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Greece credit default swaps blew out today (+140 bps or so) as concerns over sovereign debt default continue to grow. But as we noted a couple of weeks ago, US equity markets aren't too concerned. The market did trade lower early on today, but it finished higher by the end of trading. Below is a chart of Greece 5-year credit default swaps versus the S&P 500 tracking SPY ETF. As shown, US markets had a multi-week pullback the first time Greek debt problems arose, but the most recent run-up in default risk has left the major indices here unfazed. Regardless of whether they should be or not, US investors in general are not too worried about Greece this time around.
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