Event Risk In Focus

With earnings season winding down,event risk has become the focus for traders now.Stocks closed at their lows of Friday's session,with financials losing big on concern over a criminal probe into Goldman Sachs' activities.Traders are worried that further negative information about the Wall Street titan will toughen new financial regulations even more.The other main concern is the Greek debt crisis,which has reached a critical juncture this weekend.If no bailout is reached by Sunday night,Friday's selling could resume on Monday.Greece needs to come up with cash for a May 19 debt payment.
Nonetheless,stocks closed up both for the week and the month.April is traditionally a strong month for equities,while the summer months are believed to yield weaker results,according to conventional wisdom.The S&P futures were down sharply this evening,losing 21.90,while bond futures rose.In golf,Tiger Woods was in danger of not making the cut in the PGA event at Quail Hollow,with relatively obscure players being on the leader board.

A Growing Wall

The wall of worry got considerably taller this week as Dubai suspended payment on its massive debt load.Just when Americans were hoping to get into a party mood,a city many may not have heard of lopped a few percent off their recovering portfolios.The reflation trade was stopped dead in its tracks as commodity prices and equities plunged.It happened on a Friday,no less,leaving investors with a good few days to wonder what they are dealing with.The specter of commercial real estate,which had been put aside as a known quantity,burst on the scene with an unpleasant surprise.Is it just an anomaly or the tip of a new global iceberg?One can only hope that a week from now the holiday mood will be back on course on Wall Street and its satellite portfolios.