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

giovedì 19 gennaio 2012

Market Comment - January 19

(Marco Bonelli) XLNX demonstrates in a text-book case that the stock market is - most of all - a gigantic psychological game and that official earnings estimates are often not worth a lot!


XLNX preannounced weaker Q4 sales on December 19. The stock sold off that day and closed at $30.61, a low never reached since then. Research analysts reduced their estimates and adjusted their models. Yesterday XLNX reported better than expected earnings and revenues (excuse me???) and trades around $37.50 or 23% above where it closed a bit more than four weeks ago. In between XLNX, along with semiconductors, along with the technology sector, along with the overall market, benefited from a late Santa Clause rally that is still on the way. It's the same game every quarter, sometimes more, sometimes less classically played, but it broadly summarizes what is and probably still will be going on during this reporting season.

EBAY showcases a different example in which in-line to slightly better results get celebrated simply because expectations and comments were mostly negative going into the earnings, so it didn't take a lot to please investors.

Thanks to all the psychological stuff, the market closed at the highs of the day on better volume, the Dow Jones above 12500, the SPX above 1300, the Nasdaq Composite above 2753, the Russell 2000 above 769.50 and the S&P400 Midcap above 920.25. Now only the Value Line Index hasn't broken the neckline from the h+s formation (at 350) that hinted at the correction that started beginning of August - a major psychological (once again!) milestone in my view. Also, market breadth according to the adv/decl ratio recorded its best reading so far this year, a confirmation of the impressive resilience of the market.

Other than that, decent earnings, favorable news out of Europe, a slightly better perception towards banks ("...financials pulled the market down [01/17]..." / "...financials lead the market higher [yesterday]..." - just pick your spot!) and better economic data (December Industrial Production showed manufacturing output +0.9%; weekly jobless claims dropped to a 4-year low and December Housing Starts, although lower than expected, came in well within the uptrend that started in February 2011) illustrates that the broad-based concerns that dominated many market-participant's minds yesterday, were a bit exaggerated and probably still are!

So let's wait for AXP, COF, GOOG, IBM, INTC and MSFT to keep on playing the psycho game tonight!


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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