It was all Greek to investors.greek-salad

Last Thursday, things weren’t looking so good for Greece. Barron’s explained:

“…Germany scotched Greece’s request for a six-month extension to its existing aid package. Athens had sought more time to renegotiate the Draconian austerity package imposed on the land of Pericles, to keep from going bust and, perhaps, being kicked out of the euro zone.”

Just a day later, though, Eurozone leaders found grounds for compromise and Greece became the beneficiary of a four-month extension to its current aid package. The deal was contingent on Greece coming up with a list of economic reforms by this Monday for European leaders to approve.

The Irish Times reported Greek Prime Minister Tsipras gave the conditional agreement an interesting spin, telling Greek citizens, “Yesterday’s agreement with the Eurogroup… cancels the commitments of the previous government for cuts to wages and pensions, for firings in the public sector, for VAT rises on food, medicine.” After all, that’s what he promised during his campaign.

World markets were unconditionally thrilled with the news. In the United States, the Dow Jones Industrial Average and Standard & Poor’s 500 Index both closed at record highs. Markets across Europe and Asia finished the week higher. The only stock markets reported in Barron’s International Perspective that didn’t finish the week higher were in Taiwan and Canada.

Closer to home, The Federal Reserve’s Open Market Committee minutes indicated to some rate hikes may not begin in June, as had been expected. However, Reuters pointed out employment data has been very strong since the January 28 meeting and could affect the Fed’s decision about when to tighten.


Data as of 2/20/15

1-Week

Y-T-D

1-Year

3-Year

5-Year

10-Year

Standard & Poor’s 500 (Domestic Stocks)

0.6%

2.5%

14.7%

15.7%

13.8%

6.0%

10-year Treasury Note (Yield Only)

2.1

NA

2.8

2.1

3.8

4.3

Gold (per ounce)

-2.0

0.8

-8.2

-11.3

1.6

11.0

Bloomberg Commodity Index

-1.7

-1.5

-23.0

-11.4

-5.2

-3.9

DJ Equity All REIT Total Return Index

-0.5

4.2

24.8

15.7

17.8

9.4

S&P 500, Gold, DJ-UBS Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT TR Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods. Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.

*The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment.  You cannot invest directly in this index.

* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.

* Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association.

* The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.

* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.

* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.

* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

* Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful.

* It’s All Greek To Me.

Sources:

http://online.barrons.com/news/articles/SB51367578116875004693704580467990994556632 (or go to http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/02-23-15_Barrons-US_Stocks_Greek_Debt_and_Global_Delusions-Footnote_1.pdf)

http://www.irishtimes.com/news/world/europe/greece-says-euro-zone-deal-cancels-austerity-commitments-1.2112632

http://online.barrons.com/mdc/public/page/9_3063-economicCalendar.html?mod=BOL_Nav_MAR_hpp (Click on “U.S. & Intl Recaps,” “Waiting for Greece,” then scroll down to the table titled “Global Stock Market Recap.”) (or go to http://peakclassic.peakadvisoralliance.com/app/webroot/custom/editor/02-23-15_Barrons_Global_Stock_Market_Recap-Footnote_3.pdf)

http://finance.yahoo.com/news/fed-rate-rise-timing-back-091012835.html

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