Consumer & Transport; week ahead

Last week's summary earnings/movers here.

Our focus shifts from luxury retailers to staples. #2 in French Food, Carrefour (NR/BBB), comes on Tuesday giving some colour ahead of our most watched earnings this quarter; #5 Auchan (NR/BB+) who will follow with 1H results on Thursday. It's curve is pricing a lot of downside - Casino's history (now #7) in credit likely not helping. Watch both for read through to new and unrated issuer ITM Entreprises (#3) as well. Tobacco players PM and BAT also report. With pricing fading for a lot of staples, headlines revenues for those not invested in non-combustibles may start to show more explicitly on earnings and credit metrics.

Luxury doesn't go away - we have Kering (NR/A-) and LVMH (Aa3/AA-) - but neither as interesting as Burberry. LVMH is high-grade and worlds largest luxury retailer - no reason it can't buck Burberry and Kering's excuses (as Richemont did) and echoing that consensus don't see it breaking 13 straight quarters of growth tomorrow. Kering is interesting - for equities. Credit has a tendency to mean revert even after misses (plenty of recently) leaving it as a tough short and a no-value long.

Instead in discretionary our focus shifts to Air-France. Today's sell-off is helping Thursday's earnings look more interesting; 29s nearly flat to Finnair for the first time since both were issued (at 10bps apart), and 28s giving +78bps over Lufthansa. Spreads may be attractive if it can give some firm guidance...but given it's recent performance and backdrop peers are painting, that may be a tough ask. We reiterate caution ahead of then.