Asian markets traded mostly higher, as the region rebounded from Monday’s slide. The Nikkei gained .7% to 9182, the Kospi rose .5% to 1967, and the ASX 200 edged up .3%. In greater China, markets closed lower, as he Hang Seng slipped .3% to 20485, and the Shanghai Composite eased .1% to 2449, snapping a 4-day winning streak.
The newly elected leftist leader of Greece, Alexis Tsipras rejected the terms of the international Greek bailout, raising the likelihood the heavily indebted country will be unable to raise further capital from the European bailout funds. European markets sank, as the CAC40 tumbled 2.8%, the DAX slumped 1.9%, and the FTSE fell 1.8%. In Greece, the Athens General Index dropped 3.6% to 620.52, its lowest level since 1992, extending Monday’s steep 7% drop.
US stocks closed down, but fared much better than their European peers. The Dow had dropped as much as 198 points in the early morning, but mostly recovered to close down 76 points to 12932. The S&P 500 and Nasdaq both shed .4%.
Currencies
The drop in metals pressured the Australian dollar, which fell .7% to 1.0114, due to its position as a major metal exporter. The euro and Swiss franc both declined .6%, and the Canadian dollar slipped .3% to .9985. The pound and yen both closed up fractionally.
Economic Outlook
The possibility of a Greek default may become a reality if the newly elected government can form a coalition, and the markets will be very sensitive to the ongoing political developments.
Dow Drops For 6th Straight Day On European Debt Worries
EquitiesAsian markets slumped on Wednesday, as fears over Greece’s political fate spooked investors. The Nikkei dropped 1.5% to 9045, while the Kospi and ASX 200 both slumped .9%. China’s Shanghai Composite sank 1.7%, and the Hang Seng shed .8%, as Chinese oil companies fell sharply due to the drop in oil.
European banks tanked, dropping 3.3%, although the major European indexes closed mixed. The FTSE fell .4%, the CAC40 slipped .2%, while the DAX gained .5%.
US stocks closed lower, but once again managed to erase most of their early losses. The Dow fell 97 points to 12835, extending its losing streak to 6 days. The Nasdaq fell .4% to 2935, and the S&P 500 skidded .7% to 1355.
Dow Continues To Slide
Macy’s fell 3.7% despite reporting earnings which beat estimates, after the company failed to raise its full-year profit forecast.
Currencies
The euro fell below 1.30 to 1.2941, down .5% as mounting concerns over Greece and Spain continue to pressure the single-currency. The Swiss franc also declined .5% to 1.0776, continuing to move in lock-step with the euro. The pound eased .1% to 1.6141, the Australian dollar fell .6% to 1.0056, and the Canadian dollar slipped .2% to 1.0013, crossing below parity. Bucking the downtrend, the yen edged up .3% to 79.62.
Economic Outlook
A report released last Wednesday suggests Spain will need another $45 billion to aid its banking industry, implying another bailout will be needed.
Europe Gains On Greek Coalition Hopes
EquitiesDisappointing trade data weighed on Asian markets on Thursday, as imports grew much less than expected. The Nikkei declined .4% to 9010, the Kospi slid .3%, and the Hang Seng dropped .5% to 20227. Ironically, the Shanghai Composite inched up .1%, but the trade data limited gains. Australia’s ASX 200 advanced .5% following a report that showed unemployment unexpectedly fell below 5%.
European markets closed higher, recovering from earlier losses, as rumors of a coalition deal in Greece helped ease anxiety. The DAX climbed .7% to 6518, the CAC40 rose .4%, and the FTSE gained .3%. Banks rallied 4.2%, rebounding after Wednesday’s 3.3% loss.
In the US, the Dow rose 20 points to 12855, snapping a 6-day losing streak. The S&P 500 gained .3% to 1358, while the Nasdaq closed down 1 point to 2934.
Dow Snaps Losing Streak, Rising 20 Points
Cisco tumbled 10.5% to 16.81 after issuing disappointing guidance, even though earning beat expectations. Juniper fell 4.9% and Salesforce.com tumbled 9.1%, as fears of a slowdown hit the sector.
Currencies
The currency markets traded in a narrow range on Thursday. The euro, Swiss franc, Britishpound, and Canadian dollar all edged up .1%. The Australian dollar climbed .6%, lifted by upbeat employment data. The yen dropped .4% to 79.99.
Economic Outlook
Weekly unemployment claims improved by 1K to 367K, better than the 371K forecast. The US trade deficit widened to $51.8B, blowing past estimates of $49.8B, jumping $6.4B over the last month. Import prices fell .5%, more than the .1% forecast.
China’s Factory Output Way Below Estimates
EquitiesAsian markets declined on Friday as a huge hedging loss by JPMorgan shook up investors. The Nikkei dropped .6% to 8953, as Sony fell 6.4% after reporting la large loss, although Nikon jumped 8.6% on earnings which exceeded forecasts. In China, factory output grew much slower than forecast, while inflation data was in line with estimates. The Shanghai Composite declined .6%, and the Hang Seng sank 1.3% to 19964, down 5.3% for the week. The Kospi fell 1.4% to 1917, the ASX eased .2%.
An afternoon rally lifted European markets, thanks to upbeat consumer confidence data from the US. The DAX rallied 1%, the FTSE climbed .6%, and the CAC40 settled flat. Bucking the uptrend, Greece’s main index tanked 4.5%, after the parliament was unable to form a coalition.
US stocks settled mixed, surrendering earlier gains. The Dow declined 34 points to 12821, the S&P 500 dropped .3% to 1353, while the Nasdaq closed flat.
Dow Gives Up Early Gains
JP Morgan plunged 9.3% to 36.96 after revealing that it had lost more than $2 billion in a failed hedging strategy. The news pulled down the financial sector, with Citigroup and Morgn Stanley down 4.2%, while Goldman Sachs dropped 3.9%.
Currencies
The dollar traded moderately higher against global currencies, amid concerns of a China slowdown. The pound fell .4% to 1.6068, and the Australian dollar slipped .3% to 1.0024. The euro and Swiss franc both eased .1%, and the yen closed down 4 pips to 79.93. The Canadian dollar managed a gain of .2% to 1.0010, following the release of upbeat employment data.
Economic Outlook
Consumer sentiment exceeded forecasts, climbing to 77.8 from 76.4, while PPI slipped .2%. Analysts had expected both figures to remain flat.
Stocks Drop As Eurozone Fears Escalate
EquitiesAsian markets closed mostly lower, as the latest Greek drama raised anxiety. In China, the Shanghai Composite fell .6% to 2381, despite the central bank’s latest cut in reserve requirements which was announced over the weekend. The Hang Seng dropped 1.2% to 19735, its 8th straight loss, and the Kospi eased .2% to 1914. On the upside, the Nikkei edged up .2% to 8974, and the ASX 200 rose .3% to 4297.
European markets tanked, as concerns over an economic slowdown, Greece, and Spain, combined. The CAC40 tumbled 2.3%, the FTSE slumped 2%, and the DAX dropped 1.9%. In Spain, the IBEX fell 2.7%, while credit default swaps on Spain’s 5-year notes spiked to record highs.
US stocks dropped as well, but the losses were more moderate. The Dow fell 125 points to 12695, while the Nasdaq and S&P 500 both shed 1.1%, to 2903 and 1338, respectively. The rise in fear pushed the VIX up 10% to 21.87, its highest leve since January.
VIX Jumps 10% As Fear Grows
Groupon skyrocketed 18.6% ahead of its earnings announcement.
Currencies
The US dollar benefited from the flight to safety, gaining against most currencies. The euro and Swiss franc fell .6%, and the Australian dollar fell .5% to .9970, slipping below parity. The British pound managed a small gain of .2% to 1.6100, and the yen inched up less than .1% to 79.87.
Economic Outlook
Tuesday’s busy economic calendar will include CPI, the Empire State manufacturing index, retail sales, business inventories, and the NAHB housing market index.