Euro Equity Update

Today is EQUITY DAY as the US Fed surprisingly postponed the start of the tapering process. The interpretation and forecast for the next few months has thus probably become hazier. However, one positive for equity markets is that low interest rates will stay around longer. We thus expect more support towards equities in the coming weeks.

JP Morgan expects a gradual recovery in the auto market starting 2014. Daimler and Renault are top picks.

Lufthansa has confirmed a major aircraft order to drive down fuel costs on long routes. Lufthansa thus continues to drive towards an efficiency model that should benefit the company in the long term. As we had budgeted the cost of this purchase in our model, our price target of €17.50 holds.

Deutsche bank has reported a leverage ratio of 3% in the second quarter of the year claiming that the debate on leverage and capital is finished. The company will now focus on growth. The black sheep of the financial sector remains Barclays with a ratio of 2.5%. Barclays will require some more time in order to comply with regulatory requirements. The process may affect profitability.

Apple launches new operating system and more importantly some madmen are already queuing for the iPhone 5s 3 days in advance.

Antoine