Tokyo fell 79 points to 10,013 (0.78%) while is London gained 25 points (0.49%). New York is closed for President's Day.
The markets are waiting on clarity from European leaders as plans for Greece unfold this week. So far, EU leaders have pledged support for Greece in return for Greece taking steps to reduce its record deficits. Any wavering this week on the commitment to Greece could spell further downside for the euro. The euro has now retraced 60% of the 9-month move from March 2009 lows that took the euro from $1.25 to a high of $1.51 in early December. In just the last two and half months, the euro has dropped rapidly now trading at $1.36 as the EU struggles with the burgeoning sovereign debts of the so-called PIIGS (Portugal, Italy, Ireland, Greece & Spain).
Rumors abound that China may revalue the yuan very soon in order to cool down its overheating economy. Goldman Sachs Chief Economist, Jim O’Neill, told Bloomberg News Friday that he thinks Beijing may be ready to allow the yuan to rise by as much as 5% in a one-time revaluation. This would make sense politically and economically for China and would be significant boon to Western economies, specifically Europe which receives double the blow as the dollar falls and the yuan falls with it.
A 229-point range for the day and stocks closed right where they opened. Great for the active trader...NOT! Most traders spun around in a circle expecting follow-through after the morning gap held, then going for the short, then getting squeezed...it was fun! The large morning gap up ultimately held and stocks closed 149 points higher for the day (1.5%).
Fun trading today as rumors circulated around 11:30 that Germany was putting together a bailout for Greece and the euro ripped $1.50 and the Dow rallied from the dead lows of the day to put in the highs in less than an hour up 230 points. The party wasn't done though as Germany as Germany publicly announced just after 12:30 that the rumors were unfounded and equities collapsed 100 points.
Does the doji in the charts signal the end of this couple-day bounce? This is a day when looking at the closing numbers doesn't do justice to the sporadic action throughout the day that lacked any conviction.
Looks like the European Union will put together some kind of package for Greece beginning a policy that may result in many more bailouts. Time will tell.
Big snow storm headed to NYC tonight...for real this time.
