…“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:

..“Successful speculation requires staying on top of changes in industries and companies that either create new industries or improve on existing industries. The majority of your profits will come from these two … The shrewdest traders throughout history all adapted the skill of reactionary change, as the market constantly presents new and different opportunities.”.. — Bernard Baruch

1. Health-Insurance Sector in Consolidation Talks — merger talk in the health-insurance industry is heating up as firms grapple with the challenges and opportunities the federal healthcare overhaul has created. UnitedHealth (NYSE:UNH) has reportedly approached Aetna (NYSE:AET) about a takeover deal that would likely be valued at more than $40B, after Anthem (NYSE:ANTM) approached Cigna (NYSE:CI) with a $45B buyout offer that was rebuffed. Meanwhile, Aetna and others are considering buying Humana (NYSE:HUM), which is looking at strategic alternatives including a sale.
2. FDA Sets Date for Trans Fats Restrictions — beginning in 2018, companies will have to seek approval before they can put partially hydrogenated oils into foods, after the FDA said the ingredient should no longer be considered safe and laid out far-reaching restrictions. Possible companies effected by this decision are: Nestle (OTCPK:NSRGY), PepsiCo (NYSE:PEP), Tyson Foods (NYSE:TSN), Mondelez International (NASDAQ:MDLZ), Unilever (NYSE:UL), General Mills (NYSE:GIS), Kraft Foods (NASDAQ:KRFT), Kellogg (NYSE:K), Dean Foods (NYSE:DF), Campbell Soup (NYSE:CPB), Hormel (NYSE:HRL), Hershey (NYSE:HSY), Pilgrims Pride (NASDAQ:PPC).
3. EU Calls Emergency Summit on Greece — a meeting of eurozone finance ministers ended without a deal on Greece’s flailing bailout last Thursday, spurring a special summit of European leaders on Monday (June 22 2016). Greece’s €245 billion ($279 billion) bailout deal from other eurozone governments and the International Monetary Fund runs out on June 30. That same day the country faces a €1.54 billion payment to the IMF that it won’t be able to make without a new aid transfer.
4. China Stocks in Correction — Chinese shares suffered their worst week in more than seven years last week. Both the Shanghai and Shenzhen markets fell into correction territory. The Shanghai Composite (SHCOMP) finished down 6.4% at 4,478.36 and lost 13.3% for the week, marking the second time this year it has fallen into correction territory. Fears over liquidity and margin trading were cited as reasons for the declines. Year to date, Shanghai is still up 38.4% and Shenzhen is up 93.8%.
5. Bullish Sentiment Rebounded Last week — courtesy of BIG, the weekly survey from AAII, individual investor bullish sentiment rebounded from 20.0% up to 25.4%. In spite of the rebound, bullish sentiment has now been below 40% for 17 consecutive weeks. The last time we saw bullish sentiment below 40% for this long was back in the summer of 2012.

The week ahead — Economic data from Econoday.com:

“The market is better at predicting the news than the news in predicting the market” — Gerald Loeb.

1. China’s Imports Mark Need for More Stimulus — China’s exports fell for a third month in May, while imports slumped the most in three months, underscoring a sluggish domestic environment in need of more stimulus. Annual exports fell 2.5% while imports plunged 17.6%, data from the General Administration of Customs showed on Monday. Many analysts have already penciled in sub-7% growth for the second quarter, raising the risk that the government will not meet its full-year growth target of around 7%.
2. Google (GOOG) Electronic Payment Android Pay Update — according to the WSJ, Google ‘s mobile phone payment service, Android Pay, will not garner any transaction fees from credit card companies, possibly putting pressure on Apple (NASDAQ:AAPL) to drop or lower its charges for Apple Pay. Dominant payment networks, Visa (NYSE:V) and MasterCard (NYSE:MA), recently standardized their “tokenization” card-security service and made it free, preventing payment services, such as Google (GOOG, GOOGL), from charging fees to issuers.
3. Chinese rally Sign of Excess — Mainland speculators have borrowed a record $348B to bet on further gains, price-to-earnings ratios have climbed to the highest levels in five years, while Chinese exchanges have created $6.5T in just 12 months of trading. The economy, meanwhile, is mired in its weakest expansion since 1990.
4. China Stocks Will Have to Wait to Join the MSCI Index — MarketWatch, global stock-index compiler MSCI maker says issues remain before it can include mainland China-listed A-shares. MSCI offered a list of some issues it would discuss with the regulators, including the allocation of investing quotas for large investors, capital mobility and details over beneficial ownership.
5. May Retail Sales Surged Point to Revived U.S. Growth — MarketWatch, Sales at U.S. retailers rose sharply in May and increased for the third straight month, suggesting that warmer weather induced consumers to spending more in the spring after a winter lull. Consumers splurged on big-ticket items in May, when sales of new cars and trucks hit a postrecession high. Sales at auto dealers rose 2%.
6. Greece Deal in Peril — IMF creditors walked out of talks late last week citing “Greece decisions not negotiations” are needed. Greece’s is scrambling , as time runs out for the country to fend off a looming default.
7. Bearish Sentiment Overtake The Bulls – courtesy of BIG, bullish sentiment fell from 27.34% down to 20.04%. This is the lowest weekly reading for bullish sentiment in more than two years (April 2013). At its current level, bullish sentiment is now just slightly more than a point above its lowest levels since the start of 2009 (18.92%).

The week ahead — Economic data from Econoday.com:

“The stock market is a no-called-strike game. You don’t have to swing at everything — you can wait for your pitch” — Buffett

1. Greece Makes Latest IMF Loan Repayment — Greece completed a 750-million-euro ($836.7 million) loan repayment to the International Monetary Fund last week. The Bank of Greece official said the money was paid from an emergency account held by the central bank after two meetings last week between Governor Yannis Stournaras, Deputy Prime Minister Giannis Dragasakis and Deputy Foreign Minister Euclid Tsakalotos, who manages Greece’s talks with international creditors over its bailout. Euro group chief cited “important progress” but said that “more time” is needed.
2. China Surprised Market with Rate Cut — the China ‘s Central Bank trimmed interest rates for the 3rd time in 6-months amid signs of slower growth. Rate sensitive sectors like autos and housing rallied.
3. Retail Sales Flat in April — Sales at U.S. retailers were flat in April after spike in March. Sales minus autos, which accounts for one-fifth of all retail purchases, rose a scant 0.1%. That’s well below the 0.4% Wall Street forecast. And sales minus both autos and gasoline edged up 0.2%.
4. Eurozone GDP Picks Up, Boosted By (Germany, France, Italy and Spain) — the eurozone economy expanded by 0.4% in the first quarter, marking a pickup from the 0.3% growth recorded in the final quarter of last year. since the first half of 2010, all four of the eurozone’s largest economies (Germany, France, Italy and Spain) recorded growth and the currency area grew more rapidly than both the U.S. and U.K.
5. Federal Reserve Rate Hike Choice is September or December According Former Member — according to the former Fed Vice Chairman Donald Kohn says a June rate hike is off the table following weaker-than-expected April retail sales data. Federal Reserve Chairwoman Janet Yellen has said the central bank will start considering rate hikes at the June meeting. Interest rates have been near zero since the end of 2008.
6. Bullish Sentiment Drops To Lowest Level In More Than 2 Years — courtesy of BIG, bullish sentiment dropped from 27.1% down to 26.7%. While the size of the drop in bullish sentiment was small, this week marks the tenth straight week that bullish sentiment has been below the bull market average and also the tenth decline in bullish sentiment over the last twelve weeks.

The week ahead — Economic data from Econoday.com:

“I measure what’s going on, and I adapt to it. I try to get my ego out of the way. The market is smarter than I am so I bend.” – Martin Zweig

1. China Policy Makers Signaled Easing Talks — China policy makers signaled the country had capacity to ease monetary policy and boost sluggish growth at the Boao Forum for Asia on last week. China’s central bank has already taken a series of easing steps since November, cutting interest rates twice and slashing banks’ reserve requirements.
2. US Factory Orders Rose in February For First Time in 6 Months — Reuters, the Commerce Department reported new orders for manufactured goods increased 0.2 percent, the largest gain since July, after a revised 0.7 percent drop in January. Orders excluding transportation rose 0.8 percent, the biggest rise in eight months. Shipments of factory goods rose 0.7 percent after four straight months of declines.
3. Greece Tells Creditors It Will Run Out of Cash on April 9 — Greece made an appeal for more loans before reforms on which new disbursements hinge are agreed and implemented, but the request was rejected, euro zone officials said. Also, the ECB raised its cap on emergency liquidity assistance that Greek banks can draw from the country’s central bank by €700M, increasing the ELA ceiling to €71.8B. The central bank has been raising the cap in increments to keep pressure on Greece to strike a deal.
4. March Payroll Data Shows Weak Jobs Report — Job growth slumped to a 15-month low in March, the Labor Department reported last Frid. Various tracking models used by economists show growth in gross domestic product slowing sharply to around or under a 1% annual rate in the first quarter. The slowdown has been blamed on the cold winter weather to the slowdown at West Coast ports to the impact of low oil prices and the stronger dollar.
5. Iran and the West Reach Nuclear Deal — Pres Obama hailed the tentative nuclear deal that would severely restrict Iran, including slashing the number of installed centrifuges and barring high uranium enrichment for 15 years. After IAEA inspections confirm compliance, the US and EU would suspend crippling sanctions.

The week ahead — Economic data from Econoday.com:

“I have learned through the years that after a good run of profits in the markets, it`s very important to take a few days off as a reward. The natural tendency is to keep pushing until the streak ends. But experience has taught me that a rest in the middle of the streak can often extend it.”– Martin Schwartz

1. Greek Debt Talks Break Down — MarketWatch, talks among eurozone finance ministers over a new financing arrangement for Greece broke down abruptly. The breakdown came after Greece rejected an extension of its current 240-billion-euro ($272 billion) bailout program under the conditions being offered by other ministers.
2. Oil Tanker Derails, Explodes in West Virginia — a CSX (NYSE:CSX)train carrying more than 100 tankers of crude oil has derailed and burst into a huge fireball in West Virginia, igniting at least 14 tankers. One tanker car and perhaps more fell into the Kanawha River, prompting concerns about potential contamination of water treatment facilities that serve local communities.
3. BOE Keep Interest Rates Unchange — Bank of England officials voted unanimously to leave the central bank’s benchmark interest rate unchanged at 0.5% this month and the stock of assets purchased under its bond-buying program unchanged at £375B.
4. Germany Rejects Greece’s Loan-Extension Proposal — MarketWatch, Germany has rejected Greece’s request for a six-month loan-extension agreement, saying the letter is not a “a substantial proposal” for a solution.” The Greek PM had ask the eurozone ministers to extend by 6-months its 240-bil-euro bailout, without austerity terms.
5. Moody’s Downgrades Russia Sovereign Debt to Junk — CNBC, Moody’s Investors Service downgraded Russia’s sovereign debt to junk status last Friday, citing the crisis in Ukraine and the falling price of oil. Moody’s cut Russia’s rating to Ba1 from Baa3, with a negative outlook.

The week ahead — Economic data from Econoday.com:

“I’m more concerned about controlling the downside. Learn to take the losses. The most important thing about making money is not to let your losses get out of hand.” – Marty Schwartz

1. Chinese Economy Weakens — according to the latest data, China’s exports slipping 3.3% from year-ago levels while imports plunged by 19.9%. The slide in imports is the sharpest since May 2009, while exports have not produced a negative annual reading since March 2014. Many are expecting China to lower its GDP target to around 7% this year, after posting 7.4% in 2014, its lowest annual growth rate in 24 year.
2. FBI Probes Fake TurboTax Filings — WSJ reported the FBI is examining how fraudulent tax returns were filed in 19 states through Intuit’s (NASDAQ:INTU) tax-preparation software TurboTax and whether a computer data breach allowed access to personal information. Intuit halted e-filings of state returns last week after spotting criminal attempts to get refunds through its systems, but resumed filing after steps were taken to combat the activity.
3. Halliburton to Cut Workforce by 6.5%-8% Due to Challenging Market — Halliburton (NYSE:HAL) has announced that it will cut 5,000-6,5000 jobs, due to slumping oil prices and the resulting decline in oil and gas exploration and production. CEO Lesar previously warned that 2015 would be a “tough year” for the company.
4. ECB Raises Limit on Emergency Funding for Greek Banks — MarketWatch, the European Central Bank boosted the amount of emergency assistance that can be provided to Greek banks by 5 billion euros ($5.7 billion), according to German news reports. That lifts the total amount of funding Greek banks can access through a program known as emergency liquidity assistance, or ELA, to 65 billion euros. The ECB earlier this month said it would no longer accept junk-rated Greek government debt as collateral from Greek banks in return for cheap ECB funding loans, but said the banks could continue to tap funding via ELA, which is administered by the Greek central bank.
5. House Passes Keystone Pipeline Bill, Set for Showdown with Obama — the House has again voted for a bill approving construction of TransCanada’s (NYSE:TRP) Keystone XL pipeline, setting up a political showdown with President Obama, who has vowed to veto the bill.

The week ahead — Economic data from Econoday.com:

“I skate to where the puck is going to be, not where it has been.” – Wayne Gretzky

1. Australia Cuts Rates to Record Low — the Reserve Bank of Australia has jumped on the easing bandwagon, becoming the latest global central bank to cut interest rates in response to slowing inflation and concerns over economic growth. The RBA lowered its benchmark rate by 25 bps – its first change since August 2013 – to a new record low of 2.25%.
2. ECB Says No to Greek Debt — the ECB put more pressure on the country by revoking a waiver that allowed banks to use Greek government debt as collateral for loans. Greek lenders will have to seek funding from their own central bank on less generous terms.
3. China Cuts Bank Reserves — the central bank cut the amount banks must hold in reserves, the first step in more than 2 years, as concerns mount over an economic slowdown. China’s economy slowed to 7.4% in 2014, its lowest annual growth rate in a quarter century.
4. RadioShack filed Chapter 11 Bankruptcy — RadioShack has filed for Chapter 11 bankruptcy in Delaware, saying it has $1.2B in assets and $1.39B in debts. The plan reportedly includes an asset-buy deal with Standard General (its largest shareholder) and Sprint (NYSE:S) for a “store-in-store” model that would allow the RadioShack (NYSE:RSH) name to exist in some of the acquired shops.
5. S&P Cut Its Rating on Greece’s sovereign Debt — S&P has cut its sovereign debt to B- from B with a negative outlook, citing a “narrowed” time frame to reach a deal with its official creditors before running out of cash. Moody’s also put Greece on review for another downgrade.

The week ahead — Economic data from Econoday.com:

“A peak performance trader is totally committed to being the best and doing whatever it takes to be the best. He feels totally responsible for whatever happens and thus can learn from mistakes. These people typically have a working business plan for trading because they treat trading as a business” – Van K Tharp

1. Greece Anti-Austerity Syriza Party Win — Party leader Alexis Tsipras has already moved to form a coalition that will work to reverse years of austerity measures imposed on Greece by the Troika. The euro dropped to a fresh 11-year low after initial results came out, falling as far as $1.1098 vs. the dollar, although it is now up 0.4% at $1.1244 amid speculation that the victory won’t push the nation to exit the currency bloc.
2. S&P Cuts Russia’s Rating to Junk — Bloomberg, Russia’s foreign-currency credit rating was cut to junk by Standard & Poor’s, putting it below investment grade for the first time in a decade. The penalties have locked Russian corporate borrowers out of international debt markets and curbed investor appetite for the ruble, stocks and bonds.
3. Denmark Cuts Deposit Rate for Third Time in Two Weeks — MarketWatch, the Danish National Bank late last week cut its deposit rate by 15 basis points to negative 0.5% in an effort to prevent the krone from strengthening too much against the euro. It’s the third time in less than two weeks the central bank has slashed its deposit rate, following persistent upward pressure on the krone’s peg to the euro resulted from European Central Bank launched a quantitative-easing program and the Swiss National Bank ditched its euro cap.
4. US GDP Downshifts to 2.6% Rate in the Fourth Quarter — MarketWatch, the value of all goods and services produced by the U.S. — grew at a 2.6% annual clip in the fourth quarter. For all of 2014, the U.S. economy grew at a 2.4% rate, slightly faster than the 2.2% gain in the prior year. Consumer spending was a major positive in the fourth quarter, expanding 4.3%, the fastest pace since before the financial crisis. However, growth was pulled down by weaker business spending, a drop in federal government spending and net exports.

The week ahead — Economic data from Econoday.com: