Highlights of this Week’s Update:

  1. S. stock indices net out little change over the past nine weeks.
  2. Dow up just .7% for 2015 through last Friday, and S&P 500 up only 2.07% for the same period.
  3. Greece in the headlines (again), causing uncertainty as to end results.
  4. S. financial markets closed Friday, July 3rd for observance of the July 4th Holiday, and our offices closed as well.


The Markets:

Summer has officially begun. It’s time to go to the beach or the pool to beat the heat, or get set for your summer vacation. As far as the market is concerned, the summer doldrums began in May and have yet to let up over the past 9 weeks.  Look at market action over the past couple of months. While we get day-to-day gyrations, it’s mostly a wash by week’s end – see chart below.


The lack of volatility since May comes despite a slew of headlines that might otherwise move stocks – in either direction. Do the math – 5 wins and 4 losses. That’s a lot of effort to get back to home plate.  Last week was no exception-the Dow was off just .38% while the Standard & Poor’s 500 only dropped .4% for the same period.  Year-to-date, the Dow is up .70% and the S&P 500 has gained 2.07% through last Friday, June 26th.  (MarketWatch, Google Finance)

The latest data from both the government and private sources are signaling acceleration in economic activity, the Fed is hinting at a rate hike or hikes later in the year, and of course, there’s been no shortage of headlines screaming the dire predicament Greece is facing.

Yet, headlines do not always move markets. Greece has grabbed the headlines again today and the current situation is moving global markets (at least for a day). Greece and its financial woes is nothing new and it has been in and out of the headlines over the past few years.

More on Greece-

It’s reported that 72 percent of the outstanding 313 billion euros in Greek debt is held by the International Monetary Fund, the European Central Bank (ECB), and European governments. Just 5 billion euros is held by European banks (J.P. Morgan/MarketWatch). In other words, not much debt is held by the private sector.

A last minute “kick the can down the road” deal that would have put off the day of reckoning was still expected until June 27, when Greek Prime Minister Alexis Tsipras called for a surprise July 5 referendum on the austerity measures wanted by creditors. And it came in a 1 a.m. Athens-time speech (Wall Street Journal).

The Greek Parliament quickly agreed to next Sunday’s vote, but eurozone finance ministers rejected an extension of the current bailout agreement, which ends June 30 (NY Times). It definitely adds to the drama and uncertainty. The situation remains quite fluid and there’s no guarantee of a deal at this point.

Up until now investors have been much more sanguine, thinking a deal would eventually be reached or contagion from a possible default wouldn’t spread beyond Greece. Skeptics might argue otherwise but that’s been the current scenario.

Next week we will provide more details in our Quarterly Newsletter and should know the results of the Greek vote on Sunday, July 5th.  In the meantime, it remains sound advice not to pay much attention to the daily swings in the markets, as the day-to-day movements may not mean much once all is said and done.

We wish you and yours a very safe and Happy July 4th Holiday.  The U.S. markets will be closed this Friday, July 3rd, in observance of the Holiday, and our office will close early on Thursday, July 2nd as well.  We will be close at 3:00pm Central Time July 2nd, and also closed on Friday, July 3rd for the 4th of July weekend.  We will be back on Monday, July 6th for business as usual.

God Bless,

Your TEAM at F.I.G. Financial Advisory Services, Inc.



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