Will Greece's Government Change Affect Markets?

Suzanne O?Halloran on how Wall Street is reacting to developments in Europe.
8:26 | 11/08/11

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Transcript for Will Greece's Government Change Affect Markets?
Dow futures were rallying this morning on the latest news out of Europe joining me now to discuss all the business headlines at this hour -- -- grant. At Bloomberg TV Susanna at great to have you on the show let's start every penny -- In Europe Greece is now in the process of changing its government is this going to make a substantial difference in the debt crisis. Well the market helps -- and what we're hearing out of Greece is they are finally finally. Making progress just a few days ago things were heading in the wrong direction for US investors in global investors but today we are learning that George -- very out. -- the prime minister who will be stepping down is working with the opposition party to form a new unity government. This is really important because of the job of the need unity government is to implement austerity measures that were not put in place. When they should head and which actually added -- to the fire and then of course is will secure that a second round over a hundred billion dollars roughly. Financing from the EU in the -- and -- as well so this is very important and we are finally getting. Some more that they are making progress and that's really important for the financial markets and we have a better time coming out of here today for example -- -- Early but let's talk about Italy because that country going through a similar governmental shifts with Silvio Berlusconi being pressured now to resign. -- back country avoided -- fault. If mr. Berlusconi refuses to -- yeah. That's a great question because the markets are forcing hand. To resign and by that I mean if you take a look at Italian bond yields those are really at record levels. That raises borrowing costs for the country the market is telling him get outs and we are learning that momentarily there will be a vote in Italy a confidence vote for Berlusconi. What the market wants to see regardless of how that bill goes is that he will step down an orderly fashion if he does -- that could be problematic for the European markets and the US markets because. What we've had with Berlusconi is a couple of things first -- he's not very popular among the investment community and with the other European finance leaders and secondly. He goes to these meetings of the EU in the -- and -- says yes he promises that he will institute austerity measures then he goes back to Italy. And he hasn't been able to get anything done and that's actually part of the problem in Italy is a bigger deal really than Greece because. Their liabilities are bigger than Ireland Greece and Spain Portugal. So we don't have some progress there again that can be very problematic for the markets here that's a big European economy and another day when -- France who is now. Also talking about austerity cuts does that stem from the problems with its -- neighbors. I yes absolutely and I think you're gonna see more European nations come out and be pro active. As opposed to -- -- and that's really what caused. This many financial crisis we've had since August is -- European nations of failing to act the European leaders dragging their feet. Just at the last meeting and con just a few days ago they would they failed to come to an agreement about what they need to do in terms of boosting IMF resource is not a perfect example. Of why the markets are very nervous about these intersected European leaders so when you hear country like France and its leaders getting ahead of the problem before. That becomes -- -- region to have some turmoil with its leadership. That's a very encouraging sign -- and hopefully. For the global markets we'll hear more from other countries like Spain and Portugal be very encouraging. Certainly in the first few minutes of trading it looks like the markets are feeling a little bit more secure this morning Suzanne -- let's get back to the US and earnings out. McDonald's is out with its numbers for the quarter how did you. Yet you actually without had a same store sales. Out this morning and they did -- week actually the numbers coming in better than expected and they really solid rebound and -- that's very encouraging. Because that's one of their biggest regions but also here in the US and just hearing from the company's CEO James Skinner he said listen we offer value to our customers. That's helping folks get into the stores summoned their newer products like the make -- cafe. Which really competes with Starbucks and other coffee companies. Those are selling really well as -- but. Did the biggest growth we -- McDonald's and -- improvement I will say is Asia. And again that's really important for McDonald's McDonald's by the way that's -- had a tremendous here it's actually covering Mir -- at record levels. We're looking for -- to advance today based on the same store sales. -- -- -- meanwhile there are new signs of stress again in the housing market more people are missing mortgage payments is this a sign -- we could be headed for yet another wave of foreclosures well but will perhaps seem foreclosures are still quite high out a lot higher than they should be in and how we need to -- is look at unemployment. Above 9%. That's really is the key for the the market and at the same token don't forget home values are continuing to decline. So we'll -- -- foreclosures are rising -- not necessarily such a surprise what we really need to stop that is. Number one we need to have unemployment come down that way people would be able to make their payments and secondly we need home value to stop declining because they're so many folks. Across nations sitting in a home that they -- chest. That and they're under water and what that means is -- paid more for the home then. It's worth today -- not -- he surprised that these numbers certainly are not encouraging for the US economy doesn't seem to slip into a double dip recession. Not necessarily I think folks economists are well aware of what's happening in the housing market what we're more concerned about with job growth as -- Last week that US economy created about 80000 jobs still not enough. To bring down unemployment but a lot better -- we seen in previous months and hopes. -- Natalie to the housing market turning around at some point in the theaters so many Americans -- underwater in their mortgages. Are right let's go to developing story this morning Houston based power company I'm not sure how to say this name is a DineEquity. If it's not an easy okay strategy it they're declaring bankruptcy what's the full story there. Yet let this is that -- troubled company that eight months ago they -- they warned that they would probably have to declare bankruptcy and this is kind of an example of perhaps -- -- -- company this is the third largest power producer in the United States. They've had several takeover offers over the past year back -- 09 Carl Icahn and very well known. Billionaire shareholder activist came -- and wanted to by the company the company's board said no no we want to stay independent and here we are today this company is probably going to declare bankruptcy. Not a huge surprise the just another example of land perhaps management didn't do what it was supposed to do they shouldn't in hindsight take -- taken a look at some of those offers. And accepted a buyout package they wouldn't be in the situation today -- is unfortunate for shareholders because. -- DC at bankrupt about bankruptcy like we're seeing with Dinah G shareholders are out of luck you don't get any money. Bondholders -- mind for some type of return but it's a lose lose for a lot of folks involved pictured is okay we're. Reports that Wall Street bonuses are actually shrinking what's the reason behind -- Yes you know what let's clean -- up because it is a very difficult third quarter and by that I mean just -- basically. The end -- -- -- the beginning of August he had a lot of volatility voluntarily really -- near record levels. And what that means it's very difficult for firms like Morgan Stanley Goldman Sachs JPMorgan to make money in trading. And as a result. Bankers will pay the price because. Deals get put on hold takeovers get put on hold that the biggest tough thing for the market was fixed income trading up -- shop and a sharp decline again over that. That third quarter -- look at it this way and that's -- it's as bad news Stephanie see -- -- one point two million dollars last year. This year you're probably -- -- taking on 1700000. Not so. -- -- -- Yes after Hulu exactly don't think there's going to be a lot of sympathy out there for that and -- anything Elster going to be watching -- -- -- really -- focused on Europe because that is clearly dictating the the headlines so far so good on Wall Street in terms of what we're hearing out of Europe again congress is heading in the right direction. Other things -- keeping and I an aside from. European headlines of course the -- with Berlusconi whether or not he wins or loses and also the principal helped weave the price of oil ID three month high a couple of things happening with oil. The progress in Europe. You mean it traders' confidence that that nation or that region -- -- into a recession. But also are -- report from the UN about -- -- in its nuclear activities front that's giving us some investors a little little bit of nervousness if you will. In terms of if there could be any disruption. Ran as a big supplier of oil as we announced about some -- be watching today bearing interest -- let's take Wal-Mart look at the big board before we let you -- the Dow trading up about 24 points right now so little bit of optimism running through the markets. Susanna hall front from a Bloomberg TV great patties Suzanne emigrating MIT tea.

This transcript has been automatically generated and may not be 100% accurate.

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