European Politics Hit Global Markets
Global stock-market investors are not liking what happened in Europe yesterday.
European citizens -- fed up with debt, spending cuts, and tradition -- are rebelling. As the "fringe" element gains power, and establishment loses it, the result is fragmented politics and jittery stock markets.
France elected socialist Francois Hollande as its new president, the first time a Socialist has held office since 1995.
Hollande will work to shift the economic hardship onto the rich and soften the austerity for the masses. International investors may demand higher interest rates on their French bond holdings if they're not convinced Hollande can cut France's debt. France is Europe's second largest economy after Germany.
Investors will also want to know if he will play friendly with Germany's Angela Merkel, like his predecessor, Nicolas Sarkozy, did.
In Greece, it could take weeks for the political parties to form a governing coalition. The country is expected to take yet more austerity measures in June, and a failure to stick to the terms of Greece's bailout deal could mean the International Monetary Fund may pull the plug on supplying funds to Greece.
U.S. stock futures are following their international counterparts lower, though the blow is not as severe; the Dow is set to drop about 50 points at the opening bell. Stocks sold off on Friday after U.S. payroll growth in April came in well below expectations.
For all of last week, the broader market, as measured by the S&P 500, is down some 2.5%.
Another big story is the official kickoff of the Facebook IPO roadshow today in Manhattan. After luring big New York money, the roadshow will travel across the U.S., ending in Menlo Park, California.
As FBN reported last week, CEO Mark Zuckerberg might skip the New York event because of security concerns, although there has also been speculation Zuckerberg has no choice but to be there.
Facebook is talking about a price range of $28 to $35 a share, but those numbers can change if the roadshow shows strong demand. Wedbush has already given the social giant's stock an "outperform" rating with a $44 price target, even before it has gone public.