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 4 gennaio 2012

Market Comment - January 4

(Marco Bonelli) It's good to start the New Year with a bang but could it last a bit longer than 10 minutes...? Maybe the 50-plus "Predictions for 2012" - the annual exercise in which everyone seems to participate who is able to spell the word "stock market" and which seems to become more and more crowded each year - confused investors somewhat, leaving them basically where the market left them last Friday...


But let's get to the most important first: I wish everybody a joyful, healthy and prosperous 2012 with the right feeling and good luck for all upcoming investment and trading decisions!

With a distance, but the next important to mention is: The odds are still very favorable that stocks may resume the rally that started December 20, into the first quarter, possibly exceeding most even bullish predictions. The ironic part at this point is that predictions, forecasts or let's call it market sentiment is far away from bullish!

There is indeed plenty to worry about when you even look at the most recent developments: Re-emerging concerns of the European debt crisis reflected in rumors about rescue packages for Spain and Hungary, record over-night deposits at the ECB and rising bond yields and CDS rates, worries about earnings in the technology sector after once-highflyer AKPT warned last night ("...uncertainties in North American service provider market...") and soaring commodity prices (yesterday, the CRB Index gained 2 ½ %, broke its 50day MA and even the original downtrend from beginning of May to the upside). And we didn't even talk about recession fears, macro-economic concerns, a hard soft-landing in China, geopolitical risks, political uncertainties and others, all of which get frequently mentioned in the 50-plus predictions for 2012.

Just in one sentence: Short-term liquidity concerns in Europe are exaggerated; you should have started worrying about earnings two months ago and not now and commodity prices dropped sharply over the last six months, so one or two strong days don't change the whole picture (although rising energy prices do need to be monitored closely!).

The current sentiment (which may be described as a combination of fear, uncertainty, hesitance and lack of confidence) and sharply reduced Q4 earnings estimates that could turn out to be too conservative and produce positive earnings surprises in the upcoming reporting season will be the main driver for a powerful rally in the first quarter! You add hopes for a housing recovery (last week's November Pending Home Sales, the highest since April 2010, were the latest encouraging sign), a generally improving outlook for the US economy (November construction Spending was better than expected -although October was sharply revised down- and the December ISM Manufacturing Index confirmed the better sentiment that was already reflected in similar manufacturing data from China, various countries in Europe, Canada and Brazil) and an improving chart-picture (that shows relative strength developing in the technology, financial and cyclical sector) and you already have a solid base from where to build further gains.

There is plenty of data and events coming up over the next few days. A bunch of conferences, the International Consumer Electronics Show (CES), employment data for December and other economic statistics and AA kicking off the Q4 reporting season on Monday, January 9th. Weakness as a result of hesitance ahead of these events and skepticism regarding yesterday's rally (that mainly got the "January Effect" and "Dogs of the Dow" stamp) should be used to further accumulate positions (in the technology, industrial and financial sector)!

P.S. My "2012 Predictions" are available on request but I don't want to crowd the field even more... :)

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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