Stocks finished slightly higher on Monday following a relatively uneventful day of trading. Over the weekend, the focus turned back to Europe as a report in der Spiegel suggested that a disorderly default in Greece could be just weeks away. German yields also fell into negative territory, which shows just how relatively risky other European assets seem to investors at this juncture.
Major indices started the session flat as investors weighed some Euro news. On one hand, Hungary finally completed a T-Bill auction, though investors were cautious to run with that as they waited for news out of the Monday Merkozy meeting in Berlin, a meeting in which the two leaders would discuss growth strategy and taxes. A German newspaper article stating that the IMF was losing confidence in Greece’s reforms didn’t give the bulls much of a reason to make an early push either.
After some choppy early morning action that saw major indices hitting intraday lows, stocks would stabilize and climb slowly through the afternoon following a positive Consumer Credit report that saw credit surging to its biggest gain since 2001. Stocks closed the day just off of their intraday highs as traders “stalled” in front of numerous reports, announcements, events, and meetings later in the week.
Monday’s session didn’t do much to change the hesitant tone of this market. We are showing signs of decoupling from the Euro-headline-mania that had dominated stocks in the latter half of 2011, though not enough to ignore the situation completely. On Thursday we get debt auctions from Spain and Italy which will be watched closely. In the U.S., earnings season officially begins this week with Alcoa kicking things off after the bell on Monday. Investors will be focusing on whether earnings growth is slowing, as there has been prevalent cautious commentary regarding this issue recently.
Close Recap: S&P 500 +0.23%, NASDAQ +0.09%, DJIA +0.27%, Midcaps +0.35%.
Have a pleasant evening.
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