Looking to a Strong Open

It looks like the stock market will open higher thanks to the news that the Greek Prime Minister will survive a no-confidence vote today. The very fact that we’re watching parliamentary votes in Greece looking for good is itself highly questionable news. The sad fact is that Europe’s troubles have dominated our markets recently. Last week, the S&P 500 finally shook off its six-week losing streak which was the longest downhill run in over two years.

The other big story today is that the Federal Reserve is meeting again in Washington. There’s little doubt that the Fed will continue with its current policies. As we’ve seen from the ultra-low yields in the bond market, Wall Street expects the Fed to keep its rock-bottom rates going for a few months more.

As I noted recently, the yield on the two-year Treasury bond is down to 0.38%. It’s one thing to see low yields in short-term rates, but two years isn’t so short. Investors so desire liquidity that they’re willing to forgo nearly any income.

To bring you up to speed on all things Greek, the country needed a huge cash infusion last year to avoid going under. They got it, but now they need more. This time, the European finance ministers are demanding a pound of flesh. Or more precisely, several million euros of flesh. The Greek government will need to pass some strict austerity measures. Naturally, this has caused domestic political turmoil.

The no-confidence vote will come around 5 pm ET.

Posted by on June 21st, 2011 at 9:05 am


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