June 18th, 2012
in Gary's blogging
Closing Market Commentary For 06-18-2012
The SP500 ended the day 2 points higher than Friday not what I would call a rousing bull run. In fact it illustrates the weakness that prevails throughout the Global Community and the Greek drama was just an overblown event. Today was another day of relaxation, like Friday, just before the seriousness really begins in earnest.
You can call this the 'Summer Rally' if you find words difficult to describe this phenomena of a market rising on the Greek problem that hasn't even begun yet, poor US financial data, massive European unemployment, French Banks near insolvency and Spanish banks closing down private accounts without warning. There are accounts of banks using private accounts for their own use. Follow up:
It is not very pretty out there and it is going to get a lot worse particularly if there is a joint action against the Iranian regime. Which, by the way, the next 2 nights would be a very good time to plan an attack because tomorrow will be a totally moonless night.
Meanwhile the markets closed mixed or slightly above Fridays numbers and very low volume.
Don't expect any solutions from the international junketing in Mexico, writes Jeremy Warner:
“Few G20 meetings are anything other than a waste of space, but this one more so than most, for the latest slowdown in the world economy is something that can only be convincingly dealt with by Europe. And as we already know, Europe is seemingly quite incapable of sorting out the hopeless muddle it has inflicted on itself.
Angela Merkel, the German Chancellor, has welcomed the outcome of the Greek election, but it must have been through gritted teeth. In fact, New Democracy's narrow victory is the worst possible outcome for Berlin. What a relief that Greece has voted to remain in the euro, German policymakers profess in public. Not, they mutter as an aside.
There's virtually no politician in Greece who thinks the austerity of the bailout programme a price worth paying for membership of the euro; they all want to renegotiate the terms to some degree.
The choice made by Greeks was therefore not one of in or out of the euro, but between the outright confrontation pledged by the radical left and the guerrilla warfare of renegotiation promised by the New Democracy leader, Antonis Samaras. This is scarcely going to help matters from a German perspective.”
COMMON GROUND: Greece's two pro-bailout parties appeared to be moving toward forming a coalition government after a bruising election watched closely because of its potential impact on the world economy.
THE BACKGROUND: Sunday's vote _ the second national election in six weeks _ again left no party with enough votes to form a government on its own. Antonis Samaras' conservative New Democracy party won the most seats _129 _ in parliament and was leading efforts to forge a coalition.
THE DISCUSSIONS: Negotiations were pushed to a second day after the head of the socialist party, which came in third with 33 seats in the balloting, insisted on a broad partnership. A coalition needs 151 seats to form a government.
The 500 at the close, up 1.94. Notice it closed BELOW the 50 day MA.
The DOW at the close, own 25.35. Notice the close was BELOW the 50 day MA.
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Written by Gary