EFTA02155955

From: Henry Higdon Sent: Thur 11/1/2012 9:49:30 AM Subject: Early Tour 11.1.12 Good Morning ... European Markets mixed (Russia -0.94%, Spain -0.57%) ... Nikkei +0.21%, HSI +0.83%, SHCOMP +1.72%, KOSPI -0.71%, ASX -1.3% EUR 1.2937 (-0.18%) JPY 80.00 (-0.30%) SEK 6.6725 (-0.57%) Spain 10yr 5.62% Italy 10yr 4.93% US 10yr 1.71% Futures: Dow -29, Nasdaq -4, S&P-3 DXY 80.06 (+0.17%) Crude $86.38 (+0.16%) Gold $1723.30 (+0.24%) Asia finishes mixed despite China's official PMI manufacturing printing © 50.2 (inline with estimates but > 50 which suggests that growth has stabilized and stopped slowing for now). SHCOMP ripped after the release and closed +1.72% to outperform the region. Australia's ASX failed to rally however and closed on the lows -1.3% weighed down by the banks after NAB results yesterday as well as weak home price figures. Some European PMIs out this morning as well: UK 47.5 (est 48.0), Ireland 52.1 (51.8 prior), Russia 52.9 (52.4 prior), Swiss 46.1 (est 44.7), Sweden 43.1 (est 45.0), Greece 41.0 (42.2 prior), (Germany/France/Italy/Spain all out tomorrow). Spanish short-selling ban extended for 3 months until Jan 31 as expected. DJ headline out saying Germany sees no decision on Greek aid on Nov 12. New EU short selling regulation takes effect today that introduces a common framework for disclosure obligations, buy-in requirements and specific requirements for covering short sales (please call if any questions). Public holiday (All Saints Day) in many countries but markets are open in Belgium, France, Germany, Italy, Spain, Switzerland (Austria closed). Note that according to Citi ADP is using a new methodology for its jobs number now and it revised down its September reading from 162k to 88.2k under the new method (today is the 161 live release under the new system & consensus is 135k). With 5 days until the election, the latest NBC/WSJ poll shows Obama with narrow leads in 3 key swing states (WI, NH, IA). SPA's -4 handles = 1402.60 last. `••ADP Employment © 8:15am, Jobless Claims @ 8:30am, ISM & Construction Spending••• ***Consumer Confidence © 10am, Retail Comps, Merkel hosts Ireland PM Kenny in Berlin" ***Auto Sales out today / APA, FSLR, K, XOM, AIG, CHK, HIG, PCLN, SBUX Ws today"' • Visa Q4 eps and revenue beats estimates and starts new $1.5 billion buyback (trading +1.6%) • New Mountain close to deal for JDA Software ($45/share = 18% premium) (32% premium to Fri) • United talks with Airbus about buying A350-1000 jets to replace Boeing 747s (Bloomberg) EFTA_R1_00824388 EFTA02155955 • Luxury: Richemont leading the group higher after BofA double upgrade (UP to B) (CFR VX +3.97%) • Royal Dutch Shell Q3 better driven by downstream, YoY declines may weigh (trading +0.66%) • Carrefour sells Malaysian business to Aeon for $250mn as expected (trading +1.4%) • BSkyB O3 revs & EPS in line, EBITDA slight better, churn rate 10.9% (trading +3.8%) • BT O2 broadly inline, top line guidance reduced as expected (trading +5.3%) • Prosieben: three buyers progress to next round of bidding or Nordic business (trading +0.20%) • Barclays may be fined $470mn for alleged US energy market manipulation (trading +1.3%) • Lloyds Q3 core beats, costs better but extra PPI provision will tapper (trading +3.4%) • Glencore Q3 production numbers come in light, okay performance overall (trading +0.40%) • Genel Energy releases uneventful Q3 IMS, nothing new (trading +1.0%) • Chemring profit waming, cuts FY EPS by 30% citing contract delays (trading -14.5%) • Cookson confirms expected demerger of Performance Materials division (trading +2.8%) • Norske Skog O3 adjusted broadly in line, sees stable outlook & margins (trading -5.9%) • Remy Cointreau in talks to acquire majority stake in Larsen (AOC Cognac) (trading +0.07%) • TDC Q3 top line misses but strong op margin, reiterates FY guidance (trading -1.7%) • TGS uneventful O3 following pre announcement on Oct 8, reaffirms FY (trading -1.8%) • Swisscom to book CHF 50 million in O4 for redundancy costs (trading -1.0%) Maurel (MAU FP) strong as Sinopec said to be considering bid (trading +12.0%) • Chemicals: comments from Germany's chemical association VCI (confirms FY forecasts) • Sony 2q net loss Y15.5bn vs est of Y15.6bn profit - keeps FY f/c Y20b (7th straight qtrly loss) • Sharp widened FY net loss to Y450bn from Y250bn (expected), Nikon cut FY op profit f/c by 15% • Panasonic closed limit down (-19%) on vol 8x 30day avg — multi-decade lows after ft's yday • HKMA injects another HKS2.3bn to keep HKD from rising beyond peg (7ih time in 2 weeks) • Hong Kong September retail sales +9.4% y/y vs est 7.6% (value) (out after the close) EFTA_R1_00824389 EFTA02155956 • Japanese PM Noda says he has "high expectations" the BOJ will do its part to end deflation • Macau October casino revenuse hit new record of 27.7 billion patacas (+3.2% y/y) Leading European Sectors: Luxury +2.31%, Autos/Parts +0.82%, Telco +0.69% Lagging European Sectors: Oil & Gas -0.60%, EMU Banks -0.19%, Healthcare -0.10% UNM earnings better — CRUS beats estimates — OTEX earnings better HOTT comps light & guidance inline — WNC eps inline — GGP earnings inline ZUMZ comps light — WMB earnings light — CZR ebitda touch light CACI inline & guidance better — HGR eps inline — BMC penny better CNW earnings light — ALL earnings better — KAMN eps light DRE eps inline — PZZA penny better — USU numbers out EXTR earnings mixed — MET eps better — PLAB cuts forecast IPI earnings better — ISO eps light — HTZ earnings inline MUR eps light — RGR earnings better — FM CN numbers out Secondaries (announced/priced): PRLB, NOW IPO's: N/A Key Research: RBC downgrade TNTE NA, CS downgrade MNDI LN, GS downgrade BDEV LN Key Research: GS upgrade DOM LN, GS upgrade KGP LN, GS downgrade KON GY Key Research: GS upgrade ZAG AV, SocGen upgrade NXT LN, SocGen upgrade ABE SM Key Research: SocGen downgrade RXL FP, BofAML downgrade FME GY, BofAML downgrade CLN VX Key Research: BofAML downgrade BG/ LN, SocGen upgrade FP FP, Nordea downgrade SKAB SS Key Research: DB upgrade DANSKE DC, BofAML upgrade CFR VX, Numsi upgrade BSY LN Key Research: Equinet upgrade DTE GY, Seymour downgrade MRW LN, Investec upgrade RDSA LN Key Research: Natixis upgrade CA FP, Equinet downgrade RHM GY, Barclays downgrades WU & GOL EFTA_R1_00824390 EFTA02155957 Reporting Pre-Open: ABC, ALKS, APA, AVP, BLT, BYD, CI, COT, CKEC, EL, ESV, EXC, GNC, K, KEM, LLL, MD, MDC, MPC, PBH, PEG, PFE, PNR, PXP, RAIL, RDN, RRD, SE, SFY, SIRI, SNI, TDC, TEVA, WPI, XOM, XYL Reporting Post-Close: AIG, AIV, ARI, AVNW, BEBE, BGFV, CAR, CEC, CHK, EIX, EQIX, EOY, FLR, FRT, FSLR, HIG, IRF, JCOM, JMBA, JOE, LIFE, LLNW, LNC, LNKD, LOPE, LVS, MELT, MERC, MHGC, MHK, MTD, NEM, NILE, PBI, PCLN, RATE, SAM, SBUX, SFLY, SWKS, SWN, TRIP, TXRH, UNTD, VCLK, VNO, WBMD, WMS, YELP, ZAGG Economic Data: ADP Employment @ 8:15am, Jobless Claims c 8:30am, ISM & Construction Spending & Consumer Confidence @ 10am, Auto Sales Conferences: Morgan Stanley Metals & Mining European Tour Analyst/Investor Days: TXN, VAR Non-Deal Roadshows: N/A Shareholder Meetings: N/A Equity/Mixed Shelfs: N/A Other Newspaper Articles & Stories • Barclays to pay $470m for electricity market manipulation Telegraph • Greek death spiral raises heat for German-bloc creditors Telegraph • EU budget: who pays what and how it is spent Telegraph • Bank of England's Charlie Bean signals no more QE Telegraph • The euro is heading for a permanent state of depression Telegraph • Break up the banks if ring-fence fails Telegraph EFTA_R1_00824391 EFTA02155958 • Draghi expands role in fight to save euro FT • Italy risks economic 'vicious circle' FT • EU short-selling ban — plus ca change Lex • Athens shoots the messenger FT ed • PM seeks to placate EU budget rebels FT • Barclays — discount on it Lex • Xi should draw up a new social contract for China FT • Money market funds come under attack FT • GM Russian Car Venture Is Pleasant Surprise WSJ • Greek Austerity Pressure Rises WSJ • Vote on new cuts pushes Greek coalition to brink The Times • Portugal approves austerity budget Independent • How fat cats killed off Mickey Mouse Independent • Get ready for the triple-dip recession Guardian • Europe's leaders need to act fast to avert disaster Guardian • CBI: slow growth will last years Guardian Key Events This Week Friday: October Employment Report, Eurozone Manufacturing PMI, China Non-Manufacturing PMI, Earnings (ANR, BEAM, CVX, WPO) Saturday: G20 Fin Min Meeting in Mexico Key Events on the Horizon November 6 — US Presidential Election EFTA_R1_00824392 EFTA02155959 November 8 — China's 18`" Party Congress (leadership transition) (5-7 days) November 12 — Eurogroup meeting November 25 — Catalonia regional election in Spain Henry G. Higdon Tourmaline Europe LLP EFTA_R1_00824393 EFTA02155960 This e-mail and any files transmitted with it are confidential and Intended only for the person or entity to which It Is addressed. If you are not the intended recipient, you are hereby notified that any dissemination, distribution or copying of this e-mail and any attachment(s) is strictly prohibited. If you have received this e-mail in error please immediately notify the sender at 203-302-7300 or by replying to this e-mail and delete the e-mail and any attachment(s) from your system. Nothing herein shall be construed as a financial promotion to any person or persons, or a solicitation or recommendation to buy or sell any security or other investment or to engage in any trading strategy. Information presented is from sources believed to be reliable, but is not guaranteed to be accurate or complete. 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