The Dawn Patrol – 12.10.12 – On JPM, the WeekEnd, AMD bad. On Q3 earnings, on the US Economy Outlook. Citi bullish, MS: what to buy now!

Bonjour,

European markets to follow the US and Asia on the downwards side. The S&P closed slightly up, but edged downards after European markets closed. GOLD maintains its defensive status, it’s till high at $1769.65. Macro eyes on Italian CPI and EZ IP and the University of Michigan confidence index in the US. My own eyes on the Rip Curl Pro in Portugal (http://live.ripcurl.com/?portugal2012).

WATCH JPM earnigns today at 13:00.

EPS 1.21 (est. includes $900ml gain from $9bn TruPS redemption) Revs 24.1bl. (J.P. Morgan earnings: 5 things to look for – Earnings Outlook – MarketWatch http://on.mktw.net/TkJRhY).

For the bears:
Worth noting that several decades of price history reveals that the S&P 500 is notorious for establishing major lows in October. There have been several correction lows in October and some outright crash lows made in this period. But hindsight shows that most of these lows have been good buying opportunities. More specifically In last 10 years aside from 2007/08 market lows in Oct were lows we saw into year end ….

For the Week End
Edward Hopper at the Grand Palais or Raphael at the Louvre. And if you’re not into this at all, join me for a ride in Longchamp on Sunday…

HOT

Watch Semis after AMD disappointing 3Q: Falls 7.8% post-mkt; Sees 3Q Rev. Down ~10% vs 2Q. 1.1m shrs traded post mkt. Sees 3Q GM ~31% vs 44% prev. on $100m inventory writedown

Atos, Cap Gemini, SAP may move after Infosys cuts sales forecast – Infosys down as much as 8.8%.

Galp Energia increased oil output in the third quarter and processed 2.6 percent more crude.

Ups/Downs :

JPM upgrade EEEK to OW, reiterate OW on SRG and downgrade DMGT from OW to N. GS keep UNA as top pick into 3Q, reiterate Conv Buy on Casino and like Croda after sell-off. Socgen PT raised by 4% to 28e at Exane (O/P), Siemens cut to Hold at Socgen. ANTO is a trading Sell at CS. Barcap downgrade LXS to EW and CS to UW. Nomura downgrade Saipem to Neutral. Insurances + Banks raised to OW at DB

CURRENT THEMES

On Q3 Earnings
So far, no so good with CVX and AA giving somewhat poor guidance. AMD adds to the list of too many profit warnings. So, as we start this earnings season on the wrong foot, get ready for some turbulences. Most bullish strategists will say, this is well expected, no one will be surprised so it shouldn’t hurt the market too much. Although I believe, stocks are currently the place to be because of the lack of yield in other assets, we’re heading in a tough quarter…

On The US Economy Outlook
Bloomberg: US Q4-12 Overview And Outlook – Business Insider http://read.bi/SPmAIA

STRATEGY

Citigroup – Global Equity Outlook 4Q 2012.

Upgrading US Equities to Overweight
Citi expect cheap valuations and aggressive central bank policy will help global equity markets rally by 9% by end- 2013
They like Australia/UK Mining companies, US Diversified Financials, Asian & US Tech, and European Pharmaceuticals. Avoid European Construction, Japanese IT, US Capital Goods and Asian Telecoms.

MS (All Analysts) European Equity

Conviction into Earnings: 11 Stocks with Near Term Catalysts.
MS highlights 11 names for which Morgan Stanley Research analysts have high conviction going into earnings season. Analysts expect the shares to move materially over the next 15-60 days on upcoming results or imminent news flow during the period. Each view is backed by a Research Tactical Idea (RTI), which is a short-term call on price performance on an absolute or relative (to the industry or sector) basis.

And the winners are: , BT Group, Continental, CRH, DIA, Fortum, Ladbrokes, PGS, Sanofi, SAP, UBM, Vinci.

EUROPEAN EQUITIES

FINANCIALS

NEWS

ING To Cut About 100 Jobs at Equity Research, Dagblad Reports

Reco

kredyt bank cut to hold from buy at deutsche bank

nordea cut to hold from buy at deutsche bank

Standard Chartered Added To Ubs’s Key Calls List

Swedbank Cut To Hold From Buy at Deutsche Bank

INDUSTRIAL/MINERS/SERVICES

NEWS

Morgan Stanley highlights 11 European stocks which may move materially over next 15-60 days on upcoming results, imminent news flow. Lists BT, Continental, CRH, DIA, Fortum, Ladbrokes, PGS, Sanofi, SAP, UBM, Vinci.

Reco

Antofagasta is a Trading Sell at Credit Suisse

kazakhmys cut to equalweight from overweight at barclays

eurasian natural resources raised to equalweight at barclays

UTILITIES/OIL/HEALTHCARE/CHEMICALS

News

Expectations Too High for Syngenta’s Earnings: Bernstein

Norilsk Nickel 1H Net Falls 16% on Yr

Arseus 3Q Sales Rise 4.5% to EU121.9 Mln; Confirms 2012 Outlook

Novartis Says New Data Reinforces Efficacy Benefits of Gilenya

RECO

Lanxess Cut To Underperform VS Neutral at Credit Suisse

Coloplast A/s Raised To Hold From Sell at Berenberg

TMT

News

Bollore to List Electric Batteries, Vehicles in 2013, Echos Says

Alcatel-Lucent Has Lost Market Share in French Mobile: Les Echos

Softbank-Sprint seen presaging Deutsche Telekom U.S. exit

Reco

Asseco Business Solutions Cut To Hold From Buy at ING

RETAIL/CONSUMER/LUXURY

News

CORRECT: Nutreco Agrees Sale of Hungary Business to Nuscience

Reco

Beiersdorf Raised To Buy VS Neutral at UBS

SMALL/MIDCAPS

NEWS

Reco

Comarch SA Cut to Sell From Hold at ING

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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