The Dawn Patrol – 05.10.12 – Not much. Zynga drops. and we’ll watch the NFP.

Bonjour,

 

Markets expected to open up. Gold is up again reaching 1793 and the EURUSDat 1.3013,. Today macro eyes will be on Spanish industrial output, Swiss foreign currency reserves, German factory orders. But the most important will be the NFP…

 

 

 

Ups and Downs
Burberry
Raised toOverweight from Equalweight at Morgan Stanley, Kingfisher Cut to Equalweight at Morgan Stanley. SAGE Cut to Hold From Buy at Berenberg, Aveva Cut To Hold From Buy at Berenberg. Air Liquide Added to UBS Least Preferred European Chemicals, Givaudan Added To UBS Most Preferred European Chemicals

 

AFTER HOURS

 

Stocks ended in positive territory Thursday, with the S&P 500 finishing higher for a fourth-straight session, after some encouraging comments by ECB President Mario Draghi and as investors looked ahead to the monthly government jobs report.

 

ZNGA: 19%, to $2.27 following a trading halt. Zynga lowered its full-year bookings forecast to a range of $1.085 billion to $1.1 billion from its previous forecast of $1.15 billion to $1.225 billion. The company cited“reduced expectations” for certain games, including the recently launched “The Ville” title on Facebook, as reason for the move.

CURRENT THEMES

 

On the Fed
Nothing really key to take home. However, two quick takeaways: 1) the minutes include the views of more people than actually get to vote on the FOMC decisions and so certain portions of the release today may read a bit more hawkish than recent Bernanke communications (thisisn’t too surprising but could produce some headlines); 2) it sounds like the Fed will continue to evolve their market communications and may eventually make policy contingent on achieving specific numerical economic levels. (JPM).

 

On France
The harder they fall… The French government backpedalled on its proposal to increase taxes on corporates… Credibility??

EUROPEAN EQUITIES

 
Danone (JPM, Celine Pannuti, CFA) (BN FP, N – €47.4, PT  –  €48.00 )
Disappointing Q3 to point to downside risks to FY13E as Dairy weakens
We expect a weak Q3 top-line on 17/10 (JPMe +4.8% vs consensus 6.1%) to focus attention on top line deceleration and risks to FY12 and FY13e expectations. We expect Dairy performance to have deteriorated from Q2 levels and hit on thegroup’s top line, jeopardising management’s guidance of FY12 ‘well into 5-7%’. Besides should the outlook for Diary worsen in H212, we see a 3-5% downsiderisk to FY13E Bloomberg consensus, compounded by added taxes in France. While the stock has lagged sector peers, it is likely to remain under pressure from earnings disappointment.

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