U.S. markets opened higher after Chinese Markets rose over 5% and the hope of a debt resolution in Greece has stimulated investors. However, the averages have been melting down since the opening, although still in the green the prospect of the major indexes closing flat is a distinct possibility.
Here is the current market situation from CNN Money
North and South American markets are mixed today. The IPC is up 0.77% while the S&P 500 gains 0.53%. The Bovespa is off 1.40%.
$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.
(Reuters) - Coty Inc has sealed a deal to buy Procter & Gamble Co's beauty business, which includes brands such as Clairol and Wella, in a $12.5 billion transaction that will make Coty the world leader in perfume and hair care.
LUXEMBOURG/ATHENS (Reuters) - The European Union's chairman joined growing international calls for Greece to be granted debt restructuring as part of any new loan deal if it delivers convincing reforms to avert imminent bankruptcy.
NEW YORK (Reuters) - The New York Stock Exchange said on Thursday that the nearly four-hour trading halt on the exchange on Wednesday was due to a technical problem that stemmed from new software that was rolled out the previous evening.
Moments ago the NYSE released its explanation why its was offline for nearly 3.5 hours. Here is the official narrative:
On Tuesday evening, the NYSE began the rollout of a software release in preparation for the July 11 industry test of the upcoming SIP timestamp requirement. As is standard NYSE practice, the initial release was deployed on one trading unit. As customers began connecting after 7am on Wednesday morning, there were communication issues between customer gateways and the trading unit with the new release. It was determined that the NYSE and NYSE MKT customer gateways were not loaded with the proper configuration compatible with the new release.
Prior to the market open, gateways were updated with the correct version of software and stocks opened at 9:30am. However, the update to the gateways caused additional communication issues between the gateways and trading units, which began to manifest themselves mid-morning. At 11:09am, NYSE issued a Market Status message that a technical issue was being investigated. At 11:32am, because NYSE and NYSE MKT were actively trading but customers were still reporting unusual system behavior, the decision was made to suspend trading on NYSE and NYSE MKT. NYSE ARCA, Arca Options and NYSE AMEX Options were not impacted by this event and continued to trade normally.
NYSE and NYSE MKT began the process of canceling all open orders, working with customers to reconcile orders and trades, restarting all customer gateways and failing over to back-up trading units located in our Mahwah, NJ datacenter so trading could be resumed in a normal state. In consultation with regulators and industry, w ...
In his latest "Twilight Zone" comment piece, BofA's Michael Hartnett notes that YTD global asset returns, paltry as they are, are as follows: US dollar 7.3%, stocks 2.0%, cash flat, fixed income -3.0%, commodities -3.8%, and are summarized in the table below:
But most curious was the following:
These mediocre asset returns disguise treacherous trading conditions in past six months. Indeed, Wall Street has been a world of Pain Trades ever since the Fed signaled the end of QE early last year (Table 2). The end of Max Liquidity means the end of Minimum Volatility, and the lack of strong economic growth in recent quarters has caused the cyclical upside to asset prices to fade.
Which is why when the Fed's members say:
BRAINARD: FED WATCHING DEVELOPMENTS IN GREECE, CHINA CLOSELY
What they mean is they are watching both the 200DMA and any surges in cross-asset vol, which in the aftermath of China, and Greece, has been surging, and what's worse, cross-asset correaltion is soaring and rapidly on its way to 1.000.
Which is why those more cynical inclined have been asking: since the only reason the Fed is hiking rates is to have an "economic" alibi to justify QE4, ...
The topic of IMF's comedic forecasts and resulting disastrous policy errors has been discussed extensively, and repeatedly, over the years both elsewhere, and here. And while it does no justice to the human tragedy that ordinary Greeks have had to go through as part of 5 years of failed "bailouts" designed to preserve the wealth of German bankers, Greek oligarchs and a few corrupt politicians, the quarterly World Economic Outlook update affords even the most bankrupt Greeks, not to mention everyone else, an opportunity to laugh at what are now 5+ years of truly hilarious economic forecast hockeysticks, even as the reality continues to deteriorate with every passing year.
Case in point: earlier today the IMF released its latest forecast. In it, 2015 global GDP was cut from 3.5% to 3.3% due to previously unforeseen "risks from Greece to China". Or rather we should say cut again. Here is the history of the IMF's 2015 global GDP forecast started with July 2014:
But who cares about constantly being wrong right here, right now (aside from 11 million Greeks that is) ...
WASHINGTON (Reuters) - The eight most important U.S. financial institutions may still cast too large of a shadow over the banking system, according to a Federal Reserve official on Thursday, and the firms could realize it's in the best interest of stakeholders to shrink.
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