Courtesy of John Nyaradi.
Wall Street disses mixed Spanish, Italian, and German bond sales as the European sovereign debt crisis continues
Wall Street and investors are not buying mixed Spanish, German, and Italian bond sales today as major indexes have dropped about .3% so far on average today.
The closely watched Spanish Bond auction (NYSEARCA:EWP) this morning went better than expected, with Spanish bond yields dropping to 5.82%, a 17 basis point drop. Although the pain in Spain continues to fester, Spanish bond yields have yet to reach the psychological 7% panic button. Investors were not pleased however that the rate of bad Spanish loans had increased 8.16% from last year. Again, no more surprising news here except for the fact that Spain has not sunk quite yet.
The Italians did not help markets today either, as Italian bond yields (NYSEARCA:EWI) stayed flat at 5.48%. Although Italian bond yields managed to continue breathing, investors did not appreciate the news regarding a possible Italian economic contraction for 2013 alongside the fact (realization?) that Italy will not balance its budget for 2013. Again, no surprises here, as Spain, Italy and Portugal have remained on the edge ever since Greece decided to nearly step off of it.
Germany (NYSEARCA:EWG) meanwhile had a decent day in its bond auctions, as German yields for 2 year notes sold at a record rate of .14%. It appears that investors feel Germany, at least for now, is the safety net of the European debt scandal. As always, Germany runs the show in Europe, and that fact continues to hold throughout the crisis.
Wall Street does not like any of this news one bit, as the SPDR S&P 500 ETF (NYSEARCA:SPY) has declined over .33% today so far, while the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) has declined .4% so far today.
Bottom Line: It should be no surprise that Wall Street does not like the mixed bond and loan information emerging from the ailing European continent. What is surprising is that the Euro (say Spain and Italy) has not collapsed yet under incredible pressure and against amazing odds.
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