The following are my PERSONAL suggestions on trading during FOMC days:

·    Reduce trading size

·    Be extra picky = no trade is better than a bad trade

·    Choose entry points wisely. Look at longer time frame support and resistance for entry. Take the approach of entering at points where you normally would have placed protective stops. Example, trader x looking to go long the mini SP at 3925.00 with a stop at 3919.00, instead “stretch the price bands” due to volatility and place an entry order to buy at 3919.75 and place a stop a few points below in this hypothetical example ( consider current volatility along with support and resistance levels).

·    Expect the higher volatility during and right after the announcement

·    Expect to see some “vacuum” ( low volume, big zigzags) right before the number.

·    Consider using automated stops and limits attached to your entry order as the market can move very fast at times.

·    Keep in mind statement comes out at 1 Pm Central time, the news conference which dissects the language comes out 30 minutes later so the volatility window stretches out.

·    Know what the market was expecting, learn what came out and observe market reaction for clues

·    Be patient and be disciplined

·    If in doubt, stay out!!

Everyone loves an introductory guide to trading futures! Even experienced traders can learn something new or refresh their strategies by reviewing this trader’s guide to futures. If you’re a trader who is interested in branching out from equities or cash FX into futures, this guide will provide a great starting point. If you already know something about futures trading, you can jump to any chapter for a review.  Additionally, you can also go to the back of the booklet and test your knowledge in our helpful Futures Quiz.

Some of the guide sections include:

An interactive tutorial on the basics ( and a little more) of futures trading.

Regardless if you traded before or new to the futures markets, this tutorial is nicely put together by our regulators and the CME and touches on a variety of sub topics that go into trading futures and options.

Browse through the tutorial at your leisure and at your own pace. Please call us if you have any questions about implementing your strategy or requesting a live demo or have feedback.

Trading 101: Trading videos on bollinger bands, Parabolics, Trading levels, Range Bars and more! Watch the latest trading videos we have posted and shared with our clients! In this week’s newsletter we are sharing two videos, each a few minutes long. The videos discuss practical tips for trading and sharing our experience with you 1. Using bollinger Bands as a possible tool for exiting trades 2. One way you can use the Parabolics study ( also known as PSAR) to manage current positions, possibly as a trailing stop 3. Different ways traders can utilize support and resistance levels in their trading. 4. Entering trades on a stop, using “price confirmation”. 5. Utilizing Range Bar charts for shorter term trading as a way to try and filter out some noise. WATCH VIDEOS NOW

Many ways to trade any market, many ways to lose money in any market and only very few ways to lock in gains. If you need help creating a trading plan,visit our broker assist services.

Many ways to trade any market, many ways to lose money in any market and only very few ways to lock in gains. If you need help creating a trading plan, visit our broker assist services.

 

Did you know Cannon offers FOREX trading including the MT4 platform?

Check out our Trading Systems/ALGO Trading and Managed Accounts section!

 

US equity markets recovered some ground this week and the Shanghai Composite appeared to stabilize after another round of government pledges. The DJIA is looking a little shaky, weighed on by pain in the commodities related industrials, but the S&P500 is within sight of the recent all-time highs, notching a 1.2% gain on the week. Despite pledging hundreds of billions to prop up its market, China’s stocks sunk another 8.5% on Monday – the biggest one-day drop since 2007 – drawing another promise from the China Securities Finance Corporation(CSFC) to boost its stock purchases. The FOMC statement kept expectations of a September rate hike alive without pre-committing, while Thursday’s upward revisions to past core PCE readings and a hotter than expect initial Q2 core PCE print only supported that notion. Short term US Treasury yields backed up to levels not seen since early June as traders rotated into the US long bond, likely on the belief that rates can only rise very gradually under the current subdued growth outlook. The US Q2 employment cost index threw markets a bit of a curve ball on Friday, unwinding some of the week’s earlier bets the Fed was on the precipice of raising rates for the first time since 2006. The prospect of a Puerto Rico bond default over the weekend also dampened sentiment.

The semantic tweaks made to the FOMC statement released on Wednesday did not include any overt signals that rate hikes were imminent. However, Fed watchers characterized several minor changes as a hint that Fed officials see the economy closer than ever to full employment. For several meetings, the language talked about the need to see “additional” improvement in the labor market, but this was changed to “some” additional improvement. A related section stated that slack in the labor market had diminished, striking an earlier qualification that slack had diminished “somewhat.” On the inflation front, the statement dropped reference to “stabilized” energy prices, given that oil prices are retesting their spring lows, and it retained language that said inflation is running below the Fed’s 2% objective. The next FOMC meeting is scheduled for September 16-17.

The slowdown seen in the US Q2 employment cost index (ECI) had a broad impact on markets on Friday and made some question the viability of a September Fed rate hike. The report indicated that labor costs decelerated sharply in the quarter (+0.2% v +0.6%e), reversing Q1’s +0.7% figure and delivering the lowest rate of growth in 30 years. The Q1 reading suggested wage growth had picked up perceptibly from the stagnant trend of earlier years, holding out the hope for accelerating inflation and spending, with obvious implications for monetary policy. Analysts noted that some of the slowdown could be a reversal of a seasonal effect: the uptick in the first Q1 was concentrated in incentive-pay occupations, where bonuses and commissions can be volatile, and this pop reversed itself in the second quarter. Analysts caution that the adjusted data also rose in Q1 and decelerated in Q2. Commenting after the ECI release, Fed hawk Bullard said he was not concerned by the data, and that a September rate hike can’t be ruled out.

The first reading of Q2 US GDP was just fine, with the headline figure of +2.3% a hair below expectations but much better than the revised final Q1 figure of +0.6% (which itself was revised up from the -0.2% final report in June). Personal consumption beat expectations at +2.9%, while the export figure grew to +5.3% from -5.9% in the final Q1 report. Friday’s GDP report was the first to include new methodology meant to correct the tendency to slightly underestimate growth in Q1 and overestimate growth in Q3, due to issues in measuring military spending and consumer services. Under the new approach, the government has found that the US economy grew somewhat slower in 2012-14, at an average of +2.0% a year instead of +2.3%. The slowest recovery since the end of World War II is now even weaker than previously believed.

US consumer confidence was rattled by the Chinese slump and the Greek crisis in July, as the month’s reading fell to the lowest level since last September and widely missed expectations (90.9 v 100e). Current conditions was still looking relatively healthy at 107.4, but the outlook for next six months dropped sharply to 79.9 this month from 92.8 in June.

Fed rate policy deliberations drove USD-related currency trading. The weakening dollar trend seen last week peaked on Monday as EUR/USD touched 1.1130 and USD/JPY retested 123, but the steady tone in the FOMC release and firming expectations for a September rate hike helped EUR/USD dip back below 1.0900 and the USD/JPY test seven-week highs above 124.56 on Thursday. On Friday, the ECI report threw a wet blanket on the notion of a September rate hike, pushing EUR/USD to test toward the week’s high of 1.1130 and USD/JPY back below 124. Meanwhile, the commodity crash continued without respite: WTI crude wallowed at four-month lows around $48 and Brent sank to fresh six-month lows below $53. One-year lows were seen in gold, copper and certain softs, as well as the commodity-related Aussie and Canadian currencies.

Just when markets considered Greece fixed for now, there were rumblings of a new political crisis in Athens. Press reports suggest that EU officials are pressing the government to agree to more measures than were included in the preliminary package earlier this month, prompting pushback from PM Tsipras. He has scheduled a Syriza party summit in September to discuss the bailout with party rebels and is threatening snap elections if future votes on the bailout go against the government. Separately, the government said the Athens Stock Exchange would reopen for trading next Monday after a five-week shutdown.

The impact of falling oil prices on the energy industry emerged as a major theme as a barrage of S&P500 companies reported this week. Oil majors like Chevron and Exxon reported painful results, while pure play refiners capitalized on low input costs. Exxon’s profits fell by 50% y/y while Chevron’s slump was even more pronounced given a host of one-time charges. Surging profits at the majors’ downstream operations, which benefit from lower crude prices, did not make up for the collapse in upstream operations from the slump in prices. ConocoPhillips managed to top greatly diminished expectations. Both Exxon and Chevron maintained their capex budgets unchanged, but Exxon also said it is seeing a “downward vector” on the capex figure, while Chevron said if current oil prices persist, capex would fall in 2016 and 2017. Conoco further trimmed its own FY15 capex budget. Refiner Valero roundly beat both earnings and revenue targets, with solid gains seen in operating income as cheaper crude doubled the firm’s margins. Occidental Petroleum missed revenue expectations as total sales fell more than 30% y/y.

Social media names Facebook and Twitter were both punished for missing consensus user growth targets. Both firms exceeded revenue and earnings targets: Facebook’s revenue gained about 40% y/y and Twitter’s surged 63% y/y. Traders ignored the massive revenue growth and zoomed in on FB’s lower-than-expected 17% y/y growth in daily active users and TWTR’s subpar 12% y/y growth in monthly active users.

Allergan reached a deal to sell off its generics unit to Teva for $40 billion in cash and stock. The deal is divided between $33.8 billion in cash and approximately $6.8 billion of Teva’s shares, giving Allergan a nearly 10% stake in Teva. With the Allergan transaction, Teva also withdrew its spurned, unsolicited $37 billion offer to acquire Mylan, clearing the field for Mylan’s effort to woo Perrigo. In other merger news, Belgian chemical group Solvay agreed to buy Cytecfor $5.5 billion, giving it a bigger presence in the US lightweight materials business. Coca-Cola Enterprises stock was up double digit percentages on Friday after a report that it could combine its operations with other bottlers in Spain and Germany.

On Monday, Chinese stocks experienced their worst one day rout in eight years, falling 8.5% on jitters about the government withdrawing some of its recent measures to prop up the market. The fear was exacerbated by the unexpected y/y decline in June industrial profits data. In response to spooked investors, officials insisted that they had not withdrawn from the stock market and that they would continue efforts to stabilize sentiment. The PBoC conducted another CNY20B in open market operation liquidity injections for the week, while government reform efforts aimed at slowing the build-up of leverage in the financial system contributed to total margin debt falling to its lowest levels since March. Nonetheless, the Shanghai Composite broke a string of 3 weeks of gains with a 10% decline.

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Choppy trading in stocks, bonds, and currency whipped the markets around last week. At his post rate-decision press conference, ECB President Draghi warned that people need to get used to heightened volatility, adding more instability to an already unpredictable market. Greece crept closer to the edge, as leaders in Athens held out from agreeing to their creditors’ “final offer” and pushed back repayments of IMF debt until the end of June. The US May jobs data was very strong, keeping alive the prospect of a September Fed hike, rekindling jitters that higher rates are in sight. The Atlanta Fed raised its tracking estimate for Q2 GDP by three-tenths to 1.1% after the trade deficit narrowed to $40.9 billion in April from March’s six-year high of $51.4 billion, a steeper decline than expected. More breathtaking volatility on the Shanghai Composite ended in a nearly 9% rally on the week after official PMI numbers missed expectations and sustained hopes for more PBoC easing. In the same timeframe, US stocks mostly lost ground: the DJIA slipped 0.9%, the S&P500 fell 0.7%, while the Nasdaq was flat on the week.

Bond volatility was extremely pronounced this week as traders juggled monetary policy divergence between the US and the rest of the world against the threat of a Greek default. The yield on the German 10-year bond soared from 0.50% last Friday to an eight-month high of 0.99% on Thursday before easing slightly on Friday. The 10-year US yield hit a fresh 2015 high of 2.44% on Thursday and matched that level again after the jobs report, up from 2.12% last Friday. EUR/USD was similarly volatile, rising more than four and a half big figures from 1.0900 as high as 1.1380 on Thursday before the strong jobs report sent the pair back as low as 1.1050. USD/JPY was less choppy as the pair tested the key level of 124.50 all week before breaking higher on Friday, to 125.80, after the jobs report.

The May US jobs report was the best yet in 2015: non-farm payrolls gained 280K from a revised 221K total in April, and the number of discouraged workers fell to the lowest level since 2008. The unemployment rate rose one-tenth to 5.5%, but that was largely attributable to a rise in the workforce participation rate. After wage growth data missed expectations in two of the last three months, the May report was better than forecast, with hourly earnings rising 0.3% in the month and taking the y/y growth rate to a five year high of 2.3%. The jobs data solidified market expectations of a rate hike in September, as reflected by fed funds futures.

Ahead of the jobs report, the IMF had cut its 2015 US growth forecast to +2.5% from +3.1% and called on the Fed to delay its first rate hike until 2016. The IMF said it does not expect inflation to reach the Fed’s 2% inflation forecast until mid-2017 and warned rate hikes could trigger abrupt rebalancing in global markets. Dovish Fed governors Brainard and Tarullo seconded some of the IMF’s critiques. Brainard cautioned that if Fed policy diverges from other central banks, US financial conditions would tighten and slow the normalization process. Tarullo said the US economy had lost momentum and asserted that sluggishness in Q1 could not be blamed entirely on transitory issues like the weather and the West Coast ports slowdown.

There was no letup in the Greece rollercoaster this week. On Monday, Greece’s major creditors presented Athens with a “final offer” and warned rejection could put the nation in default. Meanwhile, the Greeks offered a counterproposal which offered no new concessions on pension and labor issues. The creditors continue to ask for pension cuts, VAT tax reform and sustained privatization. Athens is disputing the pension and VAT reforms, and wants lower primary budget surplus targets. According to reports, creditors want a budget surplus of 1% of GDP this year and 2% next, while Greece has proposed 0.8% for 2015 and 1.5% for 2016. Snap elections are looking like a possibility as Syriza’s left wing makes more complaints about the negotiations. Negotiations between Athens and its creditors are to continue this weekend.

At the ECB’s post rate-decision press conference, Draghi reaffirmed the council’s commitment to following through with its full slate of QE bond purchases through 2016 and crowed that all is going exactly according to plan. The ECB staff raised its forecast for 2015 inflation to +0.3% from flat prior, after lowering it to that level from +0.7% back in March due to the oil price collapse. Responding to recent gains in inflation, Draghi said inflation is nowhere near the ECB’s target and that the total amount of purchases under QE should be adequate, and suggested if anything the ECB could even expand purchases if necessary.

As expected, OPEC maintained its current production ceiling unchanged at 30M bbl per day at its spring meeting in Vienna. Saudi Oil Minister al Naimi claimed the meeting was amicable, however other sources suggested that many non-Gulf OPEC members had lobbied hard for a production cut to help support prices. Russian representatives were in Vienna, and Russia Energy Minister Novak seemed to support the organization’s decision to hold steady, saying that any coordinated oil production cut would be detrimental in the longer run. The Iranians meanwhile promised to hike output 1.0M bpd as soon as sanctions are lifted, but delegates said they would address any Iran production increase only after it was a reality.

May auto sales rose to a seasonally-adjusted annualized rate of 17.8M units, the highest sales rate since the summer of 2005. General Motors and Fiat Chrysler sales were better than expected, up 3% and 4% y/y, respectively. Ford’s sales also beat expectations, but fell 1.3% y/y, including a 9.7% y/y decline in the company’s F-series trucks. Toyota and Nissan saw slight y/y declines, with sales in line with expectations.

The big merger news of the week was Altera, which agreed to be acquired by Intel for $16.7 billion in stock and cash, in a deal valued at $54 a share. Opko Health agreed to buy Bio-Reference Laboratories in an all-stock deal valued at about $1.5 billion. Opko said it would pay 2.75 shares for each Bio-Reference share, or about $52.58 per share. Investors do not seem enthusiastic about either deal: shares of OPK are down 8% on the week, while INTC is off 7%. Shares of Dish Network pointed skyward on reports T-Mobile was pursuing the company, although CNBC’s Faber cautioned that while talks between the two firms have momentum, there are plenty of issues to work out. Friday afternoon, global beverage firms bubbled higher on a report that Brazilian foods magnate Lemann is mulling a bid for Diageo, sending shares of the alcoholic beverages company up more than 5%.

The Shanghai Composite bounced nicely after the steep selloff late last week, and by Friday it reached new 7-year highs above the 5,000 mark for a rather lucky 8.888% weekly gain. May PMI data continued to favor the official figures gauging performance of state-owned enterprises over the smaller firms measured by HSBC. The official manufacturing PMI was in expansion for the 3rd straight month, rising fractionally to 50.2, while the HSBC version marked its 3rd straight contraction. China’s official non-manufacturing PMI slid to 53.2 from 53.4, a 3-year low. Economists with HSBC as well as Goldman Sachs were generally unimpressed with the results, anticipating continued steady easing by the PBoC. Next week will see the release of China’s other mainstay metrics for May, including inflation, trade, lending and industrial output.

In contrast to China, the stock market in Australia has rolled over, with S&P/ASX falling some 5% for a 4-month low below 5,500. Investors had anticipated the RBA to recommit to an easing bias at its decision this week, but the policy board took a more neutral and data-dependent view in light of a slightly better than expected Q1 GDP report. Later in the week, incoming data only justified more caution, with retail sales growth slowing to a 1-year low and trade balance posting its biggest deficit on record going back to the early 1970s.

Fri, 01 May 2015 16:03 PM ESTGlobal equities felt the pull of gravity this week as indices in Asia, Europe, and the US came off recent all-time highs. Meanwhile, in a development that caught investors’ attention, European and US sovereign bonds sold off hard on a confluence of factors. Talks between Greece and its creditors continued at a frustratingly slow pace. The first reading on US Q1 GDP was quite disappointing. The Fed acknowledged the weak first quarter by downgrading the economic conditions commentary in the FOMC policy statement, but continued to attribute the slow growth to transitory factors. Despite oil prices continuing to rebound, the BOJ reigned in its inflation outlook, pushing back the timing of achieving 2% inflation until early 2016. Speculation about more extraordinary Chinese stimulus that helped fuel recent rallies couldn’t stem the selling this week. For the week, the DJIA slipped 0.3%, the S&P500 fell 0.5% and the Nasdaq lost 1.7%.During Monday’s Asian session, financial press sources reported that the PBoC was mulling its own brand of QE asset purchase program that would let commercial banks swap local-government bonds they hold for loans from the central bank to help stave off a potential credit crunch. The Shanghai Composite rocketed up 3% on the report, but an official denial from the PBoC tempered Chinese equity gains. Beijing has already been trying to mop up the ballooning debts of local governments under a debt exchange program, without too much success. Later in the week, PBoC Deputy Governor Yi Gang said that the RRR rate was relatively high, leaving plenty of room for another cut.Markets appeared to be nervous ahead of Wednesday’s FOMC policy announcement, in which the Fed dropped its last calendar reference for forward guidance, as expected. The central bank noted that economic growth had slowed during the winter months and household spending declined, but continued to attribute this to transitory factors. The downgraded economic language may have lessened the chances of a June rate hike but there was no indication from the Fed that next month’s meeting is no longer a ‘live’ meeting.The first reading of US Q1 GDP was a bust, widely missing expectations thanks to sharp declines in nonresidential fixed investment (-3.4% v 4.7% Q4 final) and exports (-7.2% v 4.5% Q4 final). Import growth slowed considerably (+1.8 % v 10.4% Q4 final). Analysts caution that assumptions on the impact of the West Coast port strike and its resolution strongly influenced the GDP reading, and hard trade data for March could lead to big revisions in the second and final GDP readings. Unlike many other forecasters, the Atlanta Fed nailed the Q1 GDP in its GDPNow model (it had long been forecasting +0.2% growth in Q1), drawing attention for its bold call. The Atlanta Fed’s GDPNow model initiated its Q2 forecast this week at just +0.9%, considerably lower than BoA/Merrill Lynch’s +3.5% forecast and Goldman Sachs’s +3.0%.

A major rotation out of sovereign bonds began this week due to confluence of factors. Top money managers have been talking about the rich potential short position on European bonds for some time, including dethroned bond king Bill Gross, who called German bunds “the short of a lifetime.” In an interview published on Tuesday, Doubleline’s Gundlach speculated about a possible 100x levered short bet against the German bund. The same day, the euro zone March money supply report came in hotter than expected, with M3 growth rising more than expected to +4.6%, putting it back into the ECB’s comfort zone for the first time since April 2009 (the report also said euro zone private lending returned to growth for the first time in 35 months). These factors, plus a deluge of euro-denominated corporate issuance this week and a notable imbalance between eurozone government supply (€14 billion) and redemption of existing paper (€65 billion) made for a perfect storm for bonds.

Greek PM Tsipras reshuffled his team handling bailout talks with Europe and the IMF after finance minister Varoufakis was sharply criticized for his performance in the Eurogroup negotiations last week. Deputy foreign minister Tsakalotos was tapped to replace the flamboyant Varoufakis as the main Greek negotiator. Greece’s next big hurdle is coming up quickly, with another large IMF payment due on May 6th and insufficient funds available in Athens. Both sides keep saying a deal is just around the corner, with a preliminary deal possible on Sunday, May 3rd. However Eurogroup head Dijsselbloem hinted there may in fact be a “plan B” for Greece, stating that Europe is prepared for “various outcomes” in the Greek standoff.

A confusing dust-up in the Persian Gulf roiled global markets on Tuesday. Reports emerged Tuesday morning that Iran had seized a US cargo vessel, sending indices tumbling. Within an hour, a more complete picture emerged: apparently the Iranian Revolutionary Guard seized a Marshall Islands-flagged Maersk cargo ship in the Straits of Hormuz and the ship’s distress call was answered by a US Navy destroyer. Energy futures were volatile on this news, contributing to the week’s uptrend in crude oil – WTI nearly retook the $60 handle while Brent nearly took out $67.

Apple’s outstanding second-quarter results sent the company’s shares up to all-time highs around $136, although shares gave up the gains and sank to $126 through week’s end. Apple’s results were a parade of superlatives: profits rose more than 30% y/y, it sold 61.2 million iPhones, up 40% from the year-ago period, saw a 72% gain in the number of iPhones sold in China. Apple’s cash pile rose to a record $193.5 billion (up from $178 billion last quarter), and the board expanded its share repurchase authorization to $140 billion and boosted the dividend 11%.

Three big social media names had disastrous earnings reports this week. Twitter, Yelp, and LinkedIn saw their shares decline more than 20% a piece after investors found much that disagreed with them in quarterly numbers. Twitter only added four million users, and on the earnings call, the CFO explained that an “unforeseen bug” in Twitter’s integration with Apple’s iOS 8 caused it to lose four million users (“half of the company’s actual growth,” he said). LinkedIn gave a disappointing outlook for the second quarter, weighed on by its pending purchase of online learning company Lynda.com. Yelp’s revenue guidance was also a bit weak. Note that Facebook was not immune to the social slide: shares of FB were down 4% on the week.

In other earnings, Aetna, UPS, and Merck saw strong gains on very good quarterly results. UPS gained despite missing revenue targets as net income saw healthy gains and package volume growth continued at a healthy rate. Oil majors Exxon, Chevron, and Shell saw their profits cut in half on a y/y basis but still widely topped earnings expectations, thanks to strong downstream results. Conoco saw an even steeper decline in profits, and only managed to remain profitable due to a deferred tax benefit. Refiners Valero, Marathon, and Phillips 66 crushed earnings expectations thanks to cheap oil. A notable decliner was Wynn Resorts, with earnings and revenue widely missing expectations as the Macau business saw huge declines in business.

Shares of Salesforce.com spiked 16% on Wednesday on reports it had hired bankers to field takeover inquiries or possibly fend off takeover bid after receiving an approach. Speculation immediately turned to Oracle, Microsoft, and SAP, the only three firms with the heft to take on CRM’s $49B valuation. In the latest biotech M&A frenzy, Mylan spurned a takeover offer from Teva, and in turn Perrigo rebuffed Mylan’s latest offer. The $29 billion Applied Materials/Tokyo Electron merger was called off after regulators said the remedies proposed by the two firms were not enough to replace the competition lost. France’s Cap Gemini reached a deal to buy technology consultancy iGate for $4 billion.

The March quarter earnings season hit its stride this week, and just about half of the S&P500 components have released quarterly results. Global indices remain at or near all-time highs: in Asia, a PBoC RRR cut helped neutralize fears of a Chinese selloff after last Friday’s regulatory crackdown (although there was another round of similar fears regulators would be tightening the screws), while in the US a few rounds of strong earnings propelled the Nasdaq above its March 2000 all-time closing high and kept the S&P near its March all-time highs. In Europe, Greece missed another deadline to present its European partners with reforms to unlock funding, but equity and bond markets seem to be reacting much less severely to the story. Leading manufacturing indicators in Asia showed a difficult start for Q2, as advance PMIs for China and Japan saw significant deterioration. Beyond the unending Greek drama, Europe was looking slightly better, with a 10-month high in the Germany April IFO survey and another month of expansion in the preliminary Eurozone manufacturing PMI data. For the week, the DJIA added 1.4%, the S&P500 rose 1.7% and the Nasdaq surged 3.2%.

There was next to no progress made in resolving the Greek crisis at Friday’s Eurogroup meeting and yet another deadline for Athens to unveil its reform proposals was missed. With Europe’s patience running very thin, there was talk the ECB was mulling a plan to cut off the Greek financial system from ELA support and ECB President Draghi said the council would examine the issue at a May 6th meeting. In public statements, Greek and European officials continued to talk about the need to reach a deal and Greece made a few concessions, but press reports suggested talks were very heated and Greece’s creditors were considering a “final ultimatum” for Greece, with no funds released short of a comprehensive deal. The next big payment faced by Athens is a €1.4 billion bill redemption on May 8th. EUR/USD tested lows around 1.0660 on Tuesday and Thursday then rose to its highs of the week at 1.0900 on Friday.

The March home sales reports were mixed. March US existing home sales bounced higher, improving on the flattish February numbers that had been impacted by the harsh winter weather. Sales of previously owned homes climbed to the highest level since September 2013, up 13.5% y/y. Conversely, March new home sales disappointed with a 10% decline from February’s relatively good level. Analysts highlighted that both reports are highly erratic and subject to big revisions. Two major homebuilders also reported contrasting quarterly results this week. DR Horton met expectations in its second quarter and offered slightly improved FY guidance, with orders up ~30% y/y. Pulte Homes widely missed earnings and revenue targets. Pulte’s performance was weighed down with construction delays, which impeded closings.

In big tech, Microsoft and Amazon saw impressive gains in cloud computing revenue. Amazon’s quarterly revenue rose 12% and its quarterly loss was slightly smaller than expected. Investors were happy to see the firm break out AWS metrics for the first time: AWS had revenue of $1.5 billion in the quarter, with a run rate of $5 billion a year and profits of $265 million. Microsoft’s results showed CEO Nadella’s turnaround well under way, with mobile hardware and cloud services revenue up sharply even as legacy licensing and PC revenue continued to decline. IBM saw its 12th straight quarter of revenue contraction, exacerbated by lower hardware sales and the strength of the dollar

Facebook’s results were very good across the board, with advertising revenue up 46% y/y and user metrics up double digits. The social network joined the chorus of firms complaining about the effects of the strong dollar, saying forex headwinds would be even greater in Q2 than the 7% crimp in Q1. Google’s revenue and paid clicks rose slightly less than expected, although costs were lower. Analysts had been criticizing the firm for swelling expenses over recent quarters.

Industrial names showed stress from the strength of the dollar and overseas economic weakness. Caterpillar crushed earnings expectations, however the firm warned sales and profit in each of the remaining three quarters of 2015 would be lower than the first quarter. General Motors meanwhile widely missed on earnings and revenue, with significant losses in key overseas markets. Lockheed and United Technologies both missed on revenue, although Lockheed also slightly increased its FY guidance. Boeing’s revenue missed and the backlog shrank.

Consumer names Pepsi and Procter & Gamble saw flat profits and declining revenues; PG’s revenue fell for the fifth quarter in a row. McDonalds disclosed grim first-quarter results: revenue declined 11% y/y and guest traffic was down in all major segments. Shares rose post-earnings after the firm said it would disclose a major turnaround plan soon and said it closed another 220 locations worldwide in the quarter. YUM! Brands saw lower profits and continuing drag in China, but tweaked its FY outlook slightly higher. Coke had a solid quarterly report. Airlines United Continental and Southwest reported very good results, citing lower fuel prices and growing demand.

Dow Chemical saw its earnings bulked up by asset sales, even as its revenue declined 14% y/y. Competitor 3M missed earnings expectations and cut its FY guidance. Both names warned FX negative impacts on sales would be substantial for the full year. Steel firms Nucor and Reliance Steel disclosed very strong first quarter results, with both companies widely beating earnings expectations. Executives from the two firms cited improving industry conditions, although they also warned pricing remains under pressure.

Comcast officially abandoned its $45 billion deal to acquire Time Warner Cable. The announcement does not come as much of a surprise, as the consensus emerged that after the FCC’s net neutrality gambit the deal was next to impossible. The FCC was gearing up for hearings on the merger and press reports out this week suggested that DOJ lawyers were close to a decision to recommend blocking the merger. There is no breakup fee for either firm for walking away from the deal. Charter Communications (which is controlled by Liberty Media Corp) is widely understood to be interested in making a bid for Time Warner now that Comcast is out of the way, but reports indicate that TWC would demand a higher price than the $159/share that Comcast offered.

After weeks of rumors, Teva launched a $40.1 billion offer for rival Mylan. The cash-and-stock bid is valued at $82/share, a 48.3% premium compared to Mylan’s stock price on March 10, the last trading before speculation of a link-up between the two companies. The contest won’t likely be a friendly one: just last week, Mylan said a merger with Teva would be unlikely to win antitrust approval because of “significant overlap” among the two businesses. Mylan’s first line of defense was making its own offer for Perrigo. However, Perrigo rejected the initial unsolicited offer of $205/share and then also spurned a formalized cash and stock offer on the grounds that Mylan’s stock has been inflated by the Teva bid.

The PBoC started the week off with a bang, cutting its Reserve Requirement Ratio (RRR) by 100 bps to 18.5%, which eased some of the anxiety caused by new limits placed on margin trading last week. The economic data didn’t cooperate, however. The China flash HSBC PMI registered its fourth consecutive contraction and a one year low as the headline number missed estimates. Meanwhile, Japan’s preliminary April Markit manufacturing PMI missed expectations as well, and slipped into contraction for the first time in nearly a year. Japan monthly trade data saw its first surplus in almost three years, but that was at least in part due to the crash in oil prices pushing down import values.