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09Jul2015 Pre-Market Commentary: U.S. Futures Up Significantly Along With Chinese Stocks As Investors Cling To Hopes On New Greek Deal

Written by Gary

U.S. stock index futures were higher this morning after Beijing's efforts to halt a rout in Chinese stocks finally bore fruit and the U.S. Federal Reserve signaled it might hold off on raising interest rates. Chinese stocks made their biggest daily gain in six years Thursday, restoring confidence in Beijing's suite of attempts to rescue its struggling stock market.

Markets are expected to open higher, as much as one percent.


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 2.27% while Germany's DAX is up 2.04% and London's FTSE 100 is up 1.37%.

What Is Moving the Markets

Here are the headlines moving the markets. xxxxxxxxxxx

Glitch Freezes NYSE Trading for Hours

The New York Stock Exchange resumed trading after technical problems forced a halt earlier Wednesday, jarring investors and traders already unnerved by recent volatility across global financial markets.

Chinese stock volatility continues, but investors expect US impact to be limited, for now

NEW YORK (AP) — The extreme volatility in China's stock market is ongoing and about half of the 2,800 companies listed in the country's mainline index have suspended trading of their shares.

Markets bounced back strongly Thursday after the Shanghai composite lost another 5.9 percent the previous day, meaning a 30 percent decline since peaking June 12. The impact on Chinese investors is direct, but for investors in the U.S., Europe and elsewhere, it's not as simple.

China's market is largely isolated from other world exchanges, but there are worries the financial damage could hurt the broader Chinese economy, which is the second-largest in the world. Here's what has happened: ___

04 July 2015 Initial Unemployment Claims Rolling Average Again Marginally Worsens

Weekly Initial Unemployment Claims

The market was expecting the weekly initial unemployment claims at 260,000 to 290,000 (consensus 276,000) vs the 297,000 reported. The more important (because of the volatility in the weekly reported claims and seasonality errors in adjusting the data) 4 week moving average moved from 275,000 (reported last week as 274,750) to 279,500. The rolling averages generally have been equal to or under 300,000 since August 2014.

Draghi said to doubt Greek solution as Tsipras reforms awaited

FRANKFURT/ATHENS (Reuters) - European Central Bank President Mario Draghi has voiced unprecedented doubts about the chances of rescuing Greece from bankruptcy as Greek Prime Minister Alexis Tsipras was due to put forward last-ditch reform proposals on Thursday.

Lower Costs, Higher U.S. Sales Boost Walgreens Profit Forecast

Walgreens Boots Alliance Inc, the largest U.S. drug store chain, raised its full-year profit forecast as it benefits from higher sales and lower operating costs at its U.S. retail business.

Nigel Farage Destroys EU Group-Think In Just 4 Minutes:"There Is A New Berlin Wall... And It's Called The Euro"

Submitted by Simon Black via Sovereign Man blog,

Standing before the European Parliament yesterday, it took Nigel Farage just four minutes to completely destroy every argument supporting the Eurozone.

A few years back when he spoke at one of our Sovereign Man events in Santiago, he anticipated everything that we're seeing right now.

Today it's not nearly as controversial to say that the Eurozone experiment has failed. Anyone aware of what's happening in Greece should say the same. But very few people really understand why.

As Nigel explains in the video below, right from the start, the system was never intended to help the Greek people.

Greece entering the euro was great for Goldman Sachs. But terrible for Greeks. It chained the country to a system in which it didn't belong.

And what about all the bailout money that's been thrown at Greece in the time since?

None of it actually went to the Greek people. It went to bail out the French, German, and Italian banks who own Greek debt.

Sure, social welfare drags an economy underwater. But corporate welfare is what really drowns it.

Since the crisis, the country's debt to GDP has gone from 100% to 180%. Tensions have skyrocketed, and the Greek people are suffering.

(Last night Zerohedge published footage of Greek people on the island of Lesvos raiding a food truck. Shocking.)

They are the ones that now have to bear the burden of a stagnant economy, capital controls, and inflation.

None of these measures have worked. And just watch as Nigel destroys ...

China's "Sweet & Sour" Plunge Protection Lessons From 1987

Earlier this week in "Presenting China's Plunge Protection Playbook," we brought you the following annotated chart, which documents all of the steps Beijing has taken over the last two weeks in a frantic attempt to stabilize its equity markets which are in the midst of an epic meltdown catalyzed by an unwind of the margin mania that helped propel Chinese stocks into the stratosphere over the past 12 months.

That chart was created just two days ago and indeed, China hasn't let up on the plunge protection accelerator one bit since then.

On Wednesday for example, Beijing banned selling by major shareholders and corporate directors and when trading got off to yet another rocky start on Thursday (despite the fact that half the market isn't even trading), the Politburo decided it was time to arrest the slide by literally "arresting" the slide. Here's what happened overnight:

[Ministry of Public Security in conjunction with the recent Commission investigation of malicious short stock and stock index clues ] correspondent was informed on the 9th morning , Vice Minister of Public Security Meng Qingfeng led to the Commission ,

Rail Week Ending 04 July 2015: A Partially Positive Week for a Change

Econintersect: Week 26 of 2015 shows same week and same month total rail traffic (from same week and month one year ago) expanded according to the Association of American Railroads (AAR) traffic data. Intermodal traffic expanded year-over-year, which accounts for half of movements - but weekly railcar counts continued in contraction.

Pepsi Q2 Earnings Explained For 17-Year-Old Hedge Fund Managers

Earlier today, Pepsi did what few companies will do this quarter: beat both the top ($15.9BN, vs exp. $15.8BN) and the bottom line ($1.32, vs Exp. $1.24) without much use of every accounting gimmick under the sun (ahem Alcoa). The cherry on top: it also raised it earnings forecast for the year from 7% to 8%, pushing shares higher 2.2% in premarket trading.

What Pepsi did, unlike all other companies crushed by the soaring dollar, is that while the maker of Pepsi cola, Lay's potato chips and Gatorade was also hurt by weakening currencies, from the euro to the Brazilian real, Pepsi was able to push through price increases to keep revenue stable, while it continued to slash costs: in raising prices while firing people.

There is nothing wrong with that, Capitalism 101.

Solid results. What did catch our atention was Pepsi's brilliant dumbing down of its 10-Q and admission that it knows very well who its main "investor base" is these days, namely "attention-deficited", 17-year-old hedge fund managers (and algos of course), who need a simple, portable story on which to BTFD (or BTFATH).

Because when you know precisely who your New Normal target audience is, this is how you should always lay out your resuts:

...

Frontrunning: July 9


Only update software on down days: NYSE, SEC Suspect Software Update Triggered Trading Halt (BBG)

Trade halts add to China's Potemkin market problem (Reuters)

Why Beijing's Efforts Have Failed to Tame China's Stock Market (WSJ)

China stems stocks rout, but market faces lengthy hangover (Reuters)

Irrational Exuberance Triggers Chaos as China Watchdog Sidelined (BBG)

China bounce ends five-day losing streak for stocks (Reuters)

Fear Grows in Greece as Decisive Hour Nears (WSJ)

Greece Shuts Markets Through July 13 as Officials Debate Bailout (BBG)

Once Swarming with Greek Visitors, a Bulgarian Town Reels as Business Languishes (WSJ)

Robots on Wall Street? Firms Try Out Automated Analyst Reports (

PepsiCo profit, revenue beat estimates as higher pricing pays off

(Reuters) - PepsiCo Inc reported better-than-expected quarterly profit and sales and raised its full-year adjusted earnings forecast as higher prices helped drive revenue growth in its beverages business for just the second time in nearly four years.

China stems stocks rout, but market faces lengthy hangover

BEIJING/SHANGHAI (Reuters) - Beijing's increasingly frantic attempts to stem a stock market rout were finally rewarded as Chinese shares bounced around 6 percent on Thursday, but the costs of heavy-handed state intervention are likely to weigh on the market for a long time.
< ...

U.S. futures rise as China stocks rebound

(Reuters) - U.S. stock index futures were higher on Thursday after Beijing's efforts to halt a rout in Chinese stocks finally bore fruit and the U.S. Federal Reserve signaled it might hold off on raising interest rates.

U.S. funds not bailing on China yet amid free-fall in stocks

NEW YORK (Reuters) - As the Chinese stock market free-fall shows no signs of stopping, some U.S.-based fund managers said the government's effort to prop up stock values is having the opposite effect, even as some buy at what they consider panic-driven prices.

June 2015 CBO Monthly Budget Review: Deficit $52 Billion Smaller, Revenue Up 8%

from the Congressional Budget Office

The federal government ran a budget deficit of $314 billion for the first nine months of fiscal year 2015, CBO estimates. That deficit was $52 billion smaller than the one recorded during the same period last year. Revenues and outlays were both higher than the amounts recorded during the same period in fiscal year 2014 - by 8 percent and 5 percent, respectively.

Why China's Stock Markets Matter

by STRATFOR

The Shanghai Composite Index fell 6 percent on July 3, rounding out a 28 percent decline since June 12, when the country's stock markets peaked. The deterioration occurred despite intensive government efforts to stabilize prices and revive investor sentiment.

Honda expands recall to replace Takata-made air bags

TOKYO (Reuters) - Honda Motor Co said on Thursday it is recalling about 4.5 million more cars globally to replace air bag inflators made by supplier Takata Corp, the latest move in the Japanese automaker's efforts to deal with a safety scare that has seen firms around the world recall tens of millions of cars.

Fed's Kocherlakota: Drop in neutral rate makes Fed's job harder

FRANKFURT (Reuters) - A significant drop in the long-run interest-rate level that marks a sweet spot for a healthy U.S. economy is making it harder for the Federal Reserve to do its job, a top policymaker said on Thursday.

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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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