Upload
joao-pinto
View
474
Download
5
Tags:
Embed Size (px)
DESCRIPTION
Citation preview
Weekly Markets
Perspectives
For important disclosures, refer to the Disclosure Section, located at the end of this report.
n
Jan
ua
ry2
1th
,2
01
3
Equity markets rose last week. In the US, the Dow
Jones Industrial Average reached on Friday a five-
year high, after House Republicans announced that
they intend to pass a three-month increase (until April
15th) in the debt ceiling this week. Japanese indices
were again the highlight, on headlines that the Bank
of Japan is preparing to announce additional
measures at its meeting this week (on Tuesday).
The US earnings season has so far been decent,
which also helped risk sentiment. Nonetheless, only
67 S&P 500 companies have so far reported results.
Apple shares traded below the $500 mark over the
week (down c. 30% from its peak reached in mid-
September 2012), after reports that the company’s Q1
2013 component orders have been cut due to lower
than expected demand for the iPhone 5.
In Europe, Spain (2015, 2018 and 2041 bonds) and
Portugal (T-bills)’s auctions were successfull.
Portuguese 10-year government bond yields fell for a
Weekly Summarythird week in a row, supported by news that
Portugal could soon return to the market. The
Portuguese PM expects the country to start issuing
debt gradually in 2013. However, there are still
downside risks as the Portuguese Central Bank
downgrade of its GDP forecast for 2013 seems to
remind.
China Q4 2012 GDP growth came in slightly above
consensus. On a full year basis, the economy rose
by 7.8%.
This week, investors will probably remain focused
on the US and European earnings season. In
Portugal, Galp (today) and Sonae (Wednesday) will
release trading statements.
In the euro area, several surveys will be released
this week. On the political front, this week’s main
event will probably be today’s eurogroup
meeting.
-3
-2
-1
0
1
2
3
4
5
6
07 08 09 10 11 12 13
US Consumer Prices
All items (%, y/y)
Excluding Energy
and Food (%, y/y)
US: Retail sales shrugged off “fiscal cliff”
related concerns at the end of 2012
• December’s retail sales value increased by 0.5%
m/m, well above the consensus forecast at 0.2%;
• Excluding gasoline, motor vehicles and building
materials, core sales rose by a solid 0.6% m/m,
after a 0.5% increase in November;
• Retail sales accelerated at the end of 2012.
Consumers don´t seemed to be overly concerned
with the “fiscal cliff” negotiations.
US: Inflation remained muted at the
end of 2012
• Inflation remained below the Fed’s 2% target in
December. The Fed can continue to focus on
reducing the still high unemployment rate;
• The annual rate of headline CPI inflation fell to
1.7%, from 1.8%. The rate of core CPI inflation
remained unchanged at 1.9%;
• Producer prices fell by 0.2% m/m in December.
The annual rate of PPI inflation dropped to
1.3%, from 1.5% in November.
Source: US Commerce Department Source: Bureau of Labor Statistics
US: Industrial Production rises 0.3%
m/m in December 2012
• Industrial production gained 0.3% m/m in
December. The monthly variation was held back
by a 4.8% m/m drop in utilities output due to
unseasonably warm whether;
• Business equipment production increased by
1.3% m/m. Consumer goods production saw a
0.1% m/m fall in December, while construction
supplies rose by 1.0% m/m, suggesting that the
housing recovery is probably continuing.
US: The manufacturing sector is still
struggling
• The Empire State manufacturing index
remained in negative territory in January, after
falling to -7.8 from -7.3;
• The US Philly Fed manufacturing index dropped
to -5.8 in January, from +4.6 in December;
• The new orders index (-4.3 from +4.9), the
employment index (-5.2 from -0.2), and the
shipments index (+0.4 from +14.7) fell over the
month.
Source: Federal Reserve Source: Philadelphia Federal Reserve, US Federal Reserve
-50
-40
-30
-20
-10
0
10
20
30
40
50
2001 2003 2005 2007 2009 2011 2013
US Regional PMIs
Empire State manufacturing US Philly Fed
40
50
60
70
80
90
100
110
120
00 01 02 03 04 05 06 07 08 09 10 11 12 13
University of Michigan Consumer Confidence
US: Consumer confidence falls to a one-
year low
• The University of Michigan’s measure of
consumer confidence fell to 71.3 in January, from
72.9 in the previous month;
• The “fiscal cliff” deal approved in early January
and the following rise in equity prices didn’t
boost sentiment, probably reflecting the expiry of
the payroll tax cut;
• The survey’s current conditions index (normally
driven by labor market conditions) fell from 87.0
to 84.8.
US: Bank loans are still expanding
Source: Bloomberg Source: Federal Reserve Board of Governors
• Bank loans registered a solid increase over the
closing weeks of 2012;
• Most types of loans expanded, including
residential mortgages, consumer credit and
business loans;
• The growth rate of US bank loans has slowed
but it remains in positive territory, which
contrast to what is seen both in the euro-zone
and in the UK.
US January Beige Book was released last
week
• The Federal Reserve’s January Beige Book
includes information collected on or before
January 4th, 2013;
• The Beige Book prepared for the January FOMC
meeting pointed to subdued but positive
economic growth across the 12 Federal Reserve
districts;
• Concerns regarding the fiscal policy continued to
be mentioned in the commentary;
• Reports on manufacturing were less positive,
with only half of the districts reporting expansion,
and three reporting contraction;
• Both residential real estate activity and selling
prices improved in all twelve districts;
• Consumer spending was reported as higher in all
twelve districts, and benefitted from holiday sales
that were mentioned as being “modestly higher”
than in 2011.
Brazil: Copom keeps Selic
unchanged at 7.25%
Source: IBGE
• The central bank Monetary Policy Committee
left the policy rate unchanged at 7.25% in an
unanimous decision;
• The post-meeting statement signaled again that
the policy rate is expected to remain unchanged
for a period of time;
• The Copom considers that “the balance of risks
for inflation” has “deteriorated in the short-
term”, and that the recovery of domestic
activity “has been less intense than expected”;
• Market attention will likely shift to the minutes
(to be released January 24th).
2
3
4
5
6
7
8
2006 2007 2008 2009 2010 2011 2012 2013
Brazil Consumer Price Index (%, y/y)
-15
-10
-5
0
5
10
15
2000 2002 2004 2006 2008 2010 2012
EU Trade Balance (€bn)
6
7
8
9
10
11
12
13
2000 2002 2004 2006 2008 2010 2012
China GDP (%, y/y)
China: December activity growth
momentum remained solid• Real GDP rose 7.9% y/y in Q4 2012, slightly above
consensus (7.8%), supported by a good autumn
grain harvest and a rebound in property market.
the 2012 full-year GDP increased 7.8% y/y,
following 9.3% y/y in 2011;
• Real retail sales increased 13.5% y/y in December,
following 13.6% in November;
• Industrial Production rose 10.3% y/y in
December, slightly above consensus (10.2% y/y),
following 10.1% y/y in the previous month;
• Fixed asset investment increased 19.9% y/y (vs.
+20.7% y/y in November).
Source: China National Bureau of Statistics
• In November 2012, the seasonally-adjusted
euro-zone trade surplus widened from €7.4bn
to a record high of €11bn;
• Exports rose 0.8% m/m, the first monthly rise
since August 2012, while imports dropped
1.5% m/m;
• These figures suggest that net trade may have
had a decisive contribution to GDP in Q4 2012.
Source: Eurostat
Euro-zone: Trade surplus reaches
record high in November 2012
-23
-18
-13
-8
-3
2
7
12
60
70
80
90
100
110
120
1998 2000 2002 2004 2006 2008 2010 2012
Euro-zone Industrial Production and EC Industrial
Sentiment
EC Survey Industrial Sentiment (LHS)
Industrial Production (% y/y, RHS)
Euro-zone: Industrial production
disappoints in November 2012• Industrial Production fell -0.3% m/m, weaker than
the +0.2% rise expected by the consensus,
following two large monthly falls in both
September (-2.3% m/m) and October (-1.0%
m/m). Germany and France recorded small
monthly gains;
• By country, Italian and Spanish production
registered sharp monthly falls. In the euro-zone
as a whole, production was down 3.7% on an
annual basis.
Moody’s remains cautious on
Portuguese Banks. NPL ratio at 11.38%
in Spain
Source: Eurostat, European Commission
• The rating agency considers the on-going
economic recession as the key driver of asset
quality deterioration. Moody’s sees the loan-
loss capacity of most of the Portuguese rated
banks as insufficient in an adverse scenario;
• Spanish banks NPL ratio increased to 11.38% in
November. NPLs rose by €2bn (+1% m/m) to
€192bn. Private deposits fell by -4.5% y/y. Loans
to the private resident sector declined by 5.7%.
Source: Spanish Central Bank
-8
-6
-4
-2
0
2
4
6
8
78 80 82 84 86 88 90 92 94 96 98 00 02 04 06 08 10 12
Portuguese Central Bank's Coincident
Indicators
Activity Coincident Indicator - Monthly
Private Consumption Coincident Indicator - Monthly
Banco de Portugal releases December
2012 coincident indicators
• In December 2012, both the monthly coincident
indicator for the y/y evolution of economic
activity and the monthly coincident for the y/y
evolution of private consumption increased
relatively to the previous month;
• in the Q4 2012, sales of light commercial vehicles
fell 52.5% y/y (-55.5% in Q3). Sales of heavy
commercial vehicles increased 14.2% (-10.0% in
Q3). Cement sales of national firms to the
domestic market declined -29.1% y/y (-31.5% in
Q3).
Germany: Government lower 2013
growth forecast• Germany’s economy expanded by 0.9% (working-
day adjusted), 0.7% unadjusted, in
2012, according to a first estimate released by the
German Statistical Office;
• The fiscal balance of the general government
(+0.1% of GDP) went into positive territory for
the first time since 2007;
• The government lowered its 2013 growth forecast
to 0.4% (0.5% working-day adjusted), which now
matches the current Bundesbank outlook.
Source: Banco de PortugalSource: Destatis
Banco de Portugal sees lower growth in
2013
• The Portuguese Central Bank has lowered its
GDP forecast for 2013 from -1.6% to -1.9%,
reflecting a less favorable international
economic environment;
• The economy is expected to fall almost 2% in
2013, after receding by 3% in 2012, on the back
of the fiscal consolidation adopted with the 2013
budget which are expected to lead to a significant
drop in domestic demand.
Portugal: IMF completes the sixth
review
• The IMF completed the sixth review of the
Extended Fund Facility arrangement with
Portugal;
• The report considers that “the policy and
reform effort has been impressive”;
• Given a already high tax burden, the IMF
supports the government’s expenditure review;
• The report highlights the need to broaden the
tax base and to progress on structural reforms,
including labor and product market reforms;
• Finally, the IMF mentions the importance of
“continued external support and successful
crisis policies at the euro area level”;
• The IMF has already disbursed €22.2bn of the
total €27.5bn package approved on May 2011.
Banco de Portugal Projections: 2012-2014
Annual rate of change, %
2012 2013 2014 2012 2013
Gross Domestic Product -3.0 -1.9 1.3 -3.0 -1.6
Private Consumption -5.5 -3.6 0.1 -5.8 -3.6
Public Consumption -4.5 -2.4 1.5 -3.9 -2.4
Gross Fixed Capital Formation -14.4 -8.5 2.8 -14.9 -10.0
Domestic Demand -6.9 -4.0 0.8 -6.8 -4.5
Exports 4.1 2.0 4.8 6.3 5.0
Imports -6.9 -3.4 3.5 -4.7 -2.3
Current plus Capital Account (% of GDP) -0.1 3.1 4.4 -0.2 4.0
Trade Balance (% of GDP) 0.3 3.1 4.1 0.8 4.5
Harmonized Index of Consumer Prices 2.8 0.9 1.0 2.8 0.9
Source: Banco de Portugal; INE
Winter 2012 Autumn 2012
Greece: IMF completes program review
• The IMF has completed the first and second
reviews of the Extended Fund Facility
arrangement with Greece;
• The country remains focused on restoring
growth, competitiveness and debt sustainability.
However, the IMF considers that more should be
done;
• Large fiscal efforts have already been taken by the
government. Nevertheless, the report considers
that Greece still needs to increase tax collections,
fight tax evasions, and shrink the public sector;
• The IMF highlight the importance of further help
by the European partners to reduce debt below
110% of GDP;
• Finally, the report reaffirms the IMF’s preferred
creditor status.
The World Bank releases new
economic forecasts
• Last week, the World Bank released its Global
Economic Prospects (Assuring growth over the
medium term, January 2013);
• The report considers that the global economy
remains fragile, as high income countries
continue to suffer from slow growth;
• Prospects for the developing world remains
solid, albeit below the pre-crisis trend growth;
• The World Bank estimates global GDP increased
2.3% in 2012. Growth is forecast to remain
broadly unchanged at 2.4% in 2013, before
gradually strengthening to 3.1% in 2014 and
3.3% in 2015.
2011 2012e 2013f 2014f 2015f
World 2.7% 2.3% 2.4% 3.1% 3.3%
Euro-Zone 1.5% -0.4% -0.1% 0.9% 1.4%
US 1.8% 2.2% 1.9% 2.8% 3.0%
Japan -0.7% 1.9% 0.8% 1.2% 1.5%
China 9.3% 7.9% 8.4% 8.0% 7.9%
India 6.9% 5.1% 6.1% 6.8% 7.0%
Brazil 2.7% 0.9% 3.4% 4.1% 4.0%
Source: The World Bank, Global Economic Prospects, January 2013
Real GDP Growth (%)
• Banif (BANIF PL) rose 5.8% over the week. The bank’s GSM
approved the recapitalization plan, which includes €1.1bn of
State capital (€700mn through special special shares and €400
through CoCos). Moreover, the bank’s current shareholders
seem to have already pledged €100mn of the €450mn capital
increase that Banif will execute, while BES (BES PL) has
underwritten €50mn;
• BCP (BCP PL) gained 7.8%. The Bank has denied reports that it is
looking to sell its Polish unit Bank Millennium, where BCP has a
65% holding;
• Portugal Telecom (PTC PL) added 5.1%. The company announced
a definitive agreement for the sale of its minority equity stake
(28%) held in CTM (in Macau) for $411.6mn (subject to certain
adjustments). Moreover, Portugal Telecom launched its
quadruple play offer, including TV, Internet, fixed telephone, and
mobile telephone. The new service is available through FTTH.
This offer could have an important uptake to the company, given
that ZON (ZON PL) and Sonaecom (SNC) are still in the middle of
a merger process;
• Galp (GALP PL) fell -2.4%. After suffering successive delays, the
hydrocraking complex installed at the Sines refinery began the
commercial production stage.
PSI20 Weekly Review
Source: Bloomberg
200
400
600
800
1,000
1,200
1,400
1,600
1,800
Jan-12 Abr-12 Jul-12 Out-12 Jan-13
BCP and BES CDS EUR SR 5Y (bps)
BES BCP
• Portugal has successfully raised €2.5bn through a T-bill
action, last week;
• The Portuguese PM expects the country to start issuing
debt gradually in 2013. According to the local press,
Portugal wants to return to the capital market by the end of
February, in order to take advantage of improving market
sentiment, before the next programme review is due.
Portugal will probably focus on a five-year syndicated bond;
• The IMF’s chief acknoweledged that Portugal has made
progress in reducing its deficit. However, she considered
that more fiscal consolidation is needed;
• Portuguese 10-year government bond yield fell for a third
week in a row, supported by news that Portugal could soon
return to the market and speculation of potential ECB’s
OMT buying of Portuguese bonds. Although recognizing
the current positive market sentiment, the economic
adjustment process is still a long one. The 2013 budget
should keep the economy in recession. The high level of
corporate debt as a percentage of GDP remains an
important concern;
• Portuguese Banks 5Y SR CDS rose over last week, but are
still well below the 2012 year-end levels.
Portuguese Sovereign and Corporate Debt Weekly Review
Source: Bloomberg
0
5
10
15
20
25
2011 2012 2013
Portuguese Government Bond Yields (%)
2-year 5-year 10-year
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
Out-12 Nov-12 Dez-12 Jan-13 Fev-13
Portugal Telecom and EDP Selected
Corporate Bond Yields (%)
Portugal Telecom 5 7/8
04/17/18
EDP 5 3/4 09/21/17
5
6
7
8
9
10
11
12
13
Jan-12 Mar-12 Mai-12 Jul-12 Set-12 Nov-12 Jan-13
Bank of America Share Price ($)
• SAP (SAP GY) preannounced Q4 2012 results on January 15th
with licenses of €1.94bn (8% y/y excl. FX), below consensus
estimates of €1.97bn. SSRS revenues of €4.27bn (+10% y/y
excl. FX) also came lower that expected (€4.32bn). Operating
margins of 38.8% are below consensus estimates of 39.4%.
SAP will release its 2013 outlook on January 23th. The shares
fell -5.3% over the week;
• Intel (INTC US) reported Q4 2012 revenue of $13.5bn (flat
q/q), in line with consensus. EPS of $0.48 was above
consensus of $0.45 due to higher margins. The company
guided Q1 2013 revenue to a range of $12.2-$13.2bn (down
2%-9% q/q and with a $12.7bn mid-point), below consensus
of $12.9bn;
• Bank of America (BAC US) reported Q4 2012 of $0.03,
including several previously announced charges. Net interest
income was better than expected. Basel 3 capital continued to
improve. BAC’s Tier 1 common ratio now stands at 9.25%;
• ASML (ASML NA) rose 5.3% over the week. The company
announced that sales, which fell 16% to €4.73bn in 2012, will
probably be little changed in 2013, pointing to an expected
week H1. Consensus 2013 sales estimates were €5.2bn.
Last week’s European and US equity market highlights
Source: Bloomberg
-0.4
-3.9
0.5
-1.5
-0.1
14-Jan 15-Jan 16-Jan 17-Jan 18-Jan
SAP Stock Price Daily Changes (%)
17
19
21
23
25
27
29
Jan-12 Mar-12 Mai-12 Jul-12 Set-12 Nov-12 Jan-13
Intel Stock Price ($)
What we are watching this week:• In the US, Existing Home Sales (Tuesday) and New
Home Sales (Friday) reports are due. In the industrial
sector, January’s preliminary Markit Manufacturing
PMI (Thursday) will be released. This week will
probably further suggest the diverging fortunes in the
housing and industrial sectors;
• In the UK, Q4 2012 GDP data is expected to be
announced (Friday). The unwinding of the Olympics
effect will probably take its toll on quarterly growth;
• In the euro-zone, the focus for the week will probably
be the release of Flash PMIs for the euro area, France
and Germany (Thursday);
• On the euro-zone political front, this week’s main
event will probably be today’s eurogroup meeting.
Recent news suggest that there is the possibility of
the discussion or even some announcement
ragarding Cyprus, Ireland and Portugal. Moreover, the
euro-zone finance ministers are likely to appoint the
Dutch Finance Minister Jeroen Dijsselbloem as the
new head of the eurogroup, replacing the
Luxembourg Prime Minister Jean-Claude Juncker.
Event Date Hour (GMT) Survey Prior
Machine Tool Orders (y/y), Japan 21-Jan 06:00 -27.5%
Producer Prices (y/y), Germany 21-Jan 07:00 1.7% 1.4%
Trade Balance (Mln Euros), Spain 21-Jan -1492.4M
BOJ Target Rate, Japan 22-Jan 0.1%
Current Account (euros), Portugal 22-Jan -268.8M
House Price Index (y/y), Spain 22-Jan -9.3%
ZEW Survey (Current Situation), Germany 22-Jan 10:00 6.2 5.7
ZEW Survey (Econ. Sentiment), Germany 22-Jan 10:00 12.0 6.9
ZEW Survey (Econ. Sentiment), Euro-Zone 22-Jan 10:00 7.6
Richmond Fed Manufact. Index, US 22-Jan 15:00 5.0
Existing Home Sales, US 22-Jan 15:00 5.10M 5.04M
Cabinet Office Monthly Economic Report for January, Japan 23-Jan
Bank of Japan Monthly Economic Report for January 23-Jan 05:00
Production Outlook Indicator, France 23-Jan 07:45 -36.0 -38.0
Business Confidence Indicator, France 23-Jan 07:45 90.0 89.0
Bank of England Minutes 23-Jan 09:30
Current Account (mn euro), Italy 23-Jan 10:00 -245M
Euro Area Third Quarter Government Debt 23-Jan 10:00
House Price Index MoM, US 23-Jan 14:00 0.5% 0.5%
Euro-Zone Consumer Confidence 23-Jan 15:00 -26.0 -26.5
IMF Releases World Economic Outlook Update 23-Jan 15:00
Bank of Canada Rate 23-Jan 15:00 1.0% 1.0%
GDP (YoY), South Korea 23-Jan 23:00 1.9% 1.5%
HSBC Flash Manufacturing PMI, China 24-Jan 01:45 51.5
Unemployment Rate (Survey), Spain 24-Jan 08:00 26.0% 25.0%
PMI Manufacturing, France 24-Jan 08:00 44.9 44.6
PMI Services, France 24-Jan 08:00 45.5 45.2
PMI Manufacturing, Germany 24-Jan 08:30 46.8 46.0
PMI Services, Germany 24-Jan 08:30 52.0 52.0
Euro-Zone Current Account nsa 24-Jan 09:00 7.2B
ECB Euro-Zone Current Account SA 24-Jan 09:00 3.9B
PMI Manufacturing, Euro-Zone 24-Jan 09:00 46.6 46.1
PMI Services, Euro-Zone 24-Jan 09:00 48.0 47.8
PMI Composite, Euro-Zone 24-Jan 09:00 47.5 47.2
Retail Sales (y/y), Italy 24-Jan 09:00 -3.8%
Initial Jobless Claims, US 24-Jan 13:30 360K 335K
Conference Board Revisions of Leading Indicators, US 24-Jan 15:00
Leading Indicators, US 24-Jan 15:00 0.3% -0.2%
Markit US PMI Preliminary 24-Jan 53.0
Natl CPI YoY, Japan 24-Jan 23:30 -0.2% -0.2%
Producer Prices (y/y), Spain 25-Jan 08:00 2.8%
IFO - Business Climate, Germany 25-Jan 09:00 103.0 102.4
IFO - Current Assessment, Germany 25-Jan 09:00 107.3 107.1
IFO - Expectations, Germany 25-Jan 09:00 98.5 97.9
GDP (y/y), UK 25-Jan 09:30 0.2% 0.0%
New Home Sales, US 25-Jan 15:00 385K 377K
Source: Bloomberg, Fincor
0.40
0.10
0.60
-0.30-0.20
-0.40
0.90
Q1 2012 Q2 2011 Q3 2011 Q4 2011 Q1 2012 Q2 2012 Q3 2012
UK GDP Growth (q/q, %)
Next Week Preview: Economics
• US Existing Home Sales for December will be released on
Tuesday (15:00 GMT). Existing Home Sales broke above the five
million mark in the previous month and are expected to rise
further in December. The positive evolution on Pending Homes
sales also points to a continuing rise in Existing Home Sales;
• Several surveys will be release this week in the euro area. The
Zew index is expected to be announced on Tuesday. Flash PMIs
for the euro-zone, France and Germany are due Thursday. The
German Ifo Business Confidence Survey will be released on
Thursday. Notwithstanding the rise of the euro, a pickup in
business sentiment is expected, reflecting improving market
conditions;
• The Flash Markit US Manufacturing PMI is due Thursday (13:58
GMT). In December, the index rose to a seven-month high of
54.0. Given the more modest evolution in the ISM survey, the
January figure will probably show a drop back in the index;
• The first estimate of the UK Q4 2012 GDP is to be published on
Friday. A rebound in construction output is expected to be an
important help to offset (at least partially) the unwinding of the
Olympics efect.Source: Bloomberg
75
85
95
105
115
125
135
3,000
3,500
4,000
4,500
5,000
5,500
6,000
6,500
7,000
7,500
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
US Existing Home Sales and Pending Home Sales
Existing Home Sales (000s, LHS)
Pending Homes Sales Index (adv. 1 m, RHS)
Next Week Preview: Eurogroup/ ECOFIN Meetings and Government Debt
Issuance Calendar
Eurogroup/ECOFIN meeting
scheduled for January 21st-22nd• Today, EMU finance ministers will discuss the
current economic environment in the euro area,
review current assessments by the Troika
(including the sixth review of the Portuguese
programme), discuss the roadmap for the
implemention of bank recapitalization by the ESM
and the potential successor of Jean-Claude
Juncker;
• Tomorrow, the EU27 finance minister will focus
on (a) the Commission’s annual growth outlook,
(b) the economic policy coordination in Europe,
(c) the Commission’s action plan on the
prevention of tax evasion, and (d) legislative
issues regarding the financial transaction tax;
• According to some press, the eurogroup could
approve changes to the conditions on the EFSF
loans to Portugal in line with the changes made
to the loans to Greece.
• Quarterly data on government debt for EMU
countries will be released on January 21st.
Spain to auction T-Bills on January
22nd
Next week's Selected Bonds and T-Bills Supply
Issue Country Date Amount Hour (GMT)
BTF Apr 2013 France 21-Jan € 4-4.4bn
BTF Jun 2013 France 21-Jan € 1.2-1.6bn
BTF Jan 2014 France 21-Jan € 1.2-1.6bn
Gilt 4% 7 Mar 2022 UK 22-Jan GBP 1.75bn 10:30
Letras Apr 2013 Spain 22-Jan
Letras Jul 2013 Spain 22-Jan
T-Bills Apr 2013 US 22-Jan USD 32bn
T-Bill Jul 2013 US 22-Jan USD 28bn
T-Bills Mar 2013 Japan 23-Jan JPY 2.5tn
T-Bills Feb 2013 US 23-Jan
JGB 20 Dec 2032 Japan 24-Jan JPY 1.2tn 03:00
TIPS 0.125% 15 Jan 2023 (new) US 24-Jan USD 15bn
T-Bills Apr 2013 Japan 24-Jan JPY 5.7tn
T-Bills Feb 2013 UK 25-Jan GBP 0.5bn
T-Bills Apr 2013 UK 25-Jan GBP 0.5bn
T-Bills Jul 2013 UK 25-Jan GBP 1.5bn
Next week's Selected Bonds and T-Bills redemptions
Issues Country Date Amount Hour (GMT)
T-Bills Ireland 21-Jan € 0.5bn
Bubills (12m) Germany 23-Jan € 3.0bn
BTF France 24-Jan € 6.5bn
Source: Treasuries; Fincor
Next Week Preview: US Earnings SeasonApple will probably be the
highlight of the week • Of the 67 S&P companies that reported Q4
2012 results, about 75% beat on EPS,
according to Bloomberg. About 78% of the
companies beat on sales, with an average
surprise of 5%;
• Microsoft (MSFT US) will release earnings on
Thursday. Earnings are expected to reflect
weakness in PC demand. Weak market
sentiment reflects holiday season on Windows
8, Surface RT and PC sales. Focus should be on
expectations regarding the launch of Office
2013;
• McDonalds (MCD US) will release Q4 results
on Wednesday. Better US trends are expected
to be offset by a weaker performance in Asia;
• 3M (MMM US) reports earnings on Thursday.
Few surprises are expected given that the
company gave a 2013 guidance call in mid-
December.
Company Name Company Ticker Time Event Description
Tuesday, 22nd
January
EI du Pont de Nemours & Co DD US 11:00 Q4 2012 Earnings Release
Verizon Communications Inc VZ US 12:30 Q4 2012 Earnings Release
Johnson & Johnson JNJ US 12:45 Q4 2012 Earnings Release
Freeport-McMoRan Copper & Gold Inc FCX US 13:00 Q4 2012 Earnings Release
Texas Instruments Inc TXN US 20:30 Q4 2012 Earnings Release
CSX Corp CSX US 21:01 Q4 2012 Earnings Release
Advanced Micro Devices Inc AMD US 21:15 Q4 2012 Earnings Release
Google Inc GOOG US After Market Q4 2012 Earnings Release
International Business Machines Corp IBM US After Market Q4 2012 Earnings Release
Wednesday, 23rd
January
Abbott Laboratories ABT US Before Market Q4 2012 Earnings Release
Air Products & Chemicals Inc APD US Before Market Q1 2013 Earnings Release
Praxair Inc PX US Before Market Q4 2012 Earnings Release
United Technologies Corp UTX US Before Market Q4 2012 Earnings Release
General Dynamics Corp GD US Before Market Q4 2012 Earnings Release
McDonald's Corp MCD US Before Market Q4 2012 Earnings Release
WellPoint Inc WLP US 11:00 Q4 2012 Earnings Release
Motorola Solutions Inc MSI US 13:00 Q4 2012 Earnings Release
Apple Inc AAPL US 21:30 Q1 2013 Earnings Release
Amgen Inc AMGN US After Market Q4 2012 Earnings Release
SanDisk Corp SNDK US After Market Q4 2012 Earnings Release
Symantec Corp SYMC US After Market Q3 2013 Earnings Release
Thursday, 24th
January
Union Pacific Corp UNP US Before Market Q4 2012 Earnings Release
Raytheon Co RTN US 12:00 Q4 2012 Earnings Release
Xerox Corp XRX US 12:15 Q4 2012 Earnings Release
Bristol-Myers Squibb Co BMY US 12:30 Q4 2012 Earnings Release
AT&T Inc T US After Market Q4 2012 Earnings Release
Starbucks Corp SBUX US After Market Q1 2013 Earnings Release
Microsoft Corp MSFT US After Market Q2 2013 Earnings Release
3M Co MMM US Not Avaliable Q4 2012 Earnings Release
Friday, 25th
January
Honeywell International Inc HON US Before Market Q4 2012 Earnings Release
Procter & Gamble Co/The PG US Before Market Q2 2013 Earnings Release
Covidien PLC COV US Before Market Q1 2013 Earnings Release
Kimberly-Clark Corp KMB US Before Market Q4 2012 Earnings Release
Halliburton Co HAL US Not Avaliable Q4 2012 Earnings Release
Source: Bloomberg
Next Week Preview: European Earnings SeasonNovartis, Unilever and
Siemens report this week• Repsol (REP SM) will hold its
Exploration Day on Friday;
• Siemens (SIE GY) will disclose Q1
results on Wednesday. Order
momentum, management
commentary on business trends
and underlying margins are likely
to be the investors’ focus;
• Unilever (UNA NA) will report Q4
and FY2012 results on
Wednesday. Consensus compiled
by the company is looking for Q4
organic growth of 6.3% but with a
large range (5.3% - 7.8%).
Consensus expectations are for
40bp of Core EBIT margin
expansion to 13.8% in H2, which
would give +20bp or 13.7% for
FY12.
Company Name Company Ticker Time Event Description
Monday, 21st
January
Cie Financiere Richemont SA CFR VX 06:00 Q3 2013 Sales and Revenue Release - Trading Statement
Galp Energia SGPS SA GALP PL Before Market Q4 2012 Sales and Revenue Release - Trading Update
Pearson PLC PSON LN Q4 2012 Sales and Revenue Release - Trading Update
Tuesday, 22nd
January
Alstom SA ALO FP 07:00 Q3 2013 Sales and Revenue Release
SABMiller PLC SAB LN Q3 2013 Sales and Revenue Release - Trading Statement
Wednesday, 23rd
January
Novartis AG NOVN VX 06:00 Y 2012 Earnings Release
SAP AG SAP GR 06:00 Y 2012 Earnings Release
Siemens AG SIE GR 06:30 Q1 2013 Earnings Release
Sage Group PLC/The SGE LN 07:00 Q1 2013 Sales and Revenue Release - Interim Management Statement
Unilever PLC ULVR LN 07:00 Y 2012 Earnings Release
Land Securities Group PLC LAND LN 08:30 Q3 2013 Sales and Revenue Call - Interim Management Statement
BHP Billiton PLC BLT LN Q2 2013 Sales and Revenue Release - Production Report
Thursday, 24th
January
Lonza Group AG LONN VX 06:00 Y 2012 Earnings Release
Ziggo NV ZIGGO NA 06:30 Y 2012 Earnings Release
Banco de Sabadell SA SAB SM 07:30 Y 2012 Earnings Release
Svenska Cellulosa AB SCAB SS 11:00 Y 2012 Earnings Release
Nokia OYJ NOK1V FH 11:00 Y 2012 Earnings Release
JCDecaux SA DEC FP 16:40 Q4 2012 Sales and Revenue Release
easyJet PLC EZJ LN Q1 2013 Sales and Revenue Release - Interim Management Statement
Friday, 25th
January
Wartsila OYJ Abp WRT1V FH 06:30 Y 2012 Earnings Release
Anglo American PLC AAL LN 07:00 Q4 2012 Sales and Revenue Release - Production Report
Source: Bloomberg
Next Week Preview: Earnings season in Portugal and Idea of the
weekGalp and Sonae to release trading
statements• Galp (GALP PL) is expected to disclose Q4
Trading Statement on Monday. The company
will update on production volumes, crude
processed and gas sales volumes. It will also
report data on benchmark refining margins.
Production should reflect lower output from
Lula. Refining volumes is expected to be
penalized by the delay on the upgrade of the
Sines refinery;
• Sonae (SON PL) will report preliminary results
on Wednesday.
Idea of the week: Rio Tinto (RIO LN)
• The company announced last week that it will
take a total of c. US$14bn of write-downs across
its aluminium coal assets at its 2012 results.
Moreover, both the group’s CEO and the CEO of
the energy division will leave the company;
• The management changes could lead the
company to better a capital allocation in the
future. Its volume growth profile and cost
savings potential are still important attractions.
2,500
3,000
3,500
4,000
4,500
2011 2012 2013
Rio Tinto Share Price (GBp)
Source: Bloomberg
Source: Bloomberg
Charts we are watching
• Realized volatility in equity and fixed income markets is
at very low levels. Short-term implied volatility, which
tracks realized volatility, is stuck at low levels. However, it
is possible to identify a number of economic (e.g. will all
the efforts made by central bank be fruitless?) or political
(e.g. instability in the Middle East; will Spain ask for OMT
support?) risks. Nonethless, record lows in volatility
seems to be supported by the current environment of
low trading volumes and QE policies by central banks.
• Cyprus is a small economy in GDP terms. The country
needs external funding and it has applied for EU/IMF/ECB
programme in 2012. However, the Troika and the Cypriot
government have reached stalemate, with the latter
refusing to agree on the conditionality that comes with
the programme. Of the proposed bail-out of around
€17bn, c. €10bn will probably go to recapitalize the
banking sector. Today’s eurogroup meeting could bring
some news regarding the assessment of the banking
sector in Cyprus. However, with the presidential election
in February, getting a deal before then could be difficult.Source: Bloomberg
0
100
200
300
400
500
600
2010 2011 2012 2013
iPath S&P500 VIX Short-term Futures
0
5
10
15
20
25
30
35
40
45
50
2010 2011 2012 2013
Republic of Cyprus Government
Bond Yields (%)
Republic of Cyprus 3Jun2013
Republic of Cyprus 3Feb2020
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
become outdated as a consequence of changes in the environment.
Fincor - Sociedade Corretora, S.A. provides services of reception, execution, and transmission of orders.
Fincor – Sociedade Corretora, S.A.
Rua Castilho, 44 4º Andar
1250-071 Lisboa
Portugal