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Hitt og þetta 5. september 2006

DJ EUROPEAN MORNING BRIEFING: Profit-Taking To Hit Stocks

US SUMMARY: Stocks To Open Higher After Holiday

DJIA Closed
NASDAQ Closed
S&P 500 Closed
NASDAQ Future 1594.25 gain 3.75 up 0.2%
S&P Future 1315.00 gain 2.50 up 0.2%
Euro-USD 1.2835 loss 0.0040 dn 0.3%
10-Yr US Treasury: 4.73% unchanged
(Futures values, Treasury, EUR/USD Data as of 0450 GMT)
Wall Street shares should start the week higher after the national holiday Monday, while Treasurys and the dollar are holding fairly firm.

STOCKS: A light week on economic data and few earnings reports to ponder may leave investors in a mood to buy, especially after trading gets into full swing following the summer holidays. Futures point to a slightly higher opening on Tuesday.

FOREX: The dollar remains under pressure from the yen, although the euro is giving up some ground against both.

On Monday, the yen gained Japanese capital spending posted a stronger than expected rise, which in turn boosted market speculation that the Bank of Japan may raise interest rates again this year.

BONDS: Treasurys are holding last week's gains but analysts doubt yields can go much lower. Some traders even talk of any overbought state in the market.

The market has no major U.S. data to go on Tuesday, so Treasurys could trade slightly weaker in narrow ranges.

ASIAN SUMMARY: Stocks Mixed; Oil Off Recent Lows

USD-Yen 115.82 loss 0.20 dn 0.2%
AUD-USD 0.7704 0.0000 0.00%
Nikkei 225 16360.58 gain 2.51 0.0%
Hang Seng 17473.32 loss 40.56 dn 0.2%
S&P/ASX 200 5106.50 gain 15.00 up 0.3%
Taiwan Index 6745.54 loss 5.24 dn 0.1%
S.Korea Kospi 1361.04 gain 1.98 up 0.2%
JGB Yield 1.6800% up 0.0100
(All values as of 0450 GMT)
STOCKS: Asian stocks were mixed Tuesday, with Japan's Nikkei Average slipping in and out of positive territory as investors locked in profits in Toshiba and other leading shares after the index notched a three-month closing high a day earlier.

Australian shares hit a four-month high Tuesday on falling oil prices, with BHP Billiton and Rio Tinto extending gains.

In corporate news, Sun Microsystems and Unisys sued Hynix Semiconductor of South Korea in a U.S. court for allegedly price-fixing its dynamic random access memory, or DRAM, chips, Hynix said Tuesday.

FOREX: Lingering concern about Japan's interest rates continues to support the yen against the dollar.

"There's a belief in the market that the Bank of Japan won't hike again this year (after hiking in July). We tend to be more skeptical about this as we feel that the BoJ could still hike again towards the end of the year," said Bear Stearns chief currency strategist Steve Barrow.

On Monday, the Chinese yuan closed at a new all-time high, which gave an additional boost to the yen.

BONDS: Prices of Japanese government bonds slipped on a poor reception for the latest auction of 10-year bonds. Traders blamed the low coupon as unattractive at 1.7%, down from the prior issue's 1.9%.

METALS: Spot gold rose to $628.30 an ounce, as physical demand offset lower oil prices. But gold has to crack $630 to extend gains. Copper also rose on expectations of the resumption of seasonal demand after the summer lull.

OIL: Futures rose 37 cents to $68.39 Tuesday as traders bought contracts after prices fell to below 10-week lows overnight, and on persistent concerns over the Atlantic hurricane season and Iranian nuclear standoff.

EUROPEAN OUTLOOK: Stocks To Lose Ground

Euro-USD 1.2835 loss 0.0040 dn 0.3%
Stlg-USD 1.9035 loss 0.0035 dn 0.2%
USD-Franc 1.2318 gain 0.0042 dn 0.4%
(All values as of 0450 GMT)
European stocks are likely to open slightly lower with prices of government debt under a bit more profit-taking pressure. The euro also remains under pressure against the dollar.

STOCKS: European markets are likely to see modest losses at the open as investors take profits from Monday's gains.

U.K. spreadbettor IG Index is calling the FTSE down 5 points at 5981, the DAX down 1 at 5908 and the CAC down 3 at 5200.

In corporate news, Deutsche Post World Net has been awarded a contract to deliver medical supplies and equipment for the National Health Service of the U.K. The contract should be worth about EUR2.3 billion in sales for Deutsche Post.

European shares ended higher Monday, boosted by gains from the resource sector.

FOREX: The euro is coming under pressure from the dollar and yen. Some buy orders are found at around $1.2835 but they lack the muscle to support the euro, traders says. Euro zone services data will play a role.

European Central Bank president Jean-Claude Trichet Monday said his message on interest rates following last Thursday's policy meeting is clear. At that time, Trichet signaled there would be a 25-basis-point rate hike in the October meeting, noting that a "progressive withdrawal" of monetary accommodation remains warranted.

BONDS: Government debt may drift again Tuesday.

"There's been a bit of housekeeping, with some longs trimmed. But essentially the markets are waiting for something to trade off," said a dealer at a European bank.

The regular series of purchasing managers' indexes for the non-manufacturing sector in August, due Tuesday, should show a slight rise in the euro zone and a modest fall in the U.S., WestLB analysts noted.

Elsewhere, the Federal Reserve's Beige Book Wednesday should confirm the slowing-growth story, albeit with lingering inflation fears, they said, adding that German industrial production figures due Thursday should leave no doubt that economic growth in the country is on track.

But with fixed-income markets seemingly ignoring the possibility that European Central Bank rates could go above 3.5%, and still-high levels of U.S. inflation, there are growing questions about the sustainability of current bond prices at both ends of the curve.

There is "probably little room to rally from here at the short end of the euro curve," said Laurent Fransolet, fixed-income strategist at Barclays Capital.

Commerzbank analysts also maintain their view that the long end is too expensive. "However, the moment for setting up a short position has yet to be determined," they said in a research note.

In the U.K., Barclays Capital's Fransolet noted that a November rate hike by the Bank of England is only 70% priced in, while the 10-year sector is rich on the curve versus five- and 15-year issues.

On Monday, gilts largely followed the lower trend in bunds, with dealers focusing on Tuesday's GBP2.25 billion launch of a new 4.25% 2027 bond.

CALENDAR: Tuesday, Sep 5: Euro Services, Retail Data

GMT Expected Previous
0645 FRA Jul Central Govt Balance -26.9B
0700 GER Budget presented by Fin Min Steinbrueck
in Bundestag, Berlin
0745 ITA Aug RBS/ADACI PMI Svcs 58.4 58.6
0750 FRA Aug PMI Svcs 60.6 61.0
0755 GER Aug RBS/NTC PMI Svcs 56.0 56.1
0800 EU Aug RBS/NTC EuroZone PMI Svcs 57.6 57.9
0830 UK Aug CIPS/RBS PMI Svcs 57.5 57.9
0900 FRA Interim assessment of the economic
outlook for OECD countries, news
conference with OECD Chief Cotis
0900 EU Jul Euro Zone Retail Sales -0.5%MM 0.5%MM
1.3%YY 1.5%YY
1000 UK Aug British Retail Consortium/KPMG Retail +3.0%LFL +3.4%LFL
Sales Monitor
1130 US Aug Challenger Layoffs Survey -45%
1230 US IMF's Rato press conference, Washington
1430 US Tsy Asst Secy Fratto press conference, Washington
1500 US IMF's Rato speaks on "Key Steps in IMF
Reform: Taking Stock on the Eve of the
Annual Meetings in Singapore" in Washington

Aegis (AGS.LN): 1H Earnings
Average pretax profit (DJ, 4 analysts): GBP37.3M (GBP36.9M)
Average EBIT: GBP48.2M (GBP43.6M)
Average sales: GBP430M (GBP389M)
Note: Analysts will be looking for guidance on the impact of new business wins and an update on the position of Vincent Bollore, Aegis's largest shareholder and chairman of Havas (HAVS) who is lobbying to win board representation and is seen as a possible buyer of the company.


Alleanza (AL.MI): 1H Earnings
Average net profit (DJ, 5 analysts): EUR229M (EUR252.5M)
Note: Analysts expect profit to fall mainly due to lower capital gains from real estate sales in the first half compared with 1H '05. Analysts say they'll be looking for detail on how the planned merger between Sanpaolo IMI (SPI.MI) and Banca Intesa (BIN.MI) affects Intesa Vita, in which Alleanza owns a majority stake.


Ascom (ASCN.EB): 1H Earnings
Average net profit (DJ, 3 analysts): CHF11.7M (CHF50.6M)
Average sales: CHF336.5M (CHF333.7M)
Note: Last year's figure was boosted by one-offs. Sales seen at +0.8% compared with last year. Key issue is if the company can show growth at its core divisions, something analysts question.


Baloise (BALN.VX): 1H Earnings
Average net profit (DJ, 4 analysts): CHF253.5M (CHF216M)
Average premiuns: CHF4.47B (CHF4.41B)
Note: Claims are expected to remain at elevated levels with the combined ratio standing at 97.2%, only a slight improvement from the 98% in the year-earlier period. Analysts will wait for outlook comments, and will also closely monitor the situation in the life insurance segment, which has improved but is still impeded by low interest rates. Also, analysts will want to hear a clear statement on market talk about a potential linkup with Generali (G.MI).


Brixton (BXTN.LN): 1H Earnings
Average adjusted net asset value (DJ, 3 analysts): 523p (484p)
Note: NAV rise is expected to be driven by valuation increases and the market will be comparing the company with rival Slough Estates (SLOU.LN) which reported strong figures in August.


Cairn Energy (CNE.LN): 1H Earnings
Note: Bridgewell believes any detail from Cairn Energy on its plans to partially spin-off its Indian assets will overshadow the financial details of 1H results, due September 5. Says the "latest audited reserves figures and the development/export pipeline construction schedule" are also likely to attract attention. The brokerage is slightly skeptical of press report suggesting the company will raise GBP3B for shareholders via the spin-off. Believes the company will probably keep some of the money for ongoing projects, and notes there may also be some tax implications. Reiterates buy rating.


Dexia (DEXB.BT): 2Q Earnings
Average net profit (DJ, 5 analysts): EUR504.8M (EUR508M)
Note: Underlying net profit is seen at EUR484M, up 11% from EUR436.5M, and likely buoyed by strong public and project finance growth. Analysts are looking for any comments on the bank's recent purchase of Turkish Denizbank. Biggest news for Dexia is seen coming out of the bank's Investor Day on September 26. Data due Tuesday at 1200 GMT.


Hays (HAS.LN): FY Earnings
Note: Goldman Sachs sees Hays posting FY pretax profit of GBP190M, up 13% from GBP168M in 2005. Expects EPS to rise to 8.5p from 6.8p for the same period last year. Says the "key to results will be comments on UK growth in the first two months of FY '07, and with market data showing signs of improvement" expects this to have picked up.


Irish Life & Permanent (IPM.DB): 1H Earnings
Average operating EPS (DJ, 4 analysts): 78c (62.3c)
Note: Keefe, Bruyette & Woods sees robust mortgage lending and strong sales in life & pensions, but also accelerated bank margin erosion and rising bank costs.


Kerry Group (KYG.DB): 1H Earnings
Average EPS (DJ, 4 analysts): 54c (53.8c)
Note: NCB Stockbrokers sees solid 1H sales growth offset by margin decline due to rising commodity costs. Goodbody Stockbrokers says 1H will offer the first insight into trading since Kerry's profit warning in May.


MTS (MBT): 2Q Earnings
Average GAAP net profit (DJ, 6 analysts): $277.8M ($304M)
Note: Net profit seen falling due to the absence of one-off gains. Revenue seen +16% at $1.43B vs $1.23B, with average revenue per user set to bounce back from $6.2 in 1Q on higher usage and the introduction of ruble-denominated tariffs. EBITDA seen +8.4% at $707.3M on better cost control.


Spectris (SXS.LN): 1H Earnings
Average pretax pre-item profit: GBP26.9M (GBP21.1M)
Note: Profit driven by better cost and overhead management and strong cash conversion. Analysts looking for update on operating margin targets and company view on impact of macroeconomic environment.


Vinci (12548.FR): 1H Earnings
Average net profit (DJ, 3 analysts): EUR422M (EUR356M)
Average operating profit: EUR1.1B (EUR629M)
Note: Rise in profits due to strong growth in the French construction business and the acquisition of ASF (18425.FR) in March. Operating profit for the period seen at +75% from a year ago also due to purchase of ASF. Analysts expect guidance for next year and eagerly await first public presentation of CEO Xavier Huillard on Wednesday.

OTHER SCHEDULED EVENTS:

ABCAM (ABC.LN): FY Earnings

Admiral Group (ADM.LN): 1H Earnings

Advanced Medical (AMS.LN): 1H Earnings

AgCert International (AGC.LN): 1H Earnings

Anglo Irish Bank Corporation (ANGL.DB): Trading Update

Bacou-Dalloz (6089.FR): 1H Earnings

Brammer (BRAM.LN): 1H Earnings

British Airways (BAY.LN): August Traffic Data

Brit Insurance (BRE.LN): 1H Earnings

CDB Web Tech (CDB.MI): 1H Earnings

Credito Artigiano (CRI.MI): 1H Earnings

Data Cash (DATA.LN): 1H Earnings

Dechra Pharmaceuticals (DPH.LN): FY Earnings

Dmatek (DTK.LN): 1H Earnings

Gresham Computing (GHT.LN): 1H Earnings

Hal Trust (48303.AE): 1H Earnings

Headlam Group (HEAD.LN): 1H Earnings

Hemtex (HEMX.SK): AGM

Heywood Williams Group (HYWD.LN): 1H Earnings

Independent Media Distribution (IMD.LN): 1H Earnings

Italcementi (IT.MI): 1H Earnings

Lavendon Group (LVD.LN): 1H Earnings

Matalan (MTN.LN): Trading Update

Mattioli Woods (MTW.LN): FY Earnings

Meggitt (MGGT.LN): 1H Earnings

Neopost (12056.FR): 2Q Earnings

Oxford Biomedica (OXB.LN): 1H Earnings

Quadrant (QUAN.EB): 1H Earnings

Quintain Estates (QED.LN): AGM

Savills (SVS.LN): 1H Earnings

Seb (12170.FR): 1H Earnings

Stork (39066.AE): EGM

Voller Energy (VLR.LN): FY Earnings

BP (BP.LN): 2Q 2006 Dividend Payment Date

Liberty International (LII.LN): 1H 2006 Dividend Payment Date


(END) Dow Jones Newswires

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