My daughter's first baby-sitter's cousin Jean-Dominique Senard, is the new head of Renault, replacing Carlos Ghosn. He is a member of a Burgundian family of diplomats and, of course, wine-growers who were also the trusted manufacturers of chips for casinos across the border in Switzerland. His girl cousin was keen to work for an Anglophone family in Paris to improve her English, back in the 1960s when France was much more monolingual than it has become.

To understand the frustration of the Gilets Jaunes, one must recognize that modern France still has relics of the Ancienne Régime like this family, which also holds a title from before the French Revolution, not used however out of Noblesse Oblige. The Senard family, who are Catholic, are also active in ecumenism and business.

Now the oligarchy, which has plenty of other relics of royalty, will be under attack from the disgruntled motorists who are setting up their own political party in opposition to Pres Macron's “En Marche” which doesn't have a set political program.

I am intrigued by the move against Pres. Trump's long-term financial backer, Deutsche Bank. While Trump is of German heritage on his father's side, his record of stiffing creditors and frequent bankruptcies might have led Frankfurt's leading bankers to cut off his access to funds. This never happened, and Congress committees on intelligence and financial services are seeking information from DB. It is unclear if there are subpoenas out or not.

A key rational for the probe is DB's involvement in money laundering from Russians and other allies of Vladimir Putin via a Danske Bank sub in Estonia. This reminds me an element of the Nixon resignation: “Follow the money.”

Markets today are back in recuperation mode overall, with exceptions among the companies which have been reporting dud figures for 2018 or recent quarters. We have one from Britain today.

There is also news from the Dutch Antilles about another oligarchic family firm, and good news from South Africa, Finland, Norway, Ireland, India, Spain, Canada, Switzerland, Japan, Brazil, and Hong Kong. 

Tech & Tel

*British Vodafone crashed 3.2% on Wall Street after it reported lower sales for its FY Q3, euros 11 bn vs prior year level of 11.8 bn. That is about $12.5 bn. VOD however reiterated its full year guidance. The share dropped already on Thursday when its 60% sub Vodacon of South Africa reported poor sales too. A key telco number, organic service revenue, rose only 0.1% in the quarter down sequentially from Q2 gains of 0.5%.

Vodafone said service revenue declined 1.1% in Europe. This was offset by a 4.9% increase in the rest of the world despite the South African decline, because of growth in other markets. It also cited lower churn, another key telco metric which, CEO Nick Read said, “have not yet translated into our financial results.” He also said customer trends are improving in Italy, a key VOD market, and Spain. its Rest of World segment. A decline in South Africa was outweighed by growth in other global markets. 

Vodafone maintained its guidance for underlying organic adjusted EBITDA (earnings before interest, taxes, depreciation and amortization), the profit method it prefers, to grow about 3% in the FY to end Mar. 31. Free cashflow is expected to come in around Euros 5.4 bn.

Because most of its business is in the European Union, VOD reports in euros, which adds a further uncertainty to its earnings as sterling is rising against the EU common currency.

The analysts weighed in with differing calls: UBS says buy with a lowered target price now GBX 225 instead of 235. Sanford Bernstein says outperform with the same TP change; JP Morgan Chase says overweight with a TP of GBX 230 down from 240; Barclays says buy with a TP of 215; Jeffries is neutral with a GBX165 TP; and Kepler says sell with a GBX 180 TP.

VOD yields 5.9%. It told the conference call that it will bar Huawei gear in its systems and that this will not cost it any money or delays. We also think it has a crack at getting into the German market and winning from 5G, so we are bullish.

*Meanwhile, Finnish Nokia is up 6.33% on news that the Canadian government will provide US $30 mn to help NOK research 5G wireless to developing routing methods and cybersecurity for the optical system.

*Harry Geisel writes that his pick Naspers now is the controlling shareholder of Russian ad site Avito. We like NPSNY both for its stake in TCEHY and for its own array of emerging markets internet sites.

*Mercado Libre of Argentina (MELI), a Latin Amercian internet sales firm with big business in Brazil, gained another 2.25% today on talk of a possible deal with Amazon.

*Tomra, a Norwegian maker of recycling machines for cans and bottles plus sorters for drugs and potatoes, is up 2.6%. TMRAF

Healthcare

*Merck KGaA signed up to work with China's Tencent, to develop digital artificial intelligence for health care and disease awareness. TCEHY set up its medial arm last year as part of its strategic update under the Industrial Internet, which includes healthcare big data on medical devices and hospital equipment. German Merck is now controlled by the US drugmaker. TCEHY rose 2.7% on the news.

*Swiss Novartis signed a deal with Oxford University to use artificial intelligence to develop drugs for multiple sclerosis. They will use RI data from 35,000 MS patients to refine the IL-17 inhibitor being trialed by NVS now.

*Compugen is up 1.6% in US trading. Israel is shut today so this is serious.

Vehicles

*Swedish Autoliv is up today. It reports next week and is up despite a downgrade by Jefferies. It makes seatbelts and safety equipment. ALV

*Japanese Fanuc, a maker of robots used to build and paint autos, gained 3% today on hopes of a deal between the US and China.

*Johnson Matthey which makes the metals for catalytic converters rose 1.75% today as the future of electric cars (which won't need to clean their exhaust) again became uncertain.

Energy, Mining, & Industry

*Azure, the India solar power generating company, rose 3.4% today despite concerns about the Modi budget deficit, if only because its funding is from the International Finance Corp. and green energy boosting government programs from Western countries, and not New Delhi.

*Our other green energy pick for 2019, Algonquin Power of Canada, AQN, rose 1.11% today.

*Schlumberger, something of a bellwether for energy firms, is up 2.5% today. Its owners are another French clan, this one Protestant, although it is incorporated in the Dutch Antilles. They live mostly in Paris but sometimes in Houston. It is run from both cities.

*Vale of Brazil, sold, has suffered another dam bursting at Brumadinho (which means small fog in Portuguese) in Minas Gerais. There were deaths. We sold VALE because it seemed to have failed to learn the lesson of its last dam disaster and seemed to be aiming to cut its fines under a new more pro-business government. It is not going to succeed. It mines iron ore. It lost nearly 9% today so far.

*Cameco, a Brazilian firm we kept, is up 2.6% today on the news. It makes ethylene.

*Irish CRH gained 3.4% today on the London stock market because of hopes for a deal over the Northern Irish border with the Republic. It makes cement and aggregates sold worldwide but has its primary listing in London.

*Chilean Antofagasta was given an add rating today by UK broker Peel Hunt. It mines copper and has been listed in London for more than a century.

Banks

*Banco Santander rose 1.5%+ today as the market stopped penalizing SAN for its messed up attempt to hire Andrea.

*I am attempting to buy more Clydesdale & York Banking Group at $2.51-2.61 today. CYYBF is the merger winner of our former Virgin Money.