“One characteristic I’ve found among successful traders is that they function effectively when they’re not trading. When markets become very quiet and range bound, they occupy themselves with a variety of activities, from sharing ideas with peers to conducting research. Traders who do not tolerate inactivity well inevitably feel the need to trade, often when there is no objective edge present. For them, losing money is less onerous than experiencing boredom.” — unknown

1. China Markets Fall Sharply Despite Fresh Help From Beijing — Chinese shares plunged again last week as investors shrugged off a series of regulatory support measures. The panic in mainland markets also rippled across the border including Hong Kong.
2. FOMC June Meeting Minutes — minutes from the Fed’s June 16-17 meeting showed most policy makers continued to justify an interest rate hike later. However, they were worried about Greece & China, where conditions have since deteriorated. Fed officials also voiced concerns about US consumer caution, business investment and exports.
3. IBM Announced New kind of Ultra-Dense Chip — IBM has announced a new kind of ultra-dense chip, which squeezes in four times as much computing power as the best silicon currently available. The new chips will usher in the possibility of creating 7-nanometer transistors (a strand of DNA in comparison measures 2.5 nanometers in diameter). IBM (NYSE:IBM) made the research advance by using silicon-germanium instead of pure silicon, allowing transistors to switch faster and use less power by sitting more densely on a chip.
4. Europe Weighs Greek Proposal as Tsipras Seeks Lawmaker Support — the Greek PM submitted the packet of spending cuts, pension savings and tax increases to the European Commission. The government offered to meet most of the demands made by creditors in exchange for a third rescue to “fully cover” Greece’s financing needs through 2018. The bailout from the European Stability Mechanism may amount to 59 billion euros.
5. Investor Sentiment Rebounds Slightly — according the weekly sentiment survey from the American Association of Individual Investors (AAII), bullish sentiment increased from a depressed reading of 22.61% last week to 27.91% this week. Even at current levels, though, bullish sentiment remains low by historical standards. In fact, it has now been below its bull market average of 38.28% for 15 straight weeks, which is the longest streak since July 2012.

6. Greece Capitulates To Stay In The Eurozone — the eurozone and Greece have agreed in principle to a third bailout that will keep the beleaguered country in the currency area, for now, after almost total capitulation from Prime Minister Alexis Tsipras. Greece will have to put €50B of state assets in a trust fund so that they can be sold off and the proceeds used to repay debt. The government will also have to get further austerity measures through parliament, a tough ask given the “no” vote in the recent referendum.

The week ahead — Economic data from Econoday.com:

… “in the Chinese language the word “crisis” is composed of two characters, one stands for danger and the other opportunity.” — unknown

1. Puerto Rico’s ‘Death Spiral’ Gets a Reprieve — Puerto Rico’s governor announced earlier in the week that the small U.S. territory cannot pay its roughly $72 billion in debt. However, $1.9 billion in debt payments that were due were paid. Padilla then appealed to Washington to make unprecedented, “concrete” changes in bankruptcy rules to help rescue the island’s finances. Although U.S. cities and municipalities are eligible to file for bankruptcy, states and Puerto Rico are barred from seeking protection.
2. Eurogroup Said ‘No grounds for further talks’ on Greece — Eurogroup chairman Jeroen Dijsellbloem said after a conference call with fellow ministers that the Eurozone finance ministers see “no grounds for further talks” with Greece ahead of the country’s Sunday bailout referendum. Greece also became the first advanced economy to default on a payment to the International Monetary Fund. That, plus the expiry of Greece’s bailout package, brings the debt-burdened country to the brink of financial collapse and raises the chances it could eventually leave the European Union — a “Grexit”.
3. U.S. Adds 223,000 Jobs in June As Unemployment Falls to 7-year Low — MarketWatch, the U.S. created 223,000 new jobs in June and also offered evidence the U.S. is not expanding quite as fast as it was in the middle of 2014. Employment gains for May and April were reduced, the wages of U.S. workers were disappointingly flat and the percentage of Americans in the labor force fell to the lowest level in 38 years, the government reported.

4. DOJ Probing Price Collusion on Airlines — the Justice Department announced a probe whether airlines were colluding to grow at a slower pace as part of an effort to keep airfares high. Airline stocks sold off in response to the antitrust investigation. Those effected are: UAL , AAL, LUV, DAL, ALK, HA, JBLU, SAVE, SKYW, VA.
5. China Stock Rout Worsens as Watchdog Opens Probe — the bloodbath in Chinese equities extended into last Friday, with the benchmark Shanghai Composite plunging as much as 7 percent amid reports that the securities market regulator has launched a probe into suspected market manipulation. China Securities Regulatory Commission (CSRC) spokesman had set up a team to look at “clues of illegal manipulation across markets,”.
6. American Association of Individual Investors (AAII) Bullish Sentiment — the index Bullish Sentiment dropped last week from 35.6% down to 22.61%. This was the largest one-week decline in bullish sentiment since May 2013 and represents the 14th straight week where bullish sentiment has been below its long-term average.
Tags: June Job Rpt
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