(As of 7:50 am pacific)
The news of the new democracy or pro-austerity party
winning in Greece was a positive, but already factored into the market. The market opened down, but is drifting
higher of some mild positive economic news.
One surprising element of the Greek election was the effect on
volatility, which was down significantly this morning. Oil and gold are down, probably because the
dollar is higher. Interest rates are
stable. One interesting and important
thing that seems to have occurred as a result of Greek election uncertainty is
that Central Banks have come together and recognized that coordinated efforts
and even coordinated statements can have a preemptive effect on reactions of
the markets to negative events. I would
expect to see more preemptive statements and actions in the future, which
should dampen volatility brought on by European financial problems.
