Thursday, 05/12/2016
Synthesis and Analysis
If you don ‘ is dissatisfied with the decline of US indices yesterday, it is nevertheless quite happy to say, unlike previous sessions, that we know with certainty the reason for this weakness. Indeed, the US indices have relapsed last night following a drop of 3 sectors in particular:
- The retail sector in the United States after the bad news about Staples (failure of its merger with Office Depot) and Macy’s (results below expectations). Most of the sector has been impacted including Michael Kors, Nordstrom, Kohl’s and Target.Le sector biotechnology / pharma with Endo which collapsed -12.7%, -6.1% of Vertex, of Biomarin -5.9% to -4.55% Alexion, Regeneron -3.6%, Mylan and 2.8% Celgene, Gilead and -2.65% and -2.3% United Health.
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The sector of biotechnology / pharma with Endo which collapsed -12.7%, Vertex -6.1%, -5.9% Biomarin , Alexion of -4.55%, -3.6% Regeneron, and Mylan 2.8% Celgene, Gilead and -2.65% and -2.3% United Health.
- the media sector with disappointment on the results of Walt Disney Co.
Despite the sharp increase in the price of oil, the the energy sector was not spared even, also succumbing to the ambient gloom. Note that the dollar has lost some color after 6 consecutive up sessions.
US crude stocks
The US crude oil inventories fell last week for the first time since the month of March 2016 when they were expected to rise, those gasoline and distillates fell more than expected.
In detail, crude stocks fell by 3.4 million barrels when the consensus expected an increase of 714,000 barrels. Gasoline inventories have meanwhile dropped by 1.2 million barrels, much more than the 710,000 decline expected.
The reserves of distillates (heating oil included) decreased by 1.6 million barrels. The market anticipated a decline of 1 million. Finally, the refinery capacity utilization rate fell 0.6 points.
Idle automotive
If we talk about the slowdown in the automotive sector in the United States (confirmed yet yesterday’s publication of US stocks), it seems that China is also beginning to know some difficulties.
We have indeed learned that vehicle sales (China) had slowed slightly in April from the previous month. In detail, 2.12 million vehicles were sold in the country in April 2016, detailed the China Association of Automobile Manufacturers (CAAM), an increase of 6.3% year on year. In March 2016, China’s auto sales rose 8.8% to 2.44 million units.
Remember that China is the world’s largest auto market. However the market continues to be driven by the enthusiasm for private cars: auto sales equipped with an engine displacement of less than 1.6 liters were alone soared 12.1% in April on a year to 1.28 million units.
Note that the Chinese market experienced in 2015 a sharp slowdown with sales of 24.6 million vehicles, up only 4.7%. Therefore well below the 14% recorded in 2013 and the growth of almost 7% in 2014. Without government measures late 2015 (reduction of tax on purchases of small passenger cars), we imagine that the decline could be strong .
In order for the progress to be important and that the momentum is not interrupted, it is essential that government support does not stop, failing to impact the entire sector and also foreign manufacturers.
Pressure mounts
It’s not really a surprise, but this is what we feared: Turkey holding his showdown against the European Union . The theme is always sensitive since it relates to migrants.
Turkey has indeed excluded from the Anti-Terrorist legislation as requested by the European Union within the framework of the agreement between Ankara and Brussels for the visa exemption for Turkish nationals.
The Turkish Minister for European Affairs, Volkan Bozkir, said that the change of the Turkish anti-terrorism law was not an element of the agreement on visa-free travel with Europe.
A threat to be taken seriously as an advisor of Turkish President Recep Tayyip Erdogan and member of the Justice and Development Party (AKP) wrote “The European Parliament will discuss the report on the exemption of visas for Turkish citizens, “ending with” If the wrong decision is made, we will send the refugees “….
Worrying.
US Elections: A turning point?
New turning point in the nomination of the Republican Party in the United States since Donald Trump is expected today to Washington, where he will defend his candidacy in the face of Republican lawmakers who invite him to clarify his position and moderate its about to gather a party that some believe in tatters.
Donald Trump must meet especially this afternoon the President of the House of Representatives Paul Ryan (who has not yet officially dubbed the American billionaire since he announced last week that n was not willing to support it immediately), and Reince Priebus, chairman of the Republican national Committee.
If everything had to happen as expected, it is likely that Donald Trump gets the support of any one party and one should not expect the Republican Congress from 18 to 21 July.
The Republicans would be so all in battle order to attack the only “enemy”: Hillary Clinton.
Note that according to the last survey to date (11 May 2016), a Reuters / Ipsos poll shows that 41% of Americans support Clinton against 40% for Donald Trump and 19% are undecided. However, note that this is not the people themselves who vote Nov. 8, 2016.
Today
Today we will closely follow the industrial production in the euro zone, the inflation in France, Sweden and Italy in particular, the rate decision of the bank of England (Boe) and prices to import / export to the United States.
The European indices are expected to open slightly down this morning in the wake of the US closing. Just as the United States is mainly the sectors of distribution, pharmaceutical and energy that should suffer in early trading. However, as we learn for almost 2 months: What is true at the opening is not necessarily at the end.
Asian Trend
The Asian indices are down slightly this morning in the wake of the closure of New York and taking profit on oil prices. The Nikkei however is (slightly) higher this morning. this morning that the current account surplus of Japan is first learned in March was slightly over one year thanks to an improved trade balance, helped by a fall in prices of energy resources. In detail, the balance amounted to 2908.4 billion yen (EUR 23.2 billion), or 193.4 billion from a year earlier (+ 6.94%), driven also by income from Japanese investments abroad, although they fell slightly.
Then, interesting information, according to a summary of the April meeting of the Monetary Policy Committee of the BoJ released this morning, several officials of the Bank of Japan stressed the need to extend the measures of monetary stimulus to achieve an inflation rate of 2%.
At the meeting on 27 and 28 April the Bank of Japan decided to leave its monetary policy unchanged while many investors had anticipated further easing measures. The document notes that this decision was made to allow more time for the central bank to consider the impact on the economy of his decision in January to introduce negative interest rates.
News
Brazilian President Dilma Rousseff is preparing this morning to hand over power to his vice president Michel Temer, after the unavoidable opening of his impeachment trial in the Senate expected at dawn.
The Germans are opposed to 48% to a fourth term of Chancellor Angela Merkel, according to a survey released by the Insa Cicero magazine in view of the parliamentary 2017. Supporters of keeping him at the head of Government 27% and 25% are undecided. If one ignores these, two thirds of respondents want his departure Chancery says Cicero.
Global demand for gold jumped 21% in the first quarter 2016, which open to a near record level thanks to increased interest from financial investors in a growing economic uncertainty, according a report from the World gold Council (CMO).
The United States in April released a budget surplus of $ 106 billion, down 32% year on year, said the US Treasury Department. This surplus is lower than consensus expectations, which predicted it to $ 112 billion. It had been 157 billion in April 2015. Adjusted for calendar effects, the surplus would have amounted to $ 147 billion last month, against 157 billion, adjusted, a year earlier. Since the beginning of the fiscal year on October 1, the deficit totaled $ 355 billion, up 25% compared to 283 billion in the comparable period of the year in 2015. Revenue last month reached $ 438 billion, down 7% compared to April 2015, while expenditures totaled 332 billion dollars.
The former Republican candidate for the US presidential election of 2012 Mitt Romney, opponent of Donald Trump, criticized the refusal of the businessman to make public his tax returns.
The unemployment rate in Latin America will increase to 7% in 2016, reflecting the slowdown in the economies of the region, according to a report by the International Labour Organisation (ILO) and the Economic Commission of ‘UN.
Spain indicated that the launch of its first 50-year bond for 2 years strongly attracted investors. The Treasury sold three billion euros of bonds due in 2066 while it had registered a demand of 10.4 billion euros, said the Ministry of Economy said in a statement.
The huge forest fire that forced the evacuation of the oil city of Fort McMurray and the surrounding area remained out of control. His progress was however hampered by a cooler and wetter.
Energy / Utilities
► “Stop panicking” about “sustainability” and “health” of EDF, exclaims CEO of the French electrician, Jean-Bernard Lévy, in an interview published by Le Parisien / Today in France. Although he admits that the public enterprise debt “is a medium to long-term threat,” Mr. Levy assures that “there is no doubt about the sustainability and health of EDF.”
Price per barrel of
Oil prices were down in Asia this morning as a result of profit taking, after finishing the day with a high of the year thanks to a decline in stocks US crude.
Industrial / Mining / Automotive
► Nissan has entered into exclusive negotiations with Mitsubishi Motors to take a stake of over 30% stake in compatriot, via an investment of about 200 billion yen (1.6 billion euros ) did we learned two people informed of this project. If realized, this operation would make Nissan the first individual shareholder of Mitsubishi, battered the stock market since he admitted last month have exaggerated the fuel endurance of four mini-vehicle models sold in Japan, two in the Nissan brand.
► The Danish government will recommend the purchase of 27 fighter aircraft F-35 at Lockheed Martin, are we taught a three-familiar with the matter.
► Schaffner suffered, as previously announced, a net loss of CHF 0.3 million in the first half of its 2015/2016 fiscal shifted, after a net profit of 1.9 million last year. Profitability and revenues are also down, pushing the group to strengthen its economy measures. Operating profit fell to CHF 0.5 million, from 3.7 million a year earlier, and the margin has shrunk by 3 points to 0.6%. Net sales declined by 9.7% to 92.6 million during the period under review, Schaffner said in a statement. The outlook remains mixed. Revenues and EBITA are expected to improve on the result of the exercise. But because of the costs of reducing expenses, the EBITA and annual net income should be displayed down from the previous year.
► Eurazeo announced an economic turnover up 5.4% in Q1 at constant exchange rates to 962.9 million euros, a net asset value at 71.7 euros Action at 29/04, down 0.9% from the end of 2015.
► Lafarge Holcim generated first-quarter operating profit below expectations and but however, that “all the objectives in 2016 (are) on track.” The restated operating EBITDA decreased by 21.5% to 824 million Swiss francs, compared to the consensus of analysts which gave 935 million. Revenues decreased by 5.5% to 6.1 billion francs, again below the consensus. The group said that “over the year and on a comparable basis, (a) high single-digit growth (is) expected at least for the restated operating Ebitda”
► Lafarge Holcim have also arrested a shortlist of six groups likely to buy Lafarge India, understands the newspaper ‘Mint’ on the basis of indications from two sources close to the file, which it will now be requested firm offer. Some of the suitors would be led to regroup for the second phase. The non-engaging bids were submitted individually, but it seems that some of the selected had planned to form consortia, said one source. CRH could go alone, but duets could be: Blackstone / Canada Pension Plan Investment Board, but also JSW Energy / CVC Capital Partners, Ramco / Carlyle and Piramal / Goldman Sachs.
► Syngenta launched a new biological treatment of seeds, allowing a better seedling development through greater productivity of the soil, the group said. The group plans to make the first sales for soybeans in Brazil and China for corn.
► ArcelorMittal launched a takeover offer for the most expensive portion of its debt, that is to say 1.5 billion bond maturing in June 2019 and posting a initial cost of 9.85%, 10.85% and even now because of an adjustment clause. The steelmaker offers to buy each bond with a face value of $ 1000-1170 $ .
► Givaudan opened new offices and laboratories in Karachi, Pakistan, said the group. This new presence in the country will enable the group to strengthen its capabilities in the beverage material in region, snacks and confectionery.
Financial
► The financial authorities of the State of New York have asked four banks to transmit information about front companies, have we learned from a person informed of this initiative. Among the stressed banks are Goldman Sachs, BNP Paribas, Canadian Imperial Bank of Commerce and Standard Chartered, the source said.
► Zurich Insurance generated in the first quarter 2016 net income attributable to shareholders of USD 875 million, against more than 1.2 billion a year earlier (-28%). Operating profit fell 16% to 1.09 billion USD, said the insurer in a statement. In the first three months, the group achieved a turnover of 17.59 billion USD, down 6% year on year. The combined ratio deteriorated by one percentage point to 97.7%, while equity was packed (-1%) to return to below 31 USD billion. The copy made by the insurer exceeds overall consensus expectations. This one was counting on an average of USD 971 million BOP, a net profit of 749 million and a combined ratio of 98.9%. Only equity disappointed expectations (32.20 billion USD).
► Crédit Agricole SA reported net profit fell by 71% in the first quarter, due to its 25% divestment project in the regional banking group and the restructuring its debt. The bank posted a net profit of € 227 million during the quarter ended in late March, against 784 million euros in the same period of 2015. Revenues decreased 13% to EUR 3.8 billion . “The balance sheet optimization operation aimed by debt restructuring, to reduce the future cost of debt carried by Crédit Agricole SA, has resulted in a negative impact of € 448 million in income on the one first quarter. in addition, the deconsolidation of regional Banks achieved from this first quarter under IFRS 5 has resulted in the lack of recognition of the contribution of regional banks in the first quarter 2016 while allowing the collection of dividends on their 2015 result, “said the bank in a statement. Excluding the sale of the participation in the regional mutuals and exceptional items, underlying profit of Crédit Agricole SA dropped 9%
Information and Technologies
► The US competition authority looks back on the hypothesis of a possible abuse of dominant position on the part of Google in the field of research on the Internet, reports the website Politico , citing sources close to the discussions.
► Vivendi reported a further loss of Canal + in France to 59 million euros, against 50 million in the first quarter 2015, within the scope of the loss of 183,000 subscriptions in the Hexagon. The group displays the overall improvement of 3.3% of adjusted operational, thanks to the dynamism of its activities in Africa where he won 500,000 new subscribers in one year. The performance of the first quarter should not be extrapolated to the rest of the year, however, warned the financial director Hervé Philippe during a conference call, noting that a series of costs for an estimated total of 165 million euros, should weigh on the EBITA. Universal Music Group has meanwhile benefited from streaming offerings of leap that helped offset the sharp decline in legal downloads. In the first three months of the year, Vivendi posted a turnover of 2.49 billion euros, down 1.4% on a comparable basis, while its EBITA increased by 3.6% to 213 million. Adjusted net profit was 99 million, down 27.3% on a reported basis. The market was expecting on average a turnover of 2.56 billion euros, an EBITA of 186 million and an adjusted net income of 113 million.
► The No. 2 Hon Hai will take the lead in Sharp, which plans to eliminate 3,000 jobs (15% of total), as part of its restructuring accompanying its acquisition by Foxconn, according to Japanese press .
► Sunrise recorded a net profit of CHF 7 million, against a loss of 167 million a year earlier. “This improvement is mainly explained by lower interest expense and the end point of extraordinary expenses related to the IPO and refinancing of debt last year,” the company said in a statement. The turnover has declined against 8.8% yoy to 446 million. The increase in subscribers to postpaid mobile deals (+ 6.3%), internet (+ 6%) and TV (25’400 additional subscribers) could not offset declines elsewhere. confirmed the objectives Operationally, the result Adjusted EBITDA increased 1.6% to be fixed at 140 million, thanks to cost optimization policy, in a process of simplification and digitization, said the number two Swiss telecommunications.
consumption
► Adidas announced the early termination of its sponsorship deal with the English football club Chelsea in the summer of 2017, a decision that has enabled it to meet its annual targets, 2016. In total, the boost to profits will be around the amount to “double-digit millions,” it is specified. Adidas now setting up 25% year on year adjusted net profit, that is to say limited to activities intended to remain in her lap, against an increase previously expected in the range of 15 to 18% . The group also shows slightly more ambitious concerning its operating margin should reach around 7%. This indicator was previously expected between 6.6% and 7%.
► Wal-Mart decided to sue the US Visa for the right to impose its customers to enter a PIN when using a payment card immediate debit in its stores.
► Casino announces plans to launch a voluntary tender offer on the shares of Cnova NV ( “Cnova”) held by the shareholders of the float at a price of $ 5.50 per share, or a maximum of c. 196 MUSD. This offer is particularly conditional on the completion of the transaction, mentioned below, projected between Via Varejo and Cnova (consisting of Cdiscount and Cnova Brazil). This price represents a premium of 82% over the last unassigned course.
Pharmaceutical
► Barclays raised its recommendation on Sanofi to overweight from neutral weight
Futures on the US indices move up in the wake of a sharp decline initiated (as we mentioned this morning) by the weakness of the pharmaceutical industries, retail, media and energy. Reversing trend (from negative to positive) we know this morning European indices is to put on the account of the rising price of oil, the fall of the yen against the dollar, but not only.
If yesterday we (re) talking about evolution (much maligned) of the Baltic Dry Index, today it seemed interesting (always a technical side) to analyze the evolution of the indicators annoying and especially the Bull / Bear ratio which might also explain the rise of the day.
If it appears in our daily morning EU as numbers, for those who do not know, this ratio is an indicator of market trends published weekly by Investor’s Intelligence.
This is information obtained directly from professional investors. This index reflects the feeling of professional investors who trade daily on the financial markets.
Logically, therefore, a high ratio indicates a strong bullish sentiment, while a lower ratio indicates that the bears are in majority compared to bulls. In general, the extreme values of this ratio indicate so reliable enough ups and downs of the market with all times questionable timing.
As we said this morning the ratio? Observing investors “optimistic” (Bull) they observed are very close to their levels of … mid-February 2016, the lowest indices before a significant rebound. But we bring a slight downside as investors ‘negative’ (Bear) have not really progressed since last week (+ 3.12% only).
So capitulation of one side but not really of other.
Keep still in mind that historically speaking, reading ratio (Bull / Bear) above 60% is a sign of extreme optimism and a reading below 40 % reflects extreme pessimism. This morning the ratio is 65.22%! ….
As for the Turkish issue we told you about this morning, note that the voltage is still up a notch since the Turkish Minister for European Affairs, Volkan Bozkir, said again that his country respected the 72 criteria set by the European Union (EU) for the lifting of visas for Turkish nationals wishing to enter the EU and it will not modify its legislation terrorism. The EU’s reaction is expected with anxiety and impatience.
In terms of economic data this morning note that industrial production in the euro zone slowed in March for the second straight month. In retail, industrial production fell in March by 0.8% from one month to the other while the consensus was waiting unchanged. In one year, it was up 0.2% against a consensus of + 1.1% …. These figures show that growth in the eurozone in the first quarter weakened late in the period after a month of rejoicing in January.
Finally, we note that the Bank of England held its meeting today and unsurprisingly, interest rates remained unchanged at 0.5%, and it maintained the amount of its bond purchase program to 375 billion pounds. In its quarterly report on inflation and growth, published alongside, the BoE lowered its GDP growth forecast for 2016 from 2.2% to 2.0% for 2017 from 2.3% to 2.2% and for 2018 from 2.4% to 2.2%. Finally, the Bank of England said that the pound could fall and unemployment rise if Britain left the European Union (EU).
! The values to be monitored
– General Motors will invest $ 740 million in its Rosario plant in Argentina in order to produce Chevrolet Cruze II that will be primarily intended for export, announced the manufacturer – For its first year of global availability, the Ford Mustang has become the best selling sports coupe in the world. The applications are very strong for the Pony Car. According to IHS Automotive data, Ford sold about 110,000 Mustang coupes in 2015, overtaking all other sports cars. This record was made possible despite limited availability in key markets such as China and the United Kingdom. In addition, Ford has sold about 30 000 Mustang convertible, which makes the Mustang the best selling sports car in the world
-. The Danish Ministry of Finance recommended the purchase of 27 aircraft F-35 fighter from Lockheed Martin to modernize the air force of the country
-. the New York State financial authorities have asked four banks to transmit information about front companies, have we learned from a person informed of this initiative. Among the stressed banks are Goldman Sachs, BNP Paribas, Canadian Imperial Bank of Commerce and Standard Chartered, the source added
-. The US competition authority focuses again on the assumption of possible abuse of dominant position on the part of Google in the field of research on the internet, reports the website Politico, citing sources close to the discussions. – Wal-Mart decided to sue the US Visa for the right to impose its customers to enter a PIN when using a Debit payment card in its stores. – According to rumors Bayer would consider an offer on Monsanto (up 15% in pre-market) and could pay up to $ 40 billion
– A prototype of electromagnetic propulsion train, size a car, devised by start-up Hyperloop one, managed to reach a speed of 160 km an hour on a very short distance, during a test conducted Wednesday in the US Nevada desert. – Kohl’s announced for its fiscal first quarter ended in late April 2016, a net profit of $ 17 million or 9 cents per share, against $ 127 million and 63 cents per share a year ago. The group posted significant non-recurring expenses of the period ended. Quarterly adjusted EPS totaled 31 cents, below the consensus emerging.
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