Trader Talk

Futures Rally for Wrong Reason; Europe in Eight Quotes

Job Losses

Futures rally for the wrong reason: are continuing to move in the wrong direction, again a bit above consensus for the week; the prior week was also revised slightly higher.

After dropping initially, futures rallied: traders are betting that some type of stimulus (a third round of quantitative easing , or extending Operation Twist) will be coming from the Federal Reserve next week.

Quadruple witching really complicated by Greek elections. This Friday is the quarterly expiration of stocks and index options, and stock and index futures, known as "quadruple witching." The problem: These options don’t cover the Sunday election date, so some investors are rolling hedges into options that expire at the end of the month, not this Friday, to either protect themselves or capture some of the volatility.

Greek banks are rallying on vague and illegal polls showing pro-bailout parties in the lead.


1) The three-year raised what it needed, but at a much higher yield (5.3 percent vs. 3.9 percent last time) and at a lower bid to cover ratio, underscoring mounting pressure on the euro zone’s third-largest economy. The Italian 10-year yield hit a five-month high, climbing to 6.3 percent.

2) Credit Suisse dropped 10.2 percent pre-market on heavy volume after the Swiss National Bank recommended Credit Suisse and UBS to protect themselves against weaker economic conditions. Both banks’ shares took a hit on the comments, but Credit Suisse fared worse amid concerns that it would have to raise substantial amounts of common equity and possibly slash its dividend to meet the central bank’s demands.

3) Europe in Eight Quotes: Trading desks are passing around this amusing set of comments this morning. I haven't independently confirmed each quote, but you'll get the point:

1. “Spain is not Greece.” - Elena Salgado, Spanish finance minister, February 2010

2. “Portugal is not Greece.” - The Economist, April, 22, 2010

3. “Ireland is not in ‘Greek territory.’ ” - Irish Finance Minister Brian Lenihan

4. “Greece is not Ireland.” - George Papaconstantinou, Greek finance minister, Nov. 8, 2010

5. “Spain is neither Ireland nor Portugal.” - Elena Salgado, Spanish finance minister, Nov. 16, 2010

6. “Neither Spain nor Portugal is Ireland.” - Angel Gurria, secretary-general, OECD, Nov. 18, 2010

7. "Spain is not Uganda." - Spanish Prime Minister Mariano Rajoy to Luis de Guindos, Spain's minister of economy... last weekend!

8. "Italy is not Spain." - Ed Parker, Fitch MD, June, 12, 2012

—By CNBC’s Bob Pisani

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