Market Commentary and Intraday News

Wall Street In Risk-off Mode Despite Greek Election Results

341 days ago

(RTTNews) - With hopes of an immediate stimulus announcement evaporating following a favorable Greek election result, sentiment remains largely subdued and the U.S. index futures point to a mixed opening on Monday. The efforts underway in Greece to form a coalition government and a domestic homebuilder confidence data due to be released shortly after the markets open may give some direction to the markets. Meanwhile, reflecting apprehensions, European bond yields continue to surge higher.

The Greek election issue has now moved to the backburner now, with the pro-bailout New Democracy party securing 29.7 percent of the vote and 129 seats out of the total 300 seats and leading the election results. Antonis Samaras, the leader of the New Democratic party, will now have to negotiate to form a coalition government.

As of 6:18 am ET, the Dow futures are down 20 points and the S&P 500 futures are declining 1.50 points, while the Nasdaq 100 futures are gaining 5.25 points.

U.S. stocks went about a volatile run in the week ended June 15th amid stimulus hopes and trepidation concerning the Greek elections, yet ended higher for the week.

The 2-day FOMC meeting, some housing readings and the jobless claims report are among the market-moving economic data/events of the unfolding week. Traders are likely to pay attention to the post-meeting policy statement of the FOMC, the central bank's updated economic forecasts and chairman Ben Bernanke's press briefing, given the stimulus expectations that are gathering ground in the wake of recent weak data points.

The National Association of Home Builders' housing market index for June, the Commerce Department's housing starts report for May, the National Association of Realtors' existing home sales report, the Philadelphia Federal Reserve's manufacturing survey and the weekly jobless claims report are also likely to be on the investors' radar.

The Federal House Finance Agency's house price index for April, the Conference Board's leading economic indicators index for May and announcements concerning the treasury auctions of 2-year, 5-year and 7-year notes round up the economic events of the week.

The National Association of Homebuilders is scheduled to release the results of its June survey on homebuilders' confidence at 10 am ET. The consensus estimates call for the index to remain unchanged at 29.

In corporate news, Steel Dynamics (STLD) said it expects second quarter earnings per share in the range of 15-20 cents per share, with the company attributing the softer guidance to a decline in sheet steel pricing arising from increase in imports and domestic steel capacity. Analysts currently estimate earnings of 24 cents per share.

The Street is awash with speculation that Microsoft (MSFT) will unveil its own tablet PC, rivaling Apple's iPad.

The major Asian markets advanced solidly, encouraged by Greek election results, although the India market retreated on deflated rate cut hopes.

Japan's Nikkei 225 average opened notably higher and moved roughly sideways for the rest of the session. The index closed up 151.70 points or 1.77 percent at 8,721, its higher closing level since May 22nd.

Australia's All Ordinaries closed 76.90 points or 1.87 percent higher at 4,184, with energy and material stocks leading an across the board rally after commodities rallied in the Asian session.

Hong Kong's Hang Seng Index closed at 19,428, up 193.87 points or 1.01 percent.

A report released by the Chinese National Bureau of Statistics showed that house prices declined year-over-year in 54 out of the 70 cities surveyed in May compared to 46 cities that witnessed house price declines in April. Meanwhile, the Bank of Japan's monthly economic report showed that the central bank's economic assessment hasn't altered. The central bank continues to believe that economic activity has started to pick up moderately, as post-quake construction continued to support domestic demand.

The major European averages are currently higher after seeing some volatility in late morning trading, when Spanish bond yields rose to the critical 7 percent level yet again.

A report released by Rightmove showed that the average asking price of houses in the U.K. rose 1 percent month-over-month in June to 246,235 pounds. Annually, prices were up 2.4 percent. Rightmove attributed the increase to a shortage of available properties in the London region.

Commodities have given back their gains, while currencies are seeing a mixed trend.

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