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 2 marzo 2012

Market Comment - March 2

(Marco Bonelli) Financials lead the market by a far margin yesterday! Will they continue to outperform and lead the market higher?

An expanding economy and rising interest rates, the scenario that has been the center of discussion this week, would certainly be the best scenario, financial institutions could dream of. And if this was the reality until the end of the year and beyond, financials would probably be the best spot to be.

Unfortunately, weaker January personal income and spending, disappointing January construction spending and a February ISM Manufacturing Index (of note: new orders and employment down, prices paid up!) that came in below expectations questioned this reality and destroyed the Dow-13000 and Nasdaq-3000 party. The fact that also higher "whisper"-estimates existed for the ISM Index already shows a high degree of complacency concerning the economic recovery, at least among the actively involved market participants.

While a 52.4 actual number is certainly not a bad one and while there is no doubt that the US economy recently showed signs of a solid recovery, the lower ISM Manufacturing number indicates and could be a good sample to demonstrate that current expectations in regard of the strength of the recovery may be too optimistic and too far away from reality!

In the middle of slowly accumulating weaker than expected economic data and soaring energy prices (you really think the rumor of an attack and explosion of a Saudi pipeline was real?), the Dow Jones Transportation Index, that underperformed the broad market since end of January, that was the first major average that broke its uptrend from October, that broke its 50day MA last week and still appears to be in the process of forming a top, showed one of the strongest (out)-performance and rebounded back above its 50day MA. Within that group, the leaders were a mixed pack of truckers, railroads and FDX while airlines still suffered from the prospects of higher fuel-costs. Anything else but a technical rebound doesn't really come to my mind but let's watch it (the short-term downtrend from beginning of February runs at 5241, yesterday the index failed at 5243).

The last three days, bonds experienced some heavy beating (30yr yields rose from 3.02% on Tuesday to 3.18% yesterday; 10yr yields rose from 1.90% to 2.06%) that probably supported equities in a quick asset allocation shift but this morning, yields are coming back and the Dollar continues to rise. Will equities still experience a supporting bid as the most attractive option in the asset management game or will investors reconsider some of the disappointing economic data and the fact that the SPX closed just 3.51 points above the intraday highs from May 2 last year (along with the majority of industry sector indexes, although some consumer cyclical and also technology sub-sectors already broke above last year's highs) ahead of the weekend and critical data from the labor market coming up next week?

Trade well and have a great 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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