It has been a newsworthy last few days with a lot of notable developments around the globe. I am writing this week's blog post on Thursday, July 2nd, in advance of Sunday's Greek referendum. I expect no matter what the outcome of the referendum, it will have significant headline volatility. Ultimately it looks like the current Greek government needs to be out of the picture for a deal to be reached. If they are able to remain in power, the probability of a "Grexit" (Greek exit from the Euro) is very high.
The Greek headlines may have been center stage, but the debt crisis in Puerto Rico and the deteriorating stock market in China might have more impact in the intermediate term.
The employment data released on Thursday ahead of the holiday weekend was a "goldilocks" report. The somewhat surprising number, from my perspective, was the 0% increase in average hourly earnings. The rest of the report was not too hot or cold, leaving the Fed looking more at growth and inflation for indication of when to raise interest rates.
Look for more volatility in the week ahead. Interest rates are at the top of their trading range for the past month: Be on the lookout for a breakout to new highs in yields. Stocks should continue to be volatile trading on headline risk.
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