US & World News

Schneider said Thursday lowered its forecast for 2011 operating margin mainly because of a mix more negative than expected in terms of activity and contribution of geographic areas.

The French specialist of electrical equipment said in a statement that it now expects an EBIT margin (earnings before acquisition costs and impact of integration and consolidation of acquisitions in the year 2011) of 14% instead 15% previously forecast.

However, the Group confirms its forecast for organic growth of between 6% and 9% for the year.

"We expect, however, that profitability is impacted beyond the forecast, the combined effect of a mix more negative, due to growth of solutions greater than that of products and geographic mix less favorable, and a stronger inflationary pressures in emerging economies, "said Jean-Pascal Tricoire, chief executive, said in the statement.

The turnover of the group reached 5.697 million euros in the third quarter, representing organic growth of 7.7%.

At 9 months, organic growth reached 9.3%, faster than the annual target.

The activity "Power" (38% of sales in Q3) recorded organic growth of 7.6%, "Energy" (21% of sales) increased by 7.3%, "Industry" (19% of sales ) 6.6%, "IT" (15% of sales) of 12.6% and the activity "Buildings" (7% of sales) 3.0%.

The activity remained stable in Western Europe, the main market of the group (31% of sales), while Asia organic growth of 15% and North America 9%.

Emerging markets, which posted growth of 14%, now represent over 40% of the total turnover of Schneider.

Investors weary of the impact of the crisis in the euro area financial markets will have something else to put in their mouths this week: the results of business.

As each "earnings season" quarterly, the aluminum producer Alcoa, which will open the ball, his numbers are expected in the third quarter after the close of Wall Street Tuesday.

Business performance and prospects announcing they are considered an important barometer of the state of the global economy and are also likely to give an indication of the impact of the crisis in the euro area on profits companies.

But, having risen sharply over the whole of last week, Wall Street may have difficulty continuing to rise even if corporate earnings are better than expected.

Technical analysts have said in effect that the moving average of 50 days S & P 500, currently at 1178 points, could represent a significant resistance.

In the past week, the S & P benchmark for fund managers, has gained 2.1% to 1155.46 points, buoyed by the feeling that European leaders are now determined to solve the problems of their banks weakened by the debt crisis.

Nicolas Sarkozy traveled to Berlin on Sunday for talks with Angela Merkel of crisis, with a priority to overcome their differences on how to recapitalize European banks.

"Over the next three weeks, attention will focus on results – even if the situation in Europe will always be present in people's minds," said Ken Polcari, an analyst at ICAP Equities.

In addition to Alcoa, next week will also see the results of PepsiCo, Google, JPMorgan Chase and Mattel.

CONSERVATIVE ANALYST ESTIMATES

In light of the debt crisis of the area, but also signs announcing a slowdown in the global economy, many corporate earnings forecasts were revised downward by analysts in recent months .

"The forecast for the quarter just ended were very conservative so there are chances that companies do at least as well as the consensus," said Marc Pado, technical analyst at Cantor Fitzgerald.

In terms of macroeconomic indicators, market players expect including the minutes of the last meeting of the Federal Reserve, retail sales for the month of September and the feeling of households for the month of October, according to Index Thomson Reuters / University of Michigan.

The latest U.S. statistics have been rather better than expected, which has banished the specter of a return to recession in the United States and contributed to the rebound on Wall Street last week.

But, and this also applies to any positive impression left by the business results, although some indicators of the coming week confirm this trend, the positive effect could be negated if further deterioration of the debt crisis the euro area.

European shares finished higher Monday, with the financial sector, buoyed by speculation of lower interest rates by the European Central Bank (ECB) and new measures to support banks.

However, markets have reduced their earnings during the afternoon for lack of more precise statements confirming the rumors.

The CAC 40 index finished up 1.75% to 2859.34 points (final closing), while London has been 0.45%, 2.87% Frankfurt, Milan and 3.32% EuroStoxx 50 2.84%.

The index of the banking sector has been 3.57% and 6.42% of the insurers, with an increase of 8.18% for Axa, from 5.44% for Societe Generale and BNP Paribas for 3.99%.

European shares closed higher Friday on hopes of Action of the European Central Bank and government to mitigate the effects of the crisis of sovereign debt in the euro zone and support banks.

However, caution remains the watchword.

Bank stocks recorded the highest increase in Europe with a sectoral Stoxx index which gained 3.53%.

In Paris, BNP Paribas (9.78%), Societe Generale (8.76%) and Credit Agricole (4.78%), which was this week in the eye of the storm because of their exposure to Greek and Italian debt, eventually leading to increases in the CAC 40 on market rumors paying for the government to carry out some form of recapitalization.SocGen and BNP did not wish to comment on these rumors.

The gains, however, show small-scale loss of investor confidence in the ability of governments to quickly implement practical solutions to the crisis of sovereign debt and boost savings on the brink of recession on both sides Atlantic.

This cocktail of strong concerns about the banks is causing serious losses in stock market indices.For the week, the CAC 40 dropped 7.29% in Paris and at European level the EuroStoxx 50 index dropped 6.17%.

"RAMPANT FAILURE OF GREECE"

The CAC 40 gained 1.02% Friday to 2810.111 points after touching a session in new low of 2693.21 points in the year, returning to its level in March 2009.

Risk aversion has stalled late in the session, the performance of the German government bond (Bund) and 10 years, fell in the day to a new record low at 1.64%, found its level Thursday (1.75%) at the close of stock markets.

The euro meanwhile pondered over $ 1.35 and was trading around 1.3508 dollar.

Other major European markets, London

gained 0.5%, 0.63% Frankfurt, Milan 1.36%.The pan-European Euro Stoxx 50 index has been 1.52%.

"Operation Twist (the Fed) has failed to revive stock markets. It is a terrible verdict, a confirmation that governments no longer able to stimulate the economy central banks find themselves faced with the challenge to bring to his aid, "wrote Vincent Chaigneau and Ciaran O'Hagan, rates strategist at Societe Generale in their weekly note.

"They will continue to shoot in the dark, hoping to keep away the ghost of recession.Good luck, "they said, stressing that the stress imposed on the funding of banks is" a great threat to the economy. "

Pichard for Franklin, director of Barclays Bourse France, "markets do not stop to include a default rampant in Greece (although it is true that the 'political' do nothing to speed things up) and the recapitalization of some European banks. "

Cyclical stocks such as Technip (-3.93%) and Alstom (-2.52%) recorded the largest declines the CAC 40.

Economic growth in Germany this year will be closer to 3% to 2.5%, on Friday said German Chancellor Angela Merkel.

The statement came after the German banking association BdB on Wednesday cut its forecast 2.8% growth in the country for 2011, while the RWI Institute said that the risk of a recession had increased.

While the EU finance ministers meet Friday in Poland to discuss among others the debt crisis, Merkel reiterated her opposition to Eurobonds and felt that Europe should consider the possibility of intervening in the medium term to States that fail to meet their duty of fiscal consolidation.

The Tokyo Stock Exchange ended Wednesday on a sharp decline, yielding 1.14% in a climate of anxiety about the continuing debt crisis of the Greek, which encouraged profit taking after Tuesday's rebound.

The Nikkei lost 97.98 points to 8518.57, a lowest level in two and a half years, and Topix, broader, sold 8.13 points (1.08%) to 741.69.

The highest exposure to Europe were particularly hard hit.Canon has lost 4.08% to 3,295 yen.

In early trading, some purchases on the cheap recently battered shares pushed the Nikkei up to 8671.24, but profit-taking quickly reversed the trend.

The values ​​of the video game industry, fell sharply Tuesday after a presentation judged disappointing by Nintendo, have recovered slightly.Square Enix has made 0.48% to 1,475 yen after losing 3.9% on Tuesday.

Also on the rise, Sharp has benefited from the announcement of an expected increase in sales in Indonesia to gain 3.3% to 595 yen.

Ricoh has instead plunged 1.67% to 648 yen after lowering its target price of 900 yen to 600 yen by Macquarie Securities, who expects weak demand for copiers in the second half of the fiscal year.

The trade deficit the U.S. has grown against all odds in June to its highest level since October 2008, due to a decline in exports and imports indicate a slowdown in global demand, according to figures released Thursday by Commerce.

The trade balance posted a deficit of 53.07 billion dollars, while the market expected it to be reduced to 48 billion.

In May, the deficit had risen to 50.83 billion (50.23 billion in the first estimate).

Exports fell 2.3% against -0.5% in May, faster than imports (-0.8% after +2.9% in May).

The rumor of a deterioration in the rating of France has prompted a new collapse of the entire stock market. "This is completely untrue," says the entourage of Baroin. View of the Ministry of Economy and Finance at Bercy.

Bercy has "formally" denied rumors Wednesday of degradation of the French debt rating by a rating agency that led to a new collapse of the entire stock market. "These rumors are totally unfounded and the three agencies Standard and Poor's, Fitch and Moody's have confirmed that there was no risk of degradation," it was stated in the entourage of the Minister of Finance Baroin.

Rating agencies Moody's Investors Service Inc.., Standard and Poor's Corp.. Fitch Ratings and have in fact all three confirmed Wednesday the sovereign debt rating of triple A with a stable outlook they attribute to France.Fitch confirmed the note on May 31 and S & P, December 23. Moody's does not usually confirms his notes.

"It's totally false", it was stressed the same source, when asked about the rumors, which also claimed that this is why French President Nicolas Sarkozy interrupted his holiday to hold a crisis meeting at the Elysee Palace . After the meeting, the Head of State said that new measures to reduce the deficit will be announced on August 24.

European shares are down sharply divided Wednesday, two hours before the close, led by falling bank stocks as a result of new concerns fueled also by the situation in Greece and the decline of Wall Street opening. The New York Stock Exchange opened sharply down Wednesday also unable to continue the strong rebound yesterday.In Paris the CAC-40 plunged almost 5% hit by bank stocks.

The perspective attached to the sovereign rating of the United States could be raised to stable if the bipartisan agreement on reducing the U.S. deficit is being implemented and if the tax cuts of the Bush era are eliminated, said Monday director of sovereign ratings Standard & Poor's.

In an interview with Reuters Insider, David Beers warned that the rating agency would closely monitor whether the U.S. Congress is at what he has committed.

S & P on Friday denied the United States of the note "triple A", giving them now rated AA + coupled with a negative outlook.

David Beers reiterated that there was at least one in three chance that the U.S. sovereign rating is lowered again within 6 to 24 months.

A group of six U.S. senators, Democrat and Republican, introduced Tuesday a new plan for deficit reduction in exchange for raising the debt ceiling. Capitol

A group of six U.S. senators, Democrats and Republicans, called the "gang of six" presented Tuesday in closed session before other elected a new plan to try to find a solution to the crisis related to raising the debt ceiling . According to a source familiar with the matter, the plan includes spending cuts of 3600-3700 billion over 10 years. It would include increased revenues from the federal government, not by raising taxes – something the Republicans are viscerally opposed – but by reforming the tax system. The same source, the proposal also attacked the Medicare (health insurance for the elderly), dear to the Democrats.

The new plan was presented to fifty elected as one of six senators, Republican Tom Coburn, who had left the group in May announced his return Tuesday. The group is also composed of Democrats Kent Conrad, Mark Warner, Richard Durbin and Republican Saxby Chambliss and Mike Crapo. The plan of the "Gang of Six" is inspired by findings made in 2010, a special parliamentary committee. The recommendations of the commission, established by U.S. President Barack Obama, have never been approved in Congress. The commission proposed a reduction of 4,000 billion over 10 years, with cuts in social programs.

According to Senator Conrad, the reaction of elected officials present at the presentation Tuesday morning was "extremely positive"."We promised to come back and listen to their reactions over the next 24 hours and decide what to do," he told reporters. Side House, elected officials were preparing to vote Tuesday on the latest Republican proposal, entitled "Reduce, cap, balance." This radical plan of budget cuts, which contains an amendment to the Constitution for a budget to "balance" should not get through the Senate.