Photo: AP Images
The post-Greek election rally faded fast.First the scoreboard:
Dow: 12,741, -25.3, -0.2%
S&P 500: 1,344, +1.9, +0.1%
NASDAQ: 2,895, +22.5, +0.7%
And now the top stories:
- This Sunday’s Greek parliamentary elections largely went right in line with expectations. The conservative, pro-bailout New Democracy party won the most votes, easing fears of a disorderly exit from the euro. However, the left-leaning, anti-bailout SYRIZA party was close. Now they just have to form a government. Failure to do so could lead to a third round of elections, which would bring more volatility to the markets.
- Experts sounded off right away. Goldman Sachs’ Huw Pill quickly reminded the world that Greece remains a hot mess. Jefferies’ David Zervos noted that despite the win, the pro-bailout party is as unpopular as ever, and that a Greek exit from the euro has only been postponed. Citi’s Jurgen Michels reiterated his call that there was a 50 per cent to 75 per cent probability that Greece would exit the euro withing the next 12 to 18 months. This Is What Happens If Greece Exits The Euro >
- What started as a global market risk-on rally, quickly evaporated. During the European trading session, stocks and the euro quickly fell. European markets closed at the lows of the day after German Chancellor Angela Merkel told reporters that she wouldn’t budge on the Greek bailout package terms.
- Spanish government borrowing costs exploded to new euro-era highs. Yields came off of their highs to form a bizarre middle-finger-like pattern. Citi’s Willem Buiter held a conference call today where he argued that Spain and Italy would require sovereign bailouts.
- The National Association of Home Builders housing market index climbed to 29, barely beating economists’ estimate of 28. The current sales sub-index is at its highest level since April 2007. Homebuilder stocks did well today. Big winners included D.R. Horton, Lennar, and PulteGroup. BARCLAYS: These Are The 20 Best Stocks In The World >
- Groupon shares surged today following an upgrade from Morgan Stanley’s Scott Devitt. “Groupon has emerged as the leading local eCommerce company in an industry with significant barriers to scale,” Devitt wrote in a note to clients. “Its advantage due to scale (largest merchant and customer base) and technology (8 acquisitions YTD) has enabled it to accelerate NA revenue growth while improving its margins.”
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