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19-May-09 UP
Opening the Cannes Festival, the film UP from Pixar is very much in harmony with the upside rally which resumed yesterday. The
bear trap on opening on a low volume is a classic reason for the one way rise which occurred, and often the trigger of a new lasting move.
Technically indices broke upside resistance levels and should head now to new highs with a 2608 target on the cash Eurostoxx. The
consolidation was done in three downside wave, which now should let a 5 upside rally take place.
After more than two months of celebrating signs that the economy had stopped deteriorating quickly, investors are now looking
for signs it might actually improve. Investors were reminded last week that 'less-bad' doesn't necessarily mean good, "American
consumers, though emerging from their deep hibernation of late last year, are still hunkering down," said some economists, referring to
the retreat in April retail sales. A light economic calendar this week will provide few clues for investors to make up their minds, although
the May housing market index from the National Association of Home Builders and today's April housing starts and building permits are
not making the task easier from these investors sitting on massive amounts of cash any easier, which could provide much needed fuel for
the rally. The NAHB last night confirmed gradually that the housing sector has been bottoming, and this in addition to the improving
banking situation are key to set the base of a sustainable recovery whatever the speed.
Better-than-expected earnings for Q1 also helped the market cement its belief that the worst of the financial and economic crisis
might be behind. With 461 of S&P 500 companies having already reported, earnings are expected to be down 35.6% from the year earlier
quarter, according to Thomson Financial. Of companies that have reported, 65% have beat estimates, 9% have matched, and 26% have
missed. Actual results have come in 7% above estimates, the first time Thomson's "surprise factor" is positive in almost a year and a half.
"Companies have not only beaten the estimates, but by a pretty wide margins this quarter," said an earnings analyst at Thomson.
Today's ZEW measure of investor sentiment is likely to have continued its upward trend in May. The headline index, which
measures investors’ expectations for the German economy, has already increased for six months running. A very sharp rise in April left it
in positive territory for the first time since July 2007. The continued rise in equity prices, together with the announcement of extra modest
unconventional policy support from the ECB, should boost sentiment further this month. Meanwhile, yesterday’s euro-zone trade data for
March suggest that the worst of the slump in exports is probably behind us. The 1.4% monthly rise in export values was the second
consecutive increase and compares with an average monthly decline of 7.5% in the three months to January.
Up on opening, the morning’s light volume might explain a little consolidation which the US Housing data will reverse and keep
on supporting the equity indices on their way to new highs
WTI €/$ $/¥ 10 yr US 10 yr Euro Basic Energy Financ Health Tech Tel Indus Utilities SOX S&P NAS DOW Close

Last 59,4 1,3563 96,35 3,23 3,36 4,76 3,35 6,74 1,11 2,76 0,38 3,37 0,22 3,72 3,04 3,11 2,85 US
Perf 1d % 4,57 0,01 -0,04 -0,18 bp -0,7 bp 3,62 3,17 3,80 -0,09 1,47 1,29 2,16 -0,30 2,82 1,90 1,50 1,95 Europe
ECONOMIC DATA with impact
German Zew index (9h gmt) expected to rise from 13 to 20 level / minor
Housing Starts (12h30 gmt) expected to rise to 530-550k from 510k in March / always welcome to show that the housing sector bottom
is behind us which already the NAHB was pointing out last night / interesting
POSITIVE IMPACTS
TELECOM ITALIA’s CEO is looking to strengthen its alliance in industrial projects with Telefonica but ruled out the possibility of a merger
VODAFONE : FY revenue £41bn (40.6bn exp) / Ebitda £14.5bn, in line / FCF £5.7bn, in line / Final div. 5.2p (FY Div. 7.77p) / Sees
2010 FCF of £6bn to £6.5bn + adj. op profit of £11bn to £11.8bn and capex same as 2009
MARKS & SPENCER : FY sales £9.1bn, in line / Underlying PTP £604.4m (603m exp) / FY div. 15p (17p exp) / Cut 2009/10 div. to
5.5p (expected) / 2009/10 UK gross margin is expected to decrease by 125 to 175 bps
DIAGEO (not new) : KKR and Diageo may buy stakes in United Spirits (Economic Times) / KKR may buy 10% & Diageo14.99%
FIAT’s CEO is due to meet a German trade union leader Today as part of its effort to link-up with Opel & after meeting management yest.
INFINEON said its convertible bond issue, which generated proceeds of €181.5 m, was oversubscribed several times.
FERROVIAL : British airports operator BAA will appeal an order by competition regulators to sell 3 of its airports
UBS : The Govt of Singapore Investment, which has ploughed billions into UBS, told Reuters it was holding on to its investments
FORTIS : S&P's has raised the LT & ST counterparty credit ratings to 'AA-/A-1+' from 'A/Watch Pos/A-1'
NOVARTIS has assumed worldwide rights to a combination respiratory medicine it was developing with Schering-Plough
VOLKSWAGEN & PORSCHE should sell a stake in the Co resulting from a merger to a foreign investor (Lower Saxony Spokesman)
NATIXIS : French Finance Minister said that the new company formed from the merger between Caisses d’Epargne & Banques
Populaires would improve governance & would lower the risk profile of the company (Reuters)
BANK OF IRELAND : FY Net Interest Margin 1.74% / Operating Profit €3.9bn / Underlying Earnings 30.2 cts per share (10cts exp) /
Takes loan Impairment charge of €1.4bn (In line) / Offers no FY div

HYNIX SEMICONDUCTOR sees prices of computer memory chips to increase further in H2 + aims to break even earlier than planned
US BANKS are vying to be in the first wave of lenders to repay US bail-out funds / The first group is likely to be named within weeks =
Goldman, JPM and AMEX are almost certain to be in the first grouping (FT)
NEGATIVE IMPACTS
ARCANDOR’s CEO told Sueddeutsche Zeitung he opposed Metro's proposal to combine the 2 companies' department store chains
ERICSSON (Minor) : Sony Ericsson Mobile Communications needs to procure at least €100 m in the current fiscal year (Sony CFO)
ADP said its passenger traffic fell 1.7% on year in April
WPP sees a "recovery of sorts" in global markets in the H1 of 2010 but it could be short-lived (CEO)
LLOYDS - RBS : UK Financial Investments could start selling tranches in LOOYDS (43% stake) & RBS (70% stake) within a year / It has
begun taking soundings with sovereign wealth funds and other investors about selling stakes in both Banks (FT)
ABERTIS : Bancaja and Banco de Valencia started selling 13.4m shares of Abertis in a range of €12.90 and €13.30
REC intends to complete an equity offering through issuance of new shares to raise approximately NOK 4 bn and taking 3-5 bn in debt
to strengthen its financial position & ensure sufficient financial flexibility / The share issue is fully underwritten
NEXT : Sales to date are below management expectations

APPLIED MATERIALS : Applied Materials Chief Executive said the U.S. economic decline has slowed but is not over, calling recent
optimism about the economy unjustified.
RESULTS DIVIDENDS EVENTS
SAP AGM / Power and Utility conf at Goldman
Air France / Corio / Fortis / TUI Travel / HP
Sachs / Omnicom AGM / StatoilHydro AGM / Credit
Today (AMC) / Vodafone / Home Depot /
Agricole AGM / Biotech and Medical Devices at
Campbell Soup
Merrill Lynch / Deutsche Bank Healthcare conf /
WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

19-May-09 UP
Casino AGM
Fiat presents its plan for Opel / Telefonica AGM /
Accor (€1.65) / BNP Paribas (€1.00) / Groupo Ferrovial (€1.50) / Rhodia AGM / EDF AGM / Rexel AGM / Deutsche
Home Retail (€ GBp 11.11111) / LVMH (€1.25) / SAP (€0.50) / Boers AGM / Gas Natural AGM / GlaxoSmithKline
Wednesday London Stock Exchange
Statoil Hydro (NOK 4.40) / Swatch (CHF 4.25) / Unilever (GBp AGM / Zurich Financial investor day / Telekom
44.65556) Austria AGM / Intel AGM / Northrop Grumman AGM
/ Altria shareholders meeting
Henkel AG (€0.53) / L'Oreal (€1.44) / Portugal Telecom (€0.575) / Telefonica AGM / Gas Natural AGM / Logitech
Thursday British Land / Cable & Wireless / Dell / Gap
Premier Oil Rights issue 4 for 9 investor day / Boeing investor conf / Xerox AGM
Friday Aegis / Campbell Soup Arcelor Mittal ($0,1875) / Vinci (€1.10) / Michelin (€1.00) Aegis AGM / China Petroleum AGM / HSBC AGM
Monday Gazprom
TRADING IDEAS
Should head toward 2488 on the cash Eurostoxx which will be broken to head toward 2608
BUY AXA / ASML / TEF / ERICSSON on double bottom possibility.
BUY NOKIA / SIEMENS / EON / BAYER / SANOFI / GLAXO / DANONE to play eco recovery + looking good
BUY ST GOBAIN / EDF / FTE / DTE / NESTLE / VIVENDI on reversal Head & Shoulder possibility

BUY EON / SELL RWE // BUY BOUYGUES / SELL VINCI // BUY DTE / SELL FTE // BUY ST GOBAIN / SELL LAFARGE // BUY AHOLD / SELL
UNILEVER
BROKER METEOROLOGY
KBC ............................................ RAISED TO OUTPERFORM FROM NEUTRAL ............................................................... EXANE BNP
COMPASS.................................. RAISED TO HOLD FROM SELL ...................................................................... BY DEUTSCHE BANK
ATOS ORIGIN ............................ RAISED TO BUY FROM HOLD ................................................................................... BY CITIGROUP
RIO TINTO.................................. RAISED TO HOLD FROM SELL ............................................................................................. BY RBS
RSA ............................................ RAISED TO OVERWEIGHT FROM NEUTRAL ............................................................... JP MORGAN
KLOECKNER ............................. RAISED TO BUY FROM NEUTRAL ........................................................................................ BY UBS

KBC ............................................ CUT TO HOLD FROM BUY .......................................................................................................BY ING
AKZO NOBEL ............................ CUT TO SELL FROM HOLD.................................................................................................... BY RBS
ADP ............................................ CUT TO HOLD FROM BUY ......................................................................................... BY CITIGROUP

PLEASE FIND BELOW ON THE NEXT PAGE OUR MORNING ECO
WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

19-May-09 UP

CHART OF THE DAY
National Association of Home builders Market Index SA
Since 2005

80

70

60

50

40

30

20

10

0
2005 2006 2007 2008 2009

Source : NAHB

Confidence among U.S. homebuilders rose in May to its highest level since September. After a sharp increase from 9 to 14 in April this
is the second consecutive rise of the NAHB index underlining the fact that the housing slump may have touched a bottom.

ECONOMIC DATA
Time Country Indicator Period GE forecasts Consensus Previous
5.30 GMT Japan Industrial production (final) March 1,6%,-34,2% YoY
5.30 GMT Japan Capacity utilization (final) March -11,9% MoM
7.00 GMT Japan Machine tool orders April -80,4% YoY
9.00 GMT Italy Trade Balance March - € 837 million
9.30 GMT United Kingdom Consumer price index April 0,4%,+2,4% YoY 0,2%,+2,9% YoY
9.30 GMT United Kingdom Consumer price index core May 1,6% YoY 1,7% YoY
10.00 GMT Germany ZEW economic sentiment May 20 13,0
10.00 GMT Euro area Construction output May -1,8%,-11,8% YoY
13.30 GMT United States Housing starts April 530 000 520 000 510 000
13.30 GMT United States Building permits April 540 000 530 000 516 000
22.00 GMT United States ABC consumer confidence May 17 -42 -42

Inde x e s P rice % 5 D a ys Ytd Forex Price % 5 Days Ytd
DJIA 8504,1 1,18% - 3,10% EUR/USD 1,3568 -0,62% -2,92%
S&P 500 909,7 0,14% 0,72% EUR/JPY 130,81 0,74% 3,03%
Nas daq 1732,4 0,08% 9,85% USD/JPY 96,42 0,14% 5,89%
CA C 40 3245,4 0,36% 0,85% Oil Price % 5 Days Ytd
DA X 4852,0 - 0,31% 0,87% Brent $/b 58,4 0,80% 39,46%
Eur os tox x 50 2422,7 0,19% - 1,02% Gold Price % 5 Days Ytd
DJ 600 207,8 0,97% 4,78% Gold $/oz 922,4 -0,11% 4,56%
FTSE 100 4446,5 0,44% 0,28% Rates USA Euro Japan
Nikkei 9295,2 - 4,37% 4,92% Central Banks* 0,25 1,00 0,11
Shanghai Comp 2679,2 2,84% 47,14% Overnight 0,20 0,53 0,11
Sens ex ( India) 14416,6 22,27% 49,44% 3 Months 0,18 0,60 0,20
MICEX ( Rus s ia) 1012,9 - 0,21% 63,49% 10 Y ears** 3,23 3,36 1,43
Bov es pa ( Bras il) 51463,0 0,96% 37,05% *US: Fed Funds; Jap: Overnight; Euro: Ref i
** Euro: German Bund rate So urc e : B lo o m berg
WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

19-May-09 UP
ECONOMIC DATA PREVIEW
Watch in the United-States the release of the housing starts and of the building permits for April due at 13.30 GMT, both expected to
increase as the real estate markets seems to have reach the bottom and as weak prices should boost buyers.

Watch in Germany the release of the ZEW economic sentiment for May due at 10.00 GMT which is expected to slightly increase
after the sharp rise in April./JB

ECONOMY
UNITED-STATES :HOMEBUILDER CONFIDENCE RISES TO EIGHT-MONTH HIGH
Confidence among U.S. homebuilders rose in May to its highest level since September. After a sharp increase from 9 to 14 in April this
is the second consecutive rise (at 16) underlining the fact that the housing slump may have touched a bottom. The real estate market
was the first sector affected and might be the first to recover which will constitute another sign that U.S. economy is slowly but surely
getting out of the crisis. Nevertheless it must be notice that a reading below 50 means most respondents of the NAHB view conditions
are poor. The release of the housing starts and of the building permits due today should confirm this encouraging data.

EURO AREA : TRADE DEFICIT NARROWED ON EXPORTS
Euro area trade deficit narrowed dropping from -€2.9 billion in February to -€2.1 billion in March. This encouraging improvement of the
trade balance was mainly lead by a 1.4% monthly rise in export value for the second consecutive month after the rise of 1.6% in
February. This compares with an average monthly decline of 7.5% in the three months to January is a concrete sign of improvement of
the economy. Meanwhile importation rose by a modest 1.6% contributing as well to the improvement of the trade balance. After reaching
an historical low at the first quarter at (-2.5%,-4.6%YoY) it seems that the euro area has touched the bottom and will start to slowly
recover at the third quarter but unemployment will rise till next winter. /JB
WWW.GLOBAL-EQUITIES.COM / DEL SARTE / + 33 (0) 1 44 43 33 24

19-May-09 UP

VIX index : implied volatility on the S&P 500 $Libor - 3-Month (Interbank Rate)
6
85
80
5,5
75 5
70
65 4,5
60 4
55
50 3,5
45 3
40
35 2,5
30 2
25
20 1,5
15
1
10
5 0,5
21/05/2007 21/11/2007 21/05/2008 21/11/2008 21/05/2007 21/11/2007 21/05/2008 21/11/2008
Source : Bloomberg Source : Bloomberg

United States : 10-year Treasury yield 10-year Treasury spread USA-Euro zone
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
21/05/2007 21/11/2007 21/05/2008 21/11/2008 21/05/2007 21/11/2007 21/05/2008 21/11/2008
Source : Bloomberg Source : Bloomberg

Oil : Brent ($/b) Forex : Euro vs Dollar (EUR/USD)
150 1,65
140
1,6
130
1,55
120
110 1,5
100
1,45
90
1,4
80
70 1,35
60
1,3
50
40
1,25

30 1,2
21/05/2007 21/11/2007 21/05/2008 21/11/2008 21/05/2007 21/11/2007 21/05/2008 21/11/2008
Source : Bloomberg Source : Bloomberg