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Hitt og þetta 24. apríl 2006

DJ EUROPEAN MORNING BRIEFING:Investors Angst Hits Stocks

US SUMMARY: Earnings Should Again Spur Markets

DJIA 11347.45 gain 4.56 up 0.04%
NASDAQ 2342.86 loss 19.69 dn 0.8%
S&P 500 1311.28 loss 0.18 dn 0.01%
Dow Future 11376.00 loss 17.00 dn 0.2%
NASDAQ Future 1717.00 loss 2.00 dn 0.1%
S&P Future 1315.00 loss 2.00 dn 0.2%
10-Yr US Treasury: 5.01% down 0.03
(Futures values as of 0450 GMT)
Investors will likely enjoy another round of solid earnings reports this week, but those numbers could be easily ignored as the market shifts its focus back to the economy. Treasurys are bearish.

STOCKS: Wall Street has so far been impressed by first-quarter earnings, most of which have managed to beat analysts' lofty expectations. This week, strong readings on labor costs and first-quarter gross domestic product could feed inflation fears and send the market sliding.

And crude oil that surged past a record $75 per barrel and soaring prices of commodities also pose a threat to the prevailing bullishness for stocks. Analysts say those growing inflationary pressures are all the more reason for the Fed to keep raising rates, after markets have assumed the Fed would stop tightening soon.

Among this week's closely watched reports will be the Commerce Department's preliminary reading of the first-quarter gross domestic product on Friday. Inflation-weary investors have been looking for signs of a moderating economy; however, economists expect GDP growth to rebound to 5 percent from 1.7 percent in the fourth quarter.

The Commerce Department on Wednesday reports new home sales for March, which gives Wall Street an assessment of whether rising mortgage rates have affected housing demand. Analysts currently predict new home sales will total 1.1 million, up slightly from 1.08 million the month before.

Elsewhere, both the Conference Board's and University of Michigan's consumer sentiment measures are expected to be nearly unchanged. Investors could also see another drop in weekly unemployment claims as hiring improves and the job market tightens.

The second big week of the first-quarter earnings season brings reports from several more Dow industrials, including Catepillar Inc., Procter & Gamble, American Express Co., Boeing Co. and ExxonMobil Corp. Amazon.com Inc. reports after the close Tuesday.

Wall Street gave up early gains and closed mostly lower Friday. An analyst's downgrade of Dell Inc. helped send technology stocks lower.

BONDS: Longer dated Treasury prices held firm Friday, as investors adjusted curve trades in the interest rate swap market. But this week could see the bears emerge again.

"It's a difficult market for trading, the data is all over the place and that's what the Fed is watching," said Michael Kastner, portfolio manager at Sterling Stamos in New York.

With uncertainty clouding the outlook for Fed policy this summer, "It's very hard to trade the curve," at this stage, although a steeper curve should ultimately ensue, he said.

While markets and most of the forecasting community expect the Fed to stop raising rates on May 10 when the bank is widely expected to push its overnight target rate up a quarter percentage point to 5%, many think the Fed could be forced to go farther. In this environment, bearishness continues to be the dominant sentiment.

RBS Greenwich strategist David Ader said "We are open for more two-way action, but caution that the bear has not been killed off - we'd be surprised to see 10-years trade better than 4.90/5%."

But with the latest Washington Post/ABC News poll finding that 59 percent of Americans surveyed rated the economy "not good" or "poor," despite solid economic growth and declining unemployment, the Fed may have to start thinking about lowering rates soon.

ASIAN SUMMARY: Japan Stocks Sink On Forex, Oil Worry

USD-Yen 115.79 loss 1.12 dn 1.0%
AUD-USD 0.7459 loss 0.0010 dn 0.2%
Nikkei 225 17017.93 loss 386.70 dn 2.2%
Hang Seng 16782.50 loss 129.60 dn 0.8%
Taiwan Index 7139.57 gain 46.52 up 0.7%
S.Korea Kospi 1434.27 loss 17.04 dn 1.2%
JGB Yield 1.9000% down 0.0050
(All values as of 0450 GMT)
STOCKS: Japanese stocks were lower at midday on profit-taking, spurred in part by a weaker dollar against the yen and expensive oil. Traders worry both could hurt corporate profits. Australian shares rose on strong gains in mining stocks.

BONDS: Prices of Japanese government bonds rose slightly on lower stocks and prior gains in Treasurys.

METALS: Precious and base metals continued to recover, and the outlook for futures is positive.

OIL: Crude prices fell 48 cents to $74.69 as traders took some profit after recent sharp gains. Traders are anticipating new developments in the Iran nuclear dispute.

FOREX: The chief of China's central bank defended the pace of the yuan's appreciation, after the Group of Seven nations singled out China to take action to move toward greater foreign-exchange flexibility.

"Greater exchange-rate flexibility is desirable in emerging economies with large current-account surpluses, especially China, for necessary adjustments" in global imbalances to occur, the G-7 said. Global imbalances are G-7 buzzwords for the huge U.S. current-account deficit, alongside Asia's high savings rates, due in part to undervalued currencies.

EUROPEAN OUTLOOK: Lower Start For Stocks; DAX Hardest Hit

Euro-USD 1.2342 gain 0.0002 up 0.02%
Stlg-USD 1.7854 gain 0.0028 up 0.1%
USD-Franc 1.2742 loss 0.0043 dn 0.3%
(All values as of 0450 GMT)
European shares are likely to open lower, with prices of government debt and the euro holding firm.

STOCKS: European shares are set to fall at the open as nervousness creeps into the market.

U.K. spreadbettor IG Index is calling the FTSE down 5 points at 6127, the CAC down 15 at 5237 and the DAX down 42 at 6052.

Strategists at Standard & Poor's said they believe the European equity market has started to struggle as investors fret about a rising number of factors that could undermine the current mini-boom.

"Banks, in particular, have underperformed the broader market as investors focus on the impact of rising rates," these strategists said.

They remain underweight on the banking sector, notably on ABN Amro, Barclays and BBVA, which they rate at sell.

In the news, Abertis Infraestructuras agreed to acquire Italian peer Autostrade in a cash-and-stock transaction valued at about EUR14 billion euros, creating a global leader in toll roads.

U.S. investment firm Blackstone is close to buying a 5% stake in Deutsche Telekom for around EUR3 billion from the German government, according to Financial Times Deutschland.

European shares advanced on Friday as U.S. stock markets started the day with gains despite some pressure from Sweden's Ericsson and Britain's WPP after quarterly results.

BONDS: Prices of government data may edge higher to start.

"I think essentially we are in a consolidation phase in Europe waiting for developments, aside from overseas, from (this) week's data in euroland, particularly the Ifo survey," said Nick Stamenkovic, bond strategist at RIA Capital Markets.

In addition to the German Ifo business climate index, this week offers German and euro-zone inflation figures for April, and euro-zone M3 money supply numbers. Monday's retail sales will be the key data release for U.K. markets.

"This might just be a pause before we see another selloff, but it very much depends on the next batch of data and the comments of central bank officials," Stamenkovic added.

"We are currently at interesting (yield) levels, 5% on the 10-year U.S. Treasury and we came close to 4% on 10-year bunds," said Dresdner Kleinwort Wasserstein analyst Peter Fertig. "Normally there is a battle around these levels and that's what we are seeing currently."

This week's indicators, including the initial reading on first-quarter U.S. GDP growth, should help investors decide where to take yields next.

European government bond prices were mixed within ranges Friday as the markets paused ahead of this week's busy economic data schedule.

FOREX: The euro, after rallying on Friday, is starting the new week little changed.

Fears of central bank diversification away from dollar continue to benefit the euro, following Friday's Swedish Riksbank statement that it reduced its dollar reserve holdings to 20% from 37% of the total and increased its euro holdings to 50% from 37%.

The wider concern is that as the Fed seems to be getting nearer to the end of its rate-hike campaign, the market has refocused on U.S. financial imbalances.

CALENDAR: Monday, April 24: ECB Speakers

GMT Expected Previous
0645 FRA Apr Business Climate 106 105
0645 FRA Apr Product Outlook 0 -2
0830 UK Mar BBA Mtg Lending +GBP4.6B +GBP4.4B
0830 UK Mar MM17: Price Index numbers for current
cost accounting
0830 UK Mar Retail Sales +0.2%MM +0.5%MM
+2.3%YY +2.1%YY
0830 UK Mar PSNB +GBP7.0B +GBP2.27
0830 UK Mar PSNCR +GBP13.4 +GBP1.68
0830 UK Mar Provisional M4 Broad Money
0830 UK Mar M4 Equivalent Lending
0900 EU FY Euro Zone Genl Govt Deficit and Debt
1000 GER Feb Indus Production +0.6%MM -0.1%MM
+5.5%YY +3.2%YY
1000 GER Apr Bundesbank Monthly Report
1000 GER Feb Indus Production +0.6%MM -0.1%MM
+5.5%YY +3.2%YY
1430 US Apr Dallas Fed Mfg Production Index 40.8
1630 EU ECB Member Gonzalez-Paramo speaks at
Global Financial Imbalance Conference
in New York
2130 EU ECB Pres Trichet speaks at Council On
Foreign Relations conference in New
York
Autonomy Corporation (AUTN): 1Q Earnings
Note: Numis upgrades Autonomy to add from hold ahead of 1Q results April 24. Retains 510p target. Says Google represents "little direct threat" at present. "We see the potential for FY '06 estimates to be upgraded at the 1Q results if the Verity cost savings program is running ahead of forecasts." Forecasts revenue at $59.3M maximum, $12.1M EBITA.


Bankinter (BKT.MC): 1Q Earnings
Average net profit (DJ, 8 analysts): EUR56.6M (EUR49.4M)
Average net interest income: EUR110.4M (EUR105.2M)
Note: net profit seen higher on strong lending growth. Analysts to focus on costs, seen peaking in 1Q on ongoing expansion, and evolution in lending for small- and medium-sized businesses. Bankinter to report pre-market.


Banco Comercial Portugues (BCP.LB): 1Q Earnings
Net profit forecast: EUR170M - EUR177M (EUR137.5M)
Note: As in recent quarters, continued efforts to cut costs and boost cross-selling, as well as progress at BCP's international operations in Greece and Poland, will underpin earnings. In the domestic market, a slight improvement in the macroeconomic picture, with growth rising slightly, should keep a fire under mortgage lending, a key driver for profits of late. But as far as the impact on BCP shares goes, investors will be paying more attention to any updates at the news conference about the bank's EUR4.33B hostile bid for smaller rival Banco BPI (BPI.LB). BCP -0.4%, at EUR2.53. The bank reports after the market closes.


Banco Popular (POP.MC): 1Q Earnings
Average net profit (DJ, 7 analysts): EUR235.9M (EUR211.7M)
Average net interest income: EUR518 (EUR471.2M)
Note: Net profit rise supported by strong lending growth. Analysts to focus on costs in light of Popular's recent expansion, and on margins, still under pressure from low interest rate environment and tough competition. Banco Popular to report pre-market.


Electrolux (ELUX): 1Q Earnings
Average pretax profit (SME Direkt, 11 analysts): SEK1.14B (SEK1.21B)
Average operating profit: SEK1.28B (SEK1.31B)
Average revenues: SEK33B (SEK29.7B)
Note: Operating and pretax estimates include SEK227M of restructuring charges and SEK300M related to Nuremberg plant strike.. Eyes will be on whether company has managed to push through price rises and development of raw material costs. Electrolux reports at around 1000 GMT.


Handelsbanken (SHB-B.SK): 1Q Earnings
Average operating profit (SME Direkt, 18 analysts): SEK4.219B (SEK3.340B)
Note: The sharp rise is mainly attributed to an increase in commission income. Net interest income is seen increasing marginally, up 1.7% to SEK3.871, due to margin pressure on loans reflecting low interest rates and increased competition. Eyes will be on margins and development of SPP. Report is due around noon.


Kuehne & Nagel (KNIN.EB): 1Q Earnings
Average net profit (DJ, 3 analysts): CHF95M (CHF69.5M)
Note: Unclear as to the effect of the first-time full inclusion of ACR Logistics on bottom line which is causing some uncertainty. Sales seen +35% at CHF4.10B versus CHF3.03B on high freight forwarding demand and ACR consolidation. Any indication about development of seafreight and airfreight prices will be eyed. Data due around 0500 GMT.


Novartis (NVS): 1Q Earnings
Average net profit (DJ, 11 analysts): $1.68B ($1.48B)
Average sales: $8.4B ($7.34B)
Note: The net profit rise is mainly due to generic-drug division acquisitions and strong sales of key prescription drugs. Most analysts don't expect any surprises and also expect Novartis to provide a positive outlook for 06. Analysts to watch out for comments on recent in-licencing deals including companies such as Idenix (IDIX) and Servier.


Peter Hambro Mining (POG.LN): FY Earnings
Average net profit (DJ, 3 analysts): $13.76M ($15.31M)
Forecast range: $13M - $14.8M
Note: Analysts say most important aspect of results presentation will be progress on expansion projects' feasibility studies.


Prisa (PRS.MC): 1Q Earnings
Average net profit (DJ, 3 analysts): EUR29.8M (EUR29.1M)
Average EBITDA: EUR76.2M (EUR64.5M)
Average sales: EUR366.5M (EUR332.9M)
Note: Bottom line seen backed by solid Latin American operations at publishing unit Santillana. Focus will be on fresh advertising outlook for 2006.


Renault (13190.FR): 1Q Revenue
Average revenue (DJ, 5 analysts): EUR9.46B (EUR9.84B)
Note: Revenue seen -3.8%, reflecting weaker European car sales and deteriorating product mix. Automobile division revenue seen -4% at EUR9.01B vs EUR9.38B. Company reports after market.


Saab (SAAB-B.SK): 1Q Earnings
Average pretax profit (SME Direkt, 6 analysts): SEK507M (SEK327M)
Average revenue: SEK4.32B (SEK3.82B)
Average net profit: SEK348M (SEK223M)
Note: The net profit rise is expected to have been supported by a bigger proportion of large orders in the period than last time, as well as the SEK170M capital gain from the sale of Saab Metech. Focus will be on 06 outlook, margins and order bookings.


TF1 (5490.FR): 1Q Revenue
Average IFRS revenue (DJ, 5 analysts): EUR733.8M (EUR713.9M)
Note: 1Q advertising growth seen +0.5% to EUR432M as market remains affected by lower ad spending from Fast Moving Consumer Goods. The company will hold a conference call on Tuesday. Analysts will be looking for a confirmation that discussions between producers and retailers will stabilize the market from 2Q onwards.

OTHER SCHEDULED EVENTS:

Aedes (AE.MI): AGM

Banco Espirito Santo (BES.LB): 1Q Earnings

Bank Zachodni (BZW.WA): 1Q Earnings

Cargotec (CGCBV.HE): 1Q Earnings

Comdirect Bank (COM.XE): 1Q Earnings Conference Call

Completel Europe (5506.FR): AGM

ContExtVision (COV.OS): 1Q Earnings

Continental (CON.XE): Press Conference on ContiTech

Credito Bergamasco (CB.MI): AGM

Davide Campari (CPR.MI): AGM

Dawney Day Carapathian (DDC.LN): FY Earnings

Etam Developement (3574.FR): Analyst Meeting

Formjet (FMJ.LN): FY Earnings

Gatekeeper (GKR.LN): FY Earnings

Gemplus International (GEMP): 1Q Earnings

Grupo Prisa (PRS.MC): 1Q Earnings

H Lundbeck (LUN.KO): AGM

HaldEx (HLDX.SK): 1Q Earnings

Highlight Communications (HLG.XE): FY Earnings

Ingenico (12534.FR): 1Q Sales

Kuehne & Nagel International (KNIN.EB): 1Q Earnings Conference Call

Lok'n Store (LOK.LN): 1H Earnings

Millimages (4438.FR): FY Earnings

Molins (MLIN.LN): AGM

ProfilGruppen (PROF-B.SK): 1Q Earnings

Sigma Technology (SGM.LN): FY Earnings

Smurfit-Sisa (SMU.MI): AGM

Sterling Energy (SEY.LN): FY Earnings

Svedbergs i Datelstorp (SVED-B.SK): 1Q Earnings

Svedbergs i Datelstorp (SVED-B.SK): AGM

SVG Capital (SVI.LN): AGM

Synergie (3265.FR): 1Q Sales

Synnove Finden (SFM.OS): 1Q Earnings

Teleca (TELC-B.SK): 1Q Earnings/AGM

Travis Perkins (TPK.LN): AGM

Tricorona (TRIC.SK): AGM

Vanco (VAN.LN): FY Earnings

Vranken Pommery (6279.FR): FY Earnings

Witan Investment Trust (WTAN.LN): AGM

Wolfson Microelectronics (WLF.LN): 1Q Earnings

Xaar (XAR.LN): AGM

Autostrade (AUTO.MI): FY 2005 Ex-Dividend Date

Ballingslov International (BALL.SK): FY 2005 Dividend Payment Date

Banca Carige (CRG.MI): FY 2005 Dividend Payment Date

Banca Intesa (BIN.MI): FY 2005 Ex-Dividend Date

Blydenstein Willink (34034.AE): FY 2005 Ex-Dividend Date

Bossard Holding (BOS.EB): FY 2005 Dividend Payment Date

Bossard Holding (BOS.EB): FY 2005 Ex-Dividend Date

Canal Plus (12546.FR): FY 2005 Dividend Payment Date

Capitalia (CAP.MI): FY 2005 Ex-Dividend Date

Heineken (00916.AE): FY 2005 Ex-Dividend Date

HK Ruokatalo (HKRAV.HE): FY 2005 Ex-Dividend Date

Kasola (KASAS.HE): FY 2005 Dividend Payment Date

Kasola (KASAS.HE): FY 2005 Ex-Dividend Date

Lottomatica (LTO.MI): FY 2005 Ex-Dividend Date

Malmbergs Elektriska (MEAB-B.SK): FY 2005 Ex-Dividend Date

Pirelli & Co Real Estate (PRS.MI): FY 2005 Ex-Dividend Date

Recordati (REC.MI): FY 2005 Ex-Dividend Date

Skiens Aktiemolle (SKI.OS): FY 2005 Ex-Dividend Date

SSAB Svenskt Stal - A Shares (SSAB-A.SK): FY 2005 Ex-Dividend Date

Synthes-Stratec (SYST.VX): FY 2005 Dividend Payment Date

Telecom Italia Media (TME.MI): FY 2005 Ex-Dividend Date

Telecom Italia (TI): FY 2005 Ex-Dividend Date

TNT (TP): FY 2005 Ex-Dividend Date


(END) Dow Jones Newswires