With stocks bouncing a bit along with the U.S. dollar, today King World News is featuring a piece from one of the greats in the business discussing that says the "selling stampede" in stocks will continue as the Fed kicks off it two-day meeting.
June 16 (King World News) – "Ya got trouble. Right here in River City. Trouble with a capital 'T' and that rhymes with 'P' and that stands for Putin!" — Music Man, "Ya Got Trouble" (lyrics adapted)
Richmond, Virginia is located at the fall line of the James River and has consequently held the moniker of "River City" for a long time. I spent some of my youth in that city and moved back there in 1976. I remembered the aforementioned lyrics from the Music Man play/movie as I contemplated the current world news.
Let's see, we've got Russian President Putin antagonizing the Ukraine again and potentially threatening other Eastern European countries. The U.S. appears poised to store battle tanks, armored vehicles, and heavy weapons capable of supporting 5,000 troops in several Baltic and Eastern European countries to counter Russia's more aggressive posture. Then there is China's aggressive posture in the South China Sea. As Chinese/East Asia authority Bonnie S. Glaser notes, "China, Taiwan, Vietnam, Malaysia, Brunei, and the Philippines have competing territorial and jurisdictional claims, particularly over rights to exploit the region's possibly extensive reserves of oil and gas.
Freedom of navigation in the region is also a contentious issue, especially between the United States and China over the right of U.S. military vessels to operate in China's two-hundred-mile exclusive economic zone (EEZ)." China is even considering building man-made islands in the South China Sea, not to mention China and Japan's escalating row over the uninhabited Senkaku Islands in the East China Sea.
Then there is the rising potential for a Greek default and exit from the European Union (EU) as the radical Syriza party attempts to draft a plan that includes capital controls, a new sovereign bank, and a dual form of currency following the collapse of the debt talks. Add in the stunning defeat of Italian PM Matteo Renzi, worries that if Britain leaves the EU there will be a mass exodus of professional fund managers with trillions of assets, Middle East Respiratory Syndrome (MERS), Ebola has not totally gone away, California's water ban, and "Ya know we got trouble!"
Of course, this cornucopia of bad news is coming during a week of Fed Speak, a Russell 3000 rebalancing, triple witch expiration, and a slew of economic reports. No wonder the equity markets have had a stutter-step. Yesterday said step took the S&P 500 (SPX/2084.43) back to last week's intraday low of 2072, and yes, there was typo in yesterday's missive saying last week's low was 1972, which was revised.
Interestingly, the SPX found support there at the 150-day moving average (DMA) and stayed range-bound between that DMA and its 100-DMA (2088.49) for the balance of the session (a tip of the hat to my friend Arthur Cashin). So today we begin session 16 in what appears to be a 17 – 24 session "selling stampede" with the preopening S&P futures down another 10 points on more of the Greek tragedy. It will be interesting to see whether the powers that be will allow the stock market to slide into the FOMC meeting. ***ALSO RELEASED: Central Banks Worried As Investors Around The World Frantically Bid Up The Prices Of All Tangible Items To Unimaginable Levels CLICK HERE.
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