Greece and Iran stories have dominated 2015 so far, and may still lead the rest of the year
Morning Brief: Google stock rockets higher after earnings report, but was the report really that good or were investors looking for an excuse to take stocks higher?
The major stories of the week, and of the month, and of the year, have been the negotiations between Greece and EU leaders, and between the US and Iran over the former’s nuclear program. Both issues seemed to come to a conclusion this week with new agreements, but the stories will not end here.
With Greece, the issue remains the nation’s “sustainable” debt. The new agreement requires new austerity measures, political and institutional reforms, and only the vaguest hint of any debt relief. To make this story go away, Greece will need to vote in new legislation, and soon; austerity, rather than further destroying the economy, will have to become the miracle elixar that its proponents have always said it is; and some sort of debt relief will have to be proposed, and then there will have to be more meetings and debates to have it accepted.
One doesn’t have to be a cynic to see that the prospects for success here are low.
And to add insult to injury, Greece is now having to deal with wildfires burning on the outskirts of Athens and in the country’s southern Peloponnese region.
The Iran/US story will now enter a new phase, with the Senate poised to debate and then vote on the deal. The thinking is that the GOP will use the opportunity to once again blast the President, will eventually vote down the deal, and then the President will veto their judgement, and that will be that.
But two things can still go wrong: first, something in the deal will become a source of public debate which might force more Democrats to nix the deal, improving the prospects that the Senate might be able to override the President. This is highly unlikely, but still possible. The second thing that could go wrong is on the Iranian side.
Iranian hardliners could veto the deal themselves. If the deal actually does put Iran’s nuclear ambitions on hold, some will see this as going too far.
“We quickly realized that what we had feared all the time had become a reality. If Iran agrees with this our nuclear industry will be handcuffed for many years to come,” the NYT quotes one Iranian reaction.
But the odds that the deal would get scuttled by the Iranians seems small, just as it does that the GOP will actually success do the same. So what we are left with for the second half of the year is more news about Greece, iPhones, and the start of the GOP presidential debates. That should be quite a circus.
Speaking of the second half of the year… the baseball season resumes tonight. Now comes the time when teams and their fans start to have to deal with the fact that they have no hope of reaching the postseason. For team, it means deciding to sell off their players for young prospects, for fans it means turning their attention to football.
But football’s popularity may be hitting a plateau. Rule changes, injuries, premature retirements seem to be taking some of the energy out of the sport, and at a time when many parents are starting to think letting their kids play football is a bad idea.
Could baseball see a bit of a comeback in participation, or will it simply mean even more youngsters choose football (you know, soccer)?
Google shares rose over 12 percent in after hours trading and will begin trading today at around $678 a share, up over $76.
Google’s earnings report came in yesterday and it was good, but was it really that good? One wonders if, for the past few weeks, we have seen a market wanting to break out be surpressed by news events. News events are the real world, of course, while stock trading is not.
Next week Tuesday Apple announces earnings and financial news organizations, especially ones that are constant bulls, have been saying that Apple will not only beat expectations but is actually undervalued.
Guess the point I’m getting at is that there seems to be a disconnect between real news, real earnings, and sentiment on Wall Street – that feels dangerous to me.