Averages remained in the red after a pause in the markets decline today. The DOW closed down tripe digits and the small caps were off +1.60%, deeply in the red. Tomorrow's job's report could do one of two things. One, boost the green line upwards in an unprecedented move not seen in months, or, most likely, watch the averages sink a bit more.
What worries us more is the oil price scenario which is testing its support (~44.22), going below that is a serious negative market mover.
Todays S&P 500 Chart
WASHINGTON (Reuters) - Most Federal Reserve policymakers expect the U.S. jobless rate will stop plunging and stabilize right around its long-term normal level, a risky forecast given that this apparently hasn't happened in at least a half century.
BRIDGEPORT, NJ (Reuters) - As the Federal Reserve puzzles over what is holding back U.S. wages and productivity six years into the economic recovery, a pasta sauce company in New Jersey may offer some answers.
LOS ANGELES (Reuters) - McDonald's Corp said on Thursday it laid off in July 135 employees at its U.S. headquarters and 90 corporate employees posted overseas as part of a major restructuring at the fast-food chain, which has been fighting to reverse a long sales slump.
Submitted by Mike Krieger via Liberty Blitzkrieg blog,
What do you do when even wealthy people begin to face an increasingly hard time purchasing a home in a vertical market completely disconnected from income trends? You reduce downpayments and lower credit standards, of course.
Where have we seen this story beforeâ€¦
From the Wall Street Journal:
The nation's largest bank by assets plans to announce Wednesday that it is lowering the minimum credit score and down payment it requires for mortgages as big as $3 million.
The New York firm's moves follow similar steps at Bank of AmericaCorp., Wells Fargo & Co. and other banks on requirements for "jumbo" mortgagesâ€"those that exceed $417,000 in most parts of the country or $625,500 in pricier markets. At the same time, some big banks are backing away from smaller loans where they see higher regulatory costs and litigation risks.
Guess it's gonna be shipping container apartments for everyone else.
When China reported that its economy grew 7% in Q2 - spot-on Beijing's target - virtually no one believed it.
The veracity of the country's economic data has long been the subject of debate and when FT called out the country's National Bureau of Statistics for employing what we called "deficient deflator math" on the way to understating inflation and overstating output, China's statistics bureau responded, saying that although there was "room for improvement," the deflator wasn't underestimated, GDP growth wasn't overstated, and "both reflect the real situation."
One could certainly be forgiven for insisting that the NBS is simply lying, because after all, the "real situation" looks like this:
Econintersect: Week 30 of 2015 shows same week total rail traffic (from same week one year ago) contracted according to the Association of American Railroads (AAR) traffic data. Intermodal traffic contracted year-over-year, which accounts for approximately half of movements. and weekly railcar counts continued in contraction.
We hardly need to expound on Greece's near-death economic state: if anyone has missed the surreal tragicomedy of the pas 5 years all we can say is we envy you. Of all countries around the globe, if there is one nation where everyone by now knows is, or should have defaulted long ago, it is the Hellenic Republic.
But when it comes to default risk implied by government bond prices and their inverse "hedge", credit default swaps, few may be aware that Venezuela's default probability is orders of magnitude higher. Of course, our readers will be well aware of this: back in December, when its CDS was trading at "only" 2300 bps (or whatever points upfront equivalent it was back then) we said Venezuela CDS are going much, much wider. Little did we know that in just about 8 months they would more than double, and as of last check, Venezuela CDS are just shy of 5000bps suggesting a default is virtually guaranteed.
So aside from these two socialist utopias, who else is on the default chopping block? The CDS heatmap below lays out all the countries which according to the market, are most likely to tell their creditors the money is gone... it's all gone.
Below, in order of declining default risk, are the ten most likely to follow Venezuela and Greece into the great default unknown:
And which are the three countries least likely to default? No surprise, these are Germany, Switzerland, and Sweden. The US is 4th least risky.
(Reuters) - Activist investor William Ackman has built a stake worth about $5.5 billion in Mondelez International Inc , the maker of Cadbury chocolate and Oreo cookies, in what is seen as an attempt to push the company to boost earnings or sell itself.
Satellite images taken at the Turkey-Syria border corroborate what Stratfor predicted weeks ago: that Turkey, now partnered with the United States, will strike at Islamic State-controlled territory adjacent to the Turkish border. The Turks reportedly began to reinforce their southern border with troops and equipment as early as July 3. But according to these images, which were taken July 26, we now know that that equipment includes Turkish-made main battle tanks and support units poised in a defensive position on the Turkish side of the border.
(Reuters) - Wall Street slumped on Thursday as weak earnings reports from media companies raised fears that more viewers are ditching cable TV, dragging the sector to its worst two-day loss since the financial crisis.
We have shown the following chart, showcasing the unprecedented divergence between commodities and stocks countless times:
And now the sellside is finally starting to notice, and instead of merely falling back on its traditional "but if you ignore energy..." platitudes aimed squarely at the 5-year-old trader market, is taking it seriously. Here is Credit Agricole's Valentin Marinov with a note released yesterday, which it seems took the market about 24 hours to read and digest.
Stocks still up even as commodities are down â€" something has to give
The persistent selloff in global commodities (and commodity currencies) of late is attributed to mounting growth concerns (centred on China) as well as USDappreciation in the run up to Fed lift-off. Lower commodity prices have already sent gauges of inflation expectations lower and weighed on global bond yields.
Yet, it seems that these developments are in stark contrasts with the apparent resilience of the developed stock market indices. For example, the VIX index is still trading close to its lowest level this year. The question is then, should we view the apparent resilience of the developed stock markets as a sign that investors are overdoing it selling commodity and risk-correlated currencies. Market shorts seem substantial indeed. It took only some adjustments in RBA's language to send AUD more than 1.5% higher at one point yesterday.
We are far less sanguine and think that the developed stock markets may be ...
It is unclear what catalyzed today's dump. Futures were briefly green at the open, then as if all hell broke loose and without an explicit catalyst (although the technical collapse of numerous "story stocks" which had been market leaders for months, both today and in recent weeks has not helped) the E-mini, and individual stocks, just took out level after level of bids and at last check the Dow has dropped to 6 month lows, the S&P is just barely green for the year, while the biggest pain is in the Nasdaq which has dropped as much as 2% intraday.
So who are the biggest losers?
Below we lay out some of the most prominent investors, whose ownership as a % shares outstanding in today's biggest market casualties is shown in round brackets (). We look at the biggest mid ($2-$10BN market cap) and large caps ($10BN and higher) losers of the day, which we lay out in order of redness, and some of the most prominent holders of the various stocks:
LONDON (Reuters) - U.S. private equity firm Blackstone has joined forces with buyout fund Hellman & Friedman to bid for British payments processing company Worldpay, two sources familiar with the matter said on Thursday.
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