The Day Ahead: EU Leaders Pledge "Substantial Assistance" for Greece, Stocks Higher
Equity futures are pointing upwards after it was announced that European Union leaders came up with a rescue package for Greece.
According to the Financial Times, the package for Greece includes “substantial” assistance from the International Monetary Fund plus agreements from eurozone states to offer bilateral loans if Athens experiences “very serious difficulties.”
Herman Van Rompuy, president of the European Council, commented, “We hope that it will reassure all the holders of Greek bonds that the eurozone will never let Greece fail . . . If there were any danger, the other members of the eurozone would intervene.”
ECB President Jean-Claude Trichet said he is “happy” with the draft plan to aid Greece; Greek Prime Minister George Papandreou said the package would fortify the value of the euro; German Chancellor Angela Merkel said she is satisfied with the package, which was necessary to maintain a stable currency.
Two hours before the opening bell, Dow futures are up 25 points to 10,816.00 and S&P 500 futures are up 2.25 points to 1,165.00. Also, WTI crude oil is 56 cents higher at $81.09 per barrel and Spot Gold is up $6.20 to $1,096.70.
The US dollar index is weak this morning. Meantime, this morning’s Wall Street Journal reports that a sharp decline in the demand for Treasuries this week is sparking speculation of higher rates down the road.
Key Events Today:
8:30 ― Final revisions to Q4 GDP report are likely to leave the growth marker at an annualized rate of 5.9%. Economists believe final sales could be revised upwards, but a downward revision to construction spending could offset any gains there.
“We expect that inventories will be revised down slightly,” added economists from IHS Global Insight. “These would be marginal revisions, of little consequence since Q4 GDP is ancient history at this point.”
10:00 ― Consumer Sentiment has seen little movement in the past four months.
The Reuter's/University of Michigan survey fell in the preliminary March survey to 72.5 as both components, present conditions and future expectations, both slipped.
“There’s usually little change between the preliminary and the final readings from the survey,” said Ian Shepherdson from High Frequency Economics. “But we were a bit surprised by the weakness of the preliminary March number . . . so we are hopeful of a modest upward revision.”
11:30 ― Kevin Warsh, a governor at the Federal Reserve, speaks to the Shadow Open Market Committee symposium on maintaining central bank independence, in New York.