Wall Street has opened a significant decline Wednesday, the rescue plan announced for the insurer AIG had apparently not long reassured investors on the systemic risk posed by the crisis in credit markets.
In the first exchanges, the Dow Jones thirty core values lost 1.86% or 205.75 points to 10.853,27, the index expanded Standard & Poor's 500 abandons 2.21% (26.85 points) to 1.186,74 and the Nasdaq composite market, a strong technology component, stumbles of 2.03% (44.89 points) at 2.163,01.
Wall Street continues to make the yo-yo over the developments of the crisis in U.S. financial institutions. She Monday experienced its worst quarter since 2001 after the announcement of bankruptcy of the bank Lehman, then rebounded Tuesday in the hope of a rescue of AIG.
This was formalized in the form of a loan of 85 billion dollars over two years made by the Fed in exchange for approximately 80% of the capital of the insurer. The fear that shareholders very diluted by the plan made AIG relapse by 34%.
Most financial values are losing ground, even Morgan Stanley unscrews of 15% despite the announcement the previous evening of the above quarterly expectations.
The continuation of the flight of interbank rates, a sign that tensions persist on the credit market, is also feared a contagion of financial crisis to other parts of the economy. For the industry, General Electric abandoned more than 6%.
Green. The renewed vigour in the face of Dollar Euro restores the strength to export values as well as companies operating in a world where the dollar remains the currency of reference ... This is the case of aeronautics where Zodiac is among the companies quality. The current financial crisis offers investment opportunities in this type of cases at price levels not related to fundamentals. It will however be cautious in the short term because it is very difficult to know how far the game of dominoes will continue after the bankruptcy of Lehman Brothers, the sale of Merrill Lynch and the nationalization of Bear Stearns, Freddie, Fannie and AIG States United. The situation is changing very rapidly and the stock indices panic ...
Accounts. On the year 2007/2008, the company has continued to evolve on a solid pace of growth in billings. The organic growth came out at 10% over the period with an acceleration in the last quarter. The aerospace market remains well oriented with order books filled. Zodiac is thus succeeded in winning contracts nice with customers who are recruited on both sides of the Atlantic. The company is also very active in terms of external growth with the resumption of actors working on niche niche ... Driessen the global leader trolleys, was recently acquired.
Objectives. Zodiac confirmed its annual objectives in terms of profits. The rising U.S. currency represents a very positive point for the group, while parity Euro / Dollar average over the year 2007/2008 was 1.50. Even if the share price has already resumed, the potential remains important on this issue with fundamental quality and value very little demanding. We therefore believe that despite the uncertainties of the stock market, we can keep the action Zodiac portfolio already recommended to lower levels.
After five days of frantic efforts of banking authorities, breaches of the international financial system continued to grow Wednesday, with the emergence of new names on the list of establishments condemned in advance by the markets.
A few hours after the U.S. authorities had taken the historic decision to nationalize the insurer AIG and the British bank Barclays was announced the purchase for a morsel of bread of the best assets of Lehman Brothers, the British HBOS had to accept her redemption emergency.
The avalanche of new stock markets put on the nerves, despite the release of reserves by central banks.
"The turbulence caused by the financial crisis the USA are not about to stop," said Prime Minister South Korean Han Seung-soo, calling for calm local investors.
Wall Street lost nearly 3% in late morning, while exchanges should be suspended on the stock markets in Moscow, where the international crisis came to exacerbate concerns arising from the conflict in Georgia.
After resisted most of the day, the Bombay Stock Exchange craquait and fell below 4,000 points for the first time since May 2005. The London Stock Exchange lost 2.25 close%.
Long incarnation of the seriousness and solidity, the bank HBOS had to resign itself to be swallowed by its rival Lloyds TSB after seeing smoke soar to two-thirds of its market capitalization since the beginning of the year.
Other thunderclap: Barclays announced the acquisition of most of the U.S. operations of Lehman Brothers, the investment bank that has filed for bankruptcy Monday in front of the intransigence of the government.
A strategic coup incredible: for a price (250 million dollars) which would have been considered ridiculous there are only a few months, Barclays will make its subsidiary BarCap the third investment bank on Wall Street.
On the other side of the Atlantic, precisely, Wall Street came to live another historical episode.
The U.S. central bank, the Fed, which had remained inflexible Sunday at the difficulties of Lehman Brothers, made Tuesday turned 180 degrees in assisting unprecedented 85 billion dollars to the insurer AIG to avoid a global financial crisis .
The Federal Reserve has committed to lend itself are necessary for AIG, while the former number one global insurance no longer than a few hours before having to file for bankruptcy, which could cause according to analysts a chain reaction with incalculable consequences.
For Elie Cohen, director of research at CNRS, "this rescue is both bad news because it means that the crisis develops, but it is also good news because it means that the government sits on his convictions to avoid systemic crisis. "
According to the daily New York Post, U.S. authorities would now put to find a buyer for Washington Mutual, the largest bank in Seattle, which croûle under the importance of its outstanding property. The title, beaten for weeks, yet ceded nearly 9%, shortly before 16H00 GMT.
Following the elimination of three of the five investment banks on Wall Street - Bear Stearns, Lehman Brothers and Merrill Lynch, married Sunday at hussar to Bank of America - the speculation turned to the number two in the sector: Morgan Stanley. The action was losing 33%, even though the bank has issued the previous day in advance, an excellent quarterly profit of 1.42 billion dollars, just wave compared to that of a year ago.
Wall Street unscrews on Wednesday with the bank values. Investors had largely anticipated yesterday evening, before the closure, rescue hoped "ordered" the insurer AIG in New York by the U.S. government. Speculation also remains strong, both on further possible failures of large financial players, or building operations sector (Morgan Stanley (NYSE: MS - news) and Wachovia (AWO - news) are mentioned as targets) . Note again in the news business, warning of the Canadian Nortel. Against this background of uncertainty, and as markets feared especially for the health of big names U.S. finance, indices plunging again today. The Nasdaq Composite (NASDAQ: news) abandons 3.90% to 2,122 pts and the DJIA lost 2.85% to 10,743 pts.
On the economic front, the latest housing figures out without relief.
The Department of Commerce and the housing and urban development U.S. officials have released the latest figures on building permits and put in the yards of homes in the USA, for the month of August 2008. Building permits are displayed on a pace adjusted 854,000, down 8.9% compared to 937,000 in July and down 36.4% compared to last year. Starts yards emerged on a pace of 895,000, down 6.2% compared to the previous month (954,000 in July) and 33.1% compared to last year.
The U.S. Commerce Department reported Wednesday that a current account deficit widened to U.S. over $ 183 billion in the second quarter of 2008, representing 5.1% of GDP in the USA.
The Department of Energy U.S. published today its latest weekly report on U.S. stocks for the week to close on September 12, 2008. The commercial stocks of crude, excluding strategic reserve, fell by 6.3 million barrels compared to the previous week, emerging to 291.7 million barrels in the lower half of the average range for this period. Stocks of gasoline fell by 3.3 MB and are below the lower boundary of the traditional range. Stocks of distillates fell by 0.9 MB and are in the middle of the normal range. The barrel of crude resumed to $ 94 on the Nymex on Wednesday.
VALUES OF THE DAY
Lehman (-59%). After breaking Chapter 11 of the investment bank in New York Lehman Brothers (NYSE: LEH - News), Barclays (London: BARC.L - news) has put his hand on the activities of investment banking in North America and operations of capital markets firm devastated. The operation in cash saves approximately 10,000 jobs at Lehman. Of the $ 1.75 billion disbursed by Barclays, $ 1.5 billion represents the amount of the redemption of the New York offices of Lehman in the Seventh Avenue and data centers in New Jersey. $ 250 million will be paid for activities fixed income, trading, research and investment banking and equities sales at Lehman Bros.. The British Barclays will raise $ 1 billion to complete the deal, and anticipates a positive impact on its profits and capital ratios. The operation also accelerates the strategy of geographical and sectoral diversification of Barclays, Judge English, which does not take control of other operations Lehman.
AIG (-37%). The New York insurer AIG has benefited finally a rescue of U.S. authorities, following threats of bankruptcy. This requires a nationalization of the Group, while in exchange for $ 85 billion credit, the USA will take 79.9% of the shares of AIG. The U.S. authorities have held that a bankruptcy disorderly Group could add to the fragility of financial markets and the economy. The advance is paid to AIG for 24 months and must be repaid on the sale of certain assets. The key to the news is the entity leasing Air International Lease Finance Corp., probably the jewel of AIG, which could bring 5 to $ 8 billion of income according to analysts. In fact, according to the Wall Street Journal, President of the subsidiary, Steven Udvar-Hazy, could lead the takeover of California at Los Angeles International Lease Finance Corporation which he founded. Outside the latter and investment funds, sovereign or private equity, the chances of quick redemption seem thin by other specialists ... Finally, later Group at AIG, note that the Wall Street Journal refers to a replacement CEO Robert Willumstad by a tenor Allstate (NYSE: ALL - News), Edward Liddy.
Adobe (+2%). The Californian software Adobe Systems (NASDAQ: ADBE - News) issued last night its accounts for the 3rd quarter of fiscal 2008 ended in late August. Adobe has realized revenue of $ 887.3 million against $ 851.7 million in Q3 2007 and $ 886.9 million in the second quarter of 2008. The Group therefore exceeds the upper range of its earlier guidance of sales through Acrobat and LiveCycle. The GAAP diluted EPS was 35 cents against 34 cents last year and 40 cents on the previous quarter. This is in line with guidance Group housed between 34 and 36 cents, exceeding the consensus of analysts. The GAAP operating profit was $ 219.5 million against $ 255 million last year, and $ 260.2 million in the previous quarter. The GAAP net income amounted to $ 191.6 million, against $ 205.2 million last year and $ 214.9 million in the second quarter of 2008. In non-GAAP, EPS was 50 cents against 45 cents a year before and 50 cents for Q2 2008. The net non-GAAP reached $ 269.1 million, against $ 269.4 million last year and $ 272.7 million in the second quarter of 2008. On the 4th quarter of 2008, Adobe expects revenue ranging from 925 to $ 955 million and an operating margin of approximately 30.5% GAAP, or 39.5% in non-GAAP. The GAAP EPS is expected between 39 and 41 cents and the non-GAAP EPS between 51 and 53 cents.
Morgan Stanley (-37%). The investment bank in New York Morgan Stanley issued Tuesday evening its accounts of the 3rd quarter of 2008. The quarterly revenues totaled $ 8 billion on an EPS of $ 1.32 and an annualized ROE of 16%. The benefit of continuing operations was $ 1425 billion and $ 1.32 per title, against $ 1474 billion and $ 1.38 per share on the 3rd quarter last year. Revenues are up 1% year on year. The net result, at $ 1425 billion and $ 1.32 per title, is compared with a profit of $ 1543 billion and $ 1.44 per title on the Q3 2007. Despite the market environment, investment banking activity has produced $ 1 billion of revenue. In the context of market and industry environment that is known, Morgan Stanley, with a marginal decline of 7% of its quarterly net profit, is more the exception ... The title, however, relapse this day despite the accounts, on rumours of merger disadvantageous to shareholders.
Washington Mutual=======(-9%). Among the remaining sensitive issues of American finance, savings bank Washington Mutual, based in Seattle, major victim of the crisis, is still the subject of speculation for more lifelike. The New York Post refers to the track a potential resumption of WaMu by a U.S. institution, while the federal authorities would hold discussions with major banks to reach a solution. JP Morgan Chase and Wells Fargo have been contacted, as the British HSBC (London: HSBA.L - News). Recall that the three major rating agencies, Moody's, S & P and Fitch, have degraded the case these days, making WaMu even more fragile.
General Mills ======= (+3%). The American food group General Mills announced this day of "robust" accounts for its 1st quarter fiscal 2009. Revenues totaled $ 3.5 billion, up 14% to 4% higher volumes. Net income reached $ 279 million after a reduction related to the valuation of certain positions in raw materials (non-cash). The diluted EPS was 79 cents, 17 cents of non-cash reducing profits. The adjusted EPS would have been 96 cents, up 19% yoy. Profits operational segments showed 9% increase to $ 632 million. According to management, sales and quarterly profits have exceeded internal expectations. The beginning of the fiscal year strengthens the confidence of the Group for 2009, despite inflation on costs. Annual sales are expected to growth of around 5%, with prices and product mix, for a comparable increase in profits operational. The diluted EPS expected to include valuation adjustments on the positions commodities. Adjusted for non-recurring items, EPS is expected between 3.81 and $ 3.85, representing an increase of the previous guidance.
Nortel ========(-45%). The Canadian Ontario Nortel has disappointed on Wednesday by its preliminary accounts of the 3rd quarter (ended in late September) and the revision of its 2008 targets. Nortel, citing a turnaround in the economy and a sustained expansion, said experience significant pressures while its operators reduce their capital spending more than initially planned. In addition, some customers of their activities and "metro ethernet" postpone new IT investments and optics. Similarly, since the second quarter, the Toronto firm sees further pressure on earnings due to the impact of changes and some timely delivery products. Immediate Impact: Nortel now anticipates revenues of the 3rd quarter neighbouring $ 2.3 billion on a gross margin of 39%, mainly due to a postponement of delivery product on the T4 and customer mix in activities "Carrier" . The T3 operational costs are lower than expected $ 60 million in the second quarter. Now, Nortel plans for fiscal revenues decline of 2-4% over a gross margin of 42% and an operating margin improvement of 125 to 175 basis points. Mike Zafirovski, CEO Group, adds that the market environment clearly requires additional shares, "immediate and decisive", and a review of operations is in progress, as well as studying plans additional restructuring and impairment costs. Nortel also affirms its intention to explore disinvestment of activity Metro Ethernet networks (MEN).
SanDisk======== (+39%). The California Milpitas SanDisk, giant flash memory used in consumer electronics, has rejected an offer by $ 5.8 billion Samsung Electronics for its purchase, but does not seem to fundamentally hostile to a better proposal from its major customer of South Korean . The offer as "inadequate" Samsung (000830.KS - news) was made at $ 26 per title SanDisk in cash, which offered a premium enviable by almost 73% to shareholders. SanDisk looks now, from Samsung, a price that better reflects its intrinsic value. Four months of negotiations would have no effect before the public revelation of the offer of Asia. In a letter to the Board of SanDisk, the direction of Samsung critical nevertheless deemed unrealistic expectations regarding the market value of SanDisk and the price of merger. SanDisk, for its part, Samsung has seen at a possible willingness to pay a premium more copious.
Morgan Stanley surprise now fallen sharply from 37% to $ 18 on Wall Street ... despite accounts above expectations published yesterday evening. Investors are reacting to rumours that would like the declining price of a firm force to s'adosser actor to another bank. The title was expected to surge in pre-meeting, before plunging too quickly into a market depression.
The investment bank in New York Morgan Stanley issued Tuesday evening its accounts of the 3rd quarter of 2008. Exceptionally, the company publishes after the close on Wall Street. The quarterly revenues totaled $ 8 billion on an EPS of $ 1.32 and an annualized ROE of 16%. The benefit of continuing operations was $ 1425 billion and $ 1.32 per title, against $ 1474 billion and $ 1.38 per share on the 3rd quarter last year. Revenues are up 1% year on year. The net result, at $ 1425 billion and $ 1.32 per title, is compared with a profit of $ 1543 billion and $ 1.44 per title on the Q3 2007.
