1. October 15th, 2012
Weekly Markets
n Perspectives
For important disclosures, refer to the Disclosure Section, located at the end of this report.

2. Weekly Focus
4 weeks after the FED announced QE3, equity The Fed’s latest Beige Book indicated that activity
markets are showing some weakness. Last week, has still “expanded modestly”. However, it
S&P 500 had the biggest weekly retreat since frequently mentioned the ‘fiscal cliff’.
June.
There were some encouraging signs that credit
Bank stocks sold off on JPM/WFC earnings. JPM markets in the periphery are continuing to open
usually sets the tone for the rest of the bank up with some issuers tapping bond markets
earnings season. So, we’ll watch closely market during last week.
reaction to Citigroup, Goldman and Bank of
America’s earnings reports. For the second quarter Equity and bond markets market largely
in a row, S&P 500, (excluding Financials) earnings shrugged off S&P’s downgrade of Spain.
are expected to contract compared to prior year Nonetheless, with regional elections on the
levels. EPS expectations have fallen substantially, October 21st and large redemptions at the end of
especially following Q2 2012 reports. Q3 estimates the month, markets should remain focused in
are 4.6% below June-end levels. Spain.
The IMF published its World Economic Outlook. Galp has released its Q3 trading update.
The global economy is expected to maintain a Production on an entitlement basis rose 4% q/q
sluggish growth rate. Meanwhile, the IMF’s Lagarde and 60% y/y. Refining margins were strong.
backed giving Greece two more years to hit fiscal Natural gas sales increased 26.9% y/y.
targets.

3. EcoFin Meeting – ESM and a Portugal is still complying
Financial Transaction Tax with its program…
• ESM becomes operational - The ESM was ratified • According to the Ecofin: “… good track in
by all the 17 Euro area members. The mechanism implementing policy conditionality and the fiscal
has a capital base of €700bn. The initial impact of the faster than expected rebalancing of
maximum lending capacity will be €500bn; the Portuguese Economy, the Eurogroup conjures
• The ESM should replace the EFSF (European with the agreement reached between the
Financial Stability Facility) and the EFSM authorities and the Troika on revised fiscal
(European Financial Stabilization Mechanism). budgets, in conjunction with the proposed revised
But, during the next 9 months, it will operate recommendation of the Council regarding the
alongside with the EFSF; excessive deficit procedure.”;
• The ESM will only provide financial assistance to • The Eurogroup approved the next tranche of
countries under strictly economic policy support to Portugal (€800mn from the EFSF). This
conditionality; should now allow the Ecofin and IMF to approve
• 11 Member States agreed to back a financial their shares of €2bn (from the EFSM) and €1.5bn,
transactions tax: Belgium, Germany, Greece, respectively;
France, Austria, Slovenia, Portugal, Estonia, • The Eurogroup has welcomed the “government´s
Spain, Italy and Slovakia. active preparation of a return to the financial
markets in 2013”.

4. IMF: WEO points to sluggish growth… were you surprised?
• According to IMF’s latest World Outlook, global
growth is expected to be 3.3% and 3.6% in 2012 July Projections October Projections
and 2013, respectively. This marks a downward Region 2012 2013 2012 2013
revision from 3.5% and 3.9% back in July; World Output 3.5% 3.9% 3.3% 3.6%
• There’s still tail risks for the global economy, such Advanced Economies 1.4% 1.8% 1.3% 1.5%
as the viability of the euro area and possible major US 2.1% 2.2% 2.2% 2.1%
US fiscal policy mistakes; Euro Area -0.3% 0.7% -0.4% 0.2%
Germany 0.9% 1.4% 0.9% 0.9%
• The IMF warned of an high risk of a stronger
France 0.3% 0.9% 0.1% 0.4%
global slowdown given US fiscal issues. In China, Italy -1.9% -0.3% -2.3% -0.7%
the IMF doesn’t see a hard landing. It warned that Spain -1.4% -0.6% -1.5% -1.3%
delays in resolving the Eurozone crisis could see United Kingdon 0.2% 1.4% -0.4% 1.1%
European banks balance sheet contract severely; Japan 2.4% 1.5% 2.2% 1.2%
• Regarding Europe, the report says that “the Canada 2.1% 2.2% 1.9% 2.0%
recession in most of the periphery is increasingly Emerging Markets 5.6% 5.8% 5.3% 5.6%
spilling into other economies in the region”; Russia 4.0% 3.9% 3.7% 3.8%
China 8.0% 8.4% 7.8% 8.2%
• According to the IMF, the OMT program was a India 6.2% 6.6% 4.9% 6.0%
step in the right direction. A moderate pickup is Brazil 2.5% 4.7% 1.5% 4.0%
expected in 2013. Is it a reasonable expectation? Mexico 3.9% 3.7% 3.8% 3.5%
• Regarding the US: “… a modest recovery with Source: World Economic Outlook, October 2012 , IMF
weak job creation continues... although the
housing market is stabilizing…”

5. S&P cut Spain to BBB- Is the euro economy
• S&P downgraded the sovereign 2 notches to BBB-.
The outlook remains negative;
recovering?
• S&P had a higher rating relative to Moody’s • August´s rise in Eurozone industrial points to a
(Baa3/review for possible downgrade) and Fitch less downbeat economy in Q3;
(BBB/Negative); • The 0.6% rise in August was the 3rd monthly
• S&P said that “The negative outlook on the long- increase in the past 4 months;
term rating reflects … the significant risks to Spain’s • Most Eurozone economies recorded monthly
economic growth and budgetary performance, and gains;
the lack of a clear direction in euro-zone policy”; • Nonetheless, key Eurozone business surveys
• How close Spain will get to its growth and budget have been suggesting a economic contraction
targets next year will probably be decisive for S&P; in Q3.
• Moody’s will announce the results of their review
this month. Will Moody´s downgrade Spain to HY?
Spain: NPLs
10% Durable Non-Durable
8% Industrial Production Capital GoodsCons. Goods Cons. Goods
m/m % y/y % m/m % m/m % m/m %
6%
May 1.0 -2.6 1.3 0.5 2.0
4%
Jun -0.5 -2.0 -1.1 0.4 -0.7
2%
Jul 0.6 -2.8 2.0 -0.4 -0.4
0% Aug 0.6 -2.9 0.7 3.9 1.3
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Source: Bank of Spain Source: Eurostat

6. US households confidence China’s exports rose 9.9%
increase to a five-year high y/y in September
• The monthly trade deficit increased to $44.2bn in • Overseas shipments increased 9.9% y/y . The
August, due to a drop in exports and an increase in fastest pace could suggest some encouraging
the value of petroleum-related imports; signs on the external front. Imports rose 2.4%
• Exports fell 1.0% m/m, the second consecutive y/y, leaving a $27.7bn trade surplus, the
monthly decline, as the impact of the global biggest since June 2012;
slowdown feeds through; • China’s M2 gained 14.8% in September.
• The University of Michigan’s measure of US Foreign-exchange reserves rose to $3.29tr at
consumer confidence reached a 5-year high of 83.1 the end of September;
in October. The index is now inching closer to the • Copper imports rose to a 4-month high.
historical average of 85.4; Purchases of iron ore where the biggest in
• Households’ one-year ahead inflation expectations volume terms since January 2011.
fell to a four-month low of 3.1%. China: overseas shipments
(y/y change)
23%
University of Michigan Consumer Confidence (Balances)
Jun Jul Aug Sep Oct 19%
15%
Consumer confidence 73.2 72.3 74.3 78.3 83.1
Present situation 81.5 82.7 88.7 85.7 88.6 11%
9.90%
Expectations 67.8 65.6 65.1 73.5 79.5 7%
Inflation Expectations 1-yr ahead 3.1 3.0 3.6 3.3 3.1 3%
Source: U. of Michigan Survey Research Center 2005 2007 2009 2011 2013
Source: Bloomberg

7. Brazil: Has the easing cycle Bank of Korea, Turkey and
ended? Japan
• Bank of Korea cut interest rates by 25 basis
• The COPOM (Central Bank Monetary Policy
points, from 3% to 2.75%;
Committee) cut the policy rate by 25 basis points
• Instability continues around Turkey and Syria;
to 7.25%. The decision was not unanimous;
• BOJ's Shirakawa said yen strength is hurting
• The post meeting policy statement seems to
exporters. The government downgraded its
point to the end of the easing cycle and an
economic assessment for a third month. Japan’s
unchanged Selic for a prolonged period of time;
Economic Minister said “It’s necessary to take a
• But, the central bank is still concerned with the
proper response on both fiscal and financial
external backdrop…
fronts”.
Brazil's SELIC JPYUSD Exchange Rate
30%
130
25% 120
JPY per 1 USD
110
20%
100
15%
90
10%
80
5% 70
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2007 2008 2009 2010 2011 2012
Source: Bank of Brazil Source: Bloomberg

8. Last week’s market highlights
S&P500: Weekly Returns
• Last week, S&P 500 had the biggest weekly retreat 4%
3.73%
1.94%
since June. All 10 sectors in the index fell. AMD cut 3%
2.03%
1.71%
2.23%
2% 1.30% 1.07% 1.41%
sales forecast. Alcoa reduced its global aluminum 1% 0.43%
0.16% 0.36%
0.87%
0%
outlook. IMF reduced its global growth estimate for -1% -0.58% -0.55% -0.50% -0.38%
-0.32%
2012. Apple showed a third straight weekly loss; -2% -1.33%
-2.21%
-3%
• Brent oil price remains in focus due to increasing -4%
-3.02%
6-Jul
1-Jun
8-Jun
15-Jun
22-Jun
29-Jun
3-Ago
10-Ago
17-Ago
24-Ago
31-Ago
13-Jul
20-Jul
27-Jul
7-Set
14-Set
21-Set
28-Set
5-Out
12-Out
Middle East tensions. Europe could tighten sanctions
on Iran, because of the country’s nuclear program. Brent
Moreover, There’s heightening fears that Syria's civil 130
120
war would drag in Turkey. Last Friday, the International 114.64
USD per Barrel
110
Energy Agency reduced its forecast for global demand, 100
saying slower economic growth may limit fuel 90
consumption; 80
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
• STMicroelectronics (STM FP) shares rose after the STMicroelectronics
company said that it is evaluating a breakup of its 5.50
analog business from its digital assets. It may lead to 5.00
the sale of its struggling mobile-phone chip business. 4.673
Price in €
4.50
A final decision could come before year-end. The
4.00
company plans to announce Q3 earnings on October
23rd. 3.50
June-12 July-12 August-12 September-12 October-12
Source: Bloomberg

9. What we are watching this week:
CALENDAR - Event Date (GMT) Hour Survey Prior
• China will release a lot of economic CPI Y/Y, China 10-15-2012 02:30 1.90% 2.00%
data: CPI (today), Q3 GDP, retail sales Industrial Production MoM, Japan
General Government Debt, Italy
10-15-2012
10-15-2012
05:30
09:30
Not Available
Not Available
-1.30%
1,967.5B
and industrial production (all Empire Manufacturing, US
Advanced Retail Sales, US
10-15-2012
10-15-2012
13:30
13:30
-48
0.80%
-10.41
0.90%
Thursday); France issues €7bn in 3, 6 and 12M TB 10-15-2012 14:00 Not Available Not Available
• In the US, retail sales (Sep.) will be CPI Y/Y, UK
Spain issues 12 and 18M TB
10-16-2012
10-16-2012
09:30
09:30
2.10% 2.10%
Not Available Not Available
announced today. It could give some Greece issues €1.25bn in 3M TB
CPI Y/Y, Euro Zone
10-16-2012
10-16-2012
10:00
10:00
Not Available Not Available
2.70% 2.70%
more signs about private consumption Trade Balance, Euro Zone 10-16-2012 10:00 10B 15.6B
Zew Survey Current Situation, Germany 10-16-2012 10:00 11.8 12.6
in Q3; Zew Survey Economic Sentiment, Germany 10-16-2012 10:00 -14.9 -18.2
CPI M/M, US 10-16-2012 13:30 0.50% 0.60%
• This week, Spain will tap again the Bank of Italy Releases Quarterly Economic Bulletins 10-16-2012 14:00 Not Available Not Available
Industrial Production, US 10-16-2012 14:15 0.20% -1.20%
bond market. It could be important for Machine Tool Orders Y/Y, Japan 10-17-2012 07:00 Not Available -3.00%
market sentiment; Bank of England Minutes 10-17-2012 09:30 Not Available Not Available
Retail Sales Ex Auto Fuel M/M, US 10-17-2012 09:30 0.30% -0.30%
• European leaders will hold a two-days Germany issues €5bn in 2Y GB 10-17-2012 10:30 Not Available Not Available
Portugal issues 3, 6 and 12M TB 10-17-2012 10:30 Not Available Not Available
summit in Brussels (starting next German Government Releases Macro-Economic Forecasts 10-17-2012 11:00 Not Available Not Available
MBA Mortgage Applications, US 10-17-2012 12:00 -1.20%
Thursday). Greek Prime Minister Housing Starts, US 10-17-2012 13:30
Not Available
770K 750K
Antonis Samaras expects to agree a Building Permits, US 10-17-2012 13:30 810K 803K
EU Leaders start 2 days Summit in Brussels 10-18-2012 Not Available Not Available Not Available
new austerity package with the troika Spain issues 3, 4 and 10Y 10-18-2012 09:30 Not Available Not Available
France issues 2 ,3 , 4 and 5Y Notes 10-18-2012 09:50 Not Available Not Available
by the time EU leaders meet on Real GDP YoY China 10-18-2012 02:30 7.40% 7.60%
October 18-19th; Industrial Production YoY China
COPOM Meeting Minutes, Brazil
10-18-2012
10-18-2012
02:30
12:30
9.00% 8.90%
Not Available Not Available
• In Portugal, next Friday will be held the Initial Jobless Claims, US
Philadelphia Manufacturing FED, US
10-18-2012
10-18-2012
13:30
15:00
365K
0.4
339K
-1.9
Extraordinary General Meeting for Leading Indicators, US 10-18-2012 15:00 0.20% -0.10%
Bank of Portugal releases Monthly Economic Indicators Report 10-19-2012
shareholders of Teixeira Duarte. Existing Home Sales, US 10-19-2012
Not Available Not Available Not Available
15:00 4.72M 4.82M

10. Next Week Preview: Q3 European results
Next week's key results: Consensus
• The European Q3 results season kicks Monday 15th
H&M September Sales Total sales growth +14% y/y; LFL growth +4%
in this week with several big LVMH Q3 Sales Sales €6.875bn
companies expected to report; Casino Q3 Sales Sales €11.66bn
Tuesday 16th
• Nestle will announce Thursday its 9M Accor Q3 Sales
Roche Q3 Sales Sales CHF11.1bn. Will the company raise its guidance?
sales. The stock is at a all-time high; Rio Tinto Q3 Production
• Roche is expected to report Q3 sales Wednesday 17th
Danone Q3 Sales Sales €5.226bn (+8.8%). Will FY guidance be confirmed?
tomorrow; Diageo
Wartsila
Q1 Trading update
Q3 Results Sales €1.017bn (+19.5%), adj EBIT €104m,
• BHP Billiton and Rio Tinto will release Net profit €71.1m. Order intake €1.09bn.
ASML Q3 Results Revs €1.21bn, EBITDA €360.48mn,
production updates this week; Net income €277.18m, EPS €0.67.
BHP Billiton Production Update
• Besides Nestle, in the consumer TeliaSonera Q3 Results
staples sector, Diageo, SABMiller and Thursday 18th
Valeo Q3 Sales Sales €2.783bn (4.5% y/y).
Danone should announce trading FY 2012 guidance (EBIT) is expected.
Nestle Q3 Sales 9M organic growth of 6.5%, RIG 3.1% and
updates. Will the sector continue to price growth 3.4%.
SABMiller Q2 trading update
show resilience in the current SCA Q3 Results Sales of SEK22.195bn (+6.9%), adj. EBIT SEK2.131bn,
adj. net profit of SEK 1.301bn
environment? Nokia 9M Results Sales €6.971bn, operating loss €266m, net loss €390m,
loss per share €0.11, ASP at €43.20.
• In the European technology sector, D&S sales €3.53bn, non-IFRS operating loss €314m.
we’ll have ASML and Nokia. Nokia is Cairn Energy
Akzo Nobel
Trading Update
Q3 Results Revs €4.28bn, EBITDA €545.91bn, EBIT €367.9m,
obviously a highlight. The company is Tele2 Q3 Results
net income €188.36m, normalised EPS €0.99.
Sales SEK11.073bn (+6.2%), EBITDA SEK3.001bn,
probably still losing market share to EBIT SEK1.315bn, net profit SEK860m.
Friday 19th
Apple and Samsung, driving down Telenor Q3 Results
Yara Q3 Results
earnings. Fortum Q3 Results

11. Next Week Preview: US earnings season
• JP Morgan (JPM) reported Q3 2012 EPS of
Next week's key results: Consensus
$1.40. Capital markets were strong, given
good revenues in investment banking and Monday 15th
fixed income. Mortgage banking was also Citigroup Q3 Results $0.98
strong. Loan balances declined. NII pressure is Tuesday 16th
expected going forward. Wells Fargo (WFC) Coca-Cola Co Q3 Results $0.50
CSX Q3 Results $0.43
reported Q3 2012 of $0.88 vs. consensus of
Forest Labs Q3 Results $0.02
$0.87. Mortgage banking was weaker than Goldman Sachs Q3 Results $2.22
expected and margin pressure was above IBM Q3 Results $3.61
guidance; Intel Q3 Results $0.50
• Bank stocks sold off on JPM/WFC earnings. Jonhson & Jonhson Q3 Results $1.20
This week, Citigroup (Monday), Goldman Mattel Q3 Results $0.99
Sachs (Tuesday) and Bank of America Wednesday 17th
(Wednesday) will report; Abbott Labs Q3 Results $1.28
• AMD cut its sales forecasts, last week. American Express Q3 Results $1.09
Tomorrow, Intel is expected to report its Q3 Bank Of America Q3 Results -$0.01
Halliburton Q3 Results $0.68
results;
• With uncertainty surrounding election results, Thursday 18th
AMD Q3 Results $0.01
the fiscal cliff and global growth, we should
Boston Scientific Q3 Results $0.11
probably expect tepid guidance for 4Q and Source: Bloomberg
2013.

12. Next Week Preview: Economics
• Today, US retail sales should be released (13.30 US Retail Sales m/m
(excl. autos, gas and building materials)
GMT, consensus 0.7% m/m). Higher gasoline 1.2%
1.02%
0.80%
prices and sales of building materials (clean up 0.8% 0.64%
after Hurricabe Isaac) should support the 0.4% 0.30%
0.14%
headline number. Let’s see what we’ll be the 0.0%
effect from the release of the iPhone 5; -0.4%
-0.13% -0.10%
-0.26%
Jan-11 Abr-11 Jul-11 Out-11 Jan-12 Abr-12 Jul-12 Out-12 Jan-13
• In the US, NAHB Index (Oct.), Housing Starts 8
Existing Home Sales
(Sep.) and Existing Home Sales (Sep.) will also be 7
(Millions, Annualised)
7
announced. Homebuilder confidence rose to a 6
six-year high in September. August’s gain in 6
5
4.82
existing home sales could now justify a slight fall. 5
4
Nevertheless, all three indicatores will probably 4
not detract from the underlying upward trend. 3
1999 2001 2003 2005 2007 2009 2011 2013
The US housing market is recovering from the 13%
China GDP
financial crisis... 12%
(y/y change)
11%
• China Q3 GDP should be released next Thursday.
10%
Activity likely remained at a low level, as seen 9%
from the latest oficial and HSBC/Markit PMI 8%
indices. The lack of a decisive domestic policy 7%
7.6%
stimulus should probably keep China growing at a 6%
2000 2002 2004 2006 2008 2010 2012
moderate pace. Source: Bloomberg

13. Charts we are watching
Spain-Germany 10y Government
7% bond yield spread
• Markets are still expecting Spain to request 6%
Yield to maturity
aid. With the ECB liquidity program on standby, 5%
Spain-Germany 10yr Government bond yield 4%
4.18%
spread barely moved after S&P downgraded 3%
Spain’s sovereign debt rating to BBB-. But, will
2%
market's patience slowly run out if they don't
1%
request the aid soon? Jan-11 Mai-11 Set-11 Jan-12 Mai-12 Set-12
Source: Bloomberg
US breakeven inflation rates
3.0% 2.9%
• The breakeven inflation rate components of
2 years 2.7%
both 2-year and 10-year Treasury yields are 2.5%
still higher than they were a few months ago. 2.0%
2.5%
Nonetheless, they have declined after spiking 2.3%
1.5%
when the FED annnounced QE3. With nominal 2.1%
1.0%
short-interest rates at zero, the only way to 1.9%
lower real interest rates is by increasing 0.5% 1.7%
inflation expectations... 10 years (right scale)
0.0% 1.5%
Jan-11 Mai-11 Set-11 Jan-12 Mai-12 Set-12
Source: Bloomberg

14. Disclosure Section
This research report is based on information obtained from sources which we believe to be credible and reliable, but is
not guaranteed as to accuracy or completeness. All the information contained herein is based upon information
available to the public.
The recipient of this report must make its own independent assessment and decisions regarding any securities or
financial instruments mentioned herein.
This report is not, and should not be construed as an offer or a solicitation to buy or sell any securities or related
financial instruments. The investment discussed or recommended in this report may be unsuitable for investors
depending on their specific investment objectives and financial position.
The material in this research report is general information intended for recipients who understand the risks associated
with investment. It does not take account of whether an investment, course of action, or associated risks are suitable
for the recipient.
Investors should seek financial advice regarding the appropriateness of investing in any securities or investment
strategies discussed or recommended in this research report and should understand that the statements regarding
future prospects may not be realized. Investors may receive back less than initially invested. Past performance is not a
guarantee for future performance.
Fincor – Sociedade Corretora, S.A. accepts no liability of any type for any indirect or direct loss arising from the use of
this research report.
Recommendations and opinions expressed are our current opinions as of the date referred on this research report.
Current recommendations or opinions are subject to change as they depend on the evolution of the company or may
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