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

lunedì 14 novembre 2011

Market Comment - November 14

(Marco Bonelli) Will the political storms in Europe calm down or have we just seen the first couple of rounds in a long heavy-weight fight?
Will investors be able to concentrate on the fundamental picture after the political storms calms down?

The Troika will show up for another offsite meeting in Greece to evaluate if the country will get the next installment of the rescue package.

Members of the opposition party already indicated disagreement. In Italy, the new PM starts his first working day in the office, will try to form a government and then implement the austerity measures the parliament signed off over the weekend. While there may be the hope that politicians will now concentrate on what they were elected for, chances are that power-fighting, career-saving and other games will continue dominating the news headlines while getting the financial house in order and really fixing the budget will still be a back row task.

Nevertheless, disappointing fundamental data keeps on piling up (with rare exceptions like November's Michigan Consumer Confidence). On the domestic front, a lot of data from October and sentiment data from November (Empire Manufacturing, Philadelphia Fed) will be published this week, a welcome change to the no-news environment from last week.

So far major indexes ignored negative fundamental trends and other negative news which demonstrates remarkable resilience. In this process the market consolidated the massive gains from October and in some cases even managed to move back up to the highs from end of October. Most averages show a flag-formation, which confirms the consolidation stage. In normal times this technical picture also suggests higher prices moving forward. At the same time, will the SPX, Nasdaq Composite, Russell 2000 and S&P Midcap Index easily break through their 200day MAs? Will the NDX easily break through its 10 ½ year highs from February, May and July this year? And will the Value Line Index manage to break out of the September highs and the old trading range?

A move higher would be accompanies by slow and disappointing economic growth in the US, a recession in Europe, deteriorating economic growth in most other regions around the world, sharply deteriorating earnings growth (that obviously forces even AAPL to cut production on some of their products), rising uncertainties around the ability of the Super-Committee to reach any kind of agreement by November 23, almost certain ongoing power battles in Europe and an increasingly bullish investor sentiment.

What now appears like incredible resilience and will drag more market participants into the market (season plays, year-end rally, an upcoming election year and performance pressure in general, among others) might easily switch to complacency at one point!

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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