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 10 agosto 2011

Market Comment - August 10

(Marco Bonelli) The FOMC Statement was decent!

The market needed a positive statement and the market got a positive statement!

There are three points worth mentioning:

Ø  The Fed finally acknowledged that the economy is weak, that the weakness is not only to blame on temporary factors and that the downside risk has increased. This is no new news and the bleak picture they painted is nothing more than an adjustment towards reality, which is good.

Ø  The Fed pledged to keep interest rates "exceptionally low at least through mid-2013". This is a huge change from "extended period" as Ben Bernanke once defined extended period as "at least three to four months". So the 2013 statement is a strong message! On the flipside, you could argue that they have no faith in economic growth picking up for almost two years but it's probably also more an adjustment towards reality; at the same time, you could also say that "exceptionally low" doesn't mean that they leave Fed Funds at current levels for two years.

Ø  Finally they said that they discussed a range of policy tool and they are "prepared to employ these tools as appropriate". They are prepared means, that they could implement QE3 or any variation of it tomorrow. It definitely keeps the hope alive.

The initial market reaction reflected the disappointment of those market players who expected or hoped for more action instead of only promises but at the end, a QE3 announcement was highly unlikely in the first place and a decent message as the FOMC delivered was exactly what the market needed to calm down the nerves.

Beside the positive message from the statement, the initial sell-off after its release also created something positive: all major index tested, broke and finally defended Monday's lows, which left a short-term constructive chart picture.

Other than that, skepticism remains quite high as a lot of investors look to sell any rallies and wait for the final capitulation; the arguments also point to a mere bounce from technical oversold levels which was mainly driven by short-covering. The latter part may be true but that doesn't mean that the rebound could last a bit longer.

This morning's profit taking is no big surprise given that 31 stocks in the SPX advanced more than 10% yesterday, however after the first dust settles, continued negative sentiment, the perception towards low commodity prices and some bargain hunting could lift prices further up until some hard reality from the macro-economic front, Europe or other issues will kick in again, which doesn't necessarily have to be this week.

Looking at the sharp correction we saw over the last two weeks and watching a few long-term chart trends, there is a good chance that we entered a bottom-building process where buying dips will be more rewarding for investors looking out 6 to 12 months from here than selling any rebounds. For the short run, I would expect the first bounce to last a bit longer than one day, although the 4% move in the Dow Jones and 5.3% move in the Nasdaq needs to be digested first.

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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