Today (Sunday) the people of Greece head to the polls to vote in a new government which excluding the fascist Gold Dawn party looks like being a straight choice between the left-wing Syriza and right-wing New Democracy. The Syriza party which polled 17% of the vote in the May 6th elections want to cancel the bailout nationalise banks and freeze privatisations, but stay inside Eurozone. The New Democracy which recorded 19% of the vote in May want to keep the bailout but want more time for restructuring and EU help to stimulate growth.
Riding high after an impressive 1-0 win against the Russians in the Euro 2012, Sunday’s vote is being watched around the world, amidst fears that a Greek exit from the euro could spread contagion to other eurozone members and send turmoil throughout the global economy. Before all this, there was widespread market talk on Friday that central banks across the world will take coordinated steps to shield the economies from a possible Greek exit from the Eurozone which overshadowed a day of negative news from the US.
The Thomson Reuters/University of Michigan’s preliminary reading on the overall index on consumer sentiment in the US fell to 74.1 in June from to 79.3 in May, lower than the expected 77.5 reading The Federal Reserve published the news that industrial production, which includes the output from the nation’s factories, mines and utilities, dropped 0.1% in May from 1.0% in April revised down from 1.1%.
The talk of stimulus saw stocks and indices rise across the globe and the USD falling against most major currencies. The Dow Jones Industrial Average closed up 0.91% on Friday; the S&P 500 index was up 1.03% whilst the Nasdaq Composite index finished up 1.29%. European indices also finished largely up with the EURO STOXX 50 rising 1.54%, France’s CAC 40 rose 1.82%, the FTSE 100 closed up 0.22%, whilst Germany’s DAX 30 finished up 1.48%.
Investor focus for tomorrow should be all about Greece and how markets digest the results of the Greek election.
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