Premarket Commentary For 06-20-2012
Stock Futures Flat Ahead of Fed Decision U.S. stock futures are trading sideways Wednesday as the markets pause awaiting the outcome of the latest Federal Reserve meeting. The SP500 was up 1354 and by 9 fell to 1351. Opening market will most likely trend / melt higher towards the opening of the 2 day Fed meeting starting at 12:30. Expect the markets to be quiet and low volume for the first part of the morning.
spygun Richard Ruzyllo Greece: So it looks as if Venizelos will be back in Government. Once again, the Greek voters have rearranged the deckchairs on the Titanic.
Greece looks to be squaring up for a battle of wills with its EU and IMF paymasters. Alex Spillius sends this from Athens:
Greece to wage ‘major battle’ at EU summit to revise bailout: socialist leader Evangelos Venizelos. Some truth to that, but more bluster I suspect.
But, in a stark sign of the struggles faced by Greeks living with the repercussions of rising unemployment and crippling social cuts, thousands have been queuing for food handouts in Athens.
While Greece sorts out its government, Nicholas Spiro at Spiro Strategy has cautioned that it is merely a “distraction from the deep-seated problems facing the country and the eurozone in the coming weeks and months”:
If Greece itself is a sideshow, then the new government, provided it is formed, is of little consequence. Indeed there is a significant risk that a coalition comprised of figures from Greece’s discredited establishment may even exacerbate matters.
The only “winner” in Sunday’s election is Mr Tsipras. Not only has he won the argument that changing the terms of the bail-out agreement does not in itself equate to Greece’s repudiation of its membership of the eurozone, he’s now in the political driving seat as a popular leader of the opposition.
Provided it is formed, the New Democracy-led cabinet will be a weak and distrusted administration which will have to drive a hard bargain with the eurozone if it wants to remain in office for longer than a few months.
We could get a “sell the news” scenario if they Fed sticks with their previous comments. We could also get a mini blow off top. The S&P is, after all, up almost 100 point this month and has yet to put in back-to-back down days. It’s due for a rest.
Spanish 10-year notes again hit a 7% yield and then pulled back some. They also had to pay 5.07% for 12-month treasuries and 5.11% for 18-month paper. These shorter term debt yields are records are not sustainable. So much for that $125 billion injection into the banking system calming things down and giving investors confidence.
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Written by Gary
