1. October 22nd, 2012
Weekly Markets
n Perspectives
For important disclosures, refer to the Disclosure Section, located at the end of this report.
2. Weekly Focus
At last week’s European Council meeting EU some important companies, including bell-
leaders leaved many important issues on banking weather General Electric, disappointed investors.
union unanswered. Was there some unofficial 84 S&P 500 firms reported Q3 earnings during
discussion of MoU conditionality regarding a last week. Next week will probably be critical in
possible financial aid for Spain? assessing Q4 outlook as many Energy, Tech and
Industrial companies are expected to report.
In Portugal, the 2013 Budget draft was presented
to Parliament. The government will implement Euro-zone trade data for August together with
fiscal tightening measures worth 3.2% of GDP. August’s industrial production seems to suggest
that GDP growth in Q3 could be a positive
Moody’s concluded a 4-month plus review period surprise.
and kept Spain’s investment grade rating. S&P
downgraded 11 Spanish banks. According to latest China’s 3Q GDP rose 7.4% y/y. China’s growth
news, Spain seems to be more comfortable making rate is still slowing down. However, the
a request for a credit line only in order to satisfy September macro data could suggest some
the conditions of the ECB to begin buying bonds. stabilization.
Markets started the week on a positive note The Philly Fed index was back into positive
driven by Citigroup´s earnings beat and a stronger- territory for the first time since April. US housing
than-expected US retail report. However, Last continues to surprise to the upside. September’s
Friday, S&P 500 dropped the most since June as inflation rates were in line with the Fed’s target.
3. Portugal: 2013 Budget draft was presented to Parliament
• Tax increases should raise €4.3bn. Expenditure • Pensions, unemployment rates and grants to
cuts should bring savings of €1bn, including a foundations will be reduced;
planned 50% cut in temporary civil-service jobs; • Protests mounted in front of the parliament
• The government will implement fiscal tightening against the new austerity measures;
measures worth 3.2% of GDP; • The budget is creating instability inside the
• GDP is seen falling 3.0% in 2012 and 1.0% in centre-right coalition that governs Portugal;
2013. The amount of fiscal tightening required by • Will it be more difficult for the government to
the Troika is huge. Growth will likely continue to implement further tightening or to continue
surprise on the downside; with structural reforms?
• Tax increases will include higher income and
corporate taxes, an increase in the capital gains Portugal: Budget Forecasts
2012 2013
tax (from 25% to 26.5%) and higher property
taxes. A financial transaction tax could also be 5.0%
4.5%
introduced;
• Income tax brackets are reduced from 8 to 5. A
4% surcharge levy will be introduced on all
incomes and an additional 2.5% surcharge will
apply on the highest bracket; -1.0%
• A new tax over luxury real-estate will be -3.0%
implemented. Houses with a value higher than GDP growth Budget Deficit
$1mn will have to pay an additional tax; Source: 2013 Budget draft
4. Bank of Portugal releases Galicia and Basque Country Hold
monthly economic indicators elections to the Parliament
• For the market it was a key political event for
• In September 2012, the monthly coincident
Spain. According to consensus, it could have an
indicator for the year-on-year evolution of the
influence on the timing of the Spanish request
economic activity increased. The coincident
for help;
indicator for the evolution of private
• Meanwhile the constitucional clash in Catalonia
consumption increased too;
is ongoing. The Catalan parliament approved a
• In the three-month period ended in August
motion to hold a referendum on independence
2012, the retail turnover index fell 6.3%, in real
from Spain. The Spanish government intends to
year-on-year terms (-6.7% in Q2 2012);
stop any consultation;
• In the 3rd quarter of 2012, sales of light
• Catalonia is not happy with the inter-regional
commercial vehicles dropped 55.5% y/y (-57.4%
fiscal transfers´mechanism.
in Q2 2012). Sales of heavy commercial vehicles
declined 10.2% (-50.2% in Q2 2012). Cement
sales of national firms to the domestic market
fell 31.5% y/y (-29.7% in Q2 2012);
• In August, the annual growth rate of loans
granted to the resident non-monetary sector
(excluding General Government) by resident
banks was -4.2%, 0.2pp lower than the rate
observed in the previous month.
Source: Centre d´Etudis d’Opinion
5. Moody’s keeps Spain’s rating Spain: NPL ratio reached
at Investment Grade 10.51% in August
• Tuesday evening, the Moody’s ratings agency • Non-Performing Loans increased 3.1% m/m
announced that it kept the Spanish sovereign (+39.7% y/y) to €178.6bn in August and reached
rating at Baa3. The rating was kept on negative the highest level since Bank of Spain started to
outlook; collect data in 1962;
• The negative outlook reflects that the "risks to its • Spanish banks’ government bond holdings fell to
baseline scenario are high and skewed to the €243.8bn in August, still 6.7% of total assets;
downside“; • The economy is still deleveraging. Loan volumes
• The ratings agency sees significant risks to the decreased to €1,699bn. They are at August 2007
economic outlook in Spain; levels.
• Moody’s expect the country to ask for an 12% Spain: Non-performing loans 35%
enhanced conditions credit line from the ESM as 10% 10.51% 30%
a prerequisite for the ECB to activate its OMT 25%
8%
program, rather than a full-blown bailout 20%
6% 15%
program;
10%
• The consensus is that Spain would ask for aid 4%
5%
after the regional elections on October 21st. The 2%
3.08% 0%
Eurogroup meeting on November 12th could be 0% -5%
an important date to watch. 2008 2009 2010 2011 2012
NPLs to Total Loans NPLs % monthly change (right scale)
Source: Bank of Spain
6. Euro-zone trade data for BOE: October minutes were
August was healthy released
• It was decided to not expand the asset buying
• Export values increased by 3.7% in August. program. This decision wasn’t unanimous.
Imports rose by 2.1%. Seasonally adjusted Some members felt that there was still
trade surplus reached €9.9bn; considerable scope for assets purchases to
• Net trade should have made a positive provide further stimulus on the economy;
contribution to euro area GDP in Q3; • “… safe-heaven flows into the United Kingdom
• Together with August’s industrial production, had lessened”;
euro-zone trade data seems to suggest that • Headline CPI inflation fell from 2.6% y/y to 2.5%
GDP growth in Q3 could be a positive surprise. y/y in September. This is the lowest level since
Eurozone External EU Trade Balance November 2009.
(€bn) 500
Bank of England
10 9.9
400 Balance Sheet 399.5
5
300
GBP Bln
0
-5 200
-10 100
-15 0
2000 2002 2004 2006 2008 2010 2012 2006 2008 2010 2012
Source: Eurostat Source: Bank of England
7. Not much progress from China’s 3Q increases 7.4%
last week’s European • China’s 3Qfollowing 7.6% growth in in line with
consensus,
GDP rose 7.4% y/y,
2Q;
• Industrial production increased 9.2% y/y in
Council meeting September, compared to 8.9% in August.
• Banking union and fiscal coordination were on Electricity production was up 1.5% y/y in
the European Council’s agenda; September;
• On banking union, the objective to agree on the • Retail sales value increased 14.2% y/y in
legislative framework for the Single Supervisory September, compared to 13.2% in August;
Mechanism by January 1 st, 2013 was maintained.
• China’s growth rate is still slowing down.
But, no agreement on the actual implementation However, the September macro data could
was found; suggest some stabilization.
• With governments’ borrowing costs down, China GDP constant price
European leaders don’t seem to have any sense (Y/Y change)
13%
of urgency;
12% 11.9%
• Moreover, with German federal elections in
11%
September 2013, probably there’s little chance
10%
of any material progress on these issues in the
9%
near future;
8%
• We’ll have to wait until the Ecofin (12th/13th) and 7.4%
nd/23rd) of 7%
the European Council meeting (22 6.2%
6%
November to get more clarity on Greece, Cyprus 2005 2007 2009 2011 2013
Source: Bloomberg
and Spain.
8. US Retail sales rises 1.1% in US CPI in line with the Fed’s
September target
• Even excluding gasoline (+2.5%), autos (+1.3%) • The 0.6% m/m increase in September’s
and building materials (+1.1%), sales rose by an consumer price was due to rise in gasoline
impressive 0.9% m/m; prices. The annual rate of CPI inflation edged
• However, the number has probably been boosted up to 2.0%, from 1.7% in August;
by two temporary effects: the increase in food • Excluding food and energy, core prices
prices due to the recent drought and the release increased by 0.1% m/m. The annual rate of
of iPhone 5; core inflation rose to 2.0%, from 1.9%;
• Industrial Production increased 0.2% m/m, a • So, both inflation rates are in line with the
small reversion of the 0.7% m/m fall in August. Fed’s target.
The manufacturing sector is still struggling, as the Consumer Price Inflation
economic slowdown hits exporters. (annual rate)
6%
5%
4% CPI
US Retail Sales 3%
Jun Jul Aug Sep 2% 2.0%
Retail sales (m/m) -0.7% 0.7% 1.2% 1.1% 1% Core CPI
0%
(y/y) 3.5% 4.0% 5.0% 0.0% -1%
Sales (Ex. Autos, Gas & Buil.) (m/m) -0.2% 0.9% 0.1% 0.9% -2%
-3%
Source: US Commerce Department
2006 2008 2010 2012
Source: Bureau of Labor Statistics
9. US: Regional surveys Leading Indicators rose
improve 0.6% m/m in September
• The Philly Fed index was back into positive • Leading indicators increased 0.6% m/m in
territory for the first time since April. The Empire September, after falling -0.4% m/m in the
State Index also showed some signs of recovery; previous month. The economy is still fluctuating
• Both surveys seems to indicate that the national around a slow growth trend;
ISM could increase in October; • The building permits and financial components
• Conditions for the US industry seems to be offset negative contributions from ISM new
improving a bit. orders and consumer expectations. 6 of the 10
components of the indicator increased last
US Regional Surveys month.
25
Empire State Index
US: Leading Indicators
20
15%
(y/y change)
15
10%
10
5%
5 5.7 2.9%
0%
0
-5%
-5 -6.16 -10%
-10
Philly Fed Index -15%
-15
-20%
-20
-25%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
2008 2009 2010 2011 2012
Source: Bloomberg Source: The Conference Board
10. S&P 500 Earnings Update: Q3 2012 as of October 19th, 2012
• So far, 116 companies have reported Q3 results; • The consensus estimate of the Information
• The average EPS surprise has been 4%; Technology sector’s Q3 2012 EPS fell after
• Excluding Financials, there are fewer positive Microsoft and Google missed earnings and
surprises and more negative surprises; revenue estimates;
• Financials sector’s EPS has been rising since the
start of the Q3 season.
S&P 500 Q3 Earnings Summary as of October 19th, 2012
Number of companies Earnings Suprises Average Q3 Revenues Surprises Average Q3
Reported Total % of Co's Positive Negative In-line Surprise Positive Negative In-line Surprise
Oil & Gas 6 41 14.6% 50.0% 50.0% 0.0% -4.2% 16.7% 83.3% 0.0% -0.5%
Basic Materials 5 26 19.2% 60.0% 40.0% 0.0% -0.8% 40.0% 60.0% 0.0% 0.4%
Industrials 19 75 25.3% 63.2% 36.8% 0.0% 0.3% 36.8% 63.2% 0.0% -0.9%
Consumer Goods 14 57 24.6% 71.4% 28.6% 0.0% 2.6% 35.7% 64.3% 0.0% -0.9%
Health Care 11 46 23.9% 81.8% 18.2% 0.0% 2.6% 18.2% 81.8% 0.0% -1.1%
Consumer Services 18 74 24.3% 77.8% 16.7% 5.6% 2.6% 38.9% 61.1% 0.0% 0.1%
Telecommunications 1 8 12.5% 0.0% 0.0% 100.0% 0.0% 0.0% 100.0% 0.0% 0.0%
Utilities 0 32 0.0% n.m. n.m. n.m. n.m. n.m. n.m. n.m. n.m.
Financials 29 85 34.1% 82.8% 13.8% 3.5% 12.9% 69.0% 31.0% 0.0% 3.3%
Technology 13 54 24.1% 38.5% 61.5% 0.0% -2.8% 38.5% 61.5% 0.0% -1.9%
S&P 500 116 498 23.3% 69.0% 28.5% 2.6% 4.0% 42.2% 57.8% 0.0% 0.2%
S&P 500 ex. Financials 87 417 20.9% 64.4% 33.3% 2.3% 0.0% 33.3% 66.7% 0.0% 0.8%
Comparative Data (full earnings season)
Q2 2012 69.4% 29.8% 0.8% 3.8% 41.8% 58.0% 0.2% 0.1%
Source: Bloomberg
11. Last week’s market highlights
• Shares of Google lost 8% last Thursday, after
disappointing number that came hours ahead of
schedule. Google issued a statement blaming R.R.
Donnelley & Sons, its filing agent. Core Google q/q
revenue growth was 4.7%. Core Google q/q advertising
revenue reached 2.1%. Google web sites revenues were
driven by weakness in international and FX;
• Nokia’s cash performance was weak in Q3. Net cash Nokia share price (€)
decreased by €633m. Excluding the quarterly cash 4.0
payment from Microsoft, it fell by €835m. Devices
3.0
remain fragile but NSN is showing a better performance;
2.0 2.104
• Citigroup unexpectedly announced that Vikram Pandit
was stepping down as CEO. Mike Corbat, most recently 1.0
Jan-12 Mar-12 Mai-12 Jul-12 Set-12
CEO of Citi’s EMEA business, has been elected as the new
CEO;
• Last Friday, S&P 500 fell -1.7%, the most since June, as
General Electric (-3.4%), McDonald’s (-4.5%) and
Microsoft (-2.9%) disappointed investors. Advanced
Micro Devices sank 17%, its biggest drop in 4 years. The
company said Q4 sales will miss analysts’ estimates. AMD
will reduce 15% of its staff. Source: Bloomberg
12. What we are watching this week:
CALENDAR - Event Date Hour (BST) Survey Prior
• HSBC Manufacturing PMI for China Bank of Japan minutes (of Oct 5 monetary policy meeting) 10-22-2012 Not Available Not Available Not Available
will be released Wednesday. Euro-Zone Consumer Confidence 10-23-2012 15:00 -25.9 -25.9
France INSEE manufacturing survey (Oct) 10-23-2012 07:45 90 90
September’s PMI was 47.9. A higher Ireland European Court of Justice (to hear Irish ESM case) 10-23-2012 Not Available Not Available Not Available
Canada monetary policy decision 10-23-2012 Not Available Not Available Not Available
value should probably be well BoE's Governor King speech 10-23-2012 Not Available Not Available Not Available
Richmond FED Manufacturing, US 10-23-2012 15:00 4.0 4.0
received; HSBC flash Manufacturing PMI, China (Oct) 10-24-2012 02:45 Not Available 47.9
• Many survey indicators will be Germany issues 10Y, GB 10-24-2012 Not Available Not Available Not Available
PMI Manufacturing, France 10-24-2012 08:00 44.0 42.7
released this week in Europe. PMI Services, France 10-24-2012 08:00 45.4 45.0
PMI Manufacturing, Germany 10-24-2012 08:30 48.0 47.4
Following the trade data and PMI Services, Germany 10-24-2012 08:30 50.0 49.7
IFO - Business Climate, Germany (Oct) 10-24-2012 09:00 101.6 101.4
industrial production positive PMI flash Manufacturing, Euro-Zone (Oct) 10-24-2012 09:00 46.5 46.1
PMI flash Services, Euro-Zone (Oct) 10-24-2012 09:00 46.4 46.1
surprises for August, some recovery ECB's Draghi meeting with German lawmakers in Bundestag 10-24-2012 Not Available Not Available Not Available
is expected for those indicators; MBA Mortgage Applications, US
Markit US PMI Preliminary
10-24-2012
10-24-2012
12:00
Not Available
Not Available
51.5
-4.20%
Not Available
• In the US, regional surveys and New Home Sales, US
US FOMC monetary policy decision (statement at 7.15pm BST)
10-24-2012
10-24-2012
15:00
19:15
385K
0.25%
373K
0.25%
housing indicators should be Euro-Zone M3 s.a. YoY (Sep) 10-25-2012 09:00 3.0% 2.9%
Sweden Riskbank monetary policy meeting 10-25-2013 Not Available Not Available Not Available
released during the week; Preliminary GDP YoY, United Kingdom (3Q12) 10-25-2012 09:30 -0.5% -0.5%
Durable Goods Orders US 10-25-2012 13:30 6.80% -13.20%
• A two-day FOMC meeting concludes Inital Jobless Claims, US 10-25-2012 13:30 371K 388K
Pending Home Sales MoM US 10-25-2012 15:00 2% -2.60%
on Wednesday. No further policy Kansas City FED Manufacturing, US 10-25-2012 16:00 5 2
stimulus announcement is expected; GfK Consumer Confidence Survey, Germany 10-26-2012 07:00 5.9 5.9
Nationwide CPI, Japan (Sep) 10-26-2012 Not Available Not Available Not Available
• The Q3 earnings season will begin Korea prelim. real GDP (3Q12) 10-26-2012 Not Available Not Available Not Available
Mexico monetary policy decision 10-26-2012 Not Available Not Available Not Available
this week in Portugal with Portucel Consumer Confidence Indicator, France 10-26-2012 07:45 84 85
Unemployment Rate (Survey), Spain 10-26-2012 08:00 24.90% 24.63%
(today), BPI (Wednesday, after-mkt) Business Confidence, Italy 10-26-2012 09:00 88.7 88.3
Real GDP QoQ (Annualized), US (3Q12) 10-26-2012 13:30 1.80% 1.30%
and Jeronimo Martins (Friday). U. of Michigan Confidence, US (Oct) 10-26-2012 14:55 83 83.10%
13. Next Week Preview: Economics
• The first estimate of US Q3 GDP should be US GDP (q/q annualized)
4.1%
released next Friday (13:30 GMT). Consumption
growth appears to have accelerated. Residential 2.6% 2.4% 2.5%
2.3% 2.2%
investment is expected to show a robust 2.0%
1.3% 1.3%
increase. However, business investment and net
0.1%
trade should be a drag on GDP growth;
• Low mortgage rates and higher confidence Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2010 2010 2010 2010 2011 2011 2011 2011 2012 2012 2012 2012
amongst homebuyers could justify stronger
housing demand. Orders at the major US New Home Sales (000s, annualized)
1,500
homebuilders seem to point to futher increases
in new sales. The recovery in the housing market 1,000
is gathering pace; 500 373
• Survey indicators represent the most important
0
data releases this week in Europe. We’ll have 2000 2002 2004 2006 2008 2010 2012
French and German PMI manufacturing and
Germany Ifo business climate index
services for October. The September PMIs 120
pointed to divergence between those two 110
countries. Will it continue with October releases? 100 101.4
German IFO business climate will also be 90
released (Wednesday, 9:00 BST). 80
2009 2010 2011 2012 2013
Source: Bloomberg
14. Next Week Preview: FOMC meeting
• Next week’s two-day FOMC meeting concludes US Mortgage Interest rates
4.2%
on Wednesday 24th October; 30 yr Fixed rate
• No post-meeting press conference is scheduled 4.0%
for Chairman Ben Bernanke;
3.8%
• Mortgages rates have been falling in the
aftermath of the Q3 announcement; 3.6%
• The adoption of numerical threholds for the
3.4%
3.37%
unemployment rate and inflation could again be
discussed. At the last FOMC meeting, The Fed 3.2%
Jan-12 Mar-12 Mai-12 Jul-12 Set-12
came close to a decision, but Fed’s officials Source: Freddie Mac Commitment Rates
couldn´t reach agreement on a compromise. Will US Unemployment Duration average
that change be discussed again? 43
(number of weeks)
39.8
• Probably, the Fed will wait until the conclusion of 38
its Operation Twist at the end of the year. Then, 33
28
at its mid-December meeting the Fed could
23
decide about the possibility of expanding QE3;
18
• Despite the reported decline in the
13
unemployment rate to a four-year low in
8
September (7.8%), the US labor market is still
3
weak. The broader employment-to-population 1948 1958 1968 1978 1988 1998 2008
ratio has barely moved since 2009. Source: Bureau of Labor Statistics
15. Next Week Preview: Portugal – Q3 earnings season
Portucel (PTI PL) – 3rd Quarter Results: A resilient 9M), driven by solid trading gains. Pre-provision
quarter? (To be released 22nd October) profit is expected at €158m (€475m for the 9M)
and net profit at €36m (€121m for the 9M). Loans
• Sales should rise 6% y/y to €379m, down -2.8% provisions should remain high, given macro
q/q. Revenues from the paper division should be challenges in Portugal.
resilient. Given the weak macro-environment, the
company have been trying to gain market share Jerónimo Martins (JMT PL) – 3rd Quarter Results:
in Europe, following capacity closures. EBITDA Underpinned by Poland (To be released 26th October)
should reach €94m, down -3% q/q, but up 3.4%
y/y. EBITDA margins should fall to 24.9%. Higher • Sales should rise 12% y/y to €2.881m
exports to Eastern Europe should penalize gross underpinned by Poland. The activity in Portugal
margins. Net income is expected at €47m, should reflect the depressed economic activity.
roughly at the same level of Q3 2011, but down - EBITDA margin should decrease this quarter
13% q/q. over the year ago. High LFLs are expected in
Poland. The total number of stores in the
BPI (BPI PL) – Q3 Earnings Preview country should have increased during Q3.
(To be released 24th October, after market’s close, 17:00 BST)
EBITDA and Net Income are expected to have
• Q3 NII is expected at €148m (€440m for the 9M). increased. Next Thursday, we´ll put out a
NII should reflect the cost of CoCo’s. Total earnings preview report with further details.
revenues should reach €314m (€947m for the
16. Next Week Preview: Q3 European results
• A really big number of European companies should report this week.
nd th
Monday, October 22 Thursday, October 25
Svenska Handelsbanken AB Q3 2012 Results ABB Ltd Q3 2012 Results
Credit Suisse Group AG Q3 2012 Results
Koninklijke Philips Electronics NV Q3 2012 Results
Novartis AG Q3 2012 Results
Electrolux AB Q3 2012 Results BASF SE Q3 2012 Results
Scania AB Q3 2012 Results Technip SA Q3 2012 Results
rd
Tuesday, October 23 Skandinaviska Enskilda Banken AB Q3 2012 Results
Enagas SA Q3 2012 Results Jeronimo Martins SGPS SA Q3 2012 Results
Solvay SA Q3 2012 Results
Koninklijke KPN NV Q3 2012 Results
Daimler AG Q3 2012 Results
Norsk Hydro ASA Q3 2012 Results
Sanofi Q3 2012 Results
Swedbank AB Q3 2012 Results Sandvik AB Q3 2012 Results
Alfa Laval AB Q3 2012 Results Petroleum Geo-Services ASA Q3 2012 Results
ARM Holdings PLC Q3 2012 Results Banco Santander SA Q3 2012 Results
Stora Enso OYJ Q3 2012 Results Banco de Sabadell SA Q3 2012 Results
STMicroelectronics NV Q3 2012 Results UPM-Kymmene OYJ Q3 2012 Results
th Debenhams PLC Y 2012 Results
Wednesday, October 24 Metso OYJ Q3 2012 Results
SAP AG Q3 2012 Results Luxottica Group SpA Q3 2012 Results
Nordea Bank AB Q3 2012 Results Acerinox SA Q3 2012 Results
Telenor ASA Q3 2012 Results Dassault Systemes SA Q3 2012 Results
Wacker Chemie AG Q3 2012 Results AstraZeneca PLC Q3 2012 Results
Altisource Portfolio Solutions SA Q3 2012 Results
Volvo AB Q3 2012 Results th
Friday, October 26
Storebrand ASA Q3 2012 Results
Banco Popular Espanol SA Q3 2012 Results
Verbund AG Q3 2012 Results Red Electrica Corp SA Q3 2012 Results
Konecranes OYJ Q3 2012 Results Snam SpA Q3 2012 Results
Outokumpu OYJ Q3 2012 Results Marine Harvest ASA Q3 2012 Results
Reckitt Benckiser Group PLC Q3 2012 Results Belgacom SA Q3 2012 Results
Iberdrola SA Q3 2012 Results Statoil ASA Q3 2012 Results
Telefonaktiebolaget LM Ericsson Q3 2012 Results
Atlas Copco AB Q3 2012 Results
Husqvarna AB Q3 2012 Results
Mediaset Espana Comunicacion SA Q3 2012 Results
Mapfre SA Q3 2012 Results
Volkswagen AG Q3 2012 Results Mediq NV Q3 2012 Results
Saipem SpA Q3 2012 Results CaixaBank Q3 2012 Results
Home Retail Group PLC S1 2013 Results Abertis Infraestructuras SA Q3 2012 Results
17. Next Week Preview: US earnings season
• This could be an important week. We’ll have many Tech and Industrial companies reporting. Apple
should announce its quarterly results Thursday. Wednesday, October 24
th
nd
Kimberly-Clark Corp Q3 2012 Results
Monday, October 22 Eli Lilly & Co Q3 2012 Results
Caterpillar Inc Q3 2012 Results Lockheed Martin Corp Q3 2012 Results
Freeport-McMoRan Copper & Gold Inc Q3 2012 Results Praxair Inc Q3 2012 Results
Texas Instruments Inc Q3 2012 Results General Dynamics Corp Q3 2012 Results
Yahoo! Inc Q3 2012 Results Corning Inc Q3 2012 Results
Boeing Co/The Q3 2012 Results
Wynn Resorts Ltd Q3 2012 Results
rd AT&T Inc Q3 2012 Results
Tuesday, October 23 Symantec Corp Q2 2013 Results
Virgin Media Inc Q3 2012 Results Zynga Inc Q3 2012 Results
United Technologies Corp Q3 2012 Results Bristol-Myers Squibb Co Q3 2012 Results
Harley-Davidson Inc Q3 2012 Results Level 3 Communications Inc Q3 2012 Results
Lexmark International Inc Q3 2012 Results Allegheny Technologies Inc Q3 2012 Results
Reynolds American Inc Q3 2012 Results Delta Air Lines Inc Q3 2012 Results
CIT Group Inc Q3 2012 Results US Airways Group Inc Q3 2012 Results
th
AK Steel Holding Corp Q3 2012 Results Thursday, October 25
New York Times Co/The Q3 2012 Results
EI du Pont de Nemours & Co Q3 2012 Results
International Paper Co Q3 2012 Results
Whirlpool Corp Q3 2012 Results
Dow Chemical Co/The Q3 2012 Results
Xerox Corp Q3 2012 Results PulteGroup Inc Q3 2012 Results
United Parcel Service Inc Q3 2012 Results Bunge Ltd Q3 2012 Results
Illinois Tool Works Inc Q3 2012 Results Colgate-Palmolive Co Q3 2012 Results
Netflix Inc Q3 2012 Results Biogen Idec Inc Q3 2012 Results
Gilead Sciences Inc Q3 2012 Results Procter & Gamble Co/The Q1 2013 Results
Altera Corp Q3 2012 Results Sprint Nextel Corp Q3 2012 Results
Raytheon Co Q3 2012 Results
Broadcom Corp Q3 2012 Results
ConocoPhillips Q3 2012 Results
Questcor Pharmaceuticals Inc Q3 2012 Results
KLA-Tencor Corp Q1 2013 Results
Compuware Corp Q2 2013 Results Eastman Chemical Co Q3 2012 Results
Aflac Inc Q3 2012 Results Apple Inc Q4 2012 Results
Juniper Networks Inc Q3 2012 Results Amazon.com Inc Q3 2012 Results
Fortune Brands Home & Security Inc Q3 2012 Results th
Friday, October 26
Facebook Inc Q3 2012 Results Legg Mason Inc Q2 2013 Results
Amgen Inc Q3 2012 Results Goodyear Tire & Rubber Co/The Q3 2012 Results
3M Co Q3 2012 Results First Solar Inc Q3 2012 Results
18. Charts we are watching (I)
• The spread between Portuguese and German
10-year Government bond yiels reached its
lowest value since May 2011. Portugal has
recently announced new austerity measures to
make up for the budget shortfall. Nevertheless,
the overall economic and public finance
outlook remains very fragile. Does the market
believe that with the OMT the road to market
access will be easier? Source: Bloomberg
Italian 2yr Government bond yield
• The ECB’s recently announced OMT program
seems to have been decisive for the italian 7%
yield-to-maturity
Government bond market. A stagnant
economy has been a feature of Italy. This could 5%
affect the long-term sustainability of its debt
trajectory. If Spain ask for aid, will market 3%
pressure intensify again and push Italy towards 2.1%
asking for sovereign support? 1%
Mar-11 Set-11 Mar-12 Set-12
Source: Bloomberg
19. Charts we are watching (II)
EUR-INR exchange rate
75
• India’s September headline inflation (7.8% y/y)
came higher than consensus expectations. 70 70.37
INR per EUR unit
Underlying pressures persist. This could reduce 65
the likelihood of a rate cut on October 30th.
India has recently been characterized by 60
persistent inflation, a rising fiscal and current 55
account deficit, high currency volatility and
weakening output growth… 50
2006 2007 2008 2009 2010 2011 2012
Source: Bloomberg
• Standard & Poor’s revised this month South
Africa’s sovereign rating for both foreign
ZAR - EUR Exchange rate
currency (to BBB) and local currency (to A-) by 14
ZAR per EUR unit
one notch. The statement accompanying the
downgrade noted the current risks to growth 12 11.27
and to the current account deficit from
domestic labor disruptions, the political 10
environment and from a weak external
environment. The local currency is weakening 8
again... Source: Bloomberg
2008 2010 2012
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