This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Market Preview: Reality Check

NEW YORK ( TheStreet) -- That oversold bounce didn't last long now, did it?

Tuesday was a fairly ho-hum affair for U.S. stocks. The early strength was mostly based on what wasn't happening [scary headlines from Europe] than what was [a good but not great read on existing home sales in April]. So when Lucas Papademos, Greece's former prime minister, reminded Wall Street that the possibility of the country leaving the eurozone was real, the market reacted.

Now it wasn't a deep or disorderly selloff. This wasn't some big revelation. More of a reminder of what's really driving the action these days. In other words, it's prudent not to get too jazzed if the major U.S. equity indices start to claw back some of May's losses unless the impetus is real progress in Europe.

What form "real progress" would take is the best question. The idea of shared debt, eurozone bonds, is starting to get some attention but it's hard to see Germany getting on board with that. We'll know more soon with Europe's leaders set for their latest in a long line of summits on Wednesday but those waiting for definitive action are likely to be disappointed in whatever of platitudes come out of the confab.

Indeed, Credit Suisse offered some observations earlier Tuesday that underline what a big role politics are playing in the markets these days and why that's problematic. The firm held its 2012 Global Macro Investors Conference in New York last week, and came away with this insight.

"Politics was seen as the key element in the European debt crisis," the firm said. "We think this insight holds more generally: whether it is the US fiscal cliff and the required debt ceiling rise in January 2013, the leadership change in China or the Euro, political risks dominate much of the macro analysis. This is why markets trade cheaply. Investors are not political analysts."

Based on its own survey of conference participants, Credit Suisse said 29% of investors expect Greece to exit the eurozone by the end of this year, and that 42% of this group believe Greece's departure would spell the end of the single-currency bloc. The firm, which places a 10% probability on the end of the euro as we know it, also found a few contradictory opinions out there.
1 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
FB $104.07 0.00%
HPQ $9.91 0.00%
AAPL $94.02 0.00%
GOOG $683.57 0.00%
TSLA $162.60 0.00%


Chart of I:DJI
DOW 16,204.97 -211.61 -1.29%
S&P 500 1,880.05 -35.40 -1.85%
NASDAQ 4,363.1440 -146.4150 -3.25%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs