>

European governments are preparing to borrow at least $43 billion this week, reflecting deterioration in the sovereign debt story.

This loan/bailout is  pressuring markets around the world; the MSCI World Index lost half a percent, and US Futures, especially SPX futes, are showing modest pressure. Bloomberg reports that the Stoxx Europe 600 Index fell 0.8%, while the Hang Seng lost 1%.

The Street, however, is in the midst of a major rotation, dumping bonds for stocks.Whether its in anticipation of Growth, Inflation, political restraints on the Fed, or  some combination of all three is difficult to say. Earnings may be peaking, and could have a hard time maintaining their torrid pace.

Regardless, this rotation has kept a firm bid under equities. It has contained market downside, with markets not falling quite as far as the early morning futures have indicated.

Category: Asset Allocation, Fixed Income/Interest Rates, Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

7 Responses to “Europe Settlement Pressuring Futures”

  1. [...] US futures under pressure as Euro CDS spreads are
    blown out after a disappointing settlement over there. 
    Another $43 billion in Euro sovereign borrowing is expected this
    week. [...]

  2. mathman says:

    http://www.theoildrum.com/node/7302#more

    Asks if we’re not about to repeat 2008.

  3. machinehead says:

    Let’s make Wall Street’s logic explicit. Financial crises usually have proven to be bullish in retrospect, after the scary selloff on the news, because bailouts inject liquidity.

    So the biggest financial crisis ever — European sovereigns such as Portugal and Belgium teetering on the brink — ought to be super-bullish, after the forty-eleven trillion euro bailout package is announced.

    But until the Sunday night crisis meeting announcement (which will be preceded by days of official denials), I’d prefer some downside protection whilst whistling past the graveyard. Sovereign debt crises are scarier than you think!

  4. Tarkus says:

    I always scratch my head trying to figure out how “sovereign” anybody can be when up their eyeballs in debt.

    Unless it is NewSpeak, of course…

    Jumbo shrimp anyone?

  5. CrispE says:

    BR:

    The Hedgies may be setting us up for a pullback. All the psychological aspects are here plus a huge run-up since July, plus an America in grief and disappointing Christmas retail. They could take the market down 1000 DOW points, never skip a beat.

    Does it sound at all like a plan?

  6. “….Protester Mukul Ahmed said he lost $3,000 over the last three weeks. He invested all the money he has saved _ about $7,500 _ during his four years as a government official.

    An APTN cameraman at the scene said he saw some protesters injured as police swooped in to stop protesters from using loudspeakers.

    Shohidullah would not say whether any security officials were injured.

    By Monday evening, the protests had ended and the situation was back to normal in the business district where the stock exchange is located.

    Trading at the Dhaka exchange and in Chittagong, the second-largest city, was suspended until further notice, a government website said. And its Securities and Exchange Commission held an emergency meeting with merchant bankers and institutional stockbrokers to decide what actions to take to save the market from further falls.

    The trading suspension came after the benchmark Dhaka Stock Exchange general index (DGEN) tumbled 7.8 percent Sunday and 9 percent in early trading Monday.

    Bangladesh’s economy has grown by nearly 6 percent in each of the last few years. Per capita income in the nation of 150 million people crossed the $700 mark last year.

    The government has said many first-time investors invested in the market without understanding the nature of shares, while experts say the number of shares has not increased in accordance with the number of investors.

    Meanwhile, Bangladesh’s central bank has put limits on banks’ stock market investments _ a measure that has forced many banks and other financial institutions to withdraw from the market….”
    http://news.ino.com/headlines/?newsid=6897576737372710

    maybe, Yellen should take a Memo: ..

  7. DebbieSmith says:

    Here is an article showing the numerous fiscal issues facing Portugal:

    http://viableopposition.blogspot.com/2010/12/trouble-is-brewing-in-portugal-yet.html

    At least Portugal’s banking system is not facing pressure resulting from over-priced real estate markets as was the case in Ireland. One issue that will affect the country greatly is the rising price of oil since they require nearly 270,000 BOPD of imports and that was not accounted for in their latest budget.