Stage For EuroCrisis Resurgence Being Set
Now that the summer vacation period for most of Europe is coming to an end - the temporary reign of freedom enjoyed by Mario Draghi and the ECB is over. What we have repeatedly discussed in the past is that while Merkel was away - the mice were playing. Unfortunately, the cat has now returned home and she is not happy.
I have compiled a list of reading to get you caught up on the details as we enter into a holiday shortened week.
The week ahead has a heavy economic data schedule. With earnings season now in the rear view mirror, and the Federal Reserve sitting on the sidelines, attention will be focused on the headlines. For the Eurozone - the time for "talk" has passed. It is now going to quickly come down to actions - or lack thereof.
For investors there are only three choices - be long, neutral or short stocks. In an environment where the underlying fundamentals and economics are not supportive of higher asset prices - being excessively long equity risk seems to be a very binary decision - win or lose big. However, being short stocks likewise poses the same risk. Therefore, the safest position for investors currently is to remain neutral until a clearer framework for equity risk is established.