Thursday, February 11, 2010

Today’s Top Stories & Catalysts

Today’s Top Stories & Catalysts

· Greece – headlines crossing @ 6:45amET - EU’s Barroso says “a Greek accord reached”;
not clear on the details just yet or the timing of an official announcement. Earlier this
morning, Reuters reported that Euro area finance ministers agreed their countries would take
"determined and coordinated action" to help Greece, drawing on IMF expertise but not the
Fund's money, an EU government source said on Thursday. However, a senior EU source
played down the prospects of a rescue package emerging on Thursday, saying the details would be left to EU finance ministers, who meet as the Eurogroup on Monday (Reuters/CNBC).
Now all that talk is the same information we knew yesterday nothing different they thought that the currency market would see through this bologna.

· European equities – making small gains on the day; banks are giving back some of their
gains from the last couple sessions (reports that there may not be a definitive Greek
announcement today prompting some small profit taking). Credit Suisse shares are up 1%
after earnings (extending their strong rally from earlier in the week). Alcatel-Lucent shares
are off 7% after earnings disappoint (revs came in light and the ’10 outlook was trimmed).
European airline stocks were hit a fter Air France-KLM posted disappointing #s. In London,
earnings are driving the action – Smith & Nephew shares are up ~4% and Rio Tinto is up
~3% (both after earnings). BT shares fall 7% on earnings (pension woes are impacting).
Diageo shares dip 2%+ after earnings come in below expectations. Total shares rise in
France after earnings come in better-than-expected.

· Also in Europe, the Spanish GDP release this morning showed that the economy carried on
contracting in 4Q although the report was in line with consensus expectations.

· In Asia, a lower than expected China CPI number and better Australian jobs report spurred
the region higher. China’s benchmark stock index ended the session up just 0.1% after
rallying ~0.6% earlier as a lower-than-estimated increase in consumer prices bolstered
speculation the central bank will delay raising interest rates (Bloomberg). Japan and Taiwan
are closed today and the Chinese New Year is starting this weekend.

· Fannie/Freddie’s delinquent mortgage purchases could provide investors w/a “wad of cash”; as this cash is deployed back into the MBS market, it could help shelter the impact that will result when the Fed’s purchases end in Mar. Bloomberg

· Global bank tax is near according to the FT – UK PM Brown said the world’s major
economies were close to agreeing on a global bank tax; a deal could be concluded at the G20
summit in June. FT

· Small banks – warning issued by TARP panel – a Congressional inquiry has found that nearly
3K small US banks could be forced to sig. cut back on lending b/c of CRE-related losses.

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