D&D Note (6-18-2012)
The Greek’s voted for the pro-bailout party eliminating the worse case scenario. However, now the New Democracy party needs to form a coalition, most likely with the Pasok party. If a coalition can’t be formed the country will be forced to have a third election. Not to mention that Greece will run out of money by July.
The enthusiasm that sprung in the markets following the elections was quickly abated this morning when Spanish 10-Year Note yields rose back above 7%. Its that 7% mark that signals a needed bailout. And unfortunately Italy, the third largest economy in the Eurozone, is close behind Spain in rising yields.
American markets did bounce back into the day rising off the lows of the session.
The DOW (INDU) lost 17 points, the S&P 500 (SPX) gained 3 points, and the Nasdaq (COMP) added the most with 25 points, thanks mostly to the heavily weighted Apple (AAPL).
The FOMC meets this week and many investors are hesitant to make any big bets heading into the two day meeting. Most likely we will get nothing out of the FED meeting and they will defer to the next meeting. If we do get any action out of the FED it would probably be an extension of Operation Twist (where the the FED is selling short term notes and buying long term notes).
Facebook (FB) rallied again today, in part thanks to an article in the Wall Street Journal signaling out underwriter Morgan Stanley for the IPO problems. D&D will be doing some technical chart analysis on Facebook to see if indeed we have found a bottom in share price and if a buy rating is deserved.
Oil fell today $1.11 to close at $82.81 a barrel.
Gold fell $1.00 to close at $1,627.10 a Troy ounce.
The American 10-Year Note fell pushing the yield up to 1.58%.
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