No more borrowed time or money for Greece

In mid-morning trading the FTSE 100 is broadly unchanged as Europe’s final countdown begins. 

City of London
Source: Bloomberg

The hour of reckoning is near, and traders are holding their breath as the deadline looms. Equity markets are quietly confident that an agreement will be reached in some shape or form. Greece has dominated the headlines for the past month, and traders are at their wits end; it’s time to get on board or call it a day. Greece has been living on borrowed time – and money – for too long. We know the Greek people don’t want to leave the currency union, but the government hasn’t faced up to the financial reality yet. Whatever the outcome of the Greece meeting, it’s going to end with a bang and the markets are silently building up volatility, and it’s either going to end in a hallelujah moment or Armageddon.

John Wood Group shares are higher today after the company stated it has reiterated its commitment to achieving its full-year target, but it did concede that the sector is challenging. John Wood’s share price has followed the oil price higher since January. I fear dealers are getting ahead of themselves as the massive cuts in capital expenditure by big oil firms have yet to trickle down to the company. The price of oil may have rebounded but we haven’t seen the major energy companies undo the slashing of their spending plans.

Debenhams latest update wasn’t too impressive, the retailer revealed flat third-quarter LFL sales, but at least the online division posted a healthy jump in business,  and the operation is of key interest for the company.

We are expecting the Dow Jones to open 70 points higher, at 18,035, and the US market is being pushed higher by the prospect of a deal being reached over Greece. The market interprets no negative news as positive news, and as the eurozone debt crisis has proven time and time again a deal can be reached in the end.

US traders are secretly thrilled with the negative first-quarter GDP reading because it reduces the chances of a rate hike this year, and once the Greek situation is solved the bulls will run wild again. 

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