BusinessWORLD

Europe Coverage

Thu, 06 Aug 2009 09:59:28 GMT

Central Banks Watch

Today is rate decision day in Europe. The European Central Bank is expected to keep interest rates on hold at a record low of one percent, as it waits to see the impact of efforts so far to revive the economy and credit flows.

BoE to hold rates at 0.5%, fate of QE scheme unsure - Reuters poll

The Bank of England is also expected to hold its interest rate at a record low of half-a-percent. But economists polled are Reuters are split whether the BoE will expand its 213 billion dollars quantitative easing programme.

Upbeat data boosts U.K. recovery hopes

There are tentative signs that the UK economy is on the road to recovery. Government data showed industrial output rose at its fastest pace since October 2007, helped by a surge in car production. And leading British think-tank, the NIESR, expects the economy to shrink much less sharply for the current quarter than in Q2.

Commerzbank Q2 net loss to hit $917.7 mn - DJ poll

Commerzbank is expected to report a 2nd quarter net loss of nearly 918 million dollars, according to a Dow Jones poll. Analysts remain concerned about the bank's exposure to to commercial real estate as well as deterioration in its corporate and markets division.

Deutsche Telekom Q2 net profit to jump 22% to $1.12 bn - DJ poll

But fellow German heavyweight Deutsche Telekom could post a 22 percent rise in 2nd quarter net profit. Analysts expect the company's results to be helped from the first time consolidation of OTE, which is one-quarter owned by Deutsche Telekom. However, after stripping out the OTE affect, analysts expect declines in the telco's operating profit.

Zurich Financial Q2 net profit to fall 36% to $804 mn - DJ poll

Net profit for Zurich Financial Services may fall 36 percent in the 2nd quarter. The decline is mainly due to lower investment gains and moderate write-downs. Analysts will be watching out for the company's guidance and expect its balance sheet to be solid.

Unilever Q2 EPS to rise 16% to $0.53 - DJ poll

And consumer goods maker Unilever could see a 16 percent rise in its 2nd quarter earnings per share. Analysts expect the company's sales to grow at a slower pace. But they also say Unilever's sales will be driven by higher prices and they are looking out for a recovery in its volumes from the previous quarter's decline.

Asia Coverage

Thu, 06 Aug 2009 09:57:31 GMT

China to grow 8% this year - Govt think-tank

In China, an influential government think-tank released a report saying that the domestic economy may grow about 8 percent this year. The State Information Centre said that investment remained the key driver of the economic rebound. The report added that China CPI should begin rising again before the end of the year, due in part to higher prices for oil and other resources.

PBoC to fine-tune policy, warns Of recovery risks

Late on Wednesday, China's central bank said it will fine-tune its policies as needed amid concerns over the sustainability of its economic recovery. For now though, the PBoC said it will maintain its moderately loose monetary policy. It also flagged dangers of another round of asset-price bubbles and rampant inflation in the global recovery if exit strategies are too slow. We will get a better sense of the health of China's economy when official data is released next week.

U.S.A. Coverage

Thu, 06 Aug 2009 09:56:14 GMT

Wall Street hurt by economic data, corporate outlooks

Wall Street snapped a 4-day winning streak as weak economic data cooled optimism that the US recession was retreating. Disappointing corporate outlooks also weighed on the markets. The Dow Industrials slipped 4-tenths of a percent. The S&P 500 shed 0-point-3 percent. The Nasdaq Composite lost 9-tenths of percent.

U.S. financials limit market losses

But Wall Street did finish off its lows as investors ventured into riskier financial shares. Analysts also said that traders rushed to buy shares to cover short positions in these battered companies.

Shares of American International Group shot up 63 percent. The Insurer reports 2nd quarter results on Friday, which are expected to stabilize for the first time in five years. Former American Express CEO Harvey Golub has emerged as the frontrunner to become chairman of AIG, according to the Financial Times.

CIT shares ended the session 38 percent. Shares of Bank of America jumped 6-and-a-half percent. Shares of American Express advanced 6 percent after it said credit card defaults fell for a second straight month in July. It was helped by helped by a lower-than-expected number of bankruptcies.

P&G Q4 sales disappoint, warns of weak Q1

Procter & Gamble was the biggest drag on the Dow after it reported a disappointing 11 percent drop in quarterly sales. The consumer goods maker also warned that sales could fall as much as 10 percent this quarter. But 4th quarter profit beat forecasts, P&G earned 80 cents per share, which was 2 cents higher than analysts' expectations.

Cisco Q4 net profit beats, but cautious on recovery prospects

Cisco's 4th quarter net profit fell to 33 cents per share but fared better than the 29 cents that analysts were expecting. But shares fell in extended trade after the tech bellwether gave a cautious outlook for the 1st quarter. The company expects revenue to fall by 15 to 17 percent from a year earlier. CEO John Chambers said it is too soon to call a recovery.

“This is about as optimistic as we could have been, in Q3 too early to call upturn, in Q4 we said it's clearly a tipping point and it will take one or two more quarters to verify that this is accurate,” he said.

Other U.S. Earnings

News Corp reported net loss a 203 million dollars in the three months to June as revenue at its TV and publishing units tumbled. The media giant said it could charge for access to its news websites by the middle of next year, and might break off its relationship with Amazon dotcom's Kindle e-reader if it cannot get better terms.

Bond insurer MBIA reported a lower 2nd quarter profit but shares rose after it said it lowered the amount of money put aside to cover losses. And Prudential Financial, the 2nd largest US life insurer, posted a stronger-than-expected second-quarter profit but lowered its outlook for the full year.

U.S. Economic Watch

The chief reason for the negative market sentiment? Concerns over the strength of a US recovery after a report showed private employers cut more jobs than expected.

371-thousand private sector jobs were lost in July, according to the ADP Employer Services report. While this was smaller than the cuts made in June, it was above what economists had been expecting.

Labour market strains were also evident in the services sector, which comprises 80 percent of US economic output. The Institute for Supply Management said its services index fell to 46-point-4 in July. A reading of below 50 indicates a contraction in the sector.

Commodities Check

Nymex light sweet crude had edged up 8-tenths of a percent in New York trade, boosted by a weaker dollar. EIA data out overnight also showed a larger-than-expected rise in US crude inventories. Meanwhile distillate stocks showed a surprise draw, down by 1-point-1 million barrels.

Europe Coverage

Thu, 06 Aug 2009 09:50:37 GMT

Forex Focus

The dollar traded close to its lowest level this year against a basket of currencies. This after bullish economic data from around the world boosted hopes of a recovery. We are expecting Eurozone Composite PMI data later. Analysts polled by Dow Jones are expecting a reading of 46-point-8 in July, compared with 44 in June. UK industrial output also out today. It is expected to fall by 12 percent in June on an annualised basis, according to another DJ poll.

Deutsche Bourse Q2 EBITA falls to $356.9 mn

German stock exchange operator Deutsche Boerse reported a wider-than-expected 34 percent fall in 2nd quarter operating profit. Its performance was pressured by lower trading activities in the financial markets. EBITA fell to just under 357 million dollars in the three months to June. Deutsche Boerse said it was sticking to its cost guidance goal of around 1-point-8 billion dollars for 2009. It also said it has not decided whether to resume its stock buyback programme this year.

Europe Earnings Preview

Another heavy earnings day for European financials. Societe Generale is expected to post a 82 percent slump in 2nd quarter net profit. Analysts will be focusing on the French bank's trends in risky assets, provisions, and corporate and investment banking activities. And Lloyds is seen reporting a 1st half net loss. Investors will be watching its impairment charge, which some say could reach over 18 billion dollars. But analysts say that the British bank could turn in a small net profit as a result of fair value gains and other one-offs. Insurance firms such as Standrad Life, AXA and Swiss Re are seen posting lower results as well.

UBS close to hiring Merrill's McCann – FT

UBS is in talks to hire former Merrill Lynch executive Robert McCann to head its wealth management business in the Americas. This is according to the Financial Times on Tuesday, citing people close to the negotiations. Talks reportedly accelerated after UBS struck a deal last week over a US tax dispute that has ignited massive outflows at its wealth management unit. The FT said a deal between UBS and McCann could be sealed soon. A UBS spokeswoman declined to comment on the report.

Northern Rock sale unlikely before U.K. election – FT

Separately the FT also reported that British state-owned bank Northern Rock is unlikely to be sold before a general election next spring. The newspaer cited aides close to UK finance minister Alistair Darling. It also cited Darling as saying he is in no hurry to sell the bank. CEO Gary Hoffman also said there was no timetable for such a sale. Northern Rock was nationalised in early 2008 after it became the first major British victim of the credit crunch.

U.S.A. Coverage

Thu, 06 Aug 2009 09:48:39 GMT

Economic data helps extend Wall Street rally

Wall Street got a boost from positive government data that suggested the economic recovery was sustainable though somewhat slow. US stocks ended a see-saw session with slim gains.

The Dow gained nearly 4-tenths of a percent. The S&P 500 rose 0-point-3 percent. The Nasdaq Composite edged up just over 1-tenth of a percent. Thiks is its its highest close since early October.

The S&P Financial index advanced 2-point-1 percent as financial stocks became the investment of choice for many investors. The sector was also supported by upbeat US housing data.

Caterpillar expects 2012 EPS of between $8 and $10

Shares of heavy equipment maker Caterpillar jumped more than 6 percent after CEO Jim Owens gave an upbeat earnings presentation. They were the strongest performer on the Dow. Owens said the company hopes to report annual earnings of between 8 and 10 dollars a share on sales approaching 60 billion dollars by 2012, provided the world economy recovers from the current recession. He also said that in future recessions Caterpillar would be able to report annual earnings of 2 dollars and 50 cents a share.

PepsiCo to buy bottlers for $7.8 bn, shares surge

PepsiCo agreed to buy bottlers Pepsi Bottling Group and PepsiAmericas in a sweetened deal worth 7-point-8 billion dollars. The price represents premiums of more than 40 percent for the bottling firms. The move is part of PepsiCo's efforts to cut costs and boost profits in North America. PepsiCo will also be able to consolidate 80 percent of its North American beverage volume. which will speed decision-making and eliminate friction between the companies.

GE to pay $50 mn to settle SEC fraud charges

General Electric will pay 50 billion dollars to settle SEC charges that the company misled investors with fraudulent accounting in 2002 and 2003. The SEC found that GE had intentionally wrongly accounted for some commercial paper hedging activity and the sales of railroad locomotives in an effort to make its financial results look better. GE did not admit or deny wrongdoing as part of the settlement.

D.R. Horton Q3 loss steeper-than- expected at $0.45 per share

US homebuilder DR Horton reported a deeper-than-expected 3rd quarter loss of 45 cents per share. But its shares still gained more than 3 percent, boosted by a strong report on US home sales. DR Horton still faces faces difficult market conditions as it navigates its way through the worst housing slump since the 1930s. It also stands to lose its position as the largest US builder due to the merger of two rivals, Pulte Homes and Centex.

Kraft Q2 EPS at $0.56, versus Wall Street's view of $0.54

Kraft Foods reported a higher-than-expected 2nd quarter profit, helped by price increases, cost-cuts and people eating more food at home. Net income for the F&B giant jumped 11 percent to 56 cents per share, versus 54 cents per share consensus. Kraft also raised its full-year profit forecast, citing its strong performance so far this year and cost-cuts. But its shares dropped more than two percent in extended trade.

U.S. Economic Watch

The National Association of Realtors said its Pending Home Sales index rose for the 5th straight month in June. Sales rose 3-point-6 percent , which was an improvement from May's reading. US consumer spending rose 4-tenths of a percent in June, according to the Commerce Department. This was partly due to higher gasoline prices. But if the data was adjusted for inflation, spending actually fell 0-point-1 percent in June after being flat in May.

But joblessness continues to weigh on the US economic recovery.The Commerce Department said personal income declined 1-point-3 percent in June, as the effects of one-time government stimulus checks wore off. Adjusting the data for taxes and price rises, real disposable income actually tumbled 1-point-8 percent in June, the largest decline in a year.

Commodities Check

Oil prices erase losses from the previous session after API data showed a surprise drawdown in US crude inventories. US crude stocks unexpectedly fell 1-and-a-half million barrels last week, according to the API weekly report. And we are waiting for inventory numbers from the EIA due later today.

Europe Coverage

Thu, 06 Aug 2009 09:39:52 GMT

Forex Focus

The dollar fell broadly and hit its lowest point this year against a basket of currencies as risk appetite improved. This week is a major week for central banks meetings as well. No change expected from the European Central Bank whose interest rate is at a record low of one percent.

The Bank of England also expected to keep its interest rate at a record low of half-a-percent. But analysts polled by Reuters say the central bank may be under pressure to extend its quantitative easing programme.

HSBC H1 Income to fall 5.1% to $37.46 bn - DJ poll

HSBC reports today and it is expected to unveil a 5 percent slump in 1st half income, according to a Dow Jones poll. Lower fee income in its consumer lending arm is likely to offset a strong performance at its investment banking division. Analysts will also be looking for any signs of improvement in its US consumer finance impairments.

Barclays H1 pretax profit to jump 31% $6 bn - DJ poll

Barclays is seen posting a 31 percent surge in 1st half net profit, according to a Dow Jones poll. Analysts say it is expected to report strong gains from investment banking, albeit countered by high loan loss provisions.

Barclays' star bankers to get bonus bonanza - Sunday Times

Separately, Barclays investment bankers may receive bonuses amounting to 419-thousand dollars per person for six-months work. According to the Sunday Times, Barclays has set aside nearly 8-point-4 billion dollars for remuneration purposes for the 1st half of the year. The company was not immediately available for comment.

Brazil Weighs French, Swedish, U.S. Fighter Jet Contract Bids

Brazil will decide in September which company it will award a multi-billion dollar defence contract. US-based Boeing, France's Dassault and Sweden's Saab are competing to supply 36 combat aircraft to replace Brazil's aging fleet. The procurement is part of a 15 billion dollar plan to expand Brazil's military capabilities. The value of the fighter jet contract is worth up to 4 billion dollars and will include five years of logistics and support as well as a supply of missiles and bombs. Deliveries are to start in 2014.

Asia Coverage

Thu, 06 Aug 2009 09:37:05 GMT

RBA Rate Preview

Closer to home, the Reserve Bank of Australia is seen keeping its official cash rate at three percent. Australian Treasurer Wayne Swan said that interest rates would have to rise from current historic lows but he refused to speculate on the timing. The RBA rate decision is due out on Tuesday. Analysts are predicting rises in 2010, which is likely to be an election year, according to a Reuters poll.

China July PMI 53.3 vs. 53.2 in June

Over in China, its purchasing managers index inched up to 53-point-3 in July as domestic demand spurred manufacturing activity. It was also the 5th month in a row that the index has been above 50, a level that signals expansion. The data indicates that China's 585 billion dollar stimulus plan has breathed life back into its factories even as global trade remains weak.

U.S.A. Coverage

Thu, 06 Aug 2009 09:35:48 GMT

Wall Street Wrap

US stocks ended Friday's session on a mixed note. The Dow Industrials gained zero-point-2 percent. The S&P 500 ticked up nearly one-tenth of a percent. But the Nasdaq slid zero-point-3 percent.

An extremely rosy picture if we look back to the past month. The Dow surged nearly nine percent, marking its best July performance since 1989. And investors will be watching out to see if the S&P can break past the psychologically important one thousand-point level in the coming days.

U.S. Earnings Preview

The US earnings season is drawing to a close with nearly two-thirds of S&P companies having reported. Other companies scheduled to report results this week include Procter & Gamble, Kraft and Cisco. Household products maker P&G as well as F&B giant Kraft will be of particular interest to investors as they will shed light on how Americans are spending their money.

White House hopeful on extension of 'clunkers' scheme

The Obama administration was optimistic on Sunday that the US Senate would extend the so-called 'cash for clunkers' auto sales programme. But the administration also warned that without new funding, the scheme would be suspended mid-week. On Friday, the US House of Representatives passed a proposed two billion dollar extension for the programme, and it is now the Senate’s turn whether to approve or reject the proposal.

Government and industry officials had estimated that the 'clunkers' programme facilitated nearly 250-thousand sales although exact figures are not immediately available. Automakers report July sales this week.

Greenspan: U.S. Housing could take another turn downward

The US housing sector also in focus. On Sunday, former Fed Chairman Alan Greenspan said that signs of stabilization and increased confidence in the economy could be dashed if home prices were to take another turn downward. While Greenspan did not expect another steep drop in housing prices, he said that they had stabilised only temporarily.

U.S. Economic Watch

The US recession may finally be winding down if Friday's GDP data is anything to go by. The economy shrank one percent in the three months to June, surpassing expectations of a contraction of 1-and-a-half percent. This is also a sharp improvement from the 6-point-4 percent decline experienced in the 1st quarter.

IMF says sharp contraction in U.S. economy ending

The data supported an earlier IMF report that the sharp contraction in the US economy ‘seems to be ending’. But the fund also warned that the US recovery will be slow with risks still looming from the weak labour and housing markets. It stuck to earlier forecasts that US GDP will shrink by 2-point-6 percent this year and then rise by 8-tenths of a percent in 2010.

Looking ahead, this week is all about jobs. The US economy is expected to slash 320-thousand nonfarm payroll jobs in July, an improvement over June. The unemployment rate is expected to rise to 9-point-6 percent, according to a Reuters poll. The data will be released on Friday.

Europe Coverage

Mon, 03 Aug 2009 08:42:22 GMT

Air France-KLM posts $699.1 mn Q1 ops loss, promises reviews

Air France-KLM posted a wider than expected fiscal 1st quarter loss, weighed down by unprofitable fuel hedging contracts. Operating loss for the Franco-Dutch carrier came in at just under 700 million dollars in the three months to June. It vowed to shore up profitability with measures that include cutting cargo capacity further. The airline also promised to review its medium-haul network as well as tailor its payrolls to the global aviation crisis.

Continental Q2 net loss at $267 mn, CEO fate in doubt

Continental posted a 2nd quarter net loss of 267 million dollars. But it was not the results but drama that stole the limelight at the company's board meeting. Several board members said Schaeffler, which is the dominant shareholder in Continental, tried but failed to oust CEO Karl-Thomas Neumann. When the board finally got down to business, they approved a capital increase of as much as 1-point-5 billion euros to stabilize its debt burden.

Areva Q2 revenue rises 3.5%, unable to confirm FY guidance

Areva reported a 3-point-5 percent rise in 2nd quarter revenue to nearly five billion dollars. But the French nuclear group said it is unable to confirm full year guidance for revenue and operating income. Areva's performance was helped by its power transmission and distribution unit. Back in June, the company announced plans to sell the T&D unit to raise funds to invest in the nuclear business.

Europe Earnings Preview

Energy earnings still very much in focus today. France's Total is expected to post a sharp drop in quarterly profit due to weaker fuel prices from a year ago. But profit at Italy’s Enel may rise, supported by its hydroelectric and international assets.

A couple of big names in the UK reporting as well. British Airways may report its first operating loss since it was privatised for the fiscal 1st quarter. And Anglo America is seen posting a large drop in 1st half profit. Analysts also want to hear from the group why it is better off as an independent company as opposed to merging with Xstrata.

Asia Coverage

Mon, 03 Aug 2009 08:40:46 GMT

Japan June core CPI marks record fall of 1.7% y/y

Japan plunged deeper into deflation as consumer demand for goods continued to weaken. Core CPI fell by a record 1-point-7 percent in June from a year ago, making it the steepest decline in 4-and-a-half years. The fall has also gathered steam for four straight months, suggesting deflation may persist unless household demand picks up. The Bank of Japan has forecast two years of deflation.

Japan PMI shows first expansion since Feb '08 - Nomura/JMMA

But manufacturing activity in Japan expanded for the first time since February 2008, according to a Nomura - JMMA survey. Manufacturing PMI rose to 50-point-4 in July, as a recovery in global trade prompts companies to slowly resume production.

U.S.A. Coverage

Mon, 03 Aug 2009 08:38:13 GMT

Wall Street climbs on strong earnings, jobless data

Strong corporate earnings supported US stocks on Thursday, reversing losses from the previous sessions. Investors also cheered economic data showing a drop in the number of Americans on jobless benefits.

The Dow Industrials added 9-tenths of a percent. The S&P 500 rose 1-point-2 percent, and is just four points away from the psychologically important 1-thousand level. And the Nasdaq Composite gained 8-tenths of a percent. It briefly breached the 2-thousand level for first time since October.

Beating Estimates

On the earnings front, Dow Chemical posted a lower-than expected 2nd quarter net loss of 435 million dollars as cost-cutting efforts helped offset a drop in sales. Shares surged nearly 8 percent, making it the strongest performer on the Dow index. MasterCard reported stronger-than-expected 2nd quarterly net income of 349 million dollars as it raised fees charged to banks and cut expenses. And Motorola shipped more cellphones than expected in the 2nd quarter AND posted a profit of 26 million dollars.

The largest US life insurer, MetLife, posted a 2nd quarter net loss of 1-point-4 billion dollars as investment losses took their toll. But operating earnings, which excluded the investment losses, was better than expected and pushed shares up after-hours. And Kellogg reported a higher-than-expected 2nd quarter profit of 353 million dollars as costs for energy and grains eased while price increases helped lift revenue. The food maker also raised its full-year earnings forecast.

Missing Estimates

But there were those that disappointed as well. Exxon Mobil posted a steeper-than-expected drop in 2nd quarter net income to four billion dollars on lower global fuel demand and as energy prices dropped from last year's high. Walt Disney posted a 26 percent plunge in third quarter earnings to 954 million dollars as sales fell sharply at its media networks and theme parks. Its shares continued to fall in extended trade.

GE shares surge

Shares of General Electric jumped after Goldman Sachs upgraded the stock to a 'buy', saying that GE is less likely to have to spin off its finance arm. This as the chairman of the US House Financial Services Committee said that commercial companies such as GE that have financial subsidiaries should be allowed to keep the units under a revamp of rules governing banking.

BofA sets up Chinese subsidiary

Bank of America plans to set up a wholly owned subsidiary in China to expand in the world's fastest-growing major economy. This is according to Reuters sources who have been briefed on the plans. BofA is keen to expand its corporate and investment banking business as well as offer wealth management services to tap rich Chinese consumers. It is expected to formally apply to a Chinese bank regulator for a local license in the next few months.

U.S. won't suspend 'cash for 'clunkers' program – official

The US government will not suspend its so-called 'cash for clunkers' scheme, according to an Obama administration official. This despite the fact that the scheme is near its limit of 250-thousand confirmed and pending auto sales. The programme was launched just six days ago and authorized up to $4,500 in rebates for car buyers who traded in their gas-guzzlers for more fuel-efficient vehicles. But enthusiastic response to the programme has nearly depleted the one billion dollars in funding allocated to it. Ford Motors announced earlier that it has seen a dramatic increase in sales last week due to the scheme.

U.S. Economic Watch

On the economic front, government data out overnight suggested a slowing pace of layoffs as the US economy stabilizes. Initial jobless claims rose by 25-thousand last week, according to the U.S. Labour Department. But on a more encouraging note, the number of people still on benefit rolls fell to its lowest level since early April.

All eyes on the release of 2nd quarter GDP data later today. Analysts polled by Reuters forecast the US economy to contract 1-and-a-half percent from a year ago. They also expect the economy to start growing in the third quarter, as the effects of the government's 787 billion dollar stimulus package kick in. This would support US President Barack Obama's view that the economy is getting better.

Europe Coverage

Mon, 03 Aug 2009 08:31:30 GMT

Peugeot-Citroen H1 net loss at $1.35 bn, sees recovery at end-2010

French automaker Peugeot-Citroen posted a first half loss this year due to shrinking vehicle sales. Net loss came in at around 1-point-3 billion dollars, but was smaller than analyst's expectations, according to a Dow Jones poll. Peugeot also said it expects to see a recovery in the European auto market only towards the end of 2010.

CEO: Peugeot is considering 2nd JV in China – FT

And in an interview with the Financial Times, CEO Philippe Varin said his company is considering a second joint venture in China. But Varin also said Peugeot's priority would be to grow its existing joint venture with Dongfeng Motor.

ArcelorMittal posts $792 mn H1 loss

ArcelorMittal, the world's largest steelmaker also swung to a loss in the 2nd quarter due to oversupply and lower demand. The company lost 792 million dollars, compared with a profit of 5-point-8 billion dollars from a year ago.

ArcelorMittal CEO: Steel demand to rise at least 10% in 2010 – FT

CEO Lakshmi Mittal also spoke to the Financial Times and painted an optimistic outlook for the steel sector. He is confident that global steel demand will rise at least 10 percent next year, partly on the strength of government stimulus. He said that emerging economies are exiting the global downturn relatively quickly while there are signs in the US and Europe that stimulus packages are starting to take effect.

Lufthansa posts h1 net loss, still sees op profit for the full year

In after-hours earnings, Deutsche Lufthansa reported a smaller-than-expected 1st half net loss as demand for air travel continued to weaken. It lost 303 million dollars compared to a year-ago profit of 534 million dollars. But Lufthansa reiterated its goal of generating an operating profit for this year.

Air France-KLM Q1 operating loss seen at $283.26 mn - DJ poll

Meanwhile, Analysts polled by Dow Jones expect Air France to post an operating loss if 283 million dollars in the 1st quarter. The airline is also seen suffering from a slump in passenger and cargo traffic.

Europe Earnings Preview

In the energy space, all eyes out for Royal Dutch Shell's 2nd quarter results. Earnings from clean costs of supplies is expected to plunge more than 70 percent. But other energy majors - EDF, Areva and Enel - are expected to do better.

Industrial conglomerate Siemens is expected to remain profitable for the 3rd quarter. But results may come in lower than a year ago as customers remain reluctant to make big-ticket purchases. In contrast, Alcatel-Lucent is slated to post a 1st quarter net loss.

Asia Coverage

Mon, 03 Aug 2009 08:29:16 GMT

Forex Focus

The dollar trimmed gains against most major currencies after China's central bank said it will stick to a loose monetary policy to consolidate its economic recovery. The yen fell broadly after the PBoC's vice governor was reported as saying it will use market tools instead of quota-style controls to ensure credit growth is appropriate.

Japan's industrial output rose for the 4th straight month, up 2-point-4 percent in June. This as Japan exports get support from a gradual pickup in global demand led by stimulus spending across the world. And output is expected to continuing rising in July and August, according to a survey of Japanese manufacturers.

The Reserve Bank of New Zealand kept its official cash rate at a record low of 2-and-a-half percent. The central bank also retained a dovish stance, saying further easing was possible if its economic recovery is derailed by the strong New Zealand dollar.

U.S.A. Coverage

Mon, 03 Aug 2009 08:27:38 GMT

Wall Street sags on China growth concerns

US stocks fell overnight as investors fretted over reports that China's two biggest commercial banks have put a lid on their lending targets for this year. The move could slow China's economic growth which would hinder global recovery.The Dow Industrials dropped 3-tenths of a percent. The S&P 500 lost half-a-percent. The Nasdaq Composite dropped zero-point-4 percent.

Concerns about China hit commodity prices and shares in the energy and raw materials sectors. Shares of miner Freeport-McMoRan slumped more than 5 percent. Shares of oil major Chevron slid nearly 2 percent.

Still in the energy space, ConocoPhillips shares tumbled 3-and-a-half percent after the company posted a 76 percent drop in 2nd quarter profit. Net profit fell to 1-point-3 billion dollars, or 87 cents per shares, as heavy fuel supplies and weak demand hurt margins. But it narrowly beat expectations of 86 cents per share, according to a Reuters poll. The oil major left its 2009 forecasts intact.

Microsoft, Yahoo seal 10-year Web search partnership

Microsoft and Yahoo have sealed a 10-year Web search deal to challenge market leader Google. But investors punished Yahoo stock, sending it 12 percent lower, over disappointment about the limited scope of the deal. Microsoft will combine its new Bing search engine with Yahoo's experience in attracting advertisers. Yahoo said the deal would boost its annual operating income by about half a billion dollars and yield capex savings of 200 million dollars. Both companies still face antitrust and privacy issues. The deal could take as long as two-and-a-half years to get approval and be fully implemented.

U.S. Financials

The US government will officially take a 34 percent equity stake in Citigroup later today, becoming the bank's largest shareholder. Separately, insurer Hartford Financial posted a 2nd-quarter operating profit that beat market estimates, sending its shares higher after hours. And American Express has paid the US Treasury 340 million dollars to redeem warrants to buy its stock, allowing it to fully escape the government's bank bailout program.

Visa posted better-than-expected 3rd quarter results, helped by costs cuts and higher usage of debit cards by cash-strapped customers. Net income for the world's largest credit card operator jumped 73 percent to 729 million. On an adjusted basis, the company earned 67 cents per share. Visa is partially insulated from the credit crisis because it processes transactions rather than lends funds. However, the company has seen a slowdown in the growth of revenue and transaction volumes as consumers used their credit cards less. Visa stock fell 1-and-a-half percent in extended trade.

Fed survey sees U.S. recession slowing, stabilizing

The Federal Reserve said that the pace of the recession has slowed or stabilized in most areas of the US. But in its Beige Book economic survey, the central bank also warned that the US jobs market was 'extremely soft'. It noted that wages and compensation were steady or falling in most areas of the country. Fed officials say they expect growth to return in the second half of the year, but the recovery is seen to be sluggish.

A government report showed that new orders for US durable goods posted their biggest drop in five months. June orders fell 2-and-a-half percent, compared with a 1-point-3 percent rise in May. But stripping out the volatile transportation sector, new orders were up a better-than-expected 1-point-1-percent last month. Economists called that figure 'encouraging'.

All eyes are now on the release of 2nd quarter GDP on Friday. Analysts polled by Reuters are expecting a contraction of 1-and-a-half percent. But they also say the US would start clawing out of the recession in the 3rd quarter.

Obama vigorously defends economic policies

Still on the economy, President Barack Obama defended his economic policies and said they helped save the country from plunging into a depression.

“Here's what's true: we have stopped the freefall. The market's up, and the financial system's no longer on the verge of collapse. We're losing jobs at half the rate we were when I took office six months ago. We just saw home prices rise for the first time in 3 years. So there's no doubt that things have gotten better,” he said.

Obama's defense comes amid growing criticism that his 787 billion-dollar stimulus package has failed to jump-start the US economy. His job approval rating has taken a hit too, with a recent poll showing that 48 percent of Americans believe that the US had racked up a record federal deficit while failing to end the recession. And Republicans have attacked Vice President Joe Biden for saying the stimulus was intended to provide steady support over an extended period.

Commodities Check

In New York trade, oil dropped nearly 6 percent, its biggest one-day slide since April. This after EIA data showed a surge in US crude inventories on higher imports and lower refinery activity. Crude stocks jumped more than 5 million barrels last week, countering expectations for an inventory draw.

Europe Coverage

Mon, 03 Aug 2009 08:22:44 GMT

Daimler expected to post $1.9 bn Q2 net loss - DJ poll

Auto earnings will also be a major theme in Europe's trading session. Daimler is expected to post a 2nd quarter loss of 1-point-9 billion dollars, according to a Dow Jones poll. Analysts say this is due to eroding sales of luxury cars and trucks as well as restructuring charges.

Peugeot-Citroen H1 net loss seen at $1.49 bn - DJ poll

Peugeot Citroen is expected to post 1st half net loss of 1-and-a-half billion dollars due to a drop in vehicle sales. But analysts don't expect any major changes to the automaker's guidance for this year.

Bayer Q2 net profit seen to fall 35% to $533.05 mn - DJ poll

In the pharmaceuticals space, Bayer may post a 35 percent fall in 2nd quarter net profit to 533 million dollars. Analysts are watching out for an improvement in its over-the-counter consumer health sales after a disappointing 1st quarter.

Sanofi-Aventis Q2 net profit could jump 29% to $2.95 bn - DJ poll

But 2nd quarter net profit at Sanofi Aventis could jump 29 percent to 2-point-5 billion dollars. It results are seen to be boosted by its blockbuster drugs and vaccines.

U.K. to unveil $1.65 bn job creation scheme – report

The UK government will announce a nearly 1-point-7 billion dollar scheme to create tens of thousand of public sector jobs for the unemployed. According to the Daily Telegraph, the programme aims to remove 150-thousand people from the unemployment register over the next two years. The first 47-thousand jobs in the scheme will be announced later today.

U.K. announces $248 mn support for manufacturing

The government had earlier announced a nearly 250 million dollars package to promote high-technology manufacturing. Nearly one-third of the funds will be given to Rolls Royce to build and expand four British factories, which will create another 800 jobs.

Asia Coverage

Mon, 03 Aug 2009 08:20:04 GMT

Japan June retail sales fall by worse-than-expected 3%

Japanese retails sales fell more than expected in June, down three percent versus expectations of a 2-and-a-half percent decline. The data suggests that worsening job and income conditions were offsetting the positive effects of government stimulus measures.

S. Korea current account surplus rises to $5.43 bn in June

Over in South Korea, its current-account surplus rose to a 3-month high in June after falling for two straight months, due mainly to an improved trade balance. The surplus came in at 5-point-4 billion dollars, widening from a revised 3-and-a-half billion dollars in May.

U.S., China vow closer ties to lead global recovery

The US and China wrapped up their 2-day Strategic and Economic Dialogue with a shared vision to rebalance the global economy and maintain stimulus spending until economic recovery is secured. The biggest accomplishment appeared to be that both countries agreed they need to reconfigure their economies so that China is less reliant on exports for growth. As for the US, it promised to resume savings and investments to stop the boom-and-bust cycle. They also signed a memorandum on climate change, energy and the environment, and pledged their support for free trade.

CSCEC Debut

A stellar debut for China State Construction Engineering Corp in Shanghai. This is the world's biggest IPO in a year. CSCEC is the 2nd blockbuster listing in Shanghai after Sichuan Expressway on Monday. China ended a 10-month IPO suspension last month. Its strong performance bodes well for a series of other major IPOs lining up on the mainland. But analysts have also become more concerned about asset price bubbles.

BBMG Debut

Another strong debut, this time in Hong Kong. Shares of building materials maker BBMG were driven up by huge demand from retail investors. BBMG is the second largest Hong Kong listing so far this year. The company raised 768 million dollars last weekk by selling 933 million shares in its IPO.

Macquarie sees 28% slide in H1 profit, but capital strong

Australia's Macquarie Group said it expects 1st-half profit to slide 28 percent to around 360 million dollars. But it defended its strong balance sheet, saying it has about 3-point-6 billion dollars in surplus capital. In a trading update ahead of the group's annual general meeting, the bank also said its operational performance had improved in the June quarter.

U.S.A. Coverage

Mon, 03 Aug 2009 08:18:14 GMT

Wall Street Wrap

Worse-than-expected consumer confidence data pressured stocks lower. The Dow Industrials shed 1-tenth of a percent. The S&P 500 dropped 0-point-3 percent. But the Nasdaq Composite gained 4-tenths of a percent.

Investors snapped up biotech and healthcare shares a day after Amgen reported strong 2nd quarter results. Amgen's stock rose 2-point-7 percent. Shares of Coventry Health Care surged 12-point-7 percent after the company's earnings beat expectations and it lifted its full-year earnings forecast. And Aetna shares jumped 12-point-6 percent after several brokerages said its revised earnings forecast for this year is achievable.

But shares of major oil firms weighed on the broader market as the weak consumer confidence data beat down oil prices. Shares of Exxon Mobil fell 1-point-2 percent and was the top drag on the Dow.

Market sentiment also came under pressure from disappointing earnings. Office Depot reported a bigger-than-expected 2nd quarter loss on lower demand from corporate customers due to the recession. Its stock tumbled 18-point-1 percent. Shares of US Steel fell 2-point-2 percent. The company reported a 2nd quarter loss and said it expected all of its business sectors to operate in the red in the current quarter.

IBM to pay $1.2 bn in cash for business analytics firm SPSS

IBM will pay 1-point-2 billion dollars in cash for business analytics company SPSS. The deal will help Big Blue better compete with rivals Oracle and SAP in the growing field of business intelligence. Steve Mills, a senior IBM executive, told Reuters he expects double-digit growth in its analytics business despite the weak economy. SPSS shareholders would receive 50 dollars a share, which represents a 42 percent premium to Monday's closing price.

Sprint to buy Virgin Mobile USA

In another acquisition deal, Sprint Nextel will buy out Virgin Mobile USA in a deal that values the small wireless carrier at 483 million dollars. The price is a 31 percent premium over Virgin Mobile's closing price on Monday. Sprint also plans to retire all of Virgin Mobile's debt by the end of September, which is estimated to be no more than 205 million dollars.

GE says finance arm on track to hit March targets

GE officials say its finance arm is on track to hit performance targets set in March and does not need to turn to investors for more capital. GE Capital is expected to generate between 2 billion and 2-and-a-half billion dollars in profit. It also aims to cut its long-term debt to between 230 billion to 250 billion dollars by 2012.

Microsoft, Yahoo agree on ad partnership – Reuters

In after-hours news, Microsoft and Yahoo have reportedly agreed to an online search and advertising partnership and will announce it within 24 hours. According to a Reuters source, the focus of the deal is on sharing revenue between the two companies. Microsoft and Yahoo have declined to comment on the report. Yahoo shares rose in after-hours trade while Microsoft shares were roughly flat.

U.S. Economic Watch

US consumer confidence fell more than expected in July as people continued to worry about unemployment and wage cuts. The US Conference Board's consumer sentiment index fell to 46-point-6 in July. Analysts polled by Reuters were expecting a reading of 49.

But on a more positive note, US home prices unexpectedly rose in May for the first time in three years, suggesting the battered housing market is stabilizing. According to S&P/Case-Shiller index, house prices rose half-a-percent in May.

Commodities Check

Oil prices fell during New York trade after poor US consumer confidence data spurred concerns about the economic recovery. Meanwhile, the American Petroleum Institute said US crude oil stockpiles unexpectedly surged last week as imports sped up and refiners slowed their processing rates. Crude inventories rose by 4-point-1 million barrels to 352-point-4 million barrels.

CFTC to review options to curb energy speculation

The Commodity Futures Trading Commission said it will consider every option to curb excessive speculation in energy markets. The regulator is reviewing how to limit the number of futures contracts that can be held, and if some traders should be allowed to exceed those limits. But officials from major exchanges warned that the CFTC risks increasing volatility, distorting pricing functions and pushing traders to less regulated offshore markets.

Europe Coverage

Tue, 28 Jul 2009 07:42:02 GMT

Forex Focus

The dollar dropped to an 8- week low against the euro as a jump in US new home sales boosted risk appetite. The euro was also supported by data showing German consumer sentiment rose its highest level in over a year. The forward-looking GfK indicator rose to 3-and-a-half going into August.

BP seen doing better than shell in Q2

BP is widely seen as well-positioned to benefit from stronger oil prices in the previous quarter, according to a Dow Jones poll. While BP's profits are expected to down substantially for the 2nd quarter, analysts say they are likely to rise slightly from their trough last quarter. BP is also seen as less exposed to weak European gas markets as well as the global refined products and chemicals markets than rival Royal Dutch Shell.

Ahold Q2 sales seen up 13% to $9.4 bn - Reuters poll

2nd quarter results for Ahold due in a few minutes. The Dutch supermarket group is expected to post a 13 percent increase in sales to 9-point-4 billion dollars. This is according to a Reuters poll. Ahold owns the largest supermarket chain in the Netherlands but makes more than half of its sales in the United States. It is also the world's 7th largest retailer by sales.

Deutsche Bank Q2 Net Income to jump 47% to $1.36 bn - DJ poll

Deutsche bank is seen posting a 47 percent jump in 2nd quarter net profit to 1-point-4 billion dollars. Analysts polled by Dow Jones say the bank's performance should be bolstered by strong capital markets and investment banking activities. They will also look for details on an alleged spying affair, which reports have speculated underlies a power struggle between the CEO and the Chairman.

Asia Coverage

Tue, 28 Jul 2009 07:40:31 GMT

Forex Focus

The Aussie headed towards a 2009 high on comments from RBA Governor Glenn Stevens. He said that the Australian economy has fared well enough such that upside risks to the outlook should be balanced out by downside risks. He also noted that confidence has lifted and that it is increasingly likely that the Australian economic downturn will NOT be one of the worst in the post-war period. But Stevens said nothing directly on the outlook for interest rates in his speech.

Meanwhile, We also have survey results by the National Australian bank indicating that business confidence had surged to levels not seen since the collapse of Lehman Brothers. The NAB business confidence index rose 20 points to minus 4 points in the second quarter.

And South Korea's Finance Ministry warned that economic growth in the current quarter could fall below expectations. But this was only because GDP grew by a stronger-than-expected 2-point-3 percent in the 2nd quarter. The finance ministry said it would not change its overall forecasts for the economy.

Canon to streamline design, product data systems – Nikkei

Canon will spend 263 million dollars to streamline its design and product data systems in 2010, according to the Nikkei business daily. The move is expected to save Canon more than one billion dollars over the next three years. Niikkei also said that Canon will adopt the streamlined systems in 25 locations at home and abroad. The electronics firm will streamline maintenance and operation of its systems as well.

Toyota to launch new hybrid compact in Japan in 2011 – Asahi

Toyota plans to launch a hybrid compact for under 16-thousand dollars in Japan in 2011, according to the Asahi newspaper. The new model will broaden Toyota's hybrid car portfolio and allow it to better compete against rival Honda. Production of the hybrid will be based on an existing platform and engine design. Asahi said that Toyota may produce the new hybrid not only in Japan but also in France for sale in Europe.

CSCEC to list world's biggest IPO in a year on Wednesday

China State Construction Engineering Corp has confirmed that it will list its shares on the Shanghai Stock Exchange on Wednesday. Last week, the company sold 12 billion A shares and raised 7-point-3 billion dollars in the world's largest IPO in a year. Chinese regulators have pushed companies to launch IPOs over the past several weeks. This in order to mop up excess liquidity in the system that is threatening to create an asset bubble in China.

U.S.A. Coverage

Tue, 28 Jul 2009 07:38:07 GMT

Wall Street Wrap

US stocks rose slightly in a late rally as investors rotated into financial shares. The Dow Industrials rose zero-point-2 percent. The S&P 500 gained 3-tenths of a percent. The Nasdaq Composite added zero-point-1 percent.

The KBW Bank Index advanced 3-point-1 percent. Upbeat data on new home sales prompted investors to snap up banking shares such as Bank of America and Regions Financial.

US new home sales jumped 11 percent in June, the fastest pace in eight years. Meanwhile, the number of new homes still for sale fell to 281-thousand units, the lowest since February 1998. The data suggests that the housing market may be starting to recover from its worst slump since the great Depression.

The strong data gave homebuilders' stocks a boost. The Dow Jones US Home Construction Index rallied 4-point-3 percent.

Verizon Q2 EPS at $0.63, to cut 8,000 landline jobs

On the earnings front, Verizon's 2nd quarter profit excluding items fell to 63 cents per share, roughly in line with expectations. Weakness in its wholesale and corporate segments overshadowed growth in its wireless unit. Verizon said it would accelerate cost cuts by cutting 8-thousand jobs in its landline business. The latest round of layoffs come on top of 8-thousand job cuts last year. ts shares ended the session 1-point-6 percent lower.

Amgen Q2 EPS of $1.25 tops estimates

In after-hours news, Biotech firm Amgen surpassed expectations with 2nd quarter earnings per share of 1 dollars and 25 cents. Its net profit was helped by a rebound in sales of its arthritis drug as well as a 115 million dollar tax benefit. Amgen also announced a deal with UK-based GlaxoSmithKline to commercialise its osteoporosis drug in Europe and emerging markets. Its shares initially rose in extended trade but have since fallen.

Visa says president to leave, will meet or exceed financial guidance

Visa has announced a management reorganization even as it said performance is meeting or exceeding expectations. President John Morris will step down from his position but will remain in the company in another capacity. Visa will also consolidate its sales, client services, marketing, product development and innovation functions under COO John Patridge. Meanwhile CEO Joseph Saunders said the company will continue to meet or exceed its current financial guidance. Visa shares initially rose in after-hours trade but have since fallen.

Time Warner buys Google's 5% stake in AOL for $283 mn

Time Warner has paid 283 million dollars for Google's five percent stake in Internet firm AOL. The deal implies that AOL has a total value of around 5-point-7 billion dollars. Time Warner is now one step closer to ending a troublesome 8-year merger with AOL. Current Time Warner shareholders are expected to be holders of the new AOL shares once the company is spun-off. Shares of Time Warner ticked up 1-tenth of a percent but Google shares ended the session zero-point-4 percent lower.

Europe Coverage

Mon, 27 Jul 2009 07:53:47 GMT

Julius Baer H1 net profit to drop 49% to $196.7 mn – DJ

Julius Baer's first half numbers due at the top of the hour. Analysts see Switzerland's largest dedicated wealth manager posting a 49 percent fall in net profit. But net new money at its private banking division is seen coming in at a healthy 5.8 billion Swiss francs.

TNT Q2 net profit to slump 53% to $136.3 mn - DJ poll

TNT is expected to post its fourth quarterly earnings fall in a row as weaker European demand continues. Analysts see a mixed picture for the Dutch delivery service company, so its outlook is being keenly eyed.

Ryanair Q1 under pressure from fuel hedging, strong sterling – WSJ

And the Wall Street Journal expects total costs at Ryanair to fall saying it did not hedge its fuel requirements sufficiently last year. The weakness of the euro against the sterling also not boding well for the carrier's first quarter performance.

Ericsson pays $1.13 bn for Nortel's wireless assets

Ericcson will pay just over 1-point-1 billion dollars for the wireless assets of the bankrupt Nortel Networks. The assets include wireless technology being used in North America, as well as next-generation technology which many major operators plan to upgrade their networks to. Analysts say the deal will help Ericsson expand its North American footprint. But it will also mean that Nortel will be broken up instead of emerging from bankruptcy as a single unit. Ericsson plans to keep at least 2,500 jobs in the wireless operations, or about 80 percent of current staffing levels.

VW mulls raising $5.7 bn in capital to buy Porsche – FT

Volkswagen is considering a capital raising of up to 5-point-7 billion dollars as part of its plan to buy Porsche. According to the Financial Times, VW will start looking into Porsche's books in the coming days. The German automaker declined to comment on the report. Rating agencies were also sceptical of a combination of VW and Porsche. They fear that Porsche's debt burden of 14 billion dollars could worsen VW's credit profile.

Asia Coverage

Mon, 27 Jul 2009 07:51:53 GMT

Japan Economic Watch

This week is a heavy one for Japanese data.

Retail sales are expected to fall in July but at a slower pace, with analysts forecasting a contraction of 2-and-a-half percent on an annualised basis.

And the spectre of deflation hanging over Japan due to falling oil costs and weak domestic demand. June's CPI seen falling 1-point-7 percent from a year ago.

Meanwhile Industrial output probably grew at a slower pace for June, this as some companies are reluctant to restock inventories any further.

And the jobless rate is expected to hit 5-point-3 percent in June, the highest level since World War 2 as firms continue to cut cost by trimming payrolls.

Hitachi to spend $3.2 bn to make 5 listed units wholly owned – Nikkei

Japan's Hitachi is reportedly ready to spend up to 3-point-2 billion dollars to turn five listed subsidiaries into wholly owned units. According to the Nikkei Business Daily, Hitachi will launch tender offers next week to buy the shares it does not own in those units. But a Hitachi spokesperson said nothing has been decided. Hitachi currently has 16 listed units and is looking to revamp its management strategy after booking a record loss of about 8 billion dollars in the past business year. Shares of the listed units were suspended this morning.

U.S.A. Coverage

Mon, 27 Jul 2009 07:49:59 GMT

Wall Street Wrap

US stocks ended mixed on Friday. The Dow and S&P both gained 3-tenths of a percent. But the Nasdaq slid zero-point-4 percent, weighed down by Microsoft and Amazon.

Shares of both tech giants lost around 8 percent. Investors beat down their stock prices after they posted worse-than-expected quarterly results.

Despite the earnings setback, US markets still managed to climb higher for the 2nd straight week. All 3 indices gained upwards of 4 percent for the week.

The US earnings onslaught is set to continue this week. Energy giants such as Exxon and Chevron may post lower revenues as oil prices have plunged sharply from last year's high.

Investors also expecting lacklustre earnings from media conglomerates including the likes of Time Warner and Walt Disney.

Also in focus are quarterly reports from credit card operators Visa and Mastercard.

And consumer goods also in focus as we await numbers from Colgate-Palmolive and Kellogg that will give insight into shopper's minds. Signs that US consumers are cutting back on spending on essentials could revive worries about the economic recovery.

Investors will also be watching US Treasury yields this week. The US government will flood the debt market with a record number of sales, 115 billion dollars in longer term notes are to be sold.

U.S. Economic Watch

Lots going on in the economic front as well. The week will kick off with new home sales for June.

Reuters forecasts a stronger showing month on month, predicting 350-thousand units will be sold - that compares to May's 342-thousand.

But consumer confidence is expected to dip to 49 in July versus a reading of 49.3 in June.

And 2nd-quarter GDP may have contracted 1-and-a-half percent from a year ago. Some analysts polled by Reuters say this could be the last negative reading for the US economy, which would mark the end of a 19-month recession.

Bernanke: Jobless rate to stay high even if U.S. exits recession – PBS

But Ben Bernanke sounded a note of caution about economic recovery. Speaking on PBS the fed chairman said the US economy is likely to resume growth in the 2nd half of this year, but it will not be robust enough to bring down the jobless rate. Bernanke also said that the economy would have to grow around 2-and-a-half percent in order to keep the jobless rate constant. Latest government data show that the jobless rate hit 9-point-5 percent in June.

Europe Coverage

Fri, 24 Jul 2009 08:13:55 GMT

EU Economic Watch

We are expecting a slew of economic data out of Europe today. Here is a preview. The composite reading for Euro zone flash PMI is expected to rise to 45-point-3, according to a Dow Jones poll. Over in Germany, the reading for the Ifo business expectations index could improve to 90. As for the UK economy, 2nd quarter GDP could contract further by 5-point-2 percent on an annualised basis.

Merck Q2 net profit to drop 38% to $181.8 mn - DJ poll

Merck is expected to post a 38 percent drop in 2nd quarter profit, according to a Dow Jones poll. Analysts still see volume declines at the company but expect an improvement in its liquid crystals business. They are also looking to merck to confirm revenue growth outlook for this year of up to 5 percent.

Danone H1 net profit seen up 0.7% to $1 bn - DJ poll

Danone's 2nd quarter net profit may be little changed from a year ago. Analysts polled by Dow Jones say Danone's performance will be held back by weaker consumer markets. But they are expecting growth in the company's dairy division after five straight quarters of contraction.

Asia Coverage

Fri, 24 Jul 2009 08:12:40 GMT

IMF's Chalk: China Yuan is 'substantially undervalued'

The IMF considers the Chinese Yuan to be substantially undervalued and says it needs to be appreciated further. This is according to Nigel Chalk, chief of the Asia Pacific department in the IMF. He said it was difficult to determine how undervalued the Yuan is, and that a strong renminbi should be a part of China's broader policy package.