Investors face a range of competing influences heading into this morning’s market open

On the positive side, local markets may take some comfort from the relative indifference, their international peers appear to be displaying towards the rising potential for a Greek debt default. Given the large range of possible outcomes on Greece, markets appear to have decided that the best course of action is to wait and see what actually transpires before reacting.

On the positive side, local markets may take some comfort from the relative indifference, their international peers appear to be displaying towards the rising potential for a Greek debt default. Given the large range of possible outcomes on Greece, markets appear to have decided that the best course of action is to wait and see what actually transpires before reacting.

The situation for traders is also clouded by the Fed announcement which will come early tomorrow morning. Like the Greek situation, this carries two way risks. There is upside potential for stock markets if the Fed is able to focus attention on what happens after the first rate hike with assurances that it will remain very cautious about the pace of monetary tightening once it gets underway.

Recent support for banks may be another positive for today’s market. Warren Buffet’s announcement that he is likely to build a stake in four or five Australian companies over coming years may encourage a more positive view on the Australian market among his many followers. However, Mr. Buffet will no doubt be seeking to build his holdings at value and into periods of weakness.

This morning’s announcement by Woolworths that it has again reduced guidance for the current financial year will disappoint markets. This is a reminder that the current low growth environment provides little cover for companies with strategic weaknesses or those that fall behind the competition. While the planned appointment of a new CEO makes Woolworths a potential turn around stock, this may be some time off yet and investors may prefer to wait for news of who will be sitting in this hot seat before thinking in terms of turn around potential.

Weaker commodity prices overnight mean that the materials sector may not make any significant contribution to any overall gains in the ASX 200 index today.

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