Volkwagen (VLKAY) was not alone in “fixing” its cars to pass emissions standards. Mitsubishi (MMTOF) did the same for its own cars and those branded as Nissan  (NSANY), affecting about 625,000 vehicles. Donald Trump may well come up with a new platform: resuming the fight against the World War II Axis countries. I am now very glad we exited Fiat Chrysler, which would have been another enemy alongside Germany and Japan.

Allah has looked after the Saudis royals despite the settlement of the Kuwaiti oil workers' strike, which will bring back its output onto the global market. Saudi Arabia is preparing to borrow $10 billion in global markets to fund its refusal to cut output. It also hopes to raise money from a partial privatization of its national oil company, Saudi Aramco.

But the prayers of Saudi Wahabi clergy seem to have helped it deal with delays in getting the cash. Luckily, there are new output problems in Venezuela, a key OPEC oil producer. With its economy close to bankruptcy it has installed a 4-day week to save money. And now because of El Niño, its dams cannot be run to produce electricity because water levels are too low.

“Venezuela is less than 20 days from a major power production disruption,” according to Swiss consultancy Petromatrix. Its Olivier Jakob writes: “Crude and product production could be negatively impacted and the country might have to increase imports of petroleum products for generators.”

If it was not An Act of God, it was the resource curse which hit the teetering Caracas regime.

The Sunny Cloud

*Thanks to clever positioning, SAP SE (SAP) managed to make somewhat ho-hum numbers which failed to meet its targets into a cause for celebration. The cloud is very sunny in Germany.

Even after manipulations away from basic IFRS (in which Germans report) its Q1 profits fell short by 3 eurocents at 64, ~5% short. And its revenues missed by euros 40 mn, coming in at euros 4.73 bn, despite growing over 5% from prior year.

The big theme stressed by CEO Bill McDermott is that SAP is boosting its cloud command faster than guidance even if its guidance fell short overall. We are “ahead of midterm aspirations,” he stated.

Cloud produced 69% of total sales in Q1, up 5% over prior year. The cloud also brought in a 28% rise in operating profit, at euros 810 mn.

Strict IFRS eps was eurocents 48 rather, so it found another 9% somewhere in its books. While cloud went skyward, SAP lost license fees, according to CFO Luke Mucic.

*Vodafone (VOD), a supplier of cellular services, was designated as a buy by the Thundering Herd, BankofAmerica-Merrill Lynch, raised from neutral. VOD was up.

OPEC Overflow

*Suffering with the oil cartel over low receipts is an unexpected Canadian victim: CAE of Canada. Its simulator systems are used for military and civilian flight training and the Gulf region is a big buyer of aircraft and military planes.

*Schlumberger Ltd (SLB) however had its rating upped to overweight from neutral at Barclays. The Dutch Antilles firm was given a $93 target price, up over 10%. It helps oil and gas firms find wells and, with Cameron now on board, manage the flow out once the discovery has been made.

*Troubles in Venezuela, noted above, have boosted the shares of Ecopetrol across the border in Colombia, which is again heading for $10/sh. Colombia's CB is on a tightening cycle and the country has been put on the JP Morgan list of “the fragile 5” in the place of Brazil. More on this below in our Hot Latina note.

*Veresen (FCGYF) will report on Q1 May 4 after the close and then run a conference call at 9 am EST when I will be writing my blog. Can I have a volunteer for the VSN CC?

Drugmakers

*GlaxoSmithKline (GSK) which is seeking a new CEO may have to pay him more than the incumbant is receiving, according to gossip. Separately, GSK with Sanford Burnham Prebys' Medical Discovery Institute is creating a new neuroscience center in La Jolla CA. It will be headed by SBP CEO Perry Nisen who used to work for GSK.

*The luck of the Irish has held. The recent crackdown on inversions now turns out to have spared an earlier practitioner of the tax-dodge, Alkermes (ALKS). We are finally in the black with ALKS which I tipped before the Administration began its new regulation of drug companies exiling themselves, and which I kept because I liked its pipeline.

*One of those anodyne reports came from our other Danish drug house, Bavarian Nordic (BVNRY), which said that the proposals submitted by its board were voted at its AGM to which ADR owners were not accredited to vote. This resulted from BAVA withdrawing its ADR offering in the January market blight. The company has not mentioned this in its report, which kind of leaves me hungry. BVNRY, as it now is, works on live virus vaccines, notably a non-replicable smallpox jab; immunotherapy against infection and cancer; and most recently, an Ebola vaccine with Janssen, a sub of Johnson & Johnson. Its main business is with Darpa, part of the US Dept of Defense, and the US National Cancer Institute. It was hoping to list on Q to fund its prostate cancer and HPV therapies, which are being worked on with Bristol Myers. Its links to the US mean it should try listing here again. Meanwhile if you don't already own BAVA, buy it.

*Reckitt Benckiser (RBGLY), maker of OTC drugs and household stuff, like condoms, hit another 12-mo high in sterling. It is a haven from the threat of Brexit, a beneficiary of Zika virus, and a well-managed hodge-podge. It currently is at GBX 6974 (£69.74) in London. Its ADRs are 4:1. Now www.investorsintelligence.com chartists, with whom we trade letters, has put their target price for RB at GBX7000, not much more than it currently trades at. Martin Ferera, who picked the stock, despises chartists. But you have been warned.

*I mistakenly followed a writer on seekingalpha.com in asserting that diabetes med Victoza and its weight control drug Saxenda from Novo Nordisk (NVO) are the same. While they are both glp agonists, they are different ones, respectively liraglutide and semaglutine respectively. This information was put out by an anonymous writer who called the hope that Denmark/s NVO can develop an oral version of the two jabs, which he called “the Holy Grail” of pharma development. Actually in the King Arthur story they never found the Holy Grail, the cup used by Jesus during the Last Supper. So I am not sure the forecast for NVO is likely to work out. Sorry about getting it wrong. I really do know better as I have read a far more intelligent set of articles about NVO on seekingalpha.com whose editors are not very discriminating.

Hot Latinas

*Vale (VALE) was up another 3.66% yesterday. Impeachment appeals and the real is also rising. This is unlikely to continue. If you want to get into Vale buy the preferreds not the common now.

*Banco Santander, (SAN) a proxy for Latin America because of its subsidiaries there, was up 2.6%. SAN trade in Madrid and London before it starts up here.

*The secret reason for all this movement into South American stocks (stocks are feminine in Spanish so my headline is correct) is Argentina. We bought its ETF when the neo-Peronists lost the election, buying the country-specific ETF GlobalX Argentina ETF, ARGT, on macro grounds. Now it looks like the country will raise $16.5 bn, 10% over the initial offering, to meet huge demand for its paper. It will also probably add a 15% green show option for the underwriters. The market is hungry for yields

*Response to readers:

1. I published the information about money supply tallies without any notion of what the French academic initiative will mean for future central bank policy. I think the perverse behavior of currencies indicates that the way to boost growth is not functioning. The strong yen has now been joined by a strong euro. Both Euroland and Japan now have negative interest rates. That is supposed to weaken their money not strengthen it.

2. Meanwhile the US$ is weakening despite moderately increased interest rates which are supposed to make it stronger instead.

3. As for Lake Naivasha, yes I have been there. It is in western Kenya in Luo territory. The Luo tribe produced Pres. Obama's father. The main thing about the lake is not the flower plantations but the flamingos. Naivasha lake is part of the rift complex which runs from the Dead Sea in Israel across to Africa because it was in place before the Red Sea separated the two.