Written by Gary
U.S. futures are pointing to a moderately higher opening (SPY +0.4%). Analysts are reporting that the Dow and S&P could undergo a slight bounce, but pointed to a continued decline in the Nasdaq. The Fed’s bank stress tests will be released today and the results are likely to move the market.
Here is the current market situation from CNN Money | |
European markets are mixed. The FTSE 100 is higher by 0.03%, while the CAC 40 is leading the DAX lower. They are down 0.32% and 0.06% respectively. |
In Asia, Japan -0.5%. Hong Kong -0.6%. China -0.5%. India -0.4%.
In Europe, at midday, London flat. Paris -0.3%. Frankfurt -0.5%.
Futures at 6:20, Dow +0.1%. S&P +0.1%. Nasdaq -0.3%. Crude -0.5% to $44.03. Gold +0.5% to $1253.40.
Ten-year Treasury Yield +5 bps to 2.25%
Today’s Economic Calendar
7:00 MBA Mortgage Applications
8:30 International trade in goods
10:00 Pending Home Sales
10:30 EIA Petroleum Inventories
11:30 Results of $13B, 2-Year FRN Auction
1:00 PM Results of $28B, 7-Year Note Auction
Companies reporting earnings today »
Energy stocks are about to post a historic losing streak
Nasdaq futures dragged lower by falling tech stocks
What Is Moving the Markets
Here are the headlines moving the markets. | |
Activist investor calls Hong Kong market routHONG KONG (Reuters) – Six weeks ago, David Webb, an activist investor and former director of the Hong Kong exchange, issued a report titled “The Engima Network: 50 stocks not to own”. On Tuesday, most of the shares he named abruptly plunged, pointing to chronic regulatory problems over small-cap shares in the Asian financial hub. | |
Philips to buy medical device maker Spectranetics for 1.9 billion eurosAMSTERDAM (Reuters) – Dutch healthcare company Philips has agreed to buy U.S.-based Spectranetics Corp , a maker of devices to treat heart disease, for 1.9 billion euros ($2.16 billion) including debt, as it expands its image-guided therapy business. | |
Alibaba spending $1 billion to raise stake in Southeast Asia’s LazadaSINGAPORE (Reuters) – Chinese e-commerce company Alibaba Group Holding is investing an additional $1 billion in Southeast Asian online retailer Lazada Group, boosting its stake by nearly a third to 83 percent and amplifying its focus on the region. | |
Exclusive: Halliburton in talks to buy billionaire Kaiser’s equipment firm – sourcesHOUSTON (Reuters) – Halliburton Co is in late-stage talks to acquire a fast-growing U.S. oilfield equipment supplier backed by Oklahoma energy and banking billionaire George Kaiser, according to sources familiar with the matter. | |
Japan, EU press ahead on free trade pact to counter U.S. protectionismTOKYO (Reuters) – Japanese and European Union negotiators meeting in Tokyo aim to reach a free trade deal that would stand against a protectionist tide threatening the global economy, and make the United States think twice over pursuing inward-looking policies. | |
Nissan’s premium brand Infiniti courts NBA’s Stephen CurryBEIJING (Reuters) – Japanese automaker Nissan Motor Co Ltd’s premium brand Infiniti will announce a marketing agreement with U.S. basketball star Stephen Curry on Wednesday, according to a company statement seen by Reuters. | |
Oil pipeline firms’ discounts rile clients, roil marketsNEW YORK (Reuters) – U.S. pipeline operators are selling their underused space at steep discounts to keep crude flowing – angering shippers and distorting an already opaque market for oil trading. | |
Japan Tobacco tries to catch up with rival in smokeless tobaccoTOKYO (Reuters) – Japan Tobacco Inc said on Wednesday it hoped to catch up with Philip Morris International Inc in smokeless tobacco by expanding the number of smoke-free restaurants and public places that allow its vaping product. | |
Bill Blain: “The 1-, 4- And 10-Year Cycles Top Out Mid-August At Which Point Be Very Afraid… Or Something Like That”By Bill Blain of Mint Partners, Blain’s Morning Porridge – June 28th 2017 Uncertainty, confusion, a Tech-sell off.. but are things as bad as they seem? “Now I got mortgages and homes, I got stiffness in my bones, ain’t no beauty queens in this locality…” As we reach towards month end and the half-year, markets do not feel like they are in particularly solid territory. Lots of uncertainty out there. Relax. Never as bad as you think, but it helps to understand what is really going on. Noise, and lots of it. I highlighted on Monday the shifts occurring in underlying sentiment and direction. We’ve had bullish/tightening comments from many central bankers, and clear signals the debate has moved on from the continuation of “Extraordinary Monetary Policy” towards “Normalisation”. The outlook for growth (Europe, perhaps, aside) is increasingly fraught. I sense a degree of “contradictory bluster” billowing around markets. In Europe, Draghi has given a very positive assessment on recovery, pushing up the Euro and denting bonds. What he said was simple – policy remains accommodative until we get recovery, when we will normalise and tighten. Every bank analyst I know says recovery is great for undervalued European banks as it will improve margins and reduce the damage in Non-Performing-Loan books. (Of course, if European growth proves less than solid and the accommodative policy that has so inflated asset values ends, or growth is thumped by global events, then the opposite will be true of European banks….. (Clue.. I’m still bearish European banks!)) And then there was Bank of England governor Mark Carney slapping a further £11.5 bln capital requirement on UK banks to back up their c … | |
Frontrunning: June 28Global Bonds Sell Off, Sparking Fears of Further ‘Taper Tantrum’ (WSJ) Facing revolt on healthcare, GOP senators delay vote (Reuters) Global businesses dig out from latest cyber attack (Reuters) Companies Work to Contain Fallout From Cyberattack (WSJ) Cyber attack hits property arm of French bank BNP Paribas (Reuters) Obama Choked on Russia Long Before the 2016 Election (BBG) The EU May Need to Introduce a Bloc-Wide Tax After Brexit (BBG) iPhone Anniversary Edition Gives Analysts Pre-Party Jitters (WSJ) Some would-be immigrants left in limbo after Supreme Court travel ban order (Reuters) Macron Lights Fuse on ‘Mother of All Reforms’ to Renew France (BBG) Cash-Rich Sweden Squirrels Away Ahead of Demographic Time Bomb ( | |
Trump Goes After “Fake News” NYTimes, Slams Media Criticism On Healthcare: “I Know The Subject Well”One day after he repeatedly lashed out at CNN, on Wednesday President Trump blasted the the NYT in particular, and the broader press in general, for reporting that he is “not totally engaged” on healthcare. “Some of the Fake News Media likes to say that I am not totally engaged in healthcare,” Trump tweeted shortly before 7am. “Wrong, I know the subject well & want victory for U.S.”
Trump’s angry outburst followed an earlier tweet in which the president specifically targeted The New York Times. “The failing @nytimes writes false story after false story about me. They don’t even call to verify the facts of a story. A Fake News Joke!”
Trump’s fury appears to have been focused on a Times story published on Tuesday titled “On Senate Health Bill, Trump Falters in the Closer’s Role,” in which the Gray Lady said that the president was “largely on the sidelines” as the S … | |
How The “Enigma Network” Led To A Historic Crash In One Hong Kong MarketYesterday morning we discussed the sudden crashes amid 17 small cap Hong Kong firms, which collectively lost over $6 billion in market cap, on what we dubbed was a marketwide margin call, as confidence in the entire sector vaporized instantly, sending the small cap Growth Enterprise Market (GEM) plunging by over 9%, with some stocks plunging over 90%. Quoted by Bloomberg, Francis Lun, the CEO of HK’s Geo Securities said “we’re seeing a domino effect; all the companies in the same network got cut. These shares are owned by the same group of people so they must be experiencing a liquidity crunch and they don’t have the money to support the share prices.” It turns out there was more to this story, at the heart of which is a report issued six weeks ago titled “The Enigma Network: 50 stocks not to own” by David Webb, a former director of the Hong Kong stock exchange, whose argument is that companies which crashed were entwined in a complex web of cross-shareholdings that had pushed their valuations to unsustainable levels. As Reuters adds, “Webb’s report mapped out a complex web of cross-shareholdings between companies listed on both the main board and its sibling, the Growth Enterprise Market, which he said created a breeding ground for volatility.” In other words, Webb mapped out the margin call domino effect whose impact was not a question of if but when. It is shown in the chart below. | |
Central Banks Give Sleepy Markets a Wake-Up CallThe U-turn in bonds is a sign that investors haven’t been paying attention to what central banks have been saying. | |
Takata Bankruptcy Doesn’t End Auto Industry’s PainOne of the world’s largest air-bag makers, Takata Corp., has finally filed for bankruptcy after a drawn-out scandal involving faulty products that caused multiple deaths. The question now is how much wind this will take out of its big-auto-maker customers. | |
Why Central Banks Need to Worry About Falling Oil PricesThe effect of declining oil prices on inflation raises some awkward questions for markets and policy makers. | |
Metals Stocks: Gold edges higher as dollar faces further weaknessGold futures edge higher Wednesday as the U.S. dollar faces further weakness, though analysts said a weaker currency isn’t an unalloyed positive for the precious metal. | |
Currencies: Dollar slips for second straight day; euro near one-year highThe U.S. dollar slipped for a second straight day on Wednesday, with the euro headed toward its highest against the greenback in a year as investors gauged when the European Central Bank may start winding down monetary stimulus. | |
The Margin: Time magazine wants Donald Trump’s fake covers taken downTime magazine has asked the Trump Organization to remove copies of a fake magazine cover featuring Donald Trump from its golf clubs’ walls. |
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