Business

While stocks appear to have regained their footing this morning, not to mention upward momentum, the big quandary in markets remain not stocks but bonds, which refuse to validate a stronger growth narrative just one day before the Fed is set to hike rates for the second time this year. In fact, despite a recent record short squeeze in rates, with net specs recently turning bullish on the TSY complex...

... bond bears just can't seem to catch a break as yields continue to drift ever lower while the yield curve pancakes.

As the Fed begins its two-day meeting, global stocks have recovered their footing and European shares rise, led by a bounce in tech stocks as last Friday's global selloff that started in the sector shows signs of abating. Asian stocks and U.S. futures gain as investors turn their attention to today's Jeff Sessions testimony as well as tomorrow's barrage of macro data including Yellen, CPI and retail sales.

From "Blain’s Morning Porridge" by Bill Blain of Mint Partners

“We can work with fear.”

Interesting markets. Again. Tomorrow the Fed will Hike US rates by 25 basis points. The sell-off in Tech continues. The limited reaction to the UK Election howler continues to suggest we’re still short on understanding what it all means. European banks and financials continue to surprise.

The Chinese auto market is having it's own version of a "cash for clunkers" moment.  After artificially pulling sales forward for all of 2016 with a purchase tax that was cut in half from 10% to 5%, the Chinese auto market is now suffering the consequences of removing that stimulus.  As Reuters notes, Chinese auto sales have declined sharply so far in 2017 with April and May registering the first consecutive monthly declines since 2015.

Authored by Jeff Thomas via InternationalMan.com,

For many years, I’ve described black markets not as the evil danger to economies that governments profess them to be, but as predictable and sensible reactions to the overregulation of official markets.