Not rolling over: China GDP rose 9.5 percent in Q2, better than the 9.3 percent gain that was expected...the Shanghai Index is up 1.5 percent. This will give the Chinese additional resolve to raise rates.
More caution on chips: first it was Microchip Tech (MCHP), then Novellus (NVLS), then Applied Materials (AMAT)...now Netherlands-based ASML (ASML), which makes machines used to produce computer chips, is the latest to disappoint. Bookings were down 1 percent sequentially, but most importantly orders for Q3 are down 40 percent. Once again, this is an indication of weakness in cell phones, PCs, and consumer products, because the customer who buy their machines (foundries that make chips, for the most part) are worried about what they hear from their customers.
1) Bill Gross buying Italian debt! That's according to the fund's head of fixed income portfolio management. The selloff was exaggerated, according to the FT. They're also adding to U.S. Treasurys.
2) Ben Bernanke will be on Capitol Hill today, but he will probably spend most of his time trying to convince Congress to raise the debt ceiling. He'll also spend time defending QE2 (it was successfull because it ended a deflationary spiral, he will argue, but he will surely be pressed on why it did not help employment) and will likely distance himself from doing QE3 any time soon. Indeed, QE2 might have been a little too successful in quashing deflation: PPI is out tomorrow for June, CPI for Friday. Core data (including food and energy) have seen notable spikes this year; the question is whether it will be transitory or not.