Sunday night futures took a big hit as French and Greek elections spook the market. Futures were able to climb back and wipe out majority of the losses from Sunday night prior to the open. As the market was able to gain itself footing, but lacked any oomph. Volume was lower on the day as it tends to be on Monday mornings. Today was Day one of an attempt at a new rally and it was very underwhelming. A show of support by institutions would have been nice to see. Not a bad day as things could have gotten much worse, but the market is lacking the thrust.
The one bit of economic news of the day came at 3pm when the government released figures on consumer debt. It grew and quite big. Economists expected consumer credit to grow by 9 billion, but only to see it grow by 21 billion. This comes at a time when the public should be reducing debt and growing savings. Most private businesses had to adjust to the downturn in 2008, but the government and consumers have yet to experience a similar reduction. Rather than take the medicine now we are running the risk of a much larger problem requiring much more than just medicine.
Over in Europe the people have had enough of austerity and pushed toward socialism. The only problem is no one will lend anyone in Europe any money. It will boil down to the ECB getting the nod to print more Euros. Endless deficit spending has caught up with Europe and no one is willing to deal with the consequences of it. Kicking the can down the road will only lead to greater problems and more angst amongst the people of Europe. Take your medicine and move on.
The market still remains in a very dangerous area with the S&P 500 and NASDAQ below their 50 day moving averages. It would not surprise me to see today’s low taken out over the course of the next few days. Stick to your game plan and execute.