Europe will keep its chokehold on financial markets in the week ahead, as investors size up Greece’s commitment to the euro zone and watch for other headlines on the debt crisis.
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“Next week is only one of the four weeks we have to wait until the Greek election. Every utterance out of Greece makes us think about their [possible] exit and how sloppy that could be,” said Art Hogan of Lazard Capital Partners.
G-8 leaders meeting in Camp David over the weekend strongly supported keeping Greece in the euro zone and vowed to do whatever is necessary to battle financial turmoil while revitalizing their economies.
They also stressed the need for strategies to encourage growth, in a seeming effort to balance the European austerity measures pushed by Germany, and at the heart of the political crisis in Greece.
With just a few earnings and economic reports, there will be plenty of opportunity for markets to dwell on Europe and its problems. In the past week, investors began to reassess the possibility that Greece could leave the euro zone in a messy fashion, spurring bank runs in other weak peripheral countries.
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