U.S. Markets Rally on Good Greece News

Confusion out of Europe regarding Greece and a surprise interest rate cut roil world markets.

Today the Greek referendum was “off the table” and U.S. markets rallied in response with the tech sector (QQQ) gaining +2.4% and energy (NYSEARCA:USO) climbing +1.8%.

New European Central Bank President Draghi started off with a bang by lowering interest rates for the first time in two years but the bond market didn’t share in the celebration as Italian 10 year bonds (NYSE:EWI) hit a Euro era high of 6.4% and Greek 10 years hit 31%.

But gold (GLD) liked the news and registered a 1.6% gain to a six year high and the G20 continued their dramatic meeting in Cannes.

The economy showed modest signs of improvement with weekly unemployment dropping below 400,000 and a rise in factory orders.

Tomorrow brings the all important Non Farm Payrolls and Unemployment reports.

Bottom line: From both a technical and fundamental perspective, the U.S. stock market wants to go up but Greece and Europe, particularly Italy’s $1.9 Trillion in debt remain significant potential potholes.

Disclosure: No positions in ETFs or stocks discussed in this article.

John Nyaradi is the author of The ETF Investing Premium Newsletter.