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Wall Street Week Ahead: Likely win for Greek pro-bailout parties may bring respite
NEW YORK | Sun Jun 17, 2012 4:19pm EDT
http://www.reuters.com/article/2012/06/17/us-usa-stocks-weekahead-idUSBRE85E1J920120617
An official vote projection showed New Democracy taking 29.5 percent of the vote, with SYRIZA in second place with 27.1 percent and PASOK third with 12.3 percent.
<b>Because of a 50-seat bonus given to the party that comes in first, the result translates into 128 seats for New Democracy and 33 seats for PASOK in the 300-seat parliament.</b>
Roberts said whether or not central banks intervene will depend on markets next week. "If the markets start heading south I think they will be forced to," he said.
<b>- In one of the few markets trading shortly after the official election projections in Greece, the euro hit a three-week high against the U.S. dollar in early Australasian trade, rising to around $1.2730 according to Reuters data from around $1.2655 late in New York on Friday. </b>
- <b>But markets have had a tendency to react positively to political developments late Sunday and early Monday only to quickly reverse. That was the case last weekend after the EU announced a 100 billion euro bailout for Spanish banks. </b>
Weeks of worry over the potential outcome of the Greek election have prompted a number of central banks to prepare for market problems.
Central banks from major economies are ready to take steps to calm markets should the outcome of the Greek elections create a market storm, officials from the Group of 20 told Reuters.
Among them, European Central Bank President Mario Draghi said the ECB was ready to step in and fund any viable euro zone bank that gets in trouble. The Bank of England on Thursday announced a $155 billion (100 billion pound) offer of loans to banks.
Group of 20 leaders kick off a two-day summit in Mexico on Monday and the rest of the week is not likely to be any quieter.
The Federal Reserve is due to release a policy statement on Wednesday at the end of its two-day meeting, and the steady flow of sovereign debt warnings and downgrades is likely to continue.
In another sign of investor nervousness, the CBOE Volatility index .VIX, Wall Street's fear gauge, was up for much of Friday even as stocks rose, although the VIX closed lower. Stocks and the VIX typically have an inverse relationship.
<b>Many investors have been trying to prepare for the worst.
"People have been hedging their positions aggressively over the past two weeks heading into this weekend," said Alec Levine, a derivatives strategist at Newedge Group SA in New York. </b>
"No matter what happens (this) week, we will return to a massive game of chicken between the newly elected Greek government, whoever that may be, and the EU, specifically Germany."
NEW YORK | Sun Jun 17, 2012 4:19pm EDT
http://www.reuters.com/article/2012/06/17/us-usa-stocks-weekahead-idUSBRE85E1J920120617
An official vote projection showed New Democracy taking 29.5 percent of the vote, with SYRIZA in second place with 27.1 percent and PASOK third with 12.3 percent.
<b>Because of a 50-seat bonus given to the party that comes in first, the result translates into 128 seats for New Democracy and 33 seats for PASOK in the 300-seat parliament.</b>
Roberts said whether or not central banks intervene will depend on markets next week. "If the markets start heading south I think they will be forced to," he said.
<b>- In one of the few markets trading shortly after the official election projections in Greece, the euro hit a three-week high against the U.S. dollar in early Australasian trade, rising to around $1.2730 according to Reuters data from around $1.2655 late in New York on Friday. </b>
- <b>But markets have had a tendency to react positively to political developments late Sunday and early Monday only to quickly reverse. That was the case last weekend after the EU announced a 100 billion euro bailout for Spanish banks. </b>
Weeks of worry over the potential outcome of the Greek election have prompted a number of central banks to prepare for market problems.
Central banks from major economies are ready to take steps to calm markets should the outcome of the Greek elections create a market storm, officials from the Group of 20 told Reuters.
Among them, European Central Bank President Mario Draghi said the ECB was ready to step in and fund any viable euro zone bank that gets in trouble. The Bank of England on Thursday announced a $155 billion (100 billion pound) offer of loans to banks.
Group of 20 leaders kick off a two-day summit in Mexico on Monday and the rest of the week is not likely to be any quieter.
The Federal Reserve is due to release a policy statement on Wednesday at the end of its two-day meeting, and the steady flow of sovereign debt warnings and downgrades is likely to continue.
In another sign of investor nervousness, the CBOE Volatility index .VIX, Wall Street's fear gauge, was up for much of Friday even as stocks rose, although the VIX closed lower. Stocks and the VIX typically have an inverse relationship.
<b>Many investors have been trying to prepare for the worst.
"People have been hedging their positions aggressively over the past two weeks heading into this weekend," said Alec Levine, a derivatives strategist at Newedge Group SA in New York. </b>
"No matter what happens (this) week, we will return to a massive game of chicken between the newly elected Greek government, whoever that may be, and the EU, specifically Germany."
<b>A Greek exit from the euro would almost certainly lead investors to flee stocks. Paul Christopher, chief international strategist for Wells Fargo Advisors, said Friday that the Standard & Poorâs 500 index could drop 15 percent in weeks. </b>
Financial markets await a Greek election result that could spread turmoil worldwide
http://www.washingtonpost.com/busin...il-worldwide/2012/06/17/gJQAvReRjV_story.html
- Fearing a wider euro breakup, investors would demand higher interest rates on the government bonds of Spain and Italy, driving those countriesâ borrowing costs to unsustainable heights.
The banks that owned the bonds would absorb huge losses. Amid rising fear, banks could refuse to lend money to each other, causing a credit crunch like the one that followed the collapse of the Lehman Brothers investment bank in 2008.
In the worst case, economists expect, the worldâs biggest central banks â the U.S. Federal Reserve, the European Central Bank and the Bank of England â would flood financial markets with cash to restore calm.
The Dow Jones industrials rose 115 points Friday on hopes of a central bank rescue.
If the pro-bailout parties prevailed, it would buy time for European policymakers to build their defenses against financial turmoil.
Financial markets await a Greek election result that could spread turmoil worldwide
http://www.washingtonpost.com/busin...il-worldwide/2012/06/17/gJQAvReRjV_story.html
- Fearing a wider euro breakup, investors would demand higher interest rates on the government bonds of Spain and Italy, driving those countriesâ borrowing costs to unsustainable heights.
The banks that owned the bonds would absorb huge losses. Amid rising fear, banks could refuse to lend money to each other, causing a credit crunch like the one that followed the collapse of the Lehman Brothers investment bank in 2008.
In the worst case, economists expect, the worldâs biggest central banks â the U.S. Federal Reserve, the European Central Bank and the Bank of England â would flood financial markets with cash to restore calm.
The Dow Jones industrials rose 115 points Friday on hopes of a central bank rescue.
If the pro-bailout parties prevailed, it would buy time for European policymakers to build their defenses against financial turmoil.
out 8555 
- But markets have had a tendency to react positively to political developments late Sunday and early Monday only to quickly reverse. That was the case last weekend after the EU announced a 100 billion euro bailout for Spanish banks.
Going by above statement , we may see tonight 8590 , to see monday midday fizzle to 8450 .... let us see
Going by above statement , we may see tonight 8590 , to see monday midday fizzle to 8450 .... let us see