Thursday, June 23, 2011

Market comments for June 23rd UPDATE

Initial jobless Claims remained above the 400K level again this week. The data released was 429K for the week and last week's data was revised upwards from 414K to 420K. This data comes after Fed Chairman Bernanke had a news conference yesterday where he said the Fed saw a slowing economy and these words prompted a market reversal yesterday, where the Dow closed down.

There was news also on the Oil front this morning with rumors causing Oil prices to drop over $4/barrel. When the IEA held an emergency meeting, they announced they were releasing 60 million barrels of Oil stock, prices rebounded some. The Oil market will settle down some later but where it settles is anyone's guess.

Today's expected drop in US stock markets should see the Dow below the 12,000 level again. The big question still confronting nervous markets is whether Greece will enact tough austerity measures, as they must or default, and whether the US will pass a measure to raise its debt ceiling and calm jittery financial markets. Because the bluster from the Republicans has quieted on this issue in recent weeks, I do believe they have decided to extract as much cuts as they can in the deficit and then declare victory and raise the debt limit to get us to the next hurdle which is fighting for more cuts. This fight will be fought as an election issue during the Presidential campaign, in my view.

UPDATE: 7:15am PST

No sooner do I get this Blog up and make comments that I believe that the Debt Ceiling would be raised because Republicans have been noticeably quiet this past 2 weeks about their reluctance to raise the Debt Ceiling without drastic cuts in spending, that Eric Cantor issues a statement that the bipartisan negotiations have reached an impasse. These were the negotiations headed by VP Biden. Cantor says that only the President and Speaker Boehner can break the impasse. Here we go again!

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