EmailThe S&P futures are down 10 points and it is not an intellectual stretch to understand why. Europe is the problem -- again.
Over the weekend, Spain officially requested aid for its banking system. We are reading reports that suggest the early weakness stems from that action. That is a pretty loose interpretation of things considering everyone knew last week that the request would be coming; moreover, EU officials had already said they would extend up to 100 bln euros to Spain's banking system if needed.
In the same vein, Greece's "new" leadership stepped out with a request that its creditors renegotiate its bailout terms, in particular asking for more time to meet its fiscal targets. Oh, Greece doesn't want any more of its public workers to be fired either.
These requests raised the ire of German finance minister Wolfgang Schaeuble, who reportedly said Greece should stop asking for help.
So, the problem for the market this morning isn't these news items per se. Rather, it is the understanding that these news items underscore the reality that almost nothing has changed -- at least not in a good way anyway as it pertains to the eurozone's debt crisis.
There is infighting in the eurozone, both within and across borders as it relates to finding solutions for what ails the eurozone.
At the same time, there is tremendous impatience outside the eurozone, as others anxiously await some substantive and concrete solutions from eurozone leaders.
The EU Summit on Thursday and Friday presents an opportunity for such solutions, yet market participants understandably have little confidence that anything other than some vague promises to work together to defend the eurozone will be the outcome of that meeting.
That could create potential for some major upside action later in the week, or early next week, since the expectations bar is so low, but this market has been disappointed time and again by these summits that no one is rushing to frontrun the idea that a Kumbaya Pact is imminent.
The S&P futures are trading 0.9% below fair value, meaning it will be a lower start for the market and that it will be digging itself out of a hole if it is going to end the week higher than where it began.
Developments in the eurozone will have a guiding hand in things, but so will economic data in the U.S.
The New Home Sales report for May (Briefing.com consensus 350,000; prior 343,000) will be released at 10:00 a.m. ET today and will be followed by the Case-Shiller Home Price Index, Consumer Confidence, Durable Orders, Initial Claims, the third estimate for Q1 GDP, Personal Income and Spending, and Chicago PMI reports later in the week.
