weekly markets perspectives fincor 22 outubro, 2012
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TRANSCRIPT
Weekly Markets
Perspectives
For important disclosures, refer to the Disclosure Section, located at the end of this report.
n
Oct
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22
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At last week’s European Council meeting EU
leaders leaved many important issues on banking
union unanswered. Was there some unofficial
discussion of MoU conditionality regarding a
possible financial aid for Spain?
In Portugal, the 2013 Budget draft was presented
to Parliament. The government will implement
fiscal tightening measures worth 3.2% of GDP.
Moody’s concluded a 4-month plus review period
and kept Spain’s investment grade rating. S&P
downgraded 11 Spanish banks. According to latest
news, Spain seems to be more comfortable making
a request for a credit line only in order to satisfy
the conditions of the ECB to begin buying bonds.
Markets started the week on a positive note
driven by Citigroup´s earnings beat and a stronger-
than-expected US retail report. However, Last
Friday, S&P 500 dropped the most since June as
Weekly Focussome important companies, including bell-
weather General Electric, disappointed investors.
84 S&P 500 firms reported Q3 earnings during
last week. Next week will probably be critical in
assessing Q4 outlook as many Energy, Tech and
Industrial companies are expected to report.
Euro-zone trade data for August together with
August’s industrial production seems to suggest
that GDP growth in Q3 could be a positive
surprise.
China’s 3Q GDP rose 7.4% y/y. China’s growth
rate is still slowing down. However, the
September macro data could suggest some
stabilization.
The Philly Fed index was back into positive
territory for the first time since April. US housing
continues to surprise to the upside. September’s
inflation rates were in line with the Fed’s target.
-3.0%
5.0%
-1.0%
4.5%
GDP growth Budget Deficit
Portugal: Budget Forecasts2012 2013
Portugal: 2013 Budget draft was presented to Parliament• Tax increases should raise €4.3bn. Expenditure
cuts should bring savings of €1bn, including a
planned 50% cut in temporary civil-service jobs;
• The government will implement fiscal tightening
measures worth 3.2% of GDP;
• GDP is seen falling 3.0% in 2012 and 1.0% in
2013. The amount of fiscal tightening required by
the Troika is huge. Growth will likely continue to
surprise on the downside;
• Tax increases will include higher income and
corporate taxes, an increase in the capital gains
tax (from 25% to 26.5%) and higher property
taxes. A financial transaction tax could also be
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;
• A new tax over luxury real-estate will be
implemented. Houses with a value higher than
$1mn will have to pay an additional tax; Source: 2013 Budget draft
• Pensions, unemployment rates and grants to
foundations will be reduced;
• Protests mounted in front of the parliament
against the new austerity measures;
• The budget is creating instability inside the
centre-right coalition that governs Portugal;
• Will it be more difficult for the government to
implement further tightening or to continue
with structural reforms?
Bank of Portugal releases
monthly economic indicators
Galicia and Basque Country Hold elections to the Parliament • For the market it was a key political event for
Spain. According to consensus, it could have an
influence on the timing of the Spanish request
for help;
• Meanwhile the constitucional clash in Catalonia
is ongoing. The Catalan parliament approved a
motion to hold a referendum on independence
from Spain. The Spanish government intends to
stop any consultation;
• Catalonia is not happy with the inter-regional
fiscal transfers´mechanism.
Source: Centre d´Etudis d’Opinion
• In September 2012, the monthly coincident
indicator for the year-on-year evolution of the
economic activity increased. The coincident
indicator for the evolution of private
consumption increased too;
• In the three-month period ended in August
2012, the retail turnover index fell 6.3%, in real
year-on-year terms (-6.7% in Q2 2012);
• In the 3rd quarter of 2012, sales of light
commercial vehicles dropped 55.5% y/y (-57.4%
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.
10.51%
3.08%
-5%
0%
5%
10%
15%
20%
25%
30%
35%
0%
2%
4%
6%
8%
10%
12%
2008 2009 2010 2011 2012
Spain: Non-performing loans
NPLs to Total Loans NPLs % monthly change (right scale)
Moody’s keeps Spain’s rating
at Investment Grade• Tuesday evening, the Moody’s ratings agency
announced that it kept the Spanish sovereign
rating at Baa3. The rating was kept on negative
outlook;
• The negative outlook reflects that the "risks to its
baseline scenario are high and skewed to the
downside“;
• The ratings agency sees significant risks to the
economic outlook in Spain;
• Moody’s expect the country to ask for an
enhanced conditions credit line from the ESM as
a prerequisite for the ECB to activate its OMT
program, rather than a full-blown bailout
program;
• The consensus is that Spain would ask for aid
after the regional elections on October 21st. The
Eurogroup meeting on November 12th could be
an important date to watch.
• Non-Performing Loans increased 3.1% m/m
(+39.7% y/y) to €178.6bn in August and reached
the highest level since Bank of Spain started to
collect data in 1962;
• Spanish banks’ government bond holdings fell to
€243.8bn in August, still 6.7% of total assets;
• The economy is still deleveraging. Loan volumes
decreased to €1,699bn. They are at August 2007
levels.
Source: Bank of Spain
Spain: NPL ratio reached
10.51% in August
9.9
-15
-10
-5
0
5
10
2000 2002 2004 2006 2008 2010 2012
Eurozone External EU Trade Balance(€bn)
399.5
0
100
200
300
400
500
2006 2008 2010 2012
GB
P B
ln
Bank of England
Balance Sheet
• Export values increased by 3.7% in August.
Imports rose by 2.1%. Seasonally adjusted
trade surplus reached €9.9bn;
• Net trade should have made a positive
contribution to euro area GDP in Q3;
• Together with August’s industrial production,
euro-zone trade data seems to suggest that
GDP growth in Q3 could be a positive surprise.
Euro-zone trade data for
August was healthy
Source: Eurostat
BOE: October minutes were
released• It was decided to not expand the asset buying
program. This decision wasn’t unanimous.
Some members felt that there was still
considerable scope for assets purchases to
provide further stimulus on the economy;
• “… safe-heaven flows into the United Kingdom
had lessened”;
• Headline CPI inflation fell from 2.6% y/y to 2.5%
y/y in September. This is the lowest level since
November 2009.
Source: Bank of England
6.2%
11.9%
7.4%
6%
7%
8%
9%
10%
11%
12%
13%
2005 2007 2009 2011 2013
China GDP constant price(Y/Y change)
China’s 3Q increases 7.4%• China’s 3Q GDP rose 7.4% y/y, in line with
consensus, following 7.6% growth in 2Q;
• Industrial production increased 9.2% y/y in
September, compared to 8.9% in August.
Electricity production was up 1.5% y/y in
September;
• Retail sales value increased 14.2% y/y in
September, compared to 13.2% in August;
• China’s growth rate is still slowing down.
However, the September macro data could
suggest some stabilization.
Not much progress from
last week’s European
Council meeting
Source: Bloomberg
• Banking union and fiscal coordination were on
the European Council’s agenda;
• On banking union, the objective to agree on the
legislative framework for the Single Supervisory
Mechanism by January 1st, 2013 was maintained.
But, no agreement on the actual implementation
was found;
• With governments’ borrowing costs down,
European leaders don’t seem to have any sense
of urgency;
• Moreover, with German federal elections in
September 2013, probably there’s little chance
of any material progress on these issues in the
near future;
• We’ll have to wait until the Ecofin (12th/13th) and
the European Council meeting (22nd/23rd) of
November to get more clarity on Greece, Cyprus
and Spain.
2.0%
-3%
-2%
-1%
0%
1%
2%
3%
4%
5%
6%
2006 2008 2010 2012
Consumer Price Inflation (annual rate)
CPI
Core CPI
US Retail sales rises 1.1% in
September• Even excluding gasoline (+2.5%), autos (+1.3%)
and building materials (+1.1%), sales rose by an
impressive 0.9% m/m;
• However, the number has probably been boosted
by two temporary effects: the increase in food
prices due to the recent drought and the release
of iPhone 5;
• Industrial Production increased 0.2% m/m, a
small reversion of the 0.7% m/m fall in August.
The manufacturing sector is still struggling, as the
economic slowdown hits exporters.
• The 0.6% m/m increase in September’s
consumer price was due to rise in gasoline
prices. The annual rate of CPI inflation edged
up to 2.0%, from 1.7% in August;
• Excluding food and energy, core prices
increased by 0.1% m/m. The annual rate of
core inflation rose to 2.0%, from 1.9%;
• So, both inflation rates are in line with the
Fed’s target.
Jun Jul Aug Sep
Retail sales (m/m) -0.7% 0.7% 1.2% 1.1%
(y/y) 3.5% 4.0% 5.0% 0.0%
Sales (Ex. Autos, Gas & Buil.) (m/m) -0.2% 0.9% 0.1% 0.9%
Source: US Commerce Department
US Retail Sales
US CPI in line with the Fed’s
target
Source: Bureau of Labor Statistics
2.9%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
2008 2009 2010 2011 2012
US: Leading Indicators(y/y change)
5.7
-6.16
-20
-15
-10
-5
0
5
10
15
20
25
Jan Feb Mar Apr May Jun Jul Aug Sep Oct
US Regional Surveys
Empire State Index
Philly Fed Index
US: Regional surveys
improve
• The Philly Fed index was back into positive
territory for the first time since April. The Empire
State Index also showed some signs of recovery;
• Both surveys seems to indicate that the national
ISM could increase in October;
• Conditions for the US industry seems to be
improving a bit.
Leading Indicators rose
0.6% m/m in September
• Leading indicators increased 0.6% m/m in
September, after falling -0.4% m/m in the
previous month. The economy is still fluctuating
around a slow growth trend;
• The building permits and financial components
offset negative contributions from ISM new
orders and consumer expectations. 6 of the 10
components of the indicator increased last
month.
Source: Bloomberg Source: The Conference Board
Source: Bloomberg
• So far, 116 companies have reported Q3 results;
• The average EPS surprise has been 4%;
• Excluding Financials, there are fewer positive
surprises and more negative surprises;
S&P 500 Earnings Update: Q3 2012 as of October 19th, 2012• The consensus estimate of the Information
Technology sector’s Q3 2012 EPS fell after
Microsoft and Google missed earnings and
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
Average Q3 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%
Number of companies Earnings Suprises Revenues Surprises
2.104
1.0
2.0
3.0
4.0
Jan-12 Mar-12 Mai-12 Jul-12 Set-12
Nokia share price (€)
• 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
decreased by €633m. Excluding the quarterly cash
payment from Microsoft, it fell by €835m. Devices
remain fragile but NSN is showing a better performance;
• Citigroup unexpectedly announced that Vikram Pandit
was stepping down as CEO. Mike Corbat, most recently
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.
Last week’s market highlights
Source: Bloomberg
What we are watching this week:• HSBC Manufacturing PMI for China
will be released Wednesday.
September’s PMI was 47.9. A higher
value should probably be well
received;
• Many survey indicators will be
released this week in Europe.
Following the trade data and
industrial production positive
surprises for August, some recovery
is expected for those indicators;
• In the US, regional surveys and
housing indicators should be
released during the week;
• A two-day FOMC meeting concludes
on Wednesday. No further policy
stimulus announcement is expected;
• The Q3 earnings season will begin
this week in Portugal with Portucel
(today), BPI (Wednesday, after-mkt)
and Jeronimo Martins (Friday).
CALENDAR - Event Date Hour (BST) Survey Prior
Bank of Japan minutes (of Oct 5 monetary policy meeting) 10-22-2012 Not Available Not Available Not Available
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
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
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
HSBC flash Manufacturing PMI, China (Oct) 10-24-2012 02:45 Not Available 47.9
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
PMI Services, France 10-24-2012 08:00 45.4 45.0
PMI Manufacturing, Germany 10-24-2012 08:30 48.0 47.4
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
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
ECB's Draghi meeting with German lawmakers in Bundestag 10-24-2012 Not Available Not Available Not Available
MBA Mortgage Applications, US 10-24-2012 12:00 Not Available -4.20%
Markit US PMI Preliminary 10-24-2012 Not Available 51.5 Not Available
New Home Sales, US 10-24-2012 15:00 385K 373K
US FOMC monetary policy decision (statement at 7.15pm BST) 10-24-2012 19:15 0.25% 0.25%
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
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%
Inital Jobless Claims, US 10-25-2012 13:30 371K 388K
Pending Home Sales MoM US 10-25-2012 15:00 2% -2.60%
Kansas City FED Manufacturing, US 10-25-2012 16:00 5 2
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
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
Consumer Confidence Indicator, France 10-26-2012 07:45 84 85
Unemployment Rate (Survey), Spain 10-26-2012 08:00 24.90% 24.63%
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%
U. of Michigan Confidence, US (Oct) 10-26-2012 14:55 83 83.10%
101.4
80
90
100
110
120
2009 2010 2011 2012 2013
Germany Ifo business climate index
373
0
500
1,000
1,500
2000 2002 2004 2006 2008 2010 2012
US New Home Sales (000s, annualized)
Next Week Preview: Economics • The first estimate of US Q3 GDP should be
released next Friday (13:30 GMT). Consumption
growth appears to have accelerated. Residential
investment is expected to show a robust
increase. However, business investment and net
trade should be a drag on GDP growth;
• Low mortgage rates and higher confidence
amongst homebuyers could justify stronger
housing demand. Orders at the major
homebuilders seem to point to futher increases
in new sales. The recovery in the housing market
is gathering pace;
• Survey indicators represent the most important
data releases this week in Europe. We’ll have
French and German PMI manufacturing and
services for October. The September PMIs
pointed to divergence between those two
countries. Will it continue with October releases?
German IFO business climate will also be
released (Wednesday, 9:00 BST).
Source: Bloomberg
2.3% 2.2%2.6% 2.4%
0.1%
2.5%
1.3%
4.1%
2.0%
1.3%
Q1
2010
Q2
2010
Q3
2010
Q4
2010
Q1
2011
Q2
2011
Q3
2011
Q4
2011
Q1
2012
Q2
2012
Q3
2012
Q4
2012
US GDP (q/q annualized)
39.8
3
8
13
18
23
28
33
38
43
1948 1958 1968 1978 1988 1998 2008
US Unemployment Duration average(number of weeks)
3.37%
3.2%
3.4%
3.6%
3.8%
4.0%
4.2%
Jan-12 Mar-12 Mai-12 Jul-12 Set-12
US Mortgage Interest rates
30 yr Fixed rate
Next Week Preview: FOMC meeting• Next week’s two-day FOMC meeting concludes
on Wednesday 24th October;
• No post-meeting press conference is scheduled
for Chairman Ben Bernanke;
• Mortgages rates have been falling in the
aftermath of the Q3 announcement;
• The adoption of numerical threholds for the
unemployment rate and inflation could again be
discussed. At the last FOMC meeting, The Fed
came close to a decision, but Fed’s officials
couldn´t reach agreement on a compromise. Will
that change be discussed again?
• Probably, the Fed will wait until the conclusion of
its Operation Twist at the end of the year. Then,
at its mid-December meeting the Fed could
decide about the possibility of expanding QE3;
• Despite the reported decline in the
unemployment rate to a four-year low in
September (7.8%), the US labor market is still
weak. The broader employment-to-population
ratio has barely moved since 2009.
Source: Freddie Mac Commitment Rates
Source: Bureau of Labor Statistics
Next Week Preview: Portugal – Q3 earnings seasonPortucel (PTI PL) – 3rd Quarter Results: A resilient
quarter? (To be released 22nd October)
• Sales should rise 6% y/y to €379m, down -2.8%
q/q. Revenues from the paper division should be
resilient. Given the weak macro-environment, the
company have been trying to gain market share
in Europe, following capacity closures. EBITDA
should reach €94m, down -3% q/q, but up 3.4%
y/y. EBITDA margins should fall to 24.9%. Higher
exports to Eastern Europe should penalize gross
margins. Net income is expected at €47m,
roughly at the same level of Q3 2011, but down -
13% q/q.
BPI (BPI PL) – Q3 Earnings Preview(To be released 24th October, after market’s close, 17:00 BST)
• Q3 NII is expected at €148m (€440m for the 9M).
NII should reflect the cost of CoCo’s. Total
revenues should reach €314m (€947m for the
9M), driven by solid trading gains. Pre-provision
profit is expected at €158m (€475m for the 9M)
and net profit at €36m (€121m for the 9M). Loans
provisions should remain high, given macro
challenges in Portugal.
Jerónimo Martins (JMT PL) – 3rd Quarter Results:
Underpinned by Poland (To be released 26th October)
• Sales should rise 12% y/y to €2.881m
underpinned by Poland. The activity in Portugal
should reflect the depressed economic activity.
EBITDA margin should decrease this quarter
over the year ago. High LFLs are expected in
Poland. The total number of stores in the
country should have increased during Q3.
EBITDA and Net Income are expected to have
increased. Next Thursday, we´ll put out a
earnings preview report with further details.
Next Week Preview: Q3 European results • A really big number of European companies should report this week.
Monday, October 22nd
Svenska Handelsbanken AB Q3 2012 Results
Koninklijke Philips Electronics NV Q3 2012 Results
Electrolux AB Q3 2012 Results
Scania AB Q3 2012 Results
Tuesday, October 23rd
Enagas SA Q3 2012 Results
Koninklijke KPN NV Q3 2012 Results
Norsk Hydro ASA Q3 2012 Results
Swedbank AB Q3 2012 Results
Alfa Laval AB Q3 2012 Results
ARM Holdings PLC Q3 2012 Results
Stora Enso OYJ Q3 2012 Results
STMicroelectronics NV Q3 2012 Results
Wednesday, October 24th
SAP AG Q3 2012 Results
Nordea Bank AB Q3 2012 Results
Telenor ASA Q3 2012 Results
Wacker Chemie AG Q3 2012 Results
Volvo AB Q3 2012 Results
Storebrand ASA Q3 2012 Results
Verbund AG Q3 2012 Results
Konecranes OYJ Q3 2012 Results
Outokumpu OYJ Q3 2012 Results
Reckitt Benckiser Group PLC Q3 2012 Results
Iberdrola SA Q3 2012 Results
Atlas Copco AB Q3 2012 Results
Mediaset Espana Comunicacion SA Q3 2012 Results
Volkswagen AG Q3 2012 Results
Saipem SpA Q3 2012 Results
Home Retail Group PLC S1 2013 Results
Thursday, October 25th
ABB Ltd Q3 2012 Results
Credit Suisse Group AG Q3 2012 Results
Novartis AG Q3 2012 Results
BASF SE Q3 2012 Results
Technip SA Q3 2012 Results
Skandinaviska Enskilda Banken AB Q3 2012 Results
Jeronimo Martins SGPS SA Q3 2012 Results
Solvay SA Q3 2012 Results
Daimler AG Q3 2012 Results
Sanofi Q3 2012 Results
Sandvik AB Q3 2012 Results
Petroleum Geo-Services ASA Q3 2012 Results
Banco Santander SA Q3 2012 Results
Banco de Sabadell SA Q3 2012 Results
UPM-Kymmene OYJ Q3 2012 Results
Debenhams PLC Y 2012 Results
Metso OYJ Q3 2012 Results
Luxottica Group SpA Q3 2012 Results
Acerinox SA Q3 2012 Results
Dassault Systemes SA Q3 2012 Results
AstraZeneca PLC Q3 2012 Results
Altisource Portfolio Solutions SA Q3 2012 Results
Friday, October 26th
Banco Popular Espanol SA Q3 2012 Results
Red Electrica Corp SA Q3 2012 Results
Snam SpA Q3 2012 Results
Marine Harvest ASA Q3 2012 Results
Belgacom SA Q3 2012 Results
Statoil ASA Q3 2012 Results
Telefonaktiebolaget LM Ericsson Q3 2012 Results
Husqvarna AB Q3 2012 Results
Mapfre SA Q3 2012 Results
Mediq NV Q3 2012 Results
CaixaBank Q3 2012 Results
Abertis Infraestructuras SA Q3 2012 Results
Next Week Preview: US earnings season
Monday, October 22nd
Caterpillar Inc Q3 2012 Results
Freeport-McMoRan Copper & Gold Inc Q3 2012 Results
Texas Instruments Inc Q3 2012 Results
Yahoo! Inc Q3 2012 Results
Wynn Resorts Ltd Q3 2012 Results
Tuesday, October 23rd
Virgin Media Inc Q3 2012 Results
United Technologies Corp Q3 2012 Results
Harley-Davidson Inc Q3 2012 Results
Lexmark International Inc Q3 2012 Results
Reynolds American Inc Q3 2012 Results
CIT Group Inc Q3 2012 Results
AK Steel Holding Corp Q3 2012 Results
EI du Pont de Nemours & Co Q3 2012 Results
Whirlpool Corp Q3 2012 Results
Xerox Corp Q3 2012 Results
United Parcel Service Inc Q3 2012 Results
Illinois Tool Works Inc Q3 2012 Results
Netflix Inc Q3 2012 Results
Gilead Sciences Inc Q3 2012 Results
Altera Corp Q3 2012 Results
Broadcom Corp Q3 2012 Results
Questcor Pharmaceuticals Inc Q3 2012 Results
Compuware Corp Q2 2013 Results
Aflac Inc Q3 2012 Results
Juniper Networks Inc Q3 2012 Results
Fortune Brands Home & Security Inc Q3 2012 Results
Facebook Inc Q3 2012 Results
Amgen Inc Q3 2012 Results
3M Co Q3 2012 Results
• 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
Kimberly-Clark Corp Q3 2012 Results
Eli Lilly & Co Q3 2012 Results
Lockheed Martin Corp Q3 2012 Results
Praxair Inc Q3 2012 Results
General Dynamics Corp Q3 2012 Results
Corning Inc Q3 2012 Results
Boeing Co/The Q3 2012 Results
AT&T Inc Q3 2012 Results
Symantec Corp Q2 2013 Results
Zynga Inc Q3 2012 Results
Bristol-Myers Squibb Co Q3 2012 Results
Level 3 Communications Inc Q3 2012 Results
Allegheny Technologies Inc Q3 2012 Results
Delta Air Lines Inc Q3 2012 Results
US Airways Group Inc Q3 2012 Results
Thursday, October 25th
New York Times Co/The Q3 2012 Results
International Paper Co Q3 2012 Results
Dow Chemical Co/The Q3 2012 Results
PulteGroup Inc Q3 2012 Results
Bunge Ltd Q3 2012 Results
Colgate-Palmolive Co Q3 2012 Results
Biogen Idec Inc Q3 2012 Results
Procter & Gamble Co/The Q1 2013 Results
Sprint Nextel Corp Q3 2012 Results
Raytheon Co Q3 2012 Results
ConocoPhillips Q3 2012 Results
KLA-Tencor Corp Q1 2013 Results
Eastman Chemical Co Q3 2012 Results
Apple Inc Q4 2012 Results
Amazon.com Inc Q3 2012 Results
Friday, October 26th
Legg Mason Inc Q2 2013 Results
Goodyear Tire & Rubber Co/The Q3 2012 Results
First Solar Inc Q3 2012 Results
2.1%
1%
3%
5%
7%
Mar-11 Set-11 Mar-12 Set-12
yie
ld-t
o-m
atu
rity
Italian 2yr Government bond yield
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?
• The ECB’s recently announced OMT program
seems to have been decisive for the italian
Government bond market. A stagnant
economy has been a feature of Italy. This could
affect the long-term sustainability of its debt
trajectory. If Spain ask for aid, will market
pressure intensify again and push Italy towards
asking for sovereign support?
Source: Bloomberg
Source: Bloomberg
8
10
12
14
2008 2010 2012
ZA
R p
er
EU
R u
nit
ZAR - EUR Exchange rate
11.27
70.37
50
55
60
65
70
75
2006 2007 2008 2009 2010 2011 2012
INR
pe
r E
UR
un
it
EUR-INR exchange rate
Charts we are watching (II)
• India’s September headline inflation (7.8% y/y)
came higher than consensus expectations.
Underlying pressures persist. This could reduce
the likelihood of a rate cut on October 30th.
India has recently been characterized by
persistent inflation, a rising fiscal and current
account deficit, high currency volatility and
weakening output growth…
• Standard & Poor’s revised this month South
Africa’s sovereign rating for both foreign
currency (to BBB) and local currency (to A-) by
one notch. The statement accompanying the
downgrade noted the current risks to growth
and to the current account deficit from
domestic labor disruptions, the political
environment and from a weak external
environment. The local currency is weakening
again...
Source: Bloomberg
Source: Bloomberg
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