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Global Market Wrap-Up - June 21, 2013

Friday, June 21, 2013
Mark Hanna
U.S. stocks failed to rebound much out of very oversold short term conditions as a continued rally in Treasury yields pressured equities. The S&P 500 gained 0.3% and the NASDAQ fell 0.2% but the story continues to be Treasuries which appear to be rallying on the premise of some future tightening of monetary policy. The yield on 10 year Treasuries jumped over 2.50% for the first time in nearly 2 years. For the week the S&P 500 fell 2.1%, and the NASDAQ 1.9%.
  • St. Louis Federal Reserve President James Bullard said the decision by the central bank to lay out its plans to taper its bond-buying program was badly timed and that the Fed should have waited for "more tangible signs" of economic improvement and a halt in the downward direction for inflation.
Crude oil fell 1.5% to $93.69, gold added 0.45% to $1292.00, and silver gained 0.7% to $19.96.

European markets were weak with British stocks down 0.7%, Germany 1.7%, and France 1.1%.
  • In Greece, government bond prices were lower and the ASE Composite index closed down 6.1%. The country's coalition government looks to be on shaky ground with a deadlock in talks over the shutdown of the state broadcasting company and new worries about a financing gap in the country's bailout program. The International Monetary Fund threatened to suspend aid payments to the country, unless euro-zone leaders move to plug a gap of €3 billion to €4 billion ($4 billion to $5.3 billion) in the country's rescue program, the Financial Times reported late Thursday. The report said the gap stemmed from central banks refusing to roll over Greek bonds.
Japan gained 1.7% while China fell 0.5%.
  • The rate at which Chinese banks lend to each other overnight hit a record high above 13% this week before falling to 8.5% Friday. Analysts worry that new lending is not translating into growth and is increasingly dominated by unregulated operators such as trust companies, securities dealers and underground operators that make up the shadow banking system.