Market Recon Monday

Good Morning,

                     I’m going to go out on a limb and guess that today’s release of Pending Home Sales for May isn’t what’s on your mind this morning.  If it is, you must work in real estate.  If you work in the financial markets, then Greece is what’s on your mind first and foremost, and secondly…..maybe…the interest rate cut made by the PBOC over the weekend that did not rescue Chinese stock markets.
                     OK, Greece will almost certainly miss their 30 June deadline at this point (Never say never).  Greek banks will not open today, and likely will be closed at least a week, or until a resolution, or maybe the lack of a resolution becomes clear.  Then what?…….Every headline will carry exaggerated weight in the marketplace as we pass 30 June, and approach the 5 July referendum on the bailout plans that have been proposed. (The Tsipras government is recommending a “No” vote).  If the people vote “yes”, I can’t imagine the Tsipras government surviving.  If the people vote “No”. then they’ll default, and probably leave the EMU down the road.  The only guarantee  is that something will happen that we haven’t thought of yet.
                     FYI, more than a billion euros were withdrawn from ATM machines in Greece this past weekend, and all over the country, those machines ran out of cash as worried people stood in line desperately trying to get to their money.  No lines today however, as the people seem resigned to the fact that there is none available,  There is misery, and miserable people rebel.
                     If you are not aware of what is going on in the futures markets this morning, you may want to take a peek.  It’s ugly out there, but far less ugly than it was overnight.  Followers of the S&P 500 should find out early today if the lower end of the range that we have been in since early April will hold.  Like I said a while back, we are range bound, until we are not range bound.  We may leave our zone of safety today, but the futures market has indicated that there is support a rough percent lower than where markets closed on Friday.    Bottom line is that this week may be short, but it will not be fun.
                     As you might expect, US, British, and German sovereign debt products are experiencing the safe haven benefit that they usually do when seas get rough.  On the other hand, Italian, and Spanish debt have a very different experience in times like this.  What does Arthur usually say?  “Stay nimble”???  He’s got that right.  Good luck, gang.
SPX: 2107, 2099, 2090, 2084, 2079, 2073, 2068, 2057
RUT: 1283, 1278, 1272, 1266, 1257, 1253, 1248, 1243