Markets Rally in the Wake of Greece Deal

Markets rose today, climbing back toward last week's highs and back to levels that most analysts expected to see over slow summer trading. The Dow closed the day up 217.27 points to 17,977.68, near the old 18k support level. The NASDAQ added 73.81 points today, and lead the indices in real gains. It closed the day's trading at 5,071.51. The S&P 500 followed suit, gaining 22.98 points to close at 2,099.60. Hong Kong's Hang Seng index appears to have stopped bleeding.

Marathon Petroleum (MPC) Climbs on Acquisition

Marathon Petroleum (MPC) acquired competitor and pipeline-builder MarkWest Energy (MPLX) for $20 billion in a deal that was finalized today.
The diversified energy company was up nearly 8% on the news, snapping a recent downward trend. MarkWest shareholders weren't as enthusiastic about the deal, and their stock price fell by over 10%.

Bitcoin (XBT) Falls 7% Against Climbing Dollar

The Bitcoin exchange (XBT) was down over 5% today as the US Dollar strengthened, in part because of the Greece deal. Bitcoin is notoriously volatile, although the XBT listing is one of the first steps that the cyber currency has taken toward legitimacy. As of this writing, Bitcoin was trading for $290.07 per coin.

Greece Deal's Big Winner is the US Dollar

In overseas news that has been a long time coming, Greece cut a deal with Eurozone. The bailout, which is the third that the debt-stricken country has taken since 2008, will extend more time and money to Greece in order to pay back creditors. Greece has previously defaulted, missing a scheduled payment early last week.

The Euro dove to near-record lows on the news, which got a mixed reception in Europe. Many Europeans believe that this is only prolonging the inevitable. Greece's next option is to drop the Euro completely, then print its own currency to alleviate consumer suffering from the crisis. Of course, many analysts fear that this would lead to hyperinflation.

Hyperinflation may be a better alternative to the current situation, although that's a very debatable point. As of last week, banks and ATMs had been shuttered, and Greek citizens were only permitted to withdraw 70 Euros per day from their accounts. These measures had mixed successes, but they did prevent a major run on the banks.

The US Dollar was up on news of the Greece deal, and bond rates were up as well. FOREX markets, which were already bearish on the Euro, are only expected to continue their current downward trend. Still, this news is good for the US as a whole, since we have a vested interest in the Eurozone staying whole. A collapse would hurt exports and overseas business in general, as what had been a stable European Union would be shaken to the core.
Published on Jul 13, 2015
By Aaron Phillips
Aaron Phillips is a financial researcher and journalist based out of Michigan. He regularly writes the IG Daily and IG Weekly columns.

Copyrighted 2020. Content published with author's permission.

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