Ah, the media is finally talking about the European Union debt crisis again. Bond yields in Greek and Portuguese debt are soaring higher this morning continuing to climb from yesterday’s advance. Spain, Italy, Belgium, and other European nations still face major debt problems. Central banks (ECB and the Federal Reserve) can only mascaraed the debt problems by purchasing bonds for so long. Yesterday, Moodys downgraded Greek debt by three notches. Many investors thought that Greece was already bailed out in May 2010. More money creation in Europe by central banks may only help to increase the price of gold and silver.
The Asian markets all traded higher overnight. The leading Asian stock index was the Hang Seng Index (Hong Kong) which closed higher by 1.71 percent. However, the highly important Shanghai Index (China) was only higher by just 4.0 points or 0.12 percent. Therefore, commodity stocks could be contained this morning. Whenever, the Shanghai Index rallies it is prudent to expect commodity stocks to be strong at the start of the trading session in the United States.
Spot oil is pulling back a little this morning. Light crude is trading lower by 0.15 cents to $105.28 a barrel. The popular United States Oil Fund (NYSE:USO) is trading higher by 0.12 cents to $42.50 a share. Should oil decline sharply today it would likely cause a stock market bounce or rally. Traders must keep one eye on crude at all times. The problems in the Middle East and Northern Africa do not seem to be going away anytime soon, therefore, any pullback in oil may just be temporary. Oil is extended on the daily chart at this time and may need to consolidate or pullback a little before resuming another upward move.
The S&P e-mini futures are trading higher by 2.00 points this morning to 1311.00 per contract. There
are a lot of different factors that can move this market from oil, geopolitical events, to the Federal Reserve Bank’s permanent open market operation (POMO). Be prepared for anything in this type of environment.
| S&P 500 Gainers & Losers | Price | % Change |
| Sprint Nextel (S) | 4.82 | +7.59% |
| Expedia (EXPE) | 21.50 | +2.38% |
| NVIDIA (NVDA) | 20.80 | +1.61% |
| Bank of America (BAC) | 14.24 | +1.50% |
| People’s United Financial (PBCT) | 12.60 | +1.37% |
| Urban Outfitters (URBN) | 32.81 | -13.61% |
| Netflix (NFLX) | 199.30 | -3.91% |
| National Semiconductor (NSM) | 14.70 | -2.91% |
| Occidental Petroleum (OXY) | 101.35 | -1.67% |
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