Friday, February 19, 2010

Americas Equity Morning Summary February 19, 2010

Americas Equity Morning Summary February 19, 2010

Companies Featured
ADSK.O, APA.N, CBS.N, CECO.O, CMA.N, CPB.N, DELL.O, DTV.O,
EVVV.O, GPRO.O, INTU.O, LL.N, ME.N, OMX.N, RCIb.TO, RRGB.O,
RRR.N, STR.N, TCLP.O, TEX.N, WMMVY.PK

We are adding a 2.9% position in Credit Suisse Group (SFr47.60). Within the context of Huw Van Steenis’ Cautious view on European banks, we favor Credit Suisse, given its likely market share gains in private and investment banking, relatively strong balance sheet, undemanding valuation and 4.2% dividend yield. Indeed, while we believe the outlook for many global financial institutions is mixed at best, we see Credit Suisse as one of the eventual “winners” in the group.

We are removing the portfolio’s 2.9% position in AXA (€15.64). Our deletion follows the
company’s recent announcement that it intends to voluntarily delist its American Depository Shares from the NYSE. With the anticipated delisting, AXA no longer fits the Core Global STEP’s mandate to hold Blue Sky-cleared ADRs in all 50 US states.

Economics Calendar

02/19: Consumer Price Index/ Core (January), forecast: +0.3 % / +0.1%

Retail Sales (January)

A solid gain in consumer spending in January as expected, with overall sales up 0.5% and ex autos 0.6%, and minor upward revisions to prior months. With solid gains in various discretionary categories, the key retail control grouping (sales ex auto dealers, building materials stores, and gas stations) surged 0.8%, in line with the strong results from last week's chain store sales reports and matching our forecast.
We continue to see Q1 consumption rising 2.5% and GDP 2.8%.

Housing Starts (December)


Mildly stronger-than-expected report. Starts posted a modest gain in January and December was revised higher. Relative to our own expectation, the bulk of the upside surprise was in the volatile multi-family category.

Producer Price Index (January)

Both headline and core came in somewhat higher than anticipated. Energy prices posted an even sharper than anticipated gain. And, the volatile motor vehicle component showed some elevation. We estimate that the core ex motor vehicles was +0.2%.

full report -------------here

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