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

giovedì 11 agosto 2011

Market Comment - August 11

(Marco Bonelli) Are we there yet?

Well, you probably find the answer somewhere in between the argument that Tuesday was nothing more than a snap-back rally in a new bear-market, a second look at the FOMC statement and its implications for the Dollar, bonds and commodities, the men-versus-machines battle, Jamie Dimon's comment that current market action is "just volatility" and the growing talk about a double-dip recession while the center of attention remains the relentless pounding in Europe that already feels like it won't stop before anything dramatic happens.

Until 90 minutes before the close, markets didn't look that bad yesterday. Selling in the morning was much less broad-based than we used to see and even appeared forced at some points, market breadth then improved steadily throughout the day, while the SPX and Nasdaq pleasantly outperformed the Dow Jones, the $24Bln 10yr bond auction showed strong demand and parts of the technology (semiconductors in particular) and consumer sector (driven by favorable results from M and RL as well as perception towards lower energy prices) showed relative strength and even moved into positive territory. Unfortunately, fear in general, seemingly never-ending fear regarding European sovereign debt and the health of European banks and fear about a double-dip recession took over.

So in other words, it's impossible to make any bets for intraday market action as long as wide-ranging uncertainty persists and small positive headlines don't act as the relief investors are waiting for but mostly get ignored. Let's see how CSCO favorable FQ4 earnings and comments (on dramatically reduced expectations) get treated today.

If all of this has a touch of desperation, it's probably a good thing! As much as fear and confusion delivers the base for a reversal to the downside as we have seen yesterday, the same ingredients provide the base for snap-back rallies as we have seen on Tuesday. A little break from all rumors in Europe, some stabilization in the BKX, another look at the consumer sector and others that benefit from lower commodity prices and some investors getting interested in a few growth stocks in the technology space that lost half of its value will result in another intraday reversal, this time to the upside. While CSCO has a good chance to help the technology sector, favorable results and comments from KSS and possibly positive July retail sales tomorrow have a good chance helping the consumer sector.

Going forward, we will continue to see volatility but if it turns out that the market started a (probably longer-lasting) bottom building process, buying the dips might be the better strategy, but again, it's impossible to call the daily, crazy mix of momentum playing and short-covering.

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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