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 29 giugno 2012

Market Comment - June 29

(Marco Bonelli) It's magic...

An unexpected (sort of-) decision out of Brussels (which clearly exceeded the level of (non-)action of the prior 18 EU Summits), the late session rebound in the market last night on top of two small bounce-backs from Monday's sell-off, more excitement about the  slow and steady recovery in the housing market (again confirmed in KBH's earnings report this morning that mirrored LEN's results from Wednesday and the message from a couple of macro-data), Credit Suisse not losing money (despite rumors of the opposite) and a better than expected Chicago PMI for June (driven by a questionable jump in production, inventories, employment and capex) and the last trading day of the month and the quarter becomes a magic combination...

In addition, a recent shift in sentiment towards an even more cautious to negative investment approach also helps as a sharp rally (no matter how long it lasts) was probably the last what most market participants expected.

Probably the best way to handle the magic formula to solve the European crisis is to enjoy the party and just let the many details and remaining questions sink in over the next few days and weeks!

Although the Chicago PMI was reported a bit higher than expected (and a lot better than similar readings like the Empire Manufacturing Index or the Philadelphia Fed Index), it remains at the lowest levels since September 2009 and doesn't change anything in terms of economic outlook (and as mentioned, lower orders, lower backlogs doesn't really go with sharply higher production and higher employment - but we already got used to inconsistencies in these sentiment driven reports!). Also, let me briefly mention the trends in consumer spending as we received a lot of data in the past two weeks: personal consumption for Q1 was revised down, month-over-month retail sales (all versions) were negative for the second consecutive month in May, consumer confidence (all versions) started crumbling in the past month and dropped to the lowest level of the year, personal spending for March, April and May was +0.1%, +0.1% and -0.04%, respectively, basically stagnation, many retailers already warned for the current quarter and NKE confirmed the same last night - not a great portray for the sector that's responsible for 70% of GDP growth...

Nevertheless, on a magic day like today, the discouraging economic trends can be locked into the closet and don't need further attention. Let's hope this magic dream (sorry, I meant this rally) last a bit longer as it will most likely clear the current dead-lock situation in the market and pull it out of no-man's land. Traders will happily embrace this development; investors might want to wait for a different timing to step into the market!

Trade well and have a wonderful 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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