Bear Radar

Style Underperformer:

• Mid-Cap Value +.22%

Sector Underperformers:

• 1) Utilities -1.44% 2) Computer Hardware -.75% 3) Semis -.66%

Stocks Falling on Unusual Volume:

• QLGC, COTY, MLNX, MKTO, EROS, WDFC, BRCD, SCLN, ALTR, SMCI, LB, NWE, IDTI, TXN, DDD, AVGO, VIIX, NUS, WRB, AWK, SWKS, GEOS, SIG and KSS

Stocks With Unusual Put Option Activity:

• 1) ALTR 2) SWFT 3) FFIV 4) EWJ 5) EWG
  

Stocks With Most Negative News Mentions:

• 1) SHAK 2) GM 3) REGN 4) XOM 5) QLGC
  

Charts:

• ETFs Falling on Unusual Volume

• Stocks Falling on Unusual Volume

Bull Radar

Style Outperformer:

• Small-Cap Growth +.98%

Sector Outperformers:

• 1) Alt Energy +2.47% 2) Airlines +1.81% 3) Coal +1.52%
  

Stocks Rising on Unusual Volume:

• DVAX, WB, SOHU, NOAH, SINA, KATE, WBA, CMCM, WBAI, QIHU, NHTC, VIMC and NVAX

Stocks With Unusual Call Option Activity:

• 1) CONN 2) NLY 3) PEP 4) NRG 5) MDY
  

Stocks With Most Positive News Mentions:

• 1) MBLY 2) PNRA 3) GIS 4) BK 5) WBA
  

Charts:

• ETFs Rising on Unusual Volume 

• Stocks Rising on Unusual Volume

Morning Market Internals

NYSE Composite Index:

• Volume Running 15.5% Above 100-day average
• 9 Sectors Rising, 1 Sector Declining
• 77.2% of Issues Advancing, 20.6% Declining
• 20 New 52-Week Highs, 39 New Lows
• 38.7% of Issues Above 200-day Moving Average
• Average 14-Day RSI 35.7
• Vix 18.13
• Total Put/Call 1.18
• TRIN/Arms .50

Thursday Watch

Evening Headlines 

Bloomberg:  

• Who Blew Up China’s Stock Bubble? Beijing urged people to buy stocks. Now it’s begging them to stop selling. In China, the invisible hand of the market sometimes needs help from the iron fist of the state. That’s certainly true after a meltdown vaporized $3.5 trillion in the value of shares traded on the Shanghai and Shenzhen exchanges. President Xi Jinping’s government isn’t being subtle in its campaign to reflate the bubble it had a big role in creating. The government has suspended initial public offerings and eased rules on margin loans, even allowing investors to use their homes as collateral to borrow money to buy stocks. 

• China Lets Banks Roll Over Loans Backed by Share Pledges. China’s banking regulator said it will allow lenders to roll over loans backed by shares when they mature and adjust collateral requirements, adding to government efforts to contain the effects of a stock market rout. The China Banking Regulatory Commission also encouraged banks to support companies’ share buybacks by offering them collateralized loans, in a statement on Thursday.

• 50% of All Chinese Listings Suspended. (video)

• China's Market Meddling Makes Yuan Look Like a Poor Reserve Currency. China’s escalating intervention in its collapsing stock market -- after months of quiescence while equities surged -- is tarnishing policy makers’ efforts to establish the yuan as an official reserve currency. An outflow of capital from China earlier this year already exposed the dangers to officials of a full dismantling of cross-border capital controls. The appetite to let domestic investors put more funds overseas won’t be helped by the 34 percent plunge in the Shanghai Composite Index since June 12. Yet greater openness and fewer restrictions on use of the yuan are what’s needed for the currency to qualify to join the dollar, euro, pound and yen in the International Monetary Fund’s reserve-currency basket, known as the SDR.

• China’s Stock Sale Ban Draws Scorns From Templeton, Wells Fargo. Templeton Emerging Markets Group calls it an act of “desperation.” UBS Wealth Management labels it “extreme.” And Wells Fargo Funds Management says it just “postpones the inevitable.” China’s decision to ban major stockholders from selling stakes in listed companies has drawn skepticism from foreign investors. The money managers, with combined assets of almost $4 trillion, say the latest step to stem the country’s equity rout is just another measure to meddle in the market and won’t be enough to restore investors’ confidence. “It suggests desperation,” Mark Mobius, chairman of Templeton Emerging Markets Group, said by phone. “It actually creates more fear because it shows that they’ve lost control.” 

• Greeks Under the Gun to Produce a Reform Plan to Keep Euro. Greece is rushing to pull together a detailed economic package to convince European leaders that it can keep the euro. The government extended capital controls through Monday, and Prime Minister Alexis Tsipras has until midnight Thursday to present his European colleagues with a plan that includes spending cuts, in exchange for a new European bailout. The continent’s most indebted country has never been closer to leaving the currency after more than six European leaders made clear this is Greece’s last chance. Failure to get a deal could result in the European Central Bank cutting funds to Greek banks, forcing the country to issue IOUs or some other form of exchange to prevent economic collapse.

• China Headwinds Collide With Greece to Stymie Emerging Borrowers. Turbulence in global markets is pushing developing-nation debt sales into a freeze. Brazil is delaying its dollar offering to the end of the quarter, a person familiar with the strategy said on Tuesday. Kazakhstan and the Iraqi region of Kurdistan have yet to tap markets after completing investor meetings last month, while the number of issuers forced to postpone offerings will only grow, according to Sergey Dergachev at Union Investment Privatfonds GmbH in Frankfurt. Debt sales have dried up since Gabon’s $500 million offering a month ago as a rout in Chinese equities and the deadlock over a bailout for Greece takes the country to the brink of exiting the euro.  

• China Junk Bond Premiums Gap Most in Two Months Amid Stock Rout. The extra yield investors demand to hold junk debt in China widened the most in two months as the government’s failure to avert a stock slump damped demand for risky assets. The gap between five-year top-rated and AA- rated corporate bond yields increased seven basis points Wednesday to 142.25, matching the steepest climb since May 15, ChinaBond data show. Notes rated AA- or below are considered junk in China’s onshore market.

• China ETF Posts Record Drop Amid More Efforts to Arrest Rout. The early market reaction to China’s latest efforts to stem the nation’s $3.6 trillion stock selloff is in. The largest U.S.-listed exchange-traded fund tracking yuan-denominated equities plunged more than 11 percent Wednesday, the most since it started trading in 2013, after Chinese regulators banned major stockholders from selling stakes in listed companies. The iShares China Large-Cap ETF that tracks the nation’s companies trading in Hong Kong tumbled the most in six years. “A lot of these measures are a little bit desperate,” Jorge Mariscal, chief investment officer for emerging markets at UBS Wealth Management in New York, which oversees $1 trillion in invested assets, said by phone Wednesday. “Some of the interventions have created more volatility and more nervousness than they intended to.”

• Asian Stocks Swing With China as Hong Kong Rebounds, Japan Slips. Asian stocks fluctuated, with Chinese equities swinging between gains and losses as the government tries to stem the rout. Shares in Hong Kong rebounded while Japan’s Topix index slid. Citic Securities Co., China’s biggest brokerage, jumped 13 percent in Hong Kong, heading for its first gain in six days. China Life Insurance Co. gained 5 percent after UBS AG raised its rating on the nation’s largest insurer to buy from neutral. Honda Motor Co. slipped 1.8 percent as Japanese exporters retreated after the yen jumped on Wednesday amid China’s rout. The MSCI Asia Pacific Index was little changed at 139.63 as of 11:18 a.m. in Hong Kong, swinging between a gain of 0.7 percent and a loss of 1.7 percent.

• Iron Rout Seen by Andy Xie Extending Into $30s as Supply Grows. The iron ore rout isn’t done yet and the raw material will extend declines into the $30s a metric ton this year, according to Andy Xie, an independent economist who predicted a collapse in prices in February. Steel demand in China is shrinking while iron ore supplies are still rising, Xie, a former Asia-Pacific chief economist at Morgan Stanley, said in an interview from Hong Kong on Wednesday after benchmark prices collapsed 10 percent. The slump in China’s stock markets, which showed a speculative bubble was bursting, was accelerating declines, according to Xie. “China’s steel production is actually declining, that’s the reality,” Xie said by phone. “All the high-cost guys have to shut down for this market to stop falling. It’s not going to stabilize because Chinese demand is coming back, that’s not going to happen in the foreseeable future.”

• Fed Increase Little More Than Coin Flip for Derivative Traders. Unrest in China and Greece looms large with money-market derivative traders who now see little more than a coin flip's chance that the Federal Reserve will lift interest rates this year. Fed funds futures give a 54 percent probability that the central bank will lift rates in December, down from 59 percent before the Fed on Wednesday released the minutes of its June policy gathering. At the start of the month, the likelihood of the central bank lifting its near-zero benchmark rate this year was nearly 70 percent. The chance of a September hike is now 21 percent.

• NYSE, SEC Suspect Software Update Triggered Trading Halt. A computer malfunction that knocked out trading at the New York Stock Exchange for more than three hours Wednesday probably stemmed from a software update that went awry, said two people briefed on a preliminary review. The NYSE must now verify the cause and report its conclusions to the U.S. Securities and Exchange Commission, said the people who asked not to be named because the inquiry isn’t public. The SEC will use those findings to investigate whether any rule violations occurred, the people said.

Wall Street Journal: 

• Fear Grows in Greece as Decisive Hour Nears. As creditors express skepticism and capital controls bite, many Greeks find euphoria after Sunday’s ‘no’ vote fading fast. Greece requested a new three-year bailout from its skeptical eurozone creditors and pledged some economic overhauls on Wednesday, but the euphoria that some Greeks felt after Sunday’s “no” vote on the last deal was fading fast. 

• Commodities Plunge on Fears of China Cutback. Downturn serves as reminder of weak fundamental outlook. 

• The Iranian Nuclear Paradox. Once an agreement is reached, a U.S.-Iran confrontation becomes more likely, more quickly. The lines are clearly drawn in Washington on President Obama’s plan for a nuclear deal with Iran. As negotiations for a final agreement continue well past their June 30 deadline, most Republicans oppose the deal and Democrats will not block it. Many critics claim to believe that a “good deal,” which would permanently dismantle the...

• Lessons of China’s Crash. Attempts to put a floor under prices are adding to the market panic. Beijing is learning the hard way that intervention can make a stock panic worse. In the past two weeks the Chinese government has rolled out measures to support share prices, even forcing state-run entities to buy. Yet the indexes have continued to fall, and each failure is making it more difficult for the market to find its natural bottom. The Shanghai Composite Index fell a further 5.9% on Wednesday, 32% below its June 12...

Fox News:

• Despite San Francisco criticism, Clinton once backed sanctuary city policies. (video) High-profile Democrats now speaking out about San Francisco's "sanctuary" treatment of an illegal immigrant charged with the murder of a young woman weren't always so critical of the policies. Hillary Clinton and Sen. Dianne Feinstein, D-Calif., both criticized San Francisco for ignoring a federal request to hold Francisco Sanchez -- who already had been deported five times -- when he went into city custody in March. He was released in April, and is now in jail for the murder last week of Kate Steinle, 32.

MarketWatch.com: 

• Why the NYSE trading halt should alarm investors. Even if the NYSE is not the victim of cyber terrorism and is simply experiencing a regular technical glitch, if the exchange was forced to hit the “off” switch, it signals a vulnerability of a market that is almost entirely electronic and highly technical.

• Top 10 S&P 500 companies most exposed to China. 

• China’s stock-market crash is just beginning. Since the Shanghai Composite index dropped from a 52-week high around 5,178 on June 12, it’s been downhill all the way. In just three weeks, stocks listed on mainland China’s most prominent exchange tumbled 30% from their seven-year highs. The even more speculative ChiNext Index has lost 42% of its value over 21 days.

CNBC:

• Greece is bad but this is worse! (video) The twin fears of China and Greece will hang over markets Thursday with China increasingly the bigger concern. "There's definitely an issue if we see a further correction in the Chinese stock market," said Russ Koesterich, BlackRock's chief investment strategist.

Zero Hedge: 

• China Stock Futures Tumble Into Red For 2015 As Crash Protection Costs Hit Record Highs. (graph)

• Utter Desperation: Chinese Police Vow To Arrest "Malicious Short Sellers".

• Hong Kong Hammered As China Crash Contagion Continues. (graph)

• Caught On Tape: The Other Crisis Happening In Greece. (video)

• The "Historic NYSE Halt" Post-Mortem: The Shock And Awe When It All Went Down. (graph)

• There's No Hope For A Deal "Priced In" Greek Bank Bonds. (graph)

• What Greece, Cyprus, And Puerto Rico Have In Common. (graph)

• Crisis Investing Visualized.

• Chinese Media Blames Soros, "Hostile" Foreigners For Stock Bloodbath.

• Greece Illustrates 150 Years Of Socialist Failure In Europe.

• 
  Getting Ridiculous: 70% Of Alcoa's(AA) LTM "Earnings" Are From Restructuring Charges. (graph)
  

• Stocks Slammed On Belligerent Merkel, Broken Markets, & Bearish Minutes. (graph)

Business Insider:

• 'China has destroyed its stock market in order to save it'.

• Bernie Sanders' financial transaction tax proposal could raise $50 billion. 

• Crony capitalism is slowing global economic growth.

• It's impossible to execute trade orders in China.

• Greek youths have soured on the European Union.

• Why you should never take investment advice from a Chinese hairdresser.

• Baltimore mayor fires police commissioner as city's homicide rate spikes.

• Benghazi panel accuses Hillary Clinton of lying.

Reuters:

• Exclusive: Greek banks face closures, bailout or not - sources. Some large Greek banks may have to be shut and taken over by stronger rivals as part of a restructuring of the sector that would follow any bailout of the country, European officials have told Reuters. European leaders will gather on Sunday in a last-ditch attempt to salvage agreement with Greece after months of acrimonious negotiations that have taken the country to the brink of leaving the euro. But regardless of whether or not fresh funds are now unlocked for the government, some Greek banks, damaged by political and economic havoc, may have to be closed and merged with stronger rivals, officials, who asked not to be named, told Reuters. One official said that Greece's four big banks - National Bank of Greece (NBGr.AT), Eurobank (EURBr.AT), Piraeus (BOPr.AT) and Alpha Bank (ACBr.AT) - could be reduced to just two, a measure that would doubtless encounter fierce resistance in Athens.

• Alcoa(AA) earnings hurt by low aluminum prices, higher global surplus seen. Metals company Alcoa Inc reported a quarterly profit that missed expectations due to plunging primary aluminum prices on Wednesday, but revenues topped estimates on an ongoing drive to reduce reliance on the company's legacy commodity business. The New York-based company has been investing in more advanced aerospace and automotive products while selling off some of its more traditional yet costly smelting facilities.

Financial Times:

• Emerging market currencies in line of fire. China's equity rout is leaving its fingerprints all over the currencies of developing economies, already squeezed by the prospect of a rise in US interest rates and the bear market for oil. MSCI’s emerging equity index suffered a 2.5 per cent drop on Wednesday, its biggest in two years.

Telegraph:

• Greece news live: Athens submits three-year bail-out plan as leading economists now predict Grexit. Greece applies for a new three-year bail-out programme after Tsipras is warned banking collapse and humanitarian crisis are four days away.

Evening Recommendations 

• None of Note

Night Trading

• Asian equity indices are -1.0% to +.75% on average.

• Asia Ex-Japan Investment Grade CDS Index 117.75 -1.0 basis point.

• Asia Pacific Sovereign CDS Index 64.5 +2.75 basis points.

• S&P 500 futures +.61%.

• NASDAQ 100 futures +.62%.

Morning Preview Links

Earnings of Note

Company/Estimate

• (PEP)/1.24

• (CUDA)/.08

• (PSMT)/.72

Economic Releases

8:30 am EST

• Initial Jobless Claims are estimated to fall to 275K versus 281K the prior week.

• Continuing Claims are estimated to fall to 2250K versus 2264K prior.
  

Upcoming Splits

• None of note

Other Potential Market Movers

• The Fed's Kocherlakota speaking, Fed's Lael Brainard speaking, Fed's George speaking, BoE rate decision, $13B 3Y T-Bond auction, weekly Bloomberg Consumer Comfort Index, Bloomberg July US Economic Survey, weekly EIA natural gas inventory report, (LB) June Sales call and the (AAL) June Traffic update could also impact trading today.

BOTTOM LINE: Asian indices are mostly lower, weighed down by industrial and technology shares in the region. I expect US stocks to open modestly higher and to weaken into the afternoon, finishing mixed. The Portfolio is 25% net long heading into the day.

Stocks Falling Substantially into Final Hour on China Bubble-Bursting Fears, Global Growth Worries, Emerging Markets/US High-Yield Debt Angst, Commodity/Biotech Sector Weakness

Broad Equity Market Tone:

• Advance/Decline Line: Substantially Lower
  

• Sector Performance: Every Sector Declining
  

• Volume: Slightly Below Average

• Market Leading Stocks: Underperforming

Equity Investor Angst:

• Volatility(VIX) 19.24 +19.38%

• Euro/Yen Carry Return Index 13.48 -1.05%

• Emerging Markets Currency Volatility(VXY) 9.44 +1.61%

• S&P 500 Implied Correlation 62.01 +5.84%

• ISE Sentiment Index 73.0 +19.7%

• Total Put/Call 1.40 +12.0%

• NYSE Arms 2.01 +138.72% 

Credit Investor Angst:

• North American Investment Grade CDS Index 72.99 +2.86%

• America Energy Sector High-Yield CDS Index 1,269.0 +.24%

• European Financial Sector CDS Index 98.58 -1.93%

• Western Europe Sovereign Debt CDS Index 32.87 +3.20%

• Asia Pacific Sovereign Debt CDS Index 64.35 +4.08%

• Emerging Market CDS Index 319.0 +.91%
  

• iBoxx Offshore RMB China Corporates High Yield Index n/a

• 2-Year Swap Spread 25.50 unch.

• TED Spread 27.5 unch.

• 3-Month EUR/USD Cross-Currency Basis Swap -22.5 +.25 basis point

Economic Gauges:

• 3-Month T-Bill Yield .01% unch.

• Yield Curve 166.0 -1.0 basis point

• China Import Iron Ore Spot $44.59/Metric Tonne -10.10%

• Citi US Economic Surprise Index -20.7 +.8 point

• Citi Eurozone Economic Surprise Index -6.4 +.3 point

• Citi Emerging Markets Economic Surprise Index -18.0 +.6 point

• 10-Year TIPS Spread 1.85 -4.0 basis points

Overseas Futures:

• Nikkei 225 Futures: Indicating -422 open in Japan 

• China A50 Futures: Indicating -1,044 open in China

• DAX Futures: Indicating -41 open in Germany

Portfolio: 

• Slightly Higher: On gains in my index hedges and emerging markets shorts

• Disclosed Trades: None

• Market Exposure: 25% Net Long

Today's Headlines

Bloomberg:     

• China Bans Stock Sales by Major Shareholders for Six Months. China’s securities regulator banned major shareholders, corporate executives and directors from selling stakes in listed companies for six months, its latest effort to stop the nation’s $3.5 trillion stock-market rout. Investors with stakes exceeding 5 percent must maintain their positions, the China Securities Regulatory Commission said in a statement. The rule is intended to guard capital-market stability amid an “unreasonable plunge” in share prices, the CSRC said. While China has already ordered government-owned institutions to maintain or boost their stock holdings, the CSRC’s directive expands the ban on sales to non-state companies and potentially foreign investors who own major stakes in mainland businesses. Regulators have unveiled market-boosting measures almost every night over the past 10 days, steps that have so far failed to revive investor confidence. Foreign traders sold Chinese shares at a record pace this week in part due concerns over the government’s meddling in markets. “It suggests desperation,” Mark Mobius, chairman of Templeton Emerging Markets Group, said by phone Wednesday. “It actually creates more fear because it shows that they’ve lost the control.”   
• Inside China's Stock Market Collapse. (video)
• Is China Having a Crisis of Legitimacy Over Markets? (video)
• This Is Why So Many Chinese Companies Are Suspende. China's corporations have been big fans of stock-based loans, too.  At least 1,331 companies have halted trading on China's mainland exchanges, freezing $2.6 trillion of shares, or about 40 percent of the country’s market value, Bloomberg reported on Wednesday. The Shanghai Composite Index fell 5.9 percent on Wednesday. It's now about 32 percent below the peak of 5,166 it reached on June 12. The unwinding of margin loans is adding fuel to the fire. Individual investors in China, as we all know by now, have used generous margin financing terms to enter the stock market and then build up their portfolios. Less-known is that Chinese companies have been doing the same thing by using their own corporate stock to secure loans from banks. This means that they stand to lose a lot when those share prices start trending dramatically lower.
• China Ousts Russia as Riskiest BRICS Market for Options Traders. China’s market meltdown is making even Russia look good. Shanghai stocks overtook Moscow-listed equities as the riskiest for investors in the so-called BRICS universe on Wednesday for the first time since the build-up to Russia’s military intervention in Crimea in February 2014. Expectations for price swings in China jumped 23 percent today, extending the 2015 increase to 71 percent, compared with a 39 percent drop in Russian volatility this year, according to options data.
• Greeks Work on Crafting Now-or-Never Reform Plan to Keep Euro. Greece is working against the clock on a package of proposed reforms to convince European leaders headed by German Chancellor Angela Merkel that it can keep the euro. The country has until midnight Thursday in Brussels to present measures to reform its economy and cut spending in exchange for a new European bailout. Merkel is willing to let Greece go if Prime Minister Alexis Tsipras’s government doesn’t deliver plans Germany views as credible, according to two government officials familiar with her strategy, who asked not to be identified discussing private deliberations. 
• Greece Faces Euro Exit Unless Demands Accepted by Sunday. (video) European leaders talked openly about a Greek exit from the euro ahead of a weekend summit on the country’s economic future, breaking dramatically with years of denial about the possibility. Europe has “a Grexit scenario prepared in detail,” European Commission President Jean-Claude Juncker said late Tuesday night, hours before Austrian Chancellor Werner Faymann said Greece’s Plan B is “another currency.” The European Union set a Sunday deadline to reach a deal with Greece on a rescue in exchange for austerity measures and economic reforms, while the country formally requested a new three-year bailout and promised to pay back its debts.
• Bond Traders Worry Central Banks Are Firing Guns Without Bullets. What happens when central bankers do everything they can to spur economic growth and prop up markets -- and still fail? That’s a question that’s come to the fore in the past few days as China unsuccessfully tries to support its plunging stock market and the European Central Bank pledges to use its monetary tools to prevent fallout from a Greek default. Even after trillions of dollars of central-bank stimulus globally, bond traders are showing they’re still worried about stagnant global growth.
• Russian Stocks Test Bearish Gauge as China Turmoil Pounds Oil. Russian stocks breached a bearish threshold that signals they may extend declines as China’s equity-market rout spread across the world, wiping out oil’s gains this year. The benchmark Micex Index fell as much as 2.5 percent to 1,573.98, bringing it temporarily below the 200-day moving average of 1,585.7 for the first time since December, data compiled by Bloomberg show.
• Stocks Gain From Italy to Portugal as Two-Day Selloff Is Pared. Equities rallied in European countries that bore the brunt of a two-day selloff following the Greek vote, with stocks in Italy and Portugal leading the way. The FTSE MIB Index and the PSI 20 Index advanced at least 1.4 percent, rebounding from losses of 6 percent or more in the past two days. Spain’s IBEX 35 Index climbed 0.8 percent. The Euro Stoxx 50 Index added 1 percent to 3,327.5 at the close.
• Iron Ore Slumps to Lowest Since at Least 2009 in China. Iron ore retreated to the lowest level in at least six years as a rout in China’s stock markets threatened to hurt demand in the largest buyer just as the biggest producers plan to raise output. Ore with 62 percent content delivered to Qingdao sank 10 percent to $44.59 a dry metric ton on Wednesday, according to Metal Bulletin Ltd. That’s the lowest price on record dating back to May 2009, the data show. The raw material was until the past several years traded predominantly through annual benchmark prices. Compared with those benchmarks, this would be the lowest since 2005, data compiled by Clarkson Plc show.
• Goldman(GS) Sees Negative Loop in Commodities From Excess Money. It’s going to take a prolonged slump in commodities to break a cycle of too much money and excess production, according to Goldman Sachs Group Inc. The market is caught in a “negative feedback loop,” where lower raw-material prices are strengthening the dollar and lowering production costs for countries with weaker currencies, Goldman analysts wrote in a report. That boosts the prospects of higher U.S. interest rates and a reduction in emerging-economy debt, according to the bank. Demand for commodities will subsequently decline, capping prices and further reinforcing the greenback, it said. “Commodity markets still have access to far too much capital relative to future demand and a declining cost structure,” analysts including Jeffrey Currie in New York wrote in the note. “Long-term surpluses in most commodity markets require prices to remain lower for longer to balance both the near-term physical supply and demand, but more importantly, the longer-term supply and demand for capital to fund future investments.”
• Mining’s $143 Billion Stock Rout Signals Escalating China Fears. Fears of faltering Chinese growth ignited a $143 billion meltdown in global mining stocks as investors confront sputtering demand in the world’s biggest consumer of commodities. The Bloomberg World Mining Index of 79 producers dropped 17 percent in the past 10 days as prices for industrial metals such as copper, nickel and aluminum sank to six-year lows. The price of iron ore, a key profit driver for top-ranked BHP Billiton Ltd. and Rio Tinto Group, slumped 10 percent Wednesday to its lowest since at least 2009 as new supply floods the market.
• NYSE Suspends Trading in All Securities. Investors were forced to steer orders away from the New York Stock Exchange as the biggest U.S. share venue halted trading to fix a computer malfunction. The suspension, announced to securities firms through notices on the NYSE website around 11:32 a.m., dropped the biggest U.S. share platform out of the interconnected network of venues that make up the American equity market. That network continued to operate, however, as other exchanges such as the Nasdaq Stock Market and Bats Global Markets Inc. picked up the runoff.
• Attack on U.S. Power Grid Could Cost $1 Trillion, Lloyd’s Says. A cyber attack on the U.S. power grid could cost more than $1 trillion because of property damage, higher death rates and crippled infrastructure, according to Lloyd’s of London. “The scenario predicts a rise in mortality rates as health and safety systems fail; a decline in trade as ports shut down; disruption to water supplies as electric pumps fail and chaos to transport networks,” according to a report from the insurance market and Cambridge University.
• Fed’s Williams Still Sees 2015 Rate Rise as Growth Trumps Risks.
• Hedge Funds Are a Holdout in Fed’s Plan to Prevent the Next Lehman. Regulators need help from hedge funds to make sure a bank failure in the future doesn’t roil markets the way Lehman Brothers Holdings Inc. did. The problem is hedge funds don’t see what’s in it for them. The Federal Reserve, Federal Deposit Insurance Corp. and Bank of England have met with representatives for firms such as Citadel LLC, D.E. Shaw & Co., BlackRock Inc. and Pacific Investment Management Co., to try to persuade them to wait before canceling contracts with a collapsing lender, said three people with knowledge of the matter. The purpose is to give regulators more time to resurrect a failed bank so derivative trades and lending arrangements that underpin the global financial system don’t have to be terminated. Money managers who account for trillions of dollars of swaps trades are resisting, because they’re concerned that giving up their right to quickly kill contracts with a bankrupt firm could stick them with losses and violate a requirement that they act in their investors’ best interests. 
• Microsoft(MSFT) to Cut Jobs, Take $7.6 Billion Writedown on Nokia. Microsoft Corp. plans to cut as many as 7,800 jobs and write down about $7.6 billion on its Nokia phone-handset unit, wiping out nearly all of the value of a business it acquired just 14 months ago.

Wall Street Journal:

• Apple(AAPL) Plans Record Number of New iPhones. Apples asks suppliers to make up to 90 million of the expected next models by year-end.

Barron's:

• Commodities, China and Greece Hint at Deflation. Like a falling barometer, sliding commodity prices can often signal an approaching storm for investors. The contagion from the crisis in Greece and the crash in China to other major securities markets so far has been relatively muted. The far greater impact appears to be in commodities, which have fallen hard this week. Losses have been across the board, from crude oil to corn. And while there hasn’t been any single, strong linkage from the commodity pits to the tumult in Athens and Asia, the decline shouldn’t be ignored. Like a falling barometer, sliding commodity prices can often signal an approaching storm.

CNBC:

• 'Cautious' Fed worries over Greece, sets framework for future hikes: FOMC minutes. Federal Reserve officials struck a notably dovish tone in their most recent discussions about monetary policy, while at the same time setting the groundwork for future rate hikes. Minutes released Wednesday from the June Fed Open Market Committee meeting reveal the thinking behind yet another delay in normalizing policy. Members agreed the economy was getting better yet felt unready to exit a policy of zero interest rates that began in late 2008.
• The real bubble behind China's selloff.
• China's wealth plunge claims billionaires.

ZeroHedge: 

• All Trading Halted On NYSE, White House Monitoring Outage, Software "Glitch" Blamed. (graph)
• Is This What The First World Cyber War Looks Like: Global Real Time Cyber Attack Map. (map)
• It Has Begun: Greek Businesses Now Listing Prices In Drachma.
• Europe Readies Emergency "Humanitarian" Action Plan For Greece.
• Suddenly The "Experts" Are Dumbfounded.
• Greece Preparing "Alternative Currency", Kathimerini Says.
• USDJPY Breaks Key Technical Support: Next Target 118.96 According To Goldman. (graph)
• "I'm A Tad Worried At The Market's Complacency".
• Crude Carnage Continues After Another Inventory Build & Production Rise. (graph)
• Nationwide Computer "Glitch" Grounds All United Airlines Flights.
• Germany Crushes All Hope Of Greece Getting Debt Relief. (graph)

Business Insider: 

• China's market crash is reversing the most important thing the government has been trying to do in decades.
• Greece's full exit from the euro and issuing of a new currency would happen in 7 chaotic steps.
• Here's a simple explanation of why Chinese stock markets are in free fall right now.

Telegraph: 

• Greece news live: Athens submits three-year bail-out plan as leading economists now predict Grexit. Greece applies for a new three-year bail-out programme after Tsipras is warned banking collapse and humanitarian crisis are four days away.

ZDF TV:

• Tsipras Showing No Willingness to Reform His Country. German Social Democratic Party lawmaker Carsten Schneider, an SPD deputy group leader in parliament, says on ZDF TV he doesn't see any kind of willingness on the part of Greek Prime Minister Alexis Tsipras to overhaul his country's economy. "That's why I'm not talking about debt reduction if everything goes on afterward as before". "Only when I have certainty that this Greek government works in a serious fashion on solving the country's problems, only then can the debt load be discussed in a second step, but not before". Schneider says he's "skeptical" that agreement between Greece, creditors can be reached by Sunday.

Le Figaro:

• Poll Shows 62% of French Against Greek Debt Writedown. Poll also shows 73% of Germans against Greek debt writedown. 44% of the French trust German Chancellor Merkel to solve the crisis between the EU and Greece; 24% trust French President Hollande. 45% of the French and 60% of the Germans want Greece to exit the euro area.