Buy the rumor sell the news. Last night the DOW futures were up 150 points after Spain received money to sure up their banking system over the weekend, but by the end of the trading day today the DOW was down 143 points. Apple (AAPL) was one of the bright spots today rallying and staying in the green until the end of the day when the shorts came out and knocked down the stock.
Spain will receive somewhere around 100 billion Euros from the Eurozone to recapitalize their banks. While the Spanish bailout is good and a step forward, unfortunately there are quite a few more steps needed to be taken before the European sovereign debt crisis is over.
Greece votes June 17th, and markets will remain under pressure until we know wether the people of Greece vote for or against a bailout to keep them in the Eurozone.
Every year Apple has their Worldwide Developers Conference. And usually every year the market and traders choose to short the stock the day of the conference and knock it down. So it wasn’t any surprise to see the equity fall at the end of the session. Traditionally once the stock falls after the conference it becomes a good time to buy the stock, however this week anything could happen for all stocks.
China came out over the weekend with a bit of surprising data showing that they had a better-than-expected trade surplus which helped to ease the hard landing concern. Inflation for May in China slowed keeping open the door for further Chinese stimulus.
Oil fell $1.40 to close at 82.70 a barrel. Be aware that the long term support is around $75 so we could see further downward pressure on the black gold.
Real Gold, the shiny stuff, rose $5.40 to close at $1,596.80. If we see more Central Bank money printing we will surely see the commodity rise, but until there is printing it will remain in limbo.
The American 10-Year Note gained pushing the yield down to 1.60%.
The DOW (INDU) finished down -1.14% to close at 12,411.23. The Nasdaq (COMP) was down -1.70% to close at 2,809.73. And the S&P 500 (SPX) was down -1.26% to close at 1,308.93.
Don’t be surprised to see the S&P 500 test 1,275 this week ahead of the Greek elections.
This week we will be highlighting the the different components of D&D’s “Comprehensive Long-Term American Deficit Solution.”
Today we will briefly discuss the “Long-Term Deficit Reduction Plan Component.”
The key element of this component is to create a National Sales Tax. This would allow the government to capture lost revenue from the underground economy and thus help to reduce the long-term deficit.
“The National Sales Tax would be implemented as follows: Years 1 through 4 the sales tax rate would be 3%. Years 5 through 9 the sales tax rate would be 4%. Years 10 and beyond the sales tax rate would be 5%. All proceeds from the National Sales Tax would be used to reduce the long-term deficit… The National Sales Tax would be collected by the States and remitted to the Federal Government less a collection fee of .25%, which would be retained by the states.” excerpt from the paper “Comprehensive Long-Term American Deficit Solution,” by Del Lienemann, Jr.
Tomorrow we will briefly discuss the “Annual Budget Deficit Reduction Plan Component.”