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 23 dicembre 2011

Market Comment - December 23

(Marco Bonelli) Is the more than 3-year old close relationship between the SPX and the Euro coming to an end and is a stronger Dollar finally positive for stocks? A better economic outlook for the US compared to Europe should be reason enough!


The relative weakness of the Euro since end of November is almost suspicious. Since global central banks announced close cooperation and the willingness to provide liquidity if needed, stock markets rallied while the Euro's initial strength ran out of steam quickly and even deteriorated to new 10-months lows. This week clearly demonstrated the new disconnect between the SPX and the Euro with the SPX advancing 4% in the last three trading days while the value of the Euro remained unchanged.

The road to happiness is certainly no straight line. Durable Goods Orders and Personal Income and Spending data for November showed weaker than expected activity (although Durable Goods data for October was revised to the upside). So the sustainability of hopes for an economic recovery, most recently driven by renewed optimism for the housing market, will most likely get tested on a regular base. Nevertheless, the majority of economic data for Q4 was positive and the Durable Goods Orders figure may be the one famous number that doesn't automatically break the trend, especially, if New Homes Sales (at 10.00am EST) confirm the slightly positive trend in the housing sector.

A few weaker than expected economic numbers and the fact that some of the major indexes only recovered part of their losses from earlier this months are just two of the many reasons, many investors remain quite cautious. A few comments also pointed to the declining level of the VIX and the underlying complacency or lack of fear. Although not always a close mirror of overall market sentiment, this week's reading of the AAII (American Association of Individual Investors) sentiment index might describe the current psychology quite accurately: Bullish sentiment dropped sharply to 33.7%, below the historic average but not at any extreme level. Bearish sentiment also dropped to 28.2% (!), a touch below the 30% historic average. Most interestingly however, neutral sentiment rose by 11.9 to 38%! Bottom-line, while not really negative on the market, many investors also don't expect too much or any upside either!

Let's see how the New Home Sales figure comes in. A good number should help the SPX break its 200day MA at 1259, the Nasdaq Composite confirm its level above 2600, the NDX to move towards 2300 and the S&P Midcap Index and Value Line Index move towards their September highs at 889 and 340, respectively, which should bode well for more advances in the upcoming weeks.

Trade well and have a wonderful Christmas!


(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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