Waiting for the NFP, A cautious ECB, LinkedIn beats, MS looks at 4 scenarios for Europe, Opera Garnier in the WSJ… Results.


Markets to open down. All eyes on the Non Farm Payrolls.

The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy.

Milton Friedman


On the US
Not a great week in terms of data with poor non-farm data productivity numbers and weaker than expected non-manufacturing ISM. Claims came out OK yesterday, but the bears may look at the seasonal distortions caused by spring breaks in some states. In New York in particular, state claims data for the week ending April 21 show an increase of 20k in seasonally adjusted terms (seasonal adjustments provided by Haver Analytics).
But the main number for the week is today at 14:30 with the NFP…Consensus is at 160k. April Jobs Report Numbers – Business Insider http://read.bi/JR0uhY

On the ECB
No change, but the speech was cautious. Draghi:
– Sees inflation risks as broadly balanced, watch for pass through from inflation
– Sees downside risks to economic outlook, outlook has become more uncertain
– Non-standard measures havent yet shown full impact, LTRO helped avoid a major credit crunch
– ECB didnt talk about cutting interest rate, ECB policy is accomodative
Draghi discussed the problem of imbalances but noted that it is up to the governments to address this issue. ECB is firmly on the side of Germany and will look to push fiscal reforms through as the primary way to reign in debt levels. Again this proves ECB in no mood to provide more stimulus right away and waiting for Eurozone members to show more austerity. For equity markets, these comments provide little solace

On Facebook
While LinkedIn published some very strong numbers last night and rose 8.5% after market, details of the Facebook IPO are out: Facebook Details IPO Details, Issues Amended S-1 | ZeroHedge http://bit.ly/IKzZfT

On Linkedin
: LNKD: 11% – 1Q Adj. EPS 15c, Est. 9c. LinkedIn To Buy SlideShare For $118.75m. LinkedIn sees yr rev. $880m-$900m vs prev. forecast $840m-$860m, est. $876.7m. Sees 2Q rev. $210m-$215m vs est. $208.4m


GS (Bell) Strategy Matters
Germany’s lost decade: lessons learned


Germany may be Europe’s strongest economy now but in the decade starting from the mid 1990s Germany grew consistently slower than the rest of Europe as the economy struggled to rebalance post the reunification boom. Ultimately this restructuring was a success (recent economic and market performance is a testament to this) but at the time the DAX sharply underperformed the rest of Europe for more than a decade. We find that the German companies which outperformed over this period were those with the most foreign sales and lowest valuations at the outset.

MS (Fels) The Global Macro Analyst
Euro Area Scenarios: The Good, the Bad and the Ugly
This piece was published yesterday. It provides different scenarios for the Europe as the author believes that despite the LTRO (which bought time) the large economic imbalance and the lack of fiscal integration remain the two deficiencies that Europe has to overcome. Depending on the success of each the scenarios varies:
. European Renaissance: Economic rebalancing and fiscal integration: too good to be true anytime soon.
. European Divorce: the ugly one with economic divergence and political fragmentation.
. Italian Marriage: moving to fiscal union despite economic divergences (like Italy, 150 years ago).
. Staggering On: no fiscal integration, but with a lot of help from the ECB, economic reforms and austerity, the economy rebalances gradually (the most likely scenario).
Most would only work when and if the ECB accepts to act as lender of last resort.


S&P 500: Floor Breach, Breach, Breach | ZeroHedge http://bit.ly/IKAN4c
April Jobs Report Numbers – Business Insider http://read.bi/JR0uhY
The Faceboook valuation calculator: http://www.ft.com/cms/s/2/ff589e40-8d3a-11e1-8b49-00144feab49a.html#axzz1tmgx4aJk
Stop fretting about a French revolution http://on.ft.com/K5OOK8
A Bird’s-Eye View of the Palais Garnier – WSJ.com http://on.wsj.com/KuwoQb


– BNP PARIBAS 1Q rev. -15% y/y to EU9.89b; 1Q net EU2.87b vs est. EU2.67b; EU142m in losses on sovereign bond sales; ‘had good operating performance’ in consumer-banking and capital markets business; sees no additional CIB job cuts
– Swiss Re 1Q premiums rev. $6.2b; 1Q net $1.14b vs est. $688.1m; says that it is on track to deliver on targets

– Hannover Re PT Raised to EU48.8 vs EU46.6 at Morgan Stanley
– SCOR PT Raised 1% to EU21.8 at Exane; Kept at Neutral
– Generali PT Cut to EU12.5 vs EU13.5 at BofA; Kept at Neutral
– Societe Generale PT Cut to EU26.8 vs EU28.4 at Morgan Stanley; Kept at overweight
– Air France-Klm 1Q rev. EU5.65b vs est. EU5.55b; 1Q op. loss EU597m vs est. loss EU510m; 1H op. profit to be worse than 1H 2011
– Alstom FY oper. profit EU1.406b vs est. EU1.301b
– Bureau Veritas 1Q rev. EU868m vs est. EU858m; says outlook for 2012 is ‘healthy’
– Kongsberg 1Q net income NK319m vs est. NK315.4m; sees lower level of activity this year
– Lafarge 1Q sales EU3.35b vs est. EU3.32b; 1Q net loss EU44m vs est. loss EU84.5m; remains cautious for the year  but sees cement demand improving; emerging markets main source of demand; cost inflation in 2012 at lower rate than 2011
– Linde 1Q rev. EU3.51b vs est. EU3.47b; 1Q adj. Ebitda EU808m vs est. EU802.5m; reaffirms 2012 forecast

PT Raised to EU85 vs EU84 at Morgan Stanley
– Edenred Cut to Sell vs Neutral at UBS
Cautious on FINMECCANICA at Exane; Underperform rating, PT EU2.5 unchanged
– Pfeiffer Vacuum PT Raised 10% to EU110 at Exane; Kept at Outperform
– First Quantum Minerals Cut to Neutral at JPMorgan
– NOKIAN RENKAAT Raised to Neutral at HSBC
– Unibail-Rodamco Raised to Buy From Hold at Jefferies
– Land Securities PT Raised to 660p vs 640p at Morgan Stanley; Kept at Equalweight
– TGS-NOPEC PT Raised to NKr196 vs NKr174 at Morgan Stanley; Kept at Equalwight
– Svenska Cellulosa PT Cut to SEK115 vs SEK117 at Morgan Stanley; Kept at Equalweight
– UPM-Kymmene PT Cut to EU13.2 vs EU13.5 at Morgan Stanley; Kept at Overweight
– Holmen PT Cut to SEK193 vs SEK206 at Morgan Stanley; Kept at Underweight

– Veolia Environnement 1Q rev. EU7.83b; 1Q adj. operating income declined by 12% at constant exchange rates to EU543.5m
– Wacker Chemie 1Q rev. EU1.19b vs est. EU1.17b; 1Q Ebitda EU212m vs est. EU210.78m; says demand gained ‘appreciable’ momentum in many segments in 1Q

– AstraZeneca
Added to UBS’s European Key Calls List, removing Novartis
– Beiersdorf AG PT Raised 2% to EU61 at Exane; Kept at Outperform
– CLARIANT Raised to Neutral at HSBC; PT Raised 1% to CHF14.3 at Exane; Kept at Neutral
– DSM Cut to Neutral vs Buy at BofA
Buy Hikma as it is looking undervalued, BofA says
– Merck Cut to Underweight from Equalweight at Barclays; PT raised to EU80 vs EU79
– Pharmstandard Cut to Neutral from Overweight at JPMorgan

– Belgacom 1Q sales EU1.59b vs est. EU1.56b; Ebitda EU466m vs est. EU454m; 1Q net EU199m vs est. EU179m; still sees 2012 rev. ~1% lower y/y; sees 2012 Ebitda 5%-6% lower y/y
– Legrand 1Q sales EU1.09b vs est. EU1.10b; 1Q operating income EU215.9m
– Telco reports 9M loss of EU1b after a EU901m write-down of its Telecom Italia stake

– Telecom Italia
’s main investors including Telefonica agree on €3.4 billion financing package to help repay loans obtained in 2007
– EIRCOM GROUP has received a bid of about €2 billion from Hutchinson Whampoa’s Three Ireland unit
Buy France Telecom as it is ‘very attractively’ valued, ING says; Raised to Neutral vs Sell at UBS; PT Cut to EU14.5 vs EU15.5 at Morgan Stanley
– Rexel Upgraded to Overweight from Equalweight at Morgan Stanley
– Swisscom Upgraded to Neutral from Underweight at JPMorgan
– Schibsted Cut to Neutral from Overweight at JPMorgan
– Adidas PT Raised 13% to EU68 at Barclays; Stays Equalweight
– Carlsberg consensus too high for 1Q, BofA says
– LVMH PT Raised to EU150 vs EU147 at Morgan Stanley; Kept at Overweight
– Richemont Cut to Equalweight from Overweight at Morgan Stanley; Upgraded to Overweight from Equalweight at Barclays
Buy WHITBREAD as it is to deliver further strong growth at Costa, Citi says
– Mediaset Espana Comunicacion 1Q sales fell 18% to EU218m; 1Q net profit dropped 47% to EU21.2m
– Morphosys 1Q rev. EU16.1m vs est EU16.5m; 1Q Ebit loss EU800,000 vs est. loss EU1.7m; 1Q net loss EU500,000 vs est. loss EU800,000
– Panalpina 1Q rev. SF1.54b vs est. SF1.59b; 1Q loss SF40m on provisions of SF59m for fines; says it will appeal EU antitrust decision
– Sonaecom 1Q rev. EU202.5m vs est. EU198.5m; 1Q Ebitda EU60.3m vs est. EU51.2m; 1Q net EU17m
– Sponda 1Q net sales EU66m vs est. EU63.9m; pretax profit EU29.6m vs est. EU22.1m; net income EU22.7m
– Vilmorin 3Q rev. EU616.5m
– Unipol and Premafin are able to set merger terms, Italian regulator says
– Austriamicrosystems Cut to Neutral vs Buy at Goldman
– CFAO PT Raised 9% to EU35 at Exane; Kept at Neutral
– Dairy Crest Rated New Buy at Jefferies
– ERG PT Cut to EU5.9 vs EU9 at Citigroup; Kept at Neutral
– Eurofins Scientific PT Raised 25% to EU110 at Exane; Kept at Outperform
– PagesJaunes PT Cut 32% to EU1.9 at Exane; Kept at Underperform; PT Cut 29% to EU1.85 at Barclays, Stays Underweight
– Sanoma Cut to Neutral vs Buy at Swedbank
– Smurfit Kappa PT Raised to EU9.2 vs EU8 at Morgan Stanley; Kept at Overweight
– Vidrala SA PT Raised 4% to EU24 at Exane; Kept at Outperform


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