Written by Gary
US major stock indexes ended more than 1 percent higher today (SPY +1.4%), recovering less than half of yesterday’s losses. China stepped in to stabilize the yuan, investors remain concerned.
The Market in Perspective
| Here are the headlines moving the markets. | |
 | Disney profit misses expectations, shares fall 5%Walt Disney Co on Tuesday missed Wall Street estimates for quarterly profit as heavy investments in its digital portfolio outweighed gains from the worldwide phenomenal success of “Avengers: Endgame”. |
| Brent oil in bear market as China-U.S. trade tensions mountOil prices fell more than 1% on Tuesday, with Brent crude settling near seven-month lows below $60 a barrel as trade tensions between the U.S. and China intensified worries about weakening global demand. |
| Wall Street ends sharply higher as China moves on yuanU.S. stocks ended more than 1 percent higher on Tuesday, bouncing back from a sharp sell-off the previous day as China stepped in to stabilize the yuan, easing concerns that currencies would be the latest weapon in the U.S.-China trade war. |
| Trump dismisses trade war fears; China warns of market chaosU.S. President Donald Trump on Tuesday dismissed concerns over a protracted trade war with China despite a warning from Beijing that Washington’s decision to label it a currency manipulator would lead to chaos in financial markets. |
| HSBC Global Asset Management names Nicolas Moreau as CEOHSBC Global Asset Management has appointed Nicolas Moreau as its new chief executive, the firm said in a statement on Tuesday, adding that he will join the $500 billion business in September. |
| China’s Tencent talking to Vivendi about stake in Lady Gaga’s labelChina’s Tencent Holdings Ltd is in talks to buy up to 20% of Universal Music Group (UMG) from Vivendi SA , valuing the music label of Lady Gaga, Ariana Grande and the Beatles at around 30 billion euros ($34 billion), as both firms look to expand in a recovering global music market. |
| Trump vows to help farmers as China halts U.S. agricultural purchasesU.S. President Donald Trump on Tuesday vowed to protect American farmers against China by signaling to provide further aid if needed, a day after Chinese firms stopped agricultural purchases and Beijing threatened more tariffs on U.S. farm products. |
| U.S. appeals court voids Google ‘cookie’ privacy settlement that paid users nothingA federal appeals court on Tuesday struck down Google’s class-action settlement meant to resolve claims it invaded the privacy of millions of computer users by installing “cookies” in their browsers, but paying those users nothing for their troubles. |
| DuPont considers sale of nutrition and biosciences unit – CNBCIndustrial materials maker DuPont is considering the sale of its nutrition and biosciences unit, CNBC said in a tweet on Tuesday, citing a report. |
| Gold Gains As China ‘Stability’ Sparks Dead-Cat-Bounce In StocksDespite stocks still being down 5% from pre-Powell levels, today’s dead-cat-bounce has prompted a resurgence of ‘everything is awesome’ with several speaking heads proclaiming “the resilience” of markets… It all began when China fixed the yuan a smidge stronger than expected… |
| Forget China, The Fed Has A Much Bigger Problem On Its HandsThe Fed may have launched its first easing cycle since 2007 and liquidity-sapping quantitative tightening may finally be over, but Powell may have a much bigger problem on his hands – one which has nothing to do with China, and everything to do with a dramatic drain of liquidity in the market over the next two months. We first hinted at this last week when we noted that as part of the recently completed debt ceiling deal, instead of taking its time in replenishing the cash balance (green line in the chart below), the US Treasury will scramble to rebuild its cash balance up to $350 billion, from today’s level of $133 billion (gray line), a process which as we said last Wednesday will “significantly tighten up liquidity in the banking system and potentially result in turmoil in funding and money markets as the world is flooded with an issuance of T-Bills” as the Treasury seeks to fill the $217 billion cash hole, which will lead to a substantial liquidity withdrawal from the broader financial system as shown in the following Nordea chart. |
| Meet Victoria’s Transgender AngelAfter getting caught up in the Jeffrey Epstein scandal, Victoria’s Secret has been performing major damage control in order to pivot away from their highly successful “sexy women in skimpy clothes” model – hiring their first transgender model in order to show how inclusive they can be in a #MeToo world, and accepting the ‘resignation’ of chief marketing officer Ed Razek – who came under fire last year for making derogatory comments about overweight and transgender models. “We attempted to do a television special for plus-sizes…No one had any interest in it, still don’t,” said Razek last November, who added when asked about transgender models “I don’t think we should…the show is a fantasy.” |
| These 3 Macroeconomic Factors Are Driving Bitcoin Price Above $12,000Bitcoin has staged a significant rally in recent days, but the reasons behind it could mean higher prices stick around much longer. |
| Sushma Swaraj: The foreign minister with a human touchSushma Swaraj: The foreign minister with a human touchSwaraj passed away in Delhi following a cardiac arrest. She was admitted to AIIMS earlier today. |
| Govt wants to freeze IL&FS’ auditors accountsGovt wants to freeze IL&FS’ auditors accountsGovernment’s counsel has asked the NCLT to pass an order to freeze accounts of former auditors. |
| China talks tough with India over HuaweiChina talks tough with India over HuaweiBeijing warned of “reverse sanctions” on Indian cos in China should New Delhi block Huawei, sources said. |
| June 2019 CoreLogic Home Prices Increase At the Lowest Pace Since 2011Written by Steven Hansen CoreLogic’s Home Price Index (HPI) shows that home prices in the USA are up 3.4 % year-over-year (reported up 0.4 % month-over-month). CoreLogic HPI is used in the Federal Reserves’ Flow of Funds to calculate the values of residential real estate. The quote of the day was in this data release:
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| Earnings Results: Match stock soars after Tinder shows explosive growth once againMatch Group Inc.’s Tinder growth engine keeps roaring, as new features and marketing tactics helped the online-dating powerhouse deliver better-than-expected subscriber numbers yet again. |
| The Ratings Game: Shake Shack partners with GrubHub for nationwide delivery, warns of ‘volatility’Shake Shack reported earnings that beat estimates and announced nationwide delivery through GrubHub. |
| Meet the lawyer who had $38,000 in student debt forgiven — he’s one of just 5% of applicants who did itAt one point in the process, Jeffrey Morgan discovered only about half of the payments he’d made since consolidating his loans qualified towards forgiveness. |
Summary of Economic Releases this Week
Earnings Summary for Today
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