The Dawn Patrol – 12.07.12 – Peugeot, Carrefour, Temenos. On the Fed, other Central Banks…

https://lcmdawnpatrol.wordpress.com/

Bonjour,

(sorry, this is a short patrol)

Markets to open down today, following the Asian trend following the FOMC meeting where expectations for more easing were expected and on a poor Australian jobs data. Today, macro eyese will be on French and German inflation data, US jobless claims. Also the Italian govt to sell €7.5bn 361 day bills.

CARREFOUR: Q2 sales in line with expectations…. Belgium is strong, France -5.7% (vs -5% expected)… No disaster…
PEUGEOT: Operating losses to reach €700m in H1, slightly worse than expected, and cutting 9,600 jobs vs the 6,000 expected. Many people short on the name

Capgemini Rated New Underperform At Credit Suisse, PT Eu26.3

Atos Rated New Outperform At Credit Suisse, PT Eu51.6
Temenos reduces its 2012 rev. growth range, CEO steps down

Grifols b Shrs Rated New Buy At Berenberg; PT Eu19.1

Gedeon Richter Raised To Buy From Underperform at BofA

AFTER HOURS

MARRIOTT Int (MAR) down 2.2% as Sales/EPS came in at $2.78bn/42c vs analysts estimates of $2.83bn/42c.
SUPERVALU (SVU): Down 26% after it said it’s dropping its dividend.

It was another very quiet and apathetic session and other than the Fed minutes, not a whole lot really happened. While the minutes caused an immediate knee jerk move lower (which didn’t last by the close), people are reluctant to short/sell aggressively ahead of Bernanke next week (Jul 17-18) and still expect the Fed to do “something” within the next couple months. S&P once again held the 50day MA (same as Tuesday). Financials and energy both outperformed while tech, industrials, and retail all came for sale. It seems there is a small tactical bid among faster money out of the whole tech/industrial complex given the very poor earnings headlines.

The market seems relatively convinced there will be something more coming from the Fed (a Reuters survey conducted after the latest jobs report put the odds of QE3 near 70%) but timing could pose a problem.Will QE3 happen on Aug 1 or Sept 13? If it’s the latter date, then Bernanke next week before Congress may not sound as dovish as the market expects. Sentiment is cautious and the headlines are all negative but the fear of “policy” helps provide support.

CURRENT THEMES

On the Fed
The main message from the Fed minutes was that while few members thought further stimulus would be necessary to promote satisfactory growth in employment and inflation rate SEVERAL noted that additional action is warranted IF economic recovery loses momentum, if downside risks become more pronounced or if inflation drops persistently below objectives.
In other words, it looks like the majority of the FOMC is still on the fence with respects to more QE. The market has been hoping that more QE was imminent as early as next FOMC meeting (Aug 1). Given these minutes, this scenario seems only possible now if the data until then are sufficiently worrisome and/or if the stock market pulls back sufficiently. Hence the bearish reaction to the minutes.

On Earnings
Oups…. coming soon.

On other Central Banks
While the Fed keeps us on the nightwatch, Korea and Brazil cut their rates (by 25bp and 50bp respectively) and the Bak of Japan adjusted their Asset Purchase Program. Today, we’ll look at Indonesia.

OTHER STUFF

BofA: QE3 Is Coming In September – Business Insider http://read.bi/NydgWl
According To The Pareto Principle, Gold Should Hit $8300 Per Ounce By 2015 – Business Insider http://read.bi/NpOGas

EUROPEAN EQUITIES

FINANCIALS
Twenty big fund managers have warned that the so-called alternative investment fund managers directive proposed by Brussels could increase costs for ordinary investors and undermine the single market in the EU, FT says
– DNB 2Q Earnings Beats Est.; 2Q net NK4.58b vs est. NK3.9b; 2Q adj. EPS NK2.82 vs est. NK2.4; 2Q ROE 15.3%
– Barclays, U.S. Justice Dept. say bank’s settlement of allegations involving Libor manipulation has “no effect” on a 2010 deferred-prosecution agreement
– HSBC may face a $1b U.S. penalty over lack of terror Controls
– Intesa‘s CEO says core Tier 1 is to rise ‘significantly’ by Year-End
– Standard Chartered is re-entering its Real Money Portfolio (RMP), which uses EUR as funding currency for longs in EM FX (except CNY)
– BBVA Cut to Neutral VS Outperform at Credit Suisse
– Old Mutual Raised To Buy From Neutral at Nomura

INDUSTRIAL/MINERS/SERVICES
The mining industry ‘retreats to the core’: More signs of portfolio pruning from the big global miners, despite the tough environment for selling assets, FT reports
– Suedzucker 1Q profit more than doubles; 1Q rev. EU1.89b, 1Q group operating profit EU263m, 1Q net EU220.5m, EPS EU1.10 vs 46c, Reiterates forcast and still sees FY rev. increasing up to above EU7b vs EU7b Y/y, FY group operating profit rising to more than EU800m vs EU751m Y/y
– Airbus A350 has seen problems w/ final assembly; problems drilling holes into wing to fasten skins is taking longer than expected
– Peugeot is set to announce the closure of Aulnay today; it may also cut about 1000 jobs at Rennes and between 500 and 800 jobs at Valenciennes, Le Figaro reports;
– Siemens earned a contract to supply 13 narrow gauge 25kV heavy haul electric locomotives to assist BMA in starting rail ops in Queensland, reports Bloomberg
– RIO TINTO is to drop its €1 billion project in Portugal; CFO will retire at the end of 2013
Argentina will give mining cos. including Xstrata’s Alumbrera unit more time to bring back export rev. after current restrictions halted some shipments
– Assa Abloy Raised To Neutral From Underperform at BofA
– Atos Rated New Outperform At Credit Suisse, PT Eu51.6
– Capgemini Rated New Underperform At Credit Suisse, PT Eu26.3
– Kone Cut To Underperform From Neutral at BofA

UTILITIES/OIL/HEALTHCARE/CHEMICALS
Rare mutation find bolsters prospects for new Alzheimer’s drugs
– SANOFI’s plant in Toronto, where the company produces bladder-cancer treatment ImmuCyst, had mold in sterile manufacturing areas, reports Bloomberg
– BHP BILLITON is reviewing operations in aluminum and manganese, which may result in further sales, FT said
– ROYAL DUTCH SHELL brings attendant back to service stations in the U.K. and plans to have them working at 400 sites by the end of the year, FT reports; Alberta approves Shell carbon capture program, says Reuters
– IBERDROLA seeks the sale of some wind farms and solar assets, reports Bloomberg
– Akzo Nobel Raised To Overweight From Neutral at HSBC
– Arkema PT Cut to Eu71 VS Eu80 at HSBC, Stays Overweight
– BASF PT Cut to Eu68 From Eu73 at HSBC, Stays Overewight
– OMV Cut to Neutral From Buy at Nomura
– Statoil Cut To Reduce From Neutral at Nomura

TMT
Worldwide PC shipment growth droped 0.1% in 2Q, Bloomberg reports
– Vodafone New Zealand is to buy TelstraClear for NZ$840 million; the companychallenges telecom dominance with Telstra N.Z. Purchase
– Dassault Systemes completes the purchase of Gemcom software
– Grifols b Shrs Rated New Buy At Berenberg; PT Eu19.1
– Philips Raised To Neutral From Underperform at BofA

RETAIL/CONSUMER/LUXURY
– Carrefour 2Q Sales In-Line With Est.; 2Q rev. EU21.7b vs. est. EU21.6b ; 2Q Sales Down 0.3% to EU21.7b vs. Est. EU21.6b; 2Q French hypermarket LFL sales ex- fuel down 5.7%
– D.E Master Blenders Initiated at Hold at ING, PT €9
– L’oreal Cut To Sell From Hold at ING

SMALL/MIDCAPS
– Aegis may announce takeover bid from an ‘Asian Buyer,’ reports Bloomberg
– Actelion announces a cost saving plan, it sees one-off charge in 2012; it is to cut 135 R&D and admin jobs in savings program; costs cuts will take effect in late ’12, accelerating in early ‘13
– GUINESS PEAT says Crescent’s ClearView bid is ‘wholly inadequate’
– Marine Harvest sees 2Q operational EBIT of approximately NK225M
– Nutreco issues $250m in senior notes to refinance debt
– Partners Group confirms FY demand guidance of €4-5 billions
– Temenos reduces its 2012 rev. growth range, CEO steps down, Bloomberg reports
– Britvic Cut To Underperform From Neutral at BofA
– C&W Communications Raised to Buy VS Underperform at BofAML
– Gedeon Richter Raised To Buy From Underperform at BofA
– Genel Energy Raised To Overweight VS Neutral at HSBC
– Ladbrokes Raised To Buy From Hold at Numis
– Nexans Cut To Underperform From Neutral at BofA
– Resolution Raised to Outperform from Market Perform at Bernstein
– Symrise Cut To Underweight From Neutral at HSBC

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
I http://www.louiscapital.com

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