Tuesday, February 16, 2010

Today’s Top Stories & Catalysts 02.15.10

Today’s Top Stories & Catalysts

· Europe being led higher by financials, which are seeing buy interest on back of Barclays’ stronger-than-expected earnings; most of Asia is closed for the Chinese New Year’s Holiday. On the eco data front, in Europe the German ZEW came in better and UK inflation was inline w/St. but above BoE’s target. In Japan, Q4 GDP #s (out Mon morning) came in higher than expected but the details were not as encouraging. Financials are strongest performing group in Europe on back of Barclays. On the downside, L’Oreal is off 5% and Intercontinental is down ~1%+ (both on earnings).

· Greece Update - Greek government bonds fell after Finance Minister George Papaconstantinou said his country is in a “terrible mess” and compared fixing the nation’s deficit to changing “the course of the Titanic”. Papaconstantinou said his country’s public sector “is out of control” as unions planned more strikes (Greek customs officials walked off the job Tuesday for a three-day strike to protest government austerity measures). The European Finance Ministers meeting commenced Mon and continues through Tues and will probably spend a lot of time discussing Greece although they aren’t expected to make specific announcements on precise aid mechanisms and procedures (similar to the EU Summit statement from last week); the next major event will prob. be mid-Mar, at which time the Greek gov’t’s progress towards achieving its budget goals will be evaluated. Eurogroup chairman Jean-Claude Juncker said Greece must do more to cut its budget and warned that other Eurozone citizens aren’t prepared to pay for its gov’t’s mistakes. ECB president Trichet said promises made last week by Greece and the 26 other European Union governments on finances and the stability of the euro area are “enough” for the time being. The NYT had a big pg 1 article this weekend discussing how “Wall Street”, inc. Goldman, helped Greece to hid the true extent of its debt accumulation w/currency swaps and other techniques; in response to the article, Brussels has given Greece two weeks to answer allegations in the Times article. London Times article Tues morning – “Bite the bullet. Kick Greece out of the euro”.

· Dubai – speculation of a proposed offering to creditors of Dubai World have spooked global markets and caused Dubai CDS spreads to blow out last week; according to speculation, Dubai World will offer creditors either 60 percent repayment over seven years and a government guarantee, or full repayment with a debt for equity swap for property assets of Nakheel and no guarantee. Dubai said on Sunday it had made no formal restructuring proposals and nothing was expected until March or April. CNBC

· MSFT – the co officially launched its new mobile OS, Windows Mobile 7, Mon morning; overall people seemed pleased w/the actual OS during demonstrations, although there is some concern around hardware partners – the co failed to unveil any major new hardware based on the OS. MSFT hopes to have devices w/Win7 Mobile on shelves for the holiday ’10 season. MSFT could have more to say on Win7 Mobile during its MIX conf in Mar.

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