Can Cyprus Still Sink Stocks?
Say that title fast five times, lol. The markets are higher this morning despite continued uncertainty in the Cyprus situation. Officials are trying to put something together to avoid a collapse of the country's two largest banks. There has been some chatter than a large Greek bank might step in.
Eurozone officials are also discussing plans for imposing capital controls in order to prevent a run on the banks when they reopen. This comes as the ECB has threatened to stop providing Cyprus with emergency liquidity support as early as Monday.
Despite the fluid situation there, stocks are higher again this morning, continuing the stairstep pattern we have been writing about. Retailers are strong this morning after solid earnings reports from Tiffany and Nike (NKE), with the latter stock spiking to new highs. On the disappointing side, Tibco (TIBX) is down -15% after missing on revenues and lowering guidance.
Asian markets were mostly lower overnight, possibly due to Cyprus worries. But Europe is mixed to higher so far today. We expect new on Cyprus to continue hitting the headlines.
The 10-year yield is flat near 1.93%. The dollar index is lower, but so is gold (near $1608). Oil prices are up a bit around $93.00. And the volatility index is down another 3% to 13.50.
Trading comment: The market bent again yesterday but has refused to break. As I mentioned earlier this week, the longer the S&P 500 chops around in a sideways fashion and consolidates its recent gains, the more likely it is that we see another breakout to new highs. And when the SPX breaks to new all-time highs (1575) expect the media to glom onto it again and run all sorts of stories about "are we in a new bull market?".
KAM Advisors has long positions in NKE