LCM (short) Dawn Patrol – 16.04.13 – Bombs in Boston, Danone, LVMH,

Bonjour,

You can see past patrols here: https://lcmdawnpatrol.wordpress.com/. Again, all feedback is welcome.

Markets to open lower on US terror attacks, gold and commos sell off and worries about the Chinese growth and the ongoing European crisis. We should focus on the ZEW and Q1 numbers of LVMH and Danone. Hearing LVMH -2%, Danone +2%.

SX5E Futures: 2564.00y -9.00. Support at 2541 (intra day gap) then 2524 & 2509. Resistance 2556 then 2578

TODAY
10:30 UK CPI, 11:00 EZ CPI, 11: ZEW, 14:30 US CPI and Housing starts.
Numbers from Danone, LVMH, Coca Cola, J&J, GS, Intel and Yahoo!

NEWS

Two powerful bombs exploded near the finish line of the Boston Marathon on Monday afternoon, killing three people, including an 8-year-old child, and injuring more than 100… (New York Times)

Spot gold fell as much as 1.9% to $1,325/oz and gold futures for February 2014 deliver fell as much as 10% in Tokyo. (Bloomberg)(Financial Times)

Russian President Vladimir Putin urged the govt to come up with a plan to revive the flagging economy after a minister warned that a recession is possible as cos. cut investment and export demand wanes

Merkel cites risk of credit crunch in weaker euro countries BBG

Givaudan 1Q sales CHF 1.09bn vs. consensus CHF 1.12bn

LVMH in line overall, disappointing in fashion and leather, strong in Cognac. Could put pressure on the stock.

Telefonica said to spend part of the USD 3bn trapped in Venezuela. BBG

Rio Tinto attributable iron ore output 48.3MT vs. consensus 47.7MT

EDF, GDF Suez. France is considering selling stakes in the two companies, potentially raising up to EUR 4.2bn. Reuters

LVMH 1Q rev. EU6.95b, est. EU6.95b.
• 1Q organic rev. growth up 7%, est. up 8% (median of 11), in 4Q up 8%
• Continued at start of 2013 to perform in line with trends of 2H 2012 with strong growth in Asia, U.S., Europe has “good resistance despite a challenging economic environment”
• Fashion & Leather Goods 1Q organic sales up 3%, est. up 5% (median of 11)
• Wines & Spirits 1Q organic sales up 7%
• Perfumes & Cosmetics 1Q organic sales up 5%
• Watches & Jewelry 1Q organic sales up 2%
• Selective Retailing 1Q organic sales up 17%

Danone 1Q LFL sales up 5.6%, est. up 4%.
● 1Q total rev. EU5.34b, est. EU5.34b
● 1Q vol. up 3%, est. up 2.6%
● 1Q FX impact down 2.4%, est. down 1.8%
● Confirms 2013 outlook

CURRENT STUFF

JPMorgan to be faulted over Madoff: The Office of the Comptroller of the Currency is expected to issue a cease-and-desist order against JPMorgan for failing to conduct adequate due diligence and report suspicious activity relating to Bernie Madoff’s activities, according to a person familiar with the matter. (Reuters)

In Privacy-Loving France, Ministers Disclose Assets The French premier and his 37 ministers disclosed their assets—an unusual exercise in a country where the political class has long resisted measures to increase transparency.

STRATEGY

UPS&DOWNS

European Semiconductors (JPM, Deshpande) 1Q13 Preview: Choppy data. Share price pull-back creates opportunity
Though there have been some softer data points such as the ISM readings, inventory is likely to continue to decline in 1Q13, i.e. it has peaked, orders are improving & the euro and sterling are weaker. We believe investors should use pull-back to build positions in our top picks, ASML and Infineon.

Retailing – Food (MS, Aubin) Space Race not Over Yet
Given likely further compression of return on capital invested for the sector over the next two years, we view the UK food retail sector as unattractive at current valuations. We remain Underweight Tesco and Morrisons, and believe that Overweight-rated Sainsbury is the only share worth owning.

AB FOODS CUT TO NEUTRAL VS OUTPERFORM AT CREDIT SUISSE
AB INBEV PT RAISED TO EU75 FROM EU67.50 AT ING
AKZONOBEL RAISED TO BUY FROM HOLD AT ING
ARKEMA CUT TO HOLD VS BUY AT BERENBERG
C&W COMMUNICATIONS RESUMED AT NEUTRAL AT JPMORGAN; PT 43P
CARL ZEISS MEDITEC CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
DANONE RATED NEW HOLD AT INVESTEC, PT EU55
DERWENT RAISED TO OVERWEIGHT AT MORGAN STANLEY
DSM RAISED TO BUY VS HOLD AT BERENBERG
ELISA RAISED TO HOLD VS SELL AT BERENBERG
ERICSSON AND INFINEON ADDED TO UBS’S MOST PREFERRED LIST
GKN CUT TO EQUALWEIGHT VS OVERWEIGHT AT BARCLAYS
GURIT RAISED TO NEUTRAL VS SELL AT UBS
HANDELSBANKEN RAISED TO HOLD VS SELL AT DEUTSCHE BANK
LANXESS CUT TO HOLD VS BUY AT BERENBERG
MAERSK RAISED TO STRONG BUY VS BUY AT NORDEA
NESTLE RATED NEW HOLD AT INVESTEC, PT CHF69
SARAS RAISED TO BUY VS SELL AT SOCGEN
SYNTHOS CUT TO SELL VS HOLD AT ING
TELEFONICA DEUTSCHLAND HOLDING CUT TO NEUTRAL VS BUY AT CITI
TELENET CUT TO HOLD FROM BUY AT ING
UNITE RAISED TO BUY VS ADD AT NUMIS
VOZROZHDENIE RAISED TO BUY VS NEUTRAL AT BOFAML

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