Good morning,

Markets are called to open flat in Europe. This is what's happening today:

  • Data showed American shoppers spent 13% more during the Thanksgiving weekend. Sales seen at $59bln;
  • Today is cyber Monday in the US;
  • Pro-independence parties in Catalonia won a regional vote, strengthening a drive for a referendum on secession and sparking concern political uncertainty may force Spain to delay seeking aid;
  • European finance chiefs meet today to try to negotiate a bailout payment for Greece;
  • Treasuries rose before a US government report tomorrow forecast to show orders for durable goods fell in October, highlighting the uneven economic recovery;
  • Demand for the yen was limited amid speculation a general election next month will hand power to the opposition party that advocates aggressive monetary stimulus by the Bank of Japan;
  • Oil fell for the first time in three days as a cease-fire between Israel and Hamas held steady and Egyptian President Mohamed Mursi prepared to meet with the nation’s judiciary after protests against his new powers;
  • 10-year Italian debt is yielding 4.745%, 10-year Spanish debt is yielding 5.598% and 10-year Portuguese debt is yielding 7.792%;
  • Brent is trading at $111.30/barrel;
  • Gold is trading at $1750.47/oz;
  • Apple closed the session at $571.50

Alot of interesting things happening in the market. Lets start off with Black Friday. Sales were up 13% year-on-year last Friday. We saw a strong rally in techology stocks on Friday with Apple up 1.74%, Microsoft up 2.78%, IBM up 1.68% etc. Today is another day when American's go out spending more money since it is Cyber Monday in the US. Consumers get good discounts from shopping online.

Samsung is trading more than 2% lower this morning after Apple added infringement claims over six more Samsung products to its multibillion-dollar patent lawsuit. The Galaxy S III, the Galaxy Tab 8.9 Wifi tablet computer, the Galaxy Tab 2 10.1 and the Rugby Pro and Galaxy S III mini are products Apple added. Citigroup start coverage on Apple shares with a price target of $675/share.

Today in Europe we expect to get a deal for Greece. The sentiment in the market is that we will be getting one though with politicians everything is possible until you hear it from the horse's mouth. This is the third time EU finance ministers are meeting to try to come up with a plan for Greece. “It would be irresponsible not to reach an accord given all the efforts that have been made on all sides,” French Finance Minister Pierre Moscovici said late yesterday on BFM television. “I’m not going to guarantee that an accord will be reached, but I think the third time should be the charm.”

There were elections in Catalonia this weekend. Catalonia's President Artur Mas wants independence from Spain. Since Catalonia is a wealthy region, Mas doesn't want to continue paying more than it receives. However, in this weekend's election, Mas's lost seats to the Republic Left party. What is good for Mas is that the Republican Left are also pro independence and the two parties could form a majority in parliament. The Spanish government in Madrid vows to block any self-determination referendum, arguing that the constitution does not permit a region alone to decide its independence.

It makes sense to be invested in the markets. Things are improving despite at a slow pace. US citizens are spending more on consumer products and housing. The unemployment rate is coming down and an agreement is expected to be reached between Obama and Congress before the end of the year. Greece should be getting the go ahead for the next tranche of aid today and in China things are also improving. Having said this, markets are still trading below their long term average and it makes even more sense to be invested today (taking a long term view) than participating in a rally when prices would have already taken off. What's most important is that your portofolio reflects you risk-reward ratio. Always get professional advice when in doubt.

Stock to watch: Lundbeck (Price $16.55, Price Target $24)

Deutsche Bank Comments – Lundbeck is a pharmaceutical company specialising in drugs to treat central nervous system disorders such as depression. We expect Lundbeck to undergo near term earnings decline with fluctuating earnings progression post 2012 as its revenue growth is checked by various patent expiries to key products, including its largest revenue driver Lexapro (to treat depression). We believe management has stabilised the base business through the acquisition of US specialty pharmaceuticals company Ovation and R&D partnerships with Otsuka. Importantly this has bought time for the pipeline to regenerate. Longer-term Lundbeck's relatively large late-stage pipeline needs to deliver in order to grow from the 2015E earnings level. However success of Lu AA21004 (depression) does not appear to be priced in. BUY.

For further information on Lundbeck or other stocks and bonds we follow, contact our offices on 25688688.

Good day and happy trading!

Kristian Camenzuli