The Dawn Patrol – 25.09.12 – CAT Pft W. On Europe, Spain, German banks and Commodities.

(https://lcmdawnpatrol.wordpress.com/) If you receive this email more than once at the same email address please let me know. Issues with Outlook.

Bonjour,

Asian markets slightly down on lack of volume and news. European futures indicate markets to open slightly up. Gold at $1763.75, EURUSD down to 1.2903… Aujourd’hui, we’ll look at the German GFK condidence, the US S&P Case Shiller (there was a good article on Mr. Shiller last week… can’t remember where… This broker’s memory…), the French Business Confidence Indicator (double oxymoron). Spain to sell bills and Merkel and Draghi meet in Berlin.

A very interesting device to get fit (thanks Paul). FITBIT http://bit.ly/OmY4Pz. It works!

DAIMLER is planning to cut production at its largest car plant, as deteriorating markets in Europe and China hit sales of its Mercedes-Benz cars – Reuters
GLEN suspended in HK in what may be related to a decision to take a smaller stake in Kazakh zinc producer Kazzinc.
AXA had its outlook lowered by Fitch to negative as earnings are pressured by bond yields at near-record lows
Schaeffler to sell 10% CONTINENTAL stake for ~$2.13b
TEMASEK sounding out potential buyers for its £6bn STANCHART stake – FT
SFR (VIVENDI) will regroup distribution & plans job cut – CEO tells le Figaro
UNITED SPIRITS Shrs Gain After Confirming Talks With DIAGEO

Ups/Downs
TNTE
raised to Buy at Citi, ACA and GALP cut to Neutral at GS, SEV raised to OW and TOTAL + AVIVA reiterated OW at JPM, LG DISPLAY cut to Mkt Perform at Bernstein, LG ELECTRONICS cut to Sell at UBS on valuations, SCHNEIDER cut to Hold vs Buy at DB, C&W Comm. cut to Sell at Liberum, NOKIA cut to U/P at BMO, DTE cut to Hold at Jefferies whereas TEF + BOUYGUES cut to UW and TEL raised to Buy. E.ON Cut From UBS Most Preferred List, RWE From Least Preferred.

AFTER HOURS

CAT: lost 2.1% as it now expectes 2015 EPS to reach $12 to $18 vs $15 to $20 before on sales of $80 to $100m.
RHT: down 2.9% on Q2 EPS of28c vs 29c expected.
FB: -9.06 % – slumped nearly 10 percent after Barron’s said shares of the social-networking giant are worth only $15. “Facebook’s 40 percent plunge from its initial-public-offering price of $38 in May has millions of investors asking a single question: Is the stock a buy? The short answer is ‘No,'” according to the article over the weekend.
QCOR: -36.6% – Questcor plunged after the company said it was being investigated by a U.S. government agency over its promotional practices. In addition, at least three brokerages downgraded the company’s stock.
GOOG rebounds… Google continues on its upwards trend. The launch of new android devices, the Facebook worries and the tablet wars continue to benefit the company. We’re not seeing the same performance as AMZN or EBAY, but it’s definitely something to have a look at.

CURRENT THEMES

On Europe
The Sirtaki/Waltz/Fandango continues. Now Germany is pushing back according to the WSJ (http://on.wsj.com/RT6MWF). German leaders want all these aid demands to be bundled together so they don’t have to go and ask the Bundestag everytime. There are other domestic issues in Germany that need to be taken care of, and this recurrent demand for help just doesn’t help Merkel.
Also on the leverage of the ESM, a German official called the €2bn number “completely illusory” or something like “Völlig verrückt”)…

On Spain
JPM (Alex White) wrote a short piece on the matter. They don’t think the OMT activation is imminent but don’t rule out a move by Spain in the short term by saying that discussions are taking place.

On German Banks
German Banks Have Big Exposure to Spain – WSJ.com http://on.wsj.com/UBEZuk

On Commodities
Morgan Stanley’s Commodities Outlook – Business Insider http://read.bi/QuUYYw

EUROPEAN EQUITIES

TOTAL (JPM, Nitin Sharma) OW.2012 Investors’ day – explicit divestment target and reassurance on upstream organic growth – ALERT
TOTAL hosted its 2012 investors’ day today in London – led by CEO Christophe de Margerie and other members of the senior management team. This was the second of the two yearly strategy downloads – 64 slides reiterating the TOTAL buy case. Management’s tone was cautiously optimistic – no major shift in the strategic agenda but useful details that should reassure the investors particularly on the company’s ability to fund its ambitious capex programme and still deliver competitive dividend growth. We sense that the overall download should court positive analyst commentary.

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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