Courtesy of John Nyaradi
It was a quiet day for ETFs and stocks in world markets as most exchange traded funds recovered recent losses amid reduced tensions in Europe.
Incredibly, Japan’s intent to buy European bonds was the catalyst for the more positive atmosphere in Europe, and as the title of this article suggests, this is truly the sick man trying to save the terminally ill.
The soap opera in Europe, like every soap opera, is getting boring. It starts with rising interest rates and credit default swap rates which is met by the concerned government proclaiming that they’re totally solvent and will never need a bailout which ends up to be exactly what happens.
Portugal will be selling 10 year notes on Wednesday and its ten year debt has stood largely above 7% in recent days. When rates in Greece and Ireland hit these levels, bailouts came within days in both cases. Italy and Spain go to the bond trough this week, as well, and so it will be an active few days in Europe.
Bottom line; get ready for an ECB bailout of Portugal coming soon, possibly this week.
At home, we move into earnings season, Illinois is moving towards an income tax increase to deal with its budget deficit while Governor Brown in California begins to sell his austerity plans.
Daily Moves for Major ETFs:
Dow Jones Industrials: (NYSEArca: DIA) +0.30%
Russell 2000: (NYSEArca: IWM) -0.47%
NASDAQ 100: (NasdaqGM: QQQQ) +0.41%
S&P 500 Index: (NYSEArca: SPY) +0.37%
MSCI Emerging Markets:(NYSEArca: EEM) +1.06%
MSCI China (NYSEArca: FXI) +1.13%
Gold (NYSEArca: GLD) +0.59%
7-10 Year Treasuries: (NYSEArca: IEF) -0.39%
20+ Year Treasuries: (NYSEArca: TLT) -0.56%
VIX -3.71%
U.S. Dollar (NYSE:Arca: (NYSE:Arca: UUP) -0.08%
The major indexes remain overvalued and overbought on a technical and fundamental basis and so Wall Street Sector Selector remains in “Yellow Flag” status, expecting choppy to lower prices ahead.
Being an Oregonian, I, of course, watched the BCS Championship Game last night and was disappointed to see the Ducks come up short, but you just had to love those yellow shoes.
Best,
John
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