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Quick Note: My picks during this CNBC show did, in the trading session after the show, as follow:
CS +1.69%
UBS +1.01%

vs SMIMarket Today -0.1%

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EUROPEAN CRISIS
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Portugal and Spain passed their first test of the year successfully. Despite the short term success investors remain nervous on European sovereign debt.

A comparison between Portugal and Ireland might be unfair as Portugal has no big real estate debt problems and moved fairly quickly in restoring its public finances. Yet the planned austerity measures, that should reduce their deficit, might seriously temper is growth that the Bank of Portugal estimates to shrink 1.3% in 2011 while the government forecasts a 0.2% growth.

While the overall raising issues of Portugal for 2011 are relatively small (20 billion) it plays now an important role in avoiding a domino effect that might spread to Spain and other countries.

As Berlin affirmed that it will do everything they can to support the Euro stability Europe will most likely agree in expanding the Eurozone rescue fund. I think that at this stage Europe should avoid a further deterioration and intervene as necessary. The next months are going to be critical in solving this crisis.

Italy is not likely to be affected because of its internal savings rate, that usually is invested in bonds, and does not depend, as much as other countries, to foreign buyers.

Trichet remains alerted about growing inflationary pressure but a rate increase in the short term, given the Sovereign debt issue, will certainly impact the market negatively.

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SWISS FINANCIALS
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The Swiss National Bank renewed its concern about the Franc appreciation. This continuous rise might make many of the Swiss exporters uncompetitive. Still there are still some bright spots in the Swiss market:

After a fairly flat 2010 Swiss Financials started the year in a very positive mood and I see this trend continue till 2011. Most of them have "cleaned the house" from the 2008 mess and are now more competitive than many of their European counterparts that will face a new stress test in 2011.

Swiss banks rightly reinforced their presence in one of their fast growing markers: Asia. In the eyes of many international investors these banks are more secure, discrete and competitive (particularly in Wealth Management) than other European banks.

For this reason I see Swiss banks as a good buying opportunity.

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COMMODITIES
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It seems that some investors are betting on a drop in Gold and other previous metals in 2011. I don't think that Gold will see a lot of negative pressure as many of the paper currencies are still in a fairly bad shape. High unemployment in the U.S., European crisis and other bad news are good for precious metals. The price of extracting Gold has also reached close to 1000$ a ounce making a huge move downward less likely.

Additionally, during inflationary periods as the ones we will probably see in the future, precious metals tend to do well. I doubt that there is a bubble in Gold as investors exposure is very limited if compared to bonds, stocks, cash deposits and government debt.

Other commodities are also still in their bullish cycle so I will take market declines as a buying opportunity. All this with a big caveat: we might see, for a certain period at least, a stronger dollar and that will certainly damage commodity prices.

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Summary:

- Portugal and Spain passed their first test but yields remain relatively high. Further European prevention action, through the Emergency fund, might impact the market positively. I think that this might end the European crisis.

- I am bullish on Swiss Financial. In terms of competitiveness, are now well ahead of their European peers. The major banks have now cleaned their house and after a flat 2010 I expect a more positive 2011.

- Gold and Commodities will remain volatile this quarter but over the long term their demand/supply fundamentals are intact and therefore I am still bullish.