Imminent Greek Default? Buyers on Hold for the Weekend
The familiar pattern comes back to haunt US markets as an ECB official resigned sparking a downdraft within 1o minutes. Jurgen Stark, a German who sits on the Board of the European Central Bank is an opponent of the bank’s buying program. Over the past few weeks European markets have lead US markets down and speculation has increased that Greece would eventually have to default.No doubt high frequencey traders have piled on with shorts and exacerbated the moves.
Any positive vibe and prospect for jobs action from Obama’s speech was quickly eclipsed by European sovereign debt worries. Germany is in the hot seat as they are left holding the bag to shore up German banks should Greece defaults. Five year credit default swaps for Greek bonds signal a 92% probability that the country will not meet demands.
As of 12:45 EDT markets were down over 2.5% with no sector showing strength.We will present our bullish case for biopharmaceuticals for Q4 but the Greek contagion is front and center for now. The bottom trending for the S&P remains the 1100-1125 area. The 10 year yield at 1.92% is at a 60 year low!
Gold was surprisingly flat at $1866 given the Euro crisis. Get your free gold report at Investor Uprising.Gold is in a secular bull market as an alternative currency play.