Saturday, July 09, 2016

Today's Headlines

  • S&P 500 Closes Near Record as Jobs Data Caps Post-Brexit Rebound. (video) A week’s evidence that the U.S. economy’s ill health has been overstated and dovish talk from the Federal Reserve combined to briefly catapult the S&P 500 Index above its May 2015 record close, leaving stocks on the brink of ending their longest drought of the bull market. Gains on Friday capped an eight-day rebound of 6.5 percent that restored $1.4 trillion of market capitalization to U.S. shares, value that was erased in the aftermath of the U.K. vote to leave the European Union. The S&P 500 advanced more than 1 percent for the fourth time in two weeks, after stronger June payroll growth calmed concerns sown by May’s anemic number. Banks, technology and retailer shares were among the biggest contributors to the rally. 
  • Spain’s Socialists Won’t Back Rajoy’s Bid to Form Government. Spain’s Socialist Party won’t lend its support to Mariano Rajoy, the nation’s acting prime minister, who is aiming to form a government by August. “From the three options: abstention, a supporting or against, the socialists will vote against,” Pedro Sanchez, leader of the Socialist Party, said in a televised speech on Saturday. Rajoy, whose People’s Party was the only group to increase its vote in June 26 elections, is seeking support from other parties having failed to win a majority. Last month’s vote marked the second time Spaniards had been to the polls in six months. Rajoy won 137 seats in the 350-strong Spanish chamber, short of the 176 seat-threshold for a majority while Sanchez’s Socialists won 85 seats, down 5 from December.
  • Voting Starts in Japan as Abe Seeks Upper House Majority. Voting began Sunday in Japan in an upper house election that Prime Minister Shinzo Abe has billed as a chance to judge his economic policies. Opposition parties are focused on preventing a resounding win for Abe that would allow him to take the next step toward revising the pacifist constitution. Polling stations opened at 7 a.m. Tokyo time and will close at 8 p.m., with media exit polls generally published immediately afterward and official results later in the evening. Media surveys show Abe’s Liberal Democratic Party and its junior coalition partner Komeito are likely to win a simple majority of the 121 seats in contention. With support from two smaller conservative parties, the premier has a good chance of gaining the two-thirds of seats in the chamber needed to embark on constitutional change. For a guide to the election, click here.
  • Baltics to Black Sea: NATO Unity May Be Tested by Next Challenge. Leaders at the North Atlantic Treaty Organization summit that ended Saturday sought to demonstrate unity among the 28 alliance members as they face multiple threats and uncertainties, from Islamic State to Russia to Brexit. In that, they appeared to succeed. The seeds of discord, however, were also evident, as leaders wait to discover what Russia’s response to the decisions made at the Warsaw summit will be. For Poland and the Baltic states, the 4,000 troops that NATO members agreed to deploy across four countries may not be the end of what’s required, depending on Russia’s actions. At NATO’s last summit just two years ago, leaders announced a smaller rapid reaction force for the Baltic states, to similar fanfare.
  • Bonds Signaling a Fed on Permanent Hold, Fleming Says. Global bond markets in negative or record-low-yield territory signal slow growth that means the U.S. Federal Reserve probably missed its window to raise interest rates, according to former Morgan Stanley wealth-management head Greg Fleming. “Given the uncertainty and a lot of the challenges that these central banks are dealing with, rates are not going up really anywhere,” Fleming said in an interview with “Wall Street Week” scheduled to air Friday. “Our Fed has missed the window to take rates up. And I do think that’s going to be a problem over time.”
Wall Street Journal:
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