Market Update & Important Indicators
U.S. stocks advanced Monday after eurozone leaders said they reached a deal to provide further bailout aid to Greece. The Dow Jones climbed 217 points, or 1.2%, to 17,978, while the S&P 500 gained 23 points, or 1.1%, to 2,100. Stocks bounced after eurozone leaders said they would give Greece up to EUR86 billion (US$96 billion) in fresh aid as long as the government of Prime Minister Alexis Tsipras implements a round of severe austerity measures in the coming days. The endless stream of headlines about Greece's financial situation also came during a slow period for U.S. corporate news, which meant there was little else for U.S. investors to focus on. That should change in the coming days. The pace of second-quarter earnings releases will pick up this week, with reports from J.P. Morgan Chase & Co., Bank of AmericaCorp. and Intel Corp.
Stocks also rose sharply in Europe on Monday as investors cheered the bailout deal for Greece. It gives the country a fighting chance of staying in the eurozone, although the loans still depends on the government implementing a round of austerity measures in the coming days. The pan-European Stoxx Europe 600 closed 2.0% higher, while the FTSE, DAX and CAC climbed 1.0%, 1.5% and 1.9% respectively.
China shares led Asia higher Monday, as Beijing's efforts to reverse a massive selloff appear to be holding up, with hundreds of mainland stocks surging after their trading resumed. However many others remain halted. The rebound involves only about 40% of the market after hundreds of firms were suspended last week. Trading of 303 firms remains halted in Shanghai, and 883 in the Shenzhen market (out of a combined total of 2,873 stocks). The Nikkei and the Hang Seng closed up 1.6% and 1.3% respectively.
Spot copper was flat on the LME overnight, although other base metals gained (nickel +4.4%, zinc +2.1% and lead +2.8%). Crude oil lost ground, with Brent down 1.5% to $57.85/bbl and WTI down 1.0% to $52.20/bbl. Iranian nuclear talks, if successfully concluded, could increase crude oil supply. Gold is also lower, trading down 0.5% at $1,158/oz.
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