US markets finished mixed and flat yesterday despite increased heat from a burning Europe
Major US indexes and index ETFs finished mixed and flat yesterday despite continued heat from a burning, crumbling Europe. The S&P 500 declined .25% with the SPDR S&P 500 ETF (NYSEARCA:SPY) declining -.29%; the DJIA lost .08% with the SPDR Dow Jones Industrial Average ETF (NYSEARCA:DIA) losing -.10%; the NASDAQ 100 rose .31% with the PowerShares QQQ Trust Series 1 ETF (NASDAQ:QQQ) rising .28%, and the Russell 2000 Index rose .33% while the iShares Russell 2000 Index ETF (NYSEARCA:IWM) rose .27%.
The biggest news yesterday was obviously Europe, which unfortunately continues to burn to the ground. France and Germany withstanding so far, Denmark, Greece, Ireland, Italy, Spain, Portugal, Netherlands and Britain have all reached the technical definition of “recession,” while weak manufacturing and unemployment reports coupled with continued pain in Spain spelled out a brutal day for markets across the pond.
The spark appeared to be the Markit Economics PMI report released yesterday, which indicated a reading of 45.9, which was a new three year low and way below the “no-growth” mark. Spanish bond yields have also reached 5.85% and continue to edge ever closer to the 7% danger zone. To further complicate matters, France and Greece are set to hold elections this weekend, both elections of which have the capacity to severely derail any Eurozone political progress if any major power changes abound, as France’s favored Hollande has been labeled “anti-finance” and “anti-Euro,” while the Greeks also have displayed their approval of current Greek politics via looting, fires, and armed demonstrations. We will see how willing and able the French and Greeks are committed to the Eurozone through their respective elections this weekend. With unemployment in the Eurozone reaching a 15 year high, any progress insofar must be viewed as completely ridiculous with an the outlook of an extremely dim future.
News wasn’t much better at home either, as yesterday’s ADP employment report and payroll extensions report, released alongside the Commerce Department’s factory orders report, were all negative. Furthermore, Dr. Ben has indicated in recent days that that no further easing is on the table, so naturally gold and silver ETFs took a nosedive.
Bottom Line: US markets continue to remain flat despite negative economic reports released today and, more importantly, the continued and increased pressure from across the pond. Europe, in short, is burning to the ground, and despite all measures being used to contain the contagion, the Eurozone is not looking too good.
John Nyaradi is the author of The ETF Investing Premium Newsletter.