Stocks are moving higher today as investors hope election results out of Greece this weekend will not push Greece out of the EU. Traders have seemingly ignored poor data from the U.S. labor market and rising bond yields in Spain and Italy. Many analysts believe volatility will remain high tomorrow as investors make bets or pull money out of the market ahead of Greece’s elections on Sunday.
Financial stocks in Greece rallied more than 20% today as speculation swirls that secret polls show a government favorable to the EU bailout will win this weekend. This is all speculation as polling is illegal in Greece in the last two weeks before the election.
Data from the U.S. labor market shows new claims for unemployment benefits rose unexpectedly last week to 386,000. Consumer prices fell the most in over three years in May, dropping 0.3%.
Bond yields in the Spain and Italy also rose today. Spanish yields rose after Moody’s cut its rating on government debt by three notches. These downgrades put more pressure on bond yields as investors want more reassurances to hold Spain’s debt. Italy’s bond yields are also creeping higher as many investors believe Italy will be the next big financial problem.
Overall the market is rallying on nothing but hope for a good outcome from Greece this weekend. Also the Fed meets next week and traders will be wanting to hear about some kind of stimulus in the market such as another round of QE.
The Dow is currently up 115 points, the Nasdaq is up 12 points and the S&P 500 is up 10 points.