Stocks held steady for the most part yesterday after that initial burst higher on the back of the news that Tsipras has agreed to accept the Eurozone proposals IF the referendum on Sunday proves to be a YES vote. Then late yesterday afternoon - Tsipras took to the airwaves and gave a combative speech urging his countrymen to vote NO on Sunday....this as the cash strapped nation continues to struggle for air....... And this morning we get word that the Finance Minister - Yanis Varoufakis - striking a defiant tone - has offered himself up as the 'sacrificial lamb' offering to quit if voters do not back him up by voting NO. In his words - he refuses to "extend and pretend" , he would "rather cut my arm off" vs. signing a deal that fails Greece and her citizens.
Now the question is - Can the Greeks vote NO and stay in the Euro? Well - Germany and some of the other members think not, but Tsipras and Varoufakis think yes....in fact - they think that a NO vote puts them in a stronger negotiating position - as it forces the creditor banks to recognize the demands of the country's citizens. .....
And since the crisis - beginning in the spring of 2008 - the Eurozone and its leaders have been 'flying by the seat of their pants' - according to Yanis - 'making up rules as they go along.....' so what makes this any different? In his opinion - there are no rules to deal with the current situation - so therefore - nowhere is it written that Europe can throw Greece out of the Euro - no matter what the circumstances. Well - I guess we are about to find out.....The vote is on Sunday, July 5th......Banks to remain closed until after the vote - speculation is that they will re-open on Tuesday - July 7th - but will they be giving out Drachma's or Euro's?
Change of leadership??? A YES vote will most likely be the end of the current gov't causing a new round of elections for new leadership - as Yanis said:
"Maybe we'll change the configuration of the gov't because some of us will not be able to stomach it"
...at this point - the vote is within the margin of error to call it decisively and the most recent polls suggest that the 'Yea's' have it.....maybe Yanis should be networking for a new job?
Currently - European mkts are holding steady....as we move into the weekend - there have not been any more discussions nor will there be until after Sunday's referendum - With very little macro data across the continent - investors have been given a break from the drama. FTSE +0.18%, CAC 40 -0.06%, DAX -FLAT, EUROSTOXX FLAT, SPAIN FLAT and ITALY FLAT......
Here at home US futures are +4 pts holding steady as the focus for today turns to the all important NFP report. We are expecting an increase of 230k jobs to have been created in June - if so - it is a solid number, not great, but not bad...again forget the number and look at the quality of jobs created because that is the real key....Unemployment is expected to drop to 5.4% (if you really believe it).
Now look - the whispers go from +190k to +300k jobs....a wide range....My sense is that any number greater than +260k will ignite the FED and rate conversation yet again.....a number of that 'strength' will cause the hawks to say that the economy is heating up and the Fed runs the risk of being behind the 8 ball vs. in front of the 8 ball.....Really? We would have to see NFP reports at +300k consistently for 3 or 4 months to give that argument any real teeth - but hey - we are all 'flying by the seat of our pants' - and it begs the question - Does anyone really know what the trigger point really is?
Other data points today include - Init Jobless Claims of +270k, Cont Claims of 2.23 mil, ISM NY and Factory Orders - which are expected to be -0.5%.
Tomorrow is a holiday - there is a lot that can happen this weekend....I suspect that trading will be subdued today and that we may see some weakness going into the bell as the trader types take risk OFF the table going into the Greek referendum. Since there is zero info coming out Europe - and little here at home to drive the action - look for support at the 200 dma at 2055.... Sunday's vote will set the tone for trading next week.......
Now remember - back in October when we breached that key support the mkt fell 4.5% very quickly taking us to 1820 on the S&P (which was also a 10% move off the highs)......If we follow that same pattern a breach of the 200 dma next week - could take us to 1975 ish....equal to the lows of December....
On the other hand - a positive vote could cause the mkts to surge - as we saw yesterday - and that surge could take us up and thru both the 100 and 50 dma's allowing for the mkt to challenge the most recent highs.
Next week is also the unofficial start to earnings - and as usual - estimates have been cut and the bar lowered - so expect the usual 80/20 rule.....80% of the reports will meet or beat and the guidance will be upbeat - better days are ahead...
Essentially - you are making a summer tomato salad and then putting it over pasta....so Dice the tomatoes, slice the red onion, slice the garlic, add chopped basil, chunks of fresh Mozz, s&p, "splash" of water, and a couple turns of olive oil. (you can also add a bit of Oregano - but not too much) try it first without....
Prepare and let it sit out and marinate. It will create its own juice the longer it sits. You want it to be room temp when you mix it with the pasta. If you make it the day before then remove from fridge and let warm up for about 30 mins.....
Now bring a pot of salted water to a rolling boil - add pasta and cook for 8 / 10 mins....or until aldente. Strain - always reserving a mugful of water.....return the pasta to the pot - add back 1/4 mug of water to re-moisten. Toss - wait a min or two so that the pasta absorbs the water...you do not want a puddle of water in the bottom of the pan. Now add the tomato salad, 2 or 3 handfuls of grated cheese and toss well. Serve immediately in warmed bowls. Again - set the table outside, turn on some relaxing music to set the mood, light the candles and enjoy the sunset on a great summer eve. Never rush - enjoy the moment.
Buon Appetito.
Now the question is - Can the Greeks vote NO and stay in the Euro? Well - Germany and some of the other members think not, but Tsipras and Varoufakis think yes....in fact - they think that a NO vote puts them in a stronger negotiating position - as it forces the creditor banks to recognize the demands of the country's citizens. .....
And since the crisis - beginning in the spring of 2008 - the Eurozone and its leaders have been 'flying by the seat of their pants' - according to Yanis - 'making up rules as they go along.....' so what makes this any different? In his opinion - there are no rules to deal with the current situation - so therefore - nowhere is it written that Europe can throw Greece out of the Euro - no matter what the circumstances. Well - I guess we are about to find out.....The vote is on Sunday, July 5th......Banks to remain closed until after the vote - speculation is that they will re-open on Tuesday - July 7th - but will they be giving out Drachma's or Euro's?
Change of leadership??? A YES vote will most likely be the end of the current gov't causing a new round of elections for new leadership - as Yanis said:
"Maybe we'll change the configuration of the gov't because some of us will not be able to stomach it"
...at this point - the vote is within the margin of error to call it decisively and the most recent polls suggest that the 'Yea's' have it.....maybe Yanis should be networking for a new job?
Currently - European mkts are holding steady....as we move into the weekend - there have not been any more discussions nor will there be until after Sunday's referendum - With very little macro data across the continent - investors have been given a break from the drama. FTSE +0.18%, CAC 40 -0.06%, DAX -FLAT, EUROSTOXX FLAT, SPAIN FLAT and ITALY FLAT......
Here at home US futures are +4 pts holding steady as the focus for today turns to the all important NFP report. We are expecting an increase of 230k jobs to have been created in June - if so - it is a solid number, not great, but not bad...again forget the number and look at the quality of jobs created because that is the real key....Unemployment is expected to drop to 5.4% (if you really believe it).
Now look - the whispers go from +190k to +300k jobs....a wide range....My sense is that any number greater than +260k will ignite the FED and rate conversation yet again.....a number of that 'strength' will cause the hawks to say that the economy is heating up and the Fed runs the risk of being behind the 8 ball vs. in front of the 8 ball.....Really? We would have to see NFP reports at +300k consistently for 3 or 4 months to give that argument any real teeth - but hey - we are all 'flying by the seat of our pants' - and it begs the question - Does anyone really know what the trigger point really is?
Other data points today include - Init Jobless Claims of +270k, Cont Claims of 2.23 mil, ISM NY and Factory Orders - which are expected to be -0.5%.
Tomorrow is a holiday - there is a lot that can happen this weekend....I suspect that trading will be subdued today and that we may see some weakness going into the bell as the trader types take risk OFF the table going into the Greek referendum. Since there is zero info coming out Europe - and little here at home to drive the action - look for support at the 200 dma at 2055.... Sunday's vote will set the tone for trading next week.......
Now remember - back in October when we breached that key support the mkt fell 4.5% very quickly taking us to 1820 on the S&P (which was also a 10% move off the highs)......If we follow that same pattern a breach of the 200 dma next week - could take us to 1975 ish....equal to the lows of December....
On the other hand - a positive vote could cause the mkts to surge - as we saw yesterday - and that surge could take us up and thru both the 100 and 50 dma's allowing for the mkt to challenge the most recent highs.
Next week is also the unofficial start to earnings - and as usual - estimates have been cut and the bar lowered - so expect the usual 80/20 rule.....80% of the reports will meet or beat and the guidance will be upbeat - better days are ahead...
Pasta Fresca - A Summer Favorite
Fresh summer tomatoes, garlic, red onion, s&p, olive oil, basil, fresh mozzarella, and grated parmegiana cheese make this dish simple yet elegant. You can use the pasta of your choice - short, long, thin or thick....makes no difference - Take your pick.Essentially - you are making a summer tomato salad and then putting it over pasta....so Dice the tomatoes, slice the red onion, slice the garlic, add chopped basil, chunks of fresh Mozz, s&p, "splash" of water, and a couple turns of olive oil. (you can also add a bit of Oregano - but not too much) try it first without....
Prepare and let it sit out and marinate. It will create its own juice the longer it sits. You want it to be room temp when you mix it with the pasta. If you make it the day before then remove from fridge and let warm up for about 30 mins.....
Now bring a pot of salted water to a rolling boil - add pasta and cook for 8 / 10 mins....or until aldente. Strain - always reserving a mugful of water.....return the pasta to the pot - add back 1/4 mug of water to re-moisten. Toss - wait a min or two so that the pasta absorbs the water...you do not want a puddle of water in the bottom of the pan. Now add the tomato salad, 2 or 3 handfuls of grated cheese and toss well. Serve immediately in warmed bowls. Again - set the table outside, turn on some relaxing music to set the mood, light the candles and enjoy the sunset on a great summer eve. Never rush - enjoy the moment.
Buon Appetito.
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