10 June 2020

1) President Trump is slipping in the polls, and this may pose a risk to the markets. Even though the wild swings of the markets have subsided and then surged upwards, with the Democrat Joe Biden gaining in the polls, there is concerns that the markets will take a down turn as Biden becomes stronger. The President is facing criticism over his handling of the coronavirus pandemic and the protest from the killing of George Floyd by the police. A victory by Joe Biden and a Democratic sweep are considered more ‘market unfriendly’ outcomes. Taxes are one major area of contrast between the candidates, with taxes a major concern for American businesses. These fears are fueled by the Dow sliding downwards for the first time this month as the rally pauses.

2) Borrowing by the British government to pay for the coronavirus shutdown is soaring to levels not seen since World War II. This is on top of the financial problems from Brexit with Britain’s debt jumping five-fold to a 300 billion pound deficit ($380 billion dollars) . This could leave Britain with a 2.2 trillion pound debt and the need to raise taxes with an impact on economic growth. Britain is funding this expenditure with sales of bonds, but have fears of a Greece style loss of confidence among investors. The government is hoping for a fast recovery after restrictions are lifted, allowing the debt to quickly be paid down.

3) There are fears that the U.S. dollar is entering a bear market so may no longer be the safe haven for investors. This bear market could go for five to ten years. This would occur if the global economy really is bottoming out and thereby rebound again, while U.S. interest rates are at zero, with potential growth lower than the merging markets. The U.S. dollar is depreciating against many international peer currencies these last few days.

4) Stock market closings for – 9 JUN 20:

Dow 27,272.30 down 300.14
Nasdaq 9,953.75 up 29.01
S&P 500 3,207.18 down 25.21

10 Year Yield: down at 0.83%

Oil: down at $38.39

GREECE STILL NEGOTIATING WITH CREDITORS ON ITS DEBT!!!!!

Greek debt pt 2 pic

By Economic & Finance Report

Greece is still in negotiations with creditors about the debt it has encountered. Finance Minister, Yanis Varoufakis has indicated that the country is close in securing deals with many of its creditors and resuming relations with its creditors. 

Greece still may be facing bankruptcy because of the risk of defaulting on their international creditors. In June, Greece finance treasury has to start repaying  back  the IMF (International Monetary Fund) and the ECB (European Central Bank). As currently Greece will have to choose in either paying back the IMF & ECB or paying off their own citizens pensions and wages.  -SB

THE EUROZONE HAS AGREED TO EXTEND GREECE’S LIFELINE…

Greece bailout

By: Economic & Finance Report

Finance Ministers across the Eurozone spectrum agreed to extend Greece’s bailout. This allows Greece to restructure their financial banking and regulations that the country had in place. This also helps Greece in that they now do not have to put in place capital controls.

Greece Finance Minister Yanis Varoufakis, indicated they will institute new regulations and have to crack down on corruption and business entities evading taxes, while also trying to balance the Greek annual budget. 

The Eurozone’s has stated they will impose the bailout extention to Greece for an extra 4-5 months, so Greece can have the necessary time to restructure their financial banking.

-SB