…“People somehow think you must buy at the bottom and sell at the top to be successful in the market. That’s nonsense! The idea is to buy when the probability is greatest that the market is going to advance”… Jesse Livermore

1. China Factory Activity Remains Weak in June — China’s factory activity contracted for the fourth straight month in June, suggesting that more stimulus measures may be on the way. The HSBC/Markit Flash China Manufacturing PMI edged up to 49.6, from 49.2 in May, but remained below the 50 mark which separates contraction from expansion. Manufacturers also continued to cut their staff numbers, with the June reduction the sharpest in more than six years.
2. Supreme Court Rules 6-3 to Save Obamacare Subsidies — the U.S. Supreme Court ruled Thursday to save subsidies for as many as 8 million people under the Affordable Care Act. In the case of King v. Burwell, justices determined that the subsidies should be available in states that don’t have their own exchanges. The court determined that the broader context of the ACA allows subsidies to all those under the Obamacare program.
3. Korea Cuts GDP Forecast On MERS, Plans $13.5 Billion Stimulus — as its economy gets hammered by the MERS virus, South Korea is planning a stimulus package of more than 15T won ($13.5B) to cushion the economic impact of the deadly respiratory disease. The country’s finance ministry also cut its outlook for economic growth this year to 3.1% and slashed its inflation projection to 0.7%.
4. China Stocks Plunge 7%, Slide Toward Bear Territory — China’s stock markets plunged toward bear territory last Friday as margin financing in China started to explode in December. The Shanghai market, China’s largest, closed down almost 20% from its recent peak, while the second-largest Shenzhen market fell 20%, entering bear-market territory. Margin financing balance rose by 200 billion yuan to 1 trillion yuan in December according to WIND data. See chart below

5. Greece to Hold Referendum — PM Alexis Tsipras, facing a June 30 deadline for a bailout deal but with his leftist Syriza party threatening to revolt over the terms, plans to hold a July 5 referendum. That could give him the mandate to pass painful reforms and deficit cutting measures.

The week ahead — Economic data from Econoday.com:

Tags: China Bear Market, Grexit

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