>>> What to look at today - 10/09/2014

US Market closed lower, with all indexes closing in the red, early pressure come from the financials, AAPL was responsible for the volatile session with iPhone 6, iWatch & payment solution annoucement...volume were still weak at 530 mil shares...VIX @ 13,55 +6,72%...After Hours LMNR +6.9%, DIOD +4.9%, PANW +4.2%, MGCD -9.7%, URBN-2.6%, CRDS -1.7% following earningsguidance...Sentiment in Asia turned more cautious as investors expressed concern over less accommodative FOMC in the medium term and slowing growth in China in the short term. Following yesterday's report from San Francisco Fed hinting at the disconnect between expectations and Fed intentions, today's feature on CNBC again discussed the FOMC potentially dropping the "considerable time" reference in the statement as early as next meeting. Out of China, Premier Li spoke overnight and estimated M2 money supply rising only about 12.8% in August, which would mark a 5-month low. Official August money supply and yuan lending data could be out as early as today...Nikkei +0.28% Hang Seng -1.89% Shanghai -0.58%...Tencent -3.17% Lenovo -2.38% (Worst performing sector with Energy & Telcos)

Eur$ 1.2927 S&P -0.16% EuroStoxx -0.15% FTSE -0.17% DAX -0.35% SMI -0.44%

Macro
- ECB's Coeure Says Eurozone Faces Risks to Economic Growth: Cinco
- China’s 2015 Growth Target Should Be 7%-7.5%: Ex-PBOC Adviser Li
- China Growth in U-Shape Rebound Process: Ex-PBOC Adviser Li
- China Said to Be in Talks to Ease Restrictions on Car Dealers

Keep an eye on :
- ANA SM : Acciona rules out sale of Bestinver - Expansion
- ACIN SW : Announces delisting from Swiss Stock Exchange effective September 17, 2014
- AF FP : Air France-KLM Settles Derivative Transaction on Amadeus IT Shrs
- AF FP : Air France Won’t Develop Transavia Without Pilot Accord: Echos
- AF FP : Air France Strike Talks Are at a Standstill, La Tribune Says
- AMS SM : Amadeus IT Shrs Being Sold by Air France at EU28-Market
- AREVA FP : Areva Ratings May Be Cut to Junk by S&P
- BMW GY : 1114 HK -2.64% on news of Chinese to ease restrictions on car dealers
- CGG FP : Nets quartet of BroadSeis-BroadSource marine contracts worth $80M
- F IM : Ferrari Chief Montezemolo May Quit by Tomorrow: Il Sole 24 Ore
- ITP FP : Interparfums Confirms 2014 Operating Margin Target of 10%-11%
- LUX IM : Luxottica Has Potential for Higher Dividend Yield: Deutsche Bank
- MAIL LI : Mail.ru Group Sells 4% Stake in Qiwi, Kommersant Reports
- MSFT US : Closed to Buy Mincraft for near to $2bil {NSN NBNWFW6KLVRO <go>}
- NOVN VX : Novartis Says Gilenya Reduces Brain Shrinkage in MS Patients
- PDL LN : Up yesterdat of news of discover of a 232.08 carat white diamond from the Cullinan mine in South Africa
- SDRL NO : Fredriksen Not Looking at Selling Seadrill Stake: Finansavisen
- VK FP : Vallourec Gets Tube Order for U.K. Offshore Project: Co. Link
- VIV FP : Vivendi Said to Consider Buying Stake in Mediaset Unit (11% in MS Premium)
- VOD LN : Liberty Global Would Be Logical Target for Vodafone, BofAML Says
- WDI GY : Wirecard Says Apple Pay Announcement Supports Co. Strategy

>>> Brokers Upgrades & Downgrades - 10/09/2014

>>> Up
*ACERINOX ADDED TO GOLDMAN PAN-EUROPE CONVICTION BUY LIST
*AFRICAN BARRICK GOLD RAISED TO NEUTRAL VS SELL AT GOLDMAN
*ARCELORMITTAL RAISED TO OVEREWIGHT VS UNDERWEIGHT AT BARCLAYS
*CRH RAISED TO OUTPERFORM VS UNDERPERFORM AT RAYMOND JAMES
*EDF RAISED TO BUY VS NEUTRAL AT GOLDMAN
*GECINA RAISED TO NEUTRAL VS SELL AT GOLDMAN
*ICADE RAISED TO BUY VS NEUTRAL AT GOLDMAN
*IMPALA PLATINUM RAISED TO NEUTRAL VS SELL AT GOLDMAN
*OTE RAISED TO OVERWEIGHT VS EQUALWEIGHT AT MORGAN STANLEY
*RBS RAISED TO HOLD VS SELL AT INVESTEC

>>> Down
*SALZGITTER CUT TO NEUTRAL VS BUY AT GOLDMAN SACHS
*STANDARD CHARTERED CUT TO UNDERPERFORM VS NEUTRAL AT EXANE
*OUTOKUMPU CUT TO NEUTRAL VS BUY AT GOLDMAN
*STORA ENSO CUT TO UNDERPERFORM VS NEUTRAL AT CREDIT SUISSE

>>> PT changes
* Whitbread PT Raised to 5,000p vs 4,500p at Raymond James

>>> Initiation
*BELGACOM RATED NEW UNDERPERFORM AT RBC CAPITAL; PT EU23
*BODYCOTE RATED NEW BUY AT LIBERUM, PT 830P
*BOUYGUES RATED NEW OUTPERFORM AT RBC CAPITAL; PT EU32
*BSKYB RATED NEW UNDERPERFORM AT RBC CAPITAL; PT 800P
*BT GROUP RATED NEW OUTPERFORM AT RBC CAPITAL; PT 470P
*DEUTSCHE TELEKOM RATED NEW OUTPERFORM AT RBC; PT EU13.50
*ELISA RATED NEW SECTOR PERFORM AT RBC CAPITAL; PT EU23
*ILIAD RATED NEW SECTOR PERFORM AT RBC CAPITAL; PT EU221
*KPN RATED NEW UNDERPERFORM AT RBC CAPITAL; PT EU2.50
*LIBERTY GLOBAL RATED NEW OUTPERFORM AT RBC CAPITAL; PT $64
*MILLICOM RATED NEW OUTPERFORM AT RBC CAPITAL; PT SEK730
*MOBISTAR RATED NEW OUTPERFORM AT RBC CAPITAL; PT EU20
*NOS SGPS RATED NEW OUTPERFORM AT RBC CAPITAL; PT EU6.50
*TELE2 RATED NEW UNDERPERFORM AT RBC CAPITAL; PT SEK88
*TELENOR RATED NEW UNDERPERFORM AT RBC CAPITAL; PT NOK141
*TELIASONERA RATED NEW UNDERPERFORM AT RBC CAPITAL; PT EU48
*THYSSENKRUPP RATED NEW UNDERWEIGHT AT BARCLAYS, PT EU20
*VOESTALPINE RATED NEW OVERWEIGHT AT BARCLAYS, PT EU39.5
*JAZZTEL RATED NEW OUTPERFORM AT RBC CAPITAL; PT EU14
*ZOOPLA RATED NEW ADD AT NUMIS; PT 278P

>>> Call
>> Stock
*ACERINOX ADDED TO GOLDMAN PAN-EUROPE CONVICTION BUY LIST
*SSAB EXITS GOLDMAN CONVICTION BUY LIST, STAYS BUY
* CS : Nobel Biocare, SFS Group & Vontobel added to high-conviction calls
: On cautious note, adds underperform-rated Sulzer, Alpiq
: Outperform-rated Logitech kept among high-conviction calls
: Baloise (underperform), Partners Group (outperform), Rieter Holding (outperform), Straumann (outperform) removed

WSJ : Eight Takeaways from Day One of Alibaba’s Roadshow

Alibaba Group Holdings Ltd.BABA 0.00%, kicked off its 10-day roadshow at the Waldorf Astoria New York Monday ahead of its initial public offering, which is expected to be one of the largest IPOs ever.

Investors had just seen the first range for how the company would be valued by its underwriters late Friday. Many investors gathered there were still working through their financial models for the Chinese e-commerce company.

The updated prospectus and new numbers raised new questions. Some of them were answered by founder and executive chairman Jack Ma and several senior executives who fielded questions before a crowd of what many estimated at more than 1,000 people. Some questions remain.

Here’s what investors there learned:

Founder and executive chairman Jack Ma’s focus:

Two attendees who requested anonymity said Mr. Ma said that one of his main areas of focus would be on the company’s relationship with the Chinese government.

Alibaba has clearly handled the government’s role in corporate policy deftly, one person said, but Mr. Ma’s description of his role shows the potential problems that could loom if Alibaba ever falls on the wrong side of government policy.

In July, a commission advising Congress on U.S.-China economic issues raised questions about the ownership structure of Chinese companies that allow Chinese companies to get around the country’s restrictions on foreign ownership.

Alibaba’s key pitch to investors:

Growth. Several attendees said that Alibaba’s executive team and its bankers stressed the e-commerce company’s potential for massive growth in its user base. “Everyone is salivating over the potential for Chinese users,” said Ilya Grozovsky, senior research analyst at SPQR Capital. “The numbers for Alibaba are so big that they dwarf every other company we know. But the company highlighted how little e-commerce goes on in relation to the overall population.”

Alibaba’s narrative — a love story with small business:

In its prospectus and during Monday’s presentation, Alibaba has highlighted the company’s usefulness to small businesses and entrepreneurs in China. One investor said that Mr. Ma has clearly positioned himself as the hero to small business, touting how Alibaba has helped companies grow and expand in China.

W. Fifield Whitman, chief investment officer at John Locke Capital Management L.P., said that’s “exactly what the [Chinese] government wants to hear.” Mr. Whitman said he doesn’t doubt the veracity of such statements but also said it’s a smart way for Alibaba to position the company to get the Chinese government’s full support. “It’s a very good way to get everyone to gloss over potential problems if they arise,” he said, noting the potential for fraud among its user base or possible issues with the Internet in China, including potential government blocks on content.

Alibaba’s Time Frame:

102 years. Mr. Ma often speaks about Alibaba’s long-term plans. Some investors wondered whether that long-term focus could hurt returns in the near-term for investors with a shorter investing horizon.

What should investors know about Alibaba’s decision to separate Alipay, the division which processes its payments, from the broader company in 2011?

Alibaba’s decision to spin-off Alipay, which is an online payment processor often seen as similar to PayPal, has been one of the most controversial in the company’s history. The unit was one of the most profitable parts of the business.

Still investors have looming questions on this front and the ones we spoke with were largely unsatisfied with Mr. Ma’s responses to questions on this topic. Mr. Ma called the decision one of the toughest in his career and basically said that investors will eventually understand why he did it without elaborating further.

Why does Alibaba have such an unusual partnership structure?

Alibaba’s management structure is another source of confusion and potential contention. A group of 27 partners—comprised of company managers and executives of affiliates—can nominate a majority of Alibaba’s board, which gives the group effective control of the company.

Several investors said that Mr. Ma danced around this question without really answering it.

Alibaba did attempt to showcase its management team beyond Mr. Ma by having four other executives on stage responding to questions.

Will Alibaba expand internationally?

Yes, but it’s not a key area of focus, company executives said according to one attendee. Executives said Alibaba is still largely focused on China, where just half of people use the Internet and only of half of those users shop online.

How robust will demand be?

Several investors in attendance said the Alibaba IPO had one of the largest audiences they’d ever seen at a roadshow. Not everyone there had plans to buy, as some people were simply there to understand the story.

Still, the company’s IPO is expected to see significant demand from investors. One investor in attendance said he was relieved to see that Alibaba expects to price at at least $60. The investor said that price point will discourage retail investors and short-term traders from participating as it’s easier to take a position with a stock below $20. That price point will keep some of the “noise” away that was there for Facebook’s IPO.

>>> Asian Update

Asian Market Update: Investors await China money supply and lending data

***Economic Data*** - (JP) JAPAN JULY MACHINE ORDERS M/M: 3.5% V 4.0%E; Y/Y: 1.1% V 0.5%E - (JP) JAPAN AUG PPI (CGPI) M/M: -0.2% V 0.0%E; Y/Y: 3.9% (5-month low) V 4.1%E - (AU) AUSTRALIA SEPT WESTPAC CONSUMER SENTIMENT INDEX: 94.0 V 98.5 PRIOR; M/M: -4.6% V 3.8% PRIOR (first decline in 4 months) - (PH) PHILIPPINES JULY EXPORTS: $5.5B V $5.4B PRIOR; Y/Y: 12.4% V 15.2%E

***Index Snapshot (as of 03:30 GMT)*** - Nikkei225 -0.4%, S&P/ASX -0.7%, Kospi closed, Shanghai Composite -0.5%, Hang Seng -1.5%, Sept S&P500 -0.1% at 1,987

***Commodities/Fixed Income/Currencies*** - Dec gold +0.6% at $1,255, Oct crude oil +0.2% at $92.94/brl, Dec copper flat at $3.11/lb - SLV: iShares Silver Trust ETF daily holdings rise to 10,408 tonnes from 10,363 tonnes prior (highest since Nov 2013) - (US) API PETROLEUM INVENTORIES: CRUDE: -1.9M (largest draw in 5 weeks) v -1Me, GASOLINE: +0.7M v 0e, DISTILLATE: +1.7M v +0.5Me - (JP) BOJ offers to buy ¥400B in 5-10yr JGB, ¥100B in 10-25yr JGB, ¥30B in over 25yr JGB, ¥150B in corporate bonds - (AU) Australia MoF (AOFM) sells A$600M in 5.75% bond due 2021; Avg yield: 3.2650%; Bid-to-cover: 4.39x - USD/CNY: (CN) PBoC sets yuan mid point at 6.1425 v 6.1520 prior setting (strongest level since Mar 19th)

***Market Focal Points/Key Themes*** - Sentiment in Asia turned more cautious as investors expressed concern over less accommodative FOMC in the medium term and slowing growth in China in the short term. Following yesterday's report from San Francisco Fed hinting at the disconnect between expectations and Fed intentions, today's feature on CNBC again discussed the FOMC potentially dropping the "considerable time" reference in the statement as early as next meeting. Out of China, Premier Li spoke overnight and estimated M2 money supply rising only about 12.8% in August, which would mark a 5-month low. Official August money supply and yuan lending data could be out as early as today.

- Expectations of a clearer shift in US monetary policy stance also continued to play out via stronger USD, especially against the Yen. USD/JPY hit fresh 6-year high near 106.50 in the US hours and after an early dip, retested those levels late in Asia. Japan Deputy Econ Min Nishimura greenlighted further weakness in JPY as a positive for domestic economy. BOJ Dep Gov Iwata cautioned that weaker yen will not necessarily lead to higher prices, but also said it would encourage firms to be more proactive in capex and boost exports. Iwata added the 2% inflation target can be achieved and estimated potential GDP rate in Japan is estimated around 0.5%.

- Australian dollar was also a big mover among the USD majors, weighed further by a disappointing Westpac sentiment figure printing its first sequential decline in 4 months. Resident Westpac economist pointed to fiscal-tightening measures as well as increased charges for services weighing on consumption, with the proportion of those concerned with budget/taxation at the 2nd highest level on record. AUD/USD hit fresh 5-month lows below $0.9160, breaching its 200-day MA.

***Equities*** US markets: - DRL: Announces Asset Sale resulting in proceeds of approximately $423M; +10.9% afterhours - LMNR: Reports Q3 $0.61 v $0.40e, R$36.5M v $25.7Me (2 ests); +5.5% afterhours - PDLI: Guides Q3 R$165M v $135Me; +4.3% afterhours - PANW: Reports Q4 $0.11 v $0.11e, R$178.2M v $161Me; +4.0% afterhours - SIRI: Increases 2014 subscriber guidance for net adds at 1.45M (1.25M prior guidance); +1.1% afterhours - KKD: Reports Q2 $0.13 v $0.16e, R$120.5M v $118Me; -5.5% afterhours - FDO: Dollar General said to be preparing hostile bid of $9.1B for Family Dollar - financial press

Notable movers by sector: - Materials: Fortescue Metals Group FMG.AU -1.9% (iron ore decline); Tangshan Jidong 000401.CN -1.4%, Jilin Yatai 600881.CN -3.4% (fined by NDRC over price monopoly) - Industrials: MacMahon Holdings MAH.AU +4.6% (announces funding facility); Great Wall Motor 2333.HK -2.7% (Aug sales results); Guangzhou Automobile Corp 2238.HK -1.7% (Aug sales results) - Technology: Rakuten 4755.JP +3.4% (Ebates acquisition confirmed)

>>> US After Hours

After Hours Summary: LMNR +6.9%, DIOD +4.9%, PANW +4.2%, MGCD -9.7%, URBN -2.6%, CRDS -1.7% following earningsguidance After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: LMNR +6.9%, DIOD +4.9%, PANW +4.2%, PDLI +3.3%, PPHM +3.2%, UNIS +2.9%, ARRS +2.8%, SIRI +1.1%, SAIC +0.5%

Companies trading higher in after hours in reaction to news: SUPN +5.9% (Orchard Hill Capital Management files amended 13D; request that the Board hires a strategic advisor to consider selling the Company), GCI +3.4% (Icahn increased stake to 8.48% from 6.63% in 13D filing), AUXL -3.0% (announced corporate restructuring designed to 'streamline operations, maximize cash flow, and drive sustainable earnings growth'; to reduce headcount by ~30%), THOR-1.1% (announced start of Heartmate III U.S. clinical trial)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: MGCD -9.7%, URBN -2.6%, CRDS -1.7%

Companies trading lower in after hours in reaction to news: AHH -3.1% (announced public offering of 5 mln shares of common stock), AVB -1.8% (announced offering of 4.5 mln shares of common stock), EXAS -1.8% (Whitney Tilson said he is short at the Value Investing Congress), EQY -1.1% (announced 3.825 mln share public offering of common stock)

>>> Unveils Apple Watch, available in two sizes, featuring sapph

Unveils Apple Watch, available in two sizes, featuring sapphire display; priced at $349 for basic model; to be available in early 2015
Unveils Apple Watch smartwatch product, featuring sapphire display; to be available in two sizes 
- The iPhone is required with Apple Watch; will work with iPhone 6 models as well as iPhone 5, 5S and 5C
- There are at least six different watch straps and three finishes (aluminum, steel, 18K carat gold), numerous available watch faces (Classic, Sports, Gold Edition)
- Features health and fitness tracking apps, Fitness and Workout. Includes an accelerometer, features LEDs to read your heart rate, uses the GPS from your iPhone.
- Features digital crown knob that controls the device, also features Siri voice control and a touchscreen. The touchscreen senses force (taptic engine), can tell the difference between a tap and a press. Vibrates to indicate receipt of messages, notifications
- Separate Apple Watches can be touched together to exchange information
- Features maps and photo apps, turn-by-turn navigation
- Features magsafe wireless inductive charger for wireless charging.
- Developers will be able to build apps to work on the Apple Watch, via WatchKit SDK. 
- Twitter and Facebook apps to be available. Pintrest, BMW, MLB, Honeywell and Nike to launch apps as well.

-->< FOSL -3% SWATCH -1,35% in the US

>>> US Close Dow -0,57% S&P -0,65% Nasdaq-0,87% Russel -1,17%

Closing Market Summary: Influential Sectors Lead Stocks Lower

The major averages ended the Tuesday session on their lows with the S&P 500 sliding 0.7%. Small-cap stocks outperformed yesterday, but the Russell 2000 erased Monday's uptick with a 1.2% decline.

Equity indices spent the entire session in the red with the early pressure coming from the financial sector (-1.0%). The second-largest group by market cap slumped out of the gate amid broad weakness in top-weighted components. Bank of America (BAC 16.14, -0.21), Citigroup (C 51.27, -0.78), and JPMorgan Chase (JPM 59.06, -0.83) lost between 1.3% and 1.5%, while the sector acted as a drag on the market throughout the session.

Meanwhile, the consumer discretionary space (-1.0%) also weighed with the SPDR S&P Retail ETF (XRT 88.06, -0.86) falling 1.0%. The quick-service restaurant space did not fare much better as McDonald's (MCD 91.09, -1.41) fell 1.5% after reporting a 3.7% decline in comparable store sales during August. The decline was paced by a 14.5% slump in Asia following the recent food safety scandal.

Elsewhere, the top-weighted sector—technology (-0.6%)—endured a choppy session before settling on its low. Shares of Apple (AAPL 97.99, -0.37) were responsible for the volatile action, with the stock surging on the announcement that near field communication capabilities will be included in the upcoming version of the iPhone. Despite the spike, Apple slumped from highs to lows after revealing the long-rumored "Apple Watch," which will be available next year.

Combined with the underperformance of the aforementioned sectors, the afternoon retreat in Apple pressured the market to fresh lows.

Despite the weakness in three top-weighted sectors, another influential group—health care (-0.3%)—kept the market from extending its loss. Insurers and managed care names outperformed, while biotechnology slumped. Tenet Healthcare (THC 60.97, +1.98) jumped 3.4% after Deutsche Bank added the stock to its short-term buy list, while the iShares Nasdaq Biotechnology ETF (IBB 269.60, -3.46) fell 1.3%.

Similar to health care, the consumer staples sector (-0.3%) outperformed, while telecom services (-1.2%) and utilities (-1.2%) lagged.

Economic data was limited to the Job Openings and Labor Turnover Survey for July, which indicated job opening decreased to 4.673 million from 4.675 million.

Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET, while the Wholesale Inventories report for July (consensus 0.5%) will cross the wires at 10:00 ET.
  • Nasdaq Composite +9.0% YTD 
  • S&P 500 +7.6% YTD 
  • Dow Jones Industrial Average +2.6% YTD 
  • Russell 2000 -0.4% YTD

>>> Palo Alto Networks reports EPS in-line, beats on revs; guides Q1 EPS in-line

Palo Alto Networks reports EPS in-line, beats on revs; guides Q1 EPS in-line, revs above consensus 

Reports Q4 (Jul) earnings of $0.11 per share, in-line with the Capital IQ Consensus Estimate of $0.11; revenues rose 58.5% year/year to $178.2 mln vs the $161.26 mln consensus.
Billings +64% to $232.9 mln.
Co issues guidance for Q1, sees EPS of $0.12, excluding non-recurring items, vs. $0.12 Capital IQ Consensus Estimate; sees Q1 revs of $178-182 mln vs. $173.43 mln Capital IQ Consensus Estimate.

>>> Krispy Kreme misses by $0.02, beats on revs; reaffirmed FY15 EPS above conse

Krispy Kreme misses by $0.02, beats on revs; reaffirmed FY15 EPS above consensus (17.64 -0.03)
Reports Q2 (Jul) earnings of $0.13 per share, excluding non-recurring items, $0.02 worse than the Capital IQ Consensus Estimate of $0.15; revenues rose 6.9% year/year to $120.5 mln vs the $118.2 mln consensus.
Co reaffirmed upside guidance for FY15, sees EPS of $0.69-0.74, excluding non-recurring items, vs. $0.68 Capital IQ Consensus Estimate.