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

mercoledì 1 agosto 2012

Market Comment - August 1

(Marco Bonelli) Are bulls and bears mingling too much?

Sentiment is too bearish...; investors are consumed with pessimism and ignore any positive outlook...; bulls range below the historic average for weeks in the prominent weekly II and AAII surveys... but there is some kind of strange stereotype feeling to all these sentiment measures.


There are more negative than positive headlines out these days, so investors talk more about negative developments than positive, so the conclusion appears to be that sentiment is very negative, an analysis that seems a bit overstated. When you look a little closer, though, the definitions and the message become very blurry. Still nobody seems to be able to quantify what all negative and positive developments mean in terms of market return. In fact there are very few players out there who call for a powerful move to the upside or downside. A lot of bulls expect little upside and a lot of bears expect little downside and everybody happily unites in an exciting +/- 5% trading range. So much for the negative sentiment as it's mentioned in every other comment.

While the status quo of unconvincing market internals remains unchanged (weak market breadth; small- and mid-caps underperforming; Nasdaq Composite, Russell 2000 and S&P 400 in a short-term down-trend in July; no leadership to the upside, in fact financials tread water, technology is highly volatile and the consumer sector, the recent favorite, found itself among the weakest performers yesterday), a few questions came up:

Strangely, Chicago's PMI and also Consumer Confidence for July came both in higher than expected and the ADP Employment Change data also reported a better number this morning, which raises the immediate question if better economic data automatically means diminished chance of further accommodation from central banks? Another interesting question is if and when seasonal trading patterns around the election kick in as the summer prior to the election and again a few weeks before Election Day in November is usually characterized by a better market.

...just another few questions where nobody knows the answer while the investment community is desperately waiting for further market-supporting action from central banks while global manufacturing continues its journey into contraction territory (according to PMI Manufacturing data for July) - an interesting combination given the fact that bond purchases and putting a cap onto interest rates does very little to ignite economic growth amid a structural transformation of the economic landscape. Let's relax for the next few hours and enjoy the after noon session after 2.15pm as the events or non-events over the next three days have the potential to push the market outside the +/- 5% comfort range!

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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