Maverick EnergyMarkets are trending lower again, now selling off relentlessly for three consecutive days. The currency markets remain at the forefront of the movement with the dollar index rising another 500+ basis points to over 84.50 while the euro goes for new lows below $1.28. Equities are opening mostly flat and despite a small bump down in initial jobless claims and good retail sales figures (with the exception of Target) for April, the market remains in a cautious mode right now as everyone positions themselves for tomorrow’s highly anticipated April unemployment report.
Greece is still the word of the day as their parliament begins to debate the austerity measures prescribed as part of this bailout. Riots yesterday turned deadly, and while the EU has come to its rescue when they (on some level) didn’t have to….it’s quite the slap in the face to see civil workers and other protesters in Greece challenging any of the cost cuts necessary like pay freezes and the like. The EU should be insulted Greece’s public protest. Binding countries to a single currency without a central political or financial apparatus, not to mention the book-cooking that was going on, always ends in disaster when times of crisis unfold as countries lose the ability to manipulate their money supply. The end-game could be the removal of Greece as a member of the EU with an implication they could enter a few years down the road after they have “healed” themselves. If Greek’s think they have it bad now……wait until that’s thrown on the table. Contagion is the real fear right now.
Focusing on energy more crude traded below $80 and the 100-day moving average (MA), quite a feat and a decidedly bearish position near-term. The question of whether this correction was a blip or a developing trend is not quite answered yet, but with this correction in the Dow still being less than 5%….we might still have more to go in May.