Economic Analysis and Indicators

The U.S. industrial conglomerate 3M announced Monday the acquisition of Cogent Group for more than 900 million dollars (708 million euros), representing a premium of nearly 18%.

3M will pay $ 10.50 in effect by title Cogent, which posted a closing price of 8.915 dollars Friday. The transaction should be completed in the last quarter of 2010.

In 2009, Cogent, a specialist in biometric identification, had posted a turnover of approximately 130 million dollars.3M believes that the operation should subtract between nine and ten cents to earnings per share within 12 months following the conclusion of the transaction.

Excluding accounting adjustments and acquisition-related integration costs, the operation should improve the profit of one to two cents per share, according to the group.

The 3M CEO George Buckley, said last week that the group could spend about two billion dollars in acquisitions in 2010, double its initial annual forecast.

The group believes that the market for biometrics, which is now worth four billion dollars, is expected to grow 20% per year.

In pre-market trade of the title Cogent jumped over 19% to 10.73 dollars.

The growth of the U.S. economy in the second quarter was much lower estimated initially and spring to 1.6% annualized, particularly penalized by the higher increase in imports for 26 years, show the revised statistics released Friday .

The gross domestic product (GDP) had been initially estimated increase of 2.4%.This downward revision is less strong than the 1.4% proposed by economists polled by Reuters said business investment was strong enough to offset the surge in imports.

In the first quarter, the U.S. economy grew 3.7% annualized.

"The first reaction is that this is not good but we thought it would be worse, then there could be a little relief," said Nigel Gault, chief economist at IHS Global Insight.

Wall Street has also opened up following the publication before erasing its gains in response to comments from Federal Reserve Chairman Ben Bernanke.

ECONOMY SHOULD NOT FALLING IN RECESSION

The Fed chairman said that the recovery had slowed more than expected and that the central bank was prepared to take further steps to support the economy if necessary.

"The committee (monetary policy) is ready to implement further monetary easing through unconventional measures, if necessary, especially if the outlook were to deteriorate significantly," said Ben Bernanke in a speech prepared in advance for the annual symposium organized by the Fed in Jackson Hole, Wyoming.

If there is risk of a return to recession, the most likely scenario remains, according to analysts, the slow growth rather than a cover "W" to be marked by a new episode of contraction activity.

"There is no doubt, the economic recovery is losing speed," said Robert Dye, senior economist at PNC Financial Services."But if we define a recession as the decline in GDP for two or three consecutive quarters, then I think it does come to that."

"We'll see a scenario where we could have a contraction in GDP during a quarter, followed by a slight increase the next quarter," he adds.

The second quarter growth was slowed by a 32.4% jump in imports, their largest increase since 1984, while exports have as they rose just 9.1%.The trade deficit has resulted in cost 3.37 percentage points to GDP, the cost is the highest since the fourth quarter of 1947.

GROWTH OF 1% IN Q2 EXCLUDING IN STOCKS

The economy has also been penalized by a lower estimate than initially envisaged in business inventories.They rose only $ 63.2 billion (49.7 billion euros), against an initial estimate of 75.7 billion, contributing not only up 0.63 percentage point to GDP .

Stocks, which have been a major driver of the U.S. recovery began in the second quarter of 2009 increased by 44.1 billion dollars over the first three months of the year.

Excluding inventories, the economy grew 1.0% in the United States, against a growth of 1.3% originally announced in July for the second quarter.

Certain of the new publication, however, were better than previously announced.

Household spending was revised upward to +2.0% +1.6% cons announced in July, to increase the GDP by 1.38 percentage points. In the first quarter, they had increased by 1.9%.

Business investment was also revised upward. Second estimate they stand up by 17.6%, biggest gain since the first quarter of 2006, against a growth of 17% previously announced.

Investments in equipment and software have included the highest since the fourth quarter of 1983.This situation has contributed to the surge in imports.

Regarding corporate profits, they rose 2.9% in the second quarter, less than half indicated an initial estimate.

Stallergenes on Thursday posted first-half results up, thanks to a temporary decline in its investments in research and development, but adding that his efforts in this matter would resume in the second half.

The pharmaceutical company specializing in the treatment of allergies has also confirmed in a statement it expects for 2010 a growth of over 10% of its business and a "significant increase" in operating margin, which was 16.7 % in 2009.

"Investment in R & D will resume in the second half that the total exceeds the 2010 level of 2009 in absolute terms (…) The recovery of investment in the second half will slightly affect the generation of free cash flow, which is on the whole of 2010 higher than the year 2009 "has also indicated Stallergenes.

The group posted a first half net profit group share of EUR 20.2 million (+51%), a gross operating profit (EBITDA) of 35.6 million (48%) and a number of business – already published – of 110.6 million (+13%).

Stallergenes particularly benefited from sales in Germany of its blockbuster drug, the Oralair, treatment of pollen allergies which will also be launched in autumn in the Netherlands, the Czech Republic, Slovakia and Austria.

Effectiveness tests Oralair have also been made in the spring in the United States, where Stallergenes intends to introduce in early 2011 an application for authorization on the market.As regards France, the Transparency Commission should make a public notice by the end of the year.

The group, which Wendel holds 46% stake, said its costs of R & D showed a significant decrease of 22% in the first half from 21.8% of sales in 2009 to 15.0% this year .

This decrease was due to a lag between the end of current clinical trials – particularly the Oralair United States – and the scalability of the new studies.

Before the publication of interim results, the action Stallergenes closed up 4.37% to 56.18 euros, a market capitalization close to 713 million euros.

Carrefour accused of trademark infringement a Chinese supermarket chain uses his Chinese name and logo, the China Daily reported Wednesday.

Hearings began on August 18 before the Intermediate People's Court of Hefei, capital of Anhui province (east).

The French group, number two worldwide in distribution, is the chain Anhui Jiali Supermarket Chain Co Ltd and its branches in the neighboring province of Fuyang.

Carrefour said that the chain uses its Chinese name "Jialefu" – which means "happy family" – and its logo in 160 stores in the city of Fuyang.He asked the court to order a change of logo and claim compensation of up to six million yuan (700,000 euros).

Anhui Jiali, founded in 2002, was initially registered under the name of Anhui Fuyang Jialefu Business & Commerce Co Ltd before changing "Jialefu" in "Jiali" in August 2009.

He did not have infringed the trademark of Carrefour as the name was changed before the French group fails to file its complaint, the China Daily reported, citing Xinhua.

Carrefour established a foothold in the Chinese market in 1995. It has opened 157 stores and plans to increase this number to 185 by the end of this year, said the English daily.

List of values of the day Monday at the Paris Bourse, where the CAC 40 closed up 0.77% to 3553.23 points in thin turnover of 2.1 billion euros on Euronext Paris.

* EADS (3.52% to 18.525 euros) finished top of the index increases, supported by the rising dollar against the euro.

* TOTAL (0.68% to 38.025 euros), SANOFI-AVENTIS (1.91% to 45.825 euros), BNP Paribas (1.27% to 51.67 euros) and FRANCE TELECOM (1.55% to 16.345 euros) were the main contributors to the increase of ACC.

* SANOFI-AVENTIS. The absence, for several days, new information on the interest for American SANOFI Genzyme could mean that both sides have begun discussions, said Geoffrey Porges, an analyst at Sanford Bernstein.(See)

* Like BNP Paribas, the bank stocks have been well directed, buoyed by the resumption of mergers and acquisitions, including the announcement of exclusive negotiations launched by HSBC to acquire a controlling stake in South African Nedbank.

Credit Agricole gained 1.4% to 10.165 euros, Dexia 1.01% to 3.40 euros and SOCIETE GENERALE 0.46% to 41.285 euros. Outside the CAC 40, NATIXIS took 5.30% to 4.33 euros.

* SUEZ ENVIRONNEMENT (-1.19% to 12.89 euros), EDF (-0.76% to 31.8 euros) and ALSTOM (-0.65% to 39.715 euros) recorded the largest declines the CAC 40 .

Eric Woerth said Tuesday on France 3 that he "was not thought to resign" for the government in connection with the case Liliane Bettencourt, arguing that "there is also no reason (that it) does so.

The Minister of Labour MPs denounced before the attack "disgusting", "disgraceful", adding: "my integrity like that of Florence (his wife, ed) is total.

"Neither she nor I have been informed of any fraud or tax evasion" and "never, I repeat, I never gave any instruction to the tax authorities regarding the situation of Mrs. Bettencourt, or that of The Oreal, "said the minister.

"The role of my wife was placing the dividends of the company L'Oreal paid annually to Mrs. Bettencourt, wife of Andre Bettencourt, minister of General de Gaulle, in a transparent and legally," he reiterated.

"I'm the right target at the right time," he also said the minister, one of the most to the government for several weeks with the pension reform.Without naming Mediapart, who last week revealed the clandestine recordings led to controversy, he cited "information that turns a website for commercial purposes, and perhaps even politics."

Bettencourt on the list of tax evaders?

Eric Woerth, has refused to say Tuesday on France 3, if the billionaire Liliane Bettencourt account or not among the French taxpayers suspected of holding assets abroad.

"I can not answer this question because the tax is secret," said the former Minister of Budget (May 2007-March 2010), when he was questioned shortly before the meeting questions Government House, on the possible presence of the name of billionaire heiress L'Oreal on a list of thousands of French taxpayers.

This list, he said, had been "sent to the President of the Finance Committee of the Assembly and its rapporteur, who saw it. It is in the hands of the treasury. Thousands of tax audits have been triggered" , "he added.

In August 2009, Mr. Woerth was revealed to have this list in his possession.

The budget minister had opened in spring 2009 and deferred a cell for taxpayers wishing before December 31, 2009 regularize their tax affairs spontaneously. This cell was closed as planned at this deadline.

The consumer credit fell in June in the U.S. for the fifth consecutive month, according to figures released Friday by the Federal Reserve, which emphasize the reluctance of households to spend while unemployment remains high and the economic climate remains uncertain.

This decline, however, remains lower than predicted economists surveyed by Reuters.

The outstanding credit has declined from 1.34 billion, significantly less than the decrease of 5 billion expected by the market.

The May figure was revised downwards its decline, originally announced to 9.15 billion, has finally emerged as -5280000000.

Rio Tinto reported a record net profit in the first half, thanks to a recovery in metals prices and a utilization rate of its mines near 100%.

Current profit mining giant in the first six months of the year amounted to 5.8 billion dollars against 2.6 billion a year earlier and 5.5 billion expected by analysts, according to a consensus reached by the company.

Rio Tinto, which provides a significant recovery of its investment in the second half, has reached its first-half profits highest since at least 10 years.

The analysts will review the European stock markets are likely to lower their forecasts for corporate earnings in 2011, a slowdown of the global recovery, which should not leave indifferent markets already wavering.

Many industries, such as construction and automobile sectors have already incorporated this possibility in their share price but the whole market could suffer from the eventual realization of these new forecasts in fear of a relapse into recession, analysts said.

It is expected that companies in the MSCI Europe achieved an average increased earnings by 18.4% in 2011, according to Thomson Reuters data I / B / E / S, after an expected growth 33% this year.

Given the low U.S. household consumption, the slowdown of the box real estate market of China and the European dose of austerity, even this forecast may be optimistic, tacitly implying the possibility of further downgrades.

"The earnings cycle is now starting to return.If we compare the number of upward revisions and the revisions downward, the ratio starts to reverse, "said Gareth Evans, market strategist at Deutsche Bank.

"You wonder anxiously whether the results that were observed in the first quarter and we see now in the second quarter may continue through the rest of the year."

The tendency to downgrade earnings estimates for 2011 due to a slowdown in economic activity and an unfavorable base effect, the consensus for 2010 have ceased to be revised upwards in recent months.

Credit Suisse analysts estimate that the luxury segment, distribution, aerospace and defense would be at more risk if the growth forecasts of sales by 2012 were to be halved.

Signs of slowdown are multiplying: an annualized basis, the U.S. economy grew by only 2.4% in the second half after a revised figure of 3.7% last quarter, while the annual growth rate of China, while surpassing the developed countries, has also slowed from 11.9% in the first quarter to 10.3% in the second.

THE PROTECTION OF LOW VALUE

One factor that may protect the European markets as a whole from the consequences of a serious decline is forecast PER, which suggests that market valuations are low.

"If you look at market valuations, they suggest that it does not really believe in consensus for next year, otherwise the shares would be exchanged with a multiple stronger", said Robert Parkes, equity strategist at HSBC.

"That is why the multiple future results are also low compared to where we are normally at this stage of the cycle.

MSCI Europe released a PER of 10.27 in the one-year horizon, against a 20-year average of 14.98, according to Thomson Reuters DataStream.The S & P 500 gives a PER to a gap year against 16.2 11.92 average over 20 years.

Credit Suisse believes that sectors such as construction, steel, automotive, media and tourism and recreation have been incorporated into their lessons the risk of a halving of growth estimates of numbers of business.

THE FEAR OF RECESSION THE HAUNTED SPIRITS

The low valuation of companies aside, analysts believe that the forecast flat sales and profits stable or decline, fueled by fear of another recession, certainly hit all the European stock market, which has won 3.2% since the beginning of the year.

None of the areas tested by Credit Suisse had incorporated the cost of a scenario of flat sales for two years until late 2012.

The consensus on the growth of corporate profits for 2011 of the MSCI Europe has been gradually reduced from 28% in late January to 18.4% currently. For the consensus on increasing corporate profits in the S & P 500, it drops to 15.8% in 2011 against 37.5% in 2010.

It should, however, that the global economy plunges into recession for the consensus of the profit trend in 2011 gives a negative percentage.

"The consensus for next year stood at around 19%. We anticipate rather something closer to 10%.Going from 19-10% is manageable for the market, "said Nick Nelson, UBS." But if we fall from 19% to, say, zero, or in the negative, obviously it will be a shock to market, it is evident that it will not be able to handle it. "

The balance of the summer sales that ended this weekend was "generally satisfactory", said Herve Novelli, Secretary of State for Trade, while industry professionals have reported mixed sales.

Herve Novelli made an appointment to the press Tuesday afternoon at the department store Galeries Lafayette in Paris for a first quantitative assessment of balances.

"Let's wait tomorrow but overall it's been satisfactory," he said on RTL, while recognizing that the consumption, traditional engine of the French economy, going through a difficult period.

"The French are very careful right now with their spending and understate their expenses over a number of positions, not necessarily good for the consumer," he said.

In anticipation of summer sales, household consumption of manufactured goods fell 1.4% in June compared to May, with a fall of 5.0% for the post of clothing, according to statistics published July 23 by INSEE.

GREY MINE

In early July, retail, had reported good results for the first week of sales, which began this year on June 30, five days later than in 2009.

Attendance malls has reached a record level during the first weekend while department stores reported sales were up by 10-17%.

"But after the first few days of excitement, enthusiasm and fell, at the balance sheet, traders are long faces," wrote Le Parisien in its Monday edition.

"The record is not good.Sales have not fallen short despite good weather, "said Francois-Marie Grau, general delegate of the Federation of ready-to-wear, in an interview with the newspaper.

It involves the problem of purchasing power but also the introduction last year of the "floating balance" – two weeks balances freely determined by traders – who, according to him, disrupt customers by depriving them of fixed points .

"We must review the regulations for floating balances are organized nationally and at fixed dates," asked Francois-Marie Grau.

The industry also complained about the shift of one week of sales compared to 2009 and competition from the Internet.

The more favorable exchange rate of the euro has however given a boost to exports.

Altogether, according to Francois-Marie Grau, "The year 2010 should be stable, with growth below 1%, but it will not allow us to catch up in 2009 when the turnover of the sector decreased by 3.7% .