In a day where the market celebrated the $1 Trillion bailout for European nations, on had to worry about how long the Euro-Phoria would last. With the lunch hour passed, and the close about an hour away, it looks as though the market will take the gains into the close. For me this demonstrates at least a hint of stability, no matter how modest that stability may be.
In a global economy, there are many things that can impact any equity. The sensitivity with the Euro was far more than Greece, Portugal, and other nations. The potential impact involved the European Union as a whole. Last week electronic trading sent the market into a dizzying tailspin, but the correction back up was almost just as fast. When nations, economies, or currencies fail, the impact is much more lasting.
Over the coming days the Euro-Phoria associated with the bail-out will dissipate. That is when things may get very interesting. There has always been members of the European Union who felt they were carrying more than their fair share of the load. What happens when citizens realize that their country will now absorb a larger load than before. The Euro issues will be in the news for quite some time. This bailout staved off an immediate problem, but is not the total solution. If you are in the markets you need to bear this in mind.
As of this writing, the markets are responding well today. Sirius XM is pacing ahead of overall with a 5%+ gain.
- Dow - 10,727.10 +346.67 +3.34%
- Nasdaq - 2,357.39 +91.75 +4.05%
- S&P 500 - 1,151.61 +40.73 +3.69%
Celebrate the day, but temper it with the knowledge that there are still issues that will be in play for months to come.
Position - Long Sirius XM