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Markets are called to open flat this morning. This is what's happening today:
Markets are trading close to all time highs. With the Fed putting $85bln each month into the economy and US jobless claims fallings, things seem to be moving in the right direction as investors continue to search for returns in a bull market. In the US, jobless claims fell to 332,000 last week, the lowest level since mid-January. Industrial production probably rose 0.4 percent in February after shrinking 0.1 percent in January and manufacturing in the New York area held near the highest since May, surveys showed.
With growth the dominant theme, European officials sought to keep an aid package for the next problem country, Cyprus, off the agenda of the European summit and of a smaller meeting afterward of heads of the 17 euro countries. Cyprus will be dealt with at a separate meeting of euro-area finance ministers that starts at 5 p.m. today.
Samsung unveiled the Galaxy S4 with a bigger screen and software that tracks eye movements as the world’s biggest smartphone seller takes its battle with Apple Inc. to the iPhone maker’s home market. The new Galaxy has a 5-inch screen, 13-megapixel camera and motion-detection technology that lets users control features with face movements, Samsung said. The smartphone, announced yesterday at New York’s Radio City Music Hall, will begin U.S. sales on April 26 with carriers including AT&T Inc., Verizon Wireless, Sprint Nextel Corp. and T-Mobile USA Inc. Samsung wants to use the S4 – one of at least three high-end smartphones to be released this year – to reclaim the best-selling smartphone spot after the last Galaxy was overtaken by the iPhone 5 in the fourth quarter. The new handset is faster, slimmer and lighter than its predecessor and boasts features such as wrist motion for scrolling through e-mails.
Unicredit (Deutsche Bank Research) – Price E3.81, Price Target E4.9 – The Italian business is dragging Unicredit's (UCG) profitability, especially in term of high provisions on loan losses. The cost cutting in Italy has been and will be very effective, but it is not sufficient to restore profitability in line with competitors in the short term. For this reason, we think that in 2013 UCG results in Italy will not show relevant YoY improvement; however, 2014 should represent the turning point for two reasons: 1) macro recovery in Italy, and 2) the benefits from the ongoing cost cutting will become more visible. So, considering that 2014 will effectively be the "forward year" as we go through 2013, we expect UCG to deliver better performance in 2013 than the other Italian banks: Buy.
Banco Popolare (Deutsche Bank Research) – Price E1.07, Price Target E1.60 – We see potential for Banco to restructure, especially now the most urgent issues (like Banca Italease and the capital increase) have been addressed, and management can focus on the development of it's core business. However, we recognize that the current macro economic environment (low interest rates, still high cost of credit) might delay the implementation of its business plan actions and keep the profitability of the bank under pressure. Our rating is therefore Hold.
For more information on these stocks or other stocks and bonds we follow, contact our offices on 25688688.
Good day and happy trading!
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