(Les Echos) BNP Paribas agreement should be announced Monday

BNP Paribas agreement should be announced Monday

The bank should pay $ 8.9 billion fine. The prohibition on dollar transactions would apply in Switzerland and Singapore in particular.
The agreement between the U.S. government and BNP Paribas expected to be announced Monday during a press conference. The French bank is preparing to pay a fine of $ 8.9 billion, says the New York Times in its issue of Friday morning, more than its profits last year. She is accused of violating an economic embargo against Sudan, Iran and Cuba, and is expected to plead guilty - a procedure yet extremely rare on Wall Street. To this add the prohibition to conduct dollar transactions for at least six months. This prohibition does not affect any bank: it applies to its subsidiaries in Singapore and Geneva, as well as certain services to Paris. In cete hypothesis, BNP Paribas will retain access to the dollar, which should reassure customers and prevent them from returning to other banks.
The penalty is severe. It is not very far from the worst case scenario that the American press evoked late May. At this stage, no bank had never paid more than 2 billion fine for violating a U.S. embargo. But fraud detected at BNP Paribas are apparently more serious than any previous. Fraudulent transactions would amount, in total, $ 30 billion. Much was targeted to Sudan, a country plagued by genocide. They allowed essentially to finance oil contracts. BNP Paribas would deliberately concealed these transactions, through its subsidiaries Africa, the Middle East and Europe, which made the final destination - Sudan-less detectable. This desire of concealment which explains why American judges are so intransigent with regard to the French bank.

(Les Echos) l’accord BNP Paribas devrait être annoncé lundi

La banque devrait payer 8,9 milliards de dollars d’amende. L’interdiction d’effectuer des transactions en dollars s’appliquerait en Suisse et à Singapour notamment.
L’accord entre les autorités américaines et BNP Paribas devrait être annoncé lundi à l’occasion d’une conférence de presse. La banque française s’apprêterait à payer une amende de 8,9 milliards de dollars, indique le New York Times dans son édition de vendredi matin, soit plus que ses profits de l’an dernier. Elle est accusée d’avoir violé un embargo économique contre le Soudan, l’Iran et Cuba, et devrait plaider coupable – une procédure pour l’instant extrêmement rare à Wall Street. A cela s’ajouterait l’interdiction d’effectuer des transactions en dollars pendant au moins six mois. Cette interdiction n’affecterait pas toute la banque : elle s’appliquerait à ses filiales de Singapour et de Genève, ainsi qu’à certains services à Paris. Dans cete hypothèse, BNP Paribas conservera donc un accès au dollar, ce qui devrait rassurer ses clients et éviter qu’ils ne se retournent vers d’autres banques.
La sanction est sévère. Elle n’est pas très éloignée du scénario catastrophe que la presse américaine évoquait fin mai. A ce stade, aucune banque n’avait jamais payé plus de 2 milliards d’amende pour avoir violé un embargo américain. Mais les fraudes constatées chez BNP Paribas sont apparemment plus graves que toutes les précédentes. Les transactions frauduleuses s’élèveraient, au total, à 30 milliards de dollars. La majeure partie était ciblée vers le Soudan, un pays en proie au génocide. Elles permettaient essentiellement de financer des contrats pétroliers. BNP Paribas aurait volontairement dissimulé ces transactions, en passant par ses filiales d’Afrique de l’Est, du Moyen Orient et en Europe, ce qui rendait la destination finale – le Soudan- moins détectable. C’est cette volonté de dissimulation qui explique pourquoi les juges américains se montrent si intransigeants à l’égard de la banque française.

La Tribune) Bouygues Telecom tente une offensive dans la fibre en sabrant les pr

L’opérateur, parti tard dans le fixe, lance sa première offre commerciale de fibre optique à 26 euros. Mais il ne s’adresse qu’à 1 million de foyers éligibles, à Paris et quelques grandes villes. Cette agressivité commerciale est aussi un signal adressé à la concurrence en pleine recomposition du marché.

La guerre du fixe, acte II. Après avoir cassé les prix dans l'ADSL en mars avec un abonnement à 20 euros, soit 10 euros moins cher que le marché, Bouygues Telecom poursuit son offensive en s'attaquant à la fibre. L'opérateur, qui compte 2 millions d'abonnés dans le haut débit où il est entré tardivement, soit deux à trois fois moins que SFR et Free, cinq fois moins qu'Orange, lance sa première offre commerciale de fibre optique le 30 juin à 25,99 euros. « Et ce n'est pas une promotion de 2 ou 12 mois. Bouygues Telecom souhaite changer le référentiel de prix de la fibre, qui est plutôt de 40 voire 49 euros dans la tête des Français » a fait valoir Olivier Roussat, le PDG de Bouygues Telecom, lors d'une conférence de presse ce jeudi.

« Le critère de prix est devenu assez déterminant dans le fixe. On s'en est aperçu quand on a baissé le prix de l'ADSL, ce qui nous a permis d'être leader en conquête de clients au premier trimestre et de réaliser de très bonnes ventes au deuxième trimestre » a souligné le PDG de Bouygues Telecom.

Imposer un nouveau standard ?
La filiale du groupe de BTP saura-t-elle imposer un nouveau standard de prix, comme Free l'a fait dans le mobile ? Les tarifs des abonnements à la fibre jusqu'à l'abonné (FTTH) démarrent en réalité à 33 euros chez SFR et 37 euros chez Orange (hors promotions ramenant à 23 euros chez l'un et 28 euros chez l'autre pendant 12 mois) et les opérateurs multiplient déjà les ristournes (mois gratuits, rabais à leurs abonnés mobiles). Free la propose au même prix que l'ADSL (32 euros avec TV, 38 euros avec les appels vers les mobiles inclus) mais, s'il a lancé la course au déploiement très tôt, en annonçant un investissement d'un milliard d'euros dans la fibre en septembre 2006, il est en fait à peine présent commercialement pour l'instant sur le segment de la fibre : plusieurs dizaines de milliers de clients sur 5,7 millions d'abonnés haut débit. Orange est leader avec plus de 320.000 clients devant SFR (220.000). La fibre est surtout devenue une arme de (re)conquête commerciale, en particulier à Paris et dans les grandes villes, sur une cible plutôt haut de gamme de CSP+.

« Nous voulons libérer le marché du fixe. Il n'y a pas de raison économique objective, pas de prix de revient justifiant de vendre la fibre à 38 euros » a affirmé Olivier Roussat.

Le PDG de Bouygues Telecom assure que l'offre à 26 euros sera « suffisamment rentable », puisqu'il n'a plus à payer les 9 euros de dégroupage à Orange obligatoires pour l'ADSL qui utilise le réseau de cuivre téléphonique de l'opérateur historique. Au vu des comportements des clients à son offre triple-play à 20 euros, l'opérateur estime que son tarif agressif dégage pour les foyers « une marge de manœuvre pour s'abonner à un bouquet de chaînes payantes d'une enveloppe de prix équivalente », se traduisant ainsi par des revenus additionnels.

Seulement 1 million de foyers concernés
Les spécialistes du secteur considèrent que les consommateurs ne voient pas l'intérêt de s'abonner à la fibre si elle est plus chère et qu'ils disposent déjà d'un bon ADSL. L'argument prix de Bouygues peut donc jouer. Mais le marché de la fibre jusqu'au domicile en France reste modeste : 640.000 abonnés à fin mars, soit 19% des plus de 3 millions de logements éligibles selon l'Arcep, le régulateur des télécoms. Problème : la nouvelle offre de Bouygues Telecom ne s'adresse pour l'instant qu'à un million de foyers éligibles, à Paris, Lyon, Marseille, Toulouse, Bordeaux et Nice, par rapport aux 23 millions de ménages français abonnés à l'ADSL. C'est clairement une limite à la portée de cette offensive, l'offre n'étant pas nationale, comme sa Box low-cost à 16 euros chez B&You disponible uniquement dans les zones qu'il a dégroupées, soit environ 12 millions de foyers. Toutefois, Bouygues compte mettre le turbo et étendre son offre fibre à 1,4 million de prises d'ici à la fin de l'année, puis 3 millions dans les deux ans.

Jusqu'à présent, Bouygues proposait du très haut débit en marque blanche sur le réseau de Numericable (il y compte plus de 370.000 abonnés), réseau rénové en fibre optique jusqu'au pied de l'immeuble, la dernière partie restant en câble coaxial (technologie dite FTTLA). Mais la filiale du groupe de BTP veut s'affranchir de ce partenaire, rival victorieux dans la bataille pour le rachat de SFR.

« La fibre ce n'est pas la technologie de demain, mais celle d'aujourd'hui » a déclaré le PDG de Bouygues Telecom, vantant ses atouts par rapport à la technologie du câblo-opérateur « qui ne permet pas les mêmes débits dans le sens montant. »

L'opérateur, qui aurait 20.000 clients à la fibre en test, indique avoir investi 300 millions d'euros depuis 2010 dans le cadre de son accord de co-investissement dans le FTTH avec SFR dans les « zones très denses » (comprendre les grandes villes). Il compte aussi accélérer le dégroupage en installant ses équipements dans 1.500 centraux téléphoniques (trois fois plus qu'aujourd'hui) d'ici à la fin de 2015, pour couvrir 6 millions de foyers de plus en ADSL. L'opérateur va aussi commercialiser en octobre une nouvelle Box plus puissante, sous Android, à un prix inférieur à 30 euros par mois.

Un appel à la consolidation pour faire bouger Free ou Orange ?
Et si la nouvelle offre fibre était surtout un signal adressé à la concurrence ? Tout comme Free a empêché ses concurrents de vendre la 4G plus chère que la 3G en l'incluant sans surcoût dans ses forfaits en décembre, Bouygues Telecom, qui est moins sensible à une baisse des prix dans le fixe que dans le mobile, veut clairement forcer les autres opérateurs à s'aligner et les toucher au portefeuille, en particulier Free, qui utilise ses cash-flows du fixe pour financer son déploiement dans le mobile, et Orange.

« La guerre des prix dans le fixe risque de freiner les investissements dans le très haut débit. Elle va nous transformer en quasi utilities, ce qui est compliqué dans un marché très concurrentiel » avait souligné le numéro deux d'Orange, Gervais Pellissier, il y a deux semaines.

Les mouvements tarifaires et leurs effets sur le marché sont donc regardés de très près chez l'opérateur historique. « On ne va pas laisser Bouygues flinguer le marché du fixe comme un kamikaze » prévient un cadre d'Orange, même si le groupe préférerait que Free se décide à racheter Bouygues Telecom... Chez la filiale du groupe de BTP, certains prédisent que cette nouvelle salve ne sera pas sans conséquence : « au bout d'un moment, Orange craquera. Et ça peut se passer très vite » parie un proche de la direction.

(La Tribune) Bouygues Telecom tries an offensive in the fiber by slashing prices

Bouygues Telecom tries an offensive in the fiber by slashing prices

The operator, party later in the fixed launching its first commercial optical fiber 26 euros. But it only addresses one million eligible households, Paris and a few large cities. This aggressive marketing is also a signal to the competition in full restructuring of the market.

War fixed, Act II. After breaking prices in ADSL in March with a subscription to 20 euros, 10 euros cheaper than the market, Bouygues Telecom continued its offensive by attacking the fiber. The operator, which has 2 million subscribers in broadband where it came late, two to three times less than SFR and Free, five times less than Orange launches its first commercial fiber optic June 30 to 25.99 euros. "And this is not a promotion of 2 or 12 months. Bouygues Telecom wishes to change the reference price of the fiber, which is more than 40 or 49 euros in the minds of French "argued Roussat Olivier, CEO of Bouygues Telecom, at a press conference Thursday.

"The criterion on price has become quite decisive in the sets. We noticed it when we dropped the price of ADSL, which has allowed us to be a leader in winning customers in the first quarter and achieve very good sales in the second quarter, "said CEO of Bouygues Telecom.

Impose a new standard?
The subsidiary of construction group will she impose a new standard price as Free has in the mobile? Subscription rates to fiber to the home (FTTH) actually start at 33 euros and 37 euros at SFR, Orange (excluding promotions bringing to 23 euros from 28 euros and one in the other 12 months ) and operators already increasing discounts (free month discount to their mobile subscribers). Free offers the same price as ADSL (32 euros with TV, 38 euros with calls to mobiles included), but if the race started early deployment, announcing an investment of one billion euros in the fiber in September 2006, it is actually just a commercial presence for the moment on the segment of the fiber: tens of thousands of customers over 5.7 million broadband subscribers. Orange is the leader with more than 320,000 clients in SFR (220,000). Fiber is especially become a weapon of (re) gaining market share, especially in Paris and in major cities on a rather high target range of CSP +.

"We want to release the fixed market. There is no objective economic reason, no cost justifying sell the fiber to 38 euros, "said Olivier Roussat.

The CEO of Bouygues Telecom ensures that offers 26 euros will be "profitable enough", since it no longer has to pay 9 euros unbundling mandatory for Orange ADSL uses the copper telephone network of incumbent. In view of customer behavior to its triple-play offer to 20 euros, the operator believes that its aggressive price emerges for households' leeway to subscribe to a package of channels Pay an envelope equivalent price "thus resulting in additional revenue.

Only 1 million households concerned
Industry experts believe that consumers do not see the need to subscribe to the fiber if it is more expensive and they already have a good ADSL. The argument price Bouygues can play. But the market for fiber to the home in France remains modest: 640,000 subscribers at the end of March, 19% of more than 3 million of eligible housing according to ARCEP, the telecoms regulator. Problem: the new offer of Bouygues Telecom is addressed yet only one million eligible households, in Paris, Lyon, Marseille, Toulouse, Bordeaux and Nice, compared to 23 million French households subscribe to the ADSL. This is clearly a limit to the scope of this offensive, the offer is not national, as its low-cost 16 euros in Box B & You only available in areas it has unbundled, or about 12 million households . However, Bouygues has put the turbo and extend its offer fiber to 1.4 million taken by the end of the year, and 3 million within two years.

So far, Bouygues proposed very high speed white label on the network Numericable (there are more than 370,000 subscribers), renovated in fiber to the foot of the building network, the last part remaining coaxial cable (technology called FTTLA). But the subsidiary of construction group wants to eliminate this partner victorious rival in the battle for the purchase of SFR.

"The fiber is not the technology of tomorrow, but of today," said the CEO of Bouygues Telecom, touting its advantages over technology "cable operator does not allow the same flow rates in the uplink. "

The operator would have 20,000 customers to the fiber under test, said to have invested € 300 million since 2010 as part of its agreement to co-investment in FTTH with SFR in the "dense areas" (understand the key cities). It has also accelerate the unbundling by installing its equipment in 1,500 telephone exchanges (three times more than today) by the end of 2015 to cover 6 million homes over ADSL. The operator will also market in October a more powerful Box, Android, at less than 30 euros per month price.

A call for consolidation to move Free or Orange?
And the new fiber supply was primarily a signal to the competition? As Free prevented its competitors to sell more expensive than 3G at no extra cost by including in its plans in December 4G, Bouygues Telecom, which is less sensitive to lower prices in the fixed and in mobile, clearly wants force other operators to align and touch the portfolio, especially Free, using its cash flow to fund the fixed deployment in the mobile and Orange.

"The price war in the fixed may impede investment in very high speed. It will transform us into quasi utilities, which is complicated in a very competitive market, "pointed out the number two Orange, Gervais Pellissier, there two weeks.

Tariff movements and their effects on the market are watched very closely in the incumbent. "We will not let Bouygues flinguer the fixed market as a suicide bomber," warns an Orange frame, even if the group would prefer to decide to buy Free Bouygues Telecom ... At the subsidiary of construction group, some predict that this new burst will not be without consequences "after a moment, Orange crack. And it can happen very quickly "bet close to management.

>>> Iluka's offer for Kenmare may not be looked upon favorably by market

Iluka's offer for Kenmare may not be looked upon favorably by market 

The market is unlikely to look favorably upon ASX-listed mineral sands miner Iluka Resources’ offer for its UK-listed rival Kenmare Resources, the Australian Financial Review reported. The report said that JPMorgan analyst Sujit Day claimed that the transaction could cost Iluka up to AUD 600m (USD 562m) and include nearly AUD 300m in net debt. Day noted that Iluka is struggling under tough conditions in the mineral sands area and investors are unlikely to respond well to efforts to increase its exposure, rather than diversify. Day noted that in current market conditions Iluka will have net debt of AUD 124m by year end, following a loss of AUD 36m.

Another report in the Australian Financial Review said, without citing its source, that Goldman Sachs is advising Iluka on the deal.

The report said Iluka is likely to seek a friendly merger with Kenmare and could offer 20 pence per share.

The article cited Tim Schroeders, a fund manager at Pengana Capital, as saying that the merger could benefit both businesses, which have fallen out of favor with investors. Schroeders said the deal could offer both businesses a chance to make a new move forward.

Schroeders also said that Iluka could divest its iron ore royalty asset after the deal.



Source Australian Financial Review

>>> Asian Upddate

Asian Market Update: Japan employment continues to brighten while household spending sags

***Notable Economic Data*** - (CN) CHINA MAY INDUSTRIAL PROFITS Y/Y: 8.9% V 9.6% PRIOR; YTD Y/Y: 9.8% V 10.0% PRIOR - (JP) JAPAN MAY OVERALL HOUSEHOLD SPENDING Y/Y: -8.0% (2nd consecutive decline) V -2.3%E - (JP) JAPAN JUNE TOKYO CPI Y/Y: 3.0%V 3.1%E; CPI CORE Y/Y: 2.8% V 2.8%E - (JP) JAPAN MAY NATIONAL CPI Y/Y: 3.7% V 3.7%E; CPI CORE Y/Y: 3.4% (fastest pace since Apr 1982) V 3.4%E - (JP) JAPAN MAY JOBLESS RATE: 3.5% (6-year low) V 3.6%E; JOB-TO-APPLICANT RATIO: 1.09 (20-year high) V 1.08E - (JP) JAPAN MAY RETAIL SALES M/M: 4.6% V 2.9%E; RETAIL TRADE Y/Y: -0.4 % V -2.0%E - (NZ) NEW ZEALAND MAY TRADE BALANCE (NZ$): 285M (7th consecutive month of surplus) V 250ME - (KR) SOUTH KOREA MAY INDUSTRIAL PRODUCTION M/M: -2.7% V % -0.1%E; Y/Y: -2.1% V 1.0%E - (KR) SOUTH KOREA MAY CURRENT ACCOUNT BALANCE: $9.3B V $7.1B PRIOR; GOODS BALANCE: $9.4B V $10.6B PRIOR - (UK) UK JUN HOMETRACK HOUSING SURVEY M/M: 0.3% V 0.5% PRIOR; Y/Y: 6.0% V 6.1% PRIOR

***Index Snapshot (as of 03:30 GMT)*** - Nikkei225 -0.5%, S&P/ASX flat, Kospi -0.2%, Shanghai Composite -0.4%, Hang Seng flat, Sept S&P500 flat at 1,948

***Commodities/Fixed Income/Currencies*** - Aug gold +0.1% at $1,318, Aug crude oil -0.1% at $105.70/brl, Sept copper flat at $3.17/lb - SLV: Spot silver rises above $21.15; 3-month high - (JP) BOJ offers to buy ¥300B in 1-3yr JGB, ¥200B in 3-5yr JGB, ¥100B in 10-25yr JGB, ¥30B in JGB with maturity over 25-yr as well as ¥1.5T in T-bills - (US) Weekly Fed Balance Sheet Total Assets Week ending June 25th: $4.37T v $4.37T prior; Reserve Bank Credit: $4.33T v $4.33T prior; M1: -$3.0B (first decline in 3 weeks) v +$3.3B prior; M2: +$4.3B v -$9.3B prior; M1 y/y change: 10.5% v 10.3% w/w; M2 y/y change: 6.3% v 6.3% w/w

***Market Focal Points/Key Themes*** - Nike shares are up 3% afterhours following impressive Q4 numbers, beating on the top and bottom line. Futures orders were up 11%, while gross margins rose 170bps to 45.6%. Even China - previously a soft spot - appears to have made a fully recover from its inventory adjustment with a 4% rise in sales.

- A set of economic data from Japan came in mixed. Household spending is down sharply, even though finance min Aso said the decline was within expectations and still reflects adjustment from higher sales tax. Moreover, the y/y drop in retail sales was not nearly as bad as expected. Jobless rate hit a 6-year low however, and job-to-applicant ratio expanded to a 20-year high. National CPI continued its steady climb to 3.7%, while core rate hit its highest since 1982, potentially further diminishing the outlook for more BOJ easing. USD/JPY hit a 1-month low below 101.40, also helped by the falling US yields.

- NZD hit a 3-year high above $0.8790, with a slightly higher than expected trade surplus serving as catalyst. Later in the day, RBNZ Gov Wheeler released the 2014-17 central bank outlook, claiming RBNZ will steer policy to avoid damage of high inflation.

- China industrial profits growth slowed but not sufficiently to signal a pronounced retreat. In the property sector, local press reported Shanghai developer "Yuehe Real Estate" halted construction, entering a technical default. Developer was said to have run up about NY240M in debt, requiring CNY300-400M in funding to continue construction.

***Equities*** US markets: - MTW: Activist investor Relational said to have taken an over 8% stake; urging Manitowoc to split off its food service equipment business - press; +12.1% afterhours - NKE: Reports Q4 $0.78 v $0.76e, R$7.43B v $7.35Be; FY15 outlook largely unchanged from guidance given last quarter; Able to continue raising prices; +3.0% afterhours - GM: House Committee release new document indicating VP of products Doug Parks knew of ignition switch issues in 2005 - financial press; -0.2% afterhours - DD: Guides FY14 lower to $4.00-4.10 v $4.30e ($4.20-4.45 prior); updates redesign and restructuring initiative, sees restructuring charge of $0.20; -2.1% afterhours

Notable movers by sector: - Consumer Discretionary: Tabcorp TAH.AU -5.8% (court rules against company); Bosideng International Holdings 3998.HK -6.1% (FY14 results) - Materials: Paladin Energy Limited PDN.AU +6.8% (provides updates) - Industrials: NARI Technology Development 600406.CN +% (awarded contract) - Technology: Sony Corp 6758.JP -1.3% (cuts jobs in VAIO unit); Alco Holdings 328.HK +6.8% (FY14 results)

>>> US After Hours

After Hours Summary: PRGS +9.5%, NKE +3.2%, ANAD -6.7%, DD -2.3% following earnings/guidance

After Hours Gainers: Companies trading higher in after hours in reaction to earnings: PRGS +9.5%, NKE +3.2%

Companies trading higher in after hours in reaction to news: AWRE +19.7% (declared special cash dividend of $1.75 per share), MTW +11.1% (Relational Investors disclosed 8.52% active stake in 13D filing; urges spin-off of food business), DRRX +3.8% (co secured $20 mln in debt financing), TEX +2.1% (trading higher in sympathy with MTW), QEP +0.9% (filed Form 10 registration statement for spin-off of midstream business), EXPE +0.8% (announced agreement to purchase Auto Escape Group, a European care rental reservation company; terms not disclosed)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: ANAD -6.7%, DD -2.3%

Companies trading lower in after hours in reaction to news: ANAD -6.7% (announced strategic restructuring, with workforce reduction of ~140 positions), ISIS -5.7% (trading lower on negative blog mention), IG -4.9% (announced public offering of common stock), TOO -0.8% (filed for $500 mln offering of common units)

(BFW) Nike 4Q EPS, Rev. Top Ests; China, N.America Fut


MORE: Nike 4Q EPS, Rev. Top Ests; China, N.America Futures Beat
2014-06-26 20:20:43.355 GMT


By Courtney Dentch
     June 26 (Bloomberg) -- Nike 4Q EPS, rev., futures orders
top ests.; China rev., futures beat ests. Shrs gain 2.8% post-
mkt.
  * 4Q EPS cont ops 78c vs est. 75c
  * 4Q rev. cont ops $7.43b vs est. $7.34b
    * N. America rev. $3.29b, est. $3.13b (Consensus Metrix
      avg. of 25); W. Europe rev. $1.31b, est. $1.32b; China
      rev. $702m, est. $666.4m
  * 4Q global futures orders constant currency 12%, est. 11.7%
    (Consensus Metrix avg of 14)
    * N. America 11%, est. 9.8%
    * China 6%, est. 2.5%
    * W. Europe 22%, est. 19.9%
    * Central & Eastern Europe 14%, est. 11.5%
    * Japan unchanged y/y, est. -0.2%
    * Emerging mkts 9%, est. 19%
  * Call 5pm 866-602-1302
    * NOTE: FINL reports pre-mkt tmrw, earnings preview
Earnings preview
Statement: NSN N7SLL0MEQTXH <GO>


For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the reporter on this story:
Courtney Dentch in New York at +1-212-617-8732 or
cdentch1@bloomberg.net
To contact the editor responsible for this story:
Brad Skillman at +1-212-617-2763 or
bskillman1@bloomberg.net

>>>US Close Dow-0,13% S&P-0,12% Nasdaq-0,02%

Closing Market Summary: Stocks End Little Changed Despite Early Slide

The major averages posted modest losses on Thursday, but a daylong rebound off the early lows helped the indices retrace the bulk of the decline. The S&P 500 shed 0.1% with six sectors ending in the red.

Stocks did not waste any time this morning, sliding to session lows within the first 30 minutes of action. All ten sectors participated in the early retreat with financials (-0.3%) leading the market lower.

Earlier this week, the financial sector struggled to keep pace with the broader market, but today's intraday losses were large enough to pressure the S&P 500. Citigroup (C 47.23, -0.59) was the weakest performer among the majors, while European financials also struggled. Most notably, Barclays (BCS 14.55, -1.16) fell 7.4% after New York Attorney General announced fraud charges against the company. In addition, news out of the Bank of England related to higher mortgage caps and stricter lending standards may have contributed to the losses.

Like the second-largest sector, the top-weighted technology space (-0.2%) also had a tough time keeping pace with the S&P 500. The tech sector suffered from losses among large cap names like Google (GOOGL 584.77, -1.16) and Microsoft (MSFT 41.72, -0.31), while chipmakers fared only a bit better. The PHLX Semiconductor Index slid 0.4%.

On a side note, GoPro (GPRO 31.34, +7.34) was a bright spot within the sector, soaring 30.6% on its first day as a publically traded company.

Elsewhere, industrials (-0.2%) also lagged amid broad weakness in transport and defense stocks. Notably, the Dow Jones Transportation Average (-0.2%) narrowed its June gain to 0.6%, but it is worth pointing out the bellwether complex soared more than 5.5% last month.

On the upside, four sectors—consumer discretionary (+0.1%), energy (+0.1%), health care (+0.1%), and utilities (+0.2%)—posted slim gains with the utilities space extending its year-to-date gain to 15.1%.

Treasuries spent the bulk of the trading day in the green, ending just below their highs. The 10-yr note added nine ticks, sending its yield lower by tree basis points to 2.53%.

Participation was well below average with less than 600 million shares changing hands at the NYSE.

Economic data was limited to initial claims and income/spending data for May:
  • The weekly initial claims level fell to 312,000 from an upwardly revised 314,000 (from 312,000), while the consensus expected a reading of 310,000. 
    • For most of 2014, the initial claims level was bound between 320,000 and 330,000. Over the past few weeks, claims have come down into the 310,000-320,000 range. The current levels should spark an acceleration in payroll growth and show clear improvement in labor market conditions. 
  • Personal income levels increased 0.4% in May following a 0.3% increase in April. The consensus expected personal income to increase 0.4%. 
    • The May employment data showed a 0.4% increase in aggregate wages, which correlated nicely with a 0.4% increase in employee compensation. 
  • Personal spending increased 0.2% in May after no growth in April. The consensus expected spending to increase 0.4%. 
    • Adjusted for inflation, spending declined 0.1% on the heels of a 0.2% decline in real PCE in April. That will not factor all that favorably in the calculation for Q2 GDP.
Tomorrow, the final Michigan Consumer Sentiment survey for June will be released at 9:55 ET (consensus 81.7).
  • S&P 500 +5.9% YTD 
  • Nasdaq Composite +4.9% YTD 
  • Dow Jones Industrial Average +1.6% YTD 
  • Russell 2000 +1.4% YTD

>>> Europeans Banks have Underperformed EuroStoxx by almost 6% since ECB

have a look to the chart attached...

- Q2 should be good for banks and Rate environment still good
- US Bank start reporting in 2 weeks, could be a catalyst to see so me Outperformance
- for now we'll be long of BNP, DBK and mostly short of CS, GLE & BARC in relative trades, but I would rather be long ther sector vs the market
- spread is trading almost on year low levels.