Stock Markets Climb On Short-Lived Hopes For Greek Resolution

Stock markets worldwide breathed a sigh of relief as shares climbed after a number of days in which uncertainty over the Greek crisis led to broad declines. The Greek government indicated yesterday that it was willing to return to negotiations as Prime Minister Alexis Tsipras offered creditors a new bailout proposal allegedly more in line with their demands. While the offer was eventually deemed “insufficient” and was rejected by creditors, the attempt was enough to offer relief to European stocks after several consecutive days of poor performance. The UK’s FTSE ended 87.61 points higher (1.34%) to close the day at 6608.59. The German DAX added 235.53 points (2.15%) to close at 11180.50 and the French CAC 40 added 92.99 points (1.94%) to close the day at 4883.19. The positive atmosphere reached Wall Street as well. The Standard and Poor’s 500 Index added 14.31 points (0.69%) to trade at 2077.42, the Dow Jones Industrial Average rose 138.4 points (0.79%) to trade at 17757.91 and the NASDAQ rose 26.26 points (0.53%) to trade at 5013.12.

However, the positive atmosphere didn’t last long. Less than 24 hours after making a proposal to creditors that is very much aligned with their previous requirements, Tsipras abruptly changed his position on the matter, offering a very combative point of view in a television address to the Greek people. Tsipras claimed that Greece was effectively being “blackmailed” by creditors, urging voters to vote against the bailout. These remarks’ effect on the market still remains to be seen, however some creditors are confident that the July 5th referendum will likely pave the way to Greece’s exit from the bloc and a return to the drachma.

In the meantime, crude oil futures plunged on Wednesday after the Energy Information Administration (EIA) released a bearish inventory report for last week. According to the report, crude oil stockpiles rose by 2.4 million barrels despite expectations that supplies would be cut back after eight-straight weeks of a cutback trend. Crude oil fell in response below $57 barrel and has seen minor gains so far today.

Aside from new developments on the Greek crisis, all eyes are set on the U.S. nonfarm payroll report scheduled to release today followed by the U.S. unemployment rate. Eurozone retail sales will release tomorrow.