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Daily Market Update – June 23, 2015 (Close)
There was a lot of optimism yesterday coming from Europe, ostensibly because people believed that some sort of agreement, maybe a very short term one, was at hand regarding the Greek financial crisis. At this point, with so many back and forth stories and with the clock ticking away toward a deadline imposed by Christine Legarde, I’m not even sure where the story currently resides. Today did nothing to really clarify things, but at least I know enough to know that nothing big happened today. Judging by the pre-open futures this morning, either nothing had changed over-night, or the US stock market is ready to de-couple and move forward. As it turns out nothing did happen, but the US market just took the opportunity to do nothing. The pre-open futures were mildly higher and may have even been able to continue yesterday’s very nice session, but not giving up anything is good too.. Despite having given up some of those gains the previous day, it was still a very nice day and today didn’t squander any of that good spirit. With it looking just a few days ago as if we might be heading into another of those mini-corrections, or even more, the market wouldn’t go beyond a 3% decline. Even those 5% mini-corrections that we had become accustomed to over the past 3 years aren’t able to coalesce lately. The market was set to begin the day less than 1% below its all time highs, with the NASDAQ having surpassed those highs. A curveball from Europe could upset that picture a little, but more and more there is talk about how inconsequential the Greek economy really is and how the EU would be able to withsatnd the departure of Greece from its grand experiment. What recourse Greece may have is doubtful, as its new government hasn’t done much to move it forward and has only tried playing various sides against one another. In the meantime, regardless of outcome, it will be time to move on. Unlike the situation of a few years ago, with Greece again at center stage, there’s not the same kind of fear that a failure in Greece would lead to some kind of domino effect across more of the EU. So for us it will just be another story that disappears into the ether. It would, of course, have been very nice if some of yesterday’s strength could have continued today as we tried to get out from under the Greek story and look forward to the next earnings season or at least get over any concerns that an interest rate increase will come as early as the end of next month. With yesterday’s Existing Home Sales up a very strong 5% and with the price of a median home back up to the high levels last seen at the peak in 2007, there was going to be extra attention paid to New Home Sales data released today, in addition to GDP data tomorrow and Personal Income and Outlays on Thursday. In essence, it’s a busy week that may better put together a picture of how much and how fast the economy may be growing, especially on the consumer side of the equation. Too much good news, while good, could be bad in terms of expectations for when that interest rate increase finally arrives. For today, I didn’t expect to be parting with any cash, but retained the hope that I could finally create some with a sale or two of option contracts to help give some meaning to the week. I tried, but there were no takers. Maybe tomorrow. |
