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

lunedì 27 febbraio 2012

Market Comment - February 27

(Marco Bonelli) Does the Fed know more?

Let's forget about a few major incorrect decisions in the past five years, at least the prevailing assumption should be that the Fed has a better or deeper look into the state of the US economy than most other market participants. Despite mostly positive developments, better than expected economic data and even signs of life in the housing market, the discussion about QE3 never ended and was even kept alive by many comments from Fed officials. As both events don't really fit together the questions comes up if the Fed still sees underlying developments that may slow down the economic rebound or keep economic growth at a slower pace than anticipated. Not only stays the QE3 discussion alive but the Fed also shifted gears in expanding the Monetary Base, which is up 4.35% since the temporary lows in November last year.


The debate about the impact of higher crude and gasoline prices is building some steam but one of the most interesting developments in terms of economic data is the weekly rail traffic data, which was down 5.6% last week and showed car-load down 5.2%, driven by coal and farm products (lumber, petroleum and motor vehicles still showed strong car-loads) and intermodal rail traffic down the second consecutive week, the weakest reading since beginning of 2010 (ignoring one erratic move to negative at the beginning of the year).

After only a few disappointing economic data in the past two months, the focus will shift even more to the macro-economic front since the Q4 earnings reporting season is winding down and investors won't get a lot of corporate news for a while. January Durable Goods Orders, GDP, February Chicago PMI, February ISM Manufacturing and Non-Manufacturing Index and January Personal Income and Spending will get special attention, especially in the light of the Dow Jones and SPX (the first time in this rally!) locking in a new 3 ½ years closing high and the Nasdaq off to new 11 years highs almost every day.

But even Warren Buffett confirmed that "equities are very attractive compared to anything else" and "equities, single family homes are cheap relative to other assets"; for all the absolute and relative valuation calls, it's surprising how many investors stayed on the sidelines at the beginning of the year and some of them probably still are. The building products and homebuilding sector joining the Dow Jones Transportation Index in breaking the October uptrend and at least some (but well publicized) signs of the overall market being to some kind of top don't make the decision of getting more invested easier.

You throw in the development in commodities (where some market participants already speculate that the recent rally is the clearest sign of QE3 coming up), the equivalent weakness in the US Dollar (the DXY reached a two-month low on Friday and now trades again below the uptrend from 2008) and the stock-market once again enters the casino-style game (has it ever been anything different?).

Hey, the Dow Jones is up 6.2%, the SPX up 8.4% and the Nasdaq Composite up 13.7% for the year. A bit of profit-taking wouldn't be surprising to anybody, right and if the economy shows the slightest signs of weakness, QE3 will save the game - at least that appears to be the consensus view!

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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