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

venerdì 14 ottobre 2011

Market Comment - October 14

(Marco Bonelli) Congratulations to GOOG for an outstanding quarter!

It speaks for the market to move on after disappointing AA Q3 earnings and mediocre Q3 results from banking bell-weather JPM.


Although GOOG doesn't really represent a sample of the broad technology space (similar to AAPL that is in a world of its own), crushing consensus estimates will definitely lift the sector (that became a leader in the recent rally and was also the only sector in positive territory yesterday) and the broad market. As a result the NDX will break above the September highs (2337.70) and might even attempt to break back into the 2-year uptrend (2347.60) and the SPX may try to break the closely watched 1220 level.

It almost appears as text-book: a final wash-out beginning of last week, followed by clearer (I wouldn't call it brighter) perspectives in Europe, a handful of better than expected economic numbers (today's September retail sales are another example of this short-term trend), massive short-covering, sentiment improving dramatically (picking just one of the surveys, the AAII Sentiment Survey (Individual Investors) showed that bullish sentiment rose the highest level since July 21, before the stock price correction started, having said that, sentiment cannot really be called overly bullish yet as 39.8% bulls are almost matched by 36.4% bears with the balance neutral), the general chart picture improving dramatically and slowly but surely all cautious and negative market participants have to throw in the towel.

Something that should be worrisome over the next few weeks is the dramatic swings of economic data from one extreme to the next, the dramatic swing in investor sentiment over a period of only a few days and the magnitude of the rally that already shows many names in the technology and consumer space at new highs and that makes all fundamental developments in the past months appear as if it's past news and no longer relevant.

The current rally is good, the rally is fair and so far also makes sense (as it's backed up by some new developments) but - similar to any other rally - it will also overshoot and anticipate a scenario that might not reflect reality. At the end it comes down if the global fundamental developments continue to pose as back-draft and major uncertainty that will prevent a real recovery or if the macro environment is about to change and the more optimistic outlook is justified. In case of the former, the rally will eventually run out of steam, but the time-frame could be days or weeks.

Trade well and have a great weekend.


(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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