Written by Gary
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.
The Market in Perspective
Here are the headlines moving the markets. | |
U.S. companies may be hiring but lid on wages, investment hits productivity 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. | |
McDonald’s cuts 225 corporate jobs in July amid restructuring 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. | |
TBTF Banks Lowering Down-Payments & Credit Standards To Keep High-End Housing Market AliveSubmitted 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 before… From the Wall Street Journal:
Guess it’s gonna be shipping container apartments for everyone else. | |
U.S. hospitals urge DOJ antitrust probe of Anthem-Cigna deal NEW YORK (Reuters) – U.S. hospitals urged antitrust regulators this week to consider whether health insurer Anthem Inc’s planned acquisition of rival Cigna Corp would boost healthcare costs. | |
Analysts Give Up On “Man-Made” China Data: It’s “A Fantasy” That “No One Believes”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: | |
EU Commission: Third bailout deal with Greece possible before August 20 BRUSSELS (Reuters) – Talks with Greece on a third bailout are moving ahead in a satisfactory way and reaching an agreement is possible before August 20, the European Commission said on Thursday. | |
Rail Week Ending 01 August 2015: Traffic Down 1.8% in JulyEconintersect: 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. | |
Which Countries Have The Highest Default Risk: A Global CDS HeatmapWe 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. | |
Investor Ackman takes $5.5 billion stake in Cadbury owner Mondelez (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. | |
Stocks Drop on Media MeltdownU.S. stocks slumped in a selloff led by shares of media companies, which have reported a flurry of disappointing earnings amid concerns about the shift away from traditional television. | |
Bringing Turkey’s Border Strategy Into Focusby STRATFOR 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. | |
Wall Street slumps as media stocks hemorrhage (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. | |
Emerging Market Mayhem: Gross Warns Of “Debacle” As Currencies, Bonds CollapseThings are getting downright scary in emerging markets. Just ask Bill Gross:
Or have a look at this week’s headlines: UK rate hike fears recede, emerging markets on edge EMERGING MARKETS-Currencies retreat on talk of a Fed rate hike Lost Decade in Emerging Markets: Investors Already Halfway There Some Greek Lessons for Emerging Markets Currencies in Freefall Handcuff Bankers From Chile to Colombia And on, and on. One particularly alarming case that we’ve been keen to document lately is tha … | |
“Something Has To Give”: Wall Street Finally Noticed The Epic Divergence Between Stocks And CommoditiesWe 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.
| |
The Biggest Losers From Today’s RoutIt 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: Keurig Green Mountain: -28% Coca-Cola (16.8%) Fidelity (11.7%) Vanguard (4.9%) Blackrock (4.4%) Morgan Stanley (3.5%) SunEdison: -21% Greenlight Capital (7.8%) Glenview (3.8%) Lone Pine (3.6%) Fir Tree (3.3%) Third Point (3.2%) Steadfast Capital (3.0%) Omega Advisors (2.8%) York Capital (2.7%) Velinor (2.3%) Altai Capital (2.0%) Luxor (1.5%) Teradata: -16% First Eagle Investment (10%) Fairpointe Capital (3.8%) GMO (3.6%) Bessemer (2.1%) Carlson Capital (1.5%) Gotham Asset Mgmt (1.3%) Viacom -15.6%< … | |
Blackstone teams up with Hellman & Friedman for Worldpay bid: sources 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. |
Summary of Economic Releases this Week
Earnings Summary for Today
leading Stock Positions
Current Commodity Prices
Commodities are powered by Investing.com
Current Currency Crosses
The Forex Quotes are powered by Investing.com.
To contact me with questions, comments or constructive criticism is always encouraged and appreciated: