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6-Apr-09 EPILOGUE
The holiday-shortened week ahead marks the start of another earnings reporting season, kicked off by Alcoa (AA) tomorrow. Bond
markets will close early on Thursday while U.S. stock and bond markets will be closed Friday in observance of Good Friday. The
economic calendar features only a handful of reports, highlighted by the Trade Balance report on Thursday. The January U.S. trade data
revealed a rapid plunge in overall trade, which is a serious concern for global economic growth, precisely the main focus that was really
discussed through the G20 meeting. Keep an eye on the Bank of England meeting on Thursday.
The Q1 reporting season is expected to be bad. But with expectations for corporate results already so low, an improving
economic backdrop and banks being given free rein to revalue some of their mortgage-related assets, chances are investors will still
applaud. Already strategists are waking up gradually "It's not going to be as bad as everyone thinks" said market strategist at Standard &
Poor's. "It's not so much the quarterly numbers that will matter but the guidance, which will likely be weak," he added. Still "the economic
backdrop has improved and investors will have confidence that things will improve and to look through the short-term noise."
Analysts surveyed by FactSet Research on average expect earnings at S&P 500 companies to be down 35.9% from the year-
earlier quarter. Those surveyed by Thomson Financial expect earnings to be down 36.6% from the year earlier. In a sign that the global
economic downturn is taking a toll on more companies' results, all 10 sectors of the S&P are expected to post negative year-on-year
comparisons, the first time this happened since Thomson began tracking results in 1998. But in a new twist, financial firms are no longer
the biggest weight on earnings for the first quarter, as comparisons with the year-earlier quarter. Banks and other financial firms began
taking massive write-downs late in 2007. But in Q1, financials are only the fourth worst sector , with earnings expected to be down 33%
from the year earlier, according to FactSet. Besides benefiting from easier comparisons, bank earnings are also expected to benefit from
a change in accounting rules . Responding to pressure applied by lawmakers on Capitol Hill, the Financial Accounting Standards Board
(FASB) on Thursday voted to give auditors more flexibility in valuing illiquid mortgage assets that may have long-term value. This should
provide a bit of a boost to earnings for some of the largest banks.
Banks at last lending, and making nice profit from it. Barclays PLC (BARC.LN) being set to offer billions of pounds in loans to
homeowners and businesses in the U.K., the Financial Times reports Saturday, without citing sources. According to the report, the
precise amount Barclays will commit to lending has not yet been defined, but it should be close to the GBP16 billion its rival Lloyds
Banking Group PLC (LLOY.LN) promised to lend in 2009 and 2010. The move should be announced in several weeks and will follow the
lending commitment of Royal Bank of Scotland Group PLC (RBS.LN) and Lloyds Banking Group.
Geithner comments yesterday were again supportive. Saying there are "encouraging signs" in the U.S. economy but said there is
much work to be done to restore the banking and automobile industries. "It took us a long time to get here. It is going to take some time
for us to work through this." Geithner said he couldn't judge at this time whether the U.S. needs a second stimulus package along the
lines of the one signed by President Barack Obama, which should be seen as a good news. He also said Sunday that the administration
will do what's necessary to keep the giant automobile manufacturers afloat. He also held out the possibility of more aid to banks, which he
considers are key to the economic recovery very much based on the credit recovery.
The stock market continued to rally over the past week, as there are signs of improvements in the U.S. economy, but the rise of
the 3 last sessions is a lot more important in term of positive consequences than it seems. Indeed, being the first 3 days of April, these
sessions were mostly the first of the second quarter, with a feeling that the economy has been bottoming in Q1 thanks to the huge
worldwide stimuli at last reaching the real economies, which should bring growth much earlier than expected and certainly not a Great
Depression outcome. As such the employment data will improve, and who knows the speed at which the economy will be growing...
In the meantime, these positive sessions are also confirming us that the selling flow from hedge funds due to the heavy redemption
claims last year is mostly over and no longer weighting as it used to, when sending indices in the abysse, increasing the bearishness of
strategists already playing the Great Depression scenario. It is right though that the awful levels seen early March might have spoil the all
efforts from worldwide officials, equity markets being nowadays an important economic data, especially at a time when the focus is turned
on housing and wealth effect impacts. This is precisely the reason why the sharp rise seen lately is very promising, and might well make
these same bear strategists ne very angry, if not already. The market took an early bet that happen to gradually be the right one.
Yes the US improving economic data are still depressing but, inventories are on historical lows, and the biggest reason for the
gloomy data at this stage. Firms would not be spending much for storage that might not be sold, as the economic heart attacks just after
the Lehman fall has been very damageful and the "cash is king" scenario was the only response for everyone, from investors to firms. So
investors might now be much less convinced that the cash is king, and fund managers are getting very nervous of their historically high
cash investment at a time when the bear (!) equity rally has been reaching 25%, and macro data improving. As to coporates, just go out to
do some shopping and you will see, for instance, that if you buy shoes they don't have your size or the right colour, if you buy curtains
they ask you a 12 weeks delay to get things done etc ... meaning that the improving consumer confidence and spending combined to the
decreasing rates levels and the rising equity markets will lead to a sharp need for inventories rebuilt which will boost the eocnomy much
more than anyone can imagine at this stage. Another shot of a few rising sessions will just be confirming such a scenario.
Nikkei up this morning on hope that the bank of Japan (meeting of two days starting today) will bolster liquidity measures, ignoring
Obama request for sanctions after North Korea launched a long distance rocket yesterday
Up today, we should be retracing though tomorrow for a healthy “ Tuesday counter day”
WTI €/$ $/¥ 10 yr US 10 yr Euro Basic Energy Financ Health Tech Tel Indus Utilities SOX S&P NAS DOW Close

Last 53,4 1,3555 100,73 2,90 3,22 2,00 1,67 4,19 -1,56 1,35 1,03 0,95 0,62 2,94 0,97 1,20 0,50 US
Perf 1d % 2,83 0,51 -0,42 1,85 bp 6,1 bp -0,44 0,01 -0,86 -1,66 -0,02 0,68 -0,34 0,11 -0,89 -0,47 -0,27 -0,51 Europe
ECONOMIC DATA with impact
American Bankers Association Real Estate Lending Conference (Day 1 of 3)
POSITIVE IMPACTS
DAX : Germany's Eco Minister is proposing income tax cuts to as a way to stimulate the economy & help households (spokesman)
ALCATEL: earnings before interest & taxes will be at a “breakeven” point this year as the Co cuts costs by €750M (CEO in French
press)/ Co is looking at outsourcing the maintenance of its internal information technology & part of its R&D facilities (Les Echos )
FRANCE TEL an arbitration court had ordered Orascom to sell its stake in Mobinil to FTE at egp273.26 / shrs ($1.7bn)
DEUTSCHE TEL: T-Mobile plans to use Google Inc.'s Android operating system for some of its devices (New York Times)
EON wants to work with ENEL&EDF to develop nuclear energy in Italy (Il Messaggero citing head of Eon’s Italian business)
ENEL: A pool of private investors led by F2i is in exclusive talks with Enel to acquire its gas network (Il Sole 24 Ore)
GAZPROM will likely cut its multibillion-$ investment program this year amid collapsing demand for natural gas. Meanwhile, Russian
Prime Minister offered Gazprom state aid to get the company through the global recession.(WSJ)
ATLANTIA: Earnings before interest, taxes, depreciation and amortization are likely to be little changed this year at about €2.1bn, the
decline in traffic this year will probably be compensated by higher tariffs (Il Sole 24 Ore)
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6-Apr-09 EPILOGUE
SANOFI plans to acquire a majority stake in Piramal Healthcare ($850M kpi) felt through due to differences over valuation(Eco Times) /
but Co plans to buy Brazilian generic drugmaker Medley this week for about $700M (Le Figaro)
VOLKSWAGEN / PORSCHE are considering an asset swap under a plan that would allow Porsche to increase its stake in VW without
having to raise debt. Porsche is struggling to raise the financing needed to reach its goal of a 75% holding. A proposal under
consideration would involve the sale of Porsche assets to VW in return for new shares, & VW may also contribute cash
RENAULT & NISSAN will supply electric cars to the Irish mkt within 2 Y as part of a gov. plan to have 10% of vehicles electric by 2020
INDITEX plans to open 25 Zara stores in India over the next 3 Y as it seeks to offset a slowdown in Europe by expanding in Asia (AFP)
HYPO REAL ESTATE : German gov is planning to make an offer to takeover HRX as early as next week (FT)
HSBC : 96.6% take up for right issue, Tier 1 Capital Ratio now 9.8% , Equity tier 1 ratio now 8.5%
FORTIS wants to abandon the company’s dual structure and opt for a single holding in Brussels (Chairman said in Le Soir)
BMPS : MEDIOBANCA is working on setting up a consortium to acquire a €2.2bn portfolio of real estate which BMPS is selling (Il
Giornale) / CSGN and Caltagirone could join the consortium
BARCLAYS 's private-equity gp has won approval from its 3rd-party investors to separate from its parent b4 raising its 4th fund (WSJ)
AIR FRANCE & GOL Linhas(Bresilian Airline) are becoming comrrercial partner
IBM ‘s $7bn bid on Sun might collapse ( WSJ yesterday), willing to pay 10 to 11$ initially, now subject to extensive due diligence process
NEGATIVE IMPACTS
GERMAN CARS: Gov won’t cut the subsidy to motorists who buy low-emission cars but may limit it to €5Bn (Sueddeutsche Zeitung)
BMW : plans to extend shortened working hours to April and May at its sites in Landshut, Berlin and Munich (Automobilwoche)
DEUTSCHE POST is in the final round of bidders(with TNT&CVC) for the 30% of Royal Mail that UK gov wants to sell (Welt am Sonntag)
GRUPO FERROVIAL : The U.K. gov asked Merrill to investigate BAA Ltd.’s finances after the company’s bonds slumped. Merrill was also
asked to investigate the finances of Ferrovial. The report cites transport experts as saying that BAA may struggle to raise cash to fund
projects including a third runway at London’s Heathrow airport (Sunday Times)
HOLCIM : Fitch cuts ratings to BBB from BBB+
RIO TINTO: has drawn up contingency plans to sell stock as its planned $19.5Bn investment from Chinalco fall through. The $8-10 bn
share sale would be underwritten by JPM, Cazenove & Credit Suisse (the Sunday Times)
SULZER / OERLIKON : Russian billionaire Viktor Vekselberg said there are no plans for a merger between the 2 Cos
INFINEON has applied to voluntarily delist its American Depositary Shares from the New York Stock Exchange
TELEFONICA : A public prosecutor in Madrid has demanded a 4.5-year prison sentence for Telefonica CEO (C. Alierta) for alleged
insider trading in 1997 . A trial on the case will begin on April 14 (EFE)
TELECOM ITALIA : Argentina's antitrust agency, the National Commission for the Defense of Competition, has issued a surprise ruling
stripping directors from Telecom Italia from exercising voting powers in the Italian company's local unit, Telecom Argentina
RBS : will take 3 to 5 years at least to recover from the disastrous acquisition of ABN assets, which were instrumental in shredding the
bank's balance sheet, (CEO)
UBS: introduced a ban on travel abroad for its assets managers. The ban on customer visits will affect more than 1K Swiss-based
advisers and is part of a general restriction on business travel by the Zurich-based bank
SWISS BANKS : More covered bond deals are likely as the SNB seeks to balance liquidity within the country's banking system, SNB
board member said./ "Refinancing through the bond markets is very difficult for the big banks because this market is practically shut.
Therefore it is important that we in the Swiss market have a working instrument to balance funding" He added.
RESULTS DIVIDENDS EVENTS
Vallourec to discuss dividend / Telecom Italia EGM / HSBC
Today
end of Rights Issue
Tuesday Lukoil / Alcoa (AMC) / BB&B Skanska (SEK 5.25) / Zurich Fi (CHF 11.00)
Fed to study the end of short selling forbiden (return of the
''uptick rule") / Intel Developper Forum / Sulzer / Belgacom
BG Group (GBp 7,277778) / Fortum (€1.00) / Prudential (GBp
Wednesday Constellation Brands AGM / Schlumberger AGM / United Technologies AGM /
14,34444) / Sampo (€0.50) / Unibail-Rodamco (€1.40)
Daimler AGM (08.00 GMT) / Telecom Italia AGM / Daimler
AGM
Thursday Chevron Daimler (€0.60) / Givaudan (CHF 10.00) / KPN (€0.40) Klepierre AGM
Philips / Goldman Sachs / Intel / BBVA (€ 1,016129) / Banco Popular (€0.08) / Belgacom (€1.68)
Tuesday 14th
Johnson & Johnson /
TRADING IDEAS
BUY « SIEMENS / NOKIA / BASF / AEGON / AIR FRANCE / ENI / AIR LIQUIDE » to play bull charts, island reversal looking type
BUY BAYER / ROCHE / MUNICH RE / L OREAL / EON on reversal Head & Shoulder
BUY GSZ / FTE / PHILIPS / ACCOR on double bottom possibility & BUY BNP / AXA to play gap closure above soon

BUY GENERALI / SELL AXA // BUY EBAY / SELL AMAZON // BUY AEGON / SELL ALLIANZ // BUY DAIMLER / SELL BMW // BUY FTE / SELL DTE
BROKER METEOROLOGY
RENAULT............................... RAISED TO OUTPERFORM FROM MARKET PERFORM............................................. BY BERNSTEIN
SAINSBURY........................... RAISED TO OVERWEIGHT FROM NEUTRAL.............................................................. BY JP MORGAN
KLEPIERRE ........................... RAISED TO NEUTRAL FROM UNDERPERFORM...................................................BY CREDIT SUISSE
INFINEON............................... RAISED TO BUY FROM NEUTRAL............................................................................................. BY UBS
ANGLO AMERICAN............... RAISED TO HOLD FROM BUY............................................................................................BY SOC GEN
BMW .....................................CUT TO MARKET PERFORM FROM OUTPERFORM ..................................................... BY BERNSTEIN
BHP BILITON .......................CUT TO HOLD FROM BUY ....................................................................................................BY SOC GEN
RIO TINTO............................CUT TO HOLD FROM BUY ....................................................................................................BY SOC GEN
TELIASONERA ....................CUT TO SELL FROM HOLD ................................................................................... BY DEUTSCHE BANK
INTERCONTINENTAL .........CUT TO HOLD FROM BUY ............................................................................................................ BY RBS
ADECCO ..............................CUT TO SELL FROM HOLD .......................................................................................................... BY RBS
ROYAL DUTCH SHELL .......CUT TO NEUTRAL FROM BUY ........................................................................... BY BANK OF AMERICA
AXA ......................................CUT TO UNDERWEIGHT FROM NEUTRAL.................................................................... BY JP MORGAN
NOVO NORDISK..................CUT TO HOLD FROM BUY .............................................................................................................BY S&P

PLEASE FIND BELOW ON THE NEXT PAGE OUR MORNING ECO

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6-Apr-09 EPILOGUE

CHART OF THE DAY

US unemployment rate
since 1980

11

10

3
80 82 84 86 88 90 92 94 96 98 00 02 04 06 08

Source : Bureau of Labor statistics

For the fifteen month in a row jobs have been destructed in the United-States : 663 000 in March precisely for a total of 5 133 000 since
January 2008 which has never been seen before. Meanwhile the unemployment rate reached 8.5% its highest level since 1983.

ECONOMIC DATA
Time Country Indicator Period GE forecasts Consensus Previous
6-10 april China Foreign exchange reserves March $ 1946 billion
10.00 GMT Euro area Producer prices index February -0,5%,-1,5% YoY -0,8%,-0,5% YoY
10.00 GMT Euro area Retail sales February -0,4%,-2,5% YoY 0,1%,-2,2% YoY
United Kingdom New cars registrations February -21,9% YoY
18.00 GMT United-States Fed Gov Warsh speaks on financial markets

Inde x e s P rice % 5 D a ys Ytd Forex Price % 5 Days Ytd

DJIA 8017,6 3,13% - 8,65% EUR/USD 1,3563 2,78% -2,91%
S&P 500 842,5 3,29% - 6,73% EUR/JPY 136,69 -6,11% 7,32%
Nas daq 1621,9 4,97% 2,84% USD/JPY 100,78 -3,49% 10,05%
CA C 40 2958,7 4,16% - 8,06% Oil Price % 5 Days Ytd
DA X 4385,0 4,32% - 8,84% Brent $/b 54,5 15,45% 30,63%
Eur os tox x 50 2198,8 3,84% - 10,17% Gold Price % 5 Days Ytd
DJ 600 186,2 5,19% - 6,14% Gold $/oz 880,4 -3,90% -0,22%
FTSE 100 4029,7 3,37% - 9,12% Rates USA Euro Japan
Nikkei 8839,3 1,42% - 0,23% Central Banks* 0,25 1,25 0,11
Shanghai Comp 2419,8 1,91% 32,90% Overnight 0,10 0,73 0,11
Sens ex ( India) 10546,3 3,46% 9,32% 3 Months 0,21 0,72 0,22
MICEX ( Rus s ia) 837,9 2,79% 35,25% 10 Y ears** 2,91 3,22 1,46
Bov es pa ( Bras il) 44391,0 5,93% 18,22% *US: Fed Funds; Jap: Overnight; Euro: Ref i
** Euro: German Bund rate So urc e : B lo o m berg
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6-Apr-09 EPILOGUE

ECONOMIC DATA PREVIEW

No major economic data due in the United-

Watch in the Euro area the retail sales due at 10.00 GMT expected to decrease. Indeed this data is released in value and European
inflation is declining. We can say that presently the euro area is on its way to deflation., keep an eye on the production prices
expected to pursue their drop trend led by the decline of energy and commodity prices./JB

ECONOMY
UNITED-STATES: THE UNEMPLOYMENT RATE REACHED ITS HIGHEST LEVEL SINCE 1983
Despite the fact that for once the figures are on line with the expectations of the consensus witch can be seen as a good new, the
reality is here and the employment data are gloomy. Indeed for the fifteen month in a row jobs have been destructed : 663 000 in
March precisely for a total of 5 133 000 since January 2008 which has never been seen before. Meanwhile the unemployment rate
reached 8.5% its highest level since 1983. Nevertheless we have three reasons to put these figures into perspective. We can say that
companies are over laying off in comparison to the drop of the activity. As we already mentioned in the past we can say that 50 % of
the job cuts are due to the drop of the GDP and 50% are the consequence of a generalized pessimism generating a fear state of mind
pushing companies to lay off. Secondly the Fed already reacted accordingly to the situation and is preparing a rebound of the
employment . And Third factor of hope is showed by the rise of the average hourly earnings which rise of 0.2% in March and of 3.4%
from a year ago. As the inflation is close to zero this is reinforcing the real wages. As a matter of fact household purchase power will
mechanically increase before the positive impact of the Obama plan. Even if a portion of this extra purchase power will be used to
reimbursed borrowings and to increase savings this showed that the United-States will not drop into a lasting deflation.

UNITED-STATES: THE ISM SERVICES CONTRACTED AT FASTER PACE IN MARCH

After reaching an historical low in November at 37.4 and rebounded at 42.9 in January before dropping at 41.6 in February the ISM
services was expected to rise in March led by the resistance of the American consumption. Unfortunately this was not the case and
the ISM services index unexpectedly contracted at a faster pace at 40.8 (forecast 42.0) led by the rise of unemployment and by the
very low consumer confidence. This index remained under the level of 50 confirming that services which represent 75% of the
American GDP are hit./JB
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6-Apr-09 EPILOGUE
VIXindex: impliedvolatility onthe S&P 500 $Libor -3-Month(InterbankRate)
6
85
80 5,5
75
5
70
65 4,5
60
55 4
50
3,5
45
40 3
35
30 2,5
25
20 2
15 1,5
10
5 1
09/04/2007 09/10/2007 09/04/2008 09/10/2008 09/04/2009 06/04/2007 06/10/2007 06/04/2008 06/10/2008 06/04/2009
Source : Bloomberg Source : Bloomberg

UnitedStates : 10-year Treasury yield 10-year Treasury spreadUSA-Eurozone

5,5 1,2
5,25 1
5
0,8
4,75
0,6
4,5
4,25 0,4
4 0,2
3,75
0
3,5
3,25 -0,2
3 -0,4
2,75
-0,6
2,5
2,25 -0,8

2 -1
06/04/2007 06/10/2007 06/04/2008 06/10/2008 06/04/2009 06/04/2007 06/10/2007 06/04/2008 06/10/2008 06/04/2009
Source : Bloomberg Source : Bloomberg

Oil : Brent ($/b) Forex: Eurovs Dollar (EUR/USD)

150 1,65
140
1,6
130
120
1,55

110 1,5
100
1,45
90
80
1,4

70 1,35
60
1,3
50
40
1,25

30 1,2
06/04/2007 06/10/2007 06/04/2008 06/10/2008 06/04/2009 06/04/2007 06/10/2007 06/04/2008 06/10/2008 06/04/2009
Source : Bloomberg Source : Bloomberg