Dow shot up 217 (closing near the highs & 18K), advancers over decliners 5-2 & NAZ advanced 73. The MLP index went up 3+ to the 403s & the REIT index inched up a fraction in the 314s. Junk bond funds drifted lower & Treasuries declined. Oil dropped again while gold continued sliding in the mid 1100s..
AMJ (Alerian MLP Index tracking fund)
![Live 24 hours gold chart [Kitco Inc.]](http://www.kitco.com/images/live/gold.gif?0.60727540632516)
The ECB held off from expanding its aid for Greek lenders, signaling a desire to wait for the country’s lawmakers to approve reforms linked to a new bailout. The Governing Council kept the cap on Emergency Liquidity Assistance (ELA) unchanged today. Policy makers will probably wait for a 2-day meeting in Frankfurt starting Wed before deciding whether to raise the limit. Greece’s parliament will convene Wed to vote on a bailout package that includes a bank recapitalization, potentially giving the ECB room to ease its liquidity restraints. The program was agreed by euro-area leaders with Greek Prime Minister Alexis Tsipras in almost 17 hours of talks in Brussels as the basis of a 3rd bailout that can keep the country in the euro. “If there hadn’t been an agreement, if it wasn’t clear, the ECB wouldn’t have been able to continue its liquidity support for Greece,” French pres Hollande told reporters. “It will take a few more days” for conditions in the financial system to ease, he said. The €25B ($28B) equity infusion for banks envisaged by the bailout may provide grounds for policy makers to eventually raise the cap on ELA. Mario Draghi has repeatedly said he would take his lead from political developments. His task was becoming trickier as negotiations dragged on, with a €3.5B debt payment from Greece to the ECB due on Jul 20. As part of Greece’s bailout deal, a €50B fund will be established which will be financed by Greek asset sales. A bailout agreement is unlikely to be rubber-stamped before Jul 20, so creditors discussed bridge financing to avert a default. An EU official rejected the idea that the ECB is willing to postpone the debt payment.
Greece will not meet a €450M ($497M) loan repayment to the IMF that falls due Mon given its severe cash crunch, according to 2 leakers. The missed payment will follow a €1.6B payment to the IMF which Greece also missed paying last month, making it the first advanced economy to ever be "in arrears" with the fund, the IMF's official euphemism for default. With the country short of cash & with no bridge financing to tide it over, the gov did not have sufficient funds available to make the payment on today. Last month Greece asked the IMF for a last-minute repayment extension which the fund has said would be considered in "due course." The IMF, which has funded part of Greece's €240B bailouts, has said Geece may receive further funding once its arrears are cleared. Including the IMF payment, Greece faces debt payments of €8B this month to redeem maturing gov bonds, short-term T-bills plus meet interest on gov paper & loans.
China's Jun export growth rebounded to 2.8% in a sign of better global demand while imports fell 6.1%. Customs data showed exports growing again after May's 2.5% contraction. Imports were an improvement over the previous month's unexpectedly severe 17.6% contraction. An improvement in exports is a positive sign for communist leaders who worry about job losses in trade-dependent manufacturing industries that employ millions of workers. However, the data showed exports so far this year have grown only 1% over a year earlier while total trade is down 6.9%.
The Iran talks may get another extension & their outcome will affect the price of oil. The recent decline in oil prices is betting more Iranian oil will come to market. Enthusiasm about extending the Greek debt mess is celebrating too soon. Many in Greece want to play hardball & reject austerity moves. Then this is the start of earnings season, the biggest banks should report this week. While Dow has rebounded off its lows, it's still in a sideways trading range that has lasted for months. The high yielding sectors are not participating in this mini rally.
Dow Jones Industrials
AMJ (Alerian MLP Index tracking fund)
| CLQ15.NYM | ....Crude Oil Aug 15 | ....52.54 |  ...0.20 | (0.4%) |
The ECB held off from expanding its aid for Greek lenders, signaling a desire to wait for the country’s lawmakers to approve reforms linked to a new bailout. The Governing Council kept the cap on Emergency Liquidity Assistance (ELA) unchanged today. Policy makers will probably wait for a 2-day meeting in Frankfurt starting Wed before deciding whether to raise the limit. Greece’s parliament will convene Wed to vote on a bailout package that includes a bank recapitalization, potentially giving the ECB room to ease its liquidity restraints. The program was agreed by euro-area leaders with Greek Prime Minister Alexis Tsipras in almost 17 hours of talks in Brussels as the basis of a 3rd bailout that can keep the country in the euro. “If there hadn’t been an agreement, if it wasn’t clear, the ECB wouldn’t have been able to continue its liquidity support for Greece,” French pres Hollande told reporters. “It will take a few more days” for conditions in the financial system to ease, he said. The €25B ($28B) equity infusion for banks envisaged by the bailout may provide grounds for policy makers to eventually raise the cap on ELA. Mario Draghi has repeatedly said he would take his lead from political developments. His task was becoming trickier as negotiations dragged on, with a €3.5B debt payment from Greece to the ECB due on Jul 20. As part of Greece’s bailout deal, a €50B fund will be established which will be financed by Greek asset sales. A bailout agreement is unlikely to be rubber-stamped before Jul 20, so creditors discussed bridge financing to avert a default. An EU official rejected the idea that the ECB is willing to postpone the debt payment.
ECB Keeps Greek Bank-Aid Cap in Place as Parliament Vote Awaited
Greece will not meet a €450M ($497M) loan repayment to the IMF that falls due Mon given its severe cash crunch, according to 2 leakers. The missed payment will follow a €1.6B payment to the IMF which Greece also missed paying last month, making it the first advanced economy to ever be "in arrears" with the fund, the IMF's official euphemism for default. With the country short of cash & with no bridge financing to tide it over, the gov did not have sufficient funds available to make the payment on today. Last month Greece asked the IMF for a last-minute repayment extension which the fund has said would be considered in "due course." The IMF, which has funded part of Greece's €240B bailouts, has said Geece may receive further funding once its arrears are cleared. Including the IMF payment, Greece faces debt payments of €8B this month to redeem maturing gov bonds, short-term T-bills plus meet interest on gov paper & loans.
IMF Ready to Help Resolve Greek Debt Crisis
China's Jun export growth rebounded to 2.8% in a sign of better global demand while imports fell 6.1%. Customs data showed exports growing again after May's 2.5% contraction. Imports were an improvement over the previous month's unexpectedly severe 17.6% contraction. An improvement in exports is a positive sign for communist leaders who worry about job losses in trade-dependent manufacturing industries that employ millions of workers. However, the data showed exports so far this year have grown only 1% over a year earlier while total trade is down 6.9%.
China June exports up 2.8 percent, imports down 6.1 percent
The Iran talks may get another extension & their outcome will affect the price of oil. The recent decline in oil prices is betting more Iranian oil will come to market. Enthusiasm about extending the Greek debt mess is celebrating too soon. Many in Greece want to play hardball & reject austerity moves. Then this is the start of earnings season, the biggest banks should report this week. While Dow has rebounded off its lows, it's still in a sideways trading range that has lasted for months. The high yielding sectors are not participating in this mini rally.
Dow Jones Industrials
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