Market Action

• Markets started the week in the red across the world thanks to Greece’s abandonment of negotiations and surprise call for a referendum. Equities in the U.S. recovered some losses but still ended the week down more than 1% across the major indices. Utilities, and their attractive yields, were the strongest sector on the week.
• Greece will go to the polls on Sunday to determine whether or not the country supports the conditions attached to an extended round of financing, even though the creditors’ offers have expired. Greece also failed to make a payment to the IMF on Tuesday.
• The IMF also issued a report on Thursday stating that Greece needed over €60bn in refinancing, calling for additional debt relief for the country. The report also strongly criticized the Syriza party for its approach to negotiations.
• The Governor of Puerto Rico declared the island’s $72bn debts as “not payable” over the weekend. The territory has had difficulty with its obligations for years, despite a past restructuring.
• China lowered interest rates and its reserve requirements over the weekend in a small easing effort. In addition, margin requirements were slightly eased in light of the Shanghai stock market’s more than 20% fall over the past few weeks.
• Switzerland intervened in the foreign exchange market on Monday to stem a further rise in the Franc. The SNB had warned that such an action was likely out of fear the currency’s strength would hamper the economy.
• Sweden lowered its main interest rate to -0.35% this week and expanded a bond buying program. Deflationary forces have firmly gripped the country.
• The oil rig count rose for the first time since December in the U.S. Several energy companies have lowered operating expenses in an attempt to be profitable at lower crude prices.

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