The Fermentation committee will be heard on where the market has been and where it is headed. The Chairman has the floor.
From UBS' Art Cashin
The Good News Is: September Is Over. The Bad News Is: October Has Begun - Markets are starting the month in a nervous fashion. As daylight hit New York, European stock markets were down about 2% and Hong Kong was off over 4%. Here is an email that went out to a couple of trading groups around 6:30 this morning:
Sorting through the smoke. Greece admits that it will miss certain deficit targets raises new talk (and old fears) of a default. Simultaneously, Greece agrees to new tougher austerity target (may be a ploy to get next tranche despite admitting targets may be missed). Rumors that Greek problem may impact one or more banks in Belgium serves to confuse things further (contagion issue).
Markets weak, but avoid freefall (so far) trying to sort out timing and linkages of “missing targets” versus a real default or missed payment.
Hardest market hit was in Hong Kong (second day in a row) hinting that there is more here than just Europe.
Remember, this is about the banks and financials – not Greece. Greece is just the fuse.
The sense is that the auditors (the Troika) were in Athens over the weekend. It was obvious that Greece could not actually meet several imminent targets. The Greeks had to admit it, but tried to mitigate that by offering/agreeing to even more aggressive targets just a little further out. That, it was hoped, could provide cover for the Troika to release this round of bailout funds even though the original targets had been missed.
Markets are watching warily trying to gauge impact on banks. It’s about timing and level of contagion.
And as a bonus, today's Cashin trivia:
Today’s Question (in honor of the playoffs) - A few big league pitchers have thrown 4 strikeouts in one inning. How is it possible?