Wall Street Greek: TODAY’S MARKET: The New World Order is Quite Confused

We thought we knew who our friends were, or they, meaning Germany, thought they knew us until they discovered we were spying on them again. After getting caught red-handed listening in on Angela Merkel, the Germans turned up a double-agent who was working for the U.S. to learn German secrets. Global order has been disrupted, and the Germans are now expected to look at us differently. Europe and the U.S. were supposed to be the best of friends, and so just when we need each other most given the trouble to the East and Mid-East, we’re left unsure. So, stocks are lower today across both sides of the Atlantic, and gold and oil are higher. But there’s something more bothering the Americans today. It’s the fact that the FOMC is going to communicate again tomorrow, and there’s a great fear that it will increasingly have more to say about raising interest rates. I wrote about this big risk at SA, in my article Warning! The Fed Could Kill Stocks this Week.

Today’s Market

U.S. Markets

Market ETF	7/8
SPDR S&P 500 (NYSE: SPY)	-0.5%
SPDR Dow Jones (NYSE: DIA)	-0.5%
PowerShares (Nasdaq: QQQ)	-0.7%
SPDR Gold Shares (NYSE: GLD)	+0.3%
iShares US Real Estate (NYSE: IYR)	+0.4%
United States Oil (NYSE: USO)	+0.2%
PowerShares DB US$ Bullish (NYSE: UUP)	-0.1%
PIMCO Total Return ETF (NYSE: BOND)	+0.1%

Stocks were trading down for the second day in a row Tuesday morning. The reason, from my perspective, is clear. It is in anticipation of the FOMC meeting minutes release, due on Wednesday at 2:00 PM ET. As time progresses in this economic recovery, it only becomes increasingly likely that the Fed will raise interest rates. Recent discussion from the U.S. central bank has turned up the intensity on the topic, and while most agree it is not imminent, some Fed presidents suggest it would be recommended for as early as the start of 2015. Considering that stocks lead the economy by six months and that rising rates typically weigh on stocks, there’s good enough reason for investors to take money off the table now. And around Fed events like that planned for Wednesday, stocks will show investor angst.

International Markets

EUROPE	%	ASIA/PACIFIC	%
Vanguard FTSE Europe (NYSE: VGK)	-1.2%	Precidian MAXIS Nikkei (NYSE: NKY)	-0.3%
iShares MSCI UK (NYSE: EWU)	-1.0%	SPDR S&P China (NYSE: GXC)	-0.7%
iShares MSCI France (NYSE: EWQ)	-1.4%	iShares Asia 50 (NYSE: AIA)	-0.2%
iShares MSCI Germany (NYSE: EWG)	-1.0%	iShares MSCI S. Korea (NYSE: EWY)	-0.3%
Global X FTSE Greece (NYSE: GREK)	-3.8%	iPath MSCI India (NYSE: INP)	-1.9%

The premarket skinny on the declines seen in the international markets was mostly attributing it to US trading on Monday, which was in the red. The geopolitical mayhem running ramped now in Israel, Ukraine and Iraq is very likely weighing on stocks, especially in the Middle East where the trend is for escalation and spread. Certainly the recent revelation that the United States was engaged in spying on its ally in Germany has altered the sense of stability we thought existed between the developed markets of Europe and the U.S.

Economic Data

TUESDAY’S ECONOMIC REPORT SCHEDULE
Economic Data Point	Prior	Expected	Actual
TUESDAY
ICSC Weekly Store Sales	+1.0%		+1.7%
-Year-to-Year Pace	+4.6%		+3.3%
Redbook Store Sales	+3.1%		+6.0%
NFIB Small Biz Index	96.6	97.0	95.0
Job Openings (JOLTS)	4.464 M	4.40 M	4.635 M
Consumer Credit	$26.8 B	$17.5 B
Lacker Speaks
Kocherlakota Speaks
Senate Committee on Iraq

A surprisingly negative economic data point added some pressure to stocks Tuesday. The NFIB’s Small Business Optimism Index was supposed to improve, but it deteriorated instead. Perhaps small businessmen were reacting to the recently reported drop in quarterly GDP and to anticipation for future interest rate increase. Let’s hope so, because if they are expressing a reflection of what they are seeing in terms of customer traffic and spending, we’re in for some trouble – I’m talking about the “R” word, and nobody expects that.

Commodity Markets (7/8)

United States Oil (NYSE: USO)	+0.2%
iPath SP Crude Oil (NYSE: OIL)	+0.4%
U.S. Natural Gas (NYSE: UNG)	-1.4%
U.S. Gasoline (NYSE: UGA)	-0.0%
SPDR Gold Trust (NYSE: GLD)	+0.2%
Market Vectors Gold Miners (NYSE: GDX)	+1.5%
iShares Silver Trust (NYSE: SLV)	+0.4%
iPath DJ UBS Industrial Metals (NYSE: JJM)	+0.9%
Teucrium Corn ETF (NYSE: CORN)	-0.1%
Teucrium Wheat Fund (NYSE: WEAT)	+0.3%
Teucrium Soybean Fund (NYSE: SOYB)	-0.2%
iPath DJ-UBS Cocoa (NYSE: NIB)	+0.3%
iPath DJ-UBS Sugar (NYSE: SGG)	-0.6%
ICE Orange Juice Conc.	-0.2%
CME Lumber	-0.3%
CME Live Cattle	-0.4%

Oil is edging higher and gold is as well, and it has everything to do with events in the Middle East. A successful caliphate is probably the worst nightmare for energy supply globally. Deterioration in West-West relations (Germany and the U.S.) certainly isn’t good news for the dollar, especially given the common enemy recently rediscovered to the East in Russia.

Stock Activity

It’s a short earnings list today, but Alcoa (NYSE: AA) is included as it marks the start of the second quarter earnings season. AeroVironment (Nasdaq: AVAV) is an interesting little defense company that delves into alternative energy as well, or is it visa versa. The movers and shakers list follows the earnings table below.

EPS REPORTS
Company	Ticker
TUESDAY
AeroVironment	Nasdaq: AVAV
Alcoa	NYSE: AA
Bob Evans Farms	Nasdaq: BOBE
Container Store	NYSE: TCS

TODAY’S MOST ACTIVE STOCKS
BIGGEST GAINERS	% Gain
NeuroMetrix (Nasdaq: NURO)	+41%
USEC (NYSE: USU)	+19%
TherapeuticsMD (Nasdaq: TXMD)	+15%
BioAmber (Nasdaq: BIOA)	+14%
China Information Technology (Nasdaq: CNIT)	+12%
Macquarie Infrastructure (NYSE: MIC)	+10%
Royale Energy (Nasdaq: ROYL)	+9%
Rectractable Technologies (NYSE: RVP)	+6%
LookSmart (Nasdaq: LOOK)	+5%
Integrated Electrical (Nasdaq: IESC)	+5%
BIGGEST LOSERS	% Drop
Eagle Bulk Shipping (Nasdaq: EGLE)	-21%
Actions Semiconductor (Nasdaq: ACTS)	-17%
IntelliPharmaCeutics (Nasdaq: IPCI)	-14%
Camtek (Nasdaq: CAMT)	-12%
Zogenix (Nasdaq: ZGNX)	-11%
EveryWare Global (Nasdaq: EVRY)	-13%
General Steel (NYSE: GSI)	-10%
NV5 Holdings (Nasdaq: NVEE)	-10%
Karyopharm Therapeutics (Nasdaq: KPTI)	-10%
Ultragenyx Pharmaceuticals (Nasdaq: RARE)	-8%

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