And now we’re looking at two down days in a row.But first, the scoreboard:
S&P 500: -1.06
And now, the top stories:
- It was actually a weird day, very unlike previous ones. Things really got started off with a bang last night when S&P downgraded Italy’s credit rating, causing futures and the euro to tank. It’s not that much of a surprise that people are losing faith in Italy, but still it came as a bit of a surprise. The other big Europe news of the night was that the Bank of China said it was no longer going to trade FX swaps with some major French banks due to funding concerns.
- But actually nobody seemed to care once Europe opened. Indices actually rallied, even Italy! Markets are weird. French banks, however, did have a bad day.
- In the U.S., things started down, but then rallied pretty hard in the pre-market once it became clear that Europe was not melting down. We got one economic datapoint at 8:30 — a disappointing housing starts number — but nobody really cared. At all.
- By the middle of the day, stocks were rocking and rolling, and the Dow was up over 120. All eyes all day were firmly planted on The Fed, which is expected to announce further easing in the form of “Operation Twist” tomorrow.
- And so everything was going swimmingly until later in the day. Out of Greece came news that there’s still no deal with the Troika, which may not return to the country until mid-October. Also earlier in the day there were reports about the Slovenian government collapsing, delaying the next bailout round for Greece. And so ultimately the rally faded, as everyone waits for the Fed to act.
- In the end, it was kind of a weirdly quiet day, at least compared to recent ones. Two big losers: Netflix (which continues to get hammered post-reorg) and MolyCorp, the rare earth darling that got a downgrade from JPmorgan.
- Meanwhile, we learned today why the first stimulus was such a failure >
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