We all know that Spain declared lastnight that they need 100billion euros to save their banks from failing. But how does everyone think this is going to playout in the market on monday?? I personally thought that all markets should crash 5-6% on monday based on this news, as i thought it would be extremely negative and cause severe panic a country as huge as Spain unofficially saying- ''We need 100billion euros emergency crisis loan to save us from going bankrupt and becoming like greece''. Whilst if its priced in on monday that they will be granted the money, and so they wont be going bankrupt just yet, what possible logic or reasoning could that provide for an actually rally of even a few hundred points more in dow?? If i announced i am struggling very badly financially and so need to borrow 20k but a bank agrees to lend me that 20k, for any 3rd party viewing this they wouldnt ever class that as a display of fiancial strength from me, so i really just dont see how on earth spain declaring they need a huge bailout loan could be classed as positive not negative in the markets. To try using past data to workout what the most likely reaction will be though, does anyone know/have any links to reminders of what happend on the 1st market open day after greece declared they needed bailout money? After italy did? After ireland did? And portugal did (if they have done yet)
"In an emergency conference call on Saturday evening, finance ministers of the euro-zone nations offered Spain up to 100 billion euros to stabilise its banks The rescue loan will be large enough to cover âall possible capital requirements,â a statement by the Eurozone finance ministers said. " http://www.thehindubusinessline.com/industry-and-economy/article3512043.ece
guarenteed stock rally as hopium gathers momentum. entirely front run by hft / algo land. sell into it as reality returns on wednesday that actually this is not good news. how bailout after bailout is actually good news i have no idea but then common sense does not make money in the new modern markets. conclusion - do the opposite.
Spanish rally should be particularly strong tomorrow if - later today - Nadal beats Djokovic and Spain have a good showing opening Euro 2012 Group C.
Initial equity rally, but bond traders should be smarter now. Spanish yields should skyrocket within weeks, causing stocks to crash again, then another coordinated effort among central bankers + QE3 to manipulate everything back up again.
Arrrgggh, well im already holding a large buy trade position in the VIX from just below 24, and so am hoping for a meltdown this week in the runup to greek election, and so gna have to hope that market views this as a panic move and weakness announcement by spain and so their yeilds rocket and markets crash!
No vote on Monday's action but in the next month I see a rise and perhaps a huge rise ~ More money has to get printed - I don't think there are any two ways about it. I've been long silver & gold mining companies since last Monday. Last Sunday night Cramer said to sell anything Europe - that was the signal to buy Europe and I bought calls in STD, BBVA, FTE, TEF, EWI, RBS and LYG. (Some of these stocks could be up 40% in a very short time period.) I think Europe equities could rise upto 25% in the coming months if Europe starts to print money and restore confidence in the banking sector. I also think TLT might get whacked as Euro investors realize they're getting 1.5% and could get alot more % by staying in European bonds which seemingly will have the "Euro put" behind them now. I'm long TBT. European stocks should outperform US equities. I think the real question is does the Euro rise on reducing fears that Spain might leave which certainly seems to have been something the market was started getting worried about ~
Rally may not be as much as 3-4%. Part of move was priced in Friday on the rumor. Saudi market up only 1.30% http://www.bloomberg.com/quote/SASEIDX:IND/chart