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 11 novembre 2011

Market Comment - November 11

(Marco Bonelli) Doesn't it get boring and isn't it exhausting to talk about the same topics every single day?

Is there anything else out there than the European debt, economic, political and credibility crisis, the questionable efficiency of the EFSF, the still to be determined role of the ECB and the future of the Eurozone in general?

Although there were many extreme swings in news flow, sentiment and market reaction over the past months, at the end - and usually at the last minute, before the time-bomb went off - traces of progress emerged that left the impression that Europe moves forward towards some kind of solution. A disappointing compromise of a rescue package that raises more questions than it answers, changes on the political landscape in Greece and Italy, the ECB finally lowering rates (and reversing rate hikes from earlier this year half way), governments and agencies finally admitting that economic growth in Europe won't exist in Q4 and most part of 2012 (no negative growth yet because then they need to rework all budget calculations) are all tiny steps that keep hopes alive and so far pose as counter-force to the many attacks from the financial market front. The remarkable strength of the Euro in this environment clearly reflects that. In other words, as much as many market participants forecast a nasty blow-up in Europe, there is a chance that things keep on moving for a while - without any of the apocalypse-like scenarios unfolding. That's why it becomes boring and it is exhausting to discuss each possible scenario, to analyze each new comment and to come up with a new forecast every hour and every day.

Anyway, so what's the forecast for today? ....Happy Friday, that should have been funny!

The US is in a similar development stage. You could also discuss, analyze and forecast but at the end the US economy remains in a slow-growth phase, interest rates will stay close to zero until 2013, the Fed keeps on twisting their balance sheet, earnings so far were strong and as long as investors see their favorite companies "beating" expectations, even a sharp slow-down in earnings growth isn't perceived as too shocking at the moment.

So let's get to the point after this philosophical excursion: The major indexes sold off on Wednesday, erased all gains from Monday and Tuesday and showed a rather disappointing rebound yesterday, given the magnitude and force of Wednesday's decline. The Nasdaq was particularly held down by a second day of selling in AAPL that even broke the 50day MA, all driven by concerns that sky-high expectations regarding the I-Phone and I-Pad demand won't be met. So far, it's hard to bet against AAPL, so the decline in stock price will probably be more seen as a buying opportunity than a reflection of changing fundamentals. Fact is that the Dow Jones, SPX and Nasdaq continue to stay above the highs from September (which are 11717 in the Dow, 1230.50 in the SPX and 2600 in the Nasdaq Composite), so above the August/September trading range (which is a positive sign), while the Russell 2000, S&P Mid Cap and Value Line Index fell back into the range, which might be temporary if the strong opening levels hold. At the same time, many blue-chips trade at or close to moving average lines, so bottom line the market could either have seen the highs of the rally and is now in the process of forming a top or the market and the many blues-chips that trade at critical technical levels are in the process of consolidating the hefty gains from October. Whatever scenario turns out to be the right one, the averages could either move sharply higher or may face a sharp correction as a result of it. Taking everything into account, the market seems to favor the former development!

It might be a quiet and positive trading day today with bond-markets closed in observation of Veterans Day; nevertheless, investors will face a new game next week. The weekend might produce some headlines, the economic calendar will be more active, November options expire and the days will be counted until the Super-Committee has to come up with proposals for a couple of trillion Dollars in budget cuts. Stay tuned.

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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