Charts: The S&P 500 closed at 1160, down .5%. Today was a tripling witching options expiration day, so volume data is less meaningful. The index tested its closest support level (1154) and bounced up off support. This is good technical action, especially considering the fundamental news was really bad, although geopolitics continues to be really good.
Fundamentals: India raised interest rates overnight. Inflation is heating up in emerging markets, thus the concern over rate hikes and slowing growth.
Greece is saying that it can’t sell any more debt unless the IMF and/or Germany cobble together a genuine support program. Germany has been trying to get away with jaw-boning Greek credit spreads down. Greece can sell debt but wants to do so at the lower rates that will come with an implicit guarantee. It is put up or shut up time for all the actors in the Greek drama.
Stocks levered to emerging market growth took big hits today.
Geopolitics: In a Washington Post interview CIA Director Panetta said Al-Qaeda was in such disarray that one of its lieutenants, in an intercepted message, pleaded with Osama bin Laden to come out of hiding and provide leadership. OBL and a handful of top leaders are apparently dug down very deep somewhere in Pakistan and are in pure survival mode. Panetta went on to say, “It’s pretty clear from all the intelligence we are getting that they are having a very difficult time putting together any kind of command and control; that they are scrambling. And that we really do have them on the run.” This speaks to a huge whack-a-mole effect at some point. To that end, the Director says the CIA is willing to strike in urban areas or anywhere. He goes on to explain that the CIA has been involved in the interrogation of #2 Taliban Commander Mullah Baradar somewhere in Pakistan and significant intelligence is being acquired. Obviously these interrogations are gloves off and the CIA is not being constrained by human rights organizations or the US Congress. That Panetta would openly admit as much speaks to the massive political insulation he has built between his agency and liberal lawmakers in DC.
Hillary was supposed to negotiate with Russian PM Medvedev (good guy) today over nuclear weapons but Russian Pres. Putin (bad guy) horned in on the action. Elbowing Medvedev out of the way, Putin told Hillary that Russia is going forward with plans to build a nuclear reactor in Iran. Putin’s action was part of a long running power struggle that he is having with Medvedev. America needs Medvedev to win before it can go forward with creating a US-Russia alliance, which would be cemented by a nuclear arms reduction treaty. If such a treaty were to materialize, then it would actually be great if Russia built reactors in Iran and controlled fissile material there.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment