Greece Again

Published by Filipe R. Costa on Tue, 13/11/2012 - 13:12
Greece

Daily Market Commentary for November 13: Investors are concerned with Greece as many issues remain unsolved and the troika is delaying funds to the country. Equities started negative in Europe and are pointing to a lower opening in the U.S.

It seems investors are not very happy with Obama re-election as markets have been losing after Tuesday night. In just a few sessions since the election, the Dow is now down 3.25%. But, the problem is not Obama himself but rather the negotiations regarding the fiscal cliff. The country has been kicking the can until last minute and now have one month and a half to avoid a disaster. Many reforms have to be made in the U.S., and Republicans will have to allow for some tax hikes that will target the richer, otherwise the country won’t be able to avoid the problem.

Greece is in the spotlight again as it become obvious the country cannot repay its debts. The troika will have to decide what to do but without relaxing debt targets and cut on debts, Greece will continue to be a problem. Greece is under a heavy recession and the troika is not free from responsibility a its austerity model has failed completely and they still want to impose it.

The Euro will continue under pressure as problems in Europe continue to mount, although some short term strength may be experienced if US markets recover from the losses of the last few sessions.