Futures signal stocks to fall after Greek talks collapse

U.S. stock-index futures extended declines amid weaker-than-forecast manufacturing data after weekend negotiations between Greece and its creditors broke down.

Standard & Poor’s 500 Index E-mini contracts expiring in September retreated 0.7 percent to 2,071 at 9:19 a.m. in New York.

Factory production unexpectedly declined in May as the slump in energy output deepened. The 0.2 percent decrease at manufacturers followed a 0.1 percent increase in April, figures from the Federal Reserve in Washington showed Monday. Total industrial production, which also includes mines and utilities, also dropped 0.2 percent.

The latest round of bailout talks between Greece and its creditors ended in acrimony after leaders met for just 45 minutes in Brussels on Sunday. A June 18 meeting of euro-area finance ministers may now decide whether Greece will avert default and stay within the currency bloc.

“All eyes are on the tumultuous Greek negotiations which have moved the risk markets not only here in the United States, but across the globe,” said Chad Morganlander, a money manager in Florham Park, New Jersey, for Stifel, Nicolaus & Co., which oversees about $170 billion. “That as well as the weekly thematic will be the message from central banks, in particular the Federal Reserve.”

The specter of higher borrowing costs is also keeping U.S. equities in check, even after data last week signaled a pickup in consumer spending. The S&P 500 finished its seventh straight week with a move of less than 1 percent.

The Federal Reserve begins a two-day meeting tomorrow, at which officials are expected to leave interest rates unchanged. Still, improving economic reports since the central bank’s last session have pushed the probability for a September increase to 53 percent, data compiled by Bloomberg show. Chair Janet Yellen may provide further clues at a press conference on June 17.

Data earlier showed manufacturing activity in the New York region unexpectedly contracted this month amid a drop in new orders.

 

Greece is tomorrow.

I am keeping an eye on a company called TNP. It is a solid company that should be at $10, currently trading at 9.75. I am going to watch and hope it crashes tomorrow so I can pick it up under $9. It is very unrelated to the Greek economic disaster, but happens to be a greek company. IMHO, it will be the baby that gets thrown out with the bathwater tomorrow.. and who doesn´t like to buy cheap babies... er.. bad analogy.. but you get my idea.

 

I was in and out of the car this afternoon and couldn't listen to Yellen's entire press conference aired by CNBC on SiriusXM. I have the impression that the Greece debacle threw a monkey wrench into Fed plans to raise interest rates. The tepid recovery -- I use the term loosely -- seems to me not to be all that was hoped for. We'll see how the market responds tomorrow following the European open.

 

A lot of people don't seem to think that what's happening in Greece will affect other countries but this is just one example of how it will do. It might not out the world economy into financial meltdown, but it will slowly start to make an impact if it's not sorted out sooner rather than later.

Unfortunately at the moment there's doesn't seem to be anything being put in place to resolve the matter, which I for one find staggering with the amount of time it's been going on.

 

What is the solution? Restructure the greek debt once again? allowing them to cheat on the promise they made just 5 years ago? and in exchange.. the Greeks have promised to do nothing, no overhauls, no changes.. nothing. Even if you restructure their debt and allow them to skate again for another 5 years, there is nothing they are doing that would lead you to believe that we wouldn´t be back in the same situation in 5 years. Why should banks lend them money when they already aren´t paying back what they are supposed to.. and to be honest... when Greece starts calling banks and the contracts ´illegal´... who in their right mind would loan them more money.

Let them rot, the Greek economy is only 1.4% of the EU economy. They are like a spoiled child. They blame everyone else, never take responsibility for their own mess and make 0 concessions as far as restructuring.

 

It appears that Greece is a "who cares" and no significant impact on the US markets. Some of European-based commentary suggests that someone get off the collective duff and just bag it to let Greece swing in the wind. The only significant thing is Greece's exit may give Spain and Portugal some ideas to follow suit. Today Putin is meeting with Greek peeps, but I doubt there are any rubles to be had. Really wild speculation is that China will help Greece. In the meanwhile, Greek citizens are withdrawing bank savings and stuffing it into home mattresses, and CNBC and Bloomberg pundits are suggesting that Greek banks won't be able to open on Monday. Games people play. That's a song... sing the tune, Joe South (1966).

 

Greece cannot print money, they are in the EU and use the Euro.

Their biggest problem is basically pensions ( like our Social Security). There is not a lot of political will to cut pensions there because it was money that was promised and money that people planned on. It obviously has to be done at some point, just like SS will have to be tackled someday.. but for Greece, just like the USA, it is too easy for politicians to kick the can down the road.

It will get solved in Greece because they will simply default and go bankrupt and not be able to pay pensions.. there will be no politicians to blame for ´lying´.

As much as SS has been a mess in the USA for the last 2 decades, both Obama and Bush have been able to skate by through 8 years without touching the problem, and will dump it onto the next guy, who will avoid dealing with it as much as possible also.

 

I don´t think it is that nobody in the USA cares, I think it is just that this has been a very slow and visible default... sorta a ´if you always plan for the worst, you will never be disappointed´. When the new political party came into office over there early this year, I think most people realized what their end-game was all about.

Russia won´t be able to loan them the money. Russia´s cash reserves have been cut in half in the last 12 months, and it is impossible for them to get more debt... they tried to do a bond offering and had no takers, and since then there are new restrictions, so even less people could possible buy Russian bonds. I am not saying Putin won´t bail out Greece, but that will just speed up the downfall of Russia. Their economy is expected to shrink about about 5% this year, and that is with a rather generous condition of oil going to $75. The russian people will grin and bear it, like they always have throughout history, but the money Russia is losing as a country is pretty significant for their future.

I don´t see China helping. That is just not their MO. There is no such thing as loaning Greece money at this point.. anyone who gives them money would realize they are never getting it back.

 

But we still haven't come up with any solutions. While it might ve ok in your eyes to say "let them rot", these are people we are talking about, and most of which aren't responsible for getting the country into the mess it is now. These are also the people who are suffering the most, it's not the political parties, the men in the fancy suits that are members of the EU, attending meetings all over the world and living the high life. They're not the ones that will 'rot'.