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Europe Wags the Tail (again)

The news out of Europe that both the French and Greek voters are throwing out the governments that are imposing austerity measures in an effort to fix their debt and deficit laden economies had me worried, so I wanted to check on things this Sunday evening.

Unfortunately, the Japanese market is down 2.8% right now on the news in early Monday (Japan time) trading and the Euro (trading on Asian exchanges) appears to have fallen through support.

The US 10-year treasury is down to a 1.84% yield, which may be a record (I can’t recall a yield that low) showing a rush to safety.

We still have 13 hours before the US markets open, so things may calm down before then, but I will be back on the blog with thoughts on where things will go and what we are doing about it.

But, keep in mind that earnings season is very strong and stocks ultimately are priced based upon earnings and investor sentiment. Earnings are strong, but investors are temporarily frightened by Europe – but 13 hours from now, that may change. As long as earnings are strong, there is fundamental support for stock prices since sentiment can change like the direction of the wind.


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Mark