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Spain’s Debt

April 4, 2012 – 5:10 pm

This morning’s downside opening was a reaction to Spain’s poor bond offering. They issued a number of government bonds and to sell them the buyers demanded higher interest rates. Their rate is now moving towards 6% which is considered the point at which they cannot support without help from the ECB and/or IMF. (European Central Bank, International Monetary Fund)

Despite good news from ADP announcing over 200,000 new jobs created in the U.S. last month the market focused on Europe once again. It could be a short term response but it demonstrates that our stock market is not immune to the continuing troubles in Europe. It does not mean that what happens there will automatically affect us but it is also not something we as investors can ignore.

Europe will work its way out of their debt issues but it is going to take time and the best thing that can happen for them and the world is that they exit their recession. There have been signs of strength and weakness depending on the country in the EU. When the broader spectrum of countries begin to mend the debt issue will be pushed down as a problem, but for the present it is a big issue for everyone.

Good Trading
Steve Peasley

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