Dow +0.39%  17,545.18  /  +67.78 
Nasdaq +0.86%  5,091.70  /  +43.46 
S& P +0.52%  2,102.44  /  +10.90

 

World equity indexes advanced modestly on Monday as upbeat U.S. housing data helped Wall Street shrug off a weak manufacturing report, while the prospect of higher U.S. interest rates lifted the dollar for a third day.

U.S. equities rebounded as a report showed that U.S. homebuilder sentiment rose in August to its highest level in nearly a decade.

Earlier in the session, stocks had dropped as Empire State data showed August manufacturing activity in New York was at its weakest in years.

" The housing data was pretty good," said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles. " It certainly didn' t hurt the bullish tone to everything housing-related."

Minutes from the U.S. Federal Reserve' s most recent policymaking meeting are due to be released on Wednesday. Investors await that document for clues on how soon the Fed may hike rates for the first time in nearly 10 years, with many analysts expecting such a move by the end of the year.

The expectations for an impending rate hike helped the dollar rise, as did reassurance from China fixing its yuan exchange rate slightly higher for a second straight day. The dollar index .DXY was up 0.3 percent.

Housing stocks advanced after the NAHB/Wells Fargo Housing Market index showed U.S. homebuilder sentiment rose in August to its highest since a matching reading almost a decade ago. The PHLX housing sector index .HGX touched an 8-1/2 year high of 248.03 and closed up 1.2 percent at 248.01.

 

REBOUND

European stocks bounced from last week' s heavy selloff of nearly 3 percent, with the pan-European FTSEurofirst 300 index .FTEU3 closing up 0.25 percent.

MSCI' s all-country world stock index .MIWD00000PUS edged up 0.16 percent.

Crude oil remained near 6-1/2 year lows, as U.S. crude CLc1 settled down 1.5 percent at $41.87, while Brent LCOc1 settled down 0.9 percent to $48.74, after data indicated Japan' s economy contracted in the second quarter amid oversupply concerns.

The Dow Jones industrial average .DJI rose 67.78 points, or 0.39 percent, to 17,545.18, the S& P 500 .SPX gained 10.9 points, or 0.52 percent, to 2,102.44 and the Nasdaq Composite .IXIC added 43.46 points, or 0.86 percent, to 5,091.70.

Germany' s DAX lost 0.4 percent .GDAXI and France' s CAC 40 climbed 0.6 percent .FCHI. Britain' s FTSE 100 .FTSE was flat, ending 0.01 percent lower.

The yuan fell more than 4 percent at one point last week, pulling down riskier assets, including emerging currencies globally on fears of a currency war. But China slowed the pace of the currency' s drop and on Monday fixed it higher for the second day in a row.

Benchmark 10-year notes US10YT=RR were last up 8/32 in price to yield 2.1695 percent from 2.198 late on Friday.

 

... and Keith Dicker' s assessment which was that " for Greece, it&rsquo s mathematically impossible to repay its debt" and that the Greek " economy continues to plummet to deeper depths and is now -33% less than where it was in 2008."

But the truth is that for all the endless drama, Dicker continues, " the Greek debt crisis isn&rsquo t THE crisis. Rather it is simply a symptom of a much larger global debt crisis."

The problem is that the " larger global debt crisis" is finally metastasizing and spreading to more places, all of which are large enough that they can  not  be simply swept under the rug, like Greece.

* * *

IceCap' s Keith Dicker continues:

We&rsquo ve written before that governments all around the world have borrowed too much money and the weight of these debts are choking economic growth.

And to make matters worse &ndash these very same governments and their central banks have implemented various plans that have only made matters worse.

Our view has not changed &ndash the global debt crisis has escalated to a point where the government bond bubble has inflated itself to become the mother of all bubbles. It&rsquo s going to burst, and when it does it wont be pretty.

Further evidence to support our view is as follows:

Canada  &ndash the collapse in oil and commodity markets has pushed the country into recession and the Canadian Dollar to decline to levels lower than that reached during the 2008 crisis.

Oil dependent provinces Alberta and Newfoundland remain in deep denial. Since everyone in these provinces have only ever experienced a booming oil market, many naively believe things will bounce back &ndash and quickly.

Meanwhile, both Toronto and Vancouver housing markets also remain in denial as they continue to go gangbusters. Buyers today are likely buying at all-time highs.

And as we predicted last year, the Bank of Canada has cut (not raised) interest rates twice in the last 6 months.

We fully expect the Bank of Canada to eventually cut interest rates to 0% and start a money printing program as well. And for the stunner - NEGATIVE interest rates will not be that far behind.

Australia  &ndash Over the last 20 years, China has been viewed as the growth engine of the world, and justifiably so. With annual growth rates between 8% to 15%, China&rsquo s economy was literally eating every rock, stalk and barrel of practically every commodity in the world.

And naturally, any country or company that produced these commodities made a tonne of money &ndash including Australia.

Today, China&rsquo s growth rate has slowed to about 3% which is a dramatic slow down compared to what it achieved in the past. This slowdown and China&rsquo s effort to even maintain these rates, will have significant repercussions around the world.

And the first up to bear the brunt of this slowdown is its closest supplier of raw materials &ndash Australia.

With dark clouds on the economic horizon, the Australian government and central bank is doing everything possible to prevent the unpreventable recession.

Interest rates have been reduced to all-time historical lows, meanwhile the Australian Dollar has plummeted -25% over the last year. Yet &ndash the negative outlook has not improved.

Brazil  &ndash Like Australia, Brazil has benefitted immensely from China&rsquo s growth. And now, also like Australia, it too is feeling the affects of the dramatic Chinese slowdown.

The economy has now declined for 12 consecutive months making it both the longest and deepest recession in 25 years.

But wait &ndash it gets worse. Despite declining growth, inflation continues to soar higher causing interest rates to rise as well.

And if that wasn&rsquo t bad, also know that the Brazilian currency has fell off the cliff at -53%.

Sweden  &ndash Unlike Australia and Brazil, Sweden relies very little on China as a buyer of last resort. Yet, the Swedish economy is also not very hot these days.

In fact, instead of spectacular and dramatic declines in anything, it is doing the exact opposite &ndash it just isn&rsquo t moving.

While Sweden isn&rsquo t in the Eurozone, it is smack dab next to it and that in itself is reason enough for the lack of growth. We&rsquo ve written before how the debt crisis in the Eurozone is acting like a giant, slow moving tornado that is sucking the life out of the economy and everything near by. And unfortunately for Sweden, it is very near by.

While economic growth in the Nordic state hasn&rsquo t declined, it hasn&rsquo t accelerated either &ndash and this is what has many worried.

So worried, that the central bank shocked everyone not once but twice, by first announcing that they would begin to print money, and then when they announced that interest rates would be NEGATIVE.

These actions are so severe, that we need to repeat them:

1) MONEY PRINTING
2) NEGATIVE INTEREST RATES

It is hoped that these actions will cause people and companies to loosen their wallets and start spending again. Yet, what the government and the central bank doesn&rsquo t understand is that these actions will actually make the problem worse.

As the global economy continues to move as we expect, there is nothing Sweden can do to change what is coming &ndash a global recession and a significantly weaker Krona.

China, Australia, Brazil, Canada, Sweden -  it is beyond us how anyone can declare the crisis isn&rsquo t spreading. Be prepared &ndash there are going to be lots of opportunities to both make and lose money.

But first, you have to recognize what is happening.

* * *

Dow +0.40%  17,477.40  /  +69.15 
Nasdaq +0.29%  5,048.24  /  +14.68 
S& P +0.39%  2,091.54  /  +8.15

 

U.S. stocks ended a volatile week higher on Friday after upbeat U.S. economic data and as euro zone finance ministers agreed to launch a third bailout program for Greece.

All three major indexes also ended the week with slight gains, bouncing back from losses earlier in the week set off by worries over a slowdown in China and a yuan devaluation.

Gains in shares of retailers helped buoy the market. Nordstrom (JWN.N) and J.C. Penney (JCP.N) both rose after the department store chains posted better-than-expected quarterly results.

Stocks hit session highs late in the session after Belgium' s Finance Minister told Reuters in Brussels that euro zone finance ministers had agreed to a Memorandum of Understanding drafted by institutional negotiators, " with some additional measures."

U.S. producer prices rose for a third straight month in July, suggesting the drag on inflation from weaker oil prices was easing, while industrial output advanced at its strongest pace in eight months.

Though the Chinese currency devaluation added some uncertainty to the outlook for a Federal Reserve interest rate hike, most traders and economists are still expecting a September increase.

That kept the market from breaking out of its trading range, said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

" I think the bulls are nervous and bears are hoping for a big market decline once the Fed does finally hike rates," he said.

The Dow Jones industrial average .DJI rose 69.15 points, or 0.4 percent, to 17,477.4, while the S& P 500 .SPX gained 8.15 points, or 0.39 percent, to 2,091.54.

The Nasdaq Composite .IXIC, which swung 167 points from its low this week to its high, added 14.68 points, or 0.29 percent, to 5,048.24.

For the week, the Dow rose 0.6 percent, the S& P 500 added 0.7 percent and the Nasdaq gained 0.1 percent.

The day' s economic data followed strong employment and retail sales data for July on Thursday, which overall suggested the third quarter was off to a healthy start.

Nine of the 10 S& P 500 sectors ended higher.

Energy shares dipped in afternoon trade and the energy index .SPNY ended down 0.2 percent. Still, the energy index rose 3.2 percent for the week, its biggest gain since March.

J.C. Penney rose 5.6 percent at $8.52, Nordstrom jumped 4.3 percent to $78.13 and was among the biggest percentage gainers in the S& P 500, while the S& P retail index .SPXRT rose 0.4 percent.

Restaurant operator El Pollo Loco (LOCO.O) fell 20.7 percent to $14.56, below its IPO price, after weak quarterly results.

Sysco (SYY.N) rose 7.4 percent to $41.38 after Nelson Peltz reported a 7-percent stake in the food distributor and said he would seek representation on the company' s board.

NYSE advancers outnumbered decliners 2,072 to 962 on the Nasdaq, 1,697 issues rose and 1,096 fell. The S& P 500 posted 21 new 52-week highs and 11 new lows the Nasdaq recorded 62 new highs and 101 new lows.

About 5.2 billion shares changed hands on U.S. exchanges, below the 7.1 billion daily average for the month to date, according to BATS Global Markets.