STOCKS RALLY, DOW GAINS 220: Here's what you need to know
First, the scoreboard:
- Dow: 17,970.92, +210.51, (1.19%)
- S&P 500: 2,098.04, +21.42, (1.03%)
- Nasdaq: 5,069.79, +72.09, (1.44%)
And now, the top stories on Monday:
- Greece got a deal. In exchange for about 85 billion euros ($94 billion) in funding, Greece agreed to a set of strict austerity measures including a sales tax hike and pension reforms. It was the product of a marathon summit over the weekend that nearly saw Greek prime minister Alexis Tsipras literally walk out the door of the meeting - and walk Greece out of the euro. News of the agreement was out overnight on Monday, lifting US markets as well as European stocks, with the Euro Stoxx 50 finishing nearly 2% higher, and Germany's DAX closing up 1.5%.
- However, it's not yet really a deal. Greece's parliament still needs to agree to the plan by Wednesday. In a note to clients on Monday, Societe Generale's Kit Juckes wrote, "Believe it or not, instead of kicking the Greek debt can down the road, the discussion about whether or not to kick the can has itself been kicked down the road for 72 hours instead."
- Wall Street initiated coverage of Fitbit today with a very bullish outlook. Shares of the maker of fitness trackers jumped 5% in trading to as high as $44.59. Stifel had the highest 12-month price target we saw ($57) and their analysts are betting that the company is well positioned to gain from the $200 billion-global health and fitness services market. Other analysts noted competition from products like Apple Watch. "Apple Watch likely won't convert full purchase intentions indicated in the survey until Watch 2.0 launches and supply/distribution improves," Morgan Stanley noted.
- The 12-member oil cartel OPEC released its monthly report which said it expects a "more balanced" oil market in 2016. OPEC anticipates increased global oil demand by 1.34 million barrels per day (bpd) in 2016 from 1.28 million bpd this year. That should be enough to counter an oil glut. The report showed Saudi Arabia pumped a record 10.56 million bpd last month, up from 231,000 bpd in May.
- The budget deficit fell to $51.8 billion (versus $51 billion expected) in June, down 27% year-over-year, according to Treasury's monthly budget statement. This keeps the deficit near a seven-year low. According to the Wall Street Journal, a strengthening economic outlook lifted revenues, thereby closing the gap between spending and receipts.