European stocks are seen edging up on Thursday, hovering around multi-year highs hit in the previous session, although gains could be limited ahead of rate decisions and statements by the Bank of England and the European Central Bank. The ECB and the BoE both meet on Thursday, and investors will be seeking clues from the former about whether the euro zone’s central bank is moving towards another cut in interest rates. Yesterday night, in the US, the House passed a legislation to avoid a govt shutdown at the end of the month.
Today, we’ll monitor the Spanish auction at 10:30 (3y, 5y and 10y), the BoE (13:00) and ECB (13:45) decisions on rates and the German manufacturing orders (12:00). In the US, we’ll get the jobless claims and the Trade Balance.
SX5E Futures: 2679.00y -4.00. Support at 2669/71 then 2633. Resistance 2701 then 2751. Looks like opening around 2687
Check out this video of Grant “Twiggy” Baker and the Long brothers scoring perfect Ocean Beach.
Former French President Nicolas Sarkozy gave his strongest hint yet that he may consider a political comeback
Italy’s Berlusconi Acquitted in Mediatrade Case, Sole Reports
S&P: revises Portugal outlook to stable from negative; rating still BB
Vodafone: Call Waiting (Lex Column http://on.ft.com/YBgNrR)
MSFT: -0.9% – the EU levied a $732Mln fine against MSFT
SPLS: -7.1% – missed sales, FY EPS guidance lower than estimates
BAC: +3.2% – BBG reported that 6 largest banks expected to return $41B over next 12 months
AEO: -10.1% – missed EPS estimates, lower-than-forecast Q1 EPS guidance
DELL: +1.8% – CNBC’s Faber reported that Icahn has taken a position in Dell approaching 100Mln shares. Another headline from BBG followed, saying that Dell was drawing interest from HPQ and Lenovo as the board is seeking a higher bid.
Delhaize cuts dividend for first time in ten years, 4Q loss EUR 168m
JCDecaux we knew the sales number, EBIT and net is below estimates, sees slight 1Q revenue decline, will trigger some estimates cuts.
Fiat February car sales fell 10% yoy
Aviva FY Underlying Profit GBP1.78b vs GBP1.86b; Div. 9p/Shr; Div. Cut 27%
Linde 4Q Ebitda Misses, Confirms 2013 Forecast of EU4b Ebitda. Ebitda EU967m, est. EU976m; 4Q Ebit EU525m, est. EU545m..
Carrefour 2012 recurring op. inc. EU2.14b, est. EU2.07b. This looks like a solid set of numbers with a beat at the EBIT line. The unexpected dividend increase will please investors. POSITIVE and seems to confirm that Plassat is still moving in the right direction. Still some upside!
• Div. EU58c, BDVD forecast EU52c
• Sees 2013 capex ~EU2.2b-EU2.3b
• Debt down EU2.6b to EU4.32b
• 2012 net inc. group shr EU1.23b vs EU371m
• 2012 recurring op. margin 2.8% vs 2.9% Y/y
• 2012 sales ex-VAT up 0.9% to EU76.8b
• Call 9:30am CET 33 (0)1 70 77 09 40
FTSE Quarterly Review; FTSE100 index changes: Additions: Easyjet (EZJ.LN), London Stock Exchange (LSE.LN). Deletions: Kazakhmys (KAZ.LN) Intu Properties (INTU.LN). Changes effective from the start of trading on 18-Mar
On the Fed
The Beige Book continued to describe activity expanding at a “modest or moderate pace,” in line with January’s characterization. Anecdotes suggest that consumer spending held up relatively well in the face of tax hikes, manufacturing activity improved, and housing sector activity continued to strengthen.
Chinese officials warn against currency wars: “Treating the neighbors as your garbage bin and starting a currency war would not only be dangerous for others but eventually be bad for yourself,” CIC president Gao Xiqing told the WSJ. “I would hope that [Japan] doesn’t do that as a responsible government.” Meanwhile Li Yining, a Peking University professor and delegate to China’s top advisory body said China “doesn’t approve of some countries’ overly accommodative monetary policy”. (Wall Street Journal)(Bloomberg)
S&P raised Portugal’s credit rating outlook to stable from negative, saying European lenders will probably extend support to the government and make the nation’s fiscal tightening “more sustainable”. (Bloomberg)
Investors are selling gold ETFsat a record pace amid the equities rally. ETFs dumped 106 tonnes of bullion in February, the largest monthly outflow on record according to Bloomberg data. (Financial Times)
Deutsche Bank (MS, Van Steenis) Banking Balkanisation: how big a risk are draft US rules?
Risks of subsidiarisation from FBO proposals & German/Liikanen have held us back from DB despite 0.8x valuation. We believe the market underestimates the potential impact of new liquidity rules but think capital allocation is likely navigable. Still prefer CS, BARC, or UBS until clarity.
Galp (GS, Morris) Buy: High impact exploration with attractive valuation: Upgrade to Buy
Galp’s shares have underperformed the sector by 15% since September. The underlying business is performing well however, with exploration upside in Namibia, and the ramp-up in Brazil delivering. We upgrade to Buy with a €14.5 12 month target price.
Antofagasta plc (GS, Hanano): Trading near fair value; upgrading to Neutral
We upgrade ANTO to Neutral (from Sell) following weak recent share price performance. We see the stock trading at close to fair value.
Deutsche Telekom (JPM, Wittig) Incremental concerns make 2014 stabilization unlikely
DT reported a weaker than expected Q4, and recent news flow from some of DT’s key market (including German mobile, NL and Poland) has tended to be unhelpful. We cut our ex PCS EBITDA forecasts by around 2%, taking us a little below guidance and company-provided consensus. Our main concern is the impact of US value plans on service revenues and EBITDA expectations. Based on our detailed cash flow analysis we estimate DT’s ‘available recurring’ free cash flow yield at around 8%.
Adidas Sees 2013 Net Eu890m-eu920m; Analyst Est. Eu946.4m. 4Q Net Loss Narrower Than Est., Rev. Misses, Div. Beats.
Morrison Cut To Underweight VS Neutral at HSBC
UniCredit Raised to Neutral VS Underweight at HSBC
Vodafone Added to BofAML’s Europe 1 List
SAP Raised to Overweight VS Neutral at HSBC
Severn Trent Raised To Neutral at Credit Suisse
Suez Environnement Cut To Neutral VS Outperform : Credit Suisse
Nestle Raised To Outperform VS Neutral at Credit Suisse
Galp Raised To Buy at Goldman
Segro Raised To Buy VS Neutral at Goldman
Lafarge PT Raised 9% to Eu59 at Exane; Kept at Outperform
HeidelbergCement Raised From Underperform at Credit Suisse
Daimler Cut To Neutral VS Buy at Citi
OVERNIGHT MARKETS: SLIGHTLY HIGHER
Nikkei 225 up +37.98 (+0.32%) at 11,970
Topix down -0.78 (-0.08%) at 1,002
Hang Seng down -44.56 (-0.20%) at 22,733
S&P 500 up +1.67 (+0.11%) at 1,541
DJIA up +42.47 (+0.30%) at 14,296
Nasdaq down -1.76 (-0.05%) at 3,222
Eurofirst 300 down -3.07 (-0.26%) at 1,186
FTSE100 down -4.31 (-0.07%) at 6,428
CAC 40 down -13.43 (-0.35%) at 3,774
Dax up +49.02 (+0.62%) at 7,919
€/$ 1.30 (1.30)
$/¥ 93.88 (94.06)
£/$ 1.50 (1.50)
Brent Crude (ICE) down -0.29 at 110.77
Light Crude (Nymex) down -0.15 at 90.28
100 Oz Gold (Comex) up +8.10 at 1,583
Copper (Comex) up +1.40 at 348.80
10-year government bond yields (%)
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.44bps at 101.27bp
Markit iTraxx Europe -0.9bps at 111.47bp
Markit iTraxx Xover -4.3bps at 431.24bp
Markit CDX IG +0.46bps at 83.74bp
Sources: FT, Bloomberg, Markit