>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: HELE -8.7%, GWRE -6.6%, CCE -2.6%, VNCE -1.9%.

Other news: END -32% (announces decision not to make interest payments of ~ $33.5 mln), DGLY -13.9% (following yesterday's 70%+ move higher), CPLP -6% (announced offering of 15 mln common units), AER -4.7% (filed for ~29.85 mln share common stock offering by selling shareholders), GAME -4.3% (Perfect World enters into agreement to sell its shares in Shanda Games), EFC-3.5% (commences public offering of 8 mln common shares representing limited liability company interests), EFC -3.5% (commenced public offering of 8 mln common shares representing limited liability company interests), DEPO -3% (announces offering of $230 mln convertible senior notes due 2021), CDW -2.7% (commences public offering of 15 mln shares of its common stock held by selling stockholders), EFII -2.3% (proposes offering of $300 million convertible senior notes due 2019), CLVS -1.7% (to Offer $200 Million of Convertible Senior Notes), TKMR -1.7% (continued vol), BPL -1.4% (to acquire 80% interest in Corpus Christi Terminal Complex and associated Eagle Ford assets in South Texas for $860 mln; commenced a public offering of 5,500,000 limited partnership units representing limited partner interests), BHP -1.4% (weak iron ore pricing in Aus, traded lower overnight).

Analyst comments: FTR -3.4% (downgraded to Underweight from Equal-Weight at Morgan Stanley), ECHO -2% (downgraded to Sell from Hold at Stifel), CHRW -1.4% (downgraded to Sell from Hold at Stifel), SAP -1.1% (downgraded to Underperform from Neutral at Exane BNP Paribas), AMT -1% (downgraded to Equal-Weight from Overweight at Morgan Stanley).

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: AVNW +6.4%, NAV +3.9%, TEU +3.7%, ODP +1.1%, TOL +0.8%, .

M&A news: BTH +19.9% (ViSalus founders agree in principle to acquire majority of ViSalus; Blyth will retain 10% stake ), CNQR +10.9% (attributed to speculation of potential sale), ALTV +6.5% (unanimously rejects unsolicited proposal from Juniper for $8/per, adopts Shareholder Rights Plan), FL +1.2% (DailyMail discusses FL private equity buyout rumors at $70/share), VOD +1.0% (cont M&A spec), RCL +0.8% (to sell Celebrity Century to Ctrip (CTRP)).

Select financial related names showing strength: DB +2.9%, ING +1.9%, HSBC +1.4%.

Other news: CBLI +47.5% (announces green light to proceed with a pre-Emergency Use Authorization submission for entolimod), INFI +40.6% (enters into master clinical supply agreement and material transfer agreement with Roche (RHHBY), co and ABBV announce global collaborization for Duvelisib), PTN +36.3% (licenses Bremelanotide in Europe and other selected countries to Richter),ISNS +18.1% (continued move following +46% gain yest), TTPH +10.7% (announced positive oral dosing data from lead-in of IGNITE 2 Phase 3 trial of eravacycline for the treatment of complicated urinary tract infections), LOCM +8.3% (reaches favorable settlement in patent infringement litigation), VII +7.5% (continued move following +31% gain yest), FLEX +6.3% (Flextronics received shareholder approval to purchase up to 20% of its outstanding shares), RSX +4.2% (media reports of caese fire talks betw Rus/Ukraine), CHL +3.9% (Apple iPhone 6 pre-orders begin at China Mobile (CHL) website, according to reports), EXEL +3.2% (bouncing following yesterday's steep decline), YNDX +3.2% (Russian related name), VSI +2.9% (positive comments on Mad Money), QIWI+2.8% (Russian related name), PSDV +2.7% (reports ILUVIEN for chronic diabetic macular edema receives marketing authorization in Sweden), X +2.6% (looks to be a reaction to Russia/Ukraine headlines; also positive analyst comments), LOCO +2.5% (continues to be highly volatile pre-mkt name), MT +2.4% (trading higher in sympathy with peer X), GPRO +2.3% (positive comments on Mad Money), ACHN +2% (RA Capital Management discloses 18.1% passive stake in 13G filing), VOD +1.3% (M&A spec), BP +1.3% (wants oil spill admin claims removed, according to reports), TSLA +1.3% (positive comments on Mad Money), GNC +1.2% (positive comments on Mad Money), BIDU +1.1% (IndoorAtlas receives $10 mln investment from Baidu and signs exclusive agreement for Chinese Market), NVS +1% (reports Gilenya data to show Novartis is redefining MS treatment goals for patients), AZN +1% (TEVA announces UK High Court gives positive judgment in the Company's patent case against AstraZeneca (AZN)).

Analyst comments: SALT +2.3% (initiated with a Buy at Jefferies), LL +2.3% (upgraded to Outperform from Neutral at Wedbush), BDBD +2.1% (upgraded to Buy from Neutral at Longbow), CRH +2.1% (upgraded to Neutral from Underweight at HSBC Securities), ABB +2.1% (upgraded to Buy from Neutral at BofA/Merrill), DGX +0.9% (added to Conviction Buy list at Goldman)

(BFW) *PUTIN SAYS FINAL AGREEMENT MAY BE REACHED AT SEPT. 5 TALKS

BFW 09/03 12:12 *PUTIN SAYS HE DRAFTED UKRAINE PLAN BASED ON POROSHENKO TALKS
BFW 09/03 12:10 *PUTIN PROPOSES PRISONER SWAP, HUMANITARIAN CORRIDORS IN UKRAINE
BFW 09/03 12:09 *PUTIN CALLS FOR INTERNATIONAL CONTROL OVER TRUCE IN UKRAINE
BFW 09/03 12:09 *PUTIN SAYS PLAN INCLUDES END TO OFFENSIVE IN DONETSK, LUHANSK
BFW 09/03 12:08 *PUTIN OUTLINES PLAN FOR ENDING CONFLICT IN UKRAINE
BFW 09/03 12:08 *PUTIN SAYS SHARES VIEWS WITH POROSHENKO ON HOW TO END CONFLICT
BFW 09/03 12:07 *PUTIN SAYS HAD CONVERSATION WITH POROSHENKO
BN 09/03 12:07 *PUTIN: RUSSIA TO WORK ON LIFTING LIMITS ON MONGOLIAN FOOD SALES
BN 09/03 12:05 *PUTIN SAYS IMPORTANT TO INCREASE MONGOLIAN TRANSIT POTENTIAL
BN 09/03 12:05 *PUTIN SAYS TRADE TIES WERE DISCUSSED WITH MONGOLIAN OFFICIALS
*PUTIN SAYS FINAL AGREEMENT MAY BE REACHED AT SEPT. 5 TALKS
2014-09-03 12:11:16.991 GMT

--PAUL ABELSKY

-0- Sep/03/2014 12:11 GMT

(BFW) *DAIMLER SEES 2014 TRUCKS PRODUCTION BELOW EXPECTATIONS: BILANZ

DAIMLER SLightly lower

BN 09/03 11:59 *BILANZ CITES INTERVIEW WITH DAIMLER TRUCK CHIEF BERNHARD
BN 09/03 11:59 *DAIMLER PLANS TO DEFEND GLOBAL TRUCK MKT LEADERSHIP: BILANZ
BN 09/03 11:58 *DAIMLER SEES 2014 TRUCKS PRODUCTION BELOW EXPECTATIONS: BILANZ
BN 09/03 11:58 *DAIMLER EXPECTS TRUCK MKT TO DECLINE BY AT LEAST 5%: BILANZ
BN 09/03 11:50 *DAIMLER TO FOCUS TRUCK PRODUCTION ON CORE COMPONENTS: BILANZ
*DAIMLER SEES 2014 TRUCKS PRODUCTION BELOW EXPECTATIONS: BILANZ
2014-09-03 11:59:13.851 GMT

--BRIAN LYSAGHT

-0- Sep/03/2014 11:59 GMT

(Pimco) For Wonks Only -Bill Gross September Investment Outlook

For Wonks Only​​​
William H. Gross

​
A credit-based financial economy (as opposed to pure cash) depends on an ever-expanding outstanding level of credit for its survival. Without additional credit, interest on previously issued liabilities cannot be paid absent the sale of existing assets, which in turn would lead to a vicious cycle of debt deflation, recession and ultimately depression. It is this expansion of private and public market credit which the Fed and the BOE have successfully engineered over the past five years, while their contemporaries (the ECB and BOJ) have until now failed, at least in terms of stimulating economic growth.

The unmodeled (for lack of historical example) experiment that all major central banks are now engaged in is to ask and then answer: What growth rate of credit is enough to pay prior bills, and what policy rate/amount of Quantitative Easing (QE) is necessary to generate that growth rate? Assuming that the interest rate on outstanding debt in the U.S. is approximately 4.5% (admittedly a slight stab in the dark because of shadow debt obligations), a Fed governor using this template would want credit to expand by at least 4.5% per year in order to prevent the necessary sale of existing assets (debt and equity) to cover annual interest costs. That is close to saying they would want nominal GDP to expand at 4.5%, but that’s another story/ Investment Outlook.

How are they doing? Chart 1 shows outstanding credit growth for recent quarters and all quarters since January 2004. The chart’s definition of credit includes the standard Fed definition of private non-financial credit (corporations, households, mortgages), public liabilities (government debt), as well as financial credit. The current outstanding total approximates $58 trillion and has been expanding at an average annual rate of 2% for the past five years, and 3.5% for the most recent 12 months.

NYT - Why a Breakup of Citigroup Is Still a Good Idea

Nine years ago, Breakingviews proposed an “extreme idea” to Citigroup’s then-leader, Charles O. Prince III. The $240 billion market capitalization of the New York bank was lower than the worth of its parts valued separately. By splitting into three separate units, the idea was, Mr. Prince could hand shareholders an extra $50 billion or so, the equivalent of one entire U.S. Bancorp at the time.
As it turned out, Citi had bigger concerns ahead. The housing crash exposed spectacular losses, wiping out capital and necessitating a government bailout. Mr. Prince was sent out to the golf course. With the crisis now fairly distant in the rear-view mirror, however, it’s time for current chief executive, Michael L. Corbat, to revisit the case for a breakup.
Now cleaned up and well capitalized, Citi’s market capitalization is about $160 billion – though any loyal shareholders are still nearly 90 percent worse off than in 2005. And the bank continues to be prone to the stumbles that have proved characteristic since Sanford I. Weill, Mr. Prince’s predecessor, stitched the behemoth together.
This year, for example, Citi revealed an embarrassing fraud at its big Mexican subsidiary, Banamex. Although not material to Citi’s capital, the $400 million swindle rekindled concerns that the bank’s sprawl makes it too complex to manage. That’s one reason the Federal Reserve subsequently thwarted Citi’s plans to increase its dividend.
Slicing Citi into more manageable pieces would be one way to soothe regulators at home and abroad, not to mention American taxpayers fearful of another bailout in the future. For any voluntary breakup to gain support, though, it would need to reward shareholders well beyond breaking the dividend logjam. Some arithmetic on Citi’s component parts suggests that’s possible.
Start with Mexico. The Mexican offshoot of the Spanish bank Santander fetches twice its book value on the stock market. At about a 20 percent discount for the less profitable Banamex, Citi’s unit may be worth about $15 billion – perhaps more to the likes of the local billionaire Carlos Slim Helu. Santander’s blueprint is a good one: Separate ownership, or at least a separately listed entity, provides clarity and incentives for managers. In Santander’s case, a degree of local involvement also comforted regulators in both Madrid and Mexico City, according to an executive familiar with Santander’s initial public offering.
Citi’s North American consumer business, which includes its branded and white-label credit cards and 900 bank branches, could also be cut free. Spinning off a business highly dependent on capital market fund-raising would have been unthinkable during the crisis. But General Electric’s successful initial public offering in July of its consumer financial arm, Synchrony Financial, proved that times have changed.
Citi’s American retail division reported net income of $2.1 billion in the first half of this year. Annualize that and put it on a price-to-earnings multiple of 13 times, and the division is worth perhaps $55 billion.
That leaves what may be best called “Core Citi” – the wholesale and corporate bank, which includes the world’s top cash management and foreign-exchange backbone and a big investment bank. If Core Citi matches its first-half results through the year, it will report $11 billion of profit in 2014. At 12 times earnings, a discount to State Street and slight premium to Goldman Sachs, the business would be valued at around $132 billion.
Add up the pieces, and that’s around $200 billion — a quarter more than Citi is worth today. That doesn’t even include some other bits like the international consumer arm, which could remain with the core Citi business. Excluding Latin America, this segment is on track to earn about $1.3 billion in 2014. Managed without the shackles of a board focused heavily on the United States, the more attractive pieces of this, like franchises in Southeast Asia, Hong Kong and India, might over time even add up to another Standard Chartered in their own right.
Predictably, there are flies in the ointment. The biggest is Citi Holdings, the division into which previous bosses dumped orphaned and unwanted assets. Holdings lost $48 million in the first half of this year and would be hard to separate from the North American consumer arm, where it would eat into returns on capital for some years to come.
Another wrinkle is Citi’s so-called deferred tax asset, which the bank values at around $50 billion. This is essentially an accumulation of past losses that will offset future earnings and thereby reduce future taxes. In a breakup, only a portion of this would remain with Core Citi and the North American retail arm, necessitating a multibillion-dollar accounting charge. But in the important area of capital, this would be unlikely to hurt Citi, because international bank capital rules disqualify all but a small portion of the deferred tax asset for regulatory purposes.
And even some of these clouds may have silver linings. For example, the revival of investor interest in subprime lending bodes well for the OneMain Financial unit, currently inside Citi Holdings. The former Associates lending business, now on the block, could be worth $4 billion or more based on the multiple of book value commanded by a rival, Springleaf. Profitable sales of such noncore assets could accelerate the cleansing process and free up capital.
Mr. Corbat, the chief executive, shows no sign of considering such a radical restructuring. Without pressure from Citi’s board or its chairman, Michael E. O’Neill, who ousted Vikram S. Pandit, the last chief executive, a breakup isn’t likely to gain traction. But Mr. Corbat is a thoughtful executive, and the exercise in outlining how the bank could be wound down speedily in the event of distress – conducted at the behest of regulators – will also have revealed mechanisms that could be used to break up the company.
For now, he is focused on a strategy that Citi’s leaders believe will help the stock price narrow the bank’s 30-odd percent discount to book value. If successful, that will close the gap between the company’s market capitalization and the value of its parts. Any further mishaps, though, and shareholders, board members and regulators might start to think Citi would be better broken into bits.

>>> US Early premarket gappers

Early premarket gappers
Gapping up: INFI +46.3%, ISNS +29.7%, PTN +17.6%, VII +15.6%, CNQR +11.9%, TTPH +10.7%, AVNW +9%, CBLI +7.5%, ALTV +6.5%, EXEL +5.4%, BTH +4.9%, CHL +4.9%, RSX +4.2%, FLEX +4.1%, ACHN +3.7%, TEU +3.7%, LOCO +3.6%, YNDX +3.2%, GPRO +2.9%, QIWI +2.8%, VOD +1.5%, HSBC +1.5%, ZNGA +1.3%, BIDU +1.3%, TOL +1.2%, RCL +1%, NVS+0.9%, AZN +0.7%

Gapping down: END -20%, HELE -10.4%, GWRE -8.3%, DGLY -6.2%, DGLY -6.2%, CPLP -5.1%, TKMR -4.1%, EFC -3.9%, EFC -3.9%, DEPO -3%, CDW -2.5%, AER -2.4%, EFII -2.3%, CLVS -1.7%, RBS -1.5%, BPL -1.4%, NAV -0.6%