15.06.12 – Brace Brace. BofA cheatsheet on the Greek elections.

Kalimera!

Europe set for higher start as Asia mostly higher amid hopes central banks are preparing coordinated action to provide liquidity/stability stabilise after Greek election. UK Chancellor Osborne+Mervyn King, last night announced joint programme to boost credit and hinted further QE likely. Today is quadruple witching and FTSE rebalancing. US June Empire State + Michigan confidence due.

AFTER THE CLOSE

U.S. stocks rose and the dollar weakened as reports on American inflation and jobless claims fueled speculation the Federal Reserve may loosen monetary policy to spur growth. Treasuries fell and commodities gained. U.S. stocks briefly pared gains as Egan-Jones Ratings Co. reduced its rating on France’s government debt, fueling concern about contagion from the debt crisis. The rally resumed after Reuters reported that central banks are prepared to coordinate actions if needed to boost liquidity in financial markets. The news service cited officials linked to the Group of 20 nations.

The Standard & Poor’s 500 Index added 0.7 percent at 3:29 .m. in New York while the dollar weakened against all 16 major eers, with the euro increasing 0.4 percent to $1.2602. Ten-year reasury yields climbed three basis points to 1.63 percent, while the rate on Spain’s 10-year bond rose as high as 6.998 percent, a euro-era record, after its credit ratings were cut by Moody’s Investors Service. The S&P GSCI commodities index added 1.2 percent.

CURRENT THEMES

On Greece
When you get on an EasyJet plane, the recorded instruction says “Brace! Brace!”. I don’t really know how the markets will react whoever wins. The online sports (and other stuff) betting site betfair.com shows 65% of chances to ND. If it happens we may get an equity and Euro rally on Monday. Then markets will wait for the outcome of the FOMC meeting (19th and 20th) and may get disappointed… Get ready to do do as the voice says…

BofA publishes a useful tool: Positioning For The Weekend: BofA’s Risk Cheat-Sheet | ZeroHedge http://bit.ly/KLZaMq

On the Central Banks
The cavalry may come back on Monday from Los Cabos (why don’t they do it in Paris, Washington or London?) with a call to central bankers to provide new liquidity or stimulus to boost the economy. Will it change much? Interesting to watch the SNB…

Picture from Los Cabos

EUROPEAN EQUITIES

FINANCIALS
FTSE 100 May Fall to 3,500 Under ‘Black Sky’ Euro Break-Up
Morgan Stanley sees risk to Italy banks, it says asset quality and high NPLs are growing problems for Italian banks; Intesa, Mediobanca Cut
– Societe Generale’s CEO says that the European banking supervision and protection of deposits is a legitimate medium-term goal; SocGen’s TCW has drawn bids from PE firms, reuters Says
Credit Suisse’s capital need may spur AGO, MBIA Talks, reports Bloomberg
– CNP studies possible acquisitions in Latin America, CEO Tells Echos
– Standard Life Raised To Hold From Sell at SocGen

INDUSTRIAL/MINERS/SERVICES
– FIAT to Cut 2012 Europe Investment by Eu500m ON Market Slump
– Technip concluded three private debt sales for €325 million
– G4S is about to cut U.K. police jobs 2 months after starting its contract, says FT
– Dassault Systemes says it is on track to more than double non-IFRS EPS to ~EU3.70-4.00 in 2014 in capital markets day statement
– Fugro gets a 5 year Malaysian contract worth more than $140m
– Randgold Resources Raised to Neutral vs Sell at Goldman; PT raised to 6,300p vs 5,700p
– Essilor Cut to Neutral from Buy at BofA After Outperformance
– Safran PT Raised to EU34 vs EU32 at Morgan Stanley, kept at overweight
Buy Saint-Gobain, Looks Oversold, ING Says, PT cut to EU34.80 from EU36.70, reiterates buy

UTILITIES/OIL/HEALTHCARE/CHEMICALS
– GlaxoSmithKline’s final bid terms for the acquisition of all HGS’ outstanding common shares will have to be submitted by July 16th; won FDA approval for Menhibrix vaccine, FDA says
– Roche’sZelboraf skin-cancer treatment fails to win backing of U.K.’s National Institute for Health and Clinical Excellence, even after co. offered to cut drug’s price
– BP’s former engineer charged with destroying evidence sought for a U.S probe of 2010 Gulf of Mexico oil spill will face a Feb. 25 trial, judge says
– CNPC would like to partner Statoil’son the Norwegian continental shelf, new areas of Barents Sea
– EON missed out on potential savings by slowly integrating accounting, personnel management units, FT Deutschland says
– Energie Baden-Wurttemberg sees gross proceeds ~EU820m from capital increase; it is to issue up to 27.1m new ordinary shares
– Weir Group Raised to Neutral vs Sell at Citi; says risks now priced in
Buy Arkema and Lanxess as Weakness Already Priced-In, says Nomura

TMT
– Nokia Raised to Neutral vs Sell at Citi; Raised to Perform at Oppenheimer; PT Cut to EU1.5 vs EU2.6 at Morgan Stanley, kept at underweight; Cut to Neutral vs Outperform at Credit Suisse
– Kabel Deutschland PT Raised to EU47.5 From EU46 at ING, kept at hold

RETAIL/CONSUMER/LUXURY
– Carrefour’sActive Investors have asked the company’s board to explain during its AGM on June 18 issues surrounding the let go of former Chairman and CEO; buys 129 Eki Stores in Argentina
– Barry Callebaut appoints Dirk Poelman as Chief Innovation Officer
– Inditex PT Raised to EU88 From EU82 at ING, reiterates buy

SMALL/MIDCAPS
– Maurel & Prom said yesterday it hadn’t been contacted by Shell, confirming Reuters report
– Wilex says that Mesupron improved survival in breast-cancer trial
– Fondiaria’sBoard Member Maurizio Comoli Resigns
– Rheinmetall Oversold, Attractive for Bottom-Fishing says Berenberg, Cites IPO plans of Automotive division in current economic environment; kept at buy with PT EU45
Ageas PT Cut to EU1.5 vs EU1.9 at Morgan Stanley, kept at equalweight
– Morgan Crucible Raised To Neutral From Underperform at BofA
– USG People Added to UBS Most Preferred List, Bunzl to Least
– Greene King Rated Neutral At Nomura; PT 533p
– Marston’sRated Buy At Nomura; PT 116p
– Cairn Energy Cut To Hold From Buy at SocGen, PT Cut to 325p From 400p
– The Restaurant Group Rated Buy at Nomura; PT 380p

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