Equities Shrug off Italy

Nothing is more telling in markets than strong price action in the face of bad news. Yesterday after the market close Moody’s delivered a 3-notch downgrade to Italy’s long term sovereign credit rating with a negative outlook, Moody’s added “The negative outlook reflects ongoing economic and financial risks in Italy and in the euro area,” . After an initial wobble US equity futures ($ES_F, $SPX) regained their footing and formed a nice high and tight bull flag overnight:


S&P futures look to be breaking out above the flag as I write this – It will be interesting to see how much momentum the bulls have today. There is a bevy of news flow coming from the eurozone this morning, here are a few links:

WSJ- French Minister: Open to Bigger Greek Haircut

Bloomberg- Merkel Says Euro Bonds No Endgame for EU Woes

Reuters- Plunging PMI Fuels Recession Fears

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