For our latest recommendation, we revisit one of the world's most prominent technology companies, Mi...
European stocks soar as new good news fills the gap left by rebuttal of yesterday's good news
09/27/2011 12:20 pm EST
Today there’s another good news story to take over.
And European stocks have followed up on yesterday’s rally with a huge push higher. The German DAX Index is up 5.24% as of 11 a.m. New York time; the French CAC Index is up 5.26%; and Spain’s IBEX 35 Index is up 4.10%. (The best performance among major European indexes is being turned in by the OMX Stockholm 30 Index, which is up 5.4%.)
This morning the European Investment Bank went to some length to rebut yesterday’s story that had the bank at the center of a new European guarantee mechanism that would have used leverage to create a 3 trillion euro capacity to buy troubled sovereign debt from European banks. The bank said, "There have been media reports about a potential involvement of the EIB in a special purpose vehicle in connection with the EFSF [European Financial Stability Facility] for the purpose of bailouts. The EIB has not been approached and has no plans to be involved in this.”
But picking up any potential good news slack Eurogroup President Jean-Claude Juncker told Reuters that he has been informed that representatives of the International Monetary Fund, the European Central Bank, and the European Union will return to Athens on Wednesday or Thursday. Financial markets have been waiting for the return of this negotiating team to Greece since it left Athens earlier this month after telling Greece that the country hadn’t met the goals it agreed on and wouldn’t get its next $11 billion piece of rescue cash until it did. Since then negotiations have been conducted by phone but all sides have agreed that getting a deal done would require the return of the international team to Athens.
I think it’s reasonable to conclude—and this is what the financial markets think too it seems—that the team wouldn’t be going back to Athens unless a deal was in sight. Greece has said it would run out of money to pay pensions and government salaries around October 10 without this next cash infusion.
Next up the on the euro debt crisis checklist? The Bundestag’s Thursday vote on expanding the powers of the European Financial Stability Facility so that it can buy troubled government debt. Right now it looks like the measure will pass the German parliament with something like an 80% majority.
Related Articles on STOCKS
We hold three biotech stocks in our growth portfolio — Biogen (BIIB), Bioverativ (BIVV), and R...
Under the guise of clamping down on “widespread corruption,” Prince Mohammed bin Salman ...
Leading value investor and money manager John Buckingham sees upside potential in two banking stocks...