Daily Market Update – July 7, 2015 (Close)
WIth dueling bad news over the weekend from Greece and China and seeing the depths to which the futures had traded on Sunday evening, there’s not much doubt that we got off easily yesterday.
While there really wasn’t any good news to account for yesterday’s very mild decline, there wasn’t any additional bad news to serve as fuel.
It’s hard to believe, given the constellation of events, that the market was even briefly positive nearly 90 minutes after the open.
That’s certainly a positive, but even more positive may be the fact that a couple of attempts to sell off the market again in the afternoon fizzled out.
When you start the morning with a loss that’s expected to be 200 points on the DJIA and after a recovery into positive territory starts to re-approach a triple digit loss, you begin to have a sinking feeling that the market had only been fooling itself and was taking us for a ride.
Monday of last week started off very badly and then recovered, only to see the bottom then fall out later in the afternoon and take the DJIA to a 350 point slide. There had to be a small part of the brain that kept thinking that yesterday might be the same.
But it wasn’t.
This morning the futures wee trading in a much more sedate fashion, just as the world seems to have calmed down.
Not that the problems are gone, but at least it appears as if Greece and The EU may at start speaking to one another in good faith and maybe bring some resolution to their joint crisis.
The issue in China, however, swamps that of Greece in size and importance to our stock and bond markets and we really have no template that might be able to describe what to expect.
The use of margin borrowing is rampant in China and that turns investing into speculation.
Sometimes speculation ends well, but when so many are speculating in the same way, it’s hard to imagine a good outcome for all.
While China is trying to manipulate the market through various measures, including a cessation of all IPOs, there are very few examples of massive government intervention that can turn a ship on a dime when it’s going off course.
Unlike a Greek default, which wouldn’t have very much impact on our markets, other than perhaps to drive some European investment funds to our shores on the positive side and strengthen the USD on the negative side, China is the real deal.
But sedate or otherwise, those pre-opening futures shed no light at all on what today would be like as the market traded in a range of more than 300 points.
Importantly, the low side, down more than 200 points happened first. The upswing, that saw a triple digit gain until the final moments of trading still acquitted the market nicely.
With a couple of new positions opened yesterday an
Sometimes, what you want to do and what you actually do can be two very different things. When that’s the case, the only thing that you can hope for is that there won’t be a period of regret to follow.
At least today didn’t offer the regret.
We’ll see if we can add another day of no negative news to add to today’s nice turnaround.