Reflecting Upon the Past Several Days, One Would Think Equities Would be Down a Gazillion Points.

Reflecting upon the past several days, one would think equities would be down a gazillion points.  To recap, little was accomplished regarding the Ukraine.  Jordon, perhaps one of the weakest Middle East countries is aggressively pursuing ISIS.  Greek is thumbing its nose at the ECB and is demanding German reparations from WWII.

The President submitted a budget that is beyond DOA and too many, is absolutely infuriating.  And then the jobs data where some Committee members are losing their patience regarding a change in monetary policy as it appears the doves reign supreme at the Federal Reserve.  And then there is oil and the dollar.

For most 2014 was a difficult year, partially predicated by the outperformance of passive index mutual funds.

Many times I have commented about locusts driving one sector higher at the abandonment of all other sectors and then leaving that sector for another.  The net result is higher indices but the typical stock grossly underperforming.  Will 2015 be the inverse?

Based upon current headlines, I would suggest yes a macroeconomic geostrategic thesis is perhaps even more important today than yesterday.

Yesterday the averages declined about 0.50% on concern that Greece’s rejection of the nation’s bailout terms can lead to fresh turmoil.  Crude and the typical stock rose.

Last night the foreign markets were mixed.  London was down 0.21%, Paris up 1.19% and Frankfurt up 0.86%.  Japan was down 0.33% and Hang Seng up 0.03%.

The Dow should open moderately higher as Greece is open to some type of compromise.  My thought—do they have any other choice as normally the debtor is beholden to the creditor? The 10-year is off 5/32 to yield 1.99% and oil is down $0.50/barrel.

 

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