Euphoria over Elections in Greece Short-Lived
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With Greece elections in the rearview mirror, investors remain pessimistic regarding the difficulties in Europe. The pessimism is causing Spanish 10-year bonds yields to spike higher, and they are now well over 7 percent. Meanwhile, equity markets in Europe have erased early gains and are trading flat. U.S. stock futures gave up initial gains and are now lower.
In Greece, with votes nearly all counted, the pro-bailout New Democracy had 29.6 percent of the vote and 129 seats out of the 300 seats in Parliament. The anti-bailout Syriza party had 26.9 percent and 71 seats. Pasok has 12.3 percent. New Democracy leader Antonis Samaras has to put together a majority coalition party over the next three days.
The reaction illustrates that investors remain concerned about Greece's future in the EU, but more importantly, the crisis in Spain's banking sector remains front and center. Despite a $125 billion bailout last weekend, concerns remain that Spain will soon be unable to raise capital in the debt markets, and that could spell more trouble for EU.
MSCI Italy Index Fund Profile (NYSE: EWI) is expected to open lower, as shares in Italy slide. Other markets in Europe are trading flat, and reaction in the European ETF (NYSE: VGK) is expected to be muted.
In Greece, with votes nearly all counted, the pro-bailout New Democracy had 29.6 percent of the vote and 129 seats out of the 300 seats in Parliament. The anti-bailout Syriza party had 26.9 percent and 71 seats. Pasok has 12.3 percent. New Democracy leader Antonis Samaras has to put together a majority coalition party over the next three days.
The reaction illustrates that investors remain concerned about Greece's future in the EU, but more importantly, the crisis in Spain's banking sector remains front and center. Despite a $125 billion bailout last weekend, concerns remain that Spain will soon be unable to raise capital in the debt markets, and that could spell more trouble for EU.
MSCI Italy Index Fund Profile (NYSE: EWI) is expected to open lower, as shares in Italy slide. Other markets in Europe are trading flat, and reaction in the European ETF (NYSE: VGK) is expected to be muted.
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