11 Feb.

09

United-States : Wholesale inventories dropped on record in December

The Treasury's new bailout plan for the nation's banks is not sitting well with Wall Street

France Industrial Production (YoY %)

since 2000

Source : INSEE
For the fifth month in a row French industrial production dropped sharply in December ( -1.8%). Since
April 2008 industrial production dropped of 11.5% and at the fourth quarter the drop reached 6.7% an
unprecedented low record. (see p.3)

Indexes Price % 5 Days Ytd Forex Price % 5 Days Ytd

DJIA 7888,9 -2,16% -10,11% EUR/USD 1,2935 0,49% -7,59%
S&P 500 827,2 -1,23% -8,42% EUR/JPY 116,48 -1,20% -8,23%
Nasdaq 1524,7 0,62% -3,32% USD/JPY 90,06 -0,71% -0,64%
CAC 40 3020,8 1,29% -6,13% Oil Price % 5 Days Ytd
DAX 4505,5 2,99% -6,33% Brent $/b 44,3 0,27% 6,06%
Eurostoxx 50 2268,2 1,04% -7,33% Gold Price % 5 Days Ytd
DJ 600 193,8 2,21% -2,29% Gold $/oz 913,8 0,75% 3,45%
FTSE 100 4213,1 1,51% -4,99% Rates USA Euro Japan
Nikkei CLOSED -10,31% Central Banks* 0,25 2,00 0,11
Shanghai Comp 2260,8 9,92% 24,17% Overnight 0,20 1,00 0,11
Sensex (India) 9492,7 5,45% -1,60% 3 Months 0,31 1,03 0,25
MICEX (Russia) 728,0 16,29% 17,51% 10 Years** 2,83 3,31 1,31
Bovespa (Brasil) 41207,4 3,68% 9,74% *US: Fed Funds; Jap: Overnight; Euro: Refi
** Euro: German Bund rate Source : Bloomberg
International Energy Agency monthly Oil Market Report
Latin-America Private Equity conference.in Miami (Feb 11th –Feb 12th)
South African budget
Japanese stock markets will be closed as part of the national Foundation Day public holiday.
11th Russia Business Roundtable in Moscow.
The House Financial Services Committee hears from CEOs of eight major banks that participated in Troubled Asset
Relief Program, or TARP.
Fed Governor Elizabeth Duke, who opposed allowing GMAC to become a bank, speaks about stabilizing the housing
market.
Chicago Fed President Charles Evans speaks in Iowa about the economy.
Analysts expect Sweden's Riksbank to cut rates by half a point, to 1.5%
World Ski Championship (Val d’Isère, France) Fev 3rd – 15th

Time Country Indicator Period GE forecasts Consensus Previous

China Trade balance January $ 29,0 billion $ 38,98 billion
08.00 am Germany Consumer price index (final) January -0,5%,+0,9 % YoY -0,5%,+0,9 % YoY
08.45 am France Current account December € -4,4 billion
10.30 am United Kingdom Claimant count rate January 3,8% 3,6%
10.30 am United Kingdom Jobless claims change January 89 000 77 900
10.30 am United Kingdom Average Earnings inc bonus 3M/YoY December 3,0% 3M / YoY 3,1% 3M / YoY
10.30 am United Kingdom Average Earnings ex bonus 3M/YoY December 3,6% 3M / YoY 3,6% 3M / YoY
10.30 am United Kingdom ILO unemployment rate 3M/YoY December 6,3% 3M / YoY 6,1% 3M / YoY
10.30 am United Kingdom Manufacturing unit wage cost 3M/YoY December 4,2% 3M / YoY
01.00 pm United States MBA mortgage applications February 7 th 8,6%
01.00 pm United States Bloomberg global confidence February
02.30 pm United States Trade balance December $ - 37,0 billion $ - 35,5 billion $ - 40,4 billion
08.00 pm United States Monthly budget statment January $ - 75,0 billion $ - 78,0 billion $ 17,8 billion

! "
Chute historique de la production industrielle
Results La Tribune, p 6
Sanofi Aventis (BMO) / Peugeot (BMO) / Arcelor Mittal /
British Energy / Danone / Credit Suisse / Dassault EU finance officials agree on bank help
Systems / Telenor / Reckitt Benckiser / Publicis / EDF The Wall Street Journal, p 8
Energies Nouvelles
Geithner engages crisis on many fronts
Dividend Financial Times, p 2
Wyeth ($$0.30) / GSK (GBp 18,88889)
Banques : Obama mobilise 2.000 milliards de dollars,
Les Echos, p 7,17,31

La France accusée de protectionnisme

Le Figaro économie, p 21

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 Economic data preview

Watch in the United-States the release of the trade balance for December due at 02.30 pm .The U.S. trade deficit is expected to
decrease as the drop of the energy prices ( especially oil price) will reduce the “energetic bill” and the importation price of the United-
States.
Watch as well in the China the release of the trade balance for January expected to reveals a shrink of the trade surplus as the main
business partner of China are facing a deep recession reducing the demand for Chinese goods abroad. Keep an eye on the final release
of the consumer price index for January in Germany due at 08.00 am expected to decrease as energy and commodities prices are going
down /JB

ate

ECONOMY
UNITED-STATES : WHOLESALE INVENTORIES DROPPED ON RECORD IN DECEMBER
U.S. inventories plunged in December to their lowest level on record at - 1.4% ( forecast -0.7%).Indeed as most of the industrialized
countries are facing a deep recession cutting the global demand for U.S goods abroad . In addition the credit crunch is damping the
purchase power of American household which are not taking over .Consequently companies are making strong adjustments rising
unemployment and reducing drastically their stocks. As global offer is way over global demand the major risk will be now the deflation
which will be the worst situation for the United-States.

UNITED-STATES : ABC CONSUMER CONFIDENCE DROPPED

After dropping to a lowest January 26 th ( -54) and slightly rebounding last week ( -52) the U.S. consumer confidence measured by the
ABC survey decrease again this week at (-53). This is not a surprise as the rise of the unemployment and the credit crunch are damping
household purchase power and as recent gloomy economic data increase consumers fears.

FRANCE : INDUSTRIAL PRODUCTION SLUMPED TO LOW RECORD IN DECEMBER

For the fifth month in a row French industrial production dropped sharply in December ( -1.8%). Since April 2008 industrial production
dropped of 11.5% and at the fourth quarter the drop reached 6.7% an unprecedented low record. Logically from a year ago the industrial
production dropped to an historical low at -11.1% YoY after declining -7.7% YoY in October and -9.1%YoY in November. More than a
recession Franc e is now going through a depression and in such economic configuration the data of the GDP which will be released on
Friday should be terrible. This underline the deep and historical recession France is going through and put more pressure on the European
Central Bank to decrease its leading rate to 1% as soon as possible

ITALY : BUSINESS INDUSTRIAL PRODUCTION DROPPED SHARPLY IN DECEMBER

Italian’s industrial production fell for a fourth month in December (-2.5%) and from a year earlier declined -14.3% the biggest declined
since January 1991.This sharp drop underlined the deep recession hitting Italy which already had before the crisis huge structural
weakness. Logically as the global demand is sharply shrinking companies are cutting output and cutting jobs.

UNITED-KINGDOM : THE TRADE DEFICIT SHRINKED TO SMALLEST IN 18 MONTHS IN DECEMBER

The United-Kingdom trade deficit shrank to the smallest in 18 months. Indeed the goods-trade gap was £ - 7.4 billion( forecast £ - 8.1
billion) and the total trade balance reached - £ 3.6 billion ( forecast £ -4.2 billion ).This improvement is mainly explained by the rise of the
exportations due to the weakness of the British pound which has declined against the dollar and the euro in the past year .As a matter of
fact exports rose 0.3% on the month ,while imports dropped 2.5%. This shrink of the British trade deficit is probably one of the only good
news of the economy felling into one the worst recession of its history hit by financial and real estate crisis. /JB

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 The Treasury's new bailout plan for the nation's banks
is not sitting well with Wall Street
The Treasury's new bailout plan for the nation's banks is not sitting well with Wall Street. The Financial Stability
Plan is designed to restore faith in the banking industry, though on Tuesday it only appeared to stoke more fear and
anxiety. Stocks were sharply lower as traders frowned on the Treasury's plan to bolster the ailing financial sector. Banks
(JP Morgan -9.75 %, Wells Fargo -14.22 %, Goldman Sachs -7.65 %, Morgan Stanley -11.94 %), other financials
(Prudential Financial -16.50 %, MetLife -11.99 %, State Street -12.84 %) and homebuilders (Lennar -15.50 %, KB
Home -10.59 %, Centex -13.36 %, DR Horton -9.52 %) were particularly hit. Industrials and defence were on the
downside: General Electric -8.07 %, 3M -5.60 %, Boeing -6.05 %, Northrop Grumman -4.01 %. General Motors. (-4.59
%) will cut 10,000 jobs, or 14% of its salaried work force, this year as the auto maker struggles to cope with a steep drop
in worldwide vehicle sales. The job cuts, which will reduce GM's global white-collar workforce to 63,000 from 73,000, are
part of the plan the company submitted to Congress in December to secure bailout funding from the federal government.
The company has a week to submit an update on the restructuring plan's viability. Cisco (-4.75 %) tapped the investment
grade bond market for $4 billion, with some of the proceeds earmarked to pay off debt maturity this month and may be
make some acquisitions (only the second in its history that the company raise debt, first time acquired Scientific Atlanta in
2006). Cisco has a cash hoard of $29.5bn. Two maturities: 10 years 4.95% and 30 years 5.90% with Moody’s A1:
respectively 220 bps and 225bps above Treasury (in December, Hewlett-Packard paid a risk premium of 460bps.with A2
notation). Cisco and Indian outsourcing firm Tata Consultancy Services formed a strategic alliance to help customers build
#$%&' next generation data centers for their networks. Techs (Microsoft -3.29 %, Symantec -5.18 %, Apple -4.57 %, Dell -4.98
%, Motorola -6.02 %) and semiconductors (Intel -5.57 %, Micron Technology -6.94 %, Texas Instruments -4.51 %)
()*+&, were down. Oil companies (ExxonMobil -4.20 %, ConocoPhilips -4.99 %), oil services (Schlumberger -5.98 %, Noble
Drilling -4.88 %, Ensco -5.63 %), refiners (Sunoco -7.75 %, Valero -5.19 %), utilities (Exelon -2.49 %, Southern -2.84
%), Basic resources (Freeport McMoran -6.92 %, Nucor -6.66 %), Cyclicals (DuPont -4.71 %, International Paper -4.68
%), hotels & leisure (Starwood -7.54 %, Marriott -7.16 %), consumer stocks and foods (Kraft Foods -3.48 %, Heinz -
5.76 %, Altria -2.02 %, Mc Donald’s -2.95 %, Starbucks -7.65 %, Darden -4.76 %, Wendy’s -4.96 %), retailers (Wal
Mart -3.17 %, Target -4.40 %, Costco -2.66 %, Macy’s -7.19 %), pharmaceuticals (Merck -5.35 %, Pfizer -4.35 %),
telcos (AT&T -5.14 %, Sprint -11.02 %, Verizon -4.43 %), transport (Union Pacific -5.13 %, FedEx -6.52 %, Burlington
Northern -5.04 %, UPS -5.37 %) slumped. Omnicom (-2.20 %) said quarterly revenue was down 7% at $3.371bn
($3.362bn exp.), with organic –2.3 %, US –4.7% and Intl –9.5%. Net –13.7% at $271m ($313.9m n-1), Ebit –18%.
Genentech (-0.01 %) Roche launched its official offer for the 44% of Genentech it does not own already at $86.50 a share
(replace the 89 offer from last July turned down by the management). Genentech’s banker Goldman Sachs ask for $112 a
share. Monsanto (-3.35 %) sees FY09 EPS at $4.40-4.50 ($4.76 Reuters est), 20% plus growth. Sees Q2 & Q3 EPS up
10-12%. Expects to meet 2012 gross profit target, to focus on seeds & traits strategy.
AFTER SESSION : Bank of America +4.32%, Intel Corp +1.56%,Motorolla +1.28%,Well Fargo +4.33%,citigroup
+4.18%,General Electric +1.03%,Nvidia -3.43%,Microsoft +1.01%JP Morgan +2.23%
This morning (8.31 GMT) INDEX FUTURES: DJIA +0.190%,S&P 500 +0.242%, NASDAQ +0.81 %. / JFV
Treasurys advanced on Tuesday, pushing yields down the most since at least mid-December, as Treasury
Secretary Timothy Geithner's plans to help troubled U.S. banks disappointed investors. The plan is missing some key
details market participants were hoping for and Geithner's comments that a recovery will be slow made investors less
likely to hold riskier assets, including stocks and corporate bonds. Meanwhile, the Senate approved an $800 billion-plus
stimulus plan that President Barack Obama has been pushing for. The package must now be reconciled with a House
version before being sent to Obama for signature. Federal Reserve Chairman Ben Bernanke was also on Capitol Hill,
telling lawmakers that while economic conditions have been worse than expected, he's "encouraged" by the markets'
-./ response so far to its various credit-related programs. The Treasury Department sold a record $32 billion in 3-year notes
()*+&, to yield 1.419%, the first tranche of the biggest quarterly sales of notes and bonds on record. Indirect bidders, a class of
investors that includes foreign central banks, bought 44.8% of the sale, the highest proportion since 2004, indicating
strong demand from investors. Bidders offered $2.67 for every dollar of debt being sold, the highest since November. The
government resumed selling the maturity on a monthly basis in November, after an 18-month lapse. Today will bring $21
billion in 10-year notes, followed by $14 billion in 30-year bonds on Thursday. Both long-term debt sales are for the most
ever. The Treasury also sold $36 billion in one-month bills and $ 23 billion in one-year notes on Tuesday.
(Treasurys 2-year rate at 0.88 %, -12 bps, 5-year rate at 1.75 %, -21 bps, 10-year rate at 2.80 %, -18 bps, 30-year
rate at 3.49 %, -16 bps). The 10-year Treasury U.S./Europe rate spread widened to -54 bps. /JFV
,%(. Japanese stocks were closed today. Asian stocks fell, led by banks and commodity companies , on scepticism that the
proposed U.S. bank rescue will revive credit markets and the world’s largest economy. Hong Kong stocks fell for the first
#$%&' time in six days, led by financial and property companies , on concern U.S. bank rescue will fail to ease the global
()*+&, recession./JB
Oil prices sharply dropped yesterday to their biggest one-day loss in two weeks as investors cast doubts that the $838
billion U.S. stimulus package and the Treasury's new financial rescue plan would do enough to revive the economy. As
%0 equities and oil futures plunged, investors chased safe-haven plays in precious metals and Treasury securities, pushing
up gold prices and the U.S. dollar The WTI fell 5.08 % or –$2.01 at $37.55 a barrel and the Brent lost 4.01 % at $44.14 a
barrel. The futures for March delivery were up this morning 1.60 % at $38.15 a barrel. /LC
The yen rose against the euro and the dollar as Asian stocks fell on concern the U.S. government’s bank-rescue plan
will fail to revive lending, boosting demand for Japan’s currency as a haven. The yen also gained against higher-yielding
currencies such as South Korea’s won and Sweden’s krona and the cost of protecting Asia-Pacific bonds from default rose
-)+1 after Treasury Secretary T.Geithner failed to provide details on how he will help banks cope with toxic assets. The euro
may weaken versus the dollar before a report may show European industrial production dropped the most in almost 23
years.
(1.2923 EUR/USD vs. 1.2857 yesterday morning, 116.25 EUR/JPY vs. 117.57, 89.95 USD/JPY vs. 91.44). /JFV

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23, rue Balzac – 75008 Paris - Standard : + 33 (0) 1 444 333 00 – Fax : + 33 (0) 1 70 70 19 19 -4-
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 Europe America Asia
Indices 10/2/09 % Chg Indices 10/2/09 % Chg Indices 11/2/09 % Chg
EuroStoxx 50 2268 -3,44% DJIA 7889 -4,62% Nikkei CLOSED
DJ 600 194 -2,77% S&P 500 827 -4,91% Topix CLOSED
FTSE 100 4213 -2,19% NASDAQ 1525 -4,20% Hong Kong 13511 -3,14%
DAX (XETRA) 4506 -3,46% TSX 8818 -2,54% Singapore 1703 +0,07%
CAC 40 3021 -3,64% Bolsa (Mexico) 19826 -3,46% South Korea 1190 -0,73%
AEX (Pays Bas) 251 -4,32% Bovespa (Br.) 41207 -2,12% Thailand 442 -0,32%
SMI (Suisse) 5145 -0,27% Merval (Argent.) 1105 -2,72% Indonesia 1315 -1,19%
S&P / MIB (Italie) 19217 -2,35% IPSA (Chili) 12529 -3,46% Taiwan 4576 +1,10%
IBEX 35 (Esp.) 8397 -2,18% IGBVL (Pérou) 6873 -1,70% China 2261 -0,19%
BVL (Portugal) 2129 -1,04% India 9498 -1,60%
Source : Bloomberg
Euro Stoxx 50 % Euro Stoxx 50 % Dow Jones % Dow Jones % Nikkei 225 % Nikkei 225 %
AEGON NV -10,24 CITIGROUP INC -15,19
ING GROEP NV-CVA-7,20 -11,54 GROUP
AMERICAN INTERNATIONAL
DOWN

DOWN

DOWN
UP

UP

UP
-6,78 SHARES
DAIMLER AG-REGISTERED -10,03
AMERICAN EXPRESS CO
SOCIETE GENERALE-6,67 ALCOA INC -10,00
RENAULT SA -6,62 JPMORGAN CHASE -9,75
& CO

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 !2%
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12/02/2007 12/08/2007 12/02/2008 12/08/2008 12/02/2009 12/02/2007 12/08/2007 12/02/2008 12/08/2008 12/02/2009

Source : Bloomberg Source : Bloomberg

.%
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Source : Bloomberg Source : Bloomberg

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12/02/2007 12/08/2007 12/02/2008 12/08/2008 12/02/2009 12/02/2007 12/08/2007 12/02/2008 12/08/2008 12/02/2009

Source : Bloomberg Source : Bloomberg

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