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 13 ottobre 2011

Market Comment - October 13

(Marco Bonelli) It's all relative!

As short-term optimism has been on the rise during the last few days, a lot of investors hope that this time the rally is for real, the market has finally logged in its low and we can look forward to the year-end, the seasonally favorable time for stocks and to the election year. So given the current global environment, it's probably fair and necessary to ask:


- To which degree JPM's better Q3 earnings and revenues are already reflected in the recent 21.6% run of the stock (over seven trading days following a 40.8% decline over six months) and

- To which degree the intention to fund European banks and a bit more clarity around Greece and the situation of the Eurozone is already reflected in a 13 to 20% rally in the US (over seven trading days following a 15 to 30% decline over two months).

The recent rally from new lows last week Tuesday is the sixth rebound since the markets fell off a cliff end of July, beginning of August and certainly the most powerful which finds many stocks trading at multi-year or even all-time highs, mainly in the technology and consumer sector. Over the last couple of weeks, Europe apparently became the center of all concerns, even more concentrated than at the beginning of the market turmoil. The fact that we are in a slow to no domestic economic growth environment and a decelerating global economic and earnings environment gets more and more ignored or pushed to the back-burner.

It's interesting to mention, that the stock market closed at the lows of the day, despite an overall solid gain. Market participants got excited that the Dow Jones tipped into positive y-t-d performance (although it couldn't hold it into the close), that the SPX broke above the psychological 1200, that the Nasdaq Composite broke above a 2600 resistance (although it failed at the 100day MA), that the NDX broke above its 200day MA (although it didn't manage to break above the September highs at 2337.70 and also break into the 2-year uptrend (2345.50)). The rally pushed almost all indexes back to a number of minor and major resistance levels, also the upper Bollinger Bands, to mention just one. The Nasdaq also opened up just another two gaps, a frequent pattern over the last weeks and so far, each of the gaps got closed. Finally, as a result of the "risk-on" trade and a more positive perception towards the economic outlook, bond yields recovered to levels well above when "Operation Twist" got announced.

Let's hope the rally lasts a bit longer and the stock-market really logged in a bottom but we should also remember that the higher prices move, the higher the risk for a serious pull-back grows once the market gets reminded that the fundamental picture doesn't improve and various uncertainties still persist. But this observation is also all relative!

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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