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 16 dicembre 2011

Market Comment - December 16

(Marco Bonelli) The common quote "trading is a zero-sum game" clearly applies to the overall market these days!

Trading, investing, news-flow, economic data, headlines, money-flow and sentiment - all appears to be a zero-sum game.

Recent sentiment data (Empire and Philadelphia Fed Index for the manufacturing sector and similar data out of Europe from last week), some activity on the M&A stage, a technical rebound in the Euro (after dropping 3.7% this month to levels last seen in January this year) and some progress in the (last-minute-) US budget talks leaves the impression of an improving economic and investing environment and maybe it is! At the same time it's usually the sentiment-driven economic data that show wild swings to the positive and the negative while the core economic data remains mixed at best. You add overhanging issues like looming rating downgrades, speculation how long and deep a recession in Europe might turn out to be in 2012 and a sharply decelerating trend in earnings growth and you have your zero-sum game.

The hope and optimism from earlier this month is still alive although from a weaker base after the market suffered sharp declines in the first three trading days this week. Unfortunately the overwhelming uncertainty on many fronts turns sentiment into a volatile indicator as well (like all other data) that seemed to have lost its power as a contrarian indicator. At the same time, hopes on the liquidity front definitely continue to pose as an upside risk. The announcement from global central banks on November 30 was a positive surprise and discussions and comments about a QE operation in Europe and a QE3 announcement in the US seem to never end. In this context, it's also interesting to see that the Fed grew the monetary base by 2.8% in December, the first time in months after shrinking this broad money supply measure gradually since July this year.

December option and future expiration will dominate the first and last half hour of trading. Although the better opening may feel good, the market are just trying to recover some of the steep losses that left most major averages below important technical chart levels: The Dow Jones and SPX try to defend their 200day MA; the SPX itself stays below the 1231 highs from September; although the Nasdaq Composite and NDX closed one of the two gaps on the downside, both indexes closed below their 200, 100 and 50day MA and continue to sharply underperform the overall market (the Composite also stays below the critical 2600 level!).Other indexes like the Russell 2000 or Value-Line Index remain well within the trading range from August September.

Unless we see any significant headline, rumor or comment, the close today might define the initial market direction for the last full trading week this year but with little conviction and even less confidence among investors and considering the usual risk of any positive or negative development over the weekend, the message we will get out of today's session might not be as significant as many hope - at the end, the zero-sum game is still in full swing.

Trade well and have a great pre-Christmas 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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