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

mercoledì 9 novembre 2011

Market Comment - November 9

(Marco Bonelli) So with PM Papandreou gone and the "unity" government in place (once they agree on the definition of 'unity'), the situation in Greece is solved and everything is or will be fine rather sooner than later, right?

And with PM Berlusconi gone (almost) and another so called "technical" "unity" government in place (once they agree on the terms), the situation in Italy is also solved and everything will be fine rather sooner than later, right?


Interestingly (but not surprisingly), bond yields tell a different story and point to the obvious fact that there is a little bit more behind the current crisis than a couple of political "leaders" disappearing.

Yesterday's trading became an almost identical copy of Monday's trading session: a weak rally after the opening, the indexes hitting short-term resistance levels, pulling back in two waves, followed by eventless range trading after a couple of hours, only to shoot up on "great" news from Europe (a comment from an ECB official on Monday and the news of a "scheduled" resignation of PM Berlusconi yesterday) and to close at the highs of the day.

The past two days, the intraday rebounds lacked internal strength and conviction, still showed the technology and consumer sector as a weak link that relatively underperformed since the "excitement" after the European debt deal broke loose and also showed the Dow Jones Transportation Index (along with industrials) as very vulnerable and as a sector that usually lead to the downside in the past two days. The rebound was also accompanied by rising commodity prices (some energy prices trade at three-month highs, gold and silver quietly advanced over the past two weeks and the CRB Index tested the three-month downtrend -currently at 323- the second time yesterday - however, all prices are indicated lower this morning). Regarding the technology sector, news from ADBE and AAPL will probably contribute to the sectors underperformance today (for tomorrow we have to wait for CSCO's comments after the close tonight) and news from M (mirroring similar mediocre results from other retailers) will also contribute to the underperformance of the consumer sector.

Nevertheless, the rally so far got the stamp "risk-on", was perceived as a "buying-the-dip" environment and appeared to be completely headline-driven where buying was primarily motivated by the illusion of better times ahead and selling only occurred if there was a real reason. This picture was more or less intact until yesterday. So let's see if the "message" from European bond markets gets understood today or if the sell-off on the opening will once again be used as a buying opportunity. While the minute-charts and the intraday volatility may get high-frequency traders excited, the real and crucial levels to watch are the lows from beginning of the month (Dow Jones 11630; SPX 1215.50; Nasdaq Composite 2600) as a break to the downside will push all major indexes back into the trading range from August and September and would likely indicate further downside!

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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