As of Thursday, February 9th the S&P 500 gained 7.5 percent for the year and as of noon on Friday, February 10, it dropped 0.7 percent, snapping a five-week rally. Gasoline prices rose 22 cents per gallon, making households feel that even with declining unemployment a boost in income has yet to see an increase, causing a pinch on consumer spending. The drop in U.S. stocks came after concerns for Greece’s government default mount as their deadline approaches next week. European leaders delayed a rescue package for Greece, and proposed plans do not seem to be sufficient enough to handle Greece’s debt. The current plan in place would leave Greek debt as high as 136 percent of GDP by 2020; as of last year Greece’s debt was 160 percent of GDP, according to Bloomberg News. China’s trade data signaled a weakening growth in the world’s second-largest economy for the first time in two years as overseas shipments decreased 0.5 percent; Chinese economists remain optimistic as they maintain that demand is picking up and contribute this weakening growth to the 4 fewer working days stemming from the Chinese New Year. The IMF has warned this week that deterioration in Europe could cut China’s expansion rate by almost half this year.

Article submitted by: Charles Stack of the Capital Markets Lab (CML). To learn more about the Capital Markets Lab (CML) please visit https://business.fiu.edu/capital-markets-lab/.