Slovakia “must sign up to the rescue fund,” Robert Fico said late yesterday, adding that his party, which didn’t back the measure yesterday, is awaiting a proposal from the ruling coalition. Radicova said the only country in the 17 nations that use the euro that has yet to approve European Financial Stability Facility, must find a solution to approve the EFSF “as soon as possible.” No time for a new vote has been set.
“Eventually a yes vote will be secured,” Tim Ash, head of emerging-market research at Royal Bank of Scotland Group Plc in London, said by phone yesterday. “Does Slovakia really want to be alone among 17 euro-zone members states on this one, and when the future of Europe is at stake?”
The political turmoil in the country of 5.4 million people reverberated on global stock and currency markets. Slovak approval of enhanced powers of the EFSF, the temporary bailout fund, is crucial for adopting the key element in the strategy to prevent contagion from the debt crisis that has spread from Greece to other countries in the region.
If Alcoa is an indication, the earnings season could be off to a rocky start.
Pepsi is up next when it reports Wednesday morning, and traders are nervously awaiting banking giant J.P. Morgan‘s results Thursday…
…Alcoa kicked off the earnings season Tuesday on a weak note that could spook investors. Its stock fell more than 5 percent in late trading, after it reported profits of $0.15 per share, below the $0.22 expected by analysts. Revenues increased to $6.42 billion from $5.28 billion. The company blamed its miss on lower metal prices, seasonal factors, but also softness in Europe.
“Last Tuesday’s low 1075 on the S&P 500 marked a lower volume test of the early August low near 1100, and this is an early sign that the US equity market is trying to form a bottom,” writes Bank of America/Merrill chartist Mary Ann Bartels in a note today.
“This is encouraging, but the risk is that the market has not yet seen the explosion in volume that typically comes with a climactic capitulation,” she adds.
She’s also skeptical of the durability of light-volume rallies on Thursday and Monday that saw 90% of stocks rising.
The “lackluster volume” suggests a lack of conviction from bulls ”and likely points to short-covering, which is not the recipe for a sustainable rally.”
Following Monday’s impressive 3.41% gain, Tuesday essentially went nowhere on light volume. The gain for the day was a fractional 0.05%.
Year-to-date the index is in the red at -4.94% but 12.33% below the interim high of April 29.
From an intermediate perspective, the index is 76.7% above the March 2009 closing low and 23.6% below the nominal all-time high of October 2007.
Tomorrow’s tape mainly involves a lot of talking, and some minutes of a previous talking session.
- 1:00 p.m.: Treasury auctions some 10-year Treasurys — perfect Halloween treats!
- 2:00 p.m.: Minutes from the last FOMC meeting are due. You’ll laugh, you’ll cry, you’ll fall asleep a little bit.
- Host Hotels
- 1:10 p.m.: Cleveland Fed President Sandra Pianalto speaks
- 1:20 p.m.: Dallas Fed President Richard Fisher speaks
- 1:30 p.m.: Philadelphia Fed President Charles Plosser speaks
- 2:30 p.m.: ECB chief Jean-Claude Trichet speaks
J.P. Morgan Chase