|
Daily Market Update – July 1, 2015 (Close)
Well, the first 6 months of the year have now come to a close, and so far, 2015 isn’t much to crow about. Maybe today will get the back half of the year back on track. For a short while, at the very beginning of the year, the back and forth triple digit moves were reminiscent of the volatility last seen in the latter half of 2011, but that didn’t last very long. There were still lots of triple digit moves during the rest of the first 6 months, but the net result had been to move markets higher and volatility actually declined. With the spike in volatility on Monday following the 350 point drop it was a little better, but still not terribly enticing. Along with low premiums you would tend to expect an increase in buying demand, but that hasn’t been the case, as even speculators aren’t betting that the market will move in any significant way in either direction. Volume in the options market has been drying up and the bid – ask spreads have generally gotten larger, making it more difficult to get trades done. I can’t recall the last time I’ve had so many trades go unexecuted at the end of the day, as has been the situation in the past month. With yesterday’s minimal gain after a pre-opening futures session that was looking at triple digit gains, both the DJIA and S&P 500 finished the first half of the year virtually unchanged and it was yet another day with no trades of any sort. This morning, on news that the technically in default nation of Greece may now be coming closer to some kind of agreement with some of its debtors, is sending the market higher. For the most part, the US equity markets don’t care how much the creditors give in on loan terms, until the realization that how Greece is handled may be a template for what awaits as other debtor nations in the EU are closely looking on. The talk of contagion means nothing, whether in banking or in infectious disease, until that tipping point is activated. Then it becomes clear what the concerns were all about and why they were justified. But for now, all anyone can see is the tip of their nose. And if an agreement can come on Greek debt to the IMF, then all will be fine with the world, until the next banking crisis occurs, which it will. Maybe even with Greece again. But that doesn’t matter for now. Again it was a matter of another triple digit gain in the futures as this morning brought a preview of tomorrow’s Employment Situation Report as the ADP Report was released. Since the story is that a decision on any Greece agreement wouldn’t come until after Sunday’s referendum, there should be reason to believe that the Greek induced rally could have legs, but the ADP report could have presented some challenges to that, if it showed too strong job growth. Instead, those numbers were right in line and so traders could fantasize about a happy outcome to Sunday’s Greek referendum. With the early morning gains, my only hope was that there would be some broad lifting and give some possibility for any kind of trad There was, but not enough. Hopefully there will be more of the same tomorrow. Right now, either of those kinds of trades look fairly bleak, but a couple of good market days could change that and get the July 4th celebration off to a better start than what was appearing to be the case as Monday came to its close.
|
