EmailEuropean concerns are the current market fashion. S&P futures suggest a modestly lower open.
Moody's put Germany's credit rating on watch with a negative outlook on its AAA rating. Germany isn't really of concern, but the agency understandably noted that rapidly deteriorating conditions in Spain and Greece have implications for Germany's financial health. The 10-year Spanish bond yield is at 7.50%. That is too high for comfort.
Earnings season has moved into the slightly-boring stage. The reports are from companies that don't have broad market impact. Texas Instruments and AT&T are the big reports but they aren't drawing much attention. As is common this quarter, each beat profit estimates but fell short of Wall Street expectations for revenue. Texas Instruments revenue was down 3.6% from a year ago while AT&T revenue was up only 0.3%. Weak revenue trends for many companies will make it hard to generate profit growth the rest of the year.
DuPont had a mixed report as profits beat but revenue missed. Lockheed Martin posted good numbers, while Whirlpool and Owens & Minor had poor reports.
The potential for another round of quantitative easing from the Fed meeting next week is still a topic of chatter, but is not driving the overall market. It will increase in importance as the week progresses.
There are no economic releases today.
There was what has lately been a common intra-day market rally yesterday after the large down open. It is possible that the market inches higher through the trading session again today. Nevertheless, the darkening clouds in Europe threaten to persist as a market overhang holding back any sustained rally - at least until the Fed decides on their next step.
Founder and Chairman, Briefing.com
