Ger30, UK100 and SP500 are CFD’s, written over the Dax30, Footsie100 and S&P500 Index futures:
European stocks rose from an almost four-month low as Swiss equities rallied. Greek shares tumbled amid the country’s debt impasse. The situation in Greece continues to haunt equity markets. After negotiations between this country and its creditors were interrupted on Sunday, things have become considerably more tense. Yesterday, Tsipras Prime Minister said in Athens that his country will not stoop to their foreign creditors, referring to the condition imposed by its partners to reform the pension system, one of the most expensive in the eurozone. The position of Prime Minister was supported by almost all the members of his party. The European Commissioner Gunther Oettinger mentioned that before the Greek position the European Commission needs to have a plan B, or a contingency plan in case of default. Today, the Greek Prime Minister Tsipras had scheduled a three-day visit to Russia but given the urgency of the situation is possible that this trip is shortened. Yesterday, the Athens Executive had an emergency meeting to discuss the strategy for the coming days and the for Thursday meeting of the Eurogroup. In this context, the nervousness will continue to score investor sentiment. In recent days there has a widespread but orderly sale of Italian debt, Spanish and Portuguese. For example, Italian 10Year yields rose from 1.28% in early April to 2.40% (Current). In the same period, the Spanish yields of the same duration increased from 1.20% to 2.47% and the Portuguese from 1.67% to 3.28%. This increase in yields has been sustained but without reaching extreme nervousness, which is essentially due to the action of the ECB. The publication of the Zew index, which measures the sentiment of German economic operators may have a limited impact in today’s session. The Zew should have been negatively affected by the uncertainty in Greece and the increased volatility in Greece. Still, the Zew continue in substantially higher levels than the historical average.
US markets closed with modest losses. The European nervousness about Greece have been negatively affecting, although to a lesser extent, American investors. But unlike Europe, where the upward movement that marked this year has been compromised by uncertainty in Greece, US indices continue to fluctuate since April within a fairly wide range, in the case of S & P corresponds to 2067-2134. The fact that the major indexes are crossing a consolidation period does not invalidate the upward movement of recent months. During yesterday’s session, pressured titles were not the most sensitive to Greece but those with a higher Beta. The Beta measures the sensitivity of a bond to the movement of the market as a whole. Yesterday on Wall Street, the most vulnerable were biotechnology stocks and the ones related to social networks, which generally have a Beta well above the market. At the macroeconomic level, industrial production decreased 0.20% in May, continuing the negative trend of 2015. This decrease bucked economists’ forecasts of 0.30%. The downward trend in industrial production is mostly explained by oil production break. Even with the oil recovery, American oil production has to adjust to the new paradigm of the oil market where the price of crude should keep out of 100 USD / barrel, a level that marked the recent years. Housing Market Index in June recorded a strong increase from 54.0 to 59.0, comfortably beating the consensus of 55.0. The housing market has been one of the sectors that has shown greater resilience to the negative effects from the GDP in Q1. Today Greece should dominate the attention of investors but at the end of the session is expected a decrease in the volume justified by the expectation of investors in relation to the Fed meeting tomorrow. The situation of Greece and the Fed meeting tomorrow shall be the main events of the week.