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Not only the US and their banks are back to growth, but they will be boosted by the Chinese strong reactivity. Chinese stimulus
was the first one to reach the real economy. Its government yesterday pledged once again to throw as much liquidity as necessary at the
economy to ensure that the country’s overall economic activity remains buoyant. And sure enough, this influx of liquidity (Chinese M2 is
now growing at a record high +25.5 YoY, that’s 4% more than the previous record made at the time of the SARS, remembering that the
massive liquidity injections of 2003 led to record high GDP growth in 2004) is already having a serious impact on asset prices. There are
now undeniable signs of life in the Chinese real estate market with lower property prices, and lower mortgage rates, helping fuel a surge
in demand. In the first quarter of the year, sales value rose by 23.1% YoY while investments in property increased 4.1%. In fact, if China
is now the main “leading indicator” of global growth, which some economists would say that its property business has to be the “leading
indicator of the leading indicator”. As such, this morning the +6.1% GDP is a reference as it is seen as a an economic activity bottom,
from which a recovery will follow, according to economists consensus.
Again we totally agree that everything is not crystal clear, which is precisely the reason for the current controversial debate of the
bear market rally or else a resuming bull trend, ending the bear one which started in 2001. It is very common to see equity indices reverse
their bear trend while economic data are still gloomy. But same as on the downside, the bid and offer rule is driving a market, and the lack
of selling pressure (reflecting the end of the deleverage from hedge funds) combined to some strong possibility to see economic
landscape improving is so far perfectly justifying the latest upside run. Indeed, it makes no doubts now that we are not in a 29 Great
Depression scenario, probably thanks to the huge and prompt reactivity from worldwide officials (mostly US, Chinese and UK ones), and
this is worth a premium. If the Great depression fear turns to be a classic crisis, there will be an outcome which should head toward some
improvement, given the lower yields and energy prices bringing some stronger purchasing power to households. And this is a scenario
worth playing in term of risk reward, which only a few fund managers are keen on betting on for now. As such, any slight details telling
about the inside of quarters, or months, or weeks, through macro or corporate events is a matter to bring further equity rise, or present a
short opportunity.
Speaking to a demanding and qualified reader (always welcome to debate) we had the opportunity to discuss the inventory
levels. Yes, it might not be on lowest level, but it is interestingly down from the year before, and the ratio inventories by sales is dropping,
which you will see mostly occur at a time when the growth is reversing. The high inventory – sales ratio was lastly seen in 2001 when
growth slowed sharply. What is interesting in this ratio is that it was on a reasonable level on the times of fast growth (even though the
inventory level was very high). And what we want to say is that inventories did help creating a strong Q2 and Q3 GDP last year, same as
it killed the Q4 and (certainly) Q1 09 pace as firms were certainly not refuelling given the sharp economic fall, where cash is king was the
biggest reco to follow in order to survive (banks locking the credit activity). Stabilizing housing markets, lower yields, huge stimuli and a
rebounding equity market would very quickly drive the ratio inventory-sales sharply down boosting even more the economic recovery as
soon as things are picking up, or just become stable in term of growth, thanks to a need to rebuild inventories to fit a new economic pace,
whatever it is providing it is not negative.
Yesterday, the NAHB Housing Market Index for April (14 vs. 9) gave a boost to homebuilders and the overall equity market.
Builder confidence in the market for newly built, single-family homes rose five points to the highest level since October 2008, according to
the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). This gain was the largest one-month increase
recorded since May of 2003, and brings the HMI out of single-digit territory for the first time in six months. Every component of the HMI
reflected the boost, with the biggest gain recorded for sales expectations in the next six months (25 vs.15). “If you’re a potential buyer
who’s been sitting on the fence waiting for a sign that now is the time to act, this is it,” said NAHB Chairman Joe Robson, a home builder
from Tulsa, Okla. “Some of the most favourable buying conditions in a lifetime are now in place, and they are drawing more consumers
back to the market.” “This is a very encouraging sign that we are at or near the bottom of the current housing depression,” said NAHB
Chief Economist David Crowe. “With the prime home buying season now underway, builders report that more buyers are responding to
the pull of much-improved affordability measures, including low home prices, extremely favourable mortgage rates and the introduction of
the $8,000 first-time home buyer tax credit.”
Earnings in both Europe and US will be the focus for today and tomorrow (see board below).
WTI €/$ $/¥ 10 yr US 10 yr Euro Basic Energy Financ Health Tech Tel Indus Utilities SOX S&P NAS DOW Close

Last 49,7 1,3203 98,97 2,77 3,14 1,17 0,39 5,15 0,54 -0,57 1,00 1,31 1,42 -1,51 1,26 0,07 1,38 US
Perf 1d % 0,81 -0,18 0,40 0,91 bp -5,7 bp 0,03 0,15 0,10 0,21 -1,91 0,73 1,01 0,41 -3,12 0,04 -1,16 0,28 Europe
ECONOMIC DATA with impact
NOKIA (11 UK time)
JP Morgan (before market open)
Jobless Claims (12h30 gmt) expected 660k from previous 654k / minor as weekly data / the higher the better
Housing Starts (12h30 gmt) expected 540k from previous 583k / any improvement is welcome / minor
Building Permits (12h30 gmt) expected 549k form previous 547k / minor
Philadephia Fed index (14h gmt) expected –32 from –35 / minor
Atlanta Fed president Lockhart speaking on the financial crisis (17h gmt)
San Francisco Fed President Yellen speaking on the financial crisis (mid night)
POSITIVE IMPACTS
PERNOD RICARD trades ex-right today / Reuters ticker is PERP_r.PA / Bloomberg ticker is RIDS FP / ISIN : FR0010749887
ROCHE : Q1 sales SFR11.6bn, in line, with pharma SFR9.2bn (9.17bn exp) but thx to Tamiflu / Confident that ite can achieve its FY
targets / Mabthera got EU approval as treatment for lymphocytic leukemia / FY outlook update with impact of genentech with H1 results
FIAT : Brazilian car sales will be better in the Q2 than the already strong Q1 (CEO at Fiat Brazil)
TOTAL is well-placed to win Iraq contracts (Iraq's vice-president) / Separately, Total’s CEO is (not surprisingly) expecting the company's
2009 profits to be "considerably" lower than those of 2008 (Challenges)
ZURICH FINANCIAL : AIG is close to a deal to sell its U.S. auto insurance business to Zurich Financial Services for roughly $1.5 bn
THYSSENKRUPP : The chairman of the Krupp foundation that controls a blocking minority in ThyssenKrupp, is pushing for a high
dividend for the current year to help fund charitable activities, despite the possibility of a FY loss (Handelsblatt)
ATOS : Q1 rev. €1.29bn, in line / Cut net debt to €296 m at end-March (€304m end-Dec.) / Kept 2009 financial goals given on Feb.18
SEMI SECTOR : NEC Electronics and Renesas Technology Corp are in the final stage of talks on a merger (Japanese press)
SABMILLER trading update : Financial results remain in line with Co’s own expectations / Continued to benefit from price increases
EUROPE MARCH NEW CAR REGISTRATIONS -9% on year : FIAT +14% / VOW -0.3% / FORD -7.7%

AMERICAN EXPRESS signalled the ability of some consumers to pay their bills is stabilising (AMEX finished up 11.9%)
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16-Apr-09 EARNINGS FESTIVAL

NEGATIVE IMPACTS
STM said its supervisory board approved a proposal to cut its quarterly dividend by 2/3 TO $0.03, citing the "unstable market."
FRANCE TELECOM : Orascom Telecom said FTE had not met a deadline set by the Egyptian firm to complete a deal for buying its
shares in mobile phone company Mobinil…
DANONE : Q1 sales € 3.67 bn, in line, but with organic growth of 1% (+1.4% exp) / Confirmed 2009 earnings targets
NOVARTIS : A high dose of Diovan failed to prevent recurrences of atrial fibrillation, that increase the risk of stroke (Italian researchs)
BHP Billiton agreed with Nippon Steel a 70% drop in quarterly manganese contract prices (Steel Business Briefing)
SULZER : Q1 order intake SFR 839.3 m (848m exp) / Expects order intake to remain clearly below 2008 level / Read across Vallourec
DASSAULT SYSTEMES : Q1 preliminary revenue €310m, below its own target of €325-335m / EPS seen around €0.37, at the lower
end of its guidance range of €0.36 to €0.42 / Operating margin likely to be around 19%, within its guidance range of 18% to 21%
ANGLO AMERICAN announced that it intends to make an offering of $1.5 bn principal amount of Convertible Bonds due 2014
EUROPE MAR NEW CAR REG. -9% on year : BMW -21% / GM -20% / DAIMLER -15% / TOYOTA -12% / RNO -10.9% / PSA -9.1%
RESULTS DIVIDENDS EVENTS
Danone sales / Carrefour sales / Roche sales / Accor sales /
Atos Origin sales / Silzer order intake / Nokia (10.00 GMT) / Groupe Bruxelles Lambert (€2.30) / Lonza ( CHF L'Oreal AGM 8.00 GMT / BP AGM / Texas
Today
OMV / Google (AMC) / JP Morgan (12.00 GMT) / Coca Cola 1.75) Instruments AGM
Co / Pfizer
OMV / Citigroup (BMO) / General Electric (BMO) /
Friday Sanofi AGM / Corio AGM / Italcementi AGM
Honeywell / Merrill Lynch / Sony Ericsson (BMO)
Groupe Bruxelles Lambert / Alfa Laval / Soitec / IBM /
Monday Morgan Stanley / Bank of America / Halliburton / Texas Telecom Italia (€0.05) Rio Tinto AGM
Instruments / Eli Lily
PPR sales / Logitech / Faurecia / Tesco (BMO) / Coca-Cola
/ Manpower / Caterpillar / Merck & Co (BMO) / American Deutsche Post AGM / Mediaset AGM / Citigroup
/ Alpha Laval (SEK 2.25) / Corio (€2.64) / Henkel
Tuesday Express / British Food / AMD / DuPont / Schering-Plough AGM / Swisscom AGM / Union Fenosa AGM / Reed
(€0.53) / L'Oreal (€1.44)
(BMO) / United Tech (BMO) / Yahoo! / State Street / Elsevier AGM
Lockheed Martin / US Bancorp (BMO)
GSK / Iberdrola / Tele2 / Apple (AMC) / Boeing / AT&T BAE Systems ( GBp 9,666667) / Cadburry (GBp
Wednesday (BMO) / Mc do / Air Product and Chemicals / Alcon / eBay / 12.33333) / Deutsche Post (€0.60) / Reed Mun Re AGM
Xilinx / Wells Fargo Elsevier PLC (GBp 16,66667)
TRADING IDEAS
Target short term 2358 cash eurostoxx // Nasdaq downside gap left on 1590 cash index
BUY OIL names as TOTAL (dble bottom) / ENI / BP / ROYAL DUTCH to play the economic recovery
BUY L OREAL / AXA / AEGON / SIEMENS which just closed their gap ready to resume their upside move
BUY AHOLD / GSZ / FTE on double bottom possibility

BUY AHOLD / SELL CARREFOUR & METRO // BUY CAP / SELL SAP // BUY BAYER / SELL BASF // SANTANDER / SELL DBK // BUY PFIZER /
SELL BRISTOL // BUY TOTAL / SELL ENI // BUY AEGON / SELL ALLIANZ

BROKER METEOROLOGY
UNIBAIL-RODAMCO ...RAISED TO OVERWEIGHT ....................................................................................... BY MORGAN STANLEY
KLEPIERRE .................RAISED TO EQUAL WEIGHT .................................................................................... BY MORGAN STANLEY

LAND SECURITIES ......RATED UNDERWEIGHT ............................................................................................ BY MORGAN STANLEY

BURBERRY ..................CUT TO NEUTRAL FROM OVERWEIGHT ............................................................................. BY JPMORGAN
JCDECAUX ...................CUT TO SELL FROM NEUTRAL AND ADDS TO EUROPEAN MEDIA LEAST PREFERED LIST ..... BY UBS
TELECINCO .................CUT TO NEUITRAL FROM BUY .................................................................................. BY GOLDMAN SACHS
OLD MUTUAL ...............CUT TO NEUTAL FROM BUY ............................................................................................................. BY UBS
NESTE OIL ...................RATED NEW UNDERWEIGHT ................................................................................................. BY BARCLAYS

PLEASE FIND BELOW ON THE NEXT PAGE OUR MORNING ECO

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16-Apr-09 EARNINGS FESTIVAL

CHART OF THE DAY

US Consumer Price Index % (YoY)
Since 2005

-1
2005 2006 2007 2008 2009

Source : Bureau of Labor Statistics

Inflation in the U.S reached negative territory and fell of 0.4% from a year ago ( forecast -0.1%) in March . Inflation reached a lowest
since 1955 in the United-States. Despite what the annual headline inflation suggest, the risk of deflation remained weak at the opposite
of the situation in the euro area. Meanwhile the decline of U.S inflation can push the Fed to widened its quantitative easing policy.

ECONOMIC DATA
Time Country Indicator Period GE forecasts Consensus Previous
3.00 GMT China Real GDP First quarter 6,2% YoY 6,8% YoY
3.00 GMT China Producer prices index March -5,8% YoY -4,5% YoY
3.00 GMT China Consumer prices March -1,3% YoY -1,6% YoY
3.00 GMT China Industrial production March 6,3 % YoY 11,0% YoY
7.00 GMT Japan Machine tool orders (final) March -84,5 YoY
3.00 GMT China Industrial production March 6,3 % YoY 11,0% YoY
10.00 GMT Euro area Consumer price index March + 0,4 %, + 0,6 % YoY + 0,4 %, + 0,6 % YoY + 0,4 %, + 0,6 % YoY
10.00 GMT Euro area Consumer price index core (ex food and energy) March 1,4% YoY 1,7% YoY
13.30 GMT United States Housing starts March 590 000 540 000 583 000
13.30 GMT United States Building permits March 570 000 549 000 564 000
13.30 GMT United States Initial jobless claims April 11 th 658 000 654 000
13.30 GMT United States Continuing claims April 4 th 5 893 000 5 840 000
15.00 GMT United States Philadelphia Fed. April -32 -35

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

DJIA 8029,6 3,08% - 8,51% EUR/USD 1,3191 0,24% -5,52%
S&P 500 852,1 4,49% - 5,67% EUR/JPY 130,45 1,27% 2,96%
Nas daq 1626,8 4,18% 3,16% USD/JPY 98,89 1,52% 8,37%
CA C 40 2985,7 1,94% - 7,22% Oil Price % 5 Days Ytd
DA X 4549,8 4,60% - 5,41% Brent $/b 51,5 2,16% 23,59%
Eur os tox x 50 2263,0 3,87% - 7,54% Gold Price % 5 Days Ytd
DJ 600 190,5 3,14% - 3,95% Gold $/oz 891,8 1,40% 1,09%
FTSE 100 3968,4 - 0,52% - 10,50% Rates USA Euro Japan
Nikkei 8765,2 1,72% - 1,07% Central Banks* 0,25 1,25 0,10
Shanghai Comp 2545,1 8,05% 39,78% Overnight 0,10 0,75 0,10
Sens ex ( India) 11249,4 9,04% 16,61% 3 Months 0,14 0,72 0,20
MICEX ( Rus s ia) 906,0 3,81% 46,24% 10 Y ears** 2,78 3,14 1,46
Bov es pa ( Bras il) 45272,7 3,30% 20,57% *US: Fed Funds; Jap: Overnight; Euro: Ref i
** Euro: German Bund rate So urc e : B lo o m berg
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ECONOMIC DATA PREVIEW

Watch in the United-States the housing starts and the building permits for March due at 13.30 GMT, both expected to pursue their
rebound as real estate prices and hypothec rates are decreasing. Watch as well the weekly release of the initial jobless claims and the
continuing claims . Jobs destruction are expected to increase as in addition to the global economic downturn representing only 50 %
of the lay off there is a fear state of mind representing roughly 50 % of the jobs destructions . Watch in the Euro area the release of
the consumer price index due at 10.00 GMT expected to pursue its decrease trend. The Euro area is getting closer and closer to a
deflation situation /JB

ECONOMY
UNITED-STATES : CONSUMER PRICES DROPPED THE MOST IN 54 YEARS (YOY)
Inflation in the U.S reached negative territory and fell of 0.4% from a year ago ( forecast -0.1%) in March . Inflation reached a lowest
since 1955 in the United-States .Monthly consumer prices fell from 0.4% in February to -0.1% in March. The year on year drop of U.S.
inflation is mainly due to the drop in energy prices last year as the barrel which reached $147 in July 2008 has been divided by five in
the next following five months. Obviously the consumer price decline is due as well to the global economic downturn contracting the
activity. Meanwhile the core inflation ( ex food and energy) rose( 0.2%,+1.8% YoY) as in February confirming that the drop of consumer
price index is mainly due to the drop of energy (-3.0%) and food (-0.1%) prices. Nevertheless as previously mentioned another part of
the inflation’s decline reflect the weakness of consumer demand, particularly the 0.2% decline in clothing price and the 2.4% in hotel
room rates. On the other hand with the oil price stable around $ 50 we do not expect any significant decline in energy prices in the
coming months . Despite what the annual headline inflation suggest, the risk of deflation remained weak at the opposite of the situation
in the euro area. The decline of U.S inflation can boost the Fed to widened its quantitative easing policy.

UNITED-STATES : INDUSTRIAL PRODUCTION DROPPED MORE THAN FORECAST AND THE CAPACITY UTILIZATION FELL THE MOST ON RECORD IN MARCH
After dropping of 2.0% in January and of 1.5% in February American industrial production was expected to drop again in March as the
ISM manufacturing remained weak ( 36.3 in March) and as the global economic downturn and the weak domestic demand are humping
companies production. Nevertheless industrial production was expected to drop at a slowest pace than February figure but the scenario
was different. Indeed the drop reached 1.5% (forecast - 0.9%). Manufacturing output fell by 1.7% led by a 4.2% decline in machinery. If
we look to the breakdown by product output of consumer goods fell by a modest 0.3% in March compared to 0.7% in February and
2.2% in January but on the other hand business equipment fell by 2.3% up from 1.5% in February. It is important to bear in mind that the
industrial sector account only for 13 % of the GDP in the United-States versus 20% in the euro area and 24% in Germany. Meanwhile
the capacity utilization which reached their lowest level at 70.3% in February are digging and dropped at 69.3% in March there lowest
level since the index creation in 1967. This is a clear statement that the huge contraction of the activity is not over.

UNITED-STATES : FED BEIGE BOOK

Report from the twelve Federal Reserve Districts indicate that economic conditions have weakened since last report. Nine Districts
noted slowing in the pace of economic activity, while the remaining three : Boston, Cleveland, and Richmond described the activity as
mixed or steady. If we look to the breakdown consumer spending weakened in most, retail inventories were generally reported to be
steady, manufacturing activity was varied, housing markets and home construction remained sluggish through most of the nation, banks
reported mixed trends in lending activity, credit quality was reported to have deteriorate and despite some variation across districts
employment levels appeared to be little changed , on balance from recent months.

GERMANY : WHOLESALE PRICES DECLINE THE MOST IN 22 YEARS

After reaching their highest level in July 2008 ( 9.8%) at a time when the barrel was at $ 147 , wholesale price start a decline trend lead
by the drop of energy and commodity prices. Indeed wholesale prices are in negative territory since November 2008 and reached there
lowest level in 22 years (YoY) in March at -8.0%.Meanwhile German’s wholesale dropped from -0.1% in February to -0.9% in March.
German inflation has slowed to the lowest level rate in almost 10 years after oil prices fell and due to the global economic downturn. We
can say that Germany is now getting closer and closer to a deflation situation as the euro area./JB
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16-Apr-09 EARNINGS FESTIVAL

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
16/04/2007 16/10/2007 16/04/2008 16/10/2008 16/04/2009 16/04/2007 16/10/2007 16/04/2008 16/10/2008 16/04/2009
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
16/04/2007 16/10/2007 16/04/2008 16/10/2008 16/04/2009 16/04/2007 16/10/2007 16/04/2008 16/10/2008 16/04/2009
Source : Bloomberg Source : Bloomberg

Oil : Brent ($/b) Forex: Eurovs 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
16/04/2007 16/10/2007 16/04/2008 16/10/2008 16/04/2009 16/04/2007 16/10/2007 16/04/2008 16/10/2008 16/04/2009
Source : Bloomberg Source : Bloomberg
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