Recent weeks have harkened back 4 years to times of uncertainty regarding the future of the Euro. Greece threatening to leave the EU had created undue volatility in the regions stock markets over the last month, but that has changed…

Greece

Leadership in Greece had gained power on the premise of being anti-austerity. Austerity was the stipulation that allowed them to receive much needed funds to avoid default over the last several years.

Understandably, austerity and money tightening policies in general during a time of recession have proven to merely elevate issues. This makes it understandable that they would attempt to restructure their deal. A restructuring agreement needed to be reached by this past Friday in order for Greece to avoid default in the next several weeks.

Attempts were made at a 6 month extension to no avail as some involved felt that it was simply Greece’s way to buy time to organize an exit from the Euro. As a result a 4 month extension has been reached, creating drama… I mean a deadline at the end of June.

Greece’s willingness is a good sign that their exit is less likely than speculated. That should reduce volatility and create an opportunity for stock growth in the region.

U.S.

Economic data last week was generally strong, leading to continued gains to close out a strong February, 2015[1]:

1) Existing Home Sales down 250K in January.
2) Home Prices, 20 city, was up 4.5% for 2014.
3) Services PMI, 57.0 for February.
4) Conf. Bd. Cons. Confidence 96.4 for February
5) Core CPI unchanged at 1.6% for January.
6) Durable Goods Orders increased 2.8% in January.
7) Mich. Cons. Sent. increased to 95.4 in February.
8) Pending Home Sales up 1.7% from December.

In all, this data speaks to increasing inventories for the 1st quarter, stable prices outside of fuel volatility, a stable housing market, and a healthy consumer. Along with fair valuations, stock price changes may have more to do with tertiary impactors in the near run.

International

Germany’s unemployment rate has fallen to 6.5%, the lowest level in over 20 years[2]. India is projecting their economic growth at 8.1% to 8.5% for 2015, this projection would propel India past China as the fastest growing large economy in the world[3].

Petrobas is a large oil company run by the country of Brazil. Last week their debt was downgraded to a junk status by Moody’s[4]. This change causes concerns regarding Brazil’s sovereign debt and emerging markets in general.

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Always remember that while this is a week in review, this does not trigger or relate to trading activity on your account with Financial Future Services. Broad diversification across several asset classes with a long term holding strategy is the best strategy in any market environment.

Any and all third-party posts or responses to this blog do not reflect the views of the firm and have not been reviewed by the firm for completeness or accuracy.

[1] www.investing.com – economic calendar
[2] www.mfs.com – week in review
[3] www.mfs.com – week in review
[4] www.trwoeprice.com – weekly wrap-up