1. 17 December 2012 M o n d ay Re p o r t
Economy Markets
The lack of agreement over the US budget is weighing on the confi- Negotiations between the Republicans and the Democrats appear to
dence of US SMEs, which has, disappointingly, fallen from 93.1 to be making progress: for the first time, the Republicans are willing to
87.5. Retail sales perked up in November (up 0.3%). Industrial pro- accept tax increases for those with higher incomes. Admittedly, signi-
duction recovered by 1.1% in November, offsetting a 0.7% decline ficant differences remain, but an agreement does not seem impos-
in October: Hurricane Sandy made some statistics difficult to inter- sible. The Fed has announced that it will continue to buy US bonds
pret. A fall in both PPI and consumer prices in November (by 0.8% (at a rate of $45bn a month) as long as unemployment stays above
and 0.3% respectively) confirmed that inflation is not a problem. In 6.5%. Setting this kind of threshold is a new approach. The outline
Europe, industrial production fell by 1.4% in October, while new of a European banking union is beginning to take shape. Finally, the
vehicle registrations were down 10.3% in November. It looks as PLD’s victory in Japan’s early legislative elections has increased the
though coming out of recession will be hard work: the region’s manu- pressure on the yen. The impact on markets is very real: Japanese
facturing PMI stabilised at 46.3, while services PMI rose slightly to equities outperformed (up 2%), while the yen lost 3.4% against the
47.8 (from 46.7) in December. The cyclical improvement in China is euro in the week. For the time being, gold has not benefited from
reflected in a rise in the HSBC manufacturing PMI from 50.5 to 50.9. announcements of future quantitative policies.
Swiss Market Recommended Stock Watch
To be monitored this week: KOF winter forecast, AFD November ABB (NR) has announced plans to strategically reposition its Power
foreign trade, FH November watch exports and OFS October Systems division, which has posted disappointing performance over
construction price index. the past few quarters, mainly as a result of pricing pressure. The
group is maintaining its 2015 targets and will recognise a $350m
ZURICH ASSURANCES (PLUS) has estimated the impact of Hur- charge in Q4.
ricane Sandy in Q4 at $758m (including reinstatement premiums),
BG (MINUS) has announced that Chris Finlayson will take over
equivalent 2.2% of its book value. While at the upper end of the range
from Sir Frank Chapman as CEO with effect from 1 January 2013.
of expectations, the amount is not likely to call into question the 2012
Mr Finlayson joined BG in August 2010 after a career with Shell,
dividend of CHF 17. According to the Sunday papers, UBS (PLUS)
and was promoted to director of the Europe and Central Asia region
could be forced to pay out $1.6bn to settle charges brought by various
in November 2011.
international regulators over its involvement in the Libor-rigging
scandal. HOLCIM (NR) this morning announced an acceleration in DEUTSCHE BANK (PLUS): the bad news has been piling up for
its European cost-cutting measures. Its production capacity will be the group over the past week. On Friday evening, a decision by the
adjusted: as a result, the group – which is targeting savings of CHF German courts found the bank liable over the collapse of media group
120m a year – will write down the value of its asset by CHF 410m. Leo Kirch in a legal battle that has been going on for ten years. DB
Sentiment of traders is set to appeal.
Stock market ERICSSON (PLUS) has signed several telecoms equipment agree-
After gaining more than 8% in four weeks, and with the fiscal cliff ments: an integration contract covering VOD (video on demand)
and the Italian elections hanging over them like a sword of Damocles, and live video services for Telefonica; a contract to roll out 4G ser-
the markets appear to be taking a breather. However, equities should vices for rural operators in the US; and a contract to roll out the
be supported by Friday’s strong US industrial production figures LTE network for MTN, one of South Africa’s two largest mobile
and the still neurotic fixed income market. We remain positive for telephony operators.
the year-end.
Currencies PGS (PLUS-R) is kicking off a huge campaign to gather seismic data
The euro continues to rise against the dollar as a result of easing across an area covering 15,550 square kilometres offshore Uruguay
fears over the eurozone and low US inflation weighing on the dollar. on behalf of the national oil company, BP and Tullow. This should
The yen has taken a dive following the conservative victory in Japan have a very positive impact on the company’s customer pre-finan-
(USD/JPY: 83.95). The Swiss franc remains stable (EUR/CHF: cing.
1.208). Our ranges – EUR/USD: supp. 1.293, res. 1.3285; USD/CHF:
supp. 0.90, res. 0.938; GBP/USD: supp. 1.596, res. 1.6275; XAU/
Monda Next
B OR DI E R & C IE
USD: supp. 1,661, res. 1,790.
7 Jan y Rep
Today’s graph Performances uary ort
2013
United States
Inflation measures
6 6
since 01.01.2012 07.12.2012
4 4
SUISSE SMI 16.28% -0.33%
2 2 EUROPE DJ Stoxx 50 9.23% 0.16%
EUROPE DJ Stoxx 600 14.25% 0.08%
0 0
USA S&P 500 12.40% -0.32%
-2 -2
EMERGENTS MSCI Emerging 13.80% 1.83%
-4 -4 JAPON Nikkei 225 15.16% 2.21%
03 04 05 06 07 08 09 10 11 12 13
Unit Labor Cost (YoY) Headline CPI (YoY) Core-CPI (YoY) Source: Datastream
Source: Thomson Reuters Datastream
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