💲US Factory Orders Contract for Second Month in a Row

. One of the key lessons of investing is that divergences are unhealthy—and will eventually converge, likely in the most painful way. For the past several years, for instance, real estate prices in the supply-crunched Bay Area have been moving upwards by double-digit levels.
Good morning. One of the key lessons of investing is that divergences are unhealthy—and will eventually converge, likely in the most painful way. For the past several years, for instance, real estate prices in the supply-crunched Bay Area have been moving upwards by double-digit levels.

With all the Silicon Valley IPO's this year, capital would seem to be flowing into the region with a greater vigor than ever. However, real estate prices have now slowed—with the year-over-year change in median sale price now dropping. Considering how elevated real estate prices in the area got in the first place, the size of the necessary pullback to reach equilibrium is huge—or even more wealth will need to flow in to the region.

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MARKETS
DOW 26,966.00 +0.67%  
S&P 2,995.82 +0.77%  
NASDAQ 8,170.23 +0.75%  
*As of market close
Stocks quietly rallied Wednesday, ahead of an early close before Independence Day. The Dow and S&P 500 closed at record highs.
 
Gold was the big winner for the day, up nearly 1 percent, and crude oil hung on to $56 despite a lower-than-expected decline in inventories.

Today's TOP TIPS
US Factory Orders Contract for Second Month in a Row

Slight decline tied to drops in defense and Boeing orders.
United States factory orders fell for a second month in a row, declining 0.7 percent month-over-month in May. This follows a 1.2 percent decline in April.

Year-over-year growth is also down 1.2 percent, the lowest level of orders since August 2016.

The largest factor in the drop was a decline in defense spending and non-defense aircraft spending.

» FULL STORY

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Tesla Motors Beats Delivery Goals
Deliveries beat expectations on Model 3 sales.
In the second quarter of 2019, Tesla Motors managed to deliver a record number of vehicles, surprising most analysts. This allowed shares to rally on Wednesday.

Overall, the company beat estimates by about 10 percent, and Model 3 deliveries surprised to the upside. Tesla also noted an improvement in its logistics and delivery operations, which helped meet the delivery totals and should drive down manufacturing costs per car.

» FULL STORY

Insider Activity: The Kroger Co. (KR)
First insider buy at the grocery chain in two years.
With so much conflicting economic data, investors may be looking for defensive investments. Corporate insider buying in the space is rare, which makes the recent insider buy at grocery chain The Kroger Co. (KR) so interesting.

On July 2nd, director Ronald Sargent bought 5,000 shares, shelling out about $108,000 to add to his stake in the company. All told, he now owns just under 95,000 shares. This is the first insider buy in shares since July 2017.

» FULL STORY

Unusual Options Activity: General Electric (GE)
Big put option bet indicates decline in shares ahead.
Shares of General Electric (GE) could be moving down over the summer.

That's based on an unusual bet: a surge in trading on the September $12 put options. Why is this unusual? Because shares are at $10.63, making the trade already in-the-money.

There are a few reasons for this kind of trade. First, being in-the-money, the option should move down penny-for-penny with shares.

» FULL STORY

IN OTHER NEWS
  Former Chrysler CEO Lee Iacocca passes away at 94.  
  Expectations are pretty low for earnings season, says Credit Suisse.  
  Traders bet that Christine Lagard, nominated to lead the European Central Bank, will follow an easy money policy.  
  In a potential danger to the oil market, Iran says it will enrich uranium beyond nuclear deal limits.  
  While China mulls tariffs on rare earths, the United States has one operating mine for the 17 essential metals in California.  
  Also in California, Waymo is now allowed to transport passengers in its self-driving vehicles.  
  In acquisition news, KKR confirms it bought software company Corel for $1 Billion.  
  In tech, states are moving towards changing laws to balance drone use and privacy.  
  The recent bitcoin rally led to a surge in trading on cryptocurrency futures as well.  
  Finally, Boeing sets aside $100 million for 737 Max families and communities.  

S&P 500 MOVERS
TOP
SYMC 13.575%  
JEF 6.42%  
K 6.303%  
CAG 5.962%  
LB 4.2%  
BOTTOM
EA 4.488%  
RCL 2.1%  
NCLH 1.805%  
LRCX 1.245%  
FCX 1.223%  

Top Rated Technology Stocks
1. EGAN: eGain Communications Corp. 97
2. AMSC: American Superconductor Corporation 94
3. NICE: NICE-Systems Limited 92
4. HMNY: Helios and Matheson Analytics Inc 92
5. NXPI: NXP Semiconductors N.V. 82

Quote of the Day
The resurgence of IPOs is no flash in the pan, no signal of a bubble re-inflated. Instead, it reflects a shift in the way that investors and entrepreneurs approach company creation, the rich supply of mature companies that have yet to come public, and investors' insatiable hunger for growth stories
- Barron's on the IPO boom this year

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