Down but it’s understandable
by Peter Switzer
Wall Street was down and the failure of the Greeks to fix up their debt problems was the biggest negative but the market sell-off wasn’t significant. I think that says something and given the lack of really good news, it makes perfect sense for smart market players to take some profit off the table given the fact that the US stock market is up around 20 per cent since October.
Wall Street overnight
The Dow finished 33.07 points, or 0.26 per cent, lower to 12,675.75 while the S&P 500 lost 1.35 points, or 0.1 per cent, to 1314.65.
Reports say eurozone officials rejected the deal from private bondholders to Greece.
Frankly, I think we’re in the middle of a game of ducks and drakes with the EU and Greece trying to get the best deal while the bondholders are trying to minimise their inevitable losses.
Meanwhile, the IMF is going, cap in hand, to its stronger members trying to push their support to the Fund up by US$500 billion. The IMF will be in the forefront of helping the eurozone overcome their debt problems and it will help reduce the depth and the length of Europe’s inevitable recession.
The US Fed’s interest rate committee is meeting but you shouldn’t expect any big news here as the US economy is steadily improving and doesn’t need a QE3 injection of money. This will be kept up the Fed’s sleeve in case the EU’s recession is worse than expected and starts hurting the US recovery.
Of course Europe remains the most likely source of bad news, but later this week the Yanks should have some positive news on the economic front with durable goods orders, new home sales, leading indicators and GDP all coming out.
Locally we get the latest inflation figures, which could have a big bearing on interest rate decisions, and so this will be a big figure for our stock market and currency today.
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Published on: Wednesday, January 25, 2012blog comments powered by Disqus