Trying to get a sense of the mood on Wall Street is tricky. The major concerns are the state of Europe and the state of the USA.
As we know, in Europe there are serious economic issues in Greece, Ireland, and Italy. In the USA its all about the consequences of Congress failing to raise the debt ceiling. Investors are attempting to understand what position to take in the face of this chaos. Questions abound about how equities will hold up against this scenario. One suspects that people want to know what to do with their investments if the US credit rating tumbles etc etc etc. Truth be told, this is what I am attempting to understand. So far the messages are mixed. I would suggest you take a listen to the clip (posted directly below) where Volcker tries to answer some questions about this unique misery. In some ways he is reassuring. Don't forget that most media publications tend to take a more anxiety riddled angle on economic issues simply because fear is compelling. That part of the equation is a constant.
Reuters: Default paranoia complicating investment decisions
...the White House's July 22 deadline on a deal...Bloomberg: U.S. Stocks Fall Most in Five Weeks on European Crisis, Debt-Limit Talks
The early part of the trading in the coming week is likely to be dominated by reaction to European banking stress tests.
One of the flagship funds at Carmignac has reduced equity exposure to 20 percent against a maximum limit of 50 percent and its exposure to government bonds focuses on German debt.
"...We see high-yield and high-deficit currencies falling hard..."
...the VIX, which measures the cost of using options as insurance against declines in the S&P 500, jumped 22 percent, the biggest gain since the week of May 6, to 19.53.
"...There’s macro uncertainty, but corporate fundamentals are strong.”
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