Halister News

(Bloomberg) -- EU credit market sentiment stabilizes, as U.S. election outcome is assessed, after losses were recouped by Wednesday’s close; Asian risk assets extend recovery in overnight rally, Bloomberg strategist Simon Ballard writes.

• Earnings sesson remains in full spotlight; U.S. (S&P500 index) 3Q earnings +2.99% sales growth, +2.74% earnings growth
  • EUR (BE500 index) 3Q season currently yielding +20% earnings growth, but -2% sales growth
  • Auto sector may find itself back under scrutiny, spreads pressured wider, as Renault now referred to French prosecutors over diesel emissions

• Bloomberg Barclays Eur-Agg Corporate index closed Wednesday at 113bps (+2bps); Bloomberg Barclays Eur HY index closed at 395bps (+10bps)
• CDX IG closed Wednesday -0.2bps at 75.64; iTraxx Asia Ex Japan IG is currently -1.0bps at 117.38 and iTraxx Australia quoted -3.1bps at 105.49

NEWS

• Corporate News
• AstraZeneca 3Q Core EPS Beats, Revenue Misses; Keeps FY Forecast
• Dairy Crest 1H Revenue Drops, Adjusted Pretax Profit Rises
• National Grid 1H Operating Profit Up, Sees In-Line Performance
• Lagardere 3Q Revenue Rises, Confirms Ebit Growth Target
• ITV Sees 4Q Ad Revenue Down on Political, Economic Uncertainty
• San Miguel’s 9-Month Net Income Said to Be 43b Pesos
• Halfords 1H Adjusted Pretax Drops 12%, FY To Be As Expected
• Continental Profit Tumbles 40% on Warranty, Research Expenses
• Vedanta 1H Ebitda $1.2b Down 4% Y/y, Operating Profit $720m
• Puma Raises Outlook as Third-Quarter Earnings Beat Estimates
• Sappi 4Q Ebitda Ex-Special Items Rose to $209m vs $201m Y/Y
• Deutsche Telekom Earnings Rise as U.S. Business Wins Users

• Financial News
• Denmark’s Nykredit Sells Headquarters for DKK1.4 Billion
• Aurelius Sees More Corporate Transactions in Coming Months
• Hannover Re 3Q Profit Beats Ests.; Sees 2017 Net Income Higher
• Aegon Posts 3Q Net Income vs Loss; Underlying Pretax Drops 7%
• 3i Group Net Asset Value Rises 38% on Infrastructure Unit Growth
• Deutsche Bank Has Customers’ Confidence, Matherat Tells Echos
• Generali CFO: Impact From Italy Earthquakes EU16m So Far

• Rating News
• S&PGR Affirms U.S. ’AA+/A-1+’ Ratings; Outlook Remains Stable

• Other News
• Trump Starts New Political Era as Republicans Claim Mandate
• Icahn Left Trump Victory Party to Bet $1 Billion on Stocks

ANALYST VIEWS

• Fixed income, in terms of duration risk in euros should outperform the U.S., while total returns in dollar credit will erode faster than in the euro-denominated debt markets. The credit to equity rotation trade is a slow burning fuse though, and we ought to keep an eye on flows through the second quarter onwards in 2017: creditmarketdaily.com

NEW ISSUES

• No New Issues Wednesday
• 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.