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 4 agosto 2011

Market Comment - August 4

(Marco Bonelli) A little bit of forced selling, a little bit of panic, a little bit of intraday volatility, a little bit of rebound and a little but of excitement! Are you happy now?

The basic questions are, what caused the rebound and is it sustainable and worth to start buying the market again? (looking at the futures this morning, it should rather say: The basic questions were...)

Obviously the trigger came from comments regarding a few former Fed members supporting a more stimulative policy. Sure, QE3 is the big wild card and many investors seem to hope for or even count on another rescue mission. That mentioned, some underlying development was probably the real engine for the intraday rebound: Two sectors already showed relative strength before the QE3 speculation came up: technology and retailers.

- Technology was probably helped by the technical picture of the Nasdaq, the Composite at its 2-year uptrend and the NDX at its 200day MA.

- Retailers recovered quickly as the discussion about the sector benefitting from lower energy prices gained some traction.

- Beside that, intraday traders used the momentum to take advantage of the short-term oversold condition of the market and pushed all major indexes into positive territory, although only making up a fraction of Thursday's losses.

- Overall volume was quite heavy but that was divided between some panic selling and the rebound activity.

- Realizing that this question is odd given the current weakness in the futures, but it's probably still worth asking: could the rally be sustainable? This depends on how far you look out.

First of all, the futures seem to be down on the apparent concerns, global economy and Europe, so nothing really new as these topics are already on the radar screen. Without down-playing the seriousness of the mentioned issues (!) but every time some existing concerns get used to sell the pre-market just for the sake of selling, we often see an immediate rebound after the opening, which could easily happen today again! For this morning or today both sectors that showed relative strength yesterday, technology and consumer, could move higher again, the latter getting extra help from favorable retail same-store sales for July. This coupled with the SPX battling around the psychological 1250 level, the NDX above its 200day MA and continued hopes for QE3 could give momentum players the incentive to bet on higher prices this morning and maybe even the rest of the day.

Having said that, anywhere beyond today's trading day, the market could run into trouble again (and I'm not even referring to Friday's labor report). Beside the deteriorating global macro-environment, sentiment suggests that market-participants are not too negative:

- Articles featuring "long ideas in a rocky market".

- Comments that "oversold stocks present a buying opportunity.

- Recommendations "what to buy for a double-dip recession or a falling Dollar"

- Calls that "bad numbers are already priced in" after the recent 8-day sell-off and that "corporate fundamentals remain unchanged and strong"

- Headlines at the end of the day saying "Bulls swing back!"

So if another rebound happens this morning, let's enjoy it and keep our fingers crossed for the labor report tomorrow (which could cause some afternoon selling, but doesn't have to...)

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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