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28Jun2016 Market Update: US Markets Are Up Near One Percent, But Melting Lower On Falling Volume, Investors Not Convinced Today Is Bargain Day

Written by Gary

US markets remain up (SPY +1.0%, DOW +0.8%), but slowly drifting off the session highs. Hopes of a more coordinated central bank response to support the financial markets and firmer oil prices are helping stocks claw back some of their losses following the Brexit battering. The mostly sideways year for the Dow and S&P is still negative, down 1.6% and 2.1%, respectively. Short-term indicators are bullish, but falling.


Here is the current market situation from CNN Money

North and South American markets are broadly higher today with shares in Brazil leading the region. The Bovespa is up 1.22% while U.S.'s S&P 500 is up 0.94% and Mexico's IPC is up 0.90%.

What Is Moving the Markets

Here are the headlines moving the markets.

Wall Street climbs after Brexit-sparked selloff

(Reuters) - Wall Street was higher on Tuesday as investors rushed to buy cheap after Britain's decision to leave the European Union wiped off $3 trillion from global markets over the last two trading days.

U.S. first-quarter GDP revised up, Brexit risk to outlook

WASHINGTON (Reuters) - U.S. economic growth slowed in the first quarter but not as sharply as previously estimated, with gains in exports and software investment partially offsetting weak consumer spending. Gross domestic product increased at a 1.1 percent annual rate, rather than the 0.8 percent pace reported last month, the Commerce Department said on Tuesday in its third GDP estimate. The economy grew at a rate of 1.4 percent in the fourth quarter.

Volkswagen agrees to buy back diesel vehicles, fund clean air efforts

WASHINGTON (Reuters) - German automaker Volkswagen AG will pay as much as $15.3 billion after admitting it cheated on U.S. diesel emissions tests for years, agreeing to buy back vehicles from consumers and provide funding that could benefit makers of cleaner technologies.

Taiwanese chip supplier says Apple conservative on orders: Nikkei

(Reuters) - Taiwanese chip firm Advanced Semiconductor Engineering Inc said on Tuesday that its biggest customer, Apple Inc, was being more conservative in placing orders compared with last year, according to the Nikkei.

EU regulators readying third Google antitrust charge: sources

BRUSSELS - Alphabet's Google may face a third EU antitrust charge as soon as next month, this time focusing on its revenue mainstay AdWords ad placement service, three people familiar with the matter said on Tuesday.

Katzenberg sued over 'side deal' to Comcast-DreamWorks merger

WILMINGTON, Del. (Reuters) - Jeffrey Katzenberg, DreamWorks Animation SKG Inc's chief executive, has been hit with a proposed class action lawsuit over what a minority shareholder called an "extraordinarily valuable" side deal he struck as part of the $3.8 billion sale of the studio to Comcast Corp .

Soros had Deutsche Bank 'short' bet at time of Brexit fallout

FRANKFURT (Reuters) - Billionaire investor George Soros took out a bet of more than 100 million euros ($111 million) that Deutsche Bank shares would fall at the time of Britain's vote to quit the European Union, according to a regulatory filing.

Lending Club alleges ex-CEO took loans to boost volumes

(Reuters) - Lending Club Corp alleged on Tuesday that its founder and former Chief Executive Officer Renaud Laplanche took out loans from the online lender in order to inflate the company's volumes.

Oracle's cloud business takes lead in Latin America

SAO PAULO (Reuters) - Oracle Corp is selling more cloud-based business software than traditional licensed products in Latin America, executives said on Tuesday, underscoring how remote computing has spurred demand from smaller businesses in new markets.

After Brexit, A Trump Path To Victory

Submitted by Patrick Buchanan via Buchanan.org,

Some of us have long predicted the breakup of the European Union. The Cousins appear to have just delivered the coup de grace.

While Scotland and Northern Ireland voted to remain in the EU, England voted for independence. These people, with their unique history, language and culture, want to write their own laws and rule themselves.

The English wish to remain who they are, and they do not want their country to become, in Theodore Roosevelt's phrase, "a polyglot boarding house" for the world.

From patriots of all nations, congratulations are in order.

It will all begin to unravel now, over there, and soon over here.

Across Europe, tribalism, of all strains, is resurgent. Not only does the EU appear to be breaking up, countries appear about to break up.

Scotland will seek a second referendum to leave the U.K. The French National Front of Marine Le Pen and the Dutch Party for Freedom both want out of the EU. As Scots seek to secede from the U.K., Catalonia seeks to secede from Spain, Veneto from Italy, and Flemish nationalists from Belgium.

Ethnonationalism seems everywhere ascendant. Yet, looking back in history, is this not the way the world has been going for some centuries now?

The disintegration of the EU into its component nations would follow, as Vladimir Putin helpfully points out, the dissolution of the USSR into 15 nations, and the breakup of Yugoslavia into seven.

Czechoslovakia lately split in two. The Donbass seeks to secede from Ukraine. Is that so different from Transnistria splitting off from Romania, Abkhazia and South Ossetia seceding from Georgia, and Chechnya seeking separation from Ru ...

Bank of America: "If You Are Going To Panic, Panic Early"

Who could have possibly predicted years and years of central bank policies aimed at making the rich richer while crushing the middle class, would ultimately result in the kind of "shocking" outcome as that observed last week when in an unexpected outcome, a majority of Brits gave their collective middle finger to an establishment that had only given lip service to fixing their plight when in reality it was simply backstopping banks, propping up stock markets and generally making billionaires out of millionaires (aside for tinfoil blogs who warned from the very beginning that the outcome of one after another failed central bank policy will be precisely income inequality, eventually culminating in war).

Apparently not Bank of America, which in a note by Alay Kapur, titled "The Tide is Turning - Populism and Panic", suggests that "If you are going to panic, panic early."

Here is why, as excerpted from: "Brexit: If you are going to panic, panic early"
by BofA's Ajay Kapur

If you are going to panic, panic early - Brexit is here. And so is risk-off sentiment. Our US economists now call for the US Fed funds rate to be lower for longer with the next forecast rate hike pushed out to December this year rather than in September. We suspect that overall global policy is now likely to be easier for longer, with even more unconventional policy possibly more palatable (helicopter money, anyone?). Our views continue to be the same as they were last week.

* * *

We also think that Brexit has now possibly opened up more uncertainty about the European Union project and that the already beaten down Asian and EM equity mark ...

Draghi Warns Brexit Will Lead To "Competitive Devaluations", Years Of Low Growth

Despite ECB's Nowotny explaining earlier that "markets are getting more quiet" and that "Brexit has virtually no impact" on his economy, documents seen by Bloomberg show that Mario Draghi is extremely concerned. Warning of years of slowing growth due to Brexit, Draghi stated that if U.K. goes into recession the effects would be immediate on the euro area. Draghi further noted he's concerned by reactions of countries trying to correct with what they view as wrong exchange rates because this could start competitive devaluations and may increase risk premiums and turbulence. Concluding that the ECB would do everything necessary to ensure price stability, we suspect this fearmongery is nothing but 'using' a crisis as excuse to enabling moar QE and utlimately helicopter money.

Here is Nowotny earlier playing down the impact of Brexit...



*NOWOTNY SAYS BREXIT HAS VIRTUALLY NO IMPACT ON AUSTRIAN ECONOMY

*NOWOTNY SAYS EXCHANGE-RATE CHANNEL NOT AS IMPORTANT ANY MORE

*NOWOTNY SAYS MARKETS GETTING MORE QUIET, BALANCED

And now Draghi in full panic-monger mode... (via Bloomberg)



*DRAGHI SAID TO SEE BREXIT VOTE CUTTING EURO GDP AS MUCH AS 0.5%

*DRAGHI SAID TO SEE GDP GROWTH REDUCTION FOR NEXT THREE YEARS

*DRAGHI CONCERNED BREXIT WILL LEAD TO COMPETTIVE DEVALUATIONS

*DRAGHI SAYS IT'S TIME TO ADDRESS BANK VULNERABILITIES

*DRAGHI SAYS `WE CANNOT AFFORD NOT TO' FIX BANK VULNERABILITIES

*DRAGHI SAYS BREXIT RECESSION WOULD AFFECT FX MARKETS

Of course, the panic-mongering is simply the excuse to enable moar QE... and ultimately Helicopter money.

...

Quantifying the Brexit Shock

Investors are facing what may be the biggest policy shock of their lifetimes. But past events give some sense of how what sort of damage it will cause.

U.K. Downgraded: Why Reasons Matter More Than Impact

Post-Brexit, the U.K. has lost its triple-A rating from Standard & Poor's. That matters more politically than financially.

General Mills Isn't Appetizing at This Price

General Mills has thrived as a bond-like stock, but its valuation might be too rich even for yield-hungry investors.

The Tell: The best-paid bank CEO in America may not be who you think

The list of best paid executives in the U.S. banking industry reads as one would expect, with one notable exception—at the top.

The Wall Street Journal: LendingClub details ex-CEO's shady loans, company's layoff plans

Online lender LendingClub Corp. said Tuesday that it is cutting up to 12% of its work force in response to more muted investor demand for its loans and that it had discovered new issues related to its former chief executive.

The Wall Street Journal: Gilead receives approval for cheaper hepatitis C drug

Gilead Sciences Inc. received U.S. Food and Drug Administration approval for its Epclusa hepatitis C combination drug and priced the treatment below its older drugs for the disease.

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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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