Good morning everyone. Welcome to an interesting day for the S&P 500. In a major test for the current bull market, over 60% of Greek voters voted against the Troika’s bailout terms, paving the way for a Grexit and compounding problems in the EU. This, coupled with Puerto Rico’s debt and China’s massive stock market deleveraging, should put a lot of pressure on Spoos. Let’s see how it reacts tonight.
Here’s what else you need to know:
Shanghai surges 7.8% at open but then fades quickly in volatile trading. The composite is up 4% after the PBoC essentially lent money to brokers for margin loans. The central government is focused on supporting a market that has wiped out $2.4 trillion in value over the past three weeks. But the results are mixed. One investor told Reuters that they would sell once the market rebounded. Wall Street Journal (paywall), Reuters
China government sends message: Be happy. “‘Rainbows always appear after rains,’ said an editorial by the People’s Daily, the mouthpiece of the ruling Communist Party of China.” Reuters
Asian markets open lower. Amid rising risks, futures on the Nikkei dropped to 20,460 points in the Osaka pre-market, while the MSCI Asia Pacific Index slid 0.5% in Tokyo. CNBC / Bloomberg
Beijing channels J.P. Morgan. Taking a page off J.P. Morgan way back in 1929, China has called on 21 Chinese brokerages to commit funds and a put a floor on the nation’s falling stock market. While Morgan’s move proved to be an incredible success, the $19 billion raised by the brokerages pales in comparison to the over $300 billion daily turnover their exchanges are experiencing, leaving one Hong Kong strategist to say “This 120 billion yuan won’t last for an hour in this market.” Bloomberg
Chinese state-run media blames short-sellers, foreigners for crash. “Vicious” short-sellers and foreigners with an agenda are apparently the reason for China’s stock market crash, according to the nation’s state-run media. And some people aren’t happy with that: “(T)hey are trying to stop the plunge, but this is clearly the wrong way to do it.” Bloomberg
GOP shuns the Donald. A number of Republican White House hopefuls are currently distancing themselves from Donald Trump, with Former Texas Gov. Rick Perry saying “Donald Trump does not represent the Republican Party.” This comes after Trump made some pretty bad remarks about Mexicans, which Perry called “offensive.” MarketWatch
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