Little New York

GLOBAL EQUITIES RESEARCH

According to Alan Greenspan U.S. economic growth may resume at a faster rate than most economists forecast. Gross domestic product shrank at a 1 percent annual pace in the second quarter after a 6.4 percent slump in the first three months of the year. “We may very well have + 2.5 percent in the current quarter,” Greenspan said. According to him, the main reason is there has been such an extraordinarily high rate of inventory liquidation that the production levels are well below consumption.”

The 3.6% MoM increase in the US pending home sales index in June is the fifth gain in as many months. This latest improvement takes the index not just back above the level seen before the collapse of Lehmans last September, but to a two-year high. At face value, the index is now at a level consistent with existing home sales rising from 4.9m in June to around 5.3m. Overall, yet more evidence that the housing market has turned the corner.

A sharp fall in US personal income in June was to be expected given that incomes were temporarily boosted by the fiscal stimulus in both April and May. Excluding those Social Security payments, incomes fell 0.1% in June after a similar decline in May.

US personal spending rose by 0.4% m/m in June as consumers dipped into their savings. The saving rate fell back to 4.6% from the 15-year high of 6.2% in May. Spending may increase in July and August due to the government’s “cash for clunkers” program, which has spurred thousands of Americans to trade in old cars for newer vehicles,

Treasury will detail this afternoon, the mix of securities that it intends to offer for sale in order to meet its $406 Bn requirements.. The borrowing estimate is $109 billion less than estimated three months ago. The decrease is due to $ 70 Bn repayment of bank bailout funds and less investment than expected in Fannie Mae and Freddie Mac. For the October-December quarter, the government is expected to borrow $486 billion, the government said. In the three months ending June, the government borrowed a total of $343 billion. Meanwhile, Treasuries fell out of favour after starting the session in higher ground. The benchmark 10-year Note shed some 12 ticks, which pushed its yield back toward 3.67%

Today Euro-zone retail sales (09.00 GMT) probably increased in June, adding to signs that the overall rate of economic contraction eased in Q2. The sharp drop in inflation should have boosted sales volumes and the recent pick-up in consumer confidence also points to some improvement in spending. Accordingly, sales should rise by about 0.3% on the month.

ECONOMIC DATA WITH IMPACT


Euro-Zone PMI services – July – (08.00 GMT) : exp 45.6 / prev 45.6

UK PMI Services – July – - (08.30 GMT) : exp 51.8 / prev 51.6

UK industrial production -June – (08.30 GMT) : exp 0.0% / prev –0.6%

Euro Zone Retail sales -June -(09.00 GMT) : exp + 0.3% / prev –0.4%

US MBA Mortgage applications – July 31 -(11.00 GMT) : prev –6.3%

US ADP Employment change – July -(12.15 GMT) : exp –350 K / prev –473 K

US ISM Non-Manufacturing composite index – July -(14.00 GMT) : exp 48.0 / prev 47.0

US Factory orders – June -(14.00 GMT) : exp –0.8% / prev + 1.2%


POSITIVE IMPACTS

AXA : H1 revenues €48.14bn (€48bn exp) / Underlying profit €2.12bn (€1.86bn exp) / Solvency ratio 133% / Repeated no capital increase needed / Focus on core business / Well positioned to benefit from a mkt upturn / Prepared to withstand a further mkt downturn

SOC GEN : Q2 revenues €5.72bn (€5.55bn e) / Operating €1.61bn (€1.64bn e) / Risk charge €1.1bn (€1.33bn exp) / Q2 writedowns €1.7bn (€840m for MtM CDS used to hedge corporate loan book + €459m negative MtM on its own debt instrument + €397 in writedowns & losses on risky assets (exo) / Tier1 9.5% end-June / Outlook uncertain but some signs that eco activity could stabilize at end-09

ADIDAS : Q2 sales €2.46bn (2.39bn exp) / Q2 operating €72 m (39m exp) / Outlook confirmed

HENKEL : Q2 sales €3.49bn (3.42bn exp) / Adj. Ebit €308m (266m exp) / Unable to give outlook for FY09 but expects good Q3

CARLSBERG : H1 revenue DK 29.4bn (29.61bn exp) / Operating DK 4.4bn (4bn exp) / Cut its FY sales forecasts to DK61bn from 63bn (62.2bn exp) due to Russian market but kept its operating & FCF forecasts

ALLIED IRISH BANK : H1 PT loss €872m (-1.4bn exp) on a €2.37 bn charge for impaired loans (2.2bn exp) / No interim dividend (as exp) / Tier 1 = 7.8% / Market to remain difficult in 2009…

DBK would be close to taking a stake in Luxembourg-based banking group Sal. Oppenheim (Boersen-Zeitung)

ATLANTIA : H1 revenues €1.66 bn, in line / Ebitda €1.03 (1.01bn exp) / Sees 2009 margins substantially stable vs 2008

NEGATIVE IMPACTS

DEUTSCHE BOERSE : Q2 Revenue €515.6m (€537m exp) / EBITDA €248.8m (€281m exp) / EPS €0.89 (€0.98 exp) / Reiterates 09 cost forecast €1.28bn / No decision made on resuming SBB (as expected) / Conf call at 1500 UKT

SWISS RE : Q2 net loss SFR381m (+SFR139m e) / SFR431m charge for effects of own credit spreads / Good CR 89.4% (93.5% e) / Significant progress made in de-risking the legacy portfolio / Confidence in delivering Targets

OMV : Q2 revenue €4.11bn (4.4bn exp) / Clean Ebit €151m (€246m exp) / No FY outlook / In talks with the majority holder of Petrol

Ofisi, Turkey’s leading refined products marketer, to buy its entire 54.2% stake.

LLOYDS : H1 revenue (pro forma) £11.94bn (£11.34bn exp) / Loss before tax £3.96bn (£7bn exp) / Impairments £13.4bn / Separately Bank of NY is in talks to buy most of Lloyds’s Insight Investment Management unit, in a deal that could be valued at £250m (FT)

DAIMLER : Creditors of Chrysler have asked a U.S. bankruptcy court to allow them to sue Daimler, arguing that the 2007 sale of the U.S. automaker stripped it of its most valuable assets

STANDARD CHARTERED has shelved its plan to raise $1 bn through a listing in India (Financial Chronicle)

L&G’s CEO warned that the value of UK pension savings is threatened with a 10-20% cut under new EU capital rules (FT)

BHP BILITON said China had finished rebuilding its iron ore stockpiles and port stocks were starting to settle back to more normal levels

UCB : Blockbuster prescription drugs used to treat rheumatoid arthritis and other conditions can raise the risk of potentially deadly cancer in children and teenagers (U.S. health regulators)

TRADING IDEAS


BUY DEUTSCHE BANK / TOTAL / NOKIA / GSZ / EXXON / NEW MONT MINING on reversal head & shoulder

BUY AIR FRANCE to play restructuring plan to be set up in September + Pitot plane speed sensor will be switch in the next three weeks as European regulation is asking + eco picking up

BUY YAHOO on double bottom possibility


BUY PEUGEOT / SELL DAIMLER // BUY IBERDROLA / SELL VEOLIA // BUY CARREFOUR / SELL L OREAL // BUY GLAXO / SELL ASTRA

BUY VISA / SELL MASTERCARD // BUY EXXON / SELL CHEVRON // BUY AMD / SELL INTEL // BUY BIOGEN / SELL AMGEN


BROKER METEOROLOGY


PEUGEOT RAIDED TO NEUTRAL FROM UNDERWEIGHT BY JP MORGAN

RENAULT RAIDED TO NEUTRAL FROM UNDERWEIGHT BY JP MORGAN

VALLOUREC RAISED TO OVERWEIGHT FROM EQUAL BY MORGAN STANLEY

CNP RAISED TO OUTPERFORM FROM MERKETPERFORM BY KBW

KLEPIERRE RAISED TO OUTPERFORM FROM UNDERPERFORM BY BANK OF AMERICA – ML

UNIBAIL –RODAMCO RAISED TO BUY FROM NEUTRAL BY BANK OF AMERICA – ML

STANDARD CHARTERED RAISED TO HOLD FROM SELL BY DEUTSCHE BANK

STANDARD CHARTERED RAISED TO BUY FROM HOLD BY RBS

XSTRATA RAISED TO BUY BY BANK OF AMERICA – ML


MUN RE CUT TO NEUTRAL FROM BUY BY BANK OF AMERICA-ML

INTESA CUT TO UNDERPERFROM FROM OUTPERFORM BY CHEVREUX

BELGACOM CUT TO UNDERPERFORM FROM NEUTRAL BY BANK OF AMERICA ML

DSM CUT TO NEUTRAL FROM OUTPERFORM BY EXANE


DATA


WTI : 71,5 (0,49 %)

Eur/$ : 1,4407 (-0,01 %)

$ /Yen : 94,98 (0,28 )

10 Yr US : 3,67 ( -1,36 bp)

10 Yr Euro : 3,35 ( 0,2 bp)


Indices : US close ; Europe close

SOX : 0,07 %;-0,02%

S&P :0,30 %; -0,01 %

DOW: 0,36%; 0,01 %

NAS :0,13%; -0,16%

DJ Stoxx US Sectoral Indices : US close ; Europe close

BASIC MATERIALS : 0,13 %; -0,02 %

ENERGY : -0,31 %; -0,34 %

FINANCIAL : 2,09 %; 1,12 %

HEALTHCARE : 0,04 %; -0,28 %

TECHNO : -0,11 %; -0,34 %

TELECOM : -0,02 %; -0,52 %

INDUSTRIAL : 0,54 %; 0,12 %

UTILITIES : -1,00 %; -1,13 %

TO BE COMING

Today

Results :Soc Gen (BMO) / Axa / Fortis / Adidas / Allied Irish Bank / Swiss Re / Prudential / Lloyds / Carlsberg / OMV / Henkel / Activision Blizzard / Cisco Systems / Procter & Gamble

Dividend :Thomas Cook (GBp 4,166667) / Alcoa ($ 0,03) / Boeing ($0,42) / Intel ($ 0,14) / Pfizer($0,14) / Pfizer ($0,16) / Schering-Plough($0,065)

Events :

Thursday

Results : Deutsche Telekom / Portugal Telecom / Telecom Italia / Aviva / Delhaize / Commerzbank / KBC interim / Zurich Financial / Hannover Re / Ladbrokes / Unilever / Altana sales /CBS/ Comcast / El paso / AIG

Dividend : IBM ($0,55)

Events: American Superconductor AGM / Barclays General Meeting / British Airways General Meeting in relation to issue of £350,000,000 5.80 per cent Convertible Bonds due 2014

Friday

Results : Allianz / Fugro Hypo Real Estate / Logica /

Dividend :

Events :

Monday

Results : Clear Channel

Dividend :

Events:

Tuesday

Results :Adecco / Friends Provident / Geberit / Intercontinental Hotels / Renewable Energy / International Power / Applied Materials

Dividend : Applied Materials ($0.06) / Wyeth ($0,3)

Events:

ECONOMIC DATA PREVIEW

Today in the United-States, watch the releases of the ISM non-Manufacturing (15.00 GMT) in July that is expected up at 48 from 47 in June after the ISM Manufacturing that shrank less than expected on Monday.

Have a look at the the release of the ADP survey on private employment for July (due at 13.15 GMT) expected to contract at a slower pace : 350 000 jobs cuts expected in July from 473 000 jobs cuts in June.

Watch the factory orders (15.00 GMT) for June expected down 0.8 % after a 1.2 % rise in May

In Europe, keep an eye on the Retail sales in June expected up 0.3 % after a 0.4 % decline in May.

ECONOMY

United States: Personal income and spending in June

The US personal income fell more than expected in June by 1.3 % (-1.0 % expected) after a 1.3 % rise in May. This decline was to be expected given that incomes were temporarily boosted by the Obama administration ’s stimulus plan in both April and May and because the wages and salaries continued to drop (-0.4 %) as employment continued to deteriorate. In June, the personal spending climbed 0.4 % (from +0.1 % in May) because consumers dipped into their savings. The saving rate fell back from the 15-year high of 6.2 % in May to +4.6 % in June. Adjusted for inflation, the purchases retreated 0.1 %. In June, the prices increased less than in the same period last year. The inflation gauge tied to spending patterns dropped 0.4 % from June 2008, the biggest decrease on records (1960). The PCE deflator ex food and energy rose 1.5 %, the smallest gain since 2003.

United States: the pending home sales increased sharply in June

The US pending home sales unexpectedly rose 3.6 % in June (+0.7 % expected) after an upward revision of 0.8 % the previous month. From a year ago, the number of contracts to buy previously owned homes climbed for the fourth consecutive month by 9.4 % in June (+5.4 % in May) or the highest level since December 2004 ! The decline in home values and tax incentives, put houses within reach of first-time buyers and stabilized the real-estate. But it may be months before a sustained recovery in housing market because of the rising in unemployment and the mortgages rates that are no longer dropping.

Eurozone: The PPI fell in June

The European producer prices declined the most in at least 28 years from a year ago in June or –6.6 % (as expected) from a revised 5.9 % drop in May. That was the biggest decline on records (January 1981) and the prices have fallen every month of 2009 from the year-earlier period led by the drop in oil prices and the recession that kept pressure on manufacturers to charge less. In a monthly basis, the prise slightly rose 0.3 % in June from a revised 0 % the previous month.