Can a Greek Deal Be Accomplished Over the Weekend?

George Brooks |

C, BAC, DB, Lucas Papademos, Greece, Greek debt, european debt crisis, debt deal, write down, haircut, bonds, ECB, EFSF, IMFInvestor's first read     - Brooksie's edge before the open

Friday, February 10, 2012

DJIA: 12,890.46     S&P 500: 1351.96

News out of  Europe  before the market opened yesterday had global markets humming, but the celebration was short-lived, no such deal had been reached, which explains  a modest gain in the DJIA, S&P, etc.

This should come as no surprise; a “deal” will most likely be taken down to the  wire. Greek leaders must  sell the deal to its people and that means fighting  harsh austerity measures to the hilt before giving in.

The Greek government must pass the latest austerity package into law and identify additional 325 million euros of spending cuts before the euro-area countries endorse a second bailout. Additionally, Greece must meet a 14.5 billion euro bond payment by March 20. A deal must be reached in coming days to enable the bailout money to be processed in time to meet the bond deadline.

CONCLUSION:  Odds favor a deal will be reached, and common sense says the euro-area countries and banking community are prepared for the fallout if a deal is not reached to avoid a meltdown.

I can’t see anything happening before Monday so today should be a downer, especially since the stock market has had an uninterrupted run since mid-December.

I can see a drop to DJIA 12,735 (S&P 500: 1330) by today’s close, as buyers retreat to the sidelines and others raise some cash  in face of uncertainty. Expect a mid-day rally but sell off in the last hour.

   ECONOMIC NEWS:

TUESDAY:

  • ICSC Goldman Store Sales (7:45 a.m.) by major retailers which account for 10% of total store sales.
  • Consumer Credit (3:00 p.m.) –Consumer credit jumped $20.4 billion November.

WEDNESDAY: 

  • MBA Purchase Applications (7: 00 a.m.)as a measure of applications at mortgage bankers, this index provides leading indicator of single family home sales and housing construction.

THURSDAY:

  • Jobless Claims (8:30 a,m.) Initial claims dropped 12,000 for the week ending Jan. 28 to 367,000.  Obviously “down: is good.
  • Wholesale Trade (10:00a.m.) – slowed to 1 0.1 percent gain, Inventory/sales ratio holding at 1.15.

FRIDAY:

  • International Trade (8:30 a.m.) Trade gap widened in Nov. due to jump in oil imports and dip in exports. The index is comprised of merchandise and services
  • Consumer Sentiment (9:55 a.m.) Rose  in the final week of January, Sentiments have been soaring since July.

Recent Posts:

Jan 23 DJIA: 12,720 "Europeans Seeking Long-Term Economic Cure"
Jan 25 DJIA: 12,675 "Consolidation, Correction Likely though US Stocks Hold Strong Against EU Turmoil"
Jan. 26 DJIA: 12,756 "Fed Would Raise Interest Rates If Inflation Picks Up"
Jan. 27 DJIA: 12,734 "Warning! Tradable Market Action Lies in Waiting"
Jan. 30 DJIA: 12,660 "“HUGE” Week for Economic Indicators"
Jan. 31 DJIA: 12,653  "All That Is Needed Is a Spark"
Feb. 1   DJIA: 12,632 "Week’s Economic Reports Could Be The Springboard"
Feb. 3   DJIA: 12,862 "Investors Beating the Bullish Tune"
Feb. 6   DJIA: 12,845 "Follow the Money as It Exits Safe Havens"
Feb. 7   DJIA: 12,878 "Market Held Up By Sneaky Buying"
Feb. 8   DJIA: 12,883  "Is It Safe For Bulls to Come Out and Play?"
Feb. 9   DJIA: 12,890  "BIG Money Buying the Future"

George  Brooks

*Bloomberg.Com

**National Journal

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The writer of  Investor’s first read, George Brooks,  is not registered as an investment advisor.  Ideas expressed herein are the opinions of the writer, are for informational purposes, and are not to serve as the sole basis for any investment decision. Readers are expected to assume full responsibility for conducting their own research pursuant to investment decisions in keeping with their tolerance for risk.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

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