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Volatility Spikes on Greece Fears, Bonds Rally


Today's financial recap and tomorrow's financial outlook.


US markets reversed yesterday's gains followed an economic data miss and a new scare in Greece.

Fear hit the market today aashe market as the VIX (VIX) increased 8.6%, while Treasury yields fell.

The DJIA took the biggest hit of the major indices and closed down 0.94%. The S&P 500 and NASDAQ lost 0.86% and 0.79%, respectively.

The Russell 2000 fell 1.05%.

Economic data came in mixed.

Nonfarm Productivity for Q1 missed at -3.1% vs. the expected 3.0%. Unit Labor Costs for Q1 were higher-than-expected at 6.7%.

Initial jobless claims for the for the last week of May beat by 2K at 276K.

Oil prices fell ahead of tomorrow's OPEC meeting. The consensus is that none of the OPEC countries are expecting to change their output. Transports didn't rally despite the drop.

Cybersecurity was hit hard today. The ISE Cyber Security ETF (HACK) actually hit a new 52-week high in early trading before closing down 1.45%.

Airlines also tumbled, as did emerging markets and energy.

Real estate and utilities stocks showed the smallest declines.

Opko Health (OPK) said it will acquire Bio-Reference Labs (BRLI) for $1.47 billion in order to enhance its position in the prostate cancer diagnostic market. Opko shares fell 15.0%, while Bio-Referenced rallied an impressive 20.15%.

Ambarella (AMBA) bucked broader market weakness to rally 4.92% and break the $100 mark today. The company has rallied nearly 1500% since its IPO in 2012..

European bonds rose as the Greek government opted to delay its June 5 IMF loan payment. The government will now make a balloon payment, due on June 30. The 10-year German Bund yield fell 4.4 bps, the French 10-year yield dropped 2.9 bps.

Germany's DAX closed down -0.69% and France's CAC lost 0.93%. The UK's FTSE fell 1.31%.

The euro ended its rally against the US dollar. 

Asian markets were unaffected by today's events. Japan's Nikkei closed up 0.7% while the Shanghai Composite rallied 0.76%.

Friday's Financial Outlook

US economic news for tomorrow will feature the May NFP numbers, the Baker Hughes US Rig Count, and April's Consumer Credit report.

Overseas will feature German Factory Orders, the Bank of England Inflation Expectations, Euro-Zone GDP, and Canada's Employment Report.

Yingli Green Energy (YGE) reports earnings tomorrow morning.

No positions in stocks mentioned.
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