Weekly Market Commentary – July 6 2015 – LPL Research

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Weekly Market Commentary – July 6 2015 – LPL Research

2017-11-20T15:20:44+00:00 July 7th, 2015|Financial Article, Weekly Market Commentary|

Greece Playbook

Weekly Market Commentary 7-6-15

Greece’s critical referendum took place this weekend and the Greek people resoundingly voted “no” — rejecting the latest bailout deal from creditors. The referendum result, which some interpreted as a vote to exit the Eurozone, throws Greece’s future in the currency union firmly in doubt. The unexpected result has led to a roughly 2% decline in the broad European indexes but only a modest decline in the S&P 500 (as of 3 p.m. ET today, July 6, 2015). The negative market reaction in Europe is not surprising, given polls heading into the weekend suggested a vote for the bailout was more likely. The modest decline in the U.S. may suggest markets are increasingly comfortable with the situation.

Here we try to answer the following questions:

1. Would a Greece exit (Grexit) from the Eurozone lead to contagion for global markets?
2. Will this latest Greece crisis result in a Lehman moment?
3. Is a deal that keeps Greece in the Eurozone still even possible?
4. Does anticipated weakness in European equity markets present a buying opportunity?

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