Courtesy of John Nyaradi.
A surprise decision by Greece and slowing ISM report panic global markets.
Major stock indexes (AMEX:SPY) declined today as Greek shocked the world by announcing a referendum on its austerity program which threw last week’s European agreement on the country’s debt into total disarray.
Markets reacted poorly with the yield on Greece’s 2 year note climbing north of 80% and the panic in the streets spread as Italy’s 10 Year Note climbed to a whopping 6.3%.
At home, the ISM report declined to 50.8 for October, missing expectations and indicating weakness in the all important manufacturing sector (AMEX:DIA)
The U.S. Dollar (AMEX:UUP) gained in a flight to safety while the energy sector declined (AMEX:XLE) more than 7% on fears of a global slowdown in economic activity and energy demand.
Gold (AMEX:GLD) tumbled in response to the news and the Federal Reserve starts its widely watched two day meeting as market watchers wonder what the Fed’s next move might be.
Bottom line: We have been saying for weeks that Greece and Europe are the wild cards in today’s environment. A settlement of this uncertainty will likely lead to a year end rally while ongoing chaos can only bode ill for global equities markets.
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