News of the Morning

This may be the first day of the last 6 that the ECB has not stepped in to prop up Italian bonds, so far as I know.

After NFLX's earnings last night (-37% this morning), MMM came out with bad earnings as well (down nearly 6%).

The big news is the cancellation of the EcoFin meeting in Europe, this is not the Wednesday part 2 of the EU summit, but an interim meeting in which details were supposed to be hammered out. My take on it was there was little progress Sunday except to agree to re-capitalize the banks to the tune of $100-$110 BB Euro. Not much else was agreed upon and it seemed the previously unplanned EoFin Finance Ministers meeting was set up to make up for lost ground. However in a seemingly negative turn of events the meeting was cancelled by the head of the rotating presidency, Poland. It would appear that there was not enough consensus on the major issues to make the meeting worthwhile, which casts doubt on Wednesday's deadline meeting.

The Euro and the markets did not react well to this news. The Euro lost over 100 pips in 25 minutes and the S&P lost nearly 22 points in 8 minutes or about -1.7%. That's a typical knee jerk reaction, likely market makers will not be fond of taking an overnight loss like that on inventory and will attempt to fill the gap, however the 3C 5 min chart seemed to telegraph this morning move near perfectly.

So it is quite possible the rumors of the EcoFin cancellation were floating around yesterday.