Economic Journal - Tuesday, 6/30/2015

(as of 7:00 AM PST)

 

As the quarter draws to a close stocks are in a recovery mode after yesterday's sharp declines.  In a tumultuous day not seen in years, stocks declined by about 2% causing both the Dow and the S&P 500 Index to turn negative for the year.  Still, moves were mild compared to the wild west Shanghai market, which saw a swing from a 4% decline to a close of up 5%...all in a single trading session.  There are also hints that a last minute Greek bailout compromise is in the works which has traders interested again.  Oil is also recovering from yesterday's sharp decline while gold is giving back some gains.  It is normal to see a bounce back type of day after a huge drop as witnessed on Monday but anything other than a sharp rebound might indicate weakness over the short term.  Volatility has exploded again after being very quiet for months but even that is calming down as markets seem to be returning to a normal trading pattern.

Economic Journal - Monday, 6/29/2015

(as of 7:00 AM PST)

 

Markets are plunging in China and Europe.  There is some contagion in US markets at the open but generally damage is limited although the Dow is down nearly triple digits at the start.  China's decline is especially surprising because the Chinese Central Bank added stimulus over the weekend by lowering interest rates.  Still, the Shanghai Index plunged another 3%, bringing the high flying index to a more than 20% decline this month.  In Europe it's all about the Greek tragedy.  Greek leaders have asked for a referendum vote this week to determine its continuing relationship with the Euro while Germany and France, the two key members of the Eurozone, are digging in their heels over the frivolous attitude of Greek negotiation strategies.  It could be an ugly week in global markets.  Oil is down while precious metals are up a moderate amount, likely due to safe haven buying.  The yield on US Treasuries are up with investors seeking the relative safety of the US dollar amid a risk off scenario.

Economic Journal - Friday, 6/26/2015

(As of 7:10 am PST)

US stocks inched higher to start Friday’s session as investors continued to monitor negotiations between Greece and its creditors. Negotiations around reform plans have disintegrated in recent days after optimistic progress earlier in the week. A group of Euro-zone finance leaders will meet again Saturday in an eleventh hour meeting to hopefully land on a deal before Greece has to repay 1.54 billion euros to the International Monetary Fund (IMF) on Tuesday next week. Economic data is light today but a final reading on consumer sentiment is helping to buoy stocks as sentiment rose more than expected in June. Also, helping to stabilize stocks this morning was a better than expected earnings report from Nike which sent shares rallying 4.5%. The newly-added Dow component is leading the index higher in contrast to what otherwise is a complacent market today. In Asia, stocks finished Friday’s session lower, while the Shanghai index slid more than 7% on lingering concerns that Chinese stocks are overvalued. European markets are quiet heading into a very important weekend for Greece and the Euro-zone. Gold and oil are down today while interest rates and the US dollar are higher.  

Economic Journal - Thursday, 6/25/2015

(as of 7:00 AM PST)

 

Positive economic data pulled stocks higher this morning at the start.  Consumer spending surged to its highest level in years and inflation appeared well in check.  Jobless claims were up a small amount, but well within expectations.  The drama of the Greek financial crisis continues to weigh on international markets with Europe and Asia down moderately.  Greece will continue to be the source of volatility until a deal is struck which will push the crisis off to another day.  Yesterday the markets decline accelerated as the day wore on with financial gurus chiming in that stocks are overheated and due for a correction.  Some of that analysis continues to subdue market optimism this morning.  Oil is down a small amount while precious metals are about breakeven.  It looks like a bounce back day after yesterday's fall.

Economic Journal - Wednesday, 6/24/2015

(As of 7:20 am PST)

Stocks opened to the downside Wednesday after two consecutive days of gains as news that Greece’s latest reform proposal was rejected by its creditors. European markets fell from the open and look set to finish the day with losses for the first time this week. Economic data is light once again today, however the final revision to Q1 GDP showed GDP contracting -0.2% in the first quarter. The final revision shows a smaller decline than previously forecasted reflecting higher consumer spending and a lower drop in exports compared to the initial readings. Markets seem to be ignoring the GDP report and focusing mostly on the Greece drama that continues to unfold. Asian markets finished Wednesday’s session mixed. Gold prices are slightly lower today while oil is inching higher ahead of a report on crude inventories. Interest rates are flat as is the US dollar.

Economic Journal - Tuesday, 6/23/2015

(As of 7:20 am PST)

US stocks inched higher Tuesday as investors sifted through a busy data calendar while also cheering on prospects of a Greek debt deal later this week. Stocks rose on Monday after Greek officials submitted new reform proposals to its creditors that appeared to be a positive step in the right direction after months of negotiating. European markets soared on the news Monday and are continuing to rally today on the Greece hopes as well as strong PMI and consumer confidence data throughout Europe. Speaking of data, the US calendar is full of reports today. Orders for durable goods fell 1.8% in May, more than expected, as demand for commercial aircrafts slowed. A report on US home sales showed sales for new single-family homes rose 2.2% in May to an annual rate of 546,000, hitting the fastest pace since 2008. Data in the US remains strong supporting the Fed’s path toward a rate hike later this year. In other news today, Asian stocks finished higher with shares on China’s Shanghai composite index recovering after tumbling nearly 5% earlier Tuesday. Oil is down 1% today while gold is also down slightly. Interest rates are climbing as is the US dollar.