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 23 aprile 2012

Market Comment - April 23

(Marco Bonelli) Why isn't the market more excited about recent M&A activity, which shows that some companies see value in buying others at current prices (even so M&A activity in general is still quite subdued from a historical perspective)?

Why isn't the market more excited about the recent wave of hot IPOs (BLOX, PFPT, SPLK, TUMI etc.), which highlights the risk-taking attitude of some investors?

Why isn't the market more excited about Q1 earnings that handily beat expectations with more than 80% earnings surprises and close to 6% EPS growth?

Why isn't the technology sector reaction more to bullish sector allocation recommendations?


Maybe arguments that market leadership sectors like large-cap tech and financials remain strong are a bit worn out. Maybe arguments that the Fed and ECB remain strongly committed are a bit over-used. Maybe arguments that weaker than expected macro data being the result of a seasonally weak period for the economy are a bit too simple.

Maybe 5.92% earnings growth in Q1 (according to data from 123 of the 500 SPX companies so far) is still seen as mediocre or simply not good enough, considering that 83 of these 123 companies warned on earnings for Q2, that revenue growth is about flat and that earnings recorded strong double-digit growth last year.

Maybe arguments about cheap valuation for equities don't work on a stand-alone base. Maybe a lot of the good news about the economy, the economic outlook, earnings, AAPL, European economic crisis and monetary accommodation has been fully or mostly priced in.

Maybe investors began to realize that the fundamental reality looks different than many market participants anticipated over the course of the first three months of the year.

The opening sell-off will completely erase the unexpected rally from last Wednesday; in many cases will pull major averages down to the lows from two weeks ago, strengthen the position below the 50day MAs (levels that were subject of many fierce battles over the last trading days!) and generally darken most chart-pictures.

So is it the well-used "déjà-vu" moment becoming reality or is the "sell-in May..." proverb pre-dated to April? While history does repeat itself and is an almost infinite source of study whose results may have valuable advice for the future, I would rather call some similarities between 2011 and this year a coincidence.

The developments should be more seen as one piece but many market participants declared the 2011 events as over and are now surprised that many events miraculously "repeat". And the "sell-in May"-advice, well, either it fits into the calendar or not, right?

Talking about calendar, many more earnings will plaster the tape this week, FOMC Meeting tomorrow and Wednesday and macro-economic data like durable goods orders and Q1 GDP will certainly make it a very interesting week.

However these events will look like, the market appears to be caught in a sort of frustrating two-steps down-one-step-up trend!

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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