Greece's struggle continues
Mining companies have single-handedly propped up the London market in a day that would have seen it dragged down by the eurozone. There have been many trading sessions when the natural resource component of the FTSE 100 held it back, in comparison to its European equivalents, but today it has proved to be an asset.
Equities in the eurozone are enduring the brunt of the Greek election that has been announced for next month. Three failed attempts by Antonis Samaras to secure a president have left the door open to the anti-austerity Syriza party who are leading in the polls.
As grim as the outlook in Greece is, I feel the problem isn’t as contagious as the debt crisis a number of years ago. Many indebted eurozone nations have made strides to shore up their finances while Greece still struggles to keep up, and perhaps it is time Brussels accepts that the model doesn’t work for everyone. As we enter a new chapter in the Greek saga traders will be staying clear of eurozone stocks.
Dow pushes higher
The Dow Jones is doing remarkably well to post marginal gains on a day when its European counterparts are squarely in the red. The resilience of the US equity market is evident as Dow futures were originally indicating a lower open, but without wasting anytime time the index pushed higher after the opening bell. Traders across the pond seem set on retesting the Dow’s record high before the year is out.
Gold loses its shine
Once upon a time even the slightest political uncertainty in Greece would send traders scrambling for gold but those days are gone. The precious metal is set for a second consecutive annual loss as it seems to have lost its ‘quality’ status. Throughout the year it has failed to cling on to any rallies it enjoyed when a safe-haven was sought, and with the prospect of the Federal Reserve raising rates next year the metal has lost its shine.
Brent crude has stabilised in the $60 region as supply concerns in Libya enticed some short-term buyers, and even though the wave of selling has subsided for now there is a feeling it still isn’t safe to get back in the water.
Euro slips again
The euro is back below the $1.22 mark as the announcement of a Greek election in January 2015 could be the beginning of the end of the nation’s use of the single currency.
Given the seriousness of the situation in Greece the euro is holding up extremely well, but that could all change as the festive season has led to low trading volumes.
The euro is going to have a difficult year in 2015, as the European Central Bank edges closer to following the QE footsteps of the Fed. Meanwhile, the US central bank is trying not to rush into an interest rate rise.