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23-Apr-09 BUILDING UP
US downside finish seems reasonable. Financials ‘s 3.8% loss is no big surprise after the 8% rise the day before and the lower
earnings from Morgan Stanley while Wells Fargo ‘s nice results were played already two weeks ago. A lot of earnings to go through once
more today, bank’s stress test possible (or not) announcement tomorrow, more housing data today and tomorrow is also explaining the
lack of follow through in yesterday’s US session given the latest rise which requires some more time before breaking up. The resilience of
the European indices are mostly due to the underweight situation from fund managers on equity, and in Europe.
Sorry to insist, but as days are passing–by and the market showing some signs of resiliency, we find more and more brave if not
close to be a denial process than the one calling a “bear market” rally. Again we keep on reading that the environment is awful, liquidity
crisis still on, global falling demand, increasing inventories, bankruptcy risks from banks etc.. It seems to us that the fresh last indicators
we got are putting all this gradually behind us. The full back-up from the Fed and Obama’s team being the main reason why we are no
longer in a 29 crisis revival. Again and again, not saying everything is great, far from it. But this gloomy scenario close to a Great
Depression outcome is being avoided, and this is worth a price, or a misprice from strategists, which the market is adjusting on its own.
There is not much place to invest money, and cash proved to be certainly not king anymore the last few weeks.
Same as the internet bubble burst, which was the start of the bear market in 2000 we probably ended early March at last, there
will be some severe damages preventing a few banks and others to recover. But the bubble burst, as always, is aiming at cleaning things
where everyone was making money, and set up some new regulation process which both corporate and investors will be able to live with.
We would also remind that the equity indices rise, in addition to the very low yield environment is a very influent economic component,
and this is a fact, which helps turning confidence positively everyday a bit more, gradually clearing the dirty economic landscape. Some
“bear market rally” star economist defender concluded “…this global recession will continue for a longer period than the consensus
suggest. There may be light at the end of the tunnel – no depression and financial meltdown. But economic recovery everywhere will be
weaker and will take longer than expected. The same is true for a sustained recovery of financial markets.” It certainly doesn’t mean we
did not start a bull trend on financial markets ! Time will tell, and at this stage there are good chances we did start a new fresh bull run,
while the economy remains “bear”, or let’s rather say in “recession”, but admittedly, from very bearish economists own words, no longer in
a Great Depression stance. By the way, no one knows the speed of the recovery, its strength if any, or the remaining time of the
recession, given the historically new situation we are dealing with.
By the way, the 0.7% m/m increase in the US FHFA house price index in February builds on the 1.0% (revised from +1.7%) m/m
gain in January will fuel speculation that the housing downturn has come to an end. One monthly rise could easily be a blip in the
downward trend, but two in a row are harder to dismiss. After all, the gains come alongside evidence that housing activity has found a
floor. Home sales, housing starts and mortgage applications are now all above their troughs. Meanwhile, the fall in house prices over the
past two years and the plunge in mortgage rates have markedly improved affordability (1% cut in mortgage rate is equivalent to a 10%
housing prices drop). But it will surely be seen as bear market rally in the housing sector too … in fact every rise from any assets might be
seen as a “bear rise” given the current deflation crisis (obviously joking) …
Some more housing data to go through today and tomorrow will bring more news on the sector, which might be building up (☺). It is
very important in term of provisions for banks, assets valuation etc… Everything started from the housing markets, which spread to the
banks and then the overall economy. Housing market back on track (which is fairly obvious in France given the low yields and the wider
appetite from banks more keen on lending), banks getting better, and the economy will be picking up a lot earlier than most bear and bull
strategists are forecasting.
Interesting to see that most traditional fund managers, following analysts and strategists recommendations, were playing the wrong
horses : the Telecom sector was the defensive one to play but DT warned on Tuesday, same as the Health care with Merck lowering
guidance and Roche Avastin study failure, or Nestle disappointing sales and Heineken poor trading update, while Banks are doing fine,
Retail remains firm (Tesco, Burberry, Carrefour, Pinault) not even talking about property names. Opening down we should be fine though
today, and rangy once more. Trading will go short, fund managers will take opportunity of the downside to reduce their underweight.
WTI €/$ $/¥ 10 yr US 10 yr Euro Basic Energy Financ Health Tech Tel Indus Utilities SOX S&P NAS DOW Close

Last 48,6 1,3024 98,00 2,94 3,21 0,79 -1,24 -3,64 -1,36 0,30 0,73 1,28 -1,22 4,33 -0,77 0,14 -1,04 US
Perf 1d % -0,39 0,14 0,03 -0,37 bp 6,9 bp -1,03 0,69 0,08 0,63 -0,90 0,24 -0,39 -0,02 -1,43 0,03 -0,71 0,03 Europe
ECONOMIC DATA with impact
Jobless Claims (12h30 gmt) expected 640k from 610k / has been improving the last two weeks, should we get use to a trend ? still very
bad data, but any sustainable improvement at that stage would be as welcome as surprising / interesting
March Existing Home sales (14h gmt) expected 4.65 mn from 4.72 mn / housing data seem to be improving, which is very important to
set the base of a solid recovery. The housing prices were up two months in a row, the new home sales tomorrow will provide more inside,
interesting to see whether the sector is improving thanks to the sharp mortgage rates or just stabilizing / upside possibility
POSITIVE IMPACTS
NOVARTIS : Q1 sales $9.7bn (9.73bn exp) but pharma sales $6.43bn (6.36bn exp) / Ebit $2.35bn (2.14bn exp) / Confirmed FY sales
growth outlook / Cost saving programme ahead of schedule and set to exceed goals
CREDIT SUISSE : Q1 core net revenue SFR9.56bn (7.35bn exp) / Assets under Management SFR1122bn (1093bn exp) / Tier 1 ratio
14.1% (13.3% end 2008) / ROE 22.6% (11% exp) / Net profit SFR2bn (SFR 1bn exp)
SODEXO : Q1 revenue €7.63bn (7.45bn exp) / Ebit €421m (418m exp) / Confirms FY targets
th
FRANCE TEL-BOUYGUE-VIVENDI : French govt is not in a hurry to grant a 4 3G mobile licence. (La Tribune)
STORA ENSO : Q1 sales €2.13bn (€2.37b exp) / Oper loss €3m (€ -16m) / Announces €250mln annual cost reductions

APPLE : Q2 revenue $8.16bn (7.95bn exp) / EPS $1.33 (1.18 exp) / GM 36.4% (33.1% exp) / Sold 11m IPod (10m exp) + 3.8m Iphone
(3.5m exp) + Mac sales in line / But sees Q3 revenue $7.7-7.9bn (8.25bn exp) & Q3 EPS $0.95-1.00 (1.12 exp) (likely overcautious…)
EBAY : Q1 sales $2.02bn (1.94bn e) / EPS $0.39 (0.34 e) / Sees Q2 sales $1.85-2.05bn (1.98bn e) with Q2 EPS $0.34-0.36 ($0.35 e)
QUALCOMM postponed its earnings release until April 27, 2009 due to advanced settlement discussions with Broadcom regarding a
settlement of disputes / If a settlement is reached, it would have an impact on QCOM's Q2 financial results. However, QCOM did say its
revenue and operating income for the Q2, excluding the potential impact of the Broadcom agreement, met or exceeded prior guidance

NEGATIVE IMPACTS
ABB : Q1 revenue $7.2bn (7.55bn exp) / Ebit $862m (903m exp) / But orders $9.2bn (8.2bn exp) / Expanding cost out programme to
$2 bn / Confirmed mid-term targets / Said business in March improved but too early to say whether this represents a bottom
LVMH : Q1 revenue €4.02bn (4.09bn exp) / Organic growth -7% (-6% exp) / Spirituous, watches & perfume below estimates but offset
by very strong performance at Vuitton which gained market share, well positionning the brand for recovery
 WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

23-Apr-09 BUILDING UP
CASINO : Q1 sales €6.62bn (6.73bn exp) hit by a negative currency (Brazilian real and the Colombian peso) + petrol price drops + more
difficult discount stores sales but confirmed its FY 2009 targets / Monoprix & Franprix holding well
SWEDBANK : Q1 revenue SK9.42bn (8.56bn exp) but net loss of SK3.36bn (+636m exp) due to huge loan impairments (SK6.85bn vs
3.13bn exp) in the Baltic region & in Ukraine (provisionning of 101% of impaired loans) / Tier 1 10.8% (11.1% end 08)
AKZO NOBEL : Q1 revenue €3.27 bn (3.36bn exp) / EBIT, ex-incidentals €142 m (187m exp) / Limited forward visibility, but there were
some early indications in March that conditions in a number of our markets may be stabilizing…
DIAGEO : Top institutional investors have signalled their support for Diageo to seek talks with LVMH to buy Moet Hennessy (Daily Tel)
WHITBREAD will unveil a large jump in its pension fund deficit when it reports FY results next week (FT)
VOLKSWAGEN-PORSCHE : Porsche said that press speculation that VOW could buy its sports car unit was "highly unrealistic" /
Separately, press (FAZ) cited a source as saying that Wendelin Wiedeking's position as Porsche CEO is "shaky."
K+S has launched syndication of a €1.4 bn loan backing its acquisition of US-based Morton Salt from Dow Chemical
SOFTWARE AG : Q1 sales €165m (177m exp) / Ebit 38.1m (43m exp) / Confirmed its 2009 targets
LOGITECH : Q4 sales $408m (486m exp) / Ebit $110m (162m exp) / Still financially in a position to look for acquisition targets
OUTOKUMPU : Q1 sales €679m (676m e) / Operating loss €249m (-175m e) / Said base prices appear to have bottomed out in March

RESULTS DIVIDENDS EVENTS

ABB / Akzo Nobel / Novartis / Saab / Sodexo / Microsoft /
Mun re (€5.50) / RWE (€4.50) / Sanofi-Aventis
Today Amgen / Amazon.com / Marriott Int / American Express / Danone AGM
(€2.20)
ConocoPhillips
CNP (€2.85) / Nokia (0.40) / Reed Elsevier NV
ENI / ACS / Bankinter / Valeo / Volvo / Bristol Myers Squibb
Friday (€0.29) / Swisscom (CHF 19.00) / Syngenta Lufthansa AGM
/ 3M / Honeywell / Schlumberger / Xerox
(CHF 6.00) / VW (€1.93)
Atlas Copco / Scania / Merck KGaA / Nippon Steel / Verizon Lufthansa (€0.70) / Eiffage (€1.20) / Heineken
Monday
/ southwestern Energy (€0.34)
Tuesday BBVA / BP / Sandvik / Theolia / Pfizer / Sun Micro Bouygues (€1.60) Fortis EGM
ArcelorMittal / royal Dutsch Shell / Sanofi-Aventis / SAP /
Siemens / Bayer / Continental AG / Volkswagen / France
Aegis (GBp 1.711111) / Akzo Nobel (€1.40 ) /
Wednesday Telecom / Geberit / Nordea Bk / Norsk Hydro / ST Micro Fortis EGM / Allianz AGM
Nestlé (CHF 1.40) / Sandvik (SEK 3.15)
(after US close) / General Dynamics / American Electric
Power / Time Warner
TRADING IDEAS
An eye on Eurostoxx & Nasdaq cash index downside gap left on 2111 & 1599 levels
BUY NOVARTIS / PHILIPS / DANONE / UNILEVER looking good
BUY OIL names as TOTAL / ENI (results Tomorrow) / BP / ROYAL DUTCH to play the economic recovery
BUY NESTLE / L OREAL / VIVENDI / SIEMENS / PERNOD on reversal Head & Shoulder possibility
BUY BEIERSDORF / AHOLD / GSZ on double bottom possibility

BUY AHOLD / SELL METRO // BUY BAYER / SELL AKZO // BUY TOTAL / SELL REPSOL // BUY BNP / SELL SOCGEN // BUY CAP / SELL SAP
BROKER METEOROLOGY

L’OREAL ..............................RAISED TO NEUTRAL ......................................................................................................... BY MERRILL

BP .........................................RAISED TO BUY FROM HOLD .................................................................................................... BY RBS
BOLIDEN............................... RAISED TO NEUTRAL FROM UNDERWEIGHT ...................................................................... BY HSBC
VOLSTALPINE .....................RAISED TO BUY FROM HOLD ........................................................................................ BY CITIGROUP
PRUDENTIAL .......................CUT TO NEUTRAL FROM OVERWEIGHT ..................................................................... BY JPMORGAN
NEXANS ...............................CUT TO SELL FROM NEUTRAL ................................................................................................. BY UBS
SAIPEM .................................CUT TO NEUTRAL FROM BUY ................................................................................................... BY UBS
MEGACABLE .......................CUT TO SELL FROM NEUTRAL ......................................................................... BY GOLDMAN SACHS
BRITISH AIRWAYS ..............RATED NEW NEUTRAL ............................................................................................................. BY HSBC
SAIPEM .................................CUT TO NEUTRAL FROM BUY ................................................................................................... BY UBS
IBERDROLA .........................CUT TO HOLD FROM BUY ..............................................................................BY SOCIETE GENERALE

PLEASE FIND BELOW ON THE NEXT PAGE OUR MORNING ECO

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23-Apr-09 BUILDING UP

CHART OF THE DAY

UK Claimant count rate SA %
Since 2005

4,5

3,5

2,5

2
2005 2006 2007 2008 2009

Source : O.N.S

After reaching 4.3% in February the UK claimant count rate recording the number of people claiming unemployment related benefits
rose of 4.5% in March its highest level since February 1998.

ECONOMIC DATA
Time Country Indicator Period GE forecasts Consensus Previous
7.45 GMT France Business Confidence Indicator April 69 68
8.00 GMT France PMI manufacturing (préliminary) April 37,0 36,5
8.00 GMT France PMI services (préliminary) April 43,7 43,6
8.30 GMT Germany PMI manufacturing (advanced) April 33,0 32,4
8.30 GMT Germany PMI services (advanced) April 42,5 42,3
9.00 GMT Euro zone Current account SA February - € 10,7 billion - € 12,7 billion
9.00 GMT Euro zone PMI manufacturing (advanced) April 34,7 33,9
9.00 GMT Euro zone PMI services (advanced) April 41,4 40,9
9.00 GMT Euro zone PMI composite (advanced) April 38,9 38,3
10.00 GMT Euro zone Industrial new orders February -2,2%,-34,8% YoY -3,4%,-34,1% YoY
13.30 GMT United States Initial jobless claims April 18 th 640 000 610 000
13.30 GMT United States Continuing claims April 11 th 6 130 000 6 022 000
16.00 GMT United States Existing home sales March -1,5% MoM 5,1% MoM

Inde x e s P rice % 5 D a ys Ytd Forex Price % 5 Days Ytd

DJIA 7886,6 - 1,70% - 10,14% EUR/USD 1,3032 -1,25% -6,80%
S&P 500 843,6 - 0,97% - 6,61% EUR/JPY 127,68 2,60% 0,69%
Nas daq 1646,1 1,19% 4,38% USD/JPY 97,99 1,32% 7,49%
CA C 40 3025,2 1,40% - 5,99% Oil Price % 5 Days Ytd
DA X 4594,4 0,98% - 4,49% Brent $/b 48,6 -6,49% 16,24%
Eur os tox x 50 2285,7 1,08% - 6,62% Gold Price % 5 Days Ytd
DJ 600 192,4 1,11% - 3,01% Gold $/oz 891,2 1,81% 1,07%
FTSE 100 4030,7 1,70% - 9,10% Rates USA Euro Japan
Nikkei 8837,2 - 0,18% - 0,25% Central Banks* 0,25 1,25 0,10
Shanghai Comp 2447,9 - 2,94% 34,44% Overnight 0,10 0,78 0,10
Sens ex ( India) 10851,8 - 4,14% 12,49% 3 Months 0,13 0,83 0,20
MICEX ( Rus s ia) 905,0 - 0,03% 46,07% 10 Y ears** 2,94 3,21 1,43
Bov es pa ( Bras il) 44888,2 - 1,17% 19,54% *US: Fed Funds; Jap: Overnight; Euro: Ref i
** Euro: German Bund rate So urc e : B lo o m berg
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23-Apr-09 BUILDING UP

ECONOMIC DATA PREVIEW

Watch in the United-States the weekly release of the initial jobless claims and continuing claims due at 13.30 GMT. After the last
release drop Initial jobless claims are expected to increase and continuing claims to break a new record high. Watch as well the
release of the existing home sales due at 15.00 GMT expected to drop of 1.5% in March after rising of 5.1% in April.

Watch in the euro area the PMI manufacturing and the PMI services due at 9.00 GMT. Euro area PMI are expected to slightly
increase as they already touched the bottom but will remained way below 50 the borderline between expansion and contraction of the
activity. Watch as well the industrial new orders due at 10.00 GMT expected to pursue their sharp drop as recession is deepening. /JB

ECONOMY
UNITED-STATES : MBA MORTGAGE APPLICATIONS ROSE LAST WEEK
th
Mortgage applications in the U.S. rose from -11.0% April 10th to 5.3% April 17 . This increase is the direct consequence of the lower
borrowing cost boosting homeowners to refinance loans. Indeed Americans are taking advantage of interest rates near record low to
trim monthly payments as unemployment is sharply rising in a gloomy economic environment . This increase in refinancing is a positive
news as its is reducing mortgage payments and give more margin to households to save more or to increase spending ( consumer
spending represent roughly 70 % of the U.S. GDP).

UNITED-STATES : HOUSE PRICE INDEX ROSE FOR THE SECOND MONTH IN A ROW IN FEBRUARY
After rising of 1.0% (revised from 1.7%) in January equalling the highest monthly increase the FHFA house price index rose of 0.7% in
February. After the good news from home sales, housing starts and mortgage applications this rise is another positive sign of the slight
rebound of the house activity. Nevertheless the Case- Shiller measure of prices is still falling rapidly underlining the difficulty to forecast
the evolution of the prices in the coming months.

JAPAN : EXPORTATIONS DROPPED AT A SLOWER PACE IN MARCH

After narrowing from - yen 146 billion in January to - yen 71 billion in February Japan’s adjusted trade deficit increased to - yen 97 billion
in March. Exportation dropped of 45.6% versus 49.4% in February and importations dropped of 36.7% in March ( prior -43.0%). The
drop of shipments to U.S. and China , Japan’s two largest market slowed in March. Indeed shipments to China sank 31.5% in March
(YoY) versus 39.7% the month before and exports to the U.S. fell 51.4% after dropping 58.4% in February. It must be noticed that on
seasonally adjusted basis exports rose 2.2% from February which represent the first increase since May. Nevertheless the strong Yen
and the global economic downturn are still penalizing Japan’s exports a major component of the country GDP.

UNITED KINGDOM : CLAIMANT COUNT RATE REACHED ITS HIGHEST LEVEL FOR 11 YEARS
After reaching 4.3% in February the UK claimant count rate recording the number of people claiming unemployment related benefits
rose of 4.5% in March its highest level since February 1998. As United Kingdom economy is mainly based on finance and sectors
related to it like insurance, the country is strongly hit by the financial crisis and the global economic downturn forcing banks and
companies to sharply cut jobs. Indeed after reaching 2.50% in April 2008 and 2.60% the next two following months the claimant count
rate increased regularly since July 2007. Meanwhile the jobless claim change reached 73 700 in March and the ILO measure of
unemployment rate reached 6.7% during the last 3 months. On the other hand the Bank of England Minutes as expected showed an
unanimous vote (9-0) to maintain rate as the leading rate already reached a bottom./JB
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23-Apr-09 BUILDING UP
VIXindex: impliedvolatilityontheS&P500 $Libor -3-Month(InterbankRate)
6
85
80 5,5
75
5
70
65 4,5
60
55 4
50
3,5
45
40 3
35
30 2,5
25
20 2
15 1,5
10
5 1
23/04/2007 23/10/2007 23/04/2008 23/10/2008 23/04/2009 23/04/2007 23/10/2007 23/04/2008 23/10/2008 23/04/2009
Source : Bloomberg Source : Bloomberg

UnitedStates: 10-year Treasuryyield 10-year TreasuryspreadUSA-Eurozone

5,5 1,2
5,25 1
5
0,8
4,75
0,6
4,5
4,25 0,4
4 0,2
3,75
0
3,5
3,25 -0,2
3 -0,4
2,75
-0,6
2,5
2,25 -0,8

2 -1
23/04/2007 23/10/2007 23/04/2008 23/10/2008 23/04/2009 23/04/2007 23/10/2007 23/04/2008 23/10/2008 23/04/2009
Source : Bloomberg Source : Bloomberg

Oil : Brent ($/b) Forex: EurovsDollar (EUR/USD)

150 1,65
140
1,6
130
1,55
120
110 1,5
100
1,45
90
1,4
80
70 1,35
60
1,3
50
40
1,25

30 1,2
23/04/2007 23/10/2007 23/04/2008 23/10/2008 23/04/2009 23/04/2007 23/10/2007 23/04/2008 23/10/2008 23/04/2009
Source : Bloomberg Source : Bloomberg