U.S. Stock Markets Rise Despite Bad News From Europe

Concerns over the possibility of Greece leaving the euro have escalated. After negotiations collapsed over the weekend, Greek Prime Minister Alexis Tsipras has addressed lawmakers yesterday with a highly combative speech. Tsipras claimed that Greece’s creditors were aiming to humiliate the Greek people with wage and pension cuts. The speech has led many to believe that it is unlikely that a resolution would be reached until the end of the month when four repayments must be made to Eurozone and International Monetary Fund (IMF) creditors simultaneously. German lawmakers have been openly discussing a possible Greek exit from the Union, titled “Grexit”, indicating that the possibility is indeed very real. However, the real consequences of such a move can be fully understood if and when other struggling Eurozone members decide to adopt a similar policy against creditors. In response, European stock markets have reached their lowest level since last February. The French CAC lowered 0.1% as a broad range of shares declined. The German DAX fell 0.3% as major components such BASF SE NA O.N. (XETRA:BASFN), Deutsche Lufthansa (XETRA:LHAG), and Deutsche Bank (XETRA:DBKGn) decline nearly 1.0% each. The UK’s FTSE 100 fell 0.3% as well amid losses in the mining industry.

U.S. stock markets have risen despite the bad news from Europe, reversing two consecutive days of losses as investors focus on the Federal Open Market Committee and the possibility of learning more about an interest rate hike later today at the meeting’s press conference. The S&P 500 index rose 11.86 points (0.6%) to close the day at 2096.29 as all sectors showed gains. The Dow Jones Industrial Average rose 113.31 points (0.6%) to trade at 17904.48. Finally, the Nasdaq Composite gained 25.58 point (0.5%) to trade at 5,055.55. The gains lacked any defining piece of news, indicating that today’s Fed meeting is still the major focus. An interest rate hike is not expected to be announced, but nonetheless traders will scrutinize every word said at the conference in order to gain an understanding of when a hike will occur.

In currencies, the euro remained relatively stationary, showing slight gains against the dollar. The dollar also remained in place as seen in the dollar index. The index, which compares the dollar against a number of its peers, has lowered by a fraction of a percent.

Traders are mostly focused on today’s press conference at the conclusion of the Federal Reserve’s Federal Open Market Committee (FOMC) in which U.S. interest rates will be discussed. The bank of England will also meet today and announce any new decisions, although changes in policy have been planned to later in next year in previous quotes by bank officials. Later in the day consumer price data (CPI) will be released in the Eurozone.