The three worries for investors. Greece is going to have snap elections and the fear is that Syriza, the left wing who are anti-euro bailout will win. This tanked the Greek stock market 13% yesterday, and more today. Do the Greek politicians trade Eurostoxx futures and options? They sure do a good job of manipulating the market in the short term. Long term, they will keep pumping bailouts to Greece, always have, always will.
Crude oil tanking worrying stock investors is puzzling. The US is the biggest oil importer in the world. The effects on oil producers is a drop in the bucket to the stimulus that lower oil provides the US economy. A supply driven drop in oil prices is always a positive for the US stock market. And lower oil will help to keep the Fed more dovish due to lower inflation expectations.
China dropped huge yesterday and rebounded big today. The money is going from real estate to the stock market. The Chinese are stuck with few good investing options. They can't take their money overseas because of capital controls so they either have to go with Chinese stocks, Chinese real estate, bonds, or savings. It seems like they are going for stocks in a frenzy lately, that is unrelated to any kind of real fundamentals. The liquidity is overflowing there as well, so you can get huge moves in stocks. So China dropping big is rarely a driver for US equities. They have been dropping since 2010 and that hasn't done anything to deter a US equity bull market.
Staying long, the irrational fear of lower oil will soon pass.
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