DB cautious by palmoni



                            Global Daily Focus
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                            TUI Travel
                            Tgt 315p to 290p. Weather and currency weigh; target downgraded                         DB Access Korea Conference @ Seoul, Korea
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                            (Q2 Reporting Preview) Another strong quarter                                           London                        Nov 8-9, 2010
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                                                                                                                    European Paper Seminar @ London
                            Asia Economics Daily                                                                                                  Nov -10, 2010
                            We downgrade China's GDP forecast                                                       2010 Media & Telecom @ Florida
                            SHK Properties Ltd                                                                                                 Nov 17-18, 2010
                            Hold to Buy, tgt HKD126.70 to HKD140.70. A world-class property company;                Japan Conference @ London
                            Upgrading                                                                                                          Nov 18-19, 2010
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                            OTHERS                                                                                   Equity Focus Group
                            US Daily Economic Notes                                                                  Greg Poole
                            We are dismissing the recent improvement in jobless claims                               (1) 212 250-9902
                            Global Commodities Daily
                            Agriculture springs to life                                                              Joseph Wrenn
                            FX Strategy                                                                               (81) 3 5156-6335
                            FX Strategy Weekly
                            Macro Strategy                                                                           Ching-Li Teo, CFA
                            Early Morning Reid                                                                       (852) 2203 6206

                                                                                                                     Paul Reynolds
                                                                                                                     (44) 20 754-76539

                            Deutsche Bank Securities Inc.
                            All prices are those current at the end of the previous trading session unless otherwise indicated. Prices are sourced from local
                            exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies. Deutsche
                            Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm
                            may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single
                            factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1.
                            MICA(P) 007/05/2010
16 July 2010   Global Daily Focus

US Alternative                      (Solar Photovoltaics) Comments from InterSolar San Francisco
Companies Mentioned                     Sentiment positive; much capacity coming on. The sentiment at InterSolar was
Applied Materials                       markedly positive for the near-term, and while some expressed reservations on 2011
(AMAT.OQ),USD12.46 Hold Price           (potential oversupply), many expressed the sentiment that such was more a worry
Target USD14.00                         than an expected reality. We do anticipate an oversupply to manifest in 2011, albeit
MEMC Electronic Materials               less painful than last year's, and the show offered ample evidence (e.g. many new
(WFR.N),USD10.61 Buy Price              module suppliers from China, Applied Materials' 80 Chinese customers, many of
Target USD18.00
                                        which had not capacity last year). While the near-term will be strong, 2011 could pose
First Solar Inc.                        challenges.
(FSLR.OQ),USD131.46 Buy Price
Target USD155.00                        ASPs and capacity being added. Module ASPs stabilized in 2Q10, and in some
SunPower (SPWRA.OQ),USD13.98
                                        instances ticked up on a constant currency basis. Module ASPs should modestly
Buy Price Target USD25.00               decline in 2H10, but with supply chain shortages (particularly at the cell level), there is
                                        the clear potential for near-term improvement to the operating performance of some
                                        companies. However, we estimate that >10GWp of manufacturing capacity could be
                                        added this year, clearly setting the stage for a more difficult 2011. Some
                                        manufacturing companies seem less concerned about a challenging 2011 as initial
                                        discussions on 2011 volumes and prices remain relatively solid; we believe this could
                                        change quickly.

                                        Coverage companies. With ongoing solid demand and a strengthening Euro versus the
                                        US$, the near-term fundamental environment should remain strong. We expect mild
                                        moderation in 3Q, with modest ASP declines; 4Q could see demand increase and
                                        prices stabilize. Discounting a stronger than expected 2H10 could drive stocks higher
                                        in the near term – this seems a focus of companies and investors. This near term
                                        strength will most benefit First Solar as the company maximizes its exposure to
                                        module sales. We expect an oversupply to emerge in 2011; this should drive module
                                        ASP declines greater than what may be present industry consensus of modest
                                        declines. Such a fundamental environment would likely negatively impact most
                                        companies in the industry. Companies most insulated, and therefore potential
                                        outperformers would be those with downstream business models (e.g. First Solar,
                                        SunPower, MEMC Electronics). Furthermore, this could negatively impact equipment
                                        companies with substantial volume shipments in 2010 (e.g. Applied Materials), but
                                        accelerate the implementation of higher efficiency technology upgrades benefiting
                                        companies like Varian Semiconductor (because Varian has no revenue from sales to
                                        the solar PV industry yet), and to a lesser degree Applied Materials (i.e. volume orders
                                        will decline, but upgrades – screen printers for selective emitter implementation –
                                        should accelerate).

                                        Valuation/Risks. We value solar PV companies on both revenue growth and
                                        profitability, as applicable, in a high-growth industry. We anticipate sustained
                                        profitability for industry leaders, and stock volatility through an industry-wide rapid
                                        growth phase. We focus on P/E where viable, and look to other measures such
                                        TEV/Sales, TEV/EBITDA, P/TBV and DCF as checks. Risks include but are not limited to:
                                        (1) rapidly changing market conditions, (2) changes to government subsidization
                                        policies, (3) the impact of many competing solar PV technologies, (4) large capital
                                        investment requirements, (5) competition from other renewable energy sources, (6)
                                        long warranty periods for solar panels, and (7) geopolitical risk.

                                    Steve O'Rourke
                                    (+1) 212 250-8670

Page 2                                                                                                 Deutsche Bank Securities Inc.
16 July 2010       Global Daily Focus

TUI Travel                                                                                Buy
                                                                                          Reuters: TT.L Exchange: LSE Ticker: TT

Tgt 315p to 290p.
                                               2010E and 2011E EPS reduced by 8% and 10%, but what will TUI AG do? Recent
Price (GBP)                       224.60
                                               moves in the Euro will weigh on TUI Travel at this peak period. For 2010 we have also
Price target (GBP)                290.00
                                               reduced our forecasts for the unusually good UK weather since the last trading update,
52-wk range (GBP) 308.40 - 206.10
                                               and cut our 2011 forecasts to reflect a more cautious economic outlook. This note also
Market cap (GBP)(m)           2,486.3
                                               looks at TUI AG's strategy regarding TUI Travel, and concludes that a bid for its
Shares outstanding (m)             1,316
                                               minority holding is more viable than it was a few months ago, in our view. Our
FTSE 100 INDEX                5,211.3
                                               recommendation remains Buy given the significant upside potential to our target.
FYE 9/30        2009A 2010E 2011E
                                               Forecasts reduced for 2010 and 2011 The unusually good weather since TUI Travel’s
Revenue (GBP) 13,863 12,835 12,753
                                               last trading statement in May is likely, in our view, to have weighed on booking trends
DB PBT (GBP)         -52   146      394
                                               at an important time of year for the group. This drives around half of our 2010E
Stated PBT (GBP) -52       146      394        downgrade, with the translational move of the Euro versus Sterling comprising the
DB EPS (GBP)       23.52 22.24 25.45           remainder of the downgrade. For 2011E, the impact of weather should normalise, but
DPS (GBP)          10.70 11.40 12.50           we have taken a more cautious view on the economic outlook for 2011 as part of this
P/E (DB EPS) (x)     9.9   10.1      8.8       note.

                                               TUI AG is a more viable bidder for TUI Travel than a few months ago In our note on TUI
                                               AG in May (Which way now? 7th May 2010) we argued that if TUI AG was successful
                                               in exiting from its economic exposure to Hapag Lloyd, then there were potentially
                                               three strategies that TUI AG may pursue: 1. a bid for the remaining 45% of TUI Travel
                                               that it doesn’t own, 2. Dissolve TUI AG, 3. Invest in other tourism activities. Our
                                               conclusion at that time was that a bid for TUI Travel was unlikely, but subsequent to
                                               this, Hapag Lloyd’s outlook has materially improved (see “Better outlook for shipping
                                               increases options”, 8th July 2010), and TUI Travel shares have fallen. This note argues
                                               that a bid for this minority stake is now a more viable option. Our analysis indicates
                                               that the estimate downgrade is to a large extent priced into TUI Travel shares, whereas
                                               prospects for a bid are not.

                                               Price target reduced from 315p to 290p Our target is based on a DCF methodology,
                                               the main assumptions of which are a WACC of 9.4%, 28% tax rate, and a 0%
                                               perpetuity growth rate from 2019. The main risk to our target we perceive as
                                               operational - we see the main risk being in the group's largest continental European
                                               businesses, Germany and France. A reduction in our forecasts by £25m in 2010 would
                                               reduce our target by 17p, all else being equal. Another risk is moves in the Euro versus
                                               Sterling given that c. 50% of 2010E EBIT is likely to be derived from Eurozone
                                           Simon Champion
                                           (+44) 20 754-51983

Deutsche Bank Securities Inc.                                                                                                      Page 3
16 July 2010   Global Daily Focus

European Strategy
Companies Mentioned                      It was a great shame that because of the preoccupation with sovereign risk, the very
ASML (ASML.AS),EUR24.28 Buy              strong Q1 results passed the market by. A remarkable 67% of the Stoxx 600
Price Target EUR31.00                    companies beat consensus expectations, the highest %beat since 2005. But this has
BMW (BMWG.DE),EUR42.26 Hold              been the story for a while now – decent results seasons have often been accompanied
Price Target EUR33.00                    by poor market performance. We think Q2 will be another strong quarter, but can it
Novartis (NOVN.VX),CHF53.20              inform the market enough to turn this relationship around? We know that in the past, a
Buy Price Target CHF63.00                %beat in excess of the long term average (57%) has tended to produce a positive
                                         market return.
Fortum (FUM1V.HE),EUR19.09
Buy Price Target EUR23.00                While Euro weakness has been a positive development ahead of these results it’s
Philips (PHG.AS),EUR25.62 Buy            unlikely to be enough to really move the dial. Our own view is that results will again
Price Target EUR32.00                    exceed the long run average, but are likely to be below the 67% beat of Q1; in line
                                         with the leveling off we’ve been seeing in the US. Our aggregation of consensus
                                         estimates for the 233 Stoxx 600 companies with quarterly reports suggests that Q2
                                         earnings are expected to come in marginally (1.3% lower) below Q1 earnings and the
                                         %beat has tended to match these expectations. It’s unlikely the outlook is going to be
                                         any clearer after these results. There were after all no signs of deterioration in
                                         confidence ahead of time in 2008. But that won’t stop outlook statements being
                                         heavily scrutinized for any hint that the risk aversion across financial markets is feeding
                                         back into corporate confidence. It will be important though not to confuse a possible
                                         lack of forthright and confident commentary with a logical pause which would probably
                                         be happening anyway now that the early stage of the economic recovery is complete.

                                         The results season has so far got off to a promising start with strong results from
                                         ASML, beating DB’s estimate by 18%. BMW have raised guidance and Novartis
                                         reported solid underling results. Major companies to follow in the next days are
                                         Fortum (16 July) and Philips (19 July) (for a detailed reporting calendar including Q2
                                         EPS estimates see page 10 onwards). The peak seasons of the European Q2 reporting
                                         will be the week from 26-30 July (167 Stoxx 600 companies) and the week from 2-6
                                         August (106 companies).
                                    Gareth Evans
                                    (+44) 0 20 7545-2762

Page 4                                                                                                  Deutsche Bank Securities Inc.
16 July 2010     Global Daily Focus

Asia Economics                        We downgrade China's GDP forecast
                                          China - IP and inflation weaker than expected; we downgrade GDP forecasts

                                          Philippines – BSP leaves monetary policy unchanged, as expected; Remittances inflow
                                          remains strong through May

                                          Singapore - Retail sales decline 3.4%yoy in May

                                          UPCOMING RELEASES

                                          Sri Lanka – Exports (May) DB forecast 16.2% (24.2% in May)

                                          China - IP and inflation weaker than expected; we downgrade GDP forecasts

                                          China reported its June and Q2 economic data today. Most data points are broadly in
                                          line, but inflation and IP growth were significantly weaker than consensus

                                          Data that surprised to the downside. Industrial production growth was 13.7% yoy in
                                          June, significantly lower than market expectation of 15.1% and May's 16.5%. The
                                          sharpest deceleration is seen in the steel sector (to 8.8% yoy in June from 15.3% yoy
                                          in May). Power production growth also fell sharply to 11.4% yoy in June from 18.9%
                                          in May. CPI inflation was only 2.9% yoy in June, down from 3.1% in May and weaker
                                          than market consensus of 3.3%. This reflected the sharper-than-expected fall in food
                                          prices. PPI, at 6.4% yoy in June, also surprised on the downside, reflecting the 3.8%
                                          mom fall in prices of mining products.

                                          Data that are broadly in line. Q2 GDP growth came in at 10.3%yoy, decelerating from
                                          11.9% in Q1. Urban FAI slows to 25.5% yoy in Jan-June from 25.9% in the first five
                                          months. On a monthly basis, FAI growth decelerated further to 23.8% yoy in June
                                          from 25.4% in May. Retail sales growth moderated to 18.3% yoy in June from 18.7%
                                          in May reflecting weaker auto sales and food prices.


                                          We see several implications from these data points: First, the weaker IP figure
                                          reinforces our concern that yoy industrial production will likely continue to surprise to
                                          the downside in Q3. We now think the IP growth will decelerate to only 12% yoy in
                                          Q3 (we were expecting 13% a week ago) and 9-10% in Q4. As a result of this trend
                                          and the strong pressure from Beijing for local governments to reduce energy intensity,
                                          it is likely that power production growth will fall to only 6%yoy in Q4 from over 20%
                                          yoy in the past months. This will exert downward pressure on demand for and prices
                                          of coal.

                                      Jun Ma
                                      (+852) 2203 8308

Deutsche Bank Securities Inc.                                                                                               Page 5
16 July 2010       Global Daily Focus

SHK Properties Ltd                                                                         Buy
                                                                                           Reuters: 0016.HK Exchange: HKG Ticker: 0016

Hold to Buy, tgt HKD126.70 to HKD140.70. A world-class property company; Upgrading
                                                Upgrading Sun Hung Kai Properties to Buy; target price HK$141. Sun Hung Kai
Price (HKD)                        111.10
                                                Properties (SHKP) is more than just a local developer; we consider it a world-class
Price target (HKD)                 140.70
                                                player in a different league. Similar to other major overseas peers, it owns a sizeable
52-week range (HKD) 129.40 - 97.85
                                                rental portfolio valued at over USD22bn as at end-2009. We see further NAV upside
Market cap (USDm)                  36,759
                                                potential for SHKP given its strong management's track record in creating value, and
Shares outstanding (m)         2,564.3
                                                rising opportunities to acquire landbank in both HK and China in the next 6-12 months.
Net debt/equity (%)                  21.1
Book value/share (HKD)              89.74
Price/book (x)                        1.2       Compares favorably to global players, SHKP’s valuation looks attractive. Established in
                                                1972, SHKP has grown to become the largest property company (USD37bn market
FYE 6/30          2009A 2010E 2011E
                                                cap) in the world. We compare it with other well-known foreign property companies.
Sales (HKDm) 34,234 33,313 44,464               SHKP owns a valuable portfolio of world-class assets and it has strong earnings
NP         10,356.215,159.116,376.1             prospects, in our view. It had a net gearing of only 14.9% at end-2009, and we see
DB EPS (HKD)         4.84   5.91     6.39       room for SHKP to leverage up for expansion.
PER (x)              16.6   18.8     17.4
Yield (net) (%)       3.1    2.7      2.3       Time to catch up; we see NAV expansion opportunities. We believe SHKP would catch
                                                up with the property sector as it has been trading behind the market while property
                                                prices and rentals are soaring. We consider the upcoming launch of Larvotto as a
                                                positive share price catalyst. SHKP has a proven track record in achieving above
                                                market ASP. With a sound financial position backed by a sizeable rental portfolio (70%
                                                of GAV), we expect SHKP to capitalize on its NAV growth potential; given the Hong
                                                Kong government’s willingness to sell land and market weakness in China.

                                                Undemanding valuation at 20% discount to our est. NAV of HKD141/share. Our NAV
                                                has factored in flat residential prices in Hong Kong and China from the present level
                                                (see page 15). Current valuation appears attractive compared with the historical
                                                average discount of less than 10%. The strong momentum in the Hong Kong property
                                                market has not yet been reflected in the share price. Strong property sales and project
                                                acquisitions are NAV upside. Key risks: a slowdown in the Hong Kong economy;
                                                interest rate hikes; tightening measures by the Chinese government, SHKP could face
                                                stronger-than-expected competition for landbank.

                                            Venant Chiang
                                            (+852) 2203 6183

Page 6                                                                                                          Deutsche Bank Securities Inc.
16 July 2010     Global Daily Focus

US Daily Economic We are dismissing the recent improvement in jobless claims
                                           Commentary for Friday: In the latest report we learned that initial jobless claims fell
                                           29k (to 429k) following a 17k decline in the prior week. Ordinarily, we would interpret
                                           this to be a significant positive signal with respect to the monthly change in nonfarm
                                           payrolls. However, we are cautious not to read too much into the recent claims move,
                                           despite our current emphasis on labor market developments, because we suspect that
                                           it could be a headfake. The reason for this is that claims are often distorted in July due
                                           to seasonal shut-downs in the auto industry related to retooling for the new model
                                           year. Temporarily laid-off workers file for unemployment benefits during this period,
                                           thereby causing a spike in applications. Seasonal adjustment factors attempt to
                                           account for this, but since the schedules change every year, the claims data are prone
                                           to large week-to-week volatility. GM recently reported that they were not shutting as
                                           many assembly plants as usual due to demand for various models, so as a result the
                                           “usual” seasonal factors may be over-compensating and driving initial jobless claims
                                           artificially lower.

                                           As we do every year during this period, we back away from reading too much into any
                                           short term move in claims and instead focus on the moving averages. In fact, while
                                           claims are among the most useful labor series for predicting changes in nonfarm
                                           payrolls, their predictive value is diminished in July. Typically, initial claims and nonfarm
                                           payrolls show a roughly 80% correlation. From 2004 to present, the monthly change
                                           in claims has gotten the direction right on payrolls two-thirds of the time, i.e. higher
                                           claims equal a slower net hiring and vice versa. However, in the month of July over
                                           this same period, they accurately captured the change in trend only 50% of the time.
                                           In short, largely due to their dramatic swings at this time of year, July jobless claims
                                           are less useful as a predictor of July nonfarm payrolls. For this reason, other metrics
                                           such as the ADP employment survey, tax receipts, the employment components of
                                           various production surveys (ISM, Chicago PMI, etc.) and jobs plentiful/hard-to-get take
                                           on increased significance. Much of the key July labor data are yet to be reported, but
                                           so far we have noted mixed results from the respective employment components of
                                           the regional production surveys (NY Empire: 7.9 vs. 12.4, Philly Fed: 4.0 vs. -1.5), and
                                           as of mid-month withholding tax receipt collections are running at roughly the same
                                           pace as in June (+3.6% y/y). As a result, we are projecting July private payroll gains of
                                           +100k—slightly better than June (+83k) and just below the 3-month average change
                                           (+119k). However, based on more complete data, it appears that layoffs of temporary
                                           Census workers have proceeded at a faster pace this month than we initially
                                           projected. Recall that last month these layoffs totaled 225k. We are now projecting
                                           Census layoffs to total at least 200k in July, which pushes our overall nonfarm payroll
                                           forecast into negative territory (-100k). The drag from Census layoffs will sharply trail
                                           off over the next few months, so nonfarm payrolls should return to positive territory on
                                           a sustained basis beginning in August. By then we should be able to again pay closer
                                           attention to claims. –CR
                                      Joseph LaVorgna
                                      (+1) 212 250-7329

Deutsche Bank Securities Inc.                                                                                                    Page 7
16 July 2010   Global Daily Focus

Global Commodities Agriculture springs to life

                                         After months in the doldrums, agriculture has been the best performing commodity
                                         sector over the past four weeks when measured in spot prices terms, Figure 1. The
                                         gains in corn are particularly impressive since July has tended to be seasonally one of
                                         the weakest months of the year. However, despite recent price advances, in real term
                                         agricultural commodity prices continue to trade at a discount to their long run average

                                         In contrast, metal and energy prices in real terms are trading at a significant premium
                                         to their long run historical averages. We believe the relatively rich valuation of the
                                         energy and metals sectors has been driven by the strong rebound in global growth
                                         over the past year and the increasing correlation of these sectors to the US equity
                                         market. In contrast, we believe large parts of the agricultural sector have focused on
                                         production trends rather than demand to drive price performance.

                                         Since the end of June, grain prices have been driven higher by downgrades to US corn
                                         acreage and severe droughts in Russia, the world’s fourth largest exporter. Extreme
                                         weather events can have a powerful impact on agricultural forward curves by
                                         encouraging shortages and pushing forward curves from contango into backwardation.
                                         We find that there is a significant divergence of commodity forward curves across the
                                         agricultural and livestock sectors. Figure 2 examines the implied roll return employing
                                         the rules governing the S&PGSCI and the DBLCIOptimum Yield technology. The corn
                                         forward curve has the largest negative roll return, which is typically indicative of an
                                         over-supplied market.

                                         However, trade data released in China reveals an ongoing deterioration in the country’s
                                         agricultural trade position and we believe it will not be long before this starts to have a
                                         more meaningful impact on the complex. The fact that La Niña appears to become a
                                         lingering feature for the reminder of this year would tend to signal the dangers of
                                         drought conditions developing during the growing season in the southern United

                                         China released a slew of economic data yesterday. While most data points were
                                         broadly in line, inflation and IP were significantly weaker than consensus. IP growth
                                         was at 13.7% yoy in June, below expectations of 15.1% and May's 16.5%. The
                                         sharpest deceleration is seen in the steel sector. Power production growth also fell
                                         sharply to 11.4% yoy in June from 18.9% in May. According to our China economics
                                         research team, the weaker IP figure reinforces concerns that yoy IP will likely continue
                                         to surprise to the downside in Q3. They now think IP growth will decelerate to only
                                         12% in Q3 (down from the prior estimate of 13%) and 9-10% in Q4. As a result of this
                                         trend and the strong pressure from Beijing for local governments to reduce energy
                                         intensity, it is likely that power production growth will fall to only 6%yoy in Q4 from
                                         over 20% yoy in the past months. This will exert downward pressure on demand for
                                         and prices of coal.
                                    Michael Lewis
                                    (+44) 20 754-52166

Page 8                                                                                                  Deutsche Bank Securities Inc.
16 July 2010     Global Daily Focus

FX Strategy                           FX Strategy Weekly
                                           FX Special: Asia – Are higher rates supporting FX? We show that there appears to be a
                                           clear relationship between central bank hawkishness and EMFX performance year-to-
                                           date. This may be because exit policies of central banks have become a rough proxy
                                           for the strength of economic fundamentals for each economy.

                                           G10: Only intervention and/or higher yields can dethrone JPY.

                                           LatAm: We outline the case for COP to test 1800. We recommend a limited downside
                                           implementation via options.

                                      Bilal Hafeez
                                      (+44) 20 754-70354

Deutsche Bank Securities Inc.                                                                                             Page 9
16 July 2010   Global Daily Focus

Macro Strategy                      Early Morning Reid
                                         A CNBC report that Goldman Sachs had reached a $550m settlement with the SEC in
                                      relation to its CDO activity and BP’s comments that it managed to stop the leak for the
                                      first time in about three months, sparked a late risk rally about half an hour before the US
                                      closing bell. Asia, as we'll see in the second paragraph has not held onto these gains,
                                      preferring to concentrate on the disappointing US data and a miss from Google after the
                                      bell. The US risk rebound saw the S&P 500 (+0.12%) close at the day’s highs after
                                      having traded as low as -1.35% earlier as a handful of disappointing US economic data
                                      outweighed JPM’s earnings beat and the solid Spanish bond auction yesterday. The
                                      CNBC story was later confirmed by a SEC statement. Goldman’s acknowledged that its
                                      marketing materials relating to the CDO in question contained “incomplete information”.
                                      The settlement is the largest penalty against a Wall Street firm in history but the market
                                      welcomed the removal of the uncertainty. Goldman’s and BP’s share price rallied by
                                      more than 4% and 6% respectively in the final 30mins of trading. Post the US close we
                                      also had results from AMD and Google (Buy, $494.02). AMD (Hold, $7.41) beat both
                                      analysts’ EPS and revenue forecasts but Google’s Q2 earnings were below consensus
                                      forecasts (Google revenue was a beat).

                                         The BP (Buy, 40.75p) and GS-led rally has proved to be somewhat short-lived and the
                                      focus of the overnight session has reverted back to the disappointing US manufacturing
                                      data yesterday. The Hang Seng has erased earlier gains and is now -0.3%. The Nikkei is
                                      down -2.4% currently, and close to the day’s lows. In credit the Aus iTraxx reversed all of
                                      its opening gains and is now 4bp wider since the open. The EUR is trading off its
                                      overnight’s highs but is still above $1.29. Indeed the recent steady Euro rally is indicative
                                      of a market where the attention is subtly moving away from European funding issues
                                      and onto US data. Spain has now completed its July issuance program so the negative
                                      EU Sovereign newsflow should die down for a while. Data and earnings will thus dictate

                                         Indeed one of the most anticipated events yesterday was JPMorgan’s (Buy, $40.46)
                                      Q2 result. Despite a stronger-than-expected headline earnings ($1.09/share vs
                                      $0.71/share est.) the good news was quickly overshadowed by the weaker than
                                      expected US data. One may argue that the quality of the result was less impressive than
                                      the headline. Most of the upside was driven by a larger-than-expected loan loss reserve
                                      release ($2.3bn vs DB estimates of $0.8bn) and lower charge-offs ($5.7bn vs DB est of
                                      $7.6bn). The decline in capital markets revenue was largely expected (on QoQ basis,
                                      FICC -35%, Equities -29%, Investment banking fees largely unchanged) but the reduced
                                      contribution from markets revenue was clearly felt by the bottom line. The investment
                                      bank contributed only 29% of the group’s net income in Q2, down from 74% in the
                                      previous quarter and 54% in the same quarter last year.

                                    Jim Reid
                                    (+44) 20 754-72943

Page 10                                                                                                Deutsche Bank Securities Inc.
16 July 2010     Global Daily Focus

Appendix 1
Important Disclosures
Additional information available upon request
For disclosures pertaining to recommendations or estimates made on a security mentioned in this report, please see
the most recently published company report or visit our global disclosure look-up page on our website at

Analyst Certification
This report covers more than one security and was contributed to by more than one analyst. The views expressed in this
report accurately reflect the views of each contributor to this compendium report. In addition, each contributor has not and
will not receive any compensation for providing a specific recommendation or view in this compendium report.

Equity rating key                                             Equity rating dispersion and banking relationships

Buy: Based on a current 12- month view of total share-
holder return (TSR = percentage change in share price            2000
from current price to projected target price plus pro-                       51%
jected dividend yield ) , we recommend that investors            1500                           44%
buy the stock.
Sell: Based on a current 12-month view of total share-                             28%
holder return, we recommend that investors sell the                                                   25%
                                                                  500                                              4% 21%
Hold: We take a neutral view on the stock 12-months                  0
out and, based on this time horizon, do not recommend                          Buy               Hold               Sell
either a Buy or Sell.
                                                                            Companies Covered    Cos. w/ Banking Relationship
1. Newly issued research recommendations and target
prices always supersede previously published research.                                     Global Universe
2. Ratings definitions prior to 27 January, 2007 were:
     Buy: Expected total return (including dividends) of
     10% or more over a 12-month period
     Hold: Expected total return (including dividends)
     between -10% and 10% over a 12-month period
     Sell: Expected total return (including dividends) of -
     10% or worse over a 12-month period

Deutsche Bank Securities Inc.                                                                                               Page 11
16 July 2010    Global Daily Focus

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Page 12                                                                                            Deutsche Bank Securities Inc.
Deutsche Bank Securities Inc.

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