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06Jul2016 Market Close: US Markets Closed Fractionally Higher, Crude Prices Get A Good Bounce Off Lows And The US Dollar Slid To Support

Written by Gary

US markets closed higher on low volume (DOW +78 points) as officials sought to reassure investors of limited impact from Britain's decision to leave the European Union and as healthcare shares gained. Crude futures bounced off near-six week lows in what some analysts are calling short covering. Short-term indicators are moderately bullish, but investors need to be wary.

Todays S&P 500 Chart

The Market in Perspective

Here are the headlines moving the markets.

Fed minutes suggest rate hikes on hold until Brexit impact clearer

WASHINGTON (Reuters) - Federal Reserve policymakers decided in June that interest rate hikes should stay on hold until they have a handle on the consequences of Britain's vote on EU membership, according to the minutes of the Fed's June policy meeting released on Wednesday.

Wall Street edges up as investors digest comments on Brexit

(Reuters) - Wall Street stocks rose Wednesday afternoon as officials sought to reassure investors of limited impact from Britain's decision to leave the European Union and as healthcare shares gained.

U.S. services sector data underscores strong economic fundamentals

WASHINGTON (Reuters) - U.S. services industry activity hit a seven-month high in June as new orders surged and companies hired more workers, suggesting the economy regained speed in the second quarter.

U.S. regulator probes July 1 crash of Tesla Model X in Pennsylvania

(Reuters) - The National Highway Traffic Safety Administration is investigating a July 1 crash in Pennsylvania of a Tesla Model X "to determine whether automated functions were in use at the time of the crash," the agency said in a statement on Wednesday.

Verizon raises wireless plan rates, offers more data

NEW YORK (Reuters) - Verizon Communications Inc , the No. 1 U.S. wireless provider, said on Wednesday that it would increase plan rates but expand data buckets by 30 percent for its customers, who increasingly stream content through mobile devices.

Wal-Mart mobile pay service rollout complete, repeat usage jumps

CHICAGO (Reuters) - Wal-Mart Stores Inc said on Wednesday it has completed the rollout of its Wal-Mart Pay mobile payment service across the United States and that 88 percent of transactions on the payment app are from repeat users.

CFTC fines Barclays $560,000 for inaccurate swaps position reports

(Reuters) - The U.S. Commodity Futures Trading Commission ordered Barclays Plc to pay $560,000 (£433,433) on Wednesday, saying the bank failed to submit accurate reports on large traders' positions for physical commodities swaps.

Volkswagen recalls 5,900 gas-powered Touran models worldwide

BERLIN (Reuters) - Volkswagen is recalling almost 6,000 gas-powered Touran multi-purpose vehicles (MPV) worldwide to replace the models' front gas bottles, it said.

DoubleLine's Gundlach: gold remains best investment in 'shaky' world

NEW YORK (Reuters) - Jeffrey Gundlach, the chief executive of DoubleLine Capital, said on Wednesday that gold remains the best investment amid fears of instability in the European Union and prolonged global stagnation, as well as concerns over the effectiveness of central bank policies.

Banana Republic: One System of Justice for the Powerful (Like Clinton) ... and Another For Everyone Else

FBI Director Comey's announcement that he doesn't think Hillary Clinton should be prosecuted for sharing government documents on her private, unsecured email server is very troubling ...

The FBI Re-Wrote 6 Criminal Laws to Let Clinton Off the Hook

Former FBI director Chris Swecker said Comey should have brought charges against Clinton:

Domestic Trade Is Disintegrating: Heavy Truck Orders Plunge To Lowest Since 2010

Who says you need trade and logistics to maintain the S&P within 2% of its all time high? Not the Fed, that's who, and it's a wonderful thing because the state of US heavy trucking - the backbone of domestic trade infrastructure and logistical supply chains - suggests the US economy is in a far more dire state than the Fed would ever admit.

According to the latest data from ACT Research released today, June orders for new heavy-duty, or Class 8, trucks plunged to just 13,100, the lowest number since 2010 according to the WSJ (and since 2012 according to Bloomberg, but no need to split hairs here) indicating that trucking companies - the forward-looking bedrock of any viable recovery along with rails - expect little relief from a weak freight market and sluggish economic growth. This month's order activity was the lowest monthly total since July 2012 and the worst June since 2009.

As the WSJ reports, Trucking companies ordered 13,100 Class 8 trucks, which are used for long-haul routes, the fewest orders since the third quarter of 2010 and a more-than 30% drop from last year. With the manufacturing levels depressed thanks in part due to the strong dollar, and retail inventory levels high, freight volumes have not kept up with the ramp up in truck orders in recent years, leading to overcapacity, said Kenny Vieth, ACT's president. Truck orders plummeted last fall and have held at low levels throughout 2016. "I ...

Europe Wasn't "Fixed" and Now It Is Even MORE Bankrupt Than It Was in 2012.

So the world has woken up and realized what we've been pointing out for four years now... that Europe wasn't fixed in 2012.

European Financials have fallen back to levels not seen since the Crisis was raging to the point that France and Germany floated the idea of imposing capital and border controls.

The whole mess was "saved" based on a lie. Mario Draghi claimed he'd do "whatever it takes... and believe me it will be enough" and the markets took him at his word.

Unfortunately the math doesn't support this. The EU banking system is leveraged at 26 to 1. Many banks are leveraged far above this. Lehman was leveraged at 30 to 1 when it imploded. People laugh that somehow that was allowed to happen in 2007... without realizing that Europe's entire 46 trillion banking system is just below that.

Since Draghi "saved" Europe in 2012, he's cut interest rates to negative FOUR times and has implemented over 1 trillion in QE expanding the ECB's balance sheet well above its previous record high set at the depth of the crisis.

Meanwhile, EU GDP has remained below its pre-crisis highs (both 2008 and 2011).

Meanwhile, Debt to GDP has risen to 90% for the whole of the union, with problem countries like Italy and Spain seeing their Debt to GDP ratios soar to new record highs.

A Trigger to Revisit Bigger Global Worries

After the Brexit vote, the pound has dropped below $1.30, bond markets are going ballistic and risk appetite is taking a drubbing. But apart from the pound, is this really about the U.K.'s exit from the European Union?

Investors' Thirst for Yield Is a Bubbly Bet

As PepsiCo has shown, the quest for safe alternatives to low-yielding bonds is an increasingly crowded trade.

Unhappy Anniversary at Twitter

A year after Jack Dorsey returned to the helm of Twitter, the company seems no closer to achieving the strategic shift it needs to spur growth.

Blogger Sentiment Divided and Little Changed Entering July 2016

The latest Blogger Sentiment Poll released 05 July 2016 by Ticker Sense continues the divided outlook seen entering last month.

15 June 2016 FOMC Meeting Minutes: Funds Rate Increase Uncertain.

Fed-sealSMALLThe 15 June 2016 meeting statement presented the actions taken. This post covers the economic discussion during this FOMC meeting between the members (minutes were released today). There was a significant amount of discussion about economic conditions and how it relates to the federal funds rate. There was a sense of division between the FOMC members on when to raise the federal funds rate. The quote of these minutes was:

... some other participants were uncertain whether economic conditions would soon warrant an increase in the target range for the federal funds rate. Several of them noted downside risks to the outlook for growth in economic activity and for further improvement in labor market conditions, including the possibility that the sharp slowdown in employment gains and the continued weakness in business fixed investment signaled a downshift in economic growth, as well as the potential for global economic or financial shocks. .....

Netflix analysts are now worried about its U.S. and international businesses

Analysts worry that Netflix is being hit at home and overseas, with Brexit a new concern.

Nasdaq gains record number of transfers from NYSE

Thirteen companies transferred from the NYSE to the Nasdaq in the first half of the year.

The Ratings Game: Even good news for Tesla can be bad news for the stock

A Pacific Crest analyst slashed his price target for Tesla's stock, as evidence of strong demand for the new lower-priced cars means lower profit for the electric car maker.

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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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