentious points like pension cuts and tax increases.

Euro zone factory growth stutters as China, Japan heals

(Reuters) - Asia's largest economies showed hints of healing last month but euro zone factory growth remained tepid as Greek debt talks, and the country's possible departure from the bloc, dominated debate in Europe.

Greece offers conditional okay to bailout, Germany skeptical

ATHENS/BRUSSELS (Reuters) - Greek Prime Minister Alexis Tsipras has written to international creditors saying Greece could accept their last bailout offer if some conditions were changed, but Germany expressed skepticism while saying the door was still open for negotiations.
...

General Mills profit halves due to $260 million impairment charge

(Reuters) - General Mills Inc , the maker of Cheerios cereal and Betty Crocker cake mixes, said fourth-quarter profit halved as it recorded a $260 million charge to write down the value of one of its frozen and canned vegetable businesses.

Futures rise as Greece makes new bid for bailout deal

(Reuters) - U.S. futures rose on Wednesday after Greek Prime Minister Alexis Tsipras signaled he was prepared to accept most of creditors' bailout terms with some modifications.

Merkel Addresses German Parliament: Key Points

All eyes are once again trained squarely on Greece this morning after a letter surfaced which shows Greek PM Alexis Tsipras is prepared to concede to most of Brussel's demands in order to secure a deal for Greece which is laboring under capital controls and the threat of a banking collapse after becoming the first developed country to default to the IMF.

This morning, German Chancellor Angela Merkel addressed the German parliament. Here are the key talking points (via Bloomberg):

"The door for talks with Greece was always open and remain always open. We owe that to the people and we owe it to Europe."

"There can be no negotiations for a new credit program before the referendum."

"Greek people unquestionably confronting difficult days." Greece unilaterally ended debate on second credit program, failed to make IMF payment, Merkel says

"Greece has legitimate right to hold referendum, euro states have right to respond."

And some more of her speech highlights from MNI:


GERMANY WON'T COMPROMISE AT ALL COSTS

DON'T NEED TO FEAR EZ ECO CATASTROPHE FROM GREEK CRISIS

MERKEL: EUROPE IS MUCH STRONGER THAN 5 YEARS AGO

REFERENDUM IS LEGITIMATE RIGHT OF GREECE. GERMANY WILL AWAIT RESULTS OF REFERENDUM

DOOR FOR TALK WITH GREECE OPEN

So is Germany bluffing the bluffer Tsipras, and effectively saying it won't negotiation with the current Greek government but would rather wait until its replacement is sworn in after the referendum?

opposition leader in Germany accusing creditors of hoping for Greek govt to fall on Sunday-henc ...

Frontrunning: July 1


Tsipras backs down on many Greece bailout demands (FT)

Creditors skeptical of Tsipras' offer (Reuters)

Greek Pension Rationing Begins; Poll Shows Tsipras Backed (BBG)

Greek referendum poll shows lead for 'No' vote, but narrowing (Reuters)

Greek Bank Controls Heap More Pain on Crisis-Weary Citizens (BBG)

Greek Crisis Ripples Across European Companies as Markets Swing (BBG)

China Stocks Fall: Shanghai Composite Index Drops 5.2% (BBG)

China June factory, services surveys fuel hopes economy leveling out

June 2015 Job Cuts Up Slightly. Midyear Total Highest in Five Years.

from Challenger Gray and Christmas

Job cuts increased by about 10 percent in June, as employers announced plans to reduce payrolls by 44,842 workers during the month. Meanwhile, heavier-than-expected downsizing throughout the first half of 2015 pushed the midyear total to its highest level since 201

Bank of England Warns Greece Threatens Financial Stability

The Bank of England said the outlook for financial stability in the U.K. has deteriorated in recent days as the crisis in Greece intensifies, underscoring how the Mediterranean nation's debt troubles are reverberating outside the eurozone.

Europe rallies on revived Greek deal hopes

LONDON (Reuters) - Global shares and peripheral euro zone bonds jumped on Wednesday as Greece's prime minister signaled he was prepared to accept the bulk of the spending cuts demanded by the rest of the euro zone to keep the country afloat.

Market Wrap: Greek "Capitulation" Optimism Sends Global Risk Higher After China Re-crashes

Before we focus on the Greek drama which this morning has soared to new highs, a quick look at China which after trading largely unchanged for most of the day, saw a bout of late day selling, which brought the Shanghai Composite 5.2% lower, wiping out all Tuesday rebound gains, and back to the Monday post-PBOC crash level.One thing that was clear: nobody cared about the Chinese PMI data, where both the official PMI and HSBC Mfg PMI missed expectations and printed at 50.2 (exp. 50.4) and 49.4 (Exp. 49.6), respectively.

Other Asian equities mostly rose following renewed negotiations between Greece and its creditors with the Nikkei 225 up +0.5% following a strong BoJ Tankan survey if not so strong real wages which are now down for a record 25 consecutive months, with capex expectations at the highest level since 2004. JGBs fell 20 ticks despite the BoJ conducting its JGB purchase program while participants also look ahead towards tomorrow's 10-year JGB auction. Hang Seng was closed today due to a public holiday.

So now a quick recap on the state of play in Greece courtesy of RanSquawk:

FT writes citing leaked letter that Greek PM is prepared to accept bailout conditions

ECB's Nowotny says that the ECB have kept the Greek ELA unchanged at EUR 88.6bIn. (BBG) These comments come amid reports that the ECB is poised to impose tougher haircuts on the collateral that Greek lenders place in exchange for the emergency loans, according to the FT. Nowotny also added that the threat posed by Greece to the EUR is below what it was previously. According to sources, German finance minister Schaeuble informed conservative lawmakers that he would request that the ECB does not increase the ELA for Greek banks. (RTRS)

Eurogroup will hold a call again at 1630BST/1030CDT today in regards to Greece, according to an EU official. (BBG)

Greece may suspend the referendum (July 5th) if talks restart and there was an offer and agre ...

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