Tuesday Morning View From Europe

by: Dealing Floor

From DealingFloor:

- Gold Rises in Asian Trade as U.S. Dismisses Letter From Iranian President
- Oil Rises After Iranian President’s Letter Fails to Address U.S. Concerns
- Spot Platinum Price Surges to Record for 2nd Day on Rising Investor Demand
- Investors Held $120 Billion in U.S. Commodities Last Month, Citigroup Says


- Euronext shareholders will reject a merger with Deutsche Boerse on the ground of lack of information (WSJ).

- Degussa posted a 79% surge in 1Q profit to E129m on revenue up 21% to E2.74bln. The company warned it was unlikely to repeat the high growth rates of 1Q but nonetheless remains confident for FY.

- Lufthansa April traffic data. The airliner will try to improve on last month’s performance where it recorded a 0.4% rise in passenger traffic YoY.

- Adidas-Salomon posted a 37% rise in 1Q net income to E144m (E131m expected) on sales up 48% to E2.46bln (E2.33bln). The company is confident of reaching its targets “in 2006 and beyond”.

- Rio Tinto plans to introduce an efficiency program, which could potentially raise its net present value by billions (Australian Review citing the group’s CEO).

- UBS purchased Brazil-based Banco Pactual for $2.5bln, which has $18.6bln under management. UBS will pay $1bln now, and up to $1.5bln over 5 years.

- Swiss Re will raise $350m through a global offering of stock after its shareholders subscribed for a 50% share sale to fund the purchase of GE Reinsurance unit.

- KPN Q1 ahead of consensus and reiterate guidance for FY. Headline EBITDA E1206m vs cons 1156m, revs 3002m vs 2978m f/c; EBIT also very strong at E612m vs our E566m; 2006 FY: Revenue low single digit increase; EBITDA flat; Capex EUR 1.6 - 1.8bn; FCF EUR > 2bn


- JPMorgan’s Michael Barakos Buys Large Caps as Smaller Stocks Advance More
- Fed Forecasts, Wrong Before, Are Key to Pause in Interest-Rate Increases
- Investors Held $120 Billion in U.S. Commodities Last Month, Citigroup Says
- Business Spending to Drive U.S. Expansion as Consumers Slow, Survey Shows


Dell (-5.8% after ahours) cut its 1Q EPS guidance to $0.33 from $0.36-0.38 ($0.38 consensus), revenue should reach $14.2bln compared to a forecast of $14.2-14.6bln ($14.5bln consensus). The PC maker blamed price cut and expects current “measures to ultimately results in industry leading growth for the company.” Final results will be announced May 18.


Reporting earnings today are, amongst others Cisco, Walt Disney and Symantec.

Wholesale inventories (16:00 CET) and ABC Consumer Confidence are on the macro calendar.


Nikkei -0.58%; Kospi -0.06%; HSI -0.38%; Taiwan -1.14%; China 1.9%; India -0.73%; Thailand 0.4%; Australia 0.06%


- Asian Stocks Fall From Record; BHP, PetroChina Pace Drop on Lower Prices
- Excessive Yen Moves May Hurt Economy, Japan Finance Minister Tanigaki Says
- Samsung, Hynix Raise IPod Chip Prices For First Time This Year; Glut Eases
- Indonesian Central Bank Cuts Main Interest Rate for First Time Since July
-Sony Plans to Start Selling PlayStation 3 on Nov. 17 for as Much as $599
- Philippine Long Distance Telephone’s First-Quarter Profit Falls 7 Percent
- Sun Hung Kai Offering $1 Billion Shares in Placement; Stock Trading Halted
- Toyota Profit May Rise as Watanabe Speeds Up Production, Uses Fewer Parts
- Taiwan’s Quanta and Compal Shares Fall After Dell Misses Profit Forecast