Written by Gary
US stock indexes have fallen sharply this morning (SPY -1.5%) as shorters take advantage of an Italian non-event. The DOW is down almost 600 points as the deepening political crisis in Italy scares investors.
Here is the current market situation from CNN Money | |
 | North and South American markets are mixed today. The Bovespa is up 1.23% while the IPC gains 0.32%. The S&P 500 is off 1.45%. |
Traders Corner – Health of the Market
Looking at the last three columns (below), the first one (Actual), is what was reported this morning. The second column (Forecast) is what analysts had forecast and the third column is the previous report. Full calendar HERE.
What Is Moving the Markets
| Here are the headlines moving the markets. | |
| Wall Street tumbles on concerns over Italy’s political turmoil(Reuters) – U.S. stock indexes slumped on Tuesday, with bank stocks among the hardest hit, as a deepening political crisis in Italy triggered rush to safe-haven assets. |
| U.S. to continue trade actions against China: White HouseWASHINGTON (Reuters) – The United States said on Tuesday that it will continue pursuing action on trade with China, days after Washington and Beijing announced a tentative solution to their dispute and suggested that tensions had cooled. |
| Starbucks shuts 8,000 stores for anti-bias training(Reuters) – Starbucks Corp appealed to customers for forgiveness in a row over racial profiling on Tuesday, saying its behavior toward two black American customers last month had been reprehensible as it closed 8,000 stores for anti-bias training. |
| How the world’s biggest private equity oil and gas industry bid collapsedMELBOURNE (Reuters) – Blame it on Trump, Iran or Venezuela. Rising oil prices combined with a heavy debt load killed the world’s biggest private equity oil and gas industry deal last week. |
| Canada to buy Kinder Morgan pipeline in bid to save projectOTTAWA/WINNIPEG (Reuters) – Canada will buy Kinder Morgan Canada Ltd’s Trans Mountain pipeline for C$4.5 billion ($3.5 billion), the government said on Tuesday, in hopes of saving the project that faces formidable political and environmental opposition. |
| Delays and ‘poison pills’: team Trump runs out of road in NAFTA talksWASHINGTON (Reuters) – President Donald Trump is running out of time to deliver a revamp of the North American Free Trade Agreement (NAFTA) he promised for this year and people involved in the talks say the crunch is largely of his administration’s own making. |
| Trump giving Japan’s Abe a hard time on trade despite close tiesTOKYO (Reuters) – Tariffs on steel, threats of car import levies and intense pressure for a two-way economic deal: despite warm personal ties, U.S. President Donald Trump is giving Japanese Prime Minister Shinzo Abe a decidedly tough time on trade. |
| Not enough time for tech customs solution to Brexit: Aston MartinGAYDON, England (Reuters) – The boss of carmaker Aston Martin warned it was probably too late to roll out the kind of technology needed for the post-Brexit customs plan that is favoured by many British eurosceptics. |
| Alibaba leads consortium in $1.4 billion deal for stake in Chinese courier ZTOSHANGHAI (Reuters) – Alibaba Group Holding Ltd on Tuesday said it has led a consortium of investors to buy about 10 percent of Chinese courier ZTO Express (Cayman) Inc for $1.38 billion, as part of the e-commerce firm’s push into offline services. |
| Italian Equity, Credit Protection Costs Explode, Sovereign Risk At 5Y HighsWhile prices for Italian bonds and stocks have already plummeted, investors are anything but convinced the bottom is in as the costs for protecting against downside risk has exploded to multi-year highs for stocks and bonds… Italy’s FTSE MIB stock market benchmark had fallen almost 14% in the last three weeks…
And despite the modest bounce off today’s lows – as every European politician attempts to calm any anxiety – investors continue to pay up massively to protect their stock and bond investments.
Note that the chart above shows the “false alarms” tha … |
| How Far Can Stocks Fall?Authored by Lance Roberts via RealInvestmentAdvice.com, With the markets closed for Memorial Day yesterday, our analysis remains. In case you missed it, we updated our potential pathways following last week’s stagnation as follows:
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| Italians Furious After EU’s Oettinger Says “Markets Will Teach Them” Not To Vote For PopulistsWhen it comes to Italy, unlike most other insolvent European nations which at least have an passing ideological affinity toward the EU and the common currency project, the Italian population has been growing increasingly disenchanted and belligerent over the years toward the EU, and as shown in the BofA chart below, Italians score the lowest when answering if “EU membership has benefited the country” or if “the EU contributes to economic growth in the country.”
Between the growing animosity toward Europe, and the recent political chaos in Rome, where the country’s president – under implicit orders from Europe – blocked the formation of a democratically-elected parliament just because he didn’t like the Euroskeptic finance minister, one would think that Europe would keep a lower profile and certainly not say any words out of place that may further infuriate the Italians, who are not set to vote not only in a repeat round of national elections, but what is shaping up to be a nationwide referendum on the euro. So what does Europe do? With all the grace of a drunk elephant (not to be confused with Jean-Claude Juncker) in an Italian China store, Europe uttered not one but seve … |
| Trader Warns “Only Draghi Can Save Us Now”… But Will He?“Stuff” just got serious in Europe as not only are Italian sovereign yields blowing out at a historically unprecedented pace but the systemic threat to the political union has exploded as George Soros warned “Europe is in existential danger; it is the harsh reality..” And nowhere is that “harsh reality” more evident than in the credit markets ‘ISDA Basis’ which implicitly measures the possibility of Italian “redenomination” risk… simply put – the higher that red line goes, the less an ‘Italian Euro’ is expected to be worth relative to a ‘German Euro’…
As a reminder, FT explains that in 2014, a new global standard CDS contract was introduced, enabling holders to cash in not only if countries failed to repay their debts, but if they paid them back in another currency. Investors had lobbied for this change during the eurozone sovereign debt crisis, as the previous set of contracts, drafted in 2003, did not pay out if a country redenominated its debt… The difference between the spreads on the two contracts … |
| How Many Activists Does It Take to Change an Industrial Icon?Two of the world’s top activist investors, Elliott Management and Cevian Capital are agitating for change at Thyssenkrupp. |
| Why It Is Harder to Diagnose Hospital StocksNew accounting rules make assessing financial health more difficult for hospitals and companies that work with them. |
| Why Aren’t Companies Spending More?The renaissance in capital spending the tax cut was supposed to bring about isn’t showing up in the economic data. |
| NewsWatch: George Soros explains his audacious plan to save EuropeThe European Union is mired in an existential crisis, writes George Soros, explaining his plan to re-invent an EU that people would be proud to join. |
| Europe Markets: Italy’s stocks close with 2.7% loss as political mess rattles nervesEuropean stock markets finish sharply lower Tuesday, led by a selloff in Italian equities as investors consider the possibility that Italy may have to hold new elections that could serve as a referendum on the euro. |
| The Fed: Fed officials are basically born with their beliefs, study findsFederal Reserve officials more or less are born with their viewpoints on interest rates, a new study argues. |
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