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08Jul2015 Market Close: Averages Off One And A Half Percent, SP500 Closes Below 200 DMA

Written by Gary

Not a good session starting out with the NYSE suffering a 3 hour outage where the Dow Jones Industrial Average fell to a five-month low today amid a nearly four-hour suspension of trading. Broader concerns about the pace of global growth and market turmoil continuing in China eclipsing Greece's debt crisis has pushed the averages to close down a percentage point and a half.

Both the SP500 and DOW closed BELOW the 200 DMA and all of the major averages closed below the Bollinger lower line which may indicate an 'up' day tomorrow.

Todays S&P 500 Chart

Most members of the Federal Reserve's policy-setting committee agree that the economy is rebounding from a weak first quarter, but more proof is needed that the recovery will grow and maintain upward momentum before a decision can be made on raising interest rates. A majority of the policy setting Federal Open Market Committee "judged that the conditions for policy firming (raising rates) had not yet been achieved," according to minutes from the Fed's June 16 and 17 meeting, and others "cautioned against a premature decision."

The Market in Perspective

Here are the headlines moving the markets.

Trading resumes on New York Stock Exchange following a 3-hour outage; no cyber breach is seen

NEW YORK (AP) — Trading has resumed on the New York Stock Exchange after an outage of more than three hours caused by technical problems.

There were no interruptions at the dozens of other U.S. stock exchanges Wednesday, including the Nasdaq, so investors were still able to buy and sell NYSE-listed stocks easily. The NYSE didn't say what the problem was but described it as internal issue and not the result of a breach of its systems.

The market was already lower when the trading halt occurred at about 11:30 a.m. Eastern time as traders worried about China's failure to halt a plunge in its shares and talks remained stuck between Greece and its lenders. NYSE trading resumed at 3:10 p.m. ET. In the last 20 minutes of trading, the Dow Jones industrial average was down 244 points, or 1.4 percent, at 17,532.

The Standard & Poor's 500 index was off 33 points, or 1.6 percent, at 2,048 and the Nasdaq composite was down 87 points, ro 1.7 percent, at 4,910.

From the "flash crash" to the Nasdaq outage: technical problems that hit stocks and exchanges

NEW YORK (AP) — A squirrel brought down the Nasdaq for about half an hour on Aug. 2, 1994, by chewing into power lines near the exchange's computer center in Connecticut.

It wasn't the first time an unexpected technical problem had stopped trading or caused wild swings in the market, but today's problems tend to be more complex and more far-reaching than the ones caused by rodents.

Trading on the New York Stock Exchange was halted for more than three hours Wednesday because of a technical issue. FLASH CRASH On May 6, 2010, the Dow Jones industrial average plunged 600 points in five minutes. The index eventually closed 348 points lower.

Regulators said the dive was triggered by a computerized selling program. In April 2015, the U.S. government filed criminal charges against British future . . .

Greece seeks new EU loan deal in race to avert collapse

STRASBOURG/BRUSSELS (Reuters) - A race to save Greece from bankruptcy and keep it in the euro gathered pace on Wednesday when Athens formally applied for a three-year loan and European authorities launched an accelerated review of the request.

Stocks Slammed On Belligerent Merkel, Broken Markets, & Bearish Minutes

Summing today up perfectly...

* * *

Live shot from the #NYSE server room pic.twitter.com/z0OAfJ6bGI

— Zardoz Moot (@Zardoz_Moot) July 8, 2015

Oprah talking to bears now. pic.twitter.com/6nRzfmLj7i

— Fed Porn (@FedPorn) July 8, 2015

Shit Broke...

The Dow and S&P both close back below their 200DMA...

Stocks plunged and eviscerated all of the v-shaped recovery gains from yesterday...

Cash ...

Wall St. falls 1 percent on China fears

NEW YORK (Reuters) - U.S. stocks closed sharply lower on Wednesday, with major indexes down more than 1 percent as market turmoil in China eclipsed Greece's debt crisis.

United Airlines Grounds Flights, Citing Computer Problems

A "network connectivity issue" was blamed for a nationwide ground stop, though systems appeared to be coming back.

This Is The Way The NYSE Comes Back Online, Not With A Bang But A Whimper

Once upon a time, the NYSE was the world's most important exchange and judging by the commotion over its historical trading halt when it was offline for just under 4 hours, one would think it still is. Unfortunately for the NYSE and its new owners, the ICE, it isn't, and as the following market share chart from Nanex shows, the NYSE whose share of the total NMS volume is shown in red, may well have stayed closed and few would even notice.

d

Median Household Income Rises $371, Up 0.7% in May 2015

from Sentier Research

According to new data derived from the monthly Current Population Survey (CPS), median annual household income in May 2015 was $55,192, about $371 or 0.7 percent higher than the April 2015 median of $54,821. The Sentier Household Income Index for May 2015 was 96.6 (January 2000 = 100).

Global Tumult Gives Fed Some Pause on Rates

Worries about global turbulence and soft spots in the domestic economy weighed on Federal Reserve officials when they gathered at their June policy meeting, trepidations that could cause them to wait longer before raising short-term interest rates in the months ahead.

JPM to reform credit card collection in settlement with U.S., states

(Reuters) - JPMorgan Chase & Co will pay $136 million and reform its credit card debt collection practices as part of a joint state-federal settlement of a probe that found it had acted illegally, U.S. authorities said on Wednesday.

IMF Slams Germany, Says Greece "Needs Debt Restructuring"

Earlier today, confirming that Germany sternly refuses to change its tune about a Greek debt haircut or even a debt "reprofiling" of Greece and would not budge an inch on Tsipras tacit request for at least some debt leeway, we reported that "the German government does not see any reason to grant Greece either a classic debt haircut or any other measures that would slash the value of money on loan to the crisis-ridden country, a spokesman for the finance ministry said on Wednesday."

"At the moment and in principle we see, as the chancellor said expressly in her press conference in Brussels, no occasion at all to discuss this issue - there is no leverage or basis for that," Martin Jaeger said at a news conference.

"That refers to a haircut in the classic sense but I explicitly add we also take that to mean measures that aim to bring about a reduction in the cash value of debt - those are things that you hear in discussions under profiling, restructuring and similar things.

This put Gremany in clear confrontation with the IMF (and various other European countries who are far more inclined to consider debt haircuts for others and for themselves) so we, and many others, were wondering how Christine Lagarde would react.

We got the answer moments ago and here it is:

IMF'S LAGARDE SAYS DEBT RESTRUCTURING NEEDED IN GREECE

IMF'S LAGARDE SAYS FUND REMAINS 'FULLY ENGAGED' WITH GREECE

IMF'S LAGARDE SAYS IMF CANNOT GIVE GREECE SPECIAL TREATMENT

... thereby starting a very clear, and very determined war of words with Germany and the "no-haircut" axis which is also waging a cold war against none other than the US, under whose guidance the IMF released its debt sustainability report last week over the objections of Merkel, Schauble and company.

To be sure, this st ...

May 2015 Consumer Credit Growth Continues to Slow

Written by Steven Hansen

The headlines say consumer credit growth did grow less than last month - and came in well under forecasts. Our analysis shows consumer credit growth rate is continuing to slow. Consumer credit annual growth rate remains well above GDP's annual growth rate.

Chinese Government Struggles With Market Distress

The Chinese government struggled in vain Wednesday to prevent the distress in the country's stock markets from spreading as it openly fought market forces it has pledged to give a larger role.

Former trader Hayes ignored 2009 warning, Libor trial hears

LONDON (Reuters) - Tom Hayes, the former trader on trial on Libor interest rate rigging charges, told a London court on Wednesday he ignored a 2009 warning to stop trying to influence rates in part because he was pre-occupied with moving jobs.

Leveraged Chinese "Investors" Learning a Painful Lesson

Leveraged Chinese "Investors" Learning a Painful Lesson

- Shanghai Composite has lost over 32% of its value in less than month
- Investors selling on "panic sentiment"
- Persistent intervention by government agencies has failed to support market
- Market has doubled over past year while real economy struggles
- Chinese Market had been boosted by participation of market-illiterate savers
- May morph into wider crisis

China's stock markets continued their decline overnight with the Shanghai SE Composite falling another 4.64% and down of 32% since June 12. Markets have begun seizing up as sellers overwhelm the system.

goldcore_chart1_08-07-15
The Chinese regulator, the China Securities Regulatory Commission, has described market participants as being "irrationally" driven by "panic sentiment" despite there having been no rational basis for the run up in Chinese markets before they peaked last month.

Indeed, in these past two weeks the government itself has taken a series of panic measures to prop up the system but, thus far, to no avail. These measure include cuts in reserve requirements, and a rate cut to boost lending for the purpose of further speculation, easing regulations on margin financing, reduction on transaction fees and providing liquidity to brokerage firms to prop ...

Stocks Are Crashing To Post-"OXI" Lows - Given Up All Of Yesterday's Ramp Gains

Broken markets tanking....

But but but yesterday the clever people on Television said "see Greece doesn't matter," as stocks ripped miraculously yesterday.

Greece Submits New Loan Request as Tsipras Takes Defiant Stance

Under a tight deadline from European leaders, Greece applied for a three-year bailout loan, and the prime minister took his case to the European Parliament.

17 June 2015 FOMC Meeting Minutes: Great Lack of Consensus of When to Raise Rates

Fed-sealSMALLEconintersect: The 17 June 2015 meeting statement presented the actions taken. This post covers the economic discussion during this FOMC meeting between the members. The was a significant amount of discussion on the state of the economy and the zero bound monetary policy. It appeared the FOMC members were still divided when to raise the federal funds rate: However, the quote of these minutes was:

... many participants expressed concern that a failure of Greece and its official creditors to resolve their differences could result in disruptions in financial markets in the euro area, with possible spillover effects on the United States.......

More data needed before Fed can hike, as Greek worries loom: Fed minutes

WASHINGTON/NEW YORK (Reuters) - Federal Reserve officials needed to see more signs of a strengthening U.S. economy before raising interest rates, according to minutes of a June Fed policy meeting, at which Greece's debt crisis was cited as a serious concern.

Meanwhile, Over At The Real New York Stock Exchange

Ignore the constant commotion at the TV studio in downtown Manhattan which once was the New York Stock Exchange (currently owned by the ICE) and is now mostly packed with actors, cheerleaders, set designers and producers, and focus on the real exchange located some 40 miles away in Mahwah, NJ (which for a few months over the winter even had a laser attached to its main microwave tower), where moments ago the scene was the following...

Main entrance:

The Microwave towers:

And, apparently, quite a few electricians working for Pantaleo Electric...

FOMC Minutes Reaction: Stocks, USDollar, & Bond Yields Tumble

Gold is unchanged but stocks and bond yields are sliding post the somewhat more hawkish FOMC minutes. The USD index is falling (which suggests the minutes were more dovish) just to add some confusion...


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To contact me with questions, comments or constructive criticism is always encouraged and appreciated:

gary@econintersect.com

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