Good morning,
U.S. markets are closed in honor of the July 4th Independence Day holiday. Overnight markets were relatively quiet but all hell could break lose after the Greeks tally votes they cast on Sunday on a referendum on the latest bailout package the eurozone authorities are offering. The vote, essentially a proxy for participation in the Euro, is too close to call. … The tennis ritual known as Wimbledon saw one aging champion triumph and another implode. Roger Federer handily advances as Rafael Nadal exits the Grand Slam event after the second round.
European shares shrug off the Greferendum. Slipping a measly 0.1%, the Stoxx Europe 600 Index has seemingly brushed off any Greferendum fears despite polls on the vote becoming too close to call. Interestingly, the French referendum on the Maastricht Treaty was approved by only 51% of voters while the Danish referendum on the same subject was ratified by 56%. So this just might be a new one on a long list of “too close to call” referenda. Bloomberg
ECB stimulus proves more powerful than a Grecian crisis. The Markit Eurozone PMI Composite Output Index rose to 54.2 in June from 53.6 in May, putting second quarter performance at a four-year high. Rates of growth improved in both the manufacturing and service sectors during June. Manufacturing production rose at the quickest pace in a year, while the expansion in service sector business activity was the fastest since May 2011. “But a forward-looking measure of demand fell to a four-month low of 53.3 from 53.5,” writes Bloomberg, which signals that Eurozone business people are not completely unconcerned about Greece. .Markit Economics
Shanghai shares end lower, marking the worst 3-week performance in 23 years. In another volatile session, with the Shanghai Composite Index see-sawing from red to black, the index closed down 5.8%. From its June 12 peak, the index is now down nearly 30%, deeper than the 20% plunge recorded on Monday (also from the June 12 peak), when Chinese shares officially entered the bear market territory. Hong Kong was last seen down 0.5% and Japan closed flat. Bloomberg, CNBC
China targests short-sellers but encourages investors to bet their homes on stocks. The securities regulator says it is investigating short sellers and manipulators. The regulator is also flashing a yellow sign for IPOs; prior to 2014, IPOs were on hold for 15 months. Meanwhile, new rules published Wednesday enable investors to use their homes as collateral for margin loans. The move wasn’t all that powerful. Outstanding margin loans in the Shanghai and Shenzen markets fell on Thursday by 51 billion renminbi, the second biggest drop ever after the 56 billion renminbi drop last Friday. Bloomberg, Financial Times (paywall)
Aetna agreed to acquire Humana Inc for $37 billion in cash and stock. The deal is the latest of a merger fever that’s taking place in the five largest U.S. health insurers as they aim to get even bigger. Bloomberg
Photo: EU Council Eurozone, via Flickr