Markets opened with a burst of excitement with the S&P500 index up 1.5% to start the day. The excitement however, didn’t last with the index slowly selling off throughout the day to close up just 0.2% on the day. What does that tell us about the state of the markets currently? UNCERTAINTY rules. The NYSE opened without a glitch, United Airlines was back flying planes and Wall Street Journal was in business. No issues with the internet, China was moving off the lows, Greece was negotiating a new deal, the dollar was lower and the world seemed to back to normal… but, not normal enough as investors continue to sell the rallies. This is simply not a good sign for stocks relative to the hear and now. How it unfolds looking longer term is still anyone’s guess. For now we watch and let the noise filter out leaving us with some near term clarity. Patience, patience, patience… enough said.
Greece has put forth a new plan to deal with creditors and keep the country functioning within the euro. This was a positive for the country and the EU. Nothing is resolved, but the hope is things are moving in the right direction. Baby steps, but enough to help the outlook for Greece. GREK was up more than 6% on the day and trading higher overnight.
China bounced finally gaining more than 5% on the day and looking to move higher overnight. This helped the US markets temporarily, but the better China gets short term the better investors will feel relative to the US markets. Thursday was the first step toward a reversal off the lows… but, there is plenty of work to be done before this is over. Watching how this will unfold heading into the trading day tomorrow.
Gold was flat, oil was flat, volatility move up slightly despite the positive open and banks rallied with the bump higher in interest rates. From my view this was simply a boring day with a negative view giving up the gains posted at the open. We will see how tomorrow unfolds, but I am not holding much in terms of optimism for the broad indexes.
Stay focused an disciplined and let this all unfold patiently.