Daily Market Commentary for July 11, 2011
U.S. debt ceiling dispute continues as President Barack Obama and congressional leaders meet again today. (read more at Millennium-Traders.Com)http://www.millennium-traders.com/news/newscommentary.aspx
Per Treasury Secretary Timothy Geithner, Congress has to raise the federal governmentâ€™s legal debt limit by August 2 or the nation could be in danger of defaulting on its debt. A U.S. default could put the economy back into recession and create widespread panic in the already fragile, global financial markets. The U.S. Treasury is already bumping up against a congressionally imposed borrowing limit of $14.3 trillion. based on the current rate of federal spending, the debt ceiling would need to be raised by about $2 trillion to allow the U.S. government to function normally until the 2012 election.
The Republican-controlled House has demanded President Obama agree to reduce future spending by the same amount as any increase in the federal debt ceiling. According to the Congressional Budget Office, the U.S. is projected to spend $46.1 trillion which would add $7 trillion to the federal debt, over the next 10 years.
Brief comments from the press conference held earlier today by President Obama: Insists he won't accept short-term deal; Deal could include meaningful changes to Social Security; All leaders agree that it is 'unacceptable' to not raise debt ceiling; Says A lot of work is still ahead; Says any deficit deal should be meaningful; Says 'If Not Now, When?' on deficit deal. â€œThe things I will not consider are a temporary stopgap measure to the problem,â€ Obama said. â€œThis is the United States of America. We donâ€™t manage our affairs in three-month increments.â€ â€œI do not see a path to a deal if they do not budge, period,â€ Obama said. â€œIf their basic proposition is â€˜my way or the highway,â€™ there probably wonâ€™t be a deal done.â€ Obama added, â€œNobody has talked about increasing taxes now or next year.â€
Surging benchmark yields in Italy increased worries of a spreading European-debt crisis, sending the U.S. stock market, strongly to the downside. The DOW was lower by triple digits on the heels of rising concerns in Europe. European markets were sharply lower Monday, led lower by banking and insurance shares as fears that the euro-zone debt crisis is spreading to Italy. Stoxx Europe 600 index dropped 1.4% to end at 269.90, with banks and insurers among the worst performers. BNP Paribas SA fell 6.8% in Paris, Commerzbank AG fell 8.6% in Frankfurt and Dexia SA slumped 8% in Brussels. Some shares of Italian lenders were briefly suspended due to tumbling prices. Shares of Intesa Sanpaolo SpA fell 7.7%, falling 14% over the previous week, as the cost of borrowing for Italy rose amid worries over the outcome of stress tests for major European banks. Italyâ€™s FTSE MIB index dropped 4% to 18,295.19 as yields on Italian government debt also continued to rise after the index fell more than 7% last week. Over the weekend, Italian regulators introduced emergency short-selling disclosure rules in an attempt to curb recent volatility. The Greek ASE Composite fell 2.6% to 1,218.88 following a Financial Times report that European officials are now willing to accept some form of Greek debt default as part of a new bailout plan. Ahead of the gathering today of the euro group, European Commission and the European Central Bank top officials held a coordination meeting today to discuss a new aid program for Greece as well as, recent developments in the euro area.
Cisco Systems (NasdaqGS: CSCO) reportedly is considering job cuts to the tune of 5000 positions in an effort to save $1 Billion annually.
Amazon.com (NasdaqGS: AMZN) shares were down over 3% into early afternoon trading.
Netflix, Inc. (NasdaqGS: NFLX) shares tumbled by over 2% after setting an all time high of over $300 per share.
Economic data released today: N/A
Viewers may opt-in to our free Weekly Market News sent via email on the first trading day of the week. Review market news and active stocks from the previous week plus, see what is ahead for the upcoming trading week.
Detailed performance for stocks, futures or forex by date on our News & Commentary. Access our FREE Monthly Trading Lesson posted on our website.
Access a one week trial to our Weekly Swing Trades service. View detailed historic performance from our News & Commentary page.
Follow us now on Twitter
Viewers Poll: Is Austerity the answer for the U.S. economic slowdown?
Thanks for reading