Dow rose 121, advancers over decliners more than 2-1 & NAZ added 34. The MLP index slid a fraction to the 396s & the REIT index inched up a fraction in the 304s. Junk bond funds were mixed & Treasuries pulled back again. Oil dropped to the 58s (new short term low) & gold is lower.
AMJ (Alerian MLP Index tracking fund)
Greek Prime Minister Tsipras signaled he’s ready to end his standoff with creditors as the country gets a taste of financial meltdown. But Angela Merkel, Europe’s dominant leader, refused to engage until after a Jul 5 referendum called by Tsipras on budget cuts demanded by creditors. It took a 3rd day of capital controls, rationing pensions & the expiry of Greece’s bailout for the Greek gov to say it’s willing to accept his adversaries’ latest offer as a basis for compromise. The looming vote was the major stumbling block, along with disagreements over pensions, spending & taxes. Merkel & her finance minister, Wolfgang Schaeuble, burned by 5 months of brinkmanship, said there would be no immediate talks. “There can be no negotiations for a new credit program before the referendum,” the chancellor said. The country has provided “no basis for talking about any serious measures” to break the deadlock, Schaeuble told reporters. In the letter to the European Commission, ECB & IMF, Tsipras resisted their demands on pensions & tax discounts to Greek islands. He proposed delaying implementation of the zero-deficit clause for the country’s retirement funds & other pension reforms until Oct instead of Jul & maintaining a 30% discount on sales tax for islands. He also wants to proceed with planned changes to collective-bargaining rules that the creditors oppose. They have insisted on pension reforms that would bring savings of as much as 1% of GDP by 2016 & immediate steps to eliminate early retirement benefits & allowances for lower pensions.
Illinois & NJ have dragged down the municipal-bond market this year as the states wrestled with growing pension-fund bills. Puerto Rico is depressing it even more. Even before Puerto Rico GovernorGarcia Padilla said this week that the junk-rated island can’t afford to pay its debts, municipal bonds had returned about nothing in 2015 as investors dumped securities of the cash-strapped states & the Federal Reserve moved toward raising interest rates for the first time in 9 years. The pressure on the $3.6T market is building as Puerto Rico seeks to restructure its $72B debt load, raising the specter of a record-setting default. With about half of municipal mutual funds holding Puerto Rico bonds, that may fuel selling by investors who’ve been pulling money from the market for the past 2 months. The price of Puerto Rico’s most frequently traded securities tumbled 14% this week, hitting record lows, after Garcia Padilla said the island can’t afford to make good on all of its debts. He said officials want to negotiate with investors to postpone debt payments & will propose a restructuring plan by the end of Aug.
US private employers added 237K jobs in Jun, the biggest gain since Dec, suggesting further improvement in the jobs market which may allow the Federal Reserve to raise interest rates later this year. Economists had forecast the ADP National Employment Report would show a gain of 218K jobs. May private payroll gains were revised up to 203K from an originally reported 203K increase, which was the smallest rise since Jan 2014. The report is jointly developed with Moody's Analytics. The ADP figures come ahead of the Labor Dept's more comprehensive non-farm payrolls report tomorrow Thurs, which includes both public & private-sector employment. The forecast is for total US employment to have grown by 230K jobs in Jun, down from May's 280K increase & the unemployment rate was forecast to slip to a 7-year low of 5.4% from 5.5%.
Stocks are taking the news out of Europe & elsewhere well even though there is a fair amount of chaos. The big jobs data from the Labor Dept comes tomorrow & that should be favorable. However that news could give the FOMC the courage to raise interest rates sooner. Dow remains down YTD.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLQ15.NYM | ...Crude Oil Aug 15 | ...58.56 |  ...0.91 | (1.5%) |
| GCN15.CMX | ...Gold Jul 15 | .......1,167.80 | ,,,3.70 | (0.3%) |
Greek Prime Minister Tsipras signaled he’s ready to end his standoff with creditors as the country gets a taste of financial meltdown. But Angela Merkel, Europe’s dominant leader, refused to engage until after a Jul 5 referendum called by Tsipras on budget cuts demanded by creditors. It took a 3rd day of capital controls, rationing pensions & the expiry of Greece’s bailout for the Greek gov to say it’s willing to accept his adversaries’ latest offer as a basis for compromise. The looming vote was the major stumbling block, along with disagreements over pensions, spending & taxes. Merkel & her finance minister, Wolfgang Schaeuble, burned by 5 months of brinkmanship, said there would be no immediate talks. “There can be no negotiations for a new credit program before the referendum,” the chancellor said. The country has provided “no basis for talking about any serious measures” to break the deadlock, Schaeuble told reporters. In the letter to the European Commission, ECB & IMF, Tsipras resisted their demands on pensions & tax discounts to Greek islands. He proposed delaying implementation of the zero-deficit clause for the country’s retirement funds & other pension reforms until Oct instead of Jul & maintaining a 30% discount on sales tax for islands. He also wants to proceed with planned changes to collective-bargaining rules that the creditors oppose. They have insisted on pension reforms that would bring savings of as much as 1% of GDP by 2016 & immediate steps to eliminate early retirement benefits & allowances for lower pensions.
Greek Compromise Bid is Already Meeting With Resistance
Illinois & NJ have dragged down the municipal-bond market this year as the states wrestled with growing pension-fund bills. Puerto Rico is depressing it even more. Even before Puerto Rico GovernorGarcia Padilla said this week that the junk-rated island can’t afford to pay its debts, municipal bonds had returned about nothing in 2015 as investors dumped securities of the cash-strapped states & the Federal Reserve moved toward raising interest rates for the first time in 9 years. The pressure on the $3.6T market is building as Puerto Rico seeks to restructure its $72B debt load, raising the specter of a record-setting default. With about half of municipal mutual funds holding Puerto Rico bonds, that may fuel selling by investors who’ve been pulling money from the market for the past 2 months. The price of Puerto Rico’s most frequently traded securities tumbled 14% this week, hitting record lows, after Garcia Padilla said the island can’t afford to make good on all of its debts. He said officials want to negotiate with investors to postpone debt payments & will propose a restructuring plan by the end of Aug.
Puerto Rico at Precipice Piles on Muni Market
US private employers added 237K jobs in Jun, the biggest gain since Dec, suggesting further improvement in the jobs market which may allow the Federal Reserve to raise interest rates later this year. Economists had forecast the ADP National Employment Report would show a gain of 218K jobs. May private payroll gains were revised up to 203K from an originally reported 203K increase, which was the smallest rise since Jan 2014. The report is jointly developed with Moody's Analytics. The ADP figures come ahead of the Labor Dept's more comprehensive non-farm payrolls report tomorrow Thurs, which includes both public & private-sector employment. The forecast is for total US employment to have grown by 230K jobs in Jun, down from May's 280K increase & the unemployment rate was forecast to slip to a 7-year low of 5.4% from 5.5%.
Private Sector Adds 237K Jobs in June
Stocks are taking the news out of Europe & elsewhere well even though there is a fair amount of chaos. The big jobs data from the Labor Dept comes tomorrow & that should be favorable. However that news could give the FOMC the courage to raise interest rates sooner. Dow remains down YTD.
Dow Jones Industrials
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