Starbucks baristas get big raises: 5% or more
Starbucks baristas get raises of at least 5%, plus improvements in benefits. …read more
Source: Starbucks baristas get big raises: 5% or more
Archive for the ‘Uncategorized’ Category
Fed’s Labor Market Conditions Index Tumbles For 6th Straight Month
By Tyler Durden
Despite Friday’s ‘magnificent’ goldilocks jobs print, The Fed’s Labor Market Conditions Index (once Janet Yellen’s favorite indicator… until it started to turn down… and now just “experimental”) tumbled 1.9% in June, dramatically worse than expected and down for the 6th straight month.
Of course it’s probably nothing... better to focus on one extremely noisy data item than a 19-factor smoothed model that has historically correlated extremely well to recession…
Source: Fed’s Labor Market Conditions Index Tumbles For 6th Straight Month
Fear The No Fear
By Tyler Durden
Submitted by Lance Roberts via RealInvestmentAdvice.com,
Here we go again. Another Friday. Another attempted breakout above the 2100 level on the S&P 500. Over the last couple of months, as shown below, this has become a regular occurrence.
While the market is once again extremely overbought on a weekly basis, the employment report on Friday which showed a historically abnormal surge in June jobs growth, despite a weaker than expected wage increase and further negative revisions to May’s report, sent investors scrambling into the market. That push on Friday was enough to trigger a short-term buy signal and set the market up for a push to all-time highs.
However, don’t get too excited just yet. There are several things that need to happen before you going jumping head first into the pool.
- We have seen repeated breakout attempts on Friday’s previously which have failed to hold into the next week. Therefore, IF this breakout is going to succeed, allowing us to potentially increase equity allocation risk, it must hold through next Friday.
- The overbought condition on a weekly basis needs to be resolved somewhat to allow enough buying power to push stocks above 2135 with some voracity. A failure at that resistance level could lead to a bigger retracement back into previous trading range of 2040-2100.
- Interest rates, as shown below, need to start “buying the rally” showing a shift from “safety” back into “risk” as seen following the April deviation. (Gold bars show declining rates correlated with falling asset prices. Green bars are rising rates correlated rising assets.)
- Volume needs to start expanding, second chart below, to confirm “conviction“ to a continuation of the “bull market.”
It is important to note, as shown in the chart above, that recent short-term “sell-signals” have been reversed temporarily. However, these are very short-term signals in nature and can be quickly reversed so caution is advised at getting overly excited at the moment.
As shown below, while the market is trying to breakout above 2100, it is doing so with the market, as stated above, extremely overbought and within the context of a negative divergence from longer-term price trends. As shown, these negative divergences have tended to be resolved, although they can take time, with a market correction. Support levels current reside at 2080, 2040, 2030 and 1990.
Importantly, this is not a “bearish” outlook, but rather one that simply suggests caution before adding to current levels of portfolio risk.
As shown in the chart below, the market has continued to vacillate between one event to the next. From central bankers to job reports, the markets have not been trading on fundamentals but rather or not there will be more support from global Central Bankers. The interesting thing about the jobs report on Friday is that it removes another excuse from the Fed NOT to hike rates in July. They won’t, of course, but according to their own …read more
Source: Fear The No Fear
Walmart offers free shipping all week as Prime Day nears
Walmart is offering five days of free shipping to compete with Amazon Prime Day. …read more
Source: Walmart offers free shipping all week as Prime Day nears
Sterling Surges, UK Stocks Enter Bull Market After Andrea Leadsom Quits UK Leadership Race
By Tyler Durden
Update: it is confirmed and Leadsom is indeed out of the race leaving just Theresa May in the running.
She's gone. Leadsom statement to supporters. pic.twitter.com/hoYCxRRoOW
— Harry Cole (@MrHarryCole) July 11, 2016
* * *
And so there was one.
With the race for next Tory leadership and the next UK prime minister all down to two women, Theresa May and Andrea Leadsom, moments ago both BBC and Sky News reported that in a statement due shortly, Andrea Leadsom would announce she was quitting the UK leadership race…
Reports: Andrea Leadsom to drop out of the race to become the leader of the #Conservative party
— Sky News Newsdesk (@SkyNewsBreak) July 11, 2016
… which means the only candidate to be Britain’s next prime minister would be the soft pro-remain candidate Therea May.
Understandably, the expectation that the next UK prime minister is someone who is for the UK remaining in Europe, has sent not only sterling surging, now higher by over 100 pips in the past few minutes, wiping out all losses against the USD despite expectations of an imminent rate cut by the BOE, but more notably the FTSE-100 UK stock index, to a new bull market, up some 20% from the February lows:
- FTSE 100 RISES 20% FROM FEBRUARY LOW, SET TO ENTER BULL RUN
It may turn out that the entire Brexit fiasco was nothing but one big distraction, even though it remains unclear just how Theresa May will undo the Brexit vote even if she wanted to.
Source: Sterling Surges, UK Stocks Enter Bull Market After Andrea Leadsom Quits UK Leadership Race
Deutsche Bank’s Chief Economist Calls For €150 Billion Bailout Of European Banks
By Tyler Durden
The cards have been tipped, and it appears Italy’s Prime Minister may have been right.
In the aftermath of Brexit, much of the investing public’s attention has turned to Italian banks which are in desperate need of a bailout as a result of €360 billion in bad loans growing worse by the day (and not a bail-in, as European regulations mandate, as that would lead to an immediate bank run) to avoid a freeze and/or collapse of Italy’s banking sector. This has pushed stock prices – and default risk – on Italian banks to record levels. So far Italy’s bailout requests have mostly fallen on deaf ears, as Germany’s political leaders have resisted Renzi’s recurring pleas for a taxpayer funded rescue. However, as we have alleged, and as the Italian Prime Minister admitted last week, the core risk for Europe is not just the Italian banking sector but the biggest bank of all in Europe: Deutsche Bank.
Recall last Thursday, when speaking at a joint news conference with Swedish Prime Minister Stefan Lofven, Matteo Renzi said other European banks had much bigger problems than their Italian counterparts.
“If this non-performing loan problem is worth one, the question of derivatives at other banks, at big banks, is worth one hundred. This is the ratio: one to one hundred,” Renzi said.
He was, of course, referring to the tens of trillions of derivatives on Deutsche Bank’s books.
Today, we got the most definitive confirmation yet that the noose is tightening not only around Italy, but Germany itself (where as we reported on Thursday, Europe’s Bank Crisis Arrives In Germany as €29 Billion Bremen Landesbank On The Verge Of Failure) when none other than David Folkerts-Landau, the chief economist of Deutsche Bank, has called for a multi-billion dollar bailout for European banks.
Speaking to Germany’s Welt am Sonntag, the economist said European institutions should get fresh capital for a recapitalization following a similar bailout in the US. What he didn’t say is that the US bailout took place nearly a decade ago, in the meantime Europe’s financial sector was supposed to be fixed courtesy of “prudent” fiscal and monetary policy. It wasn’t.
As Landau says the US helped its banks with $475 billion dollars, and such a program is now needed in Europe, especially for Italian banks. In other words, just because the US did it, now it’s Europe’s turn to ask for more of the same.
“In Europe, the bailout does not need to be so large. A €150 billion program should be enough to help European banks recapitalize,” said David Folkerts-Landau. He adds that the decline in bank stocks is only the symptom of a much larger problem, namely a fatal combination of low growth, high debt and a “dangerous” deflation.
“Europe is seriously ill and needs to address very quickly the existing problems, or face an accident,” said the chief economist.
The Deutsche Bank expert said he is particularly worried about Italy and the condition of local banks, where …read more
Source: Deutsche Bank’s Chief Economist Calls For €150 Billion Bailout Of European Banks
2007 All Over Again… Banking Crisis Imminent
By Tyler Durden
Submitted by John Rubino via DollarCollapse.com,
Our good friend Michael Pollaro just sent a chart from the St. Louis Fed that shows the US drifting back into yet another banking crisis.
The green line tracks fluctuations in the US yield curve, defined as the difference in yield between 10-year and 2-year Treasuries. When the yield curve is steeply positive, banks are able to borrow short at low rates and lend long at higher rates, earning a nice return and in the process driving economic growth. When the yield curve flattens the opposite occurs, with banks unable to make money and becoming reluctant to lend. So a flattening yield curve implies a slowing economy. Note the similarity between the past few years’ spread contraction and the one that began in 2004 and culminated in the Great Recession.
Now check out the red and blue lines representing different measures of credit quality. The lower they are, the fewer loans are in various categories of “non-performance,” and vice versa. What’s happening now is similar to the spike in bad loans that started in 2005.
The implication: Despite the headline numbers (like Friday’s largely-fictitious jobs report) that imply a stable, modest expansion, under the surface the financial system — composed of business loans, bank profits, etc. — is deteriorating fast.
And since interest rates have fallen rather than risen post-Brexit, causing yield curves around the world to flatten further, it’s safe to say that these trends are accelerating.
That would explain why so many iconic money managers and speculators have turned publicly bearish recently. The latest is Jeremy Grantham of Boston-based hedge fund GMO. Here’s an excerpt from a MarketWatch article on his firm’s current stance:
Investment firm that called the 2008-09 crash doesn’t like most stocks or bonds
You need a portfolio of at least $5 million to get in the door as a client at Boston-based money management firm GMO.And with some reason. The firm is famous for predicting the last two financial crashes ahead of time, and firm chairman Jeremy Grantham is a legendary figure on Wall Street. His quarterly letters are required reading by anyone managing other people’s money.
GMO is usually seen as too bearish, but in an industry that is generally far too bullish that’s no bad thing. And often forgotten is that the firm has made some terrific contrarian buy recommendations too — such as emerging markets and value stocks at the start of the last decade, and of stocks generally in the wake of the 2008-09 crash.
But for those of us who don’t have $5 million or $10 million knocking around, what’s GMO’s best advice at the moment? To find out, I spoke to Matt Kadnar, a member of the firm’s asset allocation committee. Here’s what he said about how GMO perceives the current global investing environment:
1. The overall investment outlook is really, really dismal. “There is no asset out there that is cheap,” Kadnar says. None.
2. The outlook for U.S. stocks …read more
Source: 2007 All Over Again… Banking Crisis Imminent
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SPDR Gold Trust gold bars at the Bank of England
By BullionStar
One of the most notable developments accompanying the gold price rally of 2016 has been the very large additions to the gold bar holdings of the major physically backed gold Exchange Traded Funds (ETFs). This is especially true of the SPDR Gold Trust (ticker GLD).
The gold bar holdings of the SPDR Gold Trust peaked at 1353 tonnes on 7 December 2012 before experiencing a precipitous fall in 2013, and additional and continued shrinkage throughout 2014 and 2015. On 17 December 2015, the gold holdings of the SPDR Gold Trust hit a multi-year low of 630 tonnes, a holdings level that had not been seen since September 2008.
SPDR Gold Trust – 5 year chart of gold holdings and gold price. Black line – gold holdings in tonnes. Source: http://www.goldchartsrus.com
By 31 December 2015, GLD 'only' held 642 tonnes of gold bars. See above chart. Then as the New Year kicked off in January 2016, something dramatic happened. The SPDR Gold Trust began expanding its gold holdings again, and noticeably so. By 31 March 2016, the Trust held 819 tonnes of gold bars, and by 30 June 2016, it held 950 tonnes of gold bars. The latest figure at time of writing is 981 tonnes of gold bars as of 8 July 2016. (Source: GLD Gold holdings spreadsheet).
This is a year-to-date net change of 338.89 extra tonnes of gold bars being held within the SPDR Gold Trust. See chart below. That's a 52.8% increase compared to the quantity of gold bars the Trust held at the end of 2015, and a phenomenal amount of gold by any means, since it's over 10% of annual new mine supply, and also a larger quantity of gold than all but the world's largest central banks hold in their official gold reserves. Where is all of this gold being sourced from? That is the billion dollar question. Some is obviously being imported from Swiss refineries, but perhaps not all of it.
SPDR Gold Trust – 6 month chart of gold holdings and gold price. Black line – gold holdings in tonnes. Source: http://www.goldchartsrus.com
In January 2016, 26.8 tonnes of gold bars were added to the SPDR Gold Trust, while a massive 108 tonnes of gold bars were added in February 2016. The first quarter was rounded off with an additional 42 tonnes of gold bars added in March, bringing the Q1 additions held by GLD's gold custodian HSBC London to 176.91 tonnes of gold bars. Noticeably, some large 1-day increases in GLD's gold bar holdings occurred on 1 February (over 12 tonnes), 11 February (over 14 tonnes), 19 and 22 February (over 19 tonnes each day), and 29th February (nearly 15 tonnes), and also on 17 and 18 March (11.9 tonnes of gold bars added each day).
The second quarter saw a 15 tonne shrinkage of GLD's gold holdings in April, but a very large 64.5 …read more
Source: SPDR Gold Trust gold bars at the Bank of England
Brexit Ironies Mount: Belgian Premier Warns EU Won’t Help UK Out Of "Black Hole"
By Tyler Durden
Submitted by Michael Shedlock via MishTalk.com,
The move to punish the UK picks up steam even though such actions will damage the EU far more than the UK. Belgium is the latest country bound and determined to punish the UK.
Please consider EU will not help UK out of ‘black hole’, Belgian premier warns.
Britain’s vote to leave the EU has opened a political “black hole” in Westminster and Europe’s leaders will not bend to help it out, Belgium’s prime minister has warned.
Charles Michel’s caustic views on the unreal “dreams” of Brexiters, outlined in an hour-long interview with the Financial Times, speak to the difficulties Britain faces in reaching an exit trade deal that satisfies all 27 EU leaders and their parliaments.
Before the referendum, the liberal leader doggedly resisted giving Britain a special deal on its EU membership terms. He is now showing similar resolve over any Brexit deal, pushing the UK to start the divorce promptly and telling it to expect no big concessions on migration or market access.
“The truth is it’s a very negative situation for the UK, there is no doubt,” he said.
The Truth
The truth is Brexit is very bad for the EU, and punishing the UK will make matters worse, possibly even starting a global trade war.
Facts of the Matter
- “Italian Gov’t Collapse More Than Just a Possibility”
- The EU Cannot Survive as a Prison
- Spain’s Social Security Program Will Go Bust in 2018
- Austria’s Constitutional Court Orders Rerun of Presidential Election.
- Four Countries Blame Jean-Claude Juncker for Brexit, Two Seek His Ouster
Risk of Global Trade Collapse
Please consider “No Cherry Picking” Says Merkel; Risk of Global Trade Collapse says Mish
Bluff or Stupidity?
Germany exports €50,963,643 to the UK than it takes back in imports.
Instance the UK must abide by migration rules when that's the reason the UK left the EU is blatant stupidity given balance of trade numbers
— Mike Shedlock (@MishGEA) July 10, 2016
Another irony in this madness is Marine le Pen is the leading candidate in French polls.
Le Pen stated “This Is the Beginning of the End of the European Union“.
For details please see Hollande Lectures US About Trump.
The final irony in this mess is that it’s the EU on the verge of falling into an economic black hole, and punishing the UK is one sure way to make that happen.
Source: Brexit Ironies Mount: Belgian Premier Warns EU Won’t Help UK Out Of "Black Hole"
This app is set to launch the year’s biggest tech debut
On Monday, the company priced its IPO at 3,300 yen apiece, raising 115 billion yen ($1.14 billion). …read more
Source: This app is set to launch the year’s biggest tech debut
