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CONSUMER CYCLICALS: Continental (CONGR Baa2/BBB/BBB): Relief Rally

CONSUMER CYCLICALS
  • Eye-catching equity move. Important to note it is bouncing off recent weakness, however. The stock has been under pressure in the last month with a broker flagging profit warning risk. Michelin also flagged likely weak volume on an analyst call this week.
  • Continental held an investor call yesterday and expects China growth to offset weakness in Europe.
  • Benefits of the cost savings program are also starting to come through, with raw material costs also a tailwind.
  • Bonds continue to trade at the tight end of BBB autos.

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