Five Things to Watch: Euro Déjà Vu and More
Greece trying to renegotiate its bailout terms, commodities trying to stabilize after a rough week, and high-frequency traders trying to prepare for life after Citi. Here's what we're watching:
Crisis in Athens, Take Two: European authorities negotiating bailout terms with a spiraling Greece? Euro higher, and debt spreads rising for the likes of Ireland and Portugal? Contagion ahead? May of 2010, you say. Maybe this May will be the same. The glitter of a glowing U.S. jobs reportfaded Friday afternoon when Greek concerns tempered stock market gains. Reports surfaced late Friday that Greece is trying to renegotiate the terms of its onerous bailout package, as it considers a host of options to address its once-again deteriorating financial condition. What comes next, and how far will the ripples be felt?
Commodity Conundrum: It was a roller-coaster week for commodities markets. Thursday saw high-flying crude dip below $100 a barrel, while seasonal standout silver plummeted nearly 27% in five days. Investors are left making sense of whether the bubble has burst or a correction offers opportunity to jump back into the boom. Problems in the old continent and dimmer forecasts for the American economy may deflate the commodity craze further.
Gasoline's High Tides: Speaking of commodities, you've probably noticed that gas prices didn't head the way of silver when you were filling up at the pump over the weekend. As high waters move into New Orleans/Baton Rouge area (which accounts for 13% of America's refining capacity), the impact could range from a halt in barge and tanker traffic to a potential shutdown in refinery operations. Refiners and traders are watching the river flow, which is expected to hit record levels in a few weeks — just in time for the peak period for gasoline demand.
No More Fast Times in the Citi: It was a good run! In its recent troubled years, shares in the financial giant have become a feasting ground for high-frequency traders. Between the single-digit stock price and the incredible float of roughly 30 billion shares, Citi has perennially been a daily leader in volume. Well, the recently announced 10-for-1 reverse split took effect after Friday's close... and it's set to end the party, amongst other impacts.
It's a Bipolar World: The third meeting of the U.S.-China Strategic and Economic Dialogue kicks off in Washington Monday. Treasury Secretary Tim Geithner and Secretary of State Hillary Rodham Clinton will be joined by their respective Chinese Co-Chairs, Vice Premier Wang Qishan and State Councilor Dai Bingguo. Nobody's expecting the meetings to result in a free-floating yuan or other significant changes. But, the U.S. will certainly press China on financial reform and intellectual policy rights.