(ZH) "Prologue To Third World War": Kremlin Reacts To Security Guarantees For Uk

"Prologue To Third World War": Kremlin Reacts To Security Guarantees For Ukraine
BY TYLER DURDEN
WEDNESDAY, SEP 14, 2022 - 02:10 PM
Ukraine wants a 'NATO-esque' bloc which can be called upon to immediately defend borders with Russia, which was proposed by a working group established by President Volodymyr Zelensky. Crucially it would include the United States and other NATO allies providing Ukraine with "security guarantees". Kiev officials stressed in unveiling the plan Tuesday that it's not meant as a replacement for NATO, but as a legally binding alliance to be in place while Ukraine eventually pursues full NATO membership, as Newsweek describes of the proposal:
The Kyiv Security Compact (KSC)—proposed by Andriy Yermak, the head of Zelensky's office, and former NATO Secretary-General Anders Fogh Rasmussen—would also establish a "multi-decade" plan of investment, military training, and intelligence sharing to bolster Ukraine's defensive capabilities as the country pursues full NATO membership.
The Kremlin's reaction has been swift and fierce, with Deputy Chairman of the Security Council of Russia Dmitry Medvedev warning that it is "really a prologue to the Third World War" if it gets enacted. He described that nuclear holocaust would be the end result.
Dmitry Medvedev, via Shutterstock
According to a translation of Medvedev's reaction in state media, which had been posted in a statement to Telegram, he blamed "dull idiots" from "stupid think tanks" for concocting such a "hysterical appeal". Medvedev wrote:
"And then the Western nations will not be able to sit in their clean homes, laughing at how they carefully weaken Russia by proxy. Everything will be on fire around them. Their people will harvest their grief in full. The land will be on fire and the concrete will melt."
"Yet still the narrow-minded politicians and their stupid think tanks, thoughtfully twirling a glass of wine in their hands, talk about how they can deal with us without entering into a direct war. Dull idiots with a classical education."
He said that already the conflict in Ukraine is sliding into unknown, unpredictable territory of escalation due to the West's "unrestrained pumping of the Kiev regime with the most dangerous types of weapons."
He added to the statements as follows according to a translation:
The Kyiv camarilla gave birth to a project of "security guarantees", which are a prologue to the third world war. Of course, no one will give any "guarantees" to the Ukrainian Nazis. After all, this is almost the same as applying Article 5 of the North Atlantic Pact (Washington Treaty) to Ukraine. For NATO – the same shit, only a side view. Therefore, it’s scary.
Given the grinding conflict which is still focused in the east and south of the country, and with Moscow having vowed to "liberate" the Donbass, the security guarantees being proposed are unlikely to get off the ground anytime soon, given also it calls for a return to Ukraine's pre-2014 borders and a return of all homes and property confiscated by the invading Russian forces.
Many pundits in the West are meanwhile expressing concern that amid a largely successful Ukrainian counteroffensive in the northeast Russia could grow more unpredictable and desperate. There's ongoing speculation that President Putin could declare a formal declaration of war, something which the Kremlin on Tuesday denied there is even discussion of at this point.

FT Lex : Inditex/Marta Ortega: inflation gives dynast a baptism of fire

Inditex/Marta Ortega: inflation gives dynast a baptism of fire
Three challenges loom for the world’s biggest clothing retailer

Inditex is the world’s biggest clothing retailer. It remains remarkably nimble. Impressive interim results show it is coping with tough conditions better than peers.

A European economic crisis is giving a baptism of fire to a new top team. Marta Ortega, daughter of founder Amancio Ortega, took over as chair in April, albeit after a long apprenticeship. Chief executive Óscar García Maceiras became chief executive a few months earlier.

Three challenges loom. First, inflation is pushing up costs while cutting consumers’ spending power. Second, China’s Shein is proving tough competition. Third, the Ukraine war has forced Inditex to suspend its big Russian operation, which last year accounted for 8.5 per cent of operating profit.

The shares trade on a forward price/earnings ratio of 18 times, about 30 per cent less than the 10-year average. The stock is down just 5 per cent since Russia’s invasion of Ukraine. Swedish fashion group H&M has fallen far more.

Inditex’s big advantage is that it produces about half its clothing close to home. Manufacturing in Spain, Portugal, Morocco and Turkey allows it to respond quickly to demand. Short runs reduce unsold stock.

Inditex limits dollar-denominated costs. Analysts estimate it uses the dollar for 40 per cent of stock purchases, compared with about two-thirds for European rivals. The strength of the greenback prompted Primark owner ABF to warn on profits last week. Inditex also benefits from a growing US business.

No consumer company is immune from inflation. Shipping costs from Asia have soared. Inditex is stocking up to guard against disruption, eroding the benefits of short supply chains.

That will give Ortega and Maceiras headaches if sales cannot be sustained. The cost of living crisis will squeeze clothes budgets. More shoppers will trade down to cheaper offerings such as Shein’s. 

Inditex will need all its skill in stock management and cost control to keep its shares out of the discount bin.

(DBK) European Cross Asset Strategy: Low Energy Level


Low Energy Level

Gas and Power prices, not oil, are driving inflation and costs

We have seen unprecedented efforts of European governments to relieve the pain of higher energy prices for private households. Short term, this should be supportive for markets by keeping consumer confidence from eroding even further. However, transferring costs from private households to public debt might relieve the pain, but it does not heal the illness. Europe had already been facing rising energy costs due to its ambitious energy transition plans before the war in Ukraine. Today, having to replace Russian gas while transitioning into a greener future has aggravated the problem and could keep energy costs at uncomfortably high levels for years to come.

Power prices and earnings. While markets have been mostly concerned about European gas prices, we show that (slide 7) rising electricity costs are a bigger concern to corporate earnings than gas prices (as long as there is gas). With shrinking real disposable incomes, we expect that companies will find it increasingly difficult to pass on higher gas and power prices to
consumers. We estimate that average profit margins of European companies could shrink as much as 1% to 1.5% if this year’s gas and electricity prices were to persist into late next year

>>> US Research Calls

Research Calls

  • Upgrades:
    • Akero Therapeutics (AKRO) upgraded to Outperform from In-line at Evercore ISI; tgt raised to $50
    • Brandywine Realty (BDN) upgraded to Buy from Hold at Truist; tgt $11
    • Merck (MRK) upgraded to Buy from Hold at Berenberg; tgt raised to $100
    • Nikola Corporation (NKLA) upgraded to Buy from Neutral at BTIG Research; tgt $12
    • PayPal (PYPL) upgraded to Outperform from Mkt Perform at Raymond James; tgt $123
    • Roche Hldg (RHHBY) upgraded to Buy from Hold at Berenberg
    • Schneider Electric (SBGSY) upgraded to Buy from Hold at Deutsche Bank
    • SL Green Realty (SLG) upgraded to Buy from Hold at Truist; tgt $59
    • SoFi Technologies (SOFI) upgraded to Buy from Neutral at BofA Securities; tgt raised to $9
    • Starbucks (SBUX) upgraded to Buy from Neutral at Fubon; tgt $103
  • Downgrades:
    • Auto Trader (ATDRY) downgraded to Equal-Weight from Overweight at Morgan Stanley
    • Avantor (AVTR) downgraded to Market Perform from Outperform at Cowen; tgt lowered to $28
    • Block (SQ) downgraded to Underperform from Outperform at Evercore ISI; tgt lowered to $55
    • Bristol-Myers (BMY) downgraded to Hold from Buy at Berenberg; tgt lowered to $76
    • Corp Office Props (OFC) downgraded to Hold from Buy at Truist; tgt lowered to $28
    • CSX (CSX) downgraded to Mkt Perform from Outperform at Bernstein; tgt $32
    • Eastman Chemical (EMN) downgraded to Equal Weight from Overweight at Wells Fargo; tgt lowered to $95
    • Match Group (MTCH) downgraded to Hold from Buy at Loop Capital; tgt lowered to $60
    • Motorola Solutions (MSI) downgraded to Equal-Weight from Overweight at Morgan Stanley; tgt raised to $260
    • Nestle (NSRGY) downgraded to Neutral from Outperform at Exane BNP Paribas
    • Novartis AG (NVS) downgraded to Hold from Buy at Berenberg
    • Ocado (OCDGF) downgraded to Underperform from Neutral at Credit Suisse
    • RBC Bearings (ROLL) downgraded to Underperform from Neutral at BofA Securities; tgt raised to $235
    • Standard Life Aberdeen (SLFPF) downgraded to Sell from Hold at Deutsche Bank
    • Straumann AG (SAUHY) downgraded to Sell from Neutral at UBS
    • Syneos Health (SYNH) downgraded to Neutral from Buy at Guggenheim
    • Union Pacific (UNP) downgraded to Mkt Perform from Outperform at Bernstein; tgt lowered to $230
    • Woodward (WWD) downgraded to Hold from Buy at Jefferies; tgt $90
  • Others:
    • ADTRAN (ADTN) initiated with a Hold at WestPark Capital
    • Blueprint Medicines (BPMC) initiated with a Buy at Berenberg; tgt $90
    • Calix Networks (CALX) initiated with a Buy at WestPark Capital; tgt $75
    • Clearfield (CLFD) initiated with a Hold at WestPark Capital
    • Church & Dwight (CHD) resumed with an Underperform at BofA Securities; tgt $75
    • Clorox (CLX) resumed with an Underperform at BofA Securities; tgt $130
    • Coty (COTY) resumed with a Buy at BofA Securities; tgt $12
    • DICE Therapeutics (DICE) initiated with an Overweight at Cantor Fitzgerald; tgt $36
    • e.l.f. Beauty (ELF) initiated with a Buy at BofA Securities; tgt $45
    • Extreme Networks (EXTR) initiated with a Buy at WestPark Capital; tgt $20
    • Global Business Travel Group (GBTG) initiated with an Equal-Weight at Morgan Stanley; tgt $9
    • Hershey Foods (HSY) initiated with a Market Perform at Cowen; tgt $238
    • Kimberly-Clark (KMB) resumed with a Neutral at BofA Securities; tgt $130
    • Koninklijke DSM (RDSMY) upgraded to Buy from Hold at Jefferies
    • Kronos (KRON) initiated with a Buy at Berenberg; tgt $12
    • LSB Industries (LXU) initiated with a Buy at Stifel; tgt $23
    • MakeMyTrip (MMYT) initiated with an Overweight at JP Morgan; tgt $44
    • Masimo (MASI) initiated with a Buy at Loop Capital; tgt $206
    • Mondelez Int'l (MDLZ) initiated with an Outperform at Cowen; tgt $71
    • NETSTREIT (NTST) initiated with a Strong Buy at Raymond James; tgt $24
    • Oracle (ORCL) initiated with a Hold at Berenberg; tgt $72
    • POINT Biopharma (PNT) initiated with a Buy at Berenberg; tgt $20
    • Ribbon Communications (RBBN) initiated with a Hold at WestPark Capital
    • SES AI Corporation (SES) initiated with a Hold at Deutsche Bank; tgt $7
    • Southern Copper (SCCO) initiated with a Hold at Deutsche Bank; tgt $47
    • Vir Biotechnology (VIR) initiated with an Outperform at SVB Leerink; tgt $40

>>> US Gapping down

Gapping down
In reaction to earnings/guidance
:

  • NUE -5.1%, FLS -2.5%, LICY -0.5%

Other news:

  • ALT -51% (reports Phase 1b Clinical Trial of Pemvidutide in Subjects with NAFLD)
  • PNT -8.6% (prices offering of 13.9 mln shares of common stock at $9.00 per share)
  • TWTR -1.4% (stockholders approve merger agreement with Elon Musk)
  • AKRO -1.3% ($175 mln common stock offering)
  • CPA -1% (reports August traffic)

Analyst comments:

  • SQ -4.1% (downgraded to Underperform from Outperform at Evercore ISI)
  • UNP -3.2% (downgraded to Mkt Perform from Outperform at Bernstein)
  • AVTR -1.8% (downgraded to Market Perform from Outperform at Cowen)

>>> US Gapping up

Gapping up
In reaction to earnings/guidance
:

  • EPM +9%, RLGT +5.3%, DOOO +1.4%, GSHD +1%, ASH +0.9%, RTX +0.7%

Other news:

  • DWIN +18.5% (announces forward purchase agreement and amended backstop agreements)
  • NGM +6.1% (provides preliminary findings for Phase 1b trial of NGM120)
  • EWTX +5.8% (prices offering of 11627907 shares of its common stock at $10.32 per share)
  • TBLA +4.5% (announces restructuring program reducing headcount by 6%)
  • LEU +2.4% (secures $320 mln in new sales contracts and commitments)
  • APEI +2.3% (CEPH reaccredits Master of Public Health program)
  • OCGN +2.2% (Announces Publication of a Comprehensive Review of BBV152 in Frontiers in Immunology)
  • CCRN +1.9% (acquires assets of Mint Medical Physician Staffing and Lotus Medical Staffing)
  • STLA +1.5% (Stellantis and General Motors (GM) to execute a share repurchase transaction)
  • SBUX +1.4% (provides new growth targets in Reinvention Plan)

Analyst comments:

  • SOFI +3.1% (upgraded to Buy from Neutral at BofA Securities)
  • SLG +2.2% (upgraded to Buy from Hold at Truist)

>>> US Early premarket gappers

Early premarket gappers

  • Gapping up:
    • DWIN +18.5%, EPM +11%, NGM +6.1%, RLGT +5.3%, TBLA +4.5%, SBUX +2.6%, APEI +2.3%, STLA +2.3%, EWTX +2.1%, CCRN +1.9%, DOOO +1.4%, RTX +1.2%, RIO +1.1%, LICY +1.1%, O +0.8%, BWXT +0.8%
  • Gapping down:
    • PNT -8.5%, AKRO -2.5%, FLS -2.5%, GSHD -1.2%, CPA -1%, TWTR -0.8%, WBD -0.5%