HALISTER1: EU CREDIT DAILY: Earnings Fillip for Risk; AstraZeneca Beats

EU CREDIT DAILY: Earnings Fillip for Risk; AstraZeneca Beats

(Bloomberg) -- Largely positive quarterly earnings headlines and the Fed’s guarded optimism are helping boost sentiment ahead of the traditional August lull, Bloomberg strategist Simon Ballard writes.
  • Investors need to remain cognizant of any divide between positive headline earnings numbers and less robust underlying revenue and sales growth data
    • EA shows S&P500 current quarter sales surprise running at +1.21%; earnings surprise +5.76%
    • Underlying Q2 sales growth +1.02%; earnings growth -3.0%
  • Compressed credit spreads and well anchored yield curves underscore investor bias for bottom-up, fundamental investment research, issuer differentiation
  • CDX IG closed -0.4bps at 79.20 in overnight session; iTraxx Asia Ex Japan IG currently -0.7bps at 119.94 and iTraxx Australia quoted -2.2bps at 109.12
NEWS
  • Corporate News
  • AstraZeneca 2Q Core EPS Beats Estimates, Keeps 2016 Outlook
  • Telefonica 2Q Oibda EU3.92B; Est. EU3.9B
  • Danone First-Half Earnings Top Estimates on Price Increases
  • SoftBank 1Q Profits Rise as Japan Telecom Ops Offset Sprint
  • BAT 1H Adj. Operating Profit, Adj. Diluted EPS In Line
  • Diageo FY Sales in Line With Ests.; Confident on FY Targets
  • Samsung Electronics 2Q Net 5.83t Won; Est. 5.64t Won
  • Virgin Australia 4Q Total Capacity Down 4.5%
  • Hyundai Heavy Rises on Biggest Quarterly Profit in Three Years
  • Suncor Reports Quarterly Loss as Production Curtailed by Fire
  • Prosegur 1H Net EU80.7M Vs EU77.6M a Year Earlier
  • Malaysia Airports 2Q Net 9.38m Ringgit Vs 19.88m Loss Y/y
  • Nexans Swings to 1H Profit, Sees ‘Unsettled’ Environment in 2H
  • Renault First-Half Profit Rises 41% With 10 New Cars Planned
  • Carrefour 1H Recurring Operating Income Beats Ests.
  • Schneider Electric Upgrades FY Adjusted Ebita Margin Target
  • Total Profit Beats Ests as Cost Cuts Deepen Amid Oil Slump
  • Shell Profit Drops 72% on Lower Oil, Weaker Refining Margins
  • Centrica’s First Half Profit Drops Amid Weak Commodity Prices
  • Repsol 2Q Adj. Net EU345m; Est. EU342.1m
  • BT 1Q Sales, Adj. Ebitda In Line With Ests.; Confirms Outlook
  • Rolls-Royce 1H Profit Beats Est; Outlook Unchanged
  • BAE Systems 1H Profit Misses Est; Forecast Reiterated
  • Smith & Nephew 1H Rev. In Line; CEO Confident on Prospects
  • Sky FY Revenue Beats; Says On Track to Achieve Synergy Targets
  • VW Brand’s First-Half Profit Falls 36% Amid Emissions Scandal
  • Nissan Profit Declines on Yen, Mitsubishi Motors Posts Loss
  • Financial News
  • Credit Suisse Posts Surprise Profit in Second Quarter
  • Lloyds 1H Underlying Profit Beats Estimate; Plans More Cost Cuts
  • BNP Profit Is Little Changed as Low Rates Offset Bond Gains
  • Nomura’s First-Quarter Profit Declines Less-Than-Estimated 32%
  • Macquarie Reiterates Flat 2017 as Quarterly Profit Slips
  • Schroders 1H Adj Pretax, Inflows Drop, Sees Impact on Demand
  • AIB 1H Pretax EU1B vs EU1.2B; Bank Repays Irish State EU1.8B
  • Credit Rating News
  • S&P Outlk To Stable Fm Neg On Alta Wind Hldgs; ’BBB-’ Rtg Afmd
  • Fitch: Expected Shift in China’s Corporate Profiles Optimistic
  • S&PGRBulletin: Woolworths Ratings Unaffected By Restructuring
  • Fitch Affirms ANZNZ’s Covered Bonds at ’AAA’; Revises D-Cap
  • Other News
  • Italians’ Nest Eggs Risk Cracking as Bank-Rescue Plans Mulled
  • Brexit to Weaken U.K. Housing in Near-Term, Nationwide Says
ANALYST VIEWS
  • Santander is experiencing inevitable pressure on the net interest margin, but largely compensating for it with a combination of higher fee income and lower loan impairments: CreditSights
NEW ISSUES
  • EIB EU400m 0.875% 9/2024 Tap at MS -24
  • Rentenbank EU300m 0.625% 2/2030 Tap at MS -18
  • European IG credit pipeline here and HY credit pipeline here
  • Issuers exposed to S-T rollover and interest-rate reset risk here
  • NOTE: Simon Ballard is a credit strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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AZN LN (AstraZeneca PLC)

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