Financial Markets and Economy
Chinese Crash Continues After PBOC Cracks Down On Brokerage Liquidity (Zero Hedge)
Just when you thought it was safe to buy the 12% collapse (the biggest since Lehman) in Chinese stocks, they re-plunge another 3-4% with no dip-buyers evident. The drivers are twofold: first, China PMI beat expectations modestly (uh oh no more QDII, QE, PSL, etc.); and second – and much more critically – The PBOC Operations Office has called for stricter regulation of brokerage liquidity (implicitly clamping down on the seemingly infinite expansion of margin lending required to fuel the boom). CHINEXT has entered a bear market (down 21.5%) and the rest of the Chinese complex is down 3-5% today (down 15-20% from the highs).
FHFA: House Prices increased 0.3% in April, Up 5.3% Year-over-year (Calculated Risk)
This house price index is only for houses with Fannie or Freddie mortgages.
Uh oh! China stocks giving investors whiplash (CNN)
China's benchmark Shanghai Composite index shed as much as 4.5% during morning trading on Tuesday, before mounting a recovery.
What the bond market is telling us about Greek default (Market Watch)
A final solution to the Greek debt saga is far from a done deal but markets aren't waiting around for a deal to come to fruition.
Chicago Fed: "Index shows economic growth slightly below average in May" (Calculated Risk)
The Chicago Fed released the national activity index (a composite index of other indicators): Index shows economic growth slightly below average in May.
Ladbrokes is exploding after confirming deal talks (Business Insider)
Ladbrokes shares are surging Tuesday morning, after the British bookmaker confirmed it is in talks with gambling and gaming group Gala Coral about a merger.
Shares have opened up over 10% this morning on news of the talks, hitting a 9-month high.
When "Likes" Trump "Everyday Low Prices": Facebook Is Now Bigger Than Walmart (Zero Hedge)
Maybe WMT should start selling Confederate flags again…
Nasdaq set to build on record high as U.S. stock futures rise (Market Watch)
U.S. stocks were eyeing another upbeat trading day on Tuesday, with continued optimism over the prospects of a Greek debt deal propping up financial markets on both sides of the Atlantic.
Investors in the U.S. were also waiting for durable-goods data, as well as a duo of housing releases.
Report: The ECB just approved more emergency funding for Greek banks (Business Insider)
The European Central Bank (ECB) again increased emergency liquidity funds for Greece's banks Tuesday, according to a Greek bank source.
The amount of the new increase of the ECB's Emergency Liquidity Assistance (ELA) was not specified, but is the fourth one since Wednesday and came as Greek savers continued withdrawing their money in large volumes from the country's banks.
Greece's situation is looking more positive after new proposals were discussed at an emergency summit of European leaders Monday night. The meeting broke up without a final deal, but the summit's chair, European Council President Donald Tusk, left the talks hopeful that a cash-for-reform package would be approved by Europe's finance ministers on Wednesday night, Reuters reports.
Bouygues faces crossroads choice on telecoms business (Business Insider)
Martin Bouygues, scion of one of France's top industrialist families, must decide on Tuesday whether he is ready to part with the telecoms business that is his main contribution to the conglomerate built by his father.
The Bouygues board will meet at 1600 GMT (1200 EDT) to discuss what sources said was a 10 billion euro ($11.3 billion) bid by European telecom group Altice <ATCE.AS>. In reality, the decision lies with the 63-year-old Bouygues alone.
London stocks edge up as Sports Direct climbs, but FTSE 100’s gain is thin (Market Watch)
U.K. stocks edged higher Tuesday, as shares in retailer Sports Direct International PLC hit their highest level in six months, but as a ratings downgrade dragged on the parent company of retailer Primark.
The FTSE 100 UKX, +0.15% was up 0.1% at 6,832.76. That gain was subdued compared with those in European equity markets SXXP, +1.17% which continued to rally on prospects that a Greek debt deal is taking firmer shape.The British blue-chip index has risen for the past four sessions, including a 1.7% jump on Monday after revised reform proposals from Athens were met with optimism.
The 'Efficient' Market Prices In NFLX 7-For-1 Split (Zero Hedge)
Welcome to the new normal efficient "market" – where 7 sevenths are worth 3.5% more than the whole…
Netflix plans 7-for-1 stock split (Market Watch)
Netflix Inc. said its board has approved a seven-for-one stock split, a move that comes as shares have nearly doubled this year.
The streaming service had said in April that it expected to recommend a stock split to its board to make the shares more accessible to investors. It previously split the stock in 2004.
Container Shipping Rates from China to US, Europe Collapse (Zero Hedge)
“Sluggish westbound volumes have brought about the worst spot market rate collapse that this trade has experienced.” That’s how Drewry Maritime Research summarized it in a report a couple of weeks ago. Since then, the collapse of the rates for shipping containers from China to the West has gotten worse with clockwork relentlessness.
Dust Off That Oldsmobile, Diesel’s Almost as Cheap as Gasoline (Bloomberg)
It’s a good day to be a trucker.
While retail gasoline has surged by 25 percent this year, diesel prices have fallen by more than a quarter a gallon. The difference between the two is the smallest in almost six years and may all but disappear in two weeks’ time, according to Phil Flynn, senior market analyst at Price Futures Group.
Here’s one bear market sign you’ve never seen before (Market Watch)
It’s a bearish sign that so many advisers are declaring that we’re now in a “stock picker’s market.”
That’s because fewer and fewer stocks participate in a bull market as it approaches its top. Advisers therefore find it increasingly difficult to identify stocks that will keep up with the market, much less beat it.
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France is back in business (Business Insider)
Is Europe's second-biggest economy finally starting to benefit from the cyclical recovery? France's businesses are reporting the best conditions in nearly four years.
Pop goes the Bubble (Club Orlov Blogspot)
Running a fundraiser (which, by the way, has been a great success—thank you all very much!) has prompted me to think about money more deeply than I normally do. I am no financial expert, and I certainly can't give you investment advice, but when I figure something out for myself, it makes me want to share my insights. I know that many people see national finances as an impenetrable fog of numbers and acronyms, which they feel is best left up to financial specialists to interpret for them. But try to see national finances as a henhouse, yourself as a hen, and financial specialists as foxes. Perhaps you should pay a little bit of attention—perhaps a bit more than one would expect from a chicken?
3 Key Stock Buybacks From Monday (24/7 Wall St)
Investors love stock buyback plans. Still, not all share repurchases are created equal. Some simply offset dilution from employee stock options and acquisitions. Other share buybacks, the ones most loved by shareholders, are meant to shrink the number of shares outstanding.
Bubble fears: Is it time to consider a rainy day fund? (CNN)
It's been mostly sunny on Wall Street for six years now as stocks have soared.
But some investors are worried that the next rainy day could come soon. Stocks are pricey, we haven't had a correction in years, and America's central bank — the Federal Reserve — could shake things up in September.
What to Expect from Bed Bath & Beyond Earnings (24/7 Wall St)
Bed Bath & Beyond Inc. (NASDAQ: BBBY) will report its fiscal first-quarter financial results Wednesday after the markets close. Thomson Reuters has consensus estimates of $0.94 in earnings per share (EPS) on $2.74 billion in revenue. The same quarter from the previous year had $0.93 in EPS on $2.66 billion in revenue.
Why Jeb Bush Wants the United States to Be More Like Estonia (Mother Jones)
On Monday, Jeb Bush posted a column on Medium touting the need for ramped-up cybersecurity efforts. "Given the reliance of the United States government and the private sector on the internet, it is disturbing we remain vulnerable to its disruption and misuse," he wrote.
The piece was mostly devoid of specific ways to fix those vulnerabilities, but what Bush did propose raises some privacy concerns. The former Florida governor cited Estonia, a tiny Baltic nation that's a world leader in cybersecurity efforts, as a model to emulate. What he didn't say was that Estonia's model is predicated on pervasive government involvement in policing the country's internet infrastructure, with the central government establishing a secure online national ID system for citizens…
In Tennessee, Hospitals Want Obamacare, Senators Don't (Bloomberg)
Conventional wisdom says big corporations that employ lots of people in a state generally call the shots with local politicians, especially when those corporations are the source of major campaign contributions.
But that's not the case in Tennessee. At least when it comes to Obamacare.
Tennessee is looming as ground zero for the political fallout from the Supreme Court's decision, which could come as early as Thursday, on the insurance subsidies at the heart of President Barack Obama's health care law. Some of the nation’s biggest hospital chains are based in the Volunteer State and stand to lose hundreds of millions of dollars if the justices invalidate the subsidies. Yet they haven't been able to make the state’s Republicans budge off their stance against the health care law.
A Motel-Sized Victory for Privacy at the U.S. Supreme Court (Atlantic)
In Los Angeles, where Ben Braddock registered as Mr. Gladstone before starting his affair with Mrs. Robinson, hotel and motel operators are required by law to be nosy. They may not say, “Welcome to my inn, where your business is your own,” for they must record each guest’s name and address; the number of people in her party; her date and time of arrival; her planned date of departure; her room number; the rate she is paying; her method of payment; her ID number if she failed to reserve in advance, paid cash, or rented for 12 hours or less; and information on her vehicle (forcing her to return to the parking lot to take down the plate number).
Technology
A New Earthquake Early-Warning System for Mexico City (Wired)
THE MORNING OF Good Friday 2014 found Andy Meira standing outside his apartment in Mexico City with his wife and baby, waiting for the shaking to begin. He was one of the few people in a city of 25 million who knew an earthquake was coming, thanks to an early warning alarm, called the Grillo (Spanish for “cricket”) he’d spent the last two years building. This was the first time the prototype had gone off. If everything went well, Meira knew he should have between 60 and 90 seconds before the quake hit the city.
As soon as the Grillo chirped, Meira hurried his family to the park across the street from their building. “It was so exciting, because it was the first time it had gone off,” Meira says. “Up until then it had all been maths and coding.” When the ground actually started swirling underneath his feet in what would be a 7.2 quake, Meira and his wife were actually smiling, standing amid scared neighbors who had rushed out of their buildings after the shaking had already started.
Making a Robot Fish is Hard When You Don't Know How They Swim (Wired)
THE ANIMAL-INSPIRED ROBOT menagerie holds enough species to populate a robot zoo: cheetah bots, seal bots, wasp bots and T-Rex bots. For practicality, elegance, and the potential ability to find alien life in extraterrestrial oceans, however, nothing beats a robot that swims like a fish.
But here’s the problem hampering ambitious would-be aquatic roboticists: Physicists can’t explain how fish swim.
Even though the first robot fish actually took to the water in the early 1990s, with MIT’s “robotuna.” But despite that work and many advances since then, the math of fish propulsion remains murky.
Health and Life Sciences
One gene may drive leap from single cell to multicellular life (New Scientist)
The leap from single-celled life to multicellular creatures is easier than we ever thought. And it seems there's more than one way it can happen.
The mutation of a single gene is enough to transform single-celled brewer's yeast into a "snowflake" that evolves as a multicellular organism.
Similarly, single-celled algae quickly evolve into spherical multicellular organisms when faced with predators that eat single cells.
Can the Bacteria in Your Gut Explain Your Mood? (NY Times)
Eighteen vials were rocking back and forth on a squeaky mechanical device the shape of a butcher scale, and Mark Lyte was beside himself with excitement. ‘‘We actually got some fresh yesterday — freshly frozen,’’ Lyte said to a lab technician. Each vial contained a tiny nugget of monkey feces that were collected at the Harlow primate lab near Madison, Wis., the day before and shipped to Lyte’s lab on the Texas Tech University Health Sciences Center campus in Abilene, Tex.
Lyte’s interest was not in the feces per se but in the hidden form of life they harbor…
Molecular mechanisms within fetal lungs initiate labor (Science Daily)
UT Southwestern researchers found that the proteins SRC-1 and SRC-2 activate genes inside the fetus' lungs near full term, resulting in an increased production of surfactant components, surfactant protein A (SP-A), and platelet-activating factor (PAF). Both SP-A and PAF are then secreted by the fetus' lungs into the amniotic fluid, leading to an inflammatory response in the mother's uterus that initiates labor.Researchers at UT Southwestern Medical Center have identified two proteins in a fetus' lungs responsible for initiating the labor process, providing potential new targets for preventing preterm birth.
Life on the Home Planet
Risk of Extreme Weather From Climate Change to Rise Over Next Century, Report Says (NY Times)
More people will be exposed to floods, droughts, heat waves and other extreme weather associated with climate changeover the next century than previously thought, according to a new report in the British medical journal The Lancet.
The report, published online Monday, analyzes the health effects of recent episodes of severe weather that scientists have linked to climate change. It provides estimates of the number of people who are likely to experience the effects of climate change in coming decades, based on projections of population and demographic changes.
Rare, giant basking shark caught off Australian coast (CNN)
A rare 6.3-meter-long basking shark was accidentally caught by a trawler in seas near Portland, in southwestern Australia.
The last recorded capture of the species was in the 1930s at Lakes Entrance in the state of Victoria, Australian public broadcaster ABC reported.
Latest EU Sentinel satellite to track global food crops (BBC)
The lead spacecraft in Europe's new multi-billion-euro Earth observation programme has gone into orbit.
Known as Sentinel-2a, the satellite was sent up on a Vega rocket from Kourou in French Guiana.
The mission will return pictures of the planet's surface in visible and infrared light.
In Santiago, Climate Change Fuels Choking Air Pollution (Think Progress)
Thick clouds of heavy smog hung low in Santiago on Monday, a day of exceptional filth in Chile’s pollution-stricken capital city.
The haze forced more than 1,300 businesses to close after authorities declared an environmental emergency, the first of its kind since 1999. Approximately 80 percent of the city’s 1.7 million cars were forced to park, and 100 percent of the city’s 7 million people were warned to avoid outdoor activity. The warning was prudent — one of the last times this happened, an outbreak of influenza sent 3,500 children to the hospital every day.
