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 15 settembre 2011

Market Comment - September 15

(Marco Bonelli) It was not so much the steady 3.2%-plus move between 10.30am and 3.30pm for the major indexes that was impressive (although market breadth was not convincing at all and only Nasdaq volume was above average), it was more the 1.1%-plus decline in the last 30 minutes of trading that almost cut the advance in half, that caught my attention! Is it just the result of a no-new-news environment or is it an indicator that the market is close to reversing direction again - all part of a bottom-building process?


In times where shallow speeches and semi-smart statements dominate the news headlines, let's have a quick look at the charts to find out where the markets stand.

The Dow Jones and the Russell 2000 trade right in the middle of the wide consolidation range that is currently defined by the lows from August 9 and the highs from August 31/ September 1. The SPX, S&P Midcap and ValueLine Index closed above the middle of the range and the Nasdaq even trade close the upper end (the NDX even managed to break out the upside intraday, but fell back and closed right at its 50day MA). The more short-term, narrower ranges are:

Dow Jones: 10930 - 11450, 11550
SPX: 1173 - 1204, 1208.50
Nasdaq Comp.: 2460 - 2600, 2611.50
NDX: 2181 - 2268 (the 100day and 200day MA run at 2286)
Russell 2000: 690 - 719
MID: 826.50 - 866
Value Line: 318 - 332

Despite the late selling, the relative strength of the Nasdaq and the technology sector in particular continued. A quick look at the NDX even raises the question if there were any major events in the past few weeks or if it was simply profit taking and now the index is back in the 2200 - 2400 trading range from beginning of the year...

Luckily the shallow-water games are about to come to an end. Macro-economic numbers start to fill the ticker again. Yesterday's August retail sales disappointed, the August Industrial Production was slightly better than expected this morning (while capacity utilization disappointed) and September Empire Manufacturing Index disappointed, weekly jobless claims continue to rise since the beginning of August and the August core CPI y-o-y rate reached the Fed's target rate of 2.0%. The final number of the day will be the September Philadelphia Fed Index.

So the so-called "soft-patch" pretty much stretches through Q3 which doesn't make the growth outlook any better, but for investors to take notice, we need more data and hard facts. In the meantime, let's try to act as if there were no major events and we are basically just in the process of defining a trading range.

All that is supported by liquidity from the central banks: "ECB, Fed to cooperate on new dollar liquidity measures", "U.S. Fed to offer ECB 3-month dollar loans", "ECB announces additional US dollar liquidity-providing operations"!

This was and is the wild-card! Once the Fed and/or other central banks play with their liquidity tools, it will be difficult to bet against it. So the trading rally continues, yesterday's late sell-off was just a bit of profit-taking and the stock market finally rewards all those who said that valuations are at historic lows. The question is how long this perception lasts!

Trade well.


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

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