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The economic recovery in the euro area slowed slightly in August but companies are more optimistic for the months to come despite differences between countries in the region, show the first results of Monday's monthly survey Markit.

The PMI services, calculated on the basis of responses from purchasing managers of nearly 2,000 firms in the euro area fell slightly to 55.6 against 55.8 last month, but it is slightly better that 'expected as economists polled by Reuters had expected the average to 55.5.

It is over for the twelfth consecutive month the 50 between expansion and contraction of activity.

If growth slows, firms in the services sector, dominant in the 16 countries using the euro as their currency, appear rather more optimistic about the future, the business expectations index falling up to 68 1 after 66.5 in July.

"The recovery still has some momentum but we will witness a slowdown from the exceptional figures observed in the second quarter," warns Rob Dobson of Markit.

France and Germany, the two largest economies in the euro area, strongly rebounded in the second quarter, but this trend was not found in Spain and Italy.

"THE TAKEOVER COULD BEGIN TO SLOW DOWN"

Activity in the industrial sector has also slowed.The PMI manufacturing index is indeed stood at 55.0 in the first estimate in August against 56.7 in July, while economists polled by Reuters had expected 56.2.

The sub-index of production rose from 58.7 in July to 57.2 in August.

The composite index combines the two sectors, fell to 56.1 against 56.4 expected and 56.7 in July.

"The PMI decline in August in the euro area is a sign that the recovery could begin to slow," said Jennifer McKeown of Capital Economics.

"The decline was mainly driven by declines in the index of the manufacturing sector, particularly in Germany, suggesting that the weakening global demand could affect the resumption of exports, as was feared."

If companies continue to recruit, the pace of hiring slowed slightly from July, as the index of employment in manufacturing rose from 51.1 last month to 51.0 in August.

Economic growth in the euro zone came out at 1.0% in the second quarter, more than expected, but it should slow to 0.4% for the period July to September and 0.3% for the three months year.

ADDICTION TO GERMANY AND FRANCE

Especially, the growth differences between countries in the region have increased compared to previous periods.

"We note that (growth) is highly concentrated in the major nations, it has not extended to other peripheral nations and, in many respects, this gap is widening," said Rob Dobson.

"It's the same as in the second quarter, which saw a solid growth, particularly in Germany and to a lesser extent in France, marking a certain imbalance in relation to performance rather mixed for the Spain, Italy and Greece.So, apart from the two main countries, the situation is average. "

The PMI flash Germany show an acceleration of activity in services and a slowdown in the manufacturing sector, quite contrary to that exhibited by France.

In the euro area, the sub-index of producer prices reached its highest level since October 2008, at 50.3 against 49.4 in July. It is only the second time since October 2008 this indicator appears above 50.

This suggests that companies are now able to pass some of their higher costs to their customers.

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."

Danone issued a first-half operating result slightly better than expected and has carefully noted the objective of sales growth for the full year, considering that the crisis would continue to weigh on European consumption.

The food group, which focuses on further development of emerging markets, now provides that its comparable sales will grow at least 6% when he was previously an increase of at least 5%.

He always bet on an increase in operating free cash flow in historical data at least 10% and stability of its operating margin in 2010 compared to 2009.

"We continue to invest in countries, products and brands with strong potential: Child Nutrition in Asia, fresh dairy products in the United States, Brazil, Russia, where Danone and Unimilk merger provides us with very significant growth opportunities long term, "said Franck Riboud, CEO of Danone.

In a statement, he confirms that water and medical nutrition, the group continues "to identify potential for growth in emerging markets and through new models."

At the same time, Danone has continued its efforts to improve productivity, says its chief executive.

The action Danone, with brands ranging from yogurts Actimel waters of Evian, lost 2.23% to 45.285 euros at 9:38, while the CAC 40 0.93% but took the DJ Stoxx European " Food yielded 1.13%.

Commenting on the first half, Francis Priest, CM-CIC Securities, believes they are "good bill" but noted that Danone "remains cautious on the S2 due to a persistently difficult".

The analyst believes that the decline of the title, which takes place in small volumes, reflects disappointment with the failure to raise the target group at the ROC, which the market had anticipated.

INCREASE IN VOLUME OF THE 2ND QUARTER 8.9%

On a comparable basis, the EBIT of Danone rose 2% on a comparable basis to 1280 million euros over the period January to June, showing a margin of 15.30%.His current net income was up 10.1% to 848,000,000 euros.

Turnover amounted to 4.386 million in the second quarter (+6.9%) or 8.364 million in the half. Excluding the effects of exchange rates (+7.0%) and changes in scope of consolidation (+0.1%), it grew 6.9% on a comparable basis in the second quarter.This organic growth is divided into volumes rising by 8.9% and a decrease in value by 2.0%.

Sales rose only 1.4% to 2,420 million euros in Q2 while they increased by 15.3% to 635 million in Asia and 15.9% in the rest of the world to 1331000 .

The consensus Thomson Reuters StarMine, the operating result was expected of 1.265 million euros (+5%) and turnover of 8.261 million (+9.8%), representing an operating margin of 15.3 %.

The fresh dairy products division, which represents 55% of sales in Q2, increased its sales by 6.6% to 2.436 million euros over the period. On the entire first half, the operating margin of this sector appears to 13.94% (-94 bps).The volume effect was positive at 9.3% but the negative value effect of 2.7% due to price reductions made in several countries, Danone said.

The division "Water" (19% of sales) has seen its sales grow by 4.8% to 828 million while its margin declined 75 basis points over the first half to 13.70%.

Sales of the "Child Nutrition" (19.5% of sales) rose 8.7% to 857 million (margin down 27 bps in the first half to 19.19%).

Finally, those of the pole "medical nutrition" increased by 10.8% to 265 million (margin decline of 86 bps to 19.90% in the first half).

Free cash flow from operations increased 34.9% to EUR 858 million, or 10.3% of sales in the first half, against 636 million and 8.5% of sales from the same period of last year.

In turn, capital expenditures totaled 275 million euros, or 3.3% of turnover. This level is below the annual forecast, ranging from 4% to 5% in sales due to a timing effect, Danone said.

Net debt amounted to 3180 Danone million euros in the first half.

* Danone Graph comparing to its competitors:

here

Despite advances in EU Member States towards the Parliament, the reform of the European financial supervision remains blocked until at least early September, we learned from diplomatic and parliamentary.

On Tuesday, however, a new compromise between the bloc on this reform, in gestation for over a year, had hinted at an early agreement.

But further discussions held Wednesday morning between representatives of governments, the Parliament and the Commission were ultimately unsuccessful and the participants decided to cancel the meetings scheduled next week to do again until the fall.

"There will be no further talks before late August or early September and I think we can say that the talks failed, it was said parliamentary sources.

"The core issue is Article 6 which concerns the principle of direct supervision exercised at European level by the new supervisors," the source said, adding that the objective was to find a consensus with all states, including Great Britain.

A second source later confirmed the postponement of talks and held that "one or two additional steps the council (of EU ministers) in the direction of the European Parliament would be required to obtain an agreement."

In a statement to Reuters, the EU Internal Market Commissioner, Michel Barnier, said the objective was to find "a dynamic and balanced compromise.

"We are in the final straight but there is still some way to go," he said.

TECHNICAL MEETINGS

Without result, Wednesday's meeting helped to bring some positions of Parliament and Member States.

This applies to certain powers given to the European Council of systemic risk and the three new authorities in supervising the banking, insurance and markets.

These could permit, under certain conditions, products or financial practices, such as short sales.They would also be binding mediation in cases of disagreement between two supervisors.

The principle that the authorities could apply directly to a settlement without going through the national supervisor, in emergencies, is also acquired, as it does not undermine the budgetary sovereignty of States.

Moreover, these emergencies could be declared by the authorities but would instead be covered by the European Parliament alongside the Member States.

In contrast, the principle of supervision at European level for the European entities of pan-European nature, such as clearing houses, remains a problem.

A source close to the discussions, meetings at technical level should be organized in the coming days to work on these issues.

The Belgian presidency of the EU should work to include this item on the agenda of the meeting of ambassadors of Twenty-seven of the next week to lay the groundwork for negotiations in September.

The objective remains that the states and the Parliament adopt these texts in the first half of September so that authorities can start to work as planned on 1 January 2011.