(As of 7:15 am PST)
The third quarter kicks off
today and it looks like we’re going to have a busy one. Stocks are rallying throughout
Europe and the US after Greek Prime Minister Alexis Tsipras signaled in a
letter to Greece’s creditors that he was “prepared to accept” most of the
bailout terms of Greece’s lenders. The letter comes a day after Greece missed a
$1.7 billion repayment to the International Monetary Fund. Despite Tsipras’
demands for a few modifications to pension cuts and tax increases, the
reopening of the conversation has spurred a positive trade in European and US
equities. Adding to the momentum for US markets is a mostly positive data
calendar. The ADP employment report showed the US private sector added 237,000
jobs in June – the fastest pace in more than 6 months. The ADP report comes
just days before the more reliable non-farm payrolls report is issued by the US
Labor Department. The ISM manufacturing index rose to 53.3 in June from 52.8 in
May, slightly higher than expected and signaling activity continues to expand.
Construction spending beat expectations for May but fell off the April pace.
Other reports due out later in the day include data on truck and auto sales. While
European and US markets are rallying, Asian markets finished the day mixed with
the Shanghai index tumbling 5% Wednesday after trading up earlier in the day. The
index is down 13.5% over the last 5 days and officially in “bear market”
territory. Gold is down slightly today, while oil shed 2% ahead of a report on
crude inventories. Interest rates and the US dollar are higher. It’s a jam
packed day with lots of activity. Expect it to remain that way for the
remainder of this holiday shortened week.
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