US centre stage as Greek exit remains a possibility
INVESTORS will grapple this week with major US economic reports and the looming possibility of a Greek exit from the eurozone, which is likely to keep dragging on equities for weeks to come.
As contingency plans are made for Greece's possible departure from the eurozone, investors may not get a clear picture until Greece holds elections on June 17.
As a result, US economic statistics may grab the spotlight during the holiday-shortened week.
Major releases include consumer confidence, gross domestic product and on Friday the May non-farm payrolls report, which could provide clues on whether the economy is running out of steam or has simply hit a soft patch.
US financial markets will be closed today for a bank holiday.
Corporate news this week is expected to be light, with the first-quarter earnings season largely in the rear-view mirror.
Among S&P 500 companies, only government contractor SAIC is scheduled to report.
Reports from Irish companies will also be scarce, with few listed companies giving updates after a slew of reports in recent weeks.
"We are going to continue to worry about Europe no matter what. That is going to be a concern," said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
"But with the two main events in Europe not taking place for several weeks, the market will probably concentrate more on the domestic economy and the economic numbers."
But Europe will continue to be closely monitored, with equities affected by any developments in the fiscally troubled region.
Increasing worries about the region, coupled with tepid US data, have sent the S&P 500 down more than 5pc for May.
As the Greek elections draw closer, headlines from Europe could unsettle investors.
Belgian Deputy Prime Minister Didier Reynders said it would be a "grave professional error" if central banks and companies were not preparing for a Greek exit from the eurozone.
In addition, French banks, which are among the lenders most exposed to Greece, have stepped up their efforts on contingency plans for the debt-laden country leaving the eurozone, sources familiar with the situation said.