If the goal of European officials to deal with not only Greece but to put to bed any concerns over their resolve in dealing with the region’s debt crisis, especially ring fencing the problem around Greece, Ireland and Portugal, it has yet to be accomplished. Italian and Spanish bond yields are now above the level of last Wednesday, the day before the EU summit. Also, stock indices in both countries have given back most of the Greek bailout bounce. Due to these growing concerns, July Italian business confidence fell to a 10 month low. The US$ is higher vs the euro as a result of the above but the US$ is hitting record lows vs the Aussie and New Zealand $s and falling to multi yr lows against other Asian currencies. Underneath the daily debt worries of Europe and the US is a global economy that continues to slow and while equities will bounce around short term depending on what debt deal can pass and when, attention will quickly shift back to the ever growing unstable economic outlook. Low mortgage rates continue to have little influence on purchase decisions as the MBA said purchase apps fell to the lowest since Feb, falling 3.8%. Refi’s fell 5.5% but after last week’s jump. II: Bulls 49.5 v 46.2, most since May 11th, Bears 21.5, unch with last week.
