Focus Shifts to Greece as Debt Deal Remains Elusive

Friday’s strong jobs data gave Asian markets an opening boost on Monday.  The Nikkei and ASX 200 both climbed 1.1%, while the Kospi surrendered an early gain to end flat. China’s Shanghai Composite also closed flat, while the Hang Seng eased .2%.

European markets slipped slightly as anxiety overGreece’s debt troubles pulled down financials.  The CAC40 fell .6% the FTSE eased .2% and the DAX ended flat as Greece policymakers struggled to reach an agreement with debt holders, even as the official deadline for a deal passed.

Back at home, US stocks opened lower but erased most of their losses as the session progresses.  The Dow settled down 17 points to 12845, the Nasdaq dipped .1%, and the S&P 500 settled down fractionally at 1344.

Currencies

The Dollar had rallied earlier in the morning, but those gains evaporated as the day progressed.  The Euro declined .1% to 1.3133, recovering from a low of 1.3031.  The Pound rose .1% to 1.5828, the Australian Dollar edged up .2% to 1.0730, and the Canadian Dollar climbed .3% to .9960.  The Yen fell .5% to 76.56, and the Swiss Franc slipped .2% to 1.0886.

Economic Outlook

Pressure is mounting on Greeceto secure a deal before time runs out, triggering a default.  Greecehas until March 20th to make a payment of 14.5 billion euro, or it will default.  A deal for a 130 billion euro bailout has been pending since October, awaiting concessions fromGreece.

Greek Hopes Push up Euro, Treasuries Slide

Equities

Asian markets closed modestly lower, amid rising tensions over Greece’s debt troubles. The Nikkei eased .1% to 8918, the ASX 200 fell .5%, and the Hang Seng closed down fractionally. China’s Shanghai Composite tumbled 1.7% as steel companies dropped, while Korea’s Kospi edged up .4%.



China's Shanghai Composite Continues to Struggle, Dropping 1.6%

Indecision gripped European traders, leaving the major indexes mixed at the close. The CAC40 rose .2%, while the DAX slipped .2%, and the FTSE closed flat. Excitement abated over the potential merger of Xstrata and Glencore, as several major shareholders said they’d vote against the deal, sending shares of both companies down roughly 4%.

In the US, stocks inched up, lifted on hopes that a Greek debt deal was imminent. The Dow closed up 33 points to 12878, the S&P 500 gained .2%, and the Nasdaq rose .1%.

Currencies

An afternoon selloff in the Dollar pushed the Euro up .9% to 1.3248, its highest level in nearly 2 months. The Swiss Franc climbed .8% to 1.0963, the Australian Dollar rallied .7% to 1.0796, and the Pound gained .5% to 1.5895. The Yen slipped .3% to 76.81.

Economic Outlook

Consumer credit rose by $19.3 billion, nearly 3 times analyst estimates for a $7.7 billion increase, in a sign that the consumer spending is picking up dramatically. The TIPP economic optimism index rose to 49.4 from 47.5, more than forecast.

Asia Rallies, West Awaits Greek Deal

Equities

Asian markets rallied on Wednesday, with several of the major indexes climbing to multi-month highs. The Nikkei advanced 1.1% to 91016, a 3 month high, as Toyota raised its annual profit forecast by more than 30%. Similarly, the Kospi posted a gain of 1.1%, with leading shipbuilders advancing 6% on hopes the sector will soon recover. The Shanghai Composite surged 2.4%, and the Hang Seng jumped 1.5% to 21018, a 6 month high. The ASX 200 trailed its peers, rising just .4%.



Hang Seng Index Climbs to 6 Month High

The East’s impressive gains failed to make an impact on the West. European markets closed slightly lower, as the region anxiously awaits a Greek debt deal. The FTSE slipped .2%, while the DAX and CAC40 dipped less than .1%.

US stocks fared better, posting modest gains. The Nasdaq gained .4% to 2916, the S&P 500 rose .2%, and the Dow inched up 6 points to 12884.

Currencies

The Dollar gained modestly across the board. The Pound slumped .5% to 1.5819, and the Yen dropped .3% to 77.01. The Euro, Australian Dollar, Swiss Franc, and Canadian Dollar all ended down .1%, as the market braces for the outcome of Greece’s debt negotiations.

Economic Outlook

Weekly mortgage applications jumped last week, a healthy sign that the housing market is on the rebound.

Greek Lawmakers Reach Agreement, Market Unimpressed

Equities

Asian markets closed little changed, ahead of major rate decisions from Europe. The Nikkei slipped .2% to 9002, while the Kospi gained .5%. In China, inflation rose more than forecast, but market participants failed to notice. The Shanghai Composite rose .1% to 2350, and the Hang Seng closed flat. Australian shares closed down .2%, recovering from a 1.1% loss earlier in the day.

European markets advanced moderately, as the Bank of England and ECB kept rates unchanged. The UK’s central bank announced it would increase its quantitative easing program, and the ECB indicated it would work to make it easier for banks to get loans. The DAX gained .6%, the CAC40 rose .4%, and the FTSE edged up .3%.

Greece announced lawmakers had reached an agreement for an austerity plan, a key step in getting another bailout package, but the market reaction was minimal.

US stocks inched up for a 3rd straight day. The Dow rose 6 points to 12890, the Nasdaq advanced .4%, and the S&P 500 gained .2% to 1352.

Currencies

Despite two central bank decisions, and news of a Greek debt deal, the currency markets were relatively quiet. The Euro rose .2% to 1.3283, while the Swiss Franc and Canadian Dollar rose .1% to 1.0967 and .9953 respectively. The Yen sank .8% to 77.70. The Pound and Australian Dollar closed flat.

Economic Outlook

Weekly jobless claims fell to 358K, 11K better than forecast, and 15K better than last week. Wholesale inventories rose by 1%, significantly higher than the .4% forecast.

Doubts over Greek Bailout Weigh on Equities

Equities

Asian markets fell on Friday, as doubts lingered over the fate of Greece’s bailout package, even after lawmakers approved an austerity plan. The Nikkei declined .6% to 8947, the Kospi shed 1% to 1994, and the ASX 200 fell .9%. Chinese markets ended mixed, as the Hang Seng slumped 1.1% to 20784, while the Shanghai Composite rose .1%, despite disappointing import data.

Selling pressure accelerated in Europe. The CAC40 dropped 1.5%, the DAX sank 1.4%, and the FTSE lost .7%. Banking shares lost more than 3.4% as protests erupted in Greece over the proposed austerity measures, while European leaders demanded even steeper cuts.

US stocks closed lower, as the Dow fell 89 points to 12801, its largest fall in 2012. The Nasdaq closed down .8%, and the S&P 500 dropped .7% to 1343, while the VIX surged 11.6% to 20.79.



VIX Surges 11.6% as Greek Tensions Spike

LinkedIn shares soared 17.8% after beating analyst profit forecasts and raising its outlook for the year. Nuance shares slumped 13% after profits fell short of estimates.

Currencies

The Dollar rallied as the currency markets shifted into “risk off” mode. The Australian Dollar was the largest loser, dropping 1.1% to 1.0673. The Euro fell .7% to 1.3188, the Pound lost .4% to 1.5755, and the Swiss Franc dropped .5% to 1.0915. The Canadian Dollar shed .7% to 1.0018, while the Yen bucked the trend, inching up .1% to 77.59.

Economic Outlook

The US trade deficit grew to $48.8 billion, slightly larger than expected, and up from last month’s $47.1 billion deficit. Consumer confidence fell more than expected to 72.5, from last month’s reading of 75.