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Reactions to Greece missing an IMF payment on Tuesday were relatively muted with the market beginning to discount the impact of the crisis. Alan Skrainka from Cornerstone Wealth Management summed up the situation succinctly, stating that the Greek economy is relatively small and “a default offers very little risk for the global economy or for the rest of Europe.”
Other important news during the week included the release of lacklustre Non-Farm Payrolls data and falls in the Chinese equity markets.
There were broad-based sell-offs on Monday with the markets reacting to Greek uncertainty leading up to Tuesday’s IMF bailout deadline. The Dow Jones finished the session 350 points lower at 17,596 with the Nasdaq down 2.4%.
It was relatively quiet on the economic front with Pending Home Sales the only key release. Coming in at 0.9%, this fell short of the 1.3% expectation.
Hope that Greek Prime Minister Tsipras would soften his stance on bailout terms helped support the markets on Tuesday with the S&P 500 finishing 0.27% higher. Factoring in an IMF default, analysts switched their attention to U.S. Consumer Confidence data, which came in above forecasts.
Chicago PMI rose for the corresponding period to post 49.4. This was slightly below estimates of 50.2.
In spite of Greece missing its IMF payment deadline overnight, the ECB confirmed that they would be keeping emergency funding lines in place on Wednesday. Airline stocks reacted to news on Wednesday that the U.S. Justice Department were investigating ticket price fixing.
Economic announcements during the day pushed the indexes higher with Final Manufacturing and Construction Spending beating estimates.
The Bureau of Labor’s Non-Farm Payroll data came in below estimates of 231,000 with 223,000 new jobs recorded for the period. Average Hourly Earnings were flat with the Unemployment Rate falling 0.2% to 5.3%. Unemployment Claims, however, rose to 281,000.
There will be a Bank Holiday on Friday.
Next week will see earnings reports from: Simulations Plus (SLP ), A.Schulman Inc. (SHLM), Alcoa (AA), WD-40 (WDFC ), Chase Corp. (CCF ), Family Dollar Stores (FDO), PepsiCo. (PEP ), Price Smart (PSMT ), Walgreens Boots Alliance (WBA ), IEH Corporation (IEH).
The following economic data will also be released: Final Services PMI on Monday; Trade Balance, IBD/TIPP Economic Optimism, and JOLTS Job Openings on Tuesday; FOMC Meeting Minutes on Wednesday; Unemployment Claims on Thursday and Wholesale Inventories on Friday.