The decision by Greek Prime Minister Alexis Tsipras to put the bailout plan to a referendum has caught investors on the wrong foot. From Bloomberg:
For Europe stock traders who went all-in last week speculating on a Greek resolution, it’s time to rethink the strategy.
U.S. stock-index futures tumbled, and gains that pushed the Euro Stoxx 50 Index up 4.8 percent, including the largest one-day rally in three years, are at risk after Prime Minister Alexis Tsipras said he would put terms of the Greek bailout to voters. A Capital Markets Commission official said the Athens Stock Exchange will remain shut on Monday.
It’s a measure of how rapidly sentiment has shifted that the latest breakdown followed a week in which Greek shares posted their biggest increase since 2008, rising 16 percent. Six days ago, investors were celebrating signs the impasse was breaking as European policy makers said reforms submitted by Tsipras were a positive step.
Indeed, markets were in turmoil early on Monday. China's stock market lost 3.3 percent despite the People's Bank of China announcing a rate cut over the weekend.
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