US & World News

European shares rebounded Tuesday to midday, after a session that had brought equity markets in Europe to a low of three months.

The rebound is still limited as tensions persist in the euro area.

In Paris the CAC 40 rose 1.18% to 3135.03 points. In Frankfurt, the Dax gained 0.69% and London, the FTSE is 0.32%. The pan-European index Stoxx 50 in advance for its share of 0.93%.

The values, Michelin, a time reserved to decline, lead of almost 7.11% and the best performance of the CAC 40 after the publication of its turnover for the first quarter showing lower sales volumes offset by price increases.

STMICROELECTRONICS lead of more than 4.50% despite announcing a first-quarter loss attributed to the decline in sales in the segment of products for mobile phones and the impact a court decision.

Essilor rose by nearly 1.61% after announcing strong organic growth over the first three months of the year. 

NOVARTIS was down 1.18% after confirming expect a slight deterioration in profitability this year after a first quarter affected by an interruption production on one of its sites in the U.S. and unfavorable basis for its subsidiary Sandoz.

On the bond market, Bunds are below their record highs Monday, the market pausing, but they remain attractive to the extent that the uncertainty in the euro area is now affecting his core.

After the resignation of the government, the Netherlands, however, successfully awarded two bond lines that allowed them to raise two billion euros. 

Sign of the tensions in the euro area, Italy had to pay Tuesday unprecedented efficiencies since January in connection with auctions of zero coupon bonds or indexed.

Investors also sought a high premium for a tender Spanish short term.

On the foreign exchange market, the euro is changing the balance of around 1.3163 dollar but failed to really bounce back despite the successful bond issue in the Netherlands and after experiencing its worst day in a week Monday.

The European currency hit a 20-month low against the pound sterling at 81.45 pence, weighed down by concerns over the euro area.

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The Spanish bank La Caixa confirmed Monday its intention to acquire its rival Banca Civica through its listed subsidiary CaixaBank to give birth to the first Spanish bank to Santander and BBVA.

CaixaBank offers the equivalent of 1.97 euro per share Banca Civica via a public exchange offer (the offer) that values ​​the target at 980 million euros.

A second wave of consolidation is underway in the Spanish banking sector. This is for banks to rebuild capital after losses from the bursting of the speculative real estate bubble in late 2007.

With total assets of 285 billion euros, CaixaBank is about four times larger than the Civic.

The shareholders of Banca Civica CaixaBank will receive five shares for every eight shares held. This represents a discount of 11% over the closing price Friday of Banca Civica. Quotations CaixaBank and Banca Civica were suspended Monday before the markets open.

The banks hope to have the approval of their shareholders by June 30.

Sources close to CaixaBank, it is not excluded that the institution has used a capital increase to finance its acquisition.

The government of Mariano Rajoy wants to reduce the number of banking groups to ten when they were over 40 before the crisis.

The new alignment will bring more difficult to find a partner for Bankia, particularly exposed to real estate, say observers.

Caixa said in a statement it would maintain its dividend to 0.231 euros per share in 2012.

The Indian airline Kingfisher Airlines could be stripped of his license for non compliance with safety standards and financial viability, said Tuesday the Indian Minister of Aviation, Ajit Singh.

The company in financial difficulty, does not meet its turnaround plan, said the minister who was speaking to reporters.

Kingfisher Airlines is now operating more than 18 aircraft, barely more than a quarter of its fleet.

The company, whose debt stands at $ 1.3 billion (995 million), could file for bankruptcy if banks continue to refuse to lend money for its operations rations from day to day. 

A massive decrease in thefts has reduced the turnover of the group and the carrier has almost no money to defray the salaries and meet its tax liabilities and its airport charges.

The chairman of Kingfisher, Vijay Mallya, will meet the civil aviation authorities Tuesday or Wednesday to discuss the Group's recovery, the minister added.

According to data from Airbus, current orders Kingfisher deal 32 single-aisle A320 Family, 20 A330s, five long-haul A350 and five A380 super-jumbo.

According to the Chinese premier, the yuan has appreciated 30% since 2005. It is now close to its equilibrium value. Beijing could stabilize once more its currency to the chagrin of Western countries. A 100-yuan face a $ 100 bill.

The military budget and export quotas of rare earths are not the only subjects of friction between China and Western countries. There's one in particular which is recurrent and that may well not be resolved anytime soon: the yuan. And despite official statements sometimes included ambiguous way too optimistic by some Western obervateurs.

Early on the course of the Chinese currency, deemed too low, the subject of criticism. In the U.S., the yuan is accused of trade deficit and destroy jobs. Following the Forum summit of Asia-Pacific Economic Cooperation (APEC), last February, U.S. President Barack Obama, once again called for an appreciation of Chinese currency. His hopes are to go up in smoke.

According to Chinese Premier Wen Jiabao, speaking at its annual press conference, the last of its mandate, the yuan is now approaching an equilibrium value. It is indeed appreciated 30% since 2005 and has changed little since the beginning of the year. In other words, you must not rely on an appreciation of Chinese currency in the coming months. "We will accelerate reform of the exchange rate", has certainly also said Wen. But it was soon clear "by giving more scope to fluctuations in both directions." In other words, the yuan revaluation claimed to body and cries by the major developed countries, is absolutely not announced.

The braking worrying the Chinese economy is no stranger to these statements. The Chinese export growth has moderated from 21% in the third quarter to 14% in the fourth quarter. In February, China has even recorded a record trade deficit.

China undergoes economic cooling in other countries, experts note of BNP Paribas. The decline in exports is explained clearly by the decline in sales to European countries (22% of total exports in 2011) and to a lesser extent, the United States. Another measure of trade intensity, the current account surplus of China has reached 2.8% of GDP in 2011. "It is below the international norm of 3% of GDP", says Chinese Premier.

Under these conditions Beijing, which needs growth to ensure social peace, has every interest in stabilizing its currency. This lever has been used during the crisis: the 2008-2010 period, Beijing was chosen to secure the dollar before losing a little ground in 2011. In fact, since mid-2008, the yuan has only appreciated that about 5% against the greenback, causing the exasperation of the United States.

In 2012, BNP Paribas' experts provide at best a 3% appreciation of the Chinese currency. But its "internationalization," however, is expected to continue at a rapid pace. Eventually, indeed, China dreams of being less dependent or concurrent, of the dollar. Since 2008, it is redoubling its efforts to force the yuan internationally. Since 2009, Chinese companies can charge in yuan business transactions with foreign countries. Since 2010, foreign companies can borrow yuan, via Hong Kong on an offshore market. Air Liquide has issued bonds last September in yuan to 185 million euros. For two or three years, the yuan also sees its role reinforced by the swap agreements (that is to say, temporary exchanges of cash) made between the central bank of China and its neighboring countries (Korea, Malaysia, Singapore).

Recently, the Austrian Central Bank has signed an agreement with the Chinese central bank, becoming the first Asian central bank not be able to make investments in yuan! Finally, China allowed Japan to buy the first time in its history of Chinese government bonds. The Middle Kingdom does not stop there. Zhou Xiaochuan, governor of China's central bank, requires the input of the yuan in the composition of the SDR, the IMF's currency. But it will be hard to convince world leaders, as are many disputes between China and the West.

Fifteen of the nineteen major institutions have passed the exam successfully. Good students already announced increases in dividends to pamper their shareholders. Following the results, JPMorgan announced a dividend increase.

The Central Bank of the United States said Tuesday that fifteen of the nineteen banks that it had submitted to the 2012 version of its stress tests were successfully passed this examination.

The coregistered are: Ally, the former GMAC, saved from bankruptcy by the state in 2009 and still belonging to the Treasury, the insurer MetLife, SunTrust, Bank of Atlanta and Citigroup.  

The former world number one, also saved from bankruptcy by the state, failed narrowly on two criteria: its own funds fall below the hard limit (4.9%, against 5% required) and its leverage ("Tier 1 leverage ratio") also (2.9%, against 3% required).

Other banks (American Express, Bank of America, The Bank of New York Mellon, BB & T, Capital One, Fifth Third, Goldman Sachs, JPMorgan, Keycorp, Morgan Stanley, PNC, Regions Financial, State Street, Wells Fargo US Bancorpet have passed the exams successfully

. In the wake of the results, several large U.S. banks, including JPMorgan Chase and Wells Fargo, have announced they will upgrade the remuneration of their shareholders

. At JPMorgan is revalued quarterly dividend by 20% from 25 to 30 cents per share. In addition the bank, the largest in the U.S., has announced a new share repurchase program of up to $ 15 billion, including up to $ 12 billion will be spent this year, the balance in the first quarter in 2013.

"We are pleased to be in a position to increase our dividend and to introduce a new share buyback program," said the CEO of JPMorgan Chase, Jamie Dimon, said in the statement. "We expect to repurchase at least the number of shares we will issue the form of bonuses for employees. Beyond this, we plan to repurchase the securities that when we generate more capital than is required to fund organic growth, and when we think it brings a great value for shareholders, "he added.

At Wells Fargo, the dividend jumped 83% from 12 to 22 cents. The bank said it would buy back more shares than last year, without quantifying its projects.

Economic growth should be zero in France in the first quarter of 2012, said Wednesday the Bank of France on the basis of its monthly business survey.

In January, the BoF confirmed predict zero growth in the fourth quarter of 2011.

If these assumptions prove, France would be off, just months before presidential and parliamentary elections, a recession (a term used when the product inside Gross contracts two consecutive quarters) feared by some economists.

The business climate indicator in industry published by the BoF was stable at 96 in January.

For services, the indicator fell by one point to 93. 

In industry, "forecasts indicate a continuation of the activity for the coming weeks," reads the statement said.

For services, "the forecast is a stability-oriented activity in the short term."

The rate of capacity utilization in manufacturing industry is almost stable, below its average level of long period.

Order books were close to the normal level, linked to a slight increase in new orders. Stocks of finished goods are kept close to the desired level and finished goods prices continued to increase slightly.

In services, the division recorded a slowdown in growth, due to a decline in temporary work and computer activities. The numbers have stabilized overall and prices have paused in their advance.

Al-Jazeera would be poised to strike (still) a great blow. She has acquired the TV rights for Euro 2012 would not count stop there. But what about the games of the France team? Players of the team celebrate their victory against Spain in Euro 2008 final against Germany.

The rumor is increasingly insistent. According Lepoint.fr, Al-Jazeera would have won the TV broadcasting rights of the Euro 2012 football against the duo of TF1 and M6. Interviewed by L'Expansion. Com, Uefa and the Qatari, however, refuse to confirm. Especially since the side of a large French chain, a source very close to the case provides that "nothing is done", and it remains "a third round of betting." Still, since Al Jazeera has gained a lot of the rights of the Champions League and Ligue 1, the rumor lends resources and unlimited ambitions. It is rumored in some newsrooms and this time she would put on the table between 100 to120 million for the next edition of the European championship. A sum again unconfirmed.

A "gift" to France Televisions?

Another victory for Al-Jazeera would not without asking the air broadcasting the matches of the team of France and the final. Qatari chain could therefore turn to organize a tender to determine the granting of this free program minimum. A chance for TF1 and M6 to limit the damage? Not so sure. According to Le Point, it would indeed be considered a "gift" to public service, which devalues ​​the rights. And to soften somewhat the "shock" due to the sensational debut of this new actor. Good image would indeed be surprising from a country that, since his arrival on the French market of football business, do research clearly not economic profitability in the short term.

In fact, the leaders of France Televisions have also met with Qatari counterparts, recognizes Bilalian Daniel, the head of sports department of public television. But "it was nothing to prepare for the Euro 2012. Just to stand as brothers," says he. As for a possible favor, he asserts that "it is absolutely anything. You can not sell off the rights like that, other chains might attack us for that."

The Europa League and Cfoot in addition to the Euro?

Anyway, the ambitions of Al-Jazeera will not stop the bidding for Euro 2012. Al-Jazeera is also still in the race to clinch the match of the Europa League where a third round of betting is also expected. She finally approached to buy back the rights of the League 2 along the chain Cfoot, owned by the Professional Football League (LFP). Because Al Jazeera has yet to find a channel to broadcast the matches she bought. Or just Cfoot must stop broadcasting on pay DTT in June … either at the beginning of the euro. Just a coincidence that some obervateurs to complete a recovery scenario …

Nicolas Sarkozy left Paris Wednesday to Frankfurt where he is involved with the German Chancellor to work meeting for the summit of the euro area expected Sunday. President Nicolas Sarkozy meets with German Chancellor Angela Merkel Tuesday, August 16 at the Elysee Palace (both here in Berlin July 20, 2011)

Nicolas Sarkozy left Paris Wednesday to Frankfurt where he is involved with German Chancellor Angela Merkel at a meeting to advance the conclusion of an agreement on the future of the euro area before the EU summit scheduled for Sunday, announced the Elysee.The President of the European Central Bank (ECB) Jean-Claude Trichet, his successor Mario Draghi, the Presidents Council and the Commission of the European Union (EU), Herman Van Rompuy and José Manuel Barroso, the Executive Director of the IMF Christine Lagarde, the finance ministers and French and German, Baroin and Wolfgang Schäuble, also participate in this "informal meeting" added the source.

All these personalities gathered in Frankfurt for a ceremony in honor of Mr. Trichet, who must leave office at the head of the ECB at the end of October. "No statement is expected at the end of this working meeting," also said the French presidency.At a luncheon at the Elysee Palace with the centrist deputies, the president announced he was ready to move quickly in Germany in order to hasten the conclusion of an agreement in anticipation of EU summits and the euro area scheduled Sunday.

France hopes that the EFSF can be turned into a real bank, such that it can refinance directly with the ECB. The ECB and Germany are opposed to such provisions, which require amendment of the European treaties.Germany stands in contrast the idea of ​​a mechanism to ensure EFSF some of the bonds of troubled countries, to multiply by "leverage" its lending capacity, currently $ 440 billion euros, without the states have to increase their contributions.

First limited to Greece, the debt crisis is now spreading to other countries in the euro area and its banks. Spain has suffered a further reduction of its sovereign rating for the third time in less than two weeks, while Greece was paralyzed by a general strike. At a meeting with Merkel in Berlin on October 9, Sarkozy had promised "sustainable solutions, comprehensive and fast" to resolve the serious crisis in the euro area, in any case before the G20 summit scheduled in Cannes on November 3 and 4.

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.

For the first time since 2008, the price and the number of transactions in the old housing declined in France in 2011. Only Paris continues to grow. http://www.flickr.com/photos/gcattiaux/

For the first time since late 2008, the start of the economic crisis, the number of transactions and house prices falling in France, a trend likely to continue in 2012, according to a survey by the AFP with leading real estate networks. "Sales of existing homes fell 11% in France between the 3rd quarters of 2010 and 2011, while prices fell by 2.7% between the first half and third quarter of 2011," said Laurent Vimont, Chair Century 21, a leading network of estate agents.

Paris alone, due to demand still much stronger than supply, see the prices continue to increase, reaching a new record in Q3 8556 eurs/m2, says Vimont.After a price hike of 22.5% in the second quarter, the highest one-year for 20 years, house prices in the capital will soon level off or even declined slightly, had said in early September notaries in Paris. In the provinces, seven provinces reported, according to Century 21, a fall in prices in Q3: Burgundy (-9.7%), Central (-5.5%), Lorraine (-4.4%), Provence-Alpes Côte d'Azur (-3.7%), Basse-Normandie (-3%), Nord-Pas-de-Calais-Picardie (-3.4%), Champagne-Ardenne (-1.3%).

For Mr. Vimont, the main explanation lies in the fact that "over the solvency of first-time buyers who can not afford to buy, is broken." This decrease since mid-2011 transactions and prices is confirmed by the Real Estate Guy Hiccups."Higher mortgage rates and the presidential election should result in lower overall market in 2012," said its managing director Cédric Monssu. For Nicolas Jacquet, Executive Chairman of Urbania, the next increase in the tax on capital gains on sales of rental and second homes on 1 February 2012, resulted in "significant increase in the number of terms in Sales agencies ".

But in 2012, one can "expect for 2 or 3 years down the number of transactions as a number of people who have not reached withdraw their homes from the sale," he adds . "This announcement will have a devastating effect especially that the liquidity problems of banks should lead to a restriction in the distribution of mortgages," said Bernard Cadeau, president of the Orpi network.But this rush to sell for some households that had exceeded the limit of 15 years for tax exemption on capital gains has unintended consequences. "We remind sellers that we are bound by an obligation of means, not results, and we urge our customers to agree to sign a form stating that we are not liable for administrative delays," said Gilles Ricour Bourges, President for Ile-de-France of Fnaim (National Federation of the estate).

However, one sector is rubbing his hands at the moment: the luxury real estate. "We record a 20% increase in the number of terms because it is necessary that the promise of sale are signed before November 15 to make sure that the final acts to be registered with the notaries before February 1", told AFP Charles-Marie Jottras, Chairman Daniel Féau real estate."Non-standard goods have been no slowdown in demand, on the contrary. The category of quality goods, worth over EUR 1 million, did not suffer either in the capital and stations, sea or mountain fashion, "says Barnes network in a statement.