LCM Dawn Patrol – JPM on LVMH, JPM on Tobacco, MS on SES.

Bonjour,

Stocks to open up today again after the US closed on a all time high on low volumes.  In the US, the S&P managed new closing all-time highs on the lowest non-holiday volume day of the year. Bonds were well bid early in following the bad-is-better retail sales print (-7bps from early high yields). Commodities were leaking lower into the early macro data but as soon as it was confirmed that the US consumer is tapped out – gold, silver, copper, and WTI all started to surge higher. Homebuilders notably underperformed, Utilities significantly outperformed with the rest treading water.

Today: UK inflation, EU CPI, German ZEW. US CPI, industrial production. US earnings: Goldman, J&J, Yahoo, Coca-Cola.

TUESGEAR

sam2

One week with the Samsung Galaxy S4… Well it’s a powerful smartphone. I easily recovered all my data (except the photos, but I didn’t really try) and all my apps. The screen is great, this is the key feature of the S4 over the iPhone5. It’s amazing the clarity and sharpness… The other great features are the camera and Bloomberg on Android. Other than that, well, it’s an excellent phone. I also liked the fact that you can customise every single thing. #mygalaxyS4

NEWS

SKF 2Q NET SK1.08B; ANALYST EST. SK1.03B

Glencore Xstrata to Sell Las Bambas Copper Project in Peru

EU27 June Car Registrations Drop 5.6% Y/y to 1.134m Units

Santander Said to Weigh Buying Commerzbank Stake, Welt Reports

Swedbank 2Q Net Income Falls to SK1.59b From SK3.15b

AngloGold Cuts Output Guidance, to Take Writedown of Up to $2.6b

Rio Tinto 2Q Iron-Ore Output in Line; Raises 2013 Copper Target

Telecom Italia Goes Back to Square One With Spinoff Plan on Hold

Vodafone Said to Plan Kabel Deal Completion as Soon as October

CURRENT STUFF

Spanish PM rejects calls to stand down: Mariano Rajoy rejected what he called efforts to blackmail him into resigning. Political pressure mounted yesterday after Luis Barcenas, the former treasurer of his centre-right People’s Party, gave new testimony before a judge looking into a party finance scandal. Barcenas said he had made payments of €20,000-€25,000 to Rajoy and party secretary-general Maria Dolores Cospedal between 2008 and 2011. (Financial Times)(Wall Street Journal)

Argentina on Monday said it would allow companies to export 20% of oil and gas tax-free provided they invest $1bn over five years. The announcement came on the eve of an expected deal between re-nationalised YPF and Chevron to develop part of the rich Vaca Muerta shale formation. (Financial Times)

Gross raised Pimco rate exposure as yields jumped: “When many investors cut holdings of bonds broadly, Mr. Gross increased mortgage-backed-securities holdings for the $268 billion Total Return Fund to 36% at the end of June from 34% in May, according to data from Pimco’s website released Monday.” (Wall Street Journal)

UPS&DOWNS

LVMH (JPM,  Flouquet) H1 2013 Results preview, changes to estimates and Price Target
LVMH will report H1 13 Results on 25th July after market close, to be followed by a conference call at 9.30 am CET on the 26th (+44 (0) 203 367 9462). We expect H1 Sales up 8% organically, +6% reported to €13,681m and Current EBIT up 2% to €2,713m. This implies Q2 Sales of +9% organically, better than Q1, at +7%, as comps meaningfully ease at all key divisions. Slower revenue growth reducing operating leverage, ongoing sustained marketing expenses and negative mix should continue to put pressure on Group margin in H1. Although Q2 should show an acceleration vs Q1 to some extent, due to the ongoing destocking in W&S and W&J coupled with an ongoing period of transition at LV, the pick up might not be as pronounced as the bulls would hope for. As a result, this set of Q2 numbers may put pressure on the stock and we prefer to remain Neutral at this stage.

Global Tobacco (JPM,  Maile) Interim results to confirm solid trading
As with the Q1 results season, we expect the half year updates from across the sector to again deliver a message of consistent sustainable medium term earnings and dividend growth. Pricing remains the key driver of industry profitability, and in this respect we believe that the firm pricing which was evident in Q1 remained in place through Q2 and will remain in place through the second half of this year and beyond. Share price performance of the sector relative to local market indices has been generally sound in the year to date, with Imperial Tobacco (-15% against the All Share) and PMI (-9% against the S&P 500) the only notable laggards relative to their local indices. We remain of the view that the sector offers good value for the medium term, but within that BAT and RAI remain our top picks.

SES (MS, Rossi) Move to a relative UW
We think short-term guidance is at risk while, in the medium term, the proliferation of satellite launches globally and the rollout of HTS create downside risk. At 9.7x 2013e EV/EBITDA, valuation looks full.

BRITVIC RESUMED AT BUY AT NOMURA; PT 580P
C&C GROUP CUT TO HOLD VS BUY AT BERENBERG
CENTRICA RAISED TO EQUALWEIGHT VS UNDERWEIGHT AT BARCLAYS
DAIMLER RAISED TO BUY VS HOLD AT SOCGEN
DIXONS RETAIL RAISED TO BUY VS NEUTRAL AT NOMURA
ENI CUT TO MARKET PERFORM VS OUTPERFORM AT RAYMOND JAMES
EVRAZ CUT TO SELL VS HOLD AT SOCGEN
HOME RETAIL RAISED TO BUY VS NEUTRAL AT NOMURA
JOHNSON MATTHEY RATED NEW HOLD AT BERENBERG; PT 2,800P
KINGFISHER RAISED TO NEUTRAL VS REDUCE AT NOMURA
KONE CUT TO CONVICTION SELL VS NEUTRAL AT GOLDMAN
LUFTHANSA RAISED TO NEUTRAL VS SELL AT GOLDMAN
MAGNITOGORSK STEEL CUT TO SELL VS HOLD AT SOCGEN
MUNICH RE RAISED TO SECTOR PERFORM VS UNDERPERFORM AT RBC
NYSE EURONEXT RAISED TO OUTPERFORM VS MARKET PERFORM AT KBW
RED ELECTRICA RAISED TO NEUTRAL VS SELL AT UBS
STORA ENSO CUT TO SELL VS HOLD AT NORDEA
SWISS RE CUT TO UNDERPERFORM VS SECTOR PERFORM AT RBC
SWISSLOG CUT TO NEUTRAL VS BUY AT UBS
SYNTHOS CUT TO SELL VS HOLD AT DEUTSCHE BANK
TELEFONICA DEUTSCHLAND RATED NEW HOLD AT DEUTSCHE BANK, PT EU7
TOTAL RAISED TO OUTPERFORM VS MARKET PERFORM AT RAYMOND JAMES
TRAINERS HOUSE RAISED TO SELL VS STRONG SELL AT NORDEA
UMICORE SA RATED NEW SELL AT BERENBERG; PT EU26
VALEO REMOVED FROM CONVICTION BUY AT GOLDMAN; STILL BUY
VEDANTA RESOURCES CUT TO UNDERPERFORM VS SECTOR PERFORM AT RBC

OVERNIGHT MARKETS: UP

Asian markets
Nikkei 225 up +68.79 (+0.47%) at 14,575
Topix up +6.97 (+0.58%) at 1,209
Hang Seng down -15.87 (-0.07%) at 21,287

US markets
S&P 500 up +2.31 (+0.14%) at 1,683
DJIA up +19.96 (+0.13%) at 15,484
Nasdaq up +7.41 (+0.21%) at 3,607

European markets
Eurofirst 300 up +4.47 (+0.37%) at 1,200
FTSE100 up +41.17 (+0.63%) at 6,586
CAC 40 up +23.49 (+0.61%) at 3,879
Dax up +22.04 (+0.27%) at 8,235

Currencies
€/$ 1.31 (1.31)
$/¥ 99.73 (99.85)
£/$ 1.51 (1.51)

Commodities ($)
Brent Crude (ICE) down -0.17 at 108.92
Light Crude (Nymex) down -0.27 at 106.05
100 Oz Gold (Comex) down -4.40 at 1,279
Copper (Comex) unchanged 0.00 at 3.16

10-year government bond yields (%)
US 2.55%
UK 2.34%
Germany 1.57%

CDS (closing levels)
Markit iTraxx SovX Western Europe -0.43bps at 100.2bp
Markit iTraxx Europe +1.64bps at 113.57bp
Markit iTraxx Xover +9.58bps at 455.56bp
Markit CDX IG +1.12bps at 86.56bp

Sources: FT, Bloomberg, Markit

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s