Dow recovered 34, advancers over decliners 3-2 & NAZ gained 14. The MLP index inched fractionally higher to go over 400 & the REIT index also rose a fraction in the 303s. Junk bond funds climbed back & Treasuries lost some of yesterday's gains. Oil has a small advance while gold slid lower, stuck in its sideways trading range around 1170.
AMJ (Alerian MLP Index tracking fund)
Greece requested a new 2-year bailout program from the euro region as the country edged closer toward a financial precipice hours away. Prime Minister Tsipras asked for the aid from the European Stability Mechanism. The request is to cover all of the country’s financial needs for the next 2 years, along with a debt-restructuring plan, the Greek gov said. The gov will continue negotiations seeking a “viable agreement” within the euro area. The proposal didn’t include any of the economic-reform measures European negotiators had sought for months. A spokesman for Angela Merkel pointed to her comments earlier today, before the Greek request was made, noting that the current bailout expires at midnight tonight & there were no “relevant indications” otherwise. The move is the latest attempt by Greece to force the hand of intl creditors after talks broke down over the weekend. Tsipras called a surprise referendum for Jul 5 on the latest package of austerity measures. Euro leaders have said it’s ultimately a vote on whether to stay in the euro. The Greek gov said it will miss a payment to the IMF today & the country is preparing to exit the protection of Europe’s bailout regime at midnight.
Chinese stocks rallied, sparking the benchmark index’s biggest intraday swing since 1992, on speculation the gov will take steps to prevent bear-market losses from deepening. The Shanghai Composite Index rose for the first in 4 days, jumping 5.5% to 4277, the most since Mar 2009. The gauge swung 432 points from the highs & lows, propelling a volatility measure to a 7-year peak. An industry group representing brokerages called on investors and fund managers to take responsibility to stabilize the market after a weekend interest-rate cut failed to stem a rout. Speculation is growing that policy makers are preparing stock-boosting measures after the Shanghai Composite plunged more than 20% from a Jun 12 peak amid surging valuations & concern record high levels of borrowing to buy stocks were unsustainable. The CSI 300 Index jumped 6.7% & Hong Kong’s Hang Seng Index added 1.1%, while the Hang Seng China Enterprises Index climbed 2.3%. The ChiNext gauge of small companies rebounded 6.3%. Margin debt on the Shanghai Stock Exchange fell for a 6th day to 1.36T yuan ($219B) on Mon, the longest stretch of declines since Jun 2014. A 5X surge in leveraged wagers had helped propel the Shanghai index to a more than 150% gain in the 12 months thru Jun 12. All 10 gauges in the CSI 300 rallied Tues, with a measure of technology stocks jumping 8.3%, halting a 3-day 22% slide.
Puerto Rico will seek to delay payments on the island’s $72B debt load for “a number of years” as part of a plan to bolster the commonwealth’s finances & revive its economy, Governor Padilla said. Officials will develop a debt-restructuring plan by Aug 30. Then, the legislature passed a $9.8B budget for the fiscal year beginning Jul 1. About $1.5B will repay principal & interest. “We won’t let the heavy burden of inherited debt send us to our knees,” Garcia Padilla said. The governor’s plan to ask bondholders to share in the island’s sacrifice came as investors are also weighing the possibility of a Greek default & exit from the euro zone. Garcia Padilla also proposed forming a fiscal board that would ensure the island adheres to its restructuring plan. Puerto Rico, with $13B of general obligation bonds, faces a $630M payment on tomorrow. “It’s not that the debt will not be paid, it’s a matter of when Puerto Rico can pay,” the House Speaker said. The next budget includes a $300M fund to repay Government Development Bank (GDB) debt, although the bank will need additional legislative approval to access most of that money. The GDB, which lends to the commonwealth & its municipalities, is burning thru its cash. Puerto Rico securities have different repayment pledges, which means investors may be pitted against each other to get whatever money is available. The constitution stipulates that the commonwealth must repay general obligations first before other expenses. Other bonds, such as sales-tax debt, are backed by different revenue streams. S&P joined Fitch Ratings Mon in downgrading Puerto Rico, saying that “a default, distressed exchange, or redemption of the commonwealth’s debt appears to be inevitable within the next 6 months absent unanticipated significantly favorable changes.” S&P cut the commonwealth to CCC-, the same category as Greece. The governor’s remarks signal a reversal from his earlier stance to protect Puerto Rico’s direct debt
The world of intl debts is messy & getting worse by the day. The Ukraine has another debt mess which has to be cleaned up. Over the short term, Greece is the big story as has been the case for months (& years), & that's going nowhere fast. The lenders have to make it up as they go along, not good for the stock market. Today is the end of the month & qtr which means money managers are buying & selling to make their books look better, adding to stock market volatility.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLQ15.NYM | ...Crude Oil Aug 15 | ...58.90 |  ...0.57 | (1.0%) |
| GCN15.CMX | ...Gold Jul 15 | .......1,168.90 | ...9.60 | (0.8%) |
Greece requested a new 2-year bailout program from the euro region as the country edged closer toward a financial precipice hours away. Prime Minister Tsipras asked for the aid from the European Stability Mechanism. The request is to cover all of the country’s financial needs for the next 2 years, along with a debt-restructuring plan, the Greek gov said. The gov will continue negotiations seeking a “viable agreement” within the euro area. The proposal didn’t include any of the economic-reform measures European negotiators had sought for months. A spokesman for Angela Merkel pointed to her comments earlier today, before the Greek request was made, noting that the current bailout expires at midnight tonight & there were no “relevant indications” otherwise. The move is the latest attempt by Greece to force the hand of intl creditors after talks broke down over the weekend. Tsipras called a surprise referendum for Jul 5 on the latest package of austerity measures. Euro leaders have said it’s ultimately a vote on whether to stay in the euro. The Greek gov said it will miss a payment to the IMF today & the country is preparing to exit the protection of Europe’s bailout regime at midnight.
Tsipras Asks European Union for a New Bailout Program
Chinese stocks rallied, sparking the benchmark index’s biggest intraday swing since 1992, on speculation the gov will take steps to prevent bear-market losses from deepening. The Shanghai Composite Index rose for the first in 4 days, jumping 5.5% to 4277, the most since Mar 2009. The gauge swung 432 points from the highs & lows, propelling a volatility measure to a 7-year peak. An industry group representing brokerages called on investors and fund managers to take responsibility to stabilize the market after a weekend interest-rate cut failed to stem a rout. Speculation is growing that policy makers are preparing stock-boosting measures after the Shanghai Composite plunged more than 20% from a Jun 12 peak amid surging valuations & concern record high levels of borrowing to buy stocks were unsustainable. The CSI 300 Index jumped 6.7% & Hong Kong’s Hang Seng Index added 1.1%, while the Hang Seng China Enterprises Index climbed 2.3%. The ChiNext gauge of small companies rebounded 6.3%. Margin debt on the Shanghai Stock Exchange fell for a 6th day to 1.36T yuan ($219B) on Mon, the longest stretch of declines since Jun 2014. A 5X surge in leveraged wagers had helped propel the Shanghai index to a more than 150% gain in the 12 months thru Jun 12. All 10 gauges in the CSI 300 rallied Tues, with a measure of technology stocks jumping 8.3%, halting a 3-day 22% slide.
Puerto Rico will seek to delay payments on the island’s $72B debt load for “a number of years” as part of a plan to bolster the commonwealth’s finances & revive its economy, Governor Padilla said. Officials will develop a debt-restructuring plan by Aug 30. Then, the legislature passed a $9.8B budget for the fiscal year beginning Jul 1. About $1.5B will repay principal & interest. “We won’t let the heavy burden of inherited debt send us to our knees,” Garcia Padilla said. The governor’s plan to ask bondholders to share in the island’s sacrifice came as investors are also weighing the possibility of a Greek default & exit from the euro zone. Garcia Padilla also proposed forming a fiscal board that would ensure the island adheres to its restructuring plan. Puerto Rico, with $13B of general obligation bonds, faces a $630M payment on tomorrow. “It’s not that the debt will not be paid, it’s a matter of when Puerto Rico can pay,” the House Speaker said. The next budget includes a $300M fund to repay Government Development Bank (GDB) debt, although the bank will need additional legislative approval to access most of that money. The GDB, which lends to the commonwealth & its municipalities, is burning thru its cash. Puerto Rico securities have different repayment pledges, which means investors may be pitted against each other to get whatever money is available. The constitution stipulates that the commonwealth must repay general obligations first before other expenses. Other bonds, such as sales-tax debt, are backed by different revenue streams. S&P joined Fitch Ratings Mon in downgrading Puerto Rico, saying that “a default, distressed exchange, or redemption of the commonwealth’s debt appears to be inevitable within the next 6 months absent unanticipated significantly favorable changes.” S&P cut the commonwealth to CCC-, the same category as Greece. The governor’s remarks signal a reversal from his earlier stance to protect Puerto Rico’s direct debt
Puerto Rico Seeks to Delay Payments on $72 Billion Debt Load
The world of intl debts is messy & getting worse by the day. The Ukraine has another debt mess which has to be cleaned up. Over the short term, Greece is the big story as has been the case for months (& years), & that's going nowhere fast. The lenders have to make it up as they go along, not good for the stock market. Today is the end of the month & qtr which means money managers are buying & selling to make their books look better, adding to stock market volatility.
Dow Jones Industrials
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