EmailStock futures are up slightly ahead of a major European summit that starts tomorrow. Yes, yet another summit. Who needs political union when European leaders have lunch three times a week anyway?
The discussion level at the increasingly frequent summits has moved from how to address a Greek default, to bailing out Spanish banks, and are now increasingly on how to set up structural reforms. As the crisis persists and deepens, the pressure to find long-term solutions increases. At least, one can hope that is the case.
The headlines this morning are that the Spanish Finance Minister warned parliament that Spain can't continue to pay current interest rate levels for long. (He didn't mention 7% as the "unsustainable" point for 10-year yields that the market has adopted as the precise point at which to panic, but the death spiral concept is nonetheless valid in that general vicinity.)
The European discussion has moved from the simplistic "growth" vs "austerity" country-by-country politically driven argument to a heightened sense of urgency for European-wide solutions.
US May durable goods new orders rose 1.1% following a slightly downward revised -0.2% April level. That is close enough to expectations for this highly volatile series to be considered in line with expectations. The component breakdowns were also about as expected and the overall report is consistent with moderate GDP growth.
European stock exchanges are fractionally higher, and US futures point to a modest up open. It has been a choppy and nerve-wracking ride for the US stock market the past two months, but the S&P 500 is still up 5.0% for the year, and it is arguable that a better base of demand has been formed the past few weeks.
Founder and Chairman, Briefing.com
