1. Greece – unsurprisingly the Parliament voted ‘yes’ by 229 to 64. Varoufakis voted ‘no’ and as one observer noted “The big question now is Tsipras stays or are 39 Noes & abstentions just too much?"
Tsipras debate quotes: ‘I don’t believe the measures will benefit the economy…I had to choose between accepting a deal I disagreed with or a disorderly default!’ Crisis clearly not over, for example I note this headline in today’s FT: ‘IMF tactics in talks leave European officials baffled’. My view remains sympathetic to an IMF one: without debt restructuring this will not sustainably go off the front pages…
2. Linked to Greece the ECB press conference was insightful. Here are some edited notes I made:
1. Now that Greece said ‘yes’ they get the benefits ECB raises ELA as we expected "acts on assumption Greece is member of € area" €900M out of €1500 requested
2. But, but…don't want to underplay the difficulty ECB has had in making decisions regarding Greece in the last few weeks i.e. European governments have got to give clarity
3. Draghi: It is uncontroversial that debt relief is necessary [for Greece], so Draghi, IMF, France and Italy vs Germany over time?! Draghi notes that the total Eurosystem exposure to Greece is 130 bln euro, while the deposit base is presently about 120 bln euros. Wow!
4. Draghi calls eurozone 'fragile', 'vulnerable', 'doesn't deliver'- structural reform a must
Thoughts? The ECB is being helpful following Greece's agreement to the proposals - no surprises there. But look at the debt restructuring comments (plus the related ones towards eurozone structural reform) - this is by no means an end game.
3. Fascinating AAII weekly sentiment data out (link here). I thought this piece captured the essence of the numbers best including the thought-provoking observation:
this is the 15th consecutive week with a neutral sentiment reading above 40%. This ties a record set between November 13, 1987, and March 4, 1988, for consecutive weeks where neutral sentiment is at or above 40%. Unusually high readings of neutral sentiment (currently above 39.6%) have been associated with better-than-average returns for the S&P 500.
4. Gold has disappointed recently in the market volatility. Note an observation here about an important multi-year technical level.
5. Finally Google numbers were out after the close....a bit bump/beat and simply fantastic cash flow. A full write-up on these numbers shortly...