Submitted by Mark Hanna
Courtesy of MarketMontage. View original post here.
Feels like Groundhog Day around here, as I’ve written this headline so many times the past two years. While there was drama on the streets yesterday, it seemed a foregone conclusion the Greeks would agree to a new round of bailouts (for continental banks). Practically, aside from Friday, the market has completely ignored Greece until Friday. Futures are now back to Thursday’s levels, so effectively it is as if Friday never happened.
- Germany and the European Commission welcomed Greek approval of the austerity steps demanded for a financial lifeline, suggesting euro finance chiefs will pull Greece back from the brink when they meet in two days.
- The Greek parliament’s backing “is a crucial step forward toward the adoption of the second program,” EU Economic and Monetary Affairs Commissioner Olli Rehn told reporters in Brussels today. “I’m confident that the other conditions, including for instance the identification of the concrete measures of 325 million euros ($430 billion), will be completed by the next meeting” of finance ministers.
- Euro-area finance chiefs will convene in Brussels on Feb. 15 for their second extraordinary meeting on Greece in a week. Frustrated after two years of missed budget targets, ministers declined to ratify the 130 billion-euro package in a special session on Feb. 9, demanding that Greek officials put their verbal commitments into law.
Technically, Friday worked off a teeny bit of a massively overbought condition but not much. The major indexes did not even attempt to truly fill the gap from the employment report a week ago Friday showing a lot of strength. To the upside the market is working through a ton of resistance from last year’s highs, and to the downside it’s been mostly a ride along the 10 day moving average (extreme strength for an index), with one test of the 20 day. Until at least the 20 day is broken, it is really difficult to make any concentrated bets to the downside.
We still have some earnings reports to get through, but generally these are less market moving type of names and the lion’s share of impactful reports will be done by the end of the week. On the economic front, retail sales Tuesday, NY Fed Empire Mfg Wednesday, housing starts and Philly Fed survey Thursday, along with 2 inflation reports no one cares about anymore since Bernanke has said free money for years on end.
To finish off the weekly preview, please see the Barron’s cover this weekend:
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Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund’s holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog
