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US Markets Grind Higher After Early Dip; Greece Snap Elections Called


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

The activity early this morning drove much of the price action today. Investors continued to pile into Chinese equities after the seismic move by the government last Friday that freed up a substantial amount of deposits for use. The Hang Seng Enterprises Index was up 3.99%. In Greece, the third round of presidential elections resulted in only 168 of the 180 votes needed to elect Prime Minister Antonis Samaras' choice, which resulted in the government being dissolved and snap elections called for January 25 next year. The Greece ASE Index was down 3.91%. Lastly, Russia's Economy Ministry reported that the country's GDP contracted by 0.5% in the month of November, and was down 0.2% from a year ago.

US equities were lower in the pre-market as the aforementioned events, plus Ebola cases reported in Scotland and Japan left the market tense. That unease was overcome in the early going with shares trading slightly positive for the remainder of the day. Trading volume was slightly higher today after the last two sessions equaled less than six billion shares. Regional banks led the indices today, finishing up a percent compared to only a few points gain for the S&P 500 (SPX).

Energy stocks were surprisingly resilient in light of the 2.17% drop in West Texas crude oil futures. The SPX sector finished up by 0.34%. Lower-rated energy stocks closed down, however.

Treasuries rallied with European sovereign bonds today. The 7-year Treasury performed the best with the yield dropping by 5bps to 2.02%. The 5-year German Obl fell to a yield of 0.015%. For perspective's sake, Japanese government bond yields are negative all the way out to five years.

Tomorrow's Financial Outlook

There are two pieces of economic data scheduled to be released tomorrow. The October S&P/Case Shiller home prices index will be released with prices expected to rise by 0.4% in the month and see the year ago measure rise by 4.3%. The December Conference Board consumer confidence index will also be released. Confidence is expected to rise to 94.0 from 88.7 in the prior month with higher net incomes (from lower gasoline prices) and higher asset prices being the main benefactor.

There are no major global economic reports scheduled for tomorrow. The UK will release home prices and the ECB will release money supply stats.

There are no major earnings reports scheduled for tomorrow or the rest of the week.

Twitter: @Minyanville

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