Another time the equity market surprise us with a reversal of trend and, while last month we wrote about the potential risks of correction, today we reflect on other option of a positive recovery of the primary trend.
It is out of place think at the recovery of bullish cycle in place since 2009 while we consider possible the hypothesis of a positive and temporary time window, remaining on the table the critical issues on the Euro and US macro front.
Let us remember that despite a brilliant month for the Italian equity index and a good result for the other markets, there are negative data on USA indicators and difficulty signs which come from the German locomotive.
Furthermore, the spread between long and medium-term rates put in evidence the inversion of the curve, signaling a short-term recession.
Quarterly earnings were generally positive and for some corporate results were truly surprising. The Apple case is a good example: part of the profits will be allocated to a new buy back and this will support the listing.
In conclusion: if we want to give a positive reading to the points above we can imagine that if there will be a recession it will be short and not deep, like what happened in '88 -'89 and '99 -'00. On the other hand, the most negative reading is that of recovery before the definitive capitulation.
For now also our indicators published last month signal the easing of the tensions for which we remain "waiters" with a moderately positive short-term vision.