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 7 novembre 2011

Market Comment - November 7

(Marco Bonelli) So what is the most important news today, over the weekend, coming up, you name it?

Of course it's all subject to individual opinions but although by now the whole world is able to spell the names "Papandreou", "Berlusconi", "Merkel" and "Sarkozy" in their sleep, and although these names dominate the headlines for days and weeks and any surrounding news this week will once again direct the minute-long trends in the stock-market, there are a few data and trends that will really move the markets once the political Muppet-Show takes a break:


Germany's industrial production in September dropped by 2.7% m-o-m (this follows a drop in September factory orders of 4.3% m-o-m, which was reported on Friday). Beside that September retail sales in the Eurozone unexpectedly dropped by 0.7%. Almost all economic trends in Europe are sharply decelerating and the question is not, whether the European economy will face a recession but how bad the recession will be.

On the domestic front, since the Q3 earning reporting started in the week of October 10th, Q4 earnings estimates saw 461 revisions to the upside and 1051 revision to the downside, leading to a 3.4% drop in expected Q4 earning growth, which currently shows 8.5% growth for the SPX and 7.5% growth ex financials (this is down from expectations of 11.9% and 10.9%, respectively just last month). In 1Q12, data so far shows 5.5% earnings growth, a number that was also revised down from 9.3%. In summary, earnings growth is sharply decelerating, much more than investors expected four weeks ago. In comparison the SPX gained around 10% in the same time frame (the stock-market certainly moved due to many other reasons, too, nevertheless it's an interesting development that certainly takes some steam out of the cheap-valuation argument!).

Back to the short-term games: With very little macro-economic data out this week and the bulk of the Q3 earnings reporting season behind us, it looks like the next few days will be primarily about playing the headlines and playing some chart-levels. On Friday, the Dow Jones closed right at its 200day MA, the Nasdaq Composite slightly below, the SPX defended its spot above the crucial 1250 support and the remaining major averages are hanging in somewhere between the highs from end of October and the lows from last week. Beside that the SPX shows a classic inverse relationship to the Euro. So you pick your spots and it will be easy to figure out where the market moves next. Having said that, considering the huge volatility in the market and looking at the underlying fundamental trends, staying on the sidelines or further lightening up into any strength, seems to make a lot of sense!

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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