Friends
After last year’s volatility, we had gotten through more than two months of trading this year without a down day of more than 100 Dow points. Today finally ended that streak. With worries that the bond swap deal in Greece may fall short of the amount needed to activate the collective-action clause (which forces everyone to swap and is integral to the bailout deal), stocks fell early and often. For the day, the Dow Jones Industrial Average was down 203 points to finish the day at 12,759. The S&P 500 was down nearly 21 points to close at 1343 (failing to hold the 1370 level for the umpteenth time set us up for this pullback). Gold was slammed once again falling $29 to trade near $1675. Oil was down $1.85 to close near $104.90 per barrel WTI.
With slowing growth news coming out of China and Brazil recently, the global growth story is very much in question. We already know that Europe and Japan are going to be no help in providing any growth, so the question is – how much can the U.S. carry the water? Once again, Friday’s employment report will be very interesting and may determine the direction over the next few weeks. A pullback in here would not be surprising, and in some ways refreshing as it could allow many who missed the move over the past several months an opportunity to get in. Of course, as we know, sentiment shifts quickly nowadays, and those who thought they might want to buy at cheaper levels are often easily spooked the minute the market falls. For months now, dips have been bought and stocks have been pushed higher. We are now getting a serious test to see if that can continue, or did the failure to move through 1370 on the S&P set us up for something more measurable to the downside.
We’ll see how this plays out this week. Stay tuned.
Have a nice evening everyone.
