Today's Headlines

Bloomberg: 

• Obama Says Missile That Hit Jet Was Fired From Rebel Area. President Barack Obama said the U.S. has concluded that a surface-to-air missile launched from insurgent-held territory in eastern Ukraine brought down a Malaysia Air jetliner, killing all 298 people on board. “Their deaths are an outrage of unspeakable proportions,” Obama said today at the White House. Russia continues to refuse to de-escalate the conflict, he said, calling for an immediate cease-fire in Ukraine. The U.S. is raising pressure on Russia to end support for the rebels as the United Nations Security Council held an emergency meeting over the catastrophe. Russia’s ambassador to the UN, Vitaly Churkin, told the 15-member council today in New York that the U.S. is pushing Ukraine to escalate tensions and Russia “places all blame on Kiev.” 

• Netanyahu Orders Military to Get Ready for Wider Gaza Incursion. Israeli Prime Minister Benjamin Netanyahu said he ordered the military to prepare to widen a ground operation against Palestinian militants in the Gaza Strip which began after days of aerial bombardment. Israeli soldiers, backed by tanks, heavy artillery, aircraft and warships, moved into the Hamas-controlled enclave late yesterday after 2,100 air strikes over 10 days failed to quash barrages of rockets fired from Gaza at Israel. Gaza fighters also infiltrated Israel by sea and through what Israel says is a network of tunnels dug under the border.

• PBOC Seen Tightening as Citi Lifts GDP Outlook: China Credit. Signs that China's economic recovery is fueled by an escalation in the world's biggest corporate debt load are prompting swap traders to bet on tighter central bank monetary policy. The cost of one-year swaps, the fixed payment needed to receive the seven-day repurchase rate, has risen 39 basis points from July 11 to 4.12% and is set for the steepest five-day jump since June 21, 2013.

• Most European Stocks Drop as Ukraine Conflict Deepens. Most European stocks fell, even as the benchmark index completed a weekly advance, amid concern that the conflict between Ukraine and Russia is deepening. Volvo (VOLVB) AB and Schibsted ASA dropped at least 5.4 percent each after posting second-quarter profit that missed analysts’ estimates. Air France-KLM and Ryanair Holdings Plc led a retreat among European travel stocks. Shire Plc rose 4 percent after AbbVie Inc. agreed to buy the drugmaker for 52.48 pounds ($89.80) a share. Ericsson AB posted the biggest rally since April 2011 after reporting a profit margin that beat forecasts. The Stoxx Europe 600 Index lost less than 0.1 percent to 339.66 at the close in London as three stocks fell for every two that climbed.

• Crude Set for First Weekly Gain in a Month on Ukraine. WTI for August delivery dropped 24 cents to $102.95 a barrel at 12:26 p.m. on the New York Mercantile Exchange. Futures touched $103.94, the highest intraday level since July 8. The volume of all futures traded was 47 percent above the 100-day average for the time of day. Futures are up 2.1 percent this week.

• In Bond Market Musical Chairs, Be Ready for Bids Halting. It’s hard to blame bond investors for being nervous. They accelerated withdrawals from the riskiest debt in the past week, yanking $2.3 billion from high-yield bond funds, the biggest outflow since June 2013, according to a Wells Fargo & Co. (WFC) report. Wall Street’s largest bond dealers cut their net junk-bond holdings to $4.8 billion in the week ended July 9, the lowest level since the Federal Reserve began reporting the data in April 2013. While credit still shows signs of froth -- with new funds to buy junk-rated loans popping up left and right -- investors are increasingly anxious about when the market will turn. Their quickness to dump high-risk securities for the safest ones around shows a lack of faith that easy-money policies from central banks around the world are fueling sufficient economic growth to keep this rally going. Aside from lackluster growth, there’s also concern that markets will unravel as the Fed tries to withdraw its stimulus. Fed Chair Janet Yellen herself has said she sees signs of excessive risk-taking, particularly in the markets for bonds and loans rated below investment grade. “My nervousness about what is going on in the high-yield market is escalating,” Peter Tchir, head of macro strategy at Brean Capital LLC in New York said in a July 17 e-mailed note. “It is a bit like musical chairs. Everyone walking in a circle pretending not to be eyeing the chair, but scared that when the music stops, they won’t have a chair -- or, in this case, a bid.”

• Four Cases of Life-Threatening Plague Found in Colorado. Three more cases of plague were found in Colorado after a man was reported to have the deadliest form of the disease last week. 

Wall Street Journal:

• Malaysia Airlines Crash in Ukraine: Streaming Coverage.

• Bank of Italy Slashes 2014 Economic Growth Forecast. Central Bank Said Growth in Next Two Years Would Be Modest. The Bank of Italy dealt another blow to hopes of a convincing recovery in the country this year as it slashed its economic growth forecast and warned of "downside risk." The Bank of Italy said economic growth in the next two years would be modest, something the Italian government is hoping it can change. The central bank slashed its projection of Italy's gross domestic product growth rate for 2014 to 0.2% from its January forecast of a 0.7% rise, while it raised its 2015 forecast to an increase of 1.3% versus an earlier estimate of 1.0% growth.

MarketWatch.com:

• Stocks are ignoring reality of MH17. Opinion: Fallout may soon become too great for investors hide from.

CNBC: 

• Bigger worry than geopolitics? The Fed, of course.

• Real traders more worried about Gaza than plane crash.

ZeroHedge:

• The Cancer Death-Panel App Is Here.

• Stocks Ramp As Shorts "Squeezed" Most In A Month. (graph)

• US Treasury Admits Collateral Problem In Bond Market; Considers Issuing Ultra Long-Dated Bonds.

• Consumer Confidence Slumps To 4 Month Lows, Biggest Miss Since Dec 2012. (graph)

• Chinese Home Prices Decline In Record Number Of Cities, Average Sale Price Has Biggest Drop Since Lehman. (graph)

• Holding Company Of Portugal's 2nd Largest Bank Just Filed For Bankruptcy Protection.

• Why One Big Bank Is "Worried That The Market Is Stretched And Could Correct Rapidly".

Business Insider:

• Ukraine Could Soon Get Much Worse.

• Witness At The Crash Site In Ukraine: 'There Are Bodies Scattered Everywhere'.

• This Is The Former Russian Military Officer Who Might Be Behind The Shooting Of MH17.

• Yahoo's(YHOO) Share Of The Search Market Fell Below 10% For The First Time Ever.

• FedEx(FDX) Indicted For Allegedly Shipping Illegal Pharmacy Meds.

• Bacon Prices Are Going Bananas. (graph)

Reuters:

• Exclusive: Morgan Stanley rebuilds in commodities trading. After more than a year of scaling back in commodities, Morgan Stanley (MS.N) is ready to expand. The Wall Street bank plans to hire about a dozen traders, sales staff and other professionals in the United States. It's building up commodities trading and financing businesses that can profit despite tougher regulations, people familiar with the matter told Reuters.

• VF Corp(VFC) 2nd-qtr profit beats, but forecast misses Street. The company's shares fell as much as 2.4 percent on Friday.

• Further sanctions would have "chilling effect" on Russia -IIF. Further sanctions on Russia would have a "broader chilling effect" on the country and its companies that are already largely excluded from raising foreign capital, a lobbying group representing 500 world financial institutions and major banks warned on Friday.