Market Oversold on News Not Information
Stocks seen heavy losses on Friday based on News sparked worries about the Italian banking sector and Greek austerity plan, but the S&P 500 managed to hold its 200-day moving average, there was not spike in the Gold price and the VIX was little changed in a sign of market strength.
Aside from the misleading doomsday headlines, the US economy showed a strong turnaround and the EU have agreed to stop any default in Greece.
The U.S. economy expanded at a 1.9 percent annual rate from in January through March after expanding at a 3.1 percent pace during the last three months of 2010, revised figures from the Commerce Department showed. The government reported in May a quarterly expansion of 1.8 percent.
The Fed said after the June 21-22 policy meeting that it would maintain monetary economic stimulus after its $600 billion program of debt buying ends this month. The central bank purchased $4.6 billion of Treasuries maturing from April 2014 to May 2015 today.
Economic growth will pick up in the second half while remaining slow, and the Fed will maintain its record asset holdings for an “appropriate” period, according to Dallas Fed President Richard Fisher.
Europe’s leaders prepared the way for a second, large, bailout of Greece on Friday, pledging not to abandon the debt-laden nation to a default providing it votes a tough package of austerity measures through its Parliament next week.
“We have agreed that there will be a new program for Greece,” Chancellor Angela Merkel of Germany told reporters at the end of a two-day summit meeting in Brussels. “This is an important decision that says once again we will do everything to stabilize the euro overall.”
Shayne Heffernan
Shayne Heffernan oversees the management of funds for institutions and high net worth individuals.
Shayne Heffernan holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.