Good morning! Here are the major market stories you need to read about on Monday.
Greece’s new prime minister won’t back down. Greece’s new leftist prime minister, Alexis Tsipras, said on Sunday he would not accept an extension to Greece’s bailout, setting up a clash with EU leaders — who want him to do just that — at a summit on Thursday. Tsipras also said his government would heal the “wounds” of austerity, sticking to campaign pledges.
And Greece’s finance minister says the euro will fall apart if his country leaves the currency. If Greece is forced out of the eurozone, other countries will inevitably follow and the currency bloc will collapse, Greek Finance Minister Yanis Varoufakis said on Sunday.
The Greek market is getting smoked. Greece’s ASE index is down a whopping 5.9%, led lower by Greek banks. Borrowing rates are rising, with the Greek 10-year yield at 10.54%, up 0.43 percentage points.
Markets are down. US futures are in the red, with Dow futures down 84 points and S&P futures down 10 points. In Europe, Britain’s FTSE 100 is down 0.6%, France’s CAC 40 is down 0.8%, and Germany’s DAX is down 1.4%. Japan’s Nikkei climbed in trading Monday, closing 0.36% higher.
European investors are getting bullish. The Sentix index of investor confidence in Europe surged back upward in February, following positive economic data from the currency union. At 12.4, it’s solidly back into positive territory after a dip at the end of 2014 and at its strongest levels since last spring.
Germany’s trade surplus continues to balloon. German exports rose 3.4% in December from November, and imports dipped 0.8%. The country’s trade surplus is now the highest on record.
Chinese exports unexpectedly tumble. “China’s exports fell 3.3% in January from a year earlier, while imports fell 19.9%, disappointing analyst expectations,” Reuters’ Pete Sweeney reported. “Analysts polled by Reuters had expected to exports to rise by 6.3%, and predicted imports would fall by 3%, and foresaw a trade surplus of $US48.9 billion.”
Investigative journalists say HSBC has provided accounts to international criminals. A cache of secret bank files shows that HSBC’s Swiss banking arm helped wealthy customers avoid taxes and hide millions of dollars, according to a report by a network of investigative journalists released Sunday. The ICIJ says HSBC gave accounts to international criminals, corrupt businessmen, politicians, and celebrities.
UBS and Barclays are getting probed. According to multiple reports, the US Department of Justice is examining the currency-linked securities offered by Barclays and UBS.
John Whitehead has died. “John Whitehead, a former senior partner and cochairman of Goldman Sachs who helped make it a top-tier Wall Street firm and led its international expansion, has died, the investment bank said on Saturday,” Reuters’ Doina Chiacu reported. “He was 92.”