08Jul2015 Market Update: NYSE Trading Halted Several Times, But Doesn’t Stop Markets Decline Over One Percent

Here is the current market situation from CNN Money

44.32%

10,675

Tsipras calls for fair deal for Greece in EU parliament

STRASBOURG (Reuters) – Greek Prime Minister Alexis Tsipras called in a speech to the European Parliament on Wednesday for a fair deal to keep his country in the euro zone, acknowledging Greece’s own responsibility for its plight, after EU leaders gave him five days to come up with convincing reforms.

NYSE temporarily suspends trading due to technical glitch

(Reuters) – Trading in all securities were halted on the New York Stock Exchange on Wednesday following earlier reports of technical difficulties, although NYSE-listed issues was still trading on other exchanges.

Is This What The First World Cyber War Looks Like: Global Real Time Cyber Attack Map

After a series of cyber failures involving first UAL, then this website, then the NYSE which is still halted, then the WSJ, some have suggested that this could be a concerted cyber attack (perhaps by retaliatory China unhappy its stocks are plunging) focusing on the US. So we decided to look at a real-time cyber attack map courtesy of Norsecorp which provides real time visibility into global cyber attacks.

What clearly stands out is that for some reason Chinese hackers really are focusing on St. Louis this morning.

Whether this is related to the series of suspicious cyber failures today, is so far unclear, although if there is a connection at least there is a way to keep track of the first global cyberwar in real-time.

Systemic “Holidays” Are Coming to Banks, Money Market Accounts and More in the Weeks Ahead

This morning both the NYSE broke (canceling all open orders) and China outlawed selling stocks for large investors.

These two items seem completely unrelated… however, the reality is they are both based on a them we outlined back in May 2015.

That theme is as follows: that as the next Crisis unfolds, it will more and more difficult to get your money out of the financial system.

The reason for this concerns the actual structure of the financial system. As we’ve outlined previously, that structure is as follows:

1) The total currency (actual cash in the form of bills and coins) in the US financial system is a little over $1.36 trillion.

2) When you include digital money sitting in short-term accounts and long-term accounts then you’re talking about roughly $10 trillion in “money” in the financial system.

3) In contrast, the money in the US stock market (equity shares in publicly traded companies) is over $20 trillion in size.

4) The US bond market (money that has been lent to corporations, municipal Governments, State Governments, and the Federal Government) is almost twice this at $38 trillion.

5) Total Credit Market Instruments (mortgages, collateralized debt obligations, junk bonds, commercial paper and other digitally-based “money” that is based on debt) is even larger $58.7 trillion.

6) Unregulated over the counter derivatives traded between the big banks and corporations is north of $220 trillion.

When looking over these data points, the first thing that jumps out at the viewer is that the vast bulk of “money” in the system is in the form of digital loa …

Apple plans record initial production of new iPhones: WSJ

(Reuters) – Apple Inc is preparing for the largest initial production run for its next iPhones by the end of the year, the Wall Street journal reported.

Twitter rolls out suite of direct response ad products after struggles

SAN FRANCISCO (Reuters) – Twitter Inc rolled out three new products for its direct response advertising on Wednesday, two months after the company said weak demand for the product had lowered its revenue forecast for the year.

NYSE temporarily suspends trading of all securities

NEW YORK (Reuters) – (This version of the story was refiled to change day of week in first paragraph to Wednesday from Tuesday)

And Now The Wall Street Journal Is Down

Things are starting to get interesting. First UAL, then ZH, then the NYSE, and now the WSJ…

Global Markets: The Problem With China’s Efforts to Prop Up Its Stock Market

When a government tries to intervene in these cases, it can mean pouring money down a sinkhole and merely delaying an inevitable correction.

Microsoft hangs up on Nokia business, to cut 7,800 jobs

(Reuters) – Microsoft Corp said on Wednesday it would cut 7,800 jobs, or nearly 7 percent of its workforce, and write down about $7.6 billion related to its Nokia phone business.

Greece Preparing “Alternative Currency”, Kathimerini Says

On Tuesday, Latvia’s central bank chief Ilmars Rimsevics called the introduction of a new currency in Greece the “most realistic scenario.”

The country is in its second week of capital controls and banks remain shut in the wake of a referendum which saw some 61% of Greeks vote against the terms of the latest bailout deal proposed by the troika.

Now, Germany has indicated that any new proposal will come with harsher terms to reflect the recent deterioration in the Greek economy. Furthermore, Berlin’s stance on debt writedowns for Greece (which the IMF deems necessary if Athens is to return to fiscal sustainability) has hardened, meaning it will now be exceptionally difficult for Tsipras to fulfill the implicit promise he made to his people when he campaigned for a referendum “no” vote.

Given all of this, it now appears increasingly likely that Greece will be forced to return to the drachma or will at least be compelled to issue some manner of scrip in the face of an acute cash shortage and a worsening credit crunch which together threaten to leave government employees in the lurch and cut off the flow of imported goods.

Sure enough, Kathimerini says the Greek government is indeed preparing for the launch of an “alternative currency.” Here’s more (Google translated):

…

USDJPY Breaks Key Technical Support: Next Target 118.96 According To Goldman

After valiantly defending the 121 level, moments ago what is perhaps the most important carry currency for the US stock market dipped below and is now trading at fresh lows not seen since May.

Among the factors cited for today’s weakness, the primary one is China. Overnight DZ Bank said that “worrying” developments in China seem to be turning yen into favorite place to be as safe haven both globally and within Asia. It adds that “rising foreign purchases of short-term JPY debt would suggest that investors are currently viewing yen as safe haven.”

Whatever the reason, the one pair that has been stable as a rock in recent weeks, and which provided a key support to the market, is now sliding. Where does it go next? According to Goldman’s technical analyst Sheba Jafari there is a long way down at this point, all the way to just under 119 where the next support level is.

From Goldman:

The next level to focus on is 121.06 where the 100-dma and an ABC from the Jun. 5th high converge. A break below that point will further imply that the decline since June isn’t actually corrective at all but rather something more impulsive. If this is true then the next likely target should be down at ~118.96; a 1.618 extension from the June high. This level is also near to the 200-dma which is at 118.51 and rising.

If accurate, it means US stocks will likewise take out the all important 200-DMA suppo …

China stock market freezing up as sell-off gathers pace

SHANGHAI (Reuters) – China’s tumbling stock market showed signs of seizing up on Wednesday, as companies scrambled to escape the rout by having their shares suspended and indexes plunged after the securities regulator warned of “panic sentiment” gripping investors.

“I’m A Tad Worried At The Market’s Complacency”

Submitted by Bill Blain via Mint Partners,

“I may be wrong, but I’d say you’re lucky to be alive and I think we might say the same for the rest of Southern California….”

As some wit in the West End pointed out.. the New Greek Finance Minister is very aptly named: “Mr That’s-a-lot-of-loss”

As I return to the office after a proper breakfast in the West End, I’m a tad worried about the market’s complacency. Euro’s took a soft shoeing through Tuesday but it reversed along with peripheries on apparent rumours of accelerated ECB QE buying. The flight to quality has benefited Bunds, Gilts and Treasuries, but stock markets continue soft on the diminishing hopes that a messy Greek Divorce, Grexit and Default can be contained.

Yet… With this brewing crisis around Greece, the fact the Shanghai stock market is exposing all kinds of uncomfortable truths about China, (for instance, the lack of competitiveness, overleverage, massive over-expectations in valuations, the failure of the stock market as “bread and circuses” for the middle classes, and the fears of the party at a troublesome time), and the big bond reversal in the last quarter… and its perhaps surprising that things aren’t a whole lot worse. It’s no wonder global commodity markets are flimsier than a chocolate tea-pot. The first half of the year was pretty torrid… but it could still prove pleasant compared to what may be coming.

I’m wondering if Global Markets are poised on the edge of the precipice about to take a step forward?

My mind keeps wandering back the few weeks before the Lehman crisis erupted. No one could quite believe it could ever happen. But having observed the growing crisis as Northern Rock wobbled in 2007, the big ba …