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Hitt og þetta 12. september 2006

DJ EUROPEAN MORNING BRIEFING: Focus Remains On Commodities

US SUMMARY: Markets Rebound Late; Resource Stocks Sink

DJIA 11396.84 gain 4.73 up 0.04%
NASDAQ 2173.25 gain 7.46 up 0.3%
S&P 500 1299.54 gain 0.62 up 0.1%
Dow Future 11398.00 gain 3.00 0.0%
NASDAQ Future 1583.50 0.00 0.0%
S&P Future 1300.00 loss 0.50 0.0%
Euro-USD 1.2716 gain 0.0014 up 0.1%
10-Yr US Treasury: 4.80% up 0.02
(Futures values, Treasury, EUR/USD Data as of 0450 GMT)
Wall Street inched higher Monday as a broad retreat in commodities prompted investors to shift money out of oil and raw materials-based companies and into other stock sectors, leading to a late rebound in the equity indexes.

STOCKS: Falling prices for petroleum and metals led to declines in shares of commodities producers; Exxon Mobil and Alcoa, both Dow Jones industrials, were among the session's biggest decliners.

The six-day slide in crude prices, which closed under $66 per barrel Monday, was welcomed by Wall Street as a sign inflation will be kept under control. Cheaper oil also could help boost consumer spending, as well as corporate profits.

"The drop in oil prices is becoming a catalyst, as is other commodities, and giving people confidence to put money into areas that have somewhat been lagging such as technology," said Scott Fullman, director of investment strategy for Hapoalim Securities.

Investors have been looking for any direction about the state of the economy, but have also traded with relatively little conviction ahead of the Federal Reserve's next meeting Sept. 20. St. Louis Fed President William Poole said in a speech Monday that inflation is "pretty well controlled," but offered little else about the economy.

Tech stocks were among the beneficiaries of the migration away from oil and metals.

Shares of Texas Instruments rose 0.4% after it narrowed its third-quarter guidance for revenue and earnings from continuing operations. But Dell fell 2% after saying it would delay a quarterly filing with the Securities and Exchange Commission amid questions about its accounting.

FOREX: The dollar is slightly lower, having remained split throughout the North American session Monday, down versus the euro but up against the yen after a day of choppy trading.

The market is readying itself for a slew of U.S. data which will begin Tuesday with the release of July trade data. Investors may remain reticent ahead of the G7 and IMF meetings later this week in Singapore, leading to more choppy sessions, analysts said.

BONDS: Treasury prices ended lower Monday, as heavy corporate issuance led to some selling of Treasurys and other investors remained on the sidelines on a day when there was little economic data to give the market direction.

One reason bond investors were somewhat sidelined was confusion over action in the stock market, said Michael Cheah, portfolio manager for AIG SunAmerica Asset Management

"As a bond guy looking at the equity market, I am being confused by the equity price action," Cheah said. On the one hand, retail stocks were doing very well, suggesting a strong economy, while on the other, commodities were selling off, suggesting the opposite. "These two sectors are in contradiction," Cheah said, and the confusion "is making me cautious."

The U.S. economy should slow in coming months from roughly 4% growth to an expansion in the high 2% range, which should slowly ease inflationary pressures, Federal Reserve Bank of Boston President Cathy Minehan said Monday. Still, she cautioned that inflation remains a risk, and that the Fed should remain "quite vigilant" in containing that risk.

OIL: Prices fell again Monday as OPEC said it would continue pumping crude at high rates to extend global supplies. The price of light sweet crude fell 64 cents to $65.61 per barrel on the New York Mercantile Exchange, marking the sixth-straight day of declines.

ASIAN SUMMARY: Stocks Lower; Commodities Remain Volatile

USD-Yen 117.56 loss 0.10 dn 0.09%
AUD-USD 0.7526 gain 0.0018 up 0.2%
Nikkei 225 15738.08 loss 56.30 dn 0.4%
Hang Seng 17047.48 gain 98.89 up 0.6%
S&P/ASX 200 4938.60 loss 54.90 dn 1.1%
Taiwan Index 6650.99 loss 42.89 dn 0.6%
S.Korea Kospi 1333.13 loss 0.95 dn 0.1%
JGB Yield 1.6800% up 0.0200
(All values as of 0450 GMT)
STOCKS: Asian stocks were generally lower Tuesday as Japanese industrials including Komatsu lost more ground in the wake of weak machinery-orders data. Recent falls in oil and metals prices left Australia's BHP Billiton and other commodity stocks sharply lower.

FOREX: The dollar is higher on buying by Japan's exporters, but those will be exhausted at around Y117.90, traders in Tokyo say.

Japanese Finance Minister Sadazaku Tanigaki said Tuesday financial representatives of the G7 countries will debate foreign currency issues as part of their discussions on the world economy at their upcoming meeting in Singapore.

The risk of a disorderly decline in the U.S. dollar could increase unless policies are put in place to address global savings and investment imbalances, the IMF said Tuesday.

BONDS: Prices of Japan's government bonds trimmed losses after a fairly smooth 5-year bond auction, confounding earlier expectations for tepid demand.

METALS: Ten-week low gold prices are flushing out physical gold bargain hunters, says Ellison Chu, senior manager at Standard Bank H.K. Spot gold is trading at $594.05/oz, recovering from an intraday low $584.65, largely on consumer demand, as well as some short covering with silver's recovery. Gold is to trade between key support at $580 and resistance around $596-597.

Copper was little changed, as traders waited for gold and oil to point the way for the metal.

OIL: Prices rose 14 cents to $65.75 Tuesday. Trader Ken Hasegawa of Himawari CX in Tokyo said that the buying signaled a technical recovery and short-covering.

"I think the decline was so sharp over the last few weeks, so you can expect it to rebound, but there's no news to buy (on) aggressively," Hasegawa said.

EUROPEAN OUTLOOK: Stocks Set For Positive Open

Euro-USD 1.2716 gain 0.0014 up 0.1%
Stlg-USD 1.8688 gain 0.0038 up 0.2%
USD-Franc 1.2432 loss 0.0018 dn 0.2%
(All values as of 0450 GMT)
European shares are likely to stage a slight rebound to start, with government debt and the euro under light pressure.

STOCKS: European markets are likely to open slightly higher with investors encouraged by Wall Street's late recovery. However, the focus will remain on resource stocks with the likes of BHP Billiton hitting recent lows overnight.

U.K. spreadbettor CMC Markets is calling the FTSE up 14 points at 5865, the DAX up 8 at 5807 and the CAC up 16 at 5074.

On Monday, European shares were pressured by lower commodity stocks, though the telecom sector provided support after speculation emerged that Telecom Italia may sell its mobile operations.

Later, Telecom Italia said it was spinning off its mobile-phone assets and its fixed-line network into separate entities, a move that could pave the way for a sale of those units, though the company's chairman said it wasn't in talks to do so.

GlaxoSmithKline Monday said it has settled a long-running tax dispute with the U.S. Internal Revenue Service through a payment of more than $3 billion to the U.S. tax agency. The payment will be made from a GBP2.3 billion provision already set aside for the purpose.

FOREX: A lackluster euro is lined up against lingering short-dollar positions, leaving a stalemate ahead of the next catalyst, perhaps the G7 meeting this weekend, dealers say.

BONDS: The European Central Bank remains on investors minds, and may keep government debt under pressure Tuesday.

Most economists expect the ECB to tighten policy again by 25 basis points Oct. 5, taking the refinancing rate to 3.25%.

UBS derivatives strategist Peter Osler said there were still downside risks for bunds.

"In a rising inflationary environment and with an ECB hiking cycle in progress, 10-year yields of 3.80% aren't a good rate of return," he said.

Gilts have some underpinning from the latest U.K. inflation data.

"At the margin they reduce the likelihood that the (Bank of England's) MPC will have to act again on its implied tightening bias, although the CPI report (Tuesday) will certainly be more important in this regard," said Michael Every, senior economist at RBC Capital Markets.

European government bond prices were down Monday on weaker U.S. Treasurys and a fading safety bid as the 9/11 anniversary proceeded quietly.

CALENDAR: Tuesday, Sep 12: UK CPI; US Trade Deficit

GMT Expected Previous
0500 JPN Aug Consumer Sentiment Index 48.6
0645 FRA Jul Foreign Trade
0800 ITA 2Q Labor Cost Index
0830 UK Aug CPI
1145 US Sep 9 ICSC Store Sales Index +0.3%
1230 US Jul Trade Deficit $65.5B $64.8B
1255 US Sep 9 Redbook Retail Sales Index Unch
1300 UK Consolidated Financial Statement of the
Eurosystem
1935 US San Francisco Fed Pres Yellen speaks
2100 US Sep 10 ABC/Washington Post Consumer Confidence Index -15

Banche Popolari Unite (BPU.MI): 2Q Earnings
Average net profit (DJ, 3 analysts): EUR166M (N/A)
Average sales: EUR697M (N/A)
Note: The bank will release 05 restated figures together with 06 results. 2Q interest income seen at EUR417M, net commissions EUR211M Results due after market close.


Banco Popolare Verona e Novara (BPVN.MI): 2Q Earnings
Average net profit (DJ, 3 analysts): EUR180M
Note: Profit rise thanks to growth in lending business. Company will provide restated figures for 2Q 05. Total income seen at EUR675M, net interest income seen at EUR336M. Eyes on possible M&A comments and outlook on forthcoming months. Results due after market close.


Cobham (COB.LN): 1H Earnings
Average pretax profit before certain items (Co, 7 analysts): GBP76M
(GBP69.6M)
Note: Results likely to be boosted by defense electronics systems business and management should be optimistic on full-year outlook, says Deutsche Bank. Acquisition plans in focus.


Computacenter (CCC.LN): 1H Earnings
Note: Computacenter's 1H earnings should be broadly positive, says Shore Capital. But given the business is weighted for 2H due to period end server buying, Shore is pessimistic about seeing an earnings upgrade before the FY pre-close update. Sees broadly positive commentary about the progress in France and Germany. Retains buy.


Drax Group (DRX.LN): 1H Earnings
Average EBITDA (DJ, 4 analysts): GBP245M (GBP72M)
Note: Profit rise pinned on higher power prices. Analysts expect an update on special dividend, views about the UK's energy review concerning biomass burning, and company's future profitability given current downturn in forward power prices.


Finmeccanica (FNC.MI): 1H Earnings
Average net profit (DJ, 3 analysts): EUR567M (EUR105M)
Average EBIT: EUR314M (EUR251M)
Note: The rise mainly reflects a EUR355M capital gain from the listing of its railway equipment unit Ansaldo STS. Analysts also note good underlying growth and expect sales and profits to increase in the second half of the year. One analyst says to look out for changing guidance in earnings. Finmeccanica predicts full-year 06 EBIT at EUR840-860M.


Gaz de France (1020848.FR): 1H Earnings
Average net profit (DJ, 4 analysts): EUR1.35B (EUR1.19B)
Average EBITDA: EUR2.79B (EUR2.52B)
Note: As growing demand and higher gas prices offset lower margins on the regulated segment, analysts say. An update on the merger with Suez (SZE) is expected.


Jelmoli (JEL.EB): 1H Earnings
Average net profit (DJ, 3 analysts): CHF35.1M (CHF17.5M net loss)
Average EBITDA: CHF90.5M (CHF86.1M)
Average EBIT: CHF73.5M (CHF68.9M)
Average sales: CHF494M (CHF496M)
Note: The 1H '05 loss was due to a CHF50M charge tied to holding in real estate company Tivona. Analysts will particularly scrutinize the operating margin because net profit is volatile given uncertainties about real estate valuation and possible further charges. (MGE)


Mediaset (MS.MI): 1H Earnings
Average net profit (DJ, 8 analysts): EUR337.5M (EUR426.6M)
Average EBIT: EUR660.3M (EUR754.5M)
Average sales: EUR2.01B (EUR1.98B)
Note: The sharp drop reflects a continued weakness in advertising revenues, hit by the elections and the World Cup, which was broadcast by rival RAI. Eyes on potential changes in media regulations by the center-left government.


Pirelli (PC.MI): 1H Earnings
Average consolidated net profit (Co, 8 analysts): EUR165M (EUR177M)
Note: Higher tax payments than last time are expected to have weighed on the 1H 06 net profit result. Other figures were released in July, when the company posted a 6.7% rise in 1H operating profit on steady progress across its tires, telecommunications and real estate operations. The analyst will pay particularly close attention to the conference call for more details on Telecom Italia's new strategic shift.


Redrow (RDW.LN): FY Earnings
Average pretax profit (Co, 15 analysts): GBP119.4M (GBP139M)
Note: Earnings down due to "margin erosion," and a lower proportion of In The City units, affecting the group selling price. Analysts focusing on the state of the housing market and the Redrow's outlook for next year which should see the impact of a good order book, built up in the second half, says UBS Investment analyst Charlie Campbell.


Sanpaolo IMI (IMI): 2Q Earnings
Average net profit (DJ, 5 analysts): EUR550M (EUR561M)
Note: Net interest income seen at EUR1.05B, net commissions seen at EUR945M, and total income seen at EUR2.21B. The focus will be on comments on the swap ratio for the Intesa (BIN.MI) merger. Results are due Tuesday after the market close.


Thorntons (THT.LN): FY Earnings
Average pretax profit (Co, analysts): GBP5M (GBP8.1M)
Note: Analyst says sales are down on "shortcomings in the customer offer" and says it is unclear where the real value of the business is. Adds that although "the group invested in a factory they failed to utilize the plant sufficiently." Thorntons also invested in packaging but "it obviously was insufficient." Is looking for a reassurance that the company has a "any kind of business model that ensures sustainable growth."

OTHER SCHEDULED EVENTS:

Acea (ACE.MI): 1H Earnings

Acqua Pia Antica Marcia: 1H Earnings

Acque Potabili: 1H Earnings

AEM Torino (AET.MI): 1H Earnings

Alitalia (AZA.MI): 1H Earnings

Amplifon (AMP.MI): 1H Earnings

April Group (3868.FR): 1H Analyst Meeting

Arnoldo Mondadori Editore (MN.MI): 1H Earnings

Autostrada Torino Milano (AT.MI): 1H Earnings

Avenir Telecom (6605.FR): FY Analyst Meeting

Axon Group (AXO.LN): 1H Earnings

Banca Popolare di Milano (PMI.MI): 1H Earnings

Banco di Desio e della Brianza (BDB.MI): 1H Earnings

Bastogi (B.MI): 1H Earnings

Beni Stabili (BNS.MI): 1H Earnings

Boero Bartolomeo (BOE.MI): 1H Earnings

Buongiorno Vitaminic (BVIT.MI): 1H Earnings

Buzzi Unicem (BZU.MI): 1H Earnings

Caltagirone Editore (CED.MI): 1H Earnings

Camfin (CMF.MI): 1H Earnings

Carraro (CARR.MI): 1H Earnings

Celtic Resources (CER.LN): AGM

Charter (CHTR.LN): 1H Earnings

Chime Communications (CHW.LN): 1H Earnings

CHL (CHL.MI): 2Q Earnings

Clarins (13029.FR): 1H Analyst Meeting

Colefax Group (CFX.LN): AGM

Concurrent Technologies (CNC.LN): 1H Earnings

Credito Valtellinese (CVAL.MI): 1H Earnings

Damartex (18542.FR): FY Earnings

Dane Elec Memory: 1H Earnings

Dantax (DANT.KO): FY Earnings

De Longhi (DLG.MI): 1H Earnings

Dunedin Enterprise IT (DNE.LN): AGM

ESI Group (411031.FR): 2Q Revenue

Esprinet (PRT.MI): 1H Earnings

Eurazeo (12112.FR): 1H Earnings

Evolutech Group: 1H Earnings

Evolution Group (EVG.LN): 1H Earnings

Exprivia (XPR.MI): 1H Earnings

Flughafen Zurich (UZAN.EB): August Traffic Data

French Connection Group (FCCN.LN): 1H Earnings

Gabetti Property Solutions (GAB.MI): 1H Earnings

Gemina (GEM.MI): 1H 2006 Earnings

Generale Industrie (GI.MI): 1H Earnings

Glisten (GLI.LN): FY Earnings

Glotel (GLO.LN): AGM

Groupe Bruxelles Lambert (GBLB.BT): 1H Earnings

Guerbet (3252.FR): 1H Earnings

Gyrus Group (GYG.LN): 1H Earnings

Halladale Group (HDG.LN): AGM

Hera (HER.MI): 1H Earnings

Hill & Smith Holdings (HILS.LN): 1H Earnings

Hitt (35815.AE): 1H Earnings

HL Display (HL-B.SKY): Trading Update

Iberia (IBLA.MC): August Traffic Data

IFIL Investments (IFL.MI): 1H Earnings

Implenia (IMPN.EB): 1H Earnings

Interior Services Group (ISG.LN): FY Earnings

INVESCO Perpetual European (IPE.LN): 1H Earnings

IP Group (IPO.LN): 1H Earnings

Ipi (IPI.MI): 1H Earnings

Jetter (JTT.XE): AGM

Kardex (KAR.EB): 1H Earnings

Kiln (KIN.LN): 1H Earnings

Koninklijke Grolsch (35479.AE): 1H Earnings

Lausanne-Ouchy Holding (LOUN.EB): 1H Earnings

Lavorwash (LAV.MI): 1H Earnings

Litho Supplies (LTS.LN): 1H Earnings

Macro 4 (MAO.LN): FY Earnings

Maffei (MAF.MI): 1H Earnings

Marchpole Holdings (MPH.LN): AGM

Natexis Banques Populaires (12068.FR): 1H Presentation

Nicox (7413.FR): R&D Day

NSB Retail Systems (NSB.LN): 1H Earnings

OPD Group (OPD.LN): 1H Earnings

Pagnossin ([PAG.MI): 1H Earnings

Pargesa (PARG.EB): 2Q Earnings

Parkwood Holdings (PKW.LN): 1H Earnings

Pixology (PIX.LN): 1H Earnings

Provimi (4458.FR): 1H Earnings

Ratti (RAT.MI): 1H Earnings

Richard-Ginori 1735 (RG.MI): 1H Earnings

Safeland (SAF.LN): AGM & EGM

Schlatter (STRN.EB): 1H Earnings

Sirius Financial Solutions (SIR.LN): 1H Earnings

Smurfit-Sisa (SMU.MI): 1H Earnings

Societa Metallurgica Italiana: 1H Earnings

Sol (SOL.MI): 1H Earnings

Somfy (12049.FR): 1H Analyst Meeting

Surfcontrol (SRF.LN): FY Earnings

Thomas Cook (500413.BY): 3Q Earnings

Tod's Group (TOD.MI): 1H Earnings

UKBetting (UKB.LN): 1H Earnings

Vernalis Group (VER.LN): 1H Earnings

Vicat (3177.FR): 1H Earnings

Wolford (WOL.VI): AGM

Workplace Systems (WSI.LN): AGM

Law Debenture Corp (LWDB.LN): 1H 2006 Dividend Payment Date

Spring Group (SRG.LN): 1H 2006 Dividend Payment Date

Zardoya Otis (ZOT.MC): 2Q 2006 Dividend Payment Date


(END) Dow Jones Newswires

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