Volatile But Mostly Positive Week for Equities

News out of Greece continued to dominate market sentiment, resulting in a volatile but mostly positive week for equities. The CBOE Volatility Index spiked to its highest levels since January before pulling back,while yield on the benchmark ten-year U.S. Treasury rose sharply to close the week after cratering on Wednesday. Looking abroad, Chinese stocks delivered their first positive week since the mid-June beginning of a selloff that slashed indexesby 30% or more. 

A referendum on the terms of the most recent bailout proposal was met with a resounding "no" from 61% of the Greek public, stoking fears that a "Grexit" was all but inevitable. Later in the week, however, Greece submitted a 13-page plan of proposed economic policy overhauls and budget cuts that were more in line with what the creditors are demanding in exchange for fresh funds, raising hopes that a deal could be reached. 

While minutes from the June FOMC meeting indicated that the tumultuous global conditions have not gone unnoticed by the central bank, the tone of the comments suggested that the Fed remained likely to introduce a rate hike sometime this year - September continuing to be the most likely liftoff date - barring significant spillover into the U.S. 

A technical glitch forced the New York Stock Exchange to halt trading for about four hours on Wednesday. Though unnerving, especially given that United Airlines had also suffered technical difficulties earlier that day, the NYSE outage was a nonevent for most investors, as trades were able to be routed to other platforms that were functioning normally. The trade deficit widened 2.9% in May, less than analysts had expected. Exports declined, as the stronger dollar and international discord are weighting on overseas consumers. 

The Labor Department's Job Openings and Labor Turnover Survey (JOLTS) showed that job openings in May remained at record highs. New hires declined slightly, however, and quits were more or less flat. Wholesale inventories rose 0.8% in May, better than expected and the fastest pace in six months. Sales at the wholesale level slowed during the month, climbing only 0.3%.