Markets top open up today as Ben Bernanke reaffirms the Fed’s commitment to low rates until unemployment rate comes down (more below). The Euro area crisis is back and markets nervousness too, time to look at gold again?
SX5E Futures: Support at 2564 then 2509. Resistance 2608/10 then 2669…looks like opening around 2575
Italy to auction bonds today at 11:00 and Draghi speaks in Munich. The EZ money supply data at 11:00 will be key. In terms of numbers, EADS looks good, Bouygues sales beat ests, but weak on telcos. ABI is slightly above expectations. (more details on Earnings at the bottom of this page).
08:45 French consumer confidence (is there such a thing?),
10:00 Italian business confidence,
10:30 UK GDP
10:00 the EZ money supply,
11:00 the EZ consumer confidence index,
14:30 the US durable goods orders.
Spain’s ACS to Issue EU1.2Bln of Eurobonds, Expansion Reports
Telefonica Deutschland FY Sales, Oibda In Line With Estimates
Swiss Life CEO Says Likelihood of Further Writedowns Is Low
De Master Cuts FY13 LFL Sales, Ebit Margin Growth Forecast
Endesa 2012 Net Falls 8% to EU2.03 Bln
Hochtief to Pay 2012, 2013 Dividend, Handelsblatt Reports. Dividend could be lower.
Fraport Looks at Istanbul Airport Plan, FT Reports
Vodafone Said to Put Approach for Kabel Deutschland on Hold
BASF has no current plans for buybacks, CFO says.
ENI (I like ENI despite the fact that it’s Italian) discovers more gas in Mozambique. BBG
Stoxx 600 changes effective March 18, added: Polymetal, BCP, Telefonica Deutschland, OTE, TalkTalk Telecom, Direct Line Insurance. Removed: SGL Carbon, Postnl, Petropavlovsk, Logitech International, Bankia, Jardine Lloyd Thompson
On the Sequester
The sequester looks very certain to kick in on Friday but investors are turning towards the continuing resolutions. Boehner said overnight that “negotiations are now taking place on the CR to keep the government funded beyond Mar (“Our goal is to make sure the government is in fact funded”) and Politico posted an article discussing how House Republicans are holding a “special” meeting on the matter Wednesday.
Italian general election results have no immediate implications for Italy sovereign ratings .
S&P believes the choices of the next government, once it is mandated by President Giorgio Napolitano, will be a key factor for Italy’s sovereign creditworthiness even though given the significant differences between the largest parties, uncertainties on the direction of policy remain
On the Fed
Chairman Bernanke’s prepared remarks in his semi-annual Humphrey-Hawkins testimony to the Senate Banking Committee suggested that the FOMC leadership remains committed to maintaining monetary stimulus, contrasting with more hawkish signals from the December and January FOMC meeting minutes.
UPS & DOWNS
Vivendi (JPM, Pietro Lo Franco) Transformation plan likely to offset EPS pressure
As highlighted in our alert published yesterday VIV published better than expected FY12 results. However, the potential downside to our 13’ EPS of €1.91 is likely to be slightly worse than initially estimated (closer to -8% than -4%, an implying ANI ‘13E of c€2,350m) partially owing to lower than expected C+ guidance (impacted by new sports rights). Management’s intention to enhance value for shareholders by i) strengthening media and content, and ii) maximising SFR’s value, plus the willingness to dispose (at the right price) of Maroc Telecom and GVT, reinforced (if needed) our view that VIV’s investment story will now essentially be driven by corporate actions. As fears around EPS cuts are now mostly priced-in and corporate actions get closer, we are buyers of the stock, which remains one of our top picks in the sector along with WPP/PUB/REED.
Wienerberger Raised To Buy VS Hold at Deutsche Bank
William Demant Cut To Sell VS Hold at Deutsche Bank
Filtrona PT Raised to 670p VS 540p at Citi, Stays Neutral
Bwin.Party Raised to Neutral VS Sell at Citi
CNP Cut to Neutral VS Buy at Goldman
Enel Removed From Citi Focus List Europe; Kept at Buy
GKN Cut to Neutral VS Overweight at JPMorgan
Buy Cap Gemini, UBS Says After CEO, CFO Roadshow
Terna Raised To Buy VS Neutral at UBS
Snam Cut To Neutral VS Buy at UBS
Go Long H&M, Short Inditex, Societe Generale Recommends
EADS 2012 Ebit EU3.0b, est. EU2.57b.
• 2012 sales EU56.5b, est. EU55.0b
• Airbus 2012 Ebit rose 111% to EU1.23b
• Div: EU0.6 ; Bdvd forecast EU0.63; EU0.45 Y/y
• 2012 FCF pre-ex EU1.4b, net cash EU12.3b
• Net income rises 19% to EUR 1.2b
• Outlook: Targets EU3.5b Ebit before items in 2013 (Bloomberg est. EU3.35b); “moderate” rev. growth, breakeven FCF; EPS of EU2.5 (vs EU2.24 Y/y); aircraft orders of ~700, deliveries 600-610
• Airbus A350 making good progress, still challenging
• 2012 Airbus charges EU522m, including A380 wing crack EU251m, EU124m on A350
• Call: Call 10:30am +44 (0)20 7153 9154 or 877 423 0830
AB InBev 4Q Adj. Ebitda $4.39b; Est. $4.36b
• 4Q organic rev. growth 8.8%; est. 6.2%.
• 4Q organic Ebitda growth 9.9%, est. up 7.1%
• 4Q organic volume decline 0.1%, est. up 0.4%
• 4Q net $1.76b, est. $1.92b
Bouygues reports FY sales EU33.54b vs est. EU33.30b, sees sales sliding to EU33.45b in 2013.
• FY Ebitda EU2.82b vs est. EU2.86b
• Proposes dividend EU1.6/shr vs BDVD forecast EU1.6/shr
• NOTE: Stock down 13% YTD vs CAC industrials up 4.2%; dropped 8% last year vs CAC industrials up 23%
• Conf call 11am CET, +44(0)203-367-9454
Holcim says anticipates increase in sales of cement in 2013 though will be challenging to reach previous year’s level in aggregates, ready-mix concrete, in FY results.
• FY sales CHF21.54b vs CHF21.72b est.
• FY Ebitda CHF3.98b vs CHF4.19b est.
• FY net income attributable CHF622m vs CHF660m net income GAAP est.
• 4Q sales CHF5.35m vs CHF5.52b est.; 4Q net loss CHF161m vs CHF79.3m est.
• For 2013 expects increasing sales volumes and significant growth at operating Ebitda, operating profit level
• Sees higher sales volume in Asia Pacific, N. America, Latin America though is somewhat less optimistic with regard to Europe and Africa Middle East
• Results presentation 12pm CET: www.holcim.com/broadcast
OVERNIGHT MARKETS: MOSTLY HIGHER
Nikkei 225 down -66.10 (-0.58%) at 11,333
Topix down -10.18 (-1.05%) at 956.59
Hang Seng up +79.69 (+0.35%) at 22,599
S&P 500 up +9.09 (+0.61%) at 1,497
DJIA up +115.96 (+0.84%) at 13,900
Nasdaq up +13.40 (+0.43%) at 3,130
Eurofirst 300 down -15.82 (-1.36%) at 1,150
FTSE100 down -84.93 (-1.34%) at 6,270
CAC 40 down -99.41 (-2.67%) at 3,622
Dax down -176.08 (-2.27%) at 7,597
€/$ 1.31 (1.31)
$/¥ 91.88 (91.97)
£/$ 1.51 (1.51)
Brent Crude (ICE) up +0.05 at 112.76
Light Crude (Nymex) up +0.04 at 92.67
100 Oz Gold (Comex) down -4.20 at 1,611
Copper (Comex) up +0.50 at 357.15
10-year government bond yields (%)
CDS (closing levels)
Markit iTraxx SovX Western Europe +5.46bps at 105.13bp
Markit iTraxx Europe +11.35bps at 121.8bp
Markit iTraxx Xover +40.97bps at 473.06bp
Markit CDX IG -0.67bps at 89.46bp
Sources: FT, Bloomberg, Markit