EU CONSUMER STAPLES: Walgreen Boots; More opioid legal trouble
(WBA: BB- Stable/B1 Stable) (Stock -10% in US aftermarket)
District Court in Illinois has filed suit alleging "Walgreens pharmacists filled millions of controlled substance prescriptions with clear red flags that indicated the prescriptions were highly likely to be unlawful". Walgreens responded immediately saying it was not clear how far its responsibilities as a Pharmacist extended and the government was enforcing "arbitrary rules".
This legal trouble is not new for 'any' Pharmacy operator in the US. In 2022 Walgreen reached a Multi-state settlement to pay $4.95b in remediation over 15 years and without an admission of guilt. It is guiding to a sizeable $1.1b in (cash) legal payments this year and a has recorded a total $6.6b liability against opioid related litigation on the balance sheet.
We encourage caution on the €26s that have rallied in to Z+170, partly helped by take-private rumours triggering 101 CoC hopes. Near term catalyst still look negative for fundamentals and will leave the line exposed to 2Q earnings still. Wizz 26s are at Z+130 after also rallying in - a value view and more recently our preferred risk in the short-end on sell-offs.
Lawsuit; https://mni.marketnews.com/3E3oHs4
Walgreens response; https://mni.marketnews.com/3E21O8l
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TRUDEAU SAYS `WE HAVE A LOT OF WORK TO DO'
- TRUDEAU SAYS `WE HAVE A LOT OF WORK TO DO'
- TRUDEAU WANTS GOVT TO PREPARE FOR NEW US ADMINISTRATION
- TRUDEAU DOESN'T ADDRESS QUESTIONS ABOUT HIS LEADERSHIP
USDCAD TECHS: A Pullback Would Be Considered Corrective
- RES 4: 1.4539 3.382 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 3: 1.4537 2.0% 10-dma envelope
- RES 2: 1.4508 3.236 proj of the Oct 17 - Nov 1 - 6 price swing
- RES 1: 1.4467 High Dec 19
- PRICE: 1.4356 @ 16:56 GMT Dec 20
- SUP 1: 1.4301 Low Dec 18
- SUP 2: 1.4174/4014 20- and 50-day EMA values
- SUP 3: 1.3928 Low Nov 25 and a key support
- SUP 4: 1.3822 Low Nov 6
USDCAD bulls remain in the driver’s seat. While price faded into the Thursday close, the recent breach of 1.4178, the Nov 26 high, confirmed a resumption of the uptrend and this maintains the price sequence of higher highs and higher lows. The latest rally opens 1.4508 next, a Fibonacci projection level. Initial firm support to watch lies at 1.4174, the 20-day EMA. A pullback would be considered corrective.
AUDUSD TECHS: Bearish Trend Structure
- RES 4: 0.6550 High Nov 25
- RES 3: 0.6501 50-day EMA
- RES 2: 0.6429 High Dec 12
- RES 1: 0.6337/6396 Low Dec 11 / 20-day EMA
- PRICE: 0.6263 @ 16:55 GMT Dec 20
- SUP 1: 0.6199 Low Dec 19
- SUP 3: 0.6158 1.236 proj of the Sep 30 - Nov 6 - 7 price swing
- SUP 3: 0.6100 Round number support
- SUP 4: 0.6045 1.500 proj of the Sep 30 - Nov 6 - 7 price swing
The trend needle in AUDUSD continues to point south and this week’s fresh cycle lows and Wednesday’s sell-off, reinforce a bear theme. The move down maintains the price sequence of lower lows and lower highs. Note that moving average studies are in a bear-mode position too, highlighting a dominant downtrend. The break lower opens 0.6158 next, a Fibonacci projection. Initial firm resistance to watch is 0.6396, the 20-day EMA.
