Il Primo Ministro greco Lucas Papademos riceve l'approvazione del governo su tagli al bilancio che corrispondono al 7% del Pil nei prossimi tre anni e su una ristrutturazione finalizzata a ridurre di €100 mld gli oltre €200 mld di debito detenuto dai creditori privati, atteso il voto del parlamento • Standard & Poor's declassa il merito creditizio di 34 banche italiane tra cui UniCredit a BBB+ da A, Intesa Sanpaolo a BBB+ da A e Banca Monte dei Paschi di Siena a BBB da BBB+, S&P anticipa "una redditività decisamente debole per le banche italiane nei prossimi anni" • La produzione industriale italiana aumenta a dicembre +1,4% da novembre +0,3%, oltre le stime degli economisti +0,5%, anche se i dati del quarto trimestre -2,1% suggeriscono che la terza economia della zona euro è entrata nella seconda recessione dal 2009 • I Btp decennali salgono per la quinta settimana consecutiva, il periodo di recupero più lungo in oltre cinque anni, la prossima settimana il Tesoro vende €4 mld di buoni al 6% con scadenza 2014 • L'euro cala dal massimo di due mesi contro il dollaro, il mercato azionario europeo cala dal massimo di sei settimane e l'azionario Usa registra la prima settimana di perdite del 2012 dopo che i ministri delle finanze europee non hanno concesso il pacchetto di aiuto necessario a prevenire il collasso economico della Grecia

mercoledì 20 luglio 2011

Market Comment - July 20

(Marco Bonelli) So earnings do matter? Or were housing starts the real driver? Maybe favorable comments from US President Obama regarding the budget and debt-ceiling discussion moved the market?

How about a technical rebound which got triggered by some or all of the points mentioned above and lead to substantial short-covering in the second half of the trading day?

So far, earnings admittedly come in quite strong, with a few exceptions here and there. So after some initial doubts and 'special situations' from GOOG and several bank stocks, a broader spectrum of companies beat expectations.

In terms of June Housing Starts, I would think that this statistic was the least important market driver, despite surprisingly strong m-o-m gains for both housing starts and building permits. While it's good to see some positive data from the housing sector, the reports became so volatile and incorporate all kind of on and off-seasonal adjustments as well as one-time situations or other comparison issues. Most importantly, the data are at extremely depressed levels and will probably stay there for a while and with that doesn't really mirror and/or contribute to economic activity in general as much as it did in the past. I see last week's July Empire Manufacturing Survey and July Michigan Consumer Confidence as much more important data-points and look forward to the Philadelphia Fed Index tomorrow and other data next week to give a clearer indication how long the US economy will still be in a soft-patch.

Finally the only good thing about positive updates or even the end of the national debt discussion is that it removes the uncertainty. I would even call it an artificial uncertainty which became this big issue thanks to the media and the political activity in Washington. It was always out of question that the debt ceiling will get raised, that the political parties agree to a budget deal and that the United States will not default. So a stock-market rally based on "good" news from Washington definitely doesn't stand on strong feet and other market drivers will take over a few minutes after a budget deal gets announced.

So overall, the market picture once again turned around 180 degrees in a broad-based rally that even included the financial sector that hesitated to move higher despite better than expected Q2 earnings reports from most banks. Yesterday, the so-called follow-through buying turned out to be massive short-covering. The index that is closest to breaking out to new highs is the NDX, which closed 20.82 points below the high from last week. The index held support twice at its 50 and 100day MA and could be the leading indicator for the rest of the market. However with earnings from technology companies like EBAY, INTC, CA, QCOM, STX and XLNX out after the close tonight, investors might choose to wait and see today before they try to push the Nasdaq higher. Let's go day by day and hope we don't see another 180 degrees turn from the recent 180 degrees turn.

Trade well.

(Marco Bonelli is the Managing Director - International for CL King & Associate in New York. The opinions expressed are his own)

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