The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) opened up on Tuesday morning after a rout on Monday after weekend talks failed to bring the Greek government to terms with its lenders. The country is set to default on a $1.6 billion IMF loan today, but the wider stock market is up despite the rocky road ahead in the country.
Wall Street, after the ructions on Monday, appears to be betting that the Euro-group will be able to come to some kind of deal with Greece before the end of the week, or that the fallout from the collapse of the country’s economy won’t spread so far as to hurt Europe as a whole.
Market rebels against Greek chaos
This morning it became clear that despite Greece’s promise to hold off on a deal until a Sunday referendum was held, talks are still going on in the background in order to avoid today’s pressing default. Angela Merkel, Germany’s Prime Minister, was cool when asked about the deal.
Earlier she gave her view of the situation to the press. “This evening at exactly midnight central European time the programme expires. And I am not aware of any real indications of anything else,” she said. She added that nothing had changed, in her view, since Friday of last week and that was where all of her info was coming from.
The US market may be up on hopes that Greece will find the time and the will to come to a deal before the close of business on Tuesday. It’s not clear what the hard deadline for the IMF payment is, but the EU programme that already has billions waiting to be dispersed will expire at midnight tonight.
Reuters reported that Greece had not responded to moves toward getting a deal done before that deadline. Margaritis Schinas, spokesperson for the European Commission told press “As we speak, this move has not yet been received, registered, and time is now narrowing.”
Wall Street hopes for Greek solace
On top of the fractional increase in the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) on Tuesday morning, the Global X Funds (NYSEARCA:GREK) was having a strong day. The EFT, which follows the fortune of the Greek market, was up by more than 5 percent at time of writing. On Tuesday that ETF lost almost 20% of its value.
The increase of the SPDR S&P 500 ETF Trust (NYSEARCA:SPY) and Global X Funds (NYSEARCA:GREK) may be short lived, and they may rest on the idea that a deal will be done before any vote takes place in Greece. The actions of the country’s leaders in recent weeks suggest that that kind of hope may be misplaced.