Trader Talk

Tech Surprises; Greek Debt Crunch Time


Techs: what happened to the "tablets ate my PC" story?

Getty Images

IBM, Microsoft, and Intel all went into earnings with low expectations from the trading community, but all three generally did better than expectations:

IBM bookings of $20.4 billion a little better than street roughly $20.1billion estimates.

On Intel : capital expenditures bigger than expected (full year 2012 $12.5 billion plus or minus $400 million). That's good news for the semiconductor capital equipment stocks: Applied Materials, KLA-Tencor, both getting a bump in the after-hours.

Greece: crunch time. Traders are expecting to hear something tomorrow about the status of the Greek debt negotiations.

Here's several "talking points" that have been circulating in the last few days:

1) Greece is in its 4th year of recession; real GDP is down about 15 percent from its peak in 2008

2) the EU/IMF bailout plan is 130 billion euros. The aid is officially dependent on:

a) an improvement in its debt targets, which it has failed to achieve for several years.

b) an orderly restructuring of Greek debt. The agreement currently under negotiation will reportedly cut about 103 billion euros from a total debt of 360 billion euros.

c) structural reforms to improve the economy, but unlike Italy nothing substantial has been forthcoming.

3) Upcoming events:

a) March 20: There is a debt reimbursement of about 15 b euros.

b) April: national elections.

Looking at this, it's easy to see why the bears are so loud: even if the debt restructuring occurs, the debt level is still widely viewed as unsustainable — unless the ECB starts taking losses on the substantial Greek debt it has as well. No sign of that happening any time soon.

Bookmark CNBC Data Pages:


Want updates whenever a Trader Talk blog is filed? Follow me on Twitter:

Questions?  Comments?