Big news coming for Greece on Sunday with their Parliamentary elections. The entire Euro-zone, and really the whole world have been watching and waiting for the outcome of the election to see if Greece will stay in the Euro-zone and continue their austerity measures, or will they abandon the Euro. The implications of this situation are quite serious as the outcome in Greece will likely affect the rest of the Euro and the world financial markets.
Ultimately nothing will be decided on Monday but the fact remains that Greece cannot pay its bills and it is a matter of time until some measures are taken to resolve the situation. It seems that large central banks of the world are primed for more stimulus and the markets are getting excited over the possibility of more stimulus just as a crack addict gets excited thinking about getting more crack. In the meantime we should expect more volatility.
Jobless claims move up to 390,000 which reflects increased layoffs. This is clearly going in the wrong direction and shows the slack in employment.
Reported inflation falls to 1.7%. This decline in the growth rate under 2.0% is right on schedule and is down to 2.3% not including food and energy. It seems the price of oil declining recently was a big factor. This drop comes in just before the next Fed meeting on 6/19-6/20 and just as the latest Fed stimulus, "Operation Twist" is set to expire. It is likely that The Fed will use the combination of softening growth, the European crisis, weakening US employment to push for another round of stimulus as I've been expecting. Some suspect the next stimulus will be a purchase of mortgage backed bonds however we'll just have to wait and see what develops.