TheChek News Flow

Asian Market Update: Japan draws closer to corporate tax cut; Oil rallies amid speculation over suspended ban on US exports

***Notable Economic Data*** - (AU) AUSTRALIA MAY SKILLED VACANCIES M/M: -1.3% (3rd month of decline) V -1.3% PRIOR - (JP) JAPAN MAY CORPORATE SERVICE PRICE INDEX Y/Y: 3.6% (10th consecutive rise; fastest pace since Jan 1991) V 3.3%E - (KR) SOUTH KOREA JUN CONSUMER CONFIDENCE: 107 V 105 PRIOR

***Fixed Income/Commodities/Currencies*** - Aug gold -0.5% at $1,315/oz, Aug crude oil +0.6% at $106.71/brl, Jul copper -0.2% at $3.15/lb

- (AU) Australia 10-yr govt bond yields falling to below 3.6%, lowest in a year - (JP) BOJ offers to buy ¥300B in 1-3yr JGB, ¥200B in 3-5yr JGB and ¥400B in 5-10yr JGB as well as ¥450B in CP - SLV: iShares Silver Trust ETF daily holdings fall to 10,148 tonnes from 10,181 tonnes prior (lowest since Feb 19th) - (US) API PETROLEUM INVENTORIES: CRUDE: +4M (largest build since April 15th) v -1Me, GASOLINE: +2.2M v +1Me, DISTILLATE: -0.25M v +1Me

- Trading in USD majors is extremely thin. EUR/USD in 10pip range above $1.36, USD/JPY is down 10pips below ¥101.90, and AUD/USD is off by 15pips from the open as low as $0.9355.

***Market Focal Points/Key Themes*** - Japan press reporting PM Abe specifically targets the first reduction in corporate tax rate to 29% after the govt tax panel offered support for his corporate levy component agenda revealed by the "3rd Arrow" statement. Overnight, Abe's address indicated he is looking to cut corporate tax to below 30% in phases over the next several years beginning next April.

- Aug WTI oil and shares of US refiners went on a wild ride in electronic/extended session after the WSJ report that the Obama administration has cleared the way for initial exports of unrefined US oil following a 40-year ban. Report noted Federal officials have informed two energy firms they can legally export a particular kind of ultra-light oil, and Sen Murkowski said the Dept of Commerce allowing some condensate exports is a good first step. Subsequent report from US Commerce Department spokesperson indicated there has been no change in policy on oil exports, with existing statutes providing restrictions and allowances on crude exports. Aug contract initially spiked to $107.50 before retreating to $106.70 on the developments.

- San Fran Fed Pres Williams: US is about 2 years away from full employment, economy is moving closer to normal, and nothing will stop the Fed from increasing interest rates when required. Williams, among the more dovish Fed presidents, is not a voting member on the FOMC.

- Late in the US session, report in financial press stating Ukraine President Poroshenko is considering ending the week-long ceasefire in eastern Ukraine early after pro-Russia separatists shot down another military helicopter, killing 9 people.

***Equities*** US markets: - IMS: To Acquire Cegedim's Information Solutions and CRM Businesses for $520M in cash; affirms guidance; +5.3% afterhours - BMY: Present phase III first-line melanoma study of Nivolumab; demonstrates superior overall survival compared to Dacarbazine; study stopped early; +1.9% afterhours - BBY: Said to be considering options for Chinese business, including sales or partnership - financial press; +0.4% afterhours - AKS: Raises stainless steel prices; +0.1% afterhours - VMI: Lowers 2014 guidance to $9.35-9.65 v $10.40e (prior $10.00-10.50); Guides Q2 $2.35-2.40 v $2.80e; -4.8% afterhours

Notable movers by sector: - Consumer Discretionary: Treasury Wine Estates TWE.AU +4.1% (may receive bid) - Consumer staples: Labixiaoxin Snacks Group 1262.HK -20.0% (speculation company inflated sales Rev.) - Financials: China South City Holdings 1668.HK +7.0% (strategic alliance with Tencent) - Materials: Tongling Nonferrous Metals Group 000630.CN -3.4% (death of Chairman) - Industrials: Lend Lease Group LLC.AU -3.1% (FY14 guidance) - Technology: FIH Mobile 2038.HK -4.4% (H1 guidance); Beijing Bewinner Communications 002148.CN +2.5% (new game to China market)

Hold Off on America's House Party

Prospects for the housing market have improved, but it is hardly the time for hosannas.

The National Association of Realtors on Monday reported that sales of existing (or previously owned) homes in May rose 4.9% from April, seasonally adjusted. Better still, on Tuesday the Commerce Department reported that new-home sales gained 18.6% in May, reaching a six-year high. Even after allowing for the large error bars around the new home-sales figures, in particular, it seems like housing is escaping its recent funk.

To some extent, the improvement in sales is probably a payback for a tough winter. But slowing home-price appreciation may have had something to do with it as well.

On Tuesday, the latest reading of the S&P/Case-Shiller 20-City Composite Home Price Index, for April, was up 10.8% from a year before. The March reading had shown a 12.4% annual gain. The Federal Housing Finance Agency's less-closely watched house-price index—a more timely measure because, unlike the S&P/Case-Shiller, it is not based on a three-month average—showed monthly price gains halted in April.

It may be that the supply problems that have been pushing prices higher are finally alleviating. That is important because with home prices outpacing incomes, the possibility of owning has been getting further out of reach for many would-be first-time buyers. Meanwhile, owners hoping to move into something bigger or nicer have seen the price difference between their current home and their dream home expand to the point where many are opting to just stay put.

Absent more first-time home buyers, and more trading activity, home sales will be stuck at levels that remain well below where history says they should be.

But price hasn't been the only thing holding back the housing market. The Federal Reserve's senior loan officer survey shows that as the economy has recovered, banks have been far slower to relax lending standards for mortgages than for other types of loans. In recent quarters they have actually tightened a bit.

Applying hard lessons learned during the bust, households may also be engaging in some self regulation, demanding higher down payments of themselves and more assurances that they will have the wherewithal to make payments.

Meeting both of those criteria depends on a better job market. Although the Labor Department reported that U.S. payrolls finally nudged past their January 2008 peak last month, the population rose by about 15 million people during that period. Moreover, after adjusting for inflation, average hourly earnings have made no progress since the recession ended five years ago this month.

It is cheering that the price and supply problems that have been holding back housing are showing signs of improvement. True recovery, though, rests on employment improving to the point that banks are more willing to extend mortgages to households and households are more willing to take them. There is hope that with the recent pickup in the job market, that time is no longer over the horizon. But it hasn't come yet.

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BFW 06/24 20:11 LVMH Considering Consortium Bid for Treasury Wine: AFR Link BN 06/24 20:10 *CONSTELLATION BRANDS MAY ALSO BID FOR TWE: AFR BN 06/24 20:09 *LVMH CONSIDERING CONSORTIUM BID FOR TREASURY WINE ESTATES: AFR

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LVMH, Constellation Brands May Bid for Treasury Wine: AFR 2014-06-24 20:18:38.301 GMT

By James Thornhill June 25 (Bloomberg) -- LVMH considering whether to submit full offer or bid for premium Penfolds brand as part of a consortium, Australian Financial Review reports citing unidentified people. * Constellation Brands may bid in consortium with a U.S. buyout firm: AFR * China’s Bright Food is another potential suitor: AFR * Note: Treasury Wine Estates in May rejected an offer from KKR valuing the co. at A$3.05b: NSN N5UKB36JIJUQ<GO>

Link to article: http://goo.gl/aJqbUK (subs. reqd.)

For Related News and Information: First Word scrolling panel: FIRST<GO> First Word newswire: NH BFW<GO>

To contact the reporter on this story: James Thornhill in Sydney at +61-2-9777-8663 or jthornhill3@bloomberg.net To contact the editors responsible for this story: Chua Baizhen at +65-6212-1116 or bchua14@bloomberg.net

Closing Market Summary: Stocks End Lower Following Intraday Reversal

The stock market ended the Tuesday session on a lower note despite seeing early strength. The Dow Jones Industrial Average and S&P 500 posted respective losses of 0.7% and 0.6%, while the Nasdaq Composite shed 0.4%.

Equity indices displayed modest losses at the start, but were quick to regain their flat lines after a pair of economic data points surprised to the upside. Briefly, the New Home Sales report for May came in well ahead of estimates (504K versus consensus 440K), while the Consumer Confidence report (85.2) registered its highest reading since early 2008.

The economic news gave a boost to the consumer discretionary sector (-0.2%) and especially homebuilders. DR Horton (DHI 23.89, +0.29) and Toll Brothers (TOL 36.56, +0.43) both jumped 1.2%, while the iShares Dow Jones US Home Construction ETF (ITB 24.36, +0.21) advanced 0.9%. For its part, the discretionary sector fell into the red during the afternoon when the overall market reversed and surrendered its gain.

Before looking at the afternoon reversal, we'd like to point out that the discretionary space was just one of three influential sectors that slumped into the close.

The largest S&P 500 sector—technology (-0.5%)—saw intraday strength that was fueled by gains among chipmakers after Micron (MU 32.50, +1.24) reported better than expected earnings. The stock settled higher by 4.0%, while the PHLX Semiconductor Index lost 0.7% after being up as much as 0.7%.

Elsewhere, the health care sector (unch) surged out of the gate in reaction to positive cystic fibrosis treatment trial data from Vertex Pharmaceuticals (VRTX 93.53, +26.92). VRTX surged 40.4%, while the iShares Nasdaq Biotechnology ETF (IBB 255.48, +2.57) narrowed its gain to 1.0% after being up more than 2.0% intraday.

The intraday gains among three of the four largest sectors were not enough to prevent the key indices from tumbling into the red. The afternoon turnaround occurred shortly after the Wall Street Journal reported that a Syrian fighter jet struck targets in western Iraq, killing 50 people. The news was followed by broad-based selling activity that saw the energy sector (-2.0%) lead to the downside.

In all likelihood, the noteworthy dive was a function of profit taking, considering the sector trimmed its quarter-to-date gain to 10.6%. For comparison, no other sector shows an increase of more than 4.9% for the second quarter.

Meanwhile, the second-best sector of the second quarter-utilities—ended in the lead, climbing 0.3%.

Treasuries settled on their highs after spending the entire session in positive territory. The benchmark 10-yr yield fell five basis points to 2.58%.

Participation remained light with 635 million shares changing hands at the NYSE floor.

Economic data featured the April Case-Shiller 20-city Index, April FHFA Housing Price Index, New Home Sales for May, and the June Consumer Confidence report:

* The Case-Shiller 20-city Home Price Index for April rose 10.8%, while an 11.6% increase had been expected by the Briefing.com consensus. This followed the previous month's increase of 12.4%.  * The April Housing Price Index from the FHFA was unchanged, which followed an unrevised uptick of 0.7% observed during the prior month.  * New home sales increased 18.6% in May to 504,000 from a downwardly revised 425,000 (from 433,000). The consensus expected new home sales to increase to 440,000. 

* Sales topped 500,000 for the first time since May 2008.  * The spike in new home sales coincided with a large decline in mortgage rates. As rates turn higher, it could dent future sales growth. 

* The Conference Board's Consumer Confidence Index increased to 85.2 in June from a downwardly revised 82.2 (from 83.0). The consensus expected the index to increase to 84.0. 

* The index climbed to its highest point since the recession began in January 2008.  * A surging stock market and general improvements in overall employment conditions were enough to offset higher gasoline/oil prices and drive consumer confidence to a 6-year high. 

Tomorrow, the weekly MBA Mortgage Index will be reported at 7:00 ET, while Durable Orders for May (consensus 0.4%) and the third estimate of Q1 GDP (consensus -1.8%) will cross the wires at 8:30 ET.

* S&P 500 +5.5% YTD  * Nasdaq Composite +4.2% YTD  * Dow Jones Industrial Average +1.5% YTD  * Russell 2000 +0.8% YTD

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France to Sell 3.1% GDF Suez Stake, Finance Minister Sapin Says 2014-06-24 16:12:28.38 GMT

By Steve Rhinds June 24 (Bloomberg) -- The GDF Suez stake sale could be increased to as much as 3.6%, or 86 million shares, Sapin and Industry Minister Montebourg say in a joint e-mailed statement. * France could use sale proceeds to finance purchase of Alstom stake: Statement

Link to Company News:{GSZ FP <Equity> CN <GO>}

For Related News and Information: First Word scrolling panel: {FIRST<GO>} First Word newswire: {NH BFW<GO>}

To contact the editor responsible for this story: Steve Rhinds at +33-1-5365-5072 or srhinds@bloomberg.net

*FRANCE SAYS GDF SUEZ STAKE SALE COULD BE INCREASED TO 3.6%