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 4 novembre 2011

Market Comment - November 4

(Marco Bonelli) Do you remember the game you played as a kid, picking flower petals off a daisy in an attempt to find out if your sandbox sweet-heart really loves you: "She/he loves me - she/he loves me not - she/he loves me, etc..."?

There is a modern interpretation to that innocent game: "Referendum is on - referendum is off - referendum is on, etc..."

The only honest observation of this game is that it's a desperate attempt by the PM to save his own career and no matter the outcome, it causes more uncertainty and questions than it does any good to solve a crisis that probably already entered the stage of being out-of-control.

Despite all side-show games (G20, IMF, Greek confidence vote etc.), the October nonfarm payroll number was the most important event today and bottom-line it's probably not what investors were hoping for and therefore it can be described as slight disappointment. But didn't first comments praise the upward revisions in August and September and the drop in unemployment and underemployment rate and called it a good number because it's another non-recessionary statistic that points to continued slow growth? Yes and that is exactly the issue:

ü  Is a non-recessionary and slow-growth environment in the US sufficient to counter recessionary forces in Europe (various economic data today confirmed that again) and continued deceleration in global growth?

ü  Also, did the monster rally in October anticipate a non-recessionary and slow-growth scenario or was there hope for more behind the move?

Not facing a recession (for the moment) is certainly good news, but a continued slow growth environment with a lot of uncertainties is also not what a lot of investors were hoping for when the European crisis appeared to have been solved beginning of October and a few better economic numbers even pointed towards a better economic environment.

So in summary, in light of positive expectations for the year-end outlook and outlook for 2012, today's BLS statistic could be called a slight disappointment, simply because there was no follow-through in job-creation after better numbers in August and September.

With that it might be difficult for the major indexes to defend their closing levels from yesterday that just slightly managed to break through technical resistance levels: The Dow Jones and Nasdaq Composite slightly broke the 200day MA, the SPX slightly broke through the 1250/1258 lines, the Russell 2000 and S&P Midcap rebounded a bit more decisively from their 100day MA and the September highs, only the Value Line Index just close at the 100day MA and the September highs and stays within the range. Traders definitely achieved their goal to close the gap in the Nadaq indexes from beginning of the week and retraced more than half of the losses from Monday and Tuesday, but what's the next goal ahead of another weekend of uncertainty?

Since end of last week, the technology and consumer sector slightly underperformed and appear vulnerable to any down-side moves, closely followed by the Dow Jones Transportation Index, while the upside was mostly dominated by the energy, basic material and also industrial sector, nevertheless the market still lacks a bit of leadership in this consolidation.

Let's watch how the Groupon IPO trades, let's wait for the confidence vote in the Greek parliament and let's look forward to the weekend to get some rest after a ridiculously volatile week. There is nothing out there that predicts anything different next week.

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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