– US, UK and Eurozone consumer confidence
– US budget deadline looms
– Carney says no to further stimulus
– ECB member says bias remains towards rate cuts
– Italian bonds decline
FTSE 100: -0.81%
CAC 40: 0.00%
FTSE MIB: -1.27%
IBEX 35: -0.47%
Stoxx 600: -0.27%
European stocks were little changed following mixed consumer confidence reports in the UK, Europe and the US.
Eurozone confidence rose in September more than analysts’ expectations. An index of executive and consumer sentiment increased for a fifth month to 96.9 from a revised 95.3 in August, the European Commission in Brussels revealed, beating the forecast of 96.
In the UK, consumer confidence in September jumped to highest level since 2010 as signs of economic recovery encouraged spending. Market research group GfK‘s forward-looking consumer sentiment indicator rose to -10 this month compared to -13 in August. Economists were expecting a reading of -11. Read More
As usual, Goldman saves the best for last. From David Kostin: “We are cutting our year-end 2011 price target for the S&P 500 to 1250 from 1400. Our new target reflects a potential return of 5% from the current index level. Our revised price target reflects the heightened uncertainty that characterizes global equity markets today. Our earnings, dividend, and economics forecasts remain unchanged. The unstable macro environment appears likely to persist for the foreseeable future. Downside risk exists to our forecast if the European sovereign debt crisis deteriorates while upside exists if substantial progress is made in addressing the problem.” And since Goldman is leaving its S&P EPS forecast untouched, this is merely a contraction in the multiple from 14 to 12.5. Now if one assumes that David Rosenberg, who earlier speculated that the real S&P EPS is closer to 75 than 96, is correct, and applies the revised Goldman multiple, that means that the S&P has about 400 points of downside. Of course all of this means that one can predict the future. Which is impossible. Which leads us to believe that today’s firing of David Bianco was merely due to him refusing to play along with the revised script. Which is as follows: the banks are buying everything that their clients have to sell in advance of, you guessed QE3 in the US and more QE in the UK, Europe and Japan for one last record bonus hurrah. While we can only hope we are wrong, if we are right this means the short squeeze on the market is about to slam shut and Goldman will make out like a bandit as usual, with the S&P soaring several hundred points on ever worse macroeconomic and geopolitcal data.