By Bobby Rakhit 11/04/2007 00:00

Highlights:

Tensions continue to run high globally which are having a direct impact on the oil prices. The oil majors are the ones that are expected to profit. Expectations have managed to stay flat after having massive downgrades the 1st quarter of this year.

Consumer Services (Retail, Media, and Travel & Leisure) lead the profit warning league table. Prevailing market conditions have been weak since February.

Retailers are holding their own against the private equity raptors

European valuations remain reasonable trading at 13.6x forward earnings. This is slightly up from last week.

In the Numbers

DJ Stoxx 600 2007 EPS growth rate is 5.6% which has been revised down 50 basis points from last week.

Best – Weekly Performance (1 week EPS revisions %)

DJ Stoxx /2/ Financial Services 3.5%

DJ Stoxx /2/ Automobiles & Parts 1.9%

DJ Stoxx /2/ Travel & Leisure 1.4%

DJ Stoxx /2/ Insurance 1.3%

DJ Stoxx Small 200 0.7%

Worst – Weekly Performance (1 week EPS revisions %)

DJ Stoxx /2/ Industrial Goods & Services -4.2%

DJ Stoxx /2/ Telecommunications -1.9%

DJ Stoxx /1/ Utilities -1.5%

DJ Stoxx /1/ Technology -0.8%

Breath ratio

The number of analyst upgrades to the number of downgrades has been slowing. From a high of 12% 6 months ago this has now slipped to 5%.

These views are independent of FactSet Europe Ltd and are proprietary to Bobby Rakhit. For the full report and individual sector reviews and recommendations please contact rakhitreport@yahoo.co.uk.