GS’ Assets in a Three Risk World, MS on Portugal, MS with a new Macro piece, Central banks, WSJ on Spain.


Europe set for slight better start, with focus firmly on Spanish bond auction (10:30 Paris Time) . Macro eyes on Philly Fed + weekly initial claims. Asia fell on eurozone fears.

EBAY: +5.6% -1Q adj. EPS 55c, est. 52c; rev. $3.3b, est. $3.16b. Guidance: sees yr adj. EPS $2.30-$2.35, saw $2.25-$2.30, est. $2.30; sees yr rev. $13.8b-$14.1b, est. $13.9b.

QCOM: -3.6% – 2Q adj. EPS $1.01, est. 95c. 2Q rev. $4.94b, est. $4.84b. Guidance: sees 3Q adj. EPS 83c-89c, est. 89c; sees 3Q rev. $4.45b-$4.85b, est. $4.8b. Says it Doesn’t Have Enough Supply to Meet Demand and obviously expectations were really high on Qualcomm…

AXP: -0.2% – 1Q EPS $1.07, est. $1.01. Total rev. net of interest expense $7.61b, est. $7.58b, may not compare.


On Europe
“A $2.6 trillion European bank deleveragingcould jeopardise financial stability says the IMF, warning that banks’ plans to shrink their assets by almost 7% over the next 18 months could hit economic growth, reports the FT; the fund has so far raised $320bn in extra ‘firepower’ funding after Poland and Switzerland made commitments on Wednesday, reports Reuters.”

On Central Banks
Brazil cuts rates by 75 bps as growth slows and we could see further cuts if inflation stays low.
In the UK, the MPC minutes were surprisingly hawkish and helped the GBP vs the EUR.
In NZ, the CPI fell to 1.6% from 1.8%.
Inflation is running higher than expected in Europe (#s out Tues), UK (#s out Tues), and US (#s out last Fri). Keep in mind too the (relatively) hawkish WSJ article from this Sat (discussing CPI and Fed outlook) and also all the recent Fed remarks (a variety of officials have helped lower expectations for QE3 in the last couple weeks).

On Spain
Another gloomy article in the WSJ on the Spanish banks situation. The ECB’s LTRO helped the banks lower government rates and financial risks but they now have little spare cash to continue such purchases.




GS (Wilson) Global Economic Weekly
Assets in a Three-Risk World
GS builds on earlier work to extract three market-based factors to capture US growth risk, China growth risk and European sovereign/financial risk, and examine the sensitivities of different assets to these risks.

MS Best Ideas is out:

A S I A / P A C I F I C
Overweight: China Unicom, Daewoo International, Dr Reddy’s Lab, GLOVIS, Oil Search, QBE Insurance Group, XL Axiata,

: Life Healthcare Group, Naspers Novatek (RU), Sberbank Tekfen Holding, VimpelCom,

: ARM, BT Group, Nestle, RWE AG,
Underweight Philips

: Calsonic Kansei, Fuji Media Holdings, Kawasaki Kisen, Komatsu, Nissan Motor, Nitori Holdings, Terumo, Tokyo Tatemono
Underweight Net One Systems

Apple, BorgWarner, CBS Corp., CenturyLink, RenaissanceRe, Schlumberger, Target, Teradata, Under Armour, Union Pacific.

MS (Antonucci) Portugal: Bail-Out now, Bail-In Later?
Policy Options and Investment Implications.
Market access is still closed for Portugal. A second bailout will materialise by Sept 2012 and Europe’s determination to avoid another debt restructuring will be challenged again…

MS (Fels) The Global Macro Analyst
A Different Place.
*** NEW *** MS is launching a new bi-weekly macro piece to replace the weekly Global Monetary Analyst.
Our key theme has been and continues to be that even four years after the bursting of one of the biggest credit bubbles in history, the world remains a very different place from the one we knew before 2008. As we see it, the current macro environment is dominated by three major developments:
A sub-par global economic expansion, hindered by deleveraging but propped up by massive monetary policy support, with big economic divergences between and within major regions;
More activist central banks, governments and regulators, aiming to support ailing economies and promoting financial stability, but also to help sovereigns to fund themselves;
Relentless rebalancing between consumption-led and export/investment-led economies, both across EM-DM but also within Europe.



Quote Of The Day | ZeroHedge : “Angela Merkel is not happy that financial markets have not made any contribution to resolving the financial crisis”
Can Europe Bail Out Spain? – Business Insider



– CaixaBank1Q net €48m vs est. €162m; core capital ratio 12.4% vs 12.5% in December; bad loans ratio 5.25% vs 4.90% in December; its board approves the acquisition agreement for Banca Civica
– ING Groep, seeking to sell its asset-management division in Asia, has approached potential buyers including Sumitomo Mitsui Financial Group Inc. and Invesco Ltd., reports Bloomberg
– Societe Generale PT raised to EU28 vs EU26 at JPMorgan, kept at Overweight; capital release potential from legacy assets underestimated; unlikely to raise capital
– VTB BANK cut to Neutral vs Buy at Goldman

– SCHINDLER reports 1Q rev. SF1.9b vs est. SF1.87b; 1Q orders up 5.4%; forecasts higher FY net income
– Sodexo 1H rev. €9.07b vs est. €9.07b; 1H organic growth 6.4%; 1H oper. profit €559m; 1H net €297m; maintains FY targets of oper. profit up ~10%, organic rev. growth 6-7%, acquisitions impacting rev. ~4%
– SAAB 1Q sales SK5.57b vs est. SK5.58b; 1Q order bookings SK4b vs SK5.22b; 1Q EBIT SK398m vs est. SK380m; 1Q net income SK279m vs est. SK259m; maintains 2012 outlook for sales and op. margin
– Edenred 1Q rev. €258m
– ACS mulls the sale of 10% of Abertis worth €900 million at current market price, reports Bloomberg
– BHP Billiton agrees to join China’s spot iron ore trading platform
– ALSTOM’s contract with a Slovenian power-plant is being investigated by the European Bank for Reconstruction and Development
– Air France-KLM Group may have to cut costs further to meet its announced debt-reduction targets in the face of higher oil prices, according to La Tribune
– Volkswagenand Audi boards approve the purchase of Ducati by Audi, they aim to complete transaction as quickly as possible; Volkswagen’s Audi unit is to build a plant in Mexico where it will start producing its SUV model in 2016
– Volkswagen’s board approves the building of a factory in Western China
– Peugeot resumed at Overweight at Morgan Stanley, PT EU 14; buy into any weakness as risk-reward ‘looks increasingly attractive’
– ASML PT raised to EU44 vs EU39 at BofA, kept at Buy; PT raised to EU45 vs EU39 at Barclays, kept at Overweight
– Eurotunnel PT raised to EU6.3 vs EU4.7 at Morgan Stanley; raised 8% to EU7.7 at Exane, kept at Outperform
– IMI Plc upgraded to Buy vs Hold at Jefferies
– Edenred PT Raised 4% to EU26 at Exane, kept at Outperform

– AKZO NOBEL 1Q rev. €3.97b vs est. €3.85b; 1Q Ebitda €423m vs est. €412.5m; vols. ‘down slightly’; says material prices ‘remain a challenge,’ sees inflationary impact from higher oil and TiO2 prices; continuing to focus on performance improvement
– Actelion 1Q rev. SF417.5m vs est. SF426.8m; 1Q net SF45.1m vs est. SF54.9m;FY 2012 product sales forecast upgraded to low-single digit decrease vs low to single digit decrease; remains on track for flat 2012 core earnings
– ORLEN 1Q retail sales 1.7m tons; 1Q refining sales 5.1m tons; sees 1Q Ebit ~900m Zloty vs est. 600.8m Zloty
– BP’sspill judge has set April 25th as the hearing on settlement approval; the group has settled with about 100,000 claimants over its Gulf of Mexico oil well blowout (expected to cost about $7.8bn although the amount is not fixed), says Reuters
– GDF Suez has bought back 12.2 million of its own shares on the stock market for about €240 million since March 1st, representing a bit more than 0.5% of its capital, says Bloomberg
Endesa’s EPS 2012-2014 is trimmed by 6% at Citi, reflecting the government decision of March 30th that reduced its EBITDA by ~€300 million, kept at Buy with PT at EU20
Buy Shire, attractive entry point, Citi Says
– SOLVAY kept on Europe 1 as the ‘best yet to come’, BofA says
– Enel upgraded to Buy vs Neutral at Citigroup, PT Kept at EU3
– Iberdrola raised to Buy vs Neutral at Citi
– Verbund cut to Sell vs Neutral at Citi; says that it has outperformed the European utilities sector 9% YTD, sees as good opportunity to lock-in profits
– Rosneft raised to Buy vs Neutral at Citi
– APR Energy cut to Sell vs Neutral at UBS
– AstraZeneca PT cut 3% to 3,100 Pence at Exane, kept at Underperform
– Beiersdorf upgraded to Outperform vs Neutral at Exane

– Publicis 1Q sales €1.45b vs est €1.42b; 1Q organic growth 4.1%; says 1Q confirmed expected trend of ‘reasonable growth’; sees stronger second half (ACTUALLY VERY DISAPPOINTING NUMBERS)
– Qualcomm sees 3Q adj. EPS 83c-89c vs est. 89c; 3Q rev. $4.45b-$4.85b vs est. $4.8b; reiterates 2012 rev. view $18.7b-$19.7b vs est. $19.5b ($19b-$20.5b)
– TELE2 reports 1Q sales SK10.5b vs est. SK10.5b; 1Q Ebitda SK2.57b vs est. SEK2.63b; misses 1Q net income SK869b vs est. SK1.1b; sees FY capex level SK5.5b vs earlier guidance SK6b; sees Swedish mobile service rev. to grow 3%-5% vs prev. 2%- 4%
– Teliasonera 1Q sales SK25.7b vs est. SK25.5b; 1Q Ebitda SK8.83b vs est. SEK8.91b; 1Q EPS GAAP SK0.9 vs est. SEK0.97; 1Q net Sk3.91b vs est. Sk4.13b; reiterates FY guidance of growth of 1%-2%; EBITDA margin to remain same level as 2011; confirmed that discussions are ongoing between it and the two other shareholders, AF Telecom and Altimo, regarding future ownership on MegaFon
– Vodafone has until 5pm today to say whether it plans to make a firm offer for Cable & Wireless Worldwide
– Vivendi’s CEO will come under increased pressure from investors to tackle the company’s low valuation relative to its businesses

– Tesco’sreluctance to commit to its US business has disappointed investors
– Nestle’s bottled-water business is struggling to regain momentum as twin concerns about the economy and the environment weigh on growth
– Europe general retail initiated with negative outlook at Bernstein
– Inditex initiated Market-Perform at Bernstein, PT EU73
– Next initiated Market-Perform at Bernstein, PT 3,200p
– Marks & Spencer initiated Market-Perform at Bernstein, PT 360p
– H&M initiated Underperform at Bernstein, PT SK200
– Kingfisher initiated Outperform at Bernstein, PT 375p
Buy PPR ahead of 1Q sales, UBS says
– Prada PT raised to HKD 51.60 vs HKD 41.50 at Berenberg, kept at Hold
– Diageo PT cut 3% to 1,410 Pence at Exane; kept at Neutral

– Nutreco 1Q rev. €1.13b vs est. €1.1b; expects 1H Ebita before exceptional items ~EU100m
– Sligro 1Q rev. €577m; 1Q organic sales growth 3% vs last year
– Jazztel sees 1Q sales €216.5m; 1Q ebitda €39.2m 1Q net income €11.8m
– Cable & Wireless Communicationsmay cut its 2013 dividend by half, says the FT
– Mediobanca suggests stock picking for Italy Mid & Small shares: Astaldi, Banca Generali, Beni Stabili, Danieli, De Longhi, Ei Towers
– Cobham PT raised to 200 Pence vs 170 Pence at Morgan Stanley

Max Kamir

Louis Capital Markets UK,LLP

Authorised and regulated by the FSA and Banque de France

39-41 rue Cambon

75001 Paris

T +33 (0)1 53 45 10 74

E mkamir

Max Kamir

Louis Capital Markets UK,LLP

Authorised and regulated by the FSA and Banque de France

39-41 rue Cambon

75001 Paris

T +33 (0)1 53 45 10 74

E mkamir


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