Courtesy of John Nyaradi.
Confusion out of Europe (NYSEARCA:EFA) regarding Greece and a surprise interest rate cut roil world markets.
Today the Greeke referendum was “off the table” and U.S. markets rallied in response with the tech sector (NYSEARCA:QQQ) gaining +2.4% and energy (NYSEARCA:USO) climbing +1.8%.
New European Central Bank President Draghi started off with a bang by lowering interest rates for the first time in two years but the bond market didn’t share in the celebration as Italian 10 year bonds (NYSEARCA:EWI) hit a Euro era high of 6.4% and Greek 10 years hit 31%.
But gold (NYSEARCA:GLD) liked the news and registered a 1.6% gain to a six year high and the G20 continued their dramatic meeting in Cannes.
The economy showed modest signs of improvement with weekly unemployment dropping below 400,000 and a rise in factory orders.
Tomorrow brings the all important Non Farm Payrolls and Unemployment reports.
Bottom line: From both a technical and fundamental perspective, the U.S. stock market wants to go up but Greece and Europe, particularly Italy’s $1.9 Trillion in debt remain significant potential potholes.
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