Futures are rather subdued on news this morning that the second Greek bailout agreement has been reached. It may be that the market is treating any such deal with skepticism because it will only lead to a third. Wal-Mart’s 15% drop in 4th quarter profit is also keeping the market from pushing substantially higher. Dow futures are currently up 26 points to 12,955. Nasdaq 100 futures are down half a point to 2,582. The S&P 500 futures are up a point to 1,360.
After a 13-hour meeting in Brussels, EU and IMF officials finally came to an agreement to provide Greece with a 130 billion Euro bailout package. They also secured agreements in which Greek debt holders would undergo a 53% write-down. This tops the initial 50% agreement reached last October. The question now is will this work?
Judging by the austerity measures they have to institute, signs point to no. If your goal is to reach certain budgetary targets, destroying your workforce is awfully strange way of getting there. Plus with Greek elections in a couple of months it is unlikely that the next group of leaders will feel obligated to stick to the plan. [Read more...]