(As of 7:15 am PST - Monday, 2/4/2013)
Europe is back in the
headlines this morning dragging stocks off their multi-year highs from last
week. Political uncertainty in Spain and
Italy has sent jitters into the markets.
Spanish Prime Minister Mariano Rajoy is caught in a corruption scandal
with allegations that he and members of his party received ‘secret
payments’. In Italy, popularity is
growing for former PM Berlusconi, with current reforms at risk if he is
elected. Yields on Spanish and Italian
bonds have been pushed higher as the already unstable economy’s deal with new
political risks. European markets were
sent spiraling, and US markets so far are following suit. Many analysts have projected a correction in
US markets would be healthy for valuations, as stocks have had their best
January start in nearly 20 years. The S&P500
is up over 6% this year. Generally economic
reports have been positive while today’s selloff could be investors taking
profits. With earnings season winding
down, expect the focus to shift to the budget wrangling and sequestration set
to kick in on March 1st.
