MARKETS UPDATE (4:15 pm EDT)
The Greek debt crisis seems to be edging closer to a "Grexit" (Greek exit from the eurozone) as European officials reported today that Greece's new finance minister, Euclid Tsakalotos, came empty-handed to Tuesday's summit meeting of eurozone finance ministers. Apparently Greece brought no new proposals to the negotiating table, much to the frustration of eurozone officials who warned that without a credible new proposal on reforms, Greece may have to abandon the euro. The new Greek finance minister promised that a new plan would be sent to creditors on Wednesday. Perhaps buoyed by the support of the Greek people who rejected the eurozone's current bailout terms in Sunday's referendum vote, Greek officials do not seem to be in a hurry to compromise their original anti-austerity proposals. If that is the case, a resolution to these negotiations may take some time. However, time is something that Greece doesn't have. To quote Belgian Finance Minister Johan Van Overtveldt who commented today on the importance of a new proposal from Greece: "It's of course very urgent. The Greek economy is in free fall, the Greek banking system is also in free fall." The Athens stock market and Greek banks will now remain closed until Thursday.
The DOW fell around 200 points early in the day on news of the unproductive meeting of eurozone officials and Greece but then rebounded and closed the day with a 93 point gain. The later rally seemed to be in response to reports that Greek Prime Minister Alexis Tsipras has submitted a proposal for interim funding for his country until the end of July. Equity markets are obviously "news sensitive" to the Greek debt issue so we can expect high volatility in the markets until this crisis is resolved. I am staying with my short position in the broad stock market for now.
My bearish bias for the precious metals was confirmed today as both gold and silver prices dropped significantly. Not surprisingly, this was accompanied by an upsurge in the U.S. Dollar Index. The dollar touched 97.20 intraday but closed the day around 96.60. We will have to wait and see if the dollar will rally now and push precious metal prices lower. As I stated in yesterday's blog, we should be watching for a bottom to the current medium-term cycles in gold and silver to unfold this month. Still on the sidelines of gold and silver.
The Greek debt crisis seems to be edging closer to a "Grexit" (Greek exit from the eurozone) as European officials reported today that Greece's new finance minister, Euclid Tsakalotos, came empty-handed to Tuesday's summit meeting of eurozone finance ministers. Apparently Greece brought no new proposals to the negotiating table, much to the frustration of eurozone officials who warned that without a credible new proposal on reforms, Greece may have to abandon the euro. The new Greek finance minister promised that a new plan would be sent to creditors on Wednesday. Perhaps buoyed by the support of the Greek people who rejected the eurozone's current bailout terms in Sunday's referendum vote, Greek officials do not seem to be in a hurry to compromise their original anti-austerity proposals. If that is the case, a resolution to these negotiations may take some time. However, time is something that Greece doesn't have. To quote Belgian Finance Minister Johan Van Overtveldt who commented today on the importance of a new proposal from Greece: "It's of course very urgent. The Greek economy is in free fall, the Greek banking system is also in free fall." The Athens stock market and Greek banks will now remain closed until Thursday.
The DOW fell around 200 points early in the day on news of the unproductive meeting of eurozone officials and Greece but then rebounded and closed the day with a 93 point gain. The later rally seemed to be in response to reports that Greek Prime Minister Alexis Tsipras has submitted a proposal for interim funding for his country until the end of July. Equity markets are obviously "news sensitive" to the Greek debt issue so we can expect high volatility in the markets until this crisis is resolved. I am staying with my short position in the broad stock market for now.
My bearish bias for the precious metals was confirmed today as both gold and silver prices dropped significantly. Not surprisingly, this was accompanied by an upsurge in the U.S. Dollar Index. The dollar touched 97.20 intraday but closed the day around 96.60. We will have to wait and see if the dollar will rally now and push precious metal prices lower. As I stated in yesterday's blog, we should be watching for a bottom to the current medium-term cycles in gold and silver to unfold this month. Still on the sidelines of gold and silver.
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