OverviewGreece at the World’s Center Stage
June 29, 2015 — Stocks ended mixed last Friday, as investors sought the relative safety of the sidelines ahead of critical weekend negotiations between Greece and international creditors. Troika creditors, including the European Central Bank, the European Union and the International Monetary Fund (IMF), proposed a five-month loan extension, offering to unlock up to €15.5B (US$17.3B) in Greek aid in exchange for required reform measures. Negotiators were said to be at odds over measures valued at approximately €2B. Greek Prime Minister Alexis Tsipras rejected the offer and called for a referendum vote on July 5th. A possible debt payment default may occur this week, which could threaten Greece’s continued membership in the Eurozone.
In highlights of U.S. weekly economic data, existing home sales jumped 5.1% in May, bringing YTD sales soaring 9.2% to the second strongest 12-month gain in two years. The first quarter GDP shrank less than earlier projected as a Wednesday final revision came in at -0.2% versus the -0.7% previously estimated. Lastly, the University of Michigan’s final June reading of consumer confidence rose to a five-month high of 96.1 from 90.7 in May.
The benchmark S&P 500 Index finished a ninth week without a move of more than 1%, the longest such stretch since August 1993. For the week, the S&P 500 and the Dow Industrials each fell 0.4%, and the NASDAQ Composite lost 0.7%. Seven of the ten major equity sector groups ended negative last week, led by Utilities (-2.3%) and Materials (-1.7%). Only Telecom (+1.2%) and Consumer Discretionary (+0.5%) advanced. The yield on 10-year Treasury notes rose by 21.5 basis points last week, finishing at 2.474%.