US & World News

On Friday a new conditional easing of U.S. monetary policy to a deterioration in economic conditions in the U.S., the Federal Reserve chairman, Ben Bernanke, has tried to appease the "hawks" who favor the Fed the fight against inflation, in order to rally them to his latest position.

This attitude may make it possible to Ben Bernanke to have the support of the Fed in cases of substantial worsening of the U.S. economic slowdown.

"The statistics should convince the most timid members (of the monetary policy committee of the Fed)," said Julia Coronado, senior economist at BNP Paribas.

When the Fed's annual symposium in Jackson Hole, Wyoming, Bernanke has compiled a table Friday gloomy economic outlook and reiterated the tools available to the central bank to stimulate the recovery.

The statements of the successor to Alan Greenspan, however, were more nuanced than those of the central bank on Aug. 10 after its last meeting, which had resulted in new measures to support the economy and credit.

The main decision that day, namely the resumption of redemptions of government bonds in the long term (Treasuries) without further inflate the stock of the central bank, has been widely discussed within the institution.

Some members of the Monetary Policy Committee considered that this decision would give the market the impression that the Fed was closer to a new monetary easing significant than it actually was.

ASSESSING THE RISKS OF A NEW FLEXIBILITY

Leaders of the Federal Reserve also wonder if the recent weakening of the U.S. economy is not just a slump before further acceleration of growth, instead of viewing it as a warning about the ability of growth support job creation.

Purchases of "Treasuries and have sent the wrong signal to the markets, while some criticized the swelling of the institution's balance sheet, increased by more than half since the beginning of the financial crisis in late 2008, to 2,300 billion (1,809 billion euros).

The statements by Ben Bernanke Friday were therefore able to reassure some of the skeptics.

While acknowledging the slowdown in the economy, the Fed chairman said that the conditions for a recovery in growth next year seemed satisfied.

"The president did not prepare the country to a recession" double dip ", stated Dana Saporta, Credit Suisse.

Ben Bernanke also acknowledged that it was difficult to assess the real impact of increased purchases of Treasuries and a lowering of interest rates, already extremely low, which the Fed pays banks for their cash have limited effects.

He also explained that one of the factors on which the Fed will base future decisions would be a further slowdown in inflation, already low, which increases the risks of deflation.

For some economists, the pace of recovery has slowed U.S. and statements from Ben Bernanke augur further action by the Fed in the months ahead.

"The general tone was to 'wait and see', despite showing signs of being not only that economic activity in the United States has returned below its potential growth but also to risk a further slowdown," wrote January Hatzius, an economist at Goldman Sachs in a note.

In outlining the conditions under which the Fed could decide new measures to prevent a relapse into recession, Ben Bernanke has probably facilitated the meeting a consensus around him on the FOMC.

Veolia Environnement publishes interim results up, thanks to the rising prices of raw materials recycled, but expressed caution about prospects for recovery of the waste market in the second half.

The world leader in environmental services has estimated that an operational perspective, the second half might look like in the second quarter, during which the situation has improved for his work "clean".

"The economic recovery is still extremely fragile, it is difficult to decide on the level of commodity prices (…), nor even on the level of volumes we observe in the final months of year.That is why we prefer to be cautious, however, said its chief financial officer, Pierre-François Riolacci, during a conference call.

"In activity cleanliness, it is true that we have observed a reversal between the first and second quarters," he said, mentioning in particular "a tremor on the books" in France and the United States.

"We tend to say that the second half might look like in the second quarter, in which case that we would generally quite favorable."

Veolia has reiterated that it was on the full year free cash flow positive after dividends and an increase in its recurring operating income.

The group also confirmed that it was three billion euros in sales over the period 2009-2011 – from 1.3 billion achieved in 2009 and 766 million in the first half of 2010 – and was continuing the implementation of a savings program overall 250 million for 2010.

VEOLIA-TRANSDEV COULD ENTER STOCK MARKET TO 2ND HALF 2011

Pierre-Francois Riolacci said the group would "do everything to exceed" its savings target and that the transfers could exceed one billion euros this year.

In the first six months of the year, the savings program has contributed to the growth of cash flow (CFO) operational Veolia up to 132 million euros.

The Chief Financial Officer also considered that the proposed merger with Transdev in the passenger could be completed by year end or early 2011.

"The most likely scenario (from the IPO of the new entity) is the second half of 2011.This is our central scenario, "he said.

Veolia in the first half net profit group share of 374 million euros (+69.9%), an operational CFO 1,885,000 (+0.2% at constant exchange rates), operating profit of 1.125 million ( +7.9% at constant exchange rates) and a turnover of 17.177 million (-3.3% at constant exchange rates).

According to the consensus reached by the editor of Reuters, analysts on average expected a net profit of 346 million euros, an operating cash flow of 1.908 million and a turnover of 16.924 million.

Recurring operating income of Veolia appears in turn to 1.078 million euros at 30 June, an increase of 6.6%.

At 9:30, the track was down 1.84% at 21.30 euros while the CAC 40 gained 0.69%. Analysts based in London, "the weak economy continue to weigh on the figures in the second half."

The group's net financial debt stood at 16.027 million euros at June 30th against 15.127 million in late 2009, largely because of an unfavorable effect of foreign exchange of 674 million.

The French carmakers are struggling to convince the stock market despite strong results and promising new models, preferring investors since the beginning of their German competitors.

Titles PSA Peugeot Citroen and Renault have lost 1.3% and 2.7% since 1 January, while BMW has jumped 55%, 64% of Volkswagen and Daimler by 42%.

As part of its quarterly results, BMW wins 4% Thursday afternoon and brought in its wake the entire European car signs the largest increase sector, which had not occurred the week at last accounts of Renault and PSA, yet robust.

Daimler has a market capitalization of 43.5 billion euros, Volkswagen and BMW 34 billion 26 billion.Renault weighs only about ten billion in stock and PSA about five billion.

"The French builders, very dependent on volume, are penalized by the fears that now surround the market with the disappearance of the scrappage scheme", says Kristina Church, an analyst at Barclays Capital."Nobody really wants to invest in these values as the horizon of the second half of 2011 and will not be more clear."

"The Germans, however, the presence of an upscale offer a strong position earlier in the emerging markets are positive for margins, hence the preference of investors."

Barclays Capital, to "underweight" on the two French groups but to "overweight" on BMW and VW, filed Monday for preferred values of analysts, on the basis of the estimates I / B / E / S. Renault arrives in fourth place, while the third six months earlier, and PSA advanced to fifth place when he was second earlier.

The leading trio is exclusively Germanic.BMW is the preferred value, affirmative action comes from Volkswagen and Daimler comes second to third place.

ALWAYS ON DOUBTS ON THE REST OF THE YEAR

This partly explains the suspicion that PSA has signed the largest drop in the CAC 40 last Wednesday, giving up 4% on the day it released interim results good. Friday, showed that Renault is its strength, which did not prevent long hesitation before the title is moving upward to close with a gain of 1.75%.

Action PSA also a victim of profit taking after rally seen since late May, is penalized by the uncertainties surrounding the position of mid-range group.Morgan Stanley also prefers Renault, although the bank regrets that it, unlike PSA, has not yet been set a target of annual profit and has merely a forecast of cash flows.

"The common perception is that you can not make money on cars simple and small.This assumption may no longer be true that decade it ", says Morgan Stanley.

The difference in treatment between the French and Germans are also due to a time lag effect "scrappage" which has enabled the sector to weather the storm.

In Germany, where support has disappeared in September 2009, the market has been adversely affected early in the year, while in France, their gradual disappearance is felt that in recent months.

THE FRENCH EXPECTED TO TOP WORLD

Daimler and BMW shares have gained 40% and 50% in 2009, while PSA and Renault have almost doubled their course.

As for Volkswagen, Europe's number one, he has won more than 70% in stock last year.

If we compare the performance since late 2008, the contrast between the two sides of the Rhine becomes less striking: BMW has won more than 100% Volkswagen 93.5%, nearly 94% PSA and Renault over 90%. Over the period, Daimler took 56.5%.

Despite regular incursions of the French – the Latitude Renault and Peugeot 508 are the latest examples – the segment of large high-end road is the prerogative of the German trio BWM, Audi (Volkswagen) and Mercedes (Daimler). Manufacturers Hexagon will therefore still to convince investors that their strategic choices are viable and that the success of the Mégane, Duster, C3 and 3008 will be achieved sustainably in their accounts.

The Paris Motor Show in early October in Paris, they provide such an opportunity.After two shows at the American held in late 2009 and early 2010 by PSA for the presentation to analysts of its new strategic plan and the new image of the Peugeot brand, it was the turn of Renault to unveil its future strategy in February 2011 .

"Analysts are always fond of presentation that management anticipates," said Kristina Church. "They like to be told of strategy whatsoever."

So few banks have failed this test of strength by 91 European institutions passed that investors should focus on groups which narrowly passed the test when markets open Monday.

Only seven European banks have failed these tests, including five Spanish settlements, and may need to raise 3.5 billion euros of capital, significantly less than expected.

However, quality testing, to assess the resilience of banks to a new recession over the next two years, has been criticized, including some judging too easy.

The results of these tests has also been somewhat overshadowed by a plethora of data on European economies suggesting that banks may face less severe economic pressures and defects on smaller loans previously imagined.

Accordingly, investors should make their own judgments on a case by case, largely due to additional data from tests such as those for the portfolios of sovereign debt, to determine what could be the next sector weaknesses.

QUESTIONS ON THE SEVERITY OF SELECTED SCENARIOS

"With so few banks have failed, investors will question whether the economic scenarios have been sufficiently severe," said Jon Peace, an analyst at Nomura.

"It is natural for investors to consider the margin with which banks have gone," he adds, citing the large margin of success of Scandinavian and British institutions, while banks Greek, Spanish and Italian 's have come out with more difficulty.

Then he was asked banks to manage to maintain a solvency ratio of less than 6% to pass the test, Sept. 10 institutions reported a Tier 1 ratio between only 6 and 7%.

Among these facilities include Deutsche Postbank, Piraeus Bank, Allied Irish Banks, Monte dei Paschi di Siena, Banca UBI, Bankinter and eight small Spanish settlements.

If an objective test was to facilitate the financing contracts with banks recently met with difficulties in this area, schools still considered too risky could nevertheless continue to have problems, except to raise more capital.

"History is not necessarily complete, and if financing costs do not improve for some banks, then we would not be surprised to see additional resistance tests (carried out) by some central banks to future, "warns Jon Peace of Nomura.

As investors take position on the results of resistance testing Monday at the opening of markets, central bank governors and heads of Supervisors will meet in Switzerland to discuss the reform proposals on the strengthening of the capital own banks.

But after their success in tests of strength, European banks may find it difficult to argue that they can apply a stricter financial regulation.

"Banks are ready to begin implementing the new rules are necessary to strengthen the capital reserves and liquidity management of banks," also told Reuters Insider, after the publication of results of resistance testing, Vitor Constancio, Vice-President of the ECB.

Crude prices have come down on Wednesday after the announcement of an unexpected rise in crude inventories in the U.S. and very cautious statements of the President of the U.S. Federal Reserve on the economic situation.

On the New York Mercantile Exchange, crude for delivery in September ended a decline of $ 1.02, or 1.31%, to 76.56 dollars a barrel.

U.S. crude reserves rose 400,000 barrels last week, when economists expected a drop instead of 1.4 million barrels.

In addition, the chairman of the Fed Ben Bernanke said Wednesday that the Fed was ready to take additional measures as necessary to sustain growth given the high level of uncertainty.

Accor announced Tuesday an increase of 5.1% of its turnover in the hotel industry in the first half on a comparable basis, driven by the high and mid-range.

The fourth group behind global hotel InterContinental, Marriott and Hilton and Starwood publish its first financial data since the demerger of its business of prepaid services, Edenred, July 2.

The total turnover of the group were up by 6.1%, representing a growth of 4.7% on a comparable basis, to 2.849 million euros.

On the only hotel business, which include brands Ibis, Sofitel and Motel 6 in the U.S., net sales increased 7.5% as reported at 2.723 million.

In the second quarter alone, the organic growth of the hotel was up 8.2% at constant scope and exchange rates.

"In most countries, especially in Europe, the recovery began in the first quarter accelerated in the second quarter, thanks to a favorable base effect," said Accor in a statement.

The group claims to have earned a higher "backed" by its occupancy rate in the upper and mid-range and higher average prices of its main markets, France, Germany and the United Kingdom.

Hotel groups noted an improvement in demand, the slow economic recovery that encourage consumers to resume their journeys.

Marriott International issued last week an increase in profit in the second quarter, benefiting from increased prices of its rooms in North America.

Accor announced the sale in early July Newrest 60% of its business catering on trains of the Compagnie des Wagons-Lits (CWL).

Edenred Monday announced an increase of 4.7% of its turnover in the second quarter, growth of Latin American operations have helped offset a more difficult economic environment in Europe.

The shares closed up 0.8% to 23.1850 euros, giving a market capitalization of 5.28 billion. It fell 39% since the beginning of the year.

ZenithOptimedia noted for his third consecutive growth forecast for global advertising market this year after surprisingly strong spending by advertisers in the U.S. and Europe in the first half.

The agency purchases of space, a subsidiary of Publicis, now expects growth of 3.5% in 2010 against 2.2% previously, considering that all regions should show some growth, even Europe West.

For France, ZenithOptimedia has raised its forecast to 1.7% in 2010 against 1.1% previously, largely thanks to television which has greatly benefited from the opening to competition of Paris and gambling Online.

"The bulk of the upward revision is in North America and Western Europe (…), But these regions grow more slowly than most emerging countries, "ZenithOptimedia said in a statement, adding that emerging countries should support the growth of the global advertising market in the coming years.

The agency expects growth of 2.4% in 2011 and 2.9% in 2012 in industrialized countries, compared to respective rates of 9.1% and 9.8% expected in emerging markets, with support from Asia-Pacific and Latin America.

For the global market, ZenithOptimedia has raised its growth forecast from 4.1% to 4.5% this year and confirmed its expectations of a 5.3% rise in 2012, after a fall of 10.3% in 2009.

ZenithOptimedia now expects a solid growth of 2.2% in Western Europe this year, despite concerns about the debt of countries in the euro area, against 0.4% previously.It anticipates a gradual increase in advertising spending in 2011 and 2012, according to the request after the entry into force of austerity plans.

HEXAGON A CONTRARIO IN 2011

In France, where business confidence is wavering, the agency expects a slowdown in market growth in 2011 and 2012, unlike the global trend.

The strongest contrast in the forecast from ZenithOptimedia North America, where the agency now expects growth of 1.3% instead of down 1.5%, benefiting from a strong recovery in demand and consumer confidence.

Television has gone through the crisis relatively well advertising, consumers tend to spend more time at home with the development of new technologies such as HDD recorders. Even more dominant in emerging markets, the television should represent 40.8% of the global advertising market in 2012 against 39.2% in 2009.

Internet advertising spending, third medium after television and press, expected to reach 17.1% in 2012 against 12.7% in 2009 to promote the growth of mobile internet and social networks.

Aon Corp., the world's first insurance broker, announced Monday it would buy the company for HR services to Hewitt Associates, about 4.9 billion dollars (3.9 billion euros) in cash and stock.

The offer represents Aon Hewitt $ 50 per share, a premium of 41% over its closing price Friday.

The transaction will allow Aon to gain a foothold in the area of human resources and benefits outsourcing and compete and Mercer, a subsidiary of Marsh and McLennan rival.

Aon plans to merge Hewitt with his own business consulting and outsourcing and expects an annual turnover of 4.3 billion dollars for the new entity to be called Aon Hewitt.

Russ Fradin, CEO of Hewitt, Hewitt will lead Aon.

Aon expects the transaction will have a positive impact on its performance in 2011 and 2012 and expects about $ 355 million of cost reductions in 2013, mainly administrative.

It is the second major operation in a year in the area of the board after the merger between Towers Perrin and Watson Wyatt for $ 3.5 billion, which gave birth to the number one global human resources consulting.

Aon intends to fund the acquisition with a bridge loan of 1.5 billion dollars and a bank loan of one billion dollars.

The action of Hewitt jumped more than 30% before the official opening of trading after closing Friday at 35.40 dollars at the NYSE. Aon closed at 38.34 dollars.

From early 2011, the European bankers will no longer affect more than one third of their bonus in cash and the payment of 40% of the total variable pay will be deferred over time, according to an agreement reached Wednesday between MEPs and member states .

Moreover, bank managers who have not repaid the state aid paid to the height of the financial crisis will not be eligible for variable pay and their salaries can not exceed a certain limit.

Finally, extraordinary payments related to retirement are covered by these rules.

"Parliament has managed to get 70% bonus is linked to the results when states were content to pay portmanteau words as 'balanced' or variable part" reasonable ", welcomed the French MEP Canfin Pascal, who was negotiating the text for the Greens.

Technically, according to the agreement, 30% of earnings will be pocketed immediately, 30% will be paid in shares not immediately salable and the remaining 40% will be paid later, half in cash and half in financial instruments linked to the performance of long After the bank.

The directive, known CRD3 (Capital Requirements Directive), also increases the capital requirements for operations re-securitization, which will affect the activity of investment banks.

The new rules should be in force early next year to cover bonuses and variable compensation paid in January 2011.

The recovery should continue at low speed in France by the end of the year, with a growth rebound in the second quarter but remain moderate then provides INSEE.

In his memo on the economy released Wednesday, the Statistical Institute expects a 0.5% of GDP in the second quarter and growing 0.4% in the next two quarters.

For the full year, growth would be 1.4%, in line with the government's forecast and just enough to stabilize unemployment.

The acquired at year end would be +0.6% and should in this case a 0.8% growth in each quarter of 2011 for achieving the government target of 2.5% was calculated INSEE which the forecast is however limited to 2010.

After rising 0.5% in the fourth quarter of 2009, GDP stagnated in the first three months of 2010 (+0.1%), fearing a relapse of the economy even if this figure is likely to be revised upwards on Friday when the national accounts are published in detail.

Entitled "In mid-stream, Note Insee business survey suggests a continuation of the recovery but at a moderate pace and with high uncertainty.

Turbulent waters

"An upturn in global activity was engaged for several quarters but there is still some way to go in this crisis and in waters which may be turbulent," said Sandrine Duchêne, head of the Business cycle, at a press conference.

Two forces are at work in France as in other advanced economies, "she said.On the one hand, the global recovery, but more beneficial to the country heavily exposed to foreign trade such as Germany or Japan, the other the need for fiscal consolidation that has already resulted in the listing Plan rigor.

"The year 2010 is a transition year between recovery and fiscal consolidation," said Sandrine Duchêne.

"In the very short term, the second quarter looks good but there is currently a cap on surveys which is expected a slowdown in activity by the end of the year."

According to INSEE, the attenuation of growth in the second half will not call into question both the positive contributions of the first quarter, namely the beginnings of a revival in business investment and re-creations of net jobs in the commercial sector.

"This trend will continue throughout the year but the pace of recovery will be slow and does not transmit only gradually income households," said Sandrine Duchêne.

In this context and with unemployment still high but stable, Insee sees household consumption stagnated in the second quarter as the first, before rising moderately (0.3%) in the next two quarters.

Demand for business will be limited but the depreciation of the euro will bring them a breath of fresh air by making their exports more competitive.

POSITIVE EFFECT OF THE EURO

In total, according to projections by INSEE, the recent decline of the euro should have a positive impact of 1.6 points on exports this year and 0.5 percentage points on growth that otherwise would therefore was only 0.9%.

Business investment in turn will benefit from improved market opportunities but will remain constrained by production capacity remains under-used, with a rate currently of 76% – ten points below the long-term average.

After eight consecutive quarters of decline, Insee sees the investment by non-financial leave of 0.6% in the second quarter, but he would decline a further 2.0% in total over 2010, following a drop of 7.9% in 2009.

Regarding employment, creation of the 24,000 net new market sectors in the first quarter – after seven quarters of destruction – would be followed by 8,000 others in the second, 4,000 and 15,000 in the third to the fourth, a total gain of 51,000 jobs this year 337,000 after destruction in 2009.

After six quarters of strong growth, the unemployment rate would remain stable for its 9.5% in France (9.9% in the counties overseas), to its highest level since late 1999.

Insee said its forecasts are surrounded by uncertainties. A resurgence of financial stress and / or the impact of measures to reduce the deficit might weigh on growth, since, unlike the depreciation of the euro, if continued, would allow countries Eurozone to benefit more from the dynamism of world trade.