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

martedì 17 luglio 2012

Market Comment - July 17

(Marco Bonelli) Will the usual "...the Fed is prepared to act if needed..."-remarks be enough?

Probably even more important than the earnings season getting into full gear is Ben Bernanke's testimony in front of Senate today and the House tomorrow as stimulus-addicted investors hope for the announcement of QE3 to happen rather yesterday than tomorrow. Although economic data continued to deteriorate somewhat (to use the Fed's choice of words), "somewhat" might not be enough to convince the majority of the FOMC members to implement any new measure in the near-term future.


While the latest rumor (and possible reason for yesterday's rally after 10.00am) of the Fed following the steps of the ECB and cutting the overnight reserve rate to zero or even negative will most likely be discussed, Ben Bernanke himself already declared this measure as not effective some time ago, so it's unlikely he fully embraces it now.

With that, once again describing US economic growth as modest to moderate and leaving no specifics in terms of if and when QE3 might be announced will most likely disappoint the market as the recent ignorance and even opposite market reaction to negative economic data (the disappointing June retail sales were the latest) was solely built on hopes for more aggressive monetary policy accommodation.

Beside that, news and rumors seem to be all over:  a number of small to mid-size M&A deals, ongoing AAPL speculation about new products, fear of escalation in the Mid-East, a rebounding and fading Euro that drags commodities with it - all quite reflective of the lack of conviction where we stand and the lack of conviction where we go. In addition, despite the rally from last Friday, the chart-picture didn't change significantly and also leaves space for bullish and bearish interpretations (having said that, the short-term downtrend from April, the medium-term uptrend from October 2011, the long-term uptrend from March 2009 and the long-term downtrend from 2007 continue to be major resistance levels for some major and also sector indexes, while majority of indexes trade below the relevant levels anyway).

With that it's probably even necessary to focus on bigger stories like no commitment in terms of QE3 and mixed earnings despite sharply reduced estimates (fyi, KO only beat estimates and avoided negative earnings growth thanks to a lower tax-rate!). It will be interesting to see how INTC's Q2 earnings and Q3 outlook tonight compare with the dozen plus estimates reductions and downgrades in recent weeks!

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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