>>> Asian Update

Asian Market Update: Japan Q1 GDP much stronger than expected on consumption surge ahead of tax hike

***Economic Data*** - (JP) JAPAN Q1 PRELIMINARY GDP Q/Q: 1.5% V 1.0%E; GDP NOMINAL Q/Q: 1.2% V 1.0%E; GDP ANNUALIZED GDP Q/Q: 5.9% (3-year high) V 4.2%E - (JP) JAPAN MAR TERTIARY INDUSTRY INDEX M/M: 2.4% V 2.2%E - (AU) AUSTRALIA APR NEW MOTOR VEHICLE SALES M/M: 0.0% V -0.3% PRIOR; Y/Y: -1.9% V -2.9% PRIOR - (AU) AUSTRALIA APR RBA FX TRANSACTIONS MARKET (A$): 325M V 736M PRIOR - (NZ) NEW ZEALAND APR BUSINESS MANUFACTURING PMI: 55.2 (7-month low) V 58.0 PRIOR

Market Snapshot (as of 03:30 GMT): - Nikkei225 -0.9%, S&P/ASX -0.2%, Kospi flat, Shanghai Composite -0.6%, Hang Seng +0.3%, Jun S&P500 -0.1% at 1,883, Jun gold -0.1% at $1,304, Jun crude oil -0.3% at $102.06/brl

***Highlights/Observations/Insights*** - Japan Q1 GDP grew at a 3-year high of 5.9% on annual basis, as consumers rushed to make advance purchases before the Apr 1st start of higher sales tax and businesses invested generously. GDP q/q components saw consumption rise 2.1% v 0.4% prior, CAPEX up 4.9% v 1.4% prior, and export growth spiking by 6% vs 0.5% prior. Public investment shrank 2.4% however after a 1.2% increase in Q4. Markets initially interpreted the higher than expected GDP as diminishing the probability of further BOJ easing, but then questioned sustainability of that rate of growth in Q2 and Q3, with headwinds from higher sales tax likely to dent consumer spending which is over 50% of Japan economy. USD/JPY fell over 20pips below 101.70 but quickly reversed those loses. Econ Min Amari acknowledged consumption growth was a major contributor to GDP, remaining confident that domestic demand would support the broader economic rebound. Amari also noted the cabinet would carefully examine Q2 and Q3 GDP before making a decision on 2015 sales tax hike to 10%. Separately, BOJ Gov Kuroda said the sales tax hike is being passed through, with prices expected to be on an upward trend later this fiscal year.

- Shanghai Composite remains under pressure on renewed concerns over China's rate of growth in the wake of disappointing April economic data. China National Energy Administration (NEA) reported Apr power consumption grew just 4.6% y/y, while local press indicated the State Council announced measures to further improve imports.

- In equities, Australia's Westfield and Graincorp were both down marginally after posting Q1 retail sales (inline with views) and a 43% y/y decline in net profit respectively. Cisco moved sharply higher in the US extended session, first after beating estimates on Q3 results and then guiding much stronger than expected on a conference call. CEO Chambers noted several businesses starting to show improving trends, but also cautioned challenges in emerging markets to continue.

- Appaloosa's David Tepper gave a closely followed address at the SkyBridge investment conference in Las Vegas, calling US equity market "dangerous" and warning not to be "too long". Tepper also said he is more worried about deflation than inflation.

***Fixed Income/Commodities/Currencies*** - JGB: (JP) Japan's MoF sells ¥2.47T in 0.2% (0.2% prior) 5-yr notes; Avg yield: 0.185% v 0.189% prior; Bid to cover: 4.62x v 4.67x prior - (JP) Japan investors bought net ¥345.7B in foreign bonds last week vs bought ¥70.8B in prior week; Foreign investors sold net ¥153.9B in Japan stocks vs bought net ¥195.9B in prior week - (CN) PBoC to drain CNY87B in 28-day repos (25th consecutive drain); Injects net CNY44B v drained CNY60B prior - USD/CNY: (CN) PBoC sets yuan mid point at 6.1640 v 6.1653 prior setting (first firmer setting in 6 sessions)

***Equities*** US markets: - VIPS: Reports Q1 $0.63 v $0.45e, R$701.9M v $651Me; +8.7% afterhours - CSCO: Reports Q3 $0.51 v $0.48e, R$11.5B v $11.3Be; Guides Q4 adj EPS $0.51-0.53 v $0.51e; Rev -3% to -1% v -5%e (implies R$12-12.3B v $11.8Be) - conf call; +7.2% afterhours - OPWR: Reports Q1 -$0.13 v -$0.25e, R$28.6M v $24.5Me; +4.1% afterhours - A: Reports Q2 $0.72 v $0.72e, R$1.73B v $1.74Be; -1.3% afterhours - NTES: Reports Q1 $1.38 v $1.40e, R$405M v $413Me; Announces $100M (1.1% market cap) repurchase program; -2.5% afterhours - JACK: Reports Q2 $0.51 v $0.52e, R$340.9M v $338Me; -2.8% afterhours - WX: Reports Q1 $0.49 (adj) v $0.39e, R$147M v $145Me; -6.3% afterhours - XONE: Reports Q1 -$0.38 v -$0.14e, R$7.3M v $10.0Me; -14.0% afterhours - RGSE: Reports Q1 -$0.32 (incl charge) v -$0.13e, R$22.1M v $24.5Me; -14.7% afterhours

- DTV: AT&T said to be working with Lazard on DirecTV deal - financial press

Notable movers by sector: - Consumer Discretionary: Guangzhou Canudilo Fashion & Accessories 002656.CN +3.7% (strategic alliance with Tencent); Anta Sports Products 2020.HK +5.3% (Q1 operating results) - Financials: Mizuho Financial Group 8411.JP -0.5% (FY13/14 results); Westfield Group WDC.AU -0.3% (quarterly trading update); Sumitomo Mitsui Financial Group 8316.JP -3.3% (FY13/14 results); Mitsubishi UFJ Financial Group 8306.JP -0.2% (FY13/14 results; Chairman resigns; names new exec) - Energy: China Shenhua Coal 1088.HK -0.9% (Apr production results) - Industrials: Yue Yuen Industrial 551.HK +1.6% (Q1 results) - Technology: Tencent Holdings 700.HK +5.2% (Q1 results); Sony Corp 6758.JP -7.0% (FY13/14 results) - Utilities: SP Ausnet SPN.AU -1.5% (FY14 results) - Telecom: Singapore Telecommunications STEL.SG -0.5% (Q4 results)

>>>US After Hours

After Hours Summary: VIPS +9.3%, CSCO +6.9%, SANW +6.6%, VOXX -20.6%, RGSE -13.3%, XONE -12.3% following earnings/guidance

After Hours Gainers: Companies trading higher in after hours in reaction to earnings: VIPS +9.3%, CSCO +6.9%, SANW +6.6%, OPWR +4.1%, CVT +3.2%, AGYS +3.1%, GEVO +2%, TKMR +1.5%

Companies trading higher in after hours in reaction to news: CLVS +9.2% (announced presentation of data for CO-1686 and lucitanib at ASCO; mentioned positively by biotech blogger), MNTA +3.4% (hearing higher following TEVA losing a bid to block generic version of Copaxone), SYMC +2.5% (ValueAct disclosed new 7.6 mln share position in the stock), DNDN +1.9% (announced presentation of PROVENGE and DN24-02 immuno-oncology data at the 2014 ASCO annual meeting), WILN +1.9% (concluded strategic review, co to remain a standalone company; announced plans to increase dividend 25%), 

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: VOXX -20.6%, RGSE -13.3%, XONE -12.3%, WX -6.3%, REED -4.6%, STEM -3.2%, ASTC -3%, DRWI -2.4%, JACK -1.4%, SEAS -0.8%, A -0.5%, HOLI -0.1%

Companies trading lower in after hours in reaction to news: INCY -8.8% (trading lower following release of abstracts related to data for co's drug ruxolitinib to be presented at ASCO), SRNE -6.0% (announced public offering of common stock, size not disclosed), SIR -4.2% (announced proposed public offering of 8 mln common shares), JACK -1.4% (announced initiation of $0.20 per share quarterly dividend)

>>> US Close Dow-0,61% S&P-0,47% Nasdaq-0,72%

Closing Market Summary: Russell 2000 Leads Stocks Lower

The stock market stumbled on Wednesday with small caps leading the fall as the Russell 2000 (-1.6%) registered its second consecutive decline that placed it back below its 200-day moving average. For its part, the S&P 500 lost 0.5% with five sectors finishing in the red.

Equity indices began the midweek session below their flat lines, but outside of the Russell 2000, their losses were held in check for the bulk of the day. The S&P 500 hovered roughly four points below its flat line for the better part of the trading day until diving to a fresh low during the last 90 minutes of action.

Meanwhile, the Russell 2000 lagged from the open, and its underperformance likely contributed to the overall sense of caution. Furthermore, the relative weakness among the top-weighted sectors prevented sustained rallies from taking shape.

Out of the five largest sectors that represent more than 70.0% of the S&P 500, consumer discretionary (-1.1%), financials (-0.8%), technology (-0.6%), and industrials (-0.8%) lagged throughout the session, while health care (unch) displayed relative strength thanks to modest gains in biotech. The iShares Nasdaq Biotechnology ETF (IBB 231.41, +0.90) advanced 0.4%.

The weakest sector of the day—consumer discretionary—suffered from noteworthy losses among apparel retailers. Shares of Fossil (FOSL 100.00, -11.45) tumbled 10.3% after the company's cautious guidance overshadowed its earnings beat. Also of note, Macy's (M 57.83, -0.01) reported a one-cent beat on below-consensus revenue, but could not rally even though shareholders were treated to a 25.0% dividend hike and an increase to the share repurchase program. As a result of the decline, the worst-performing sector of the year widened its year-to-date loss to 4.7%.

Although most cyclical sectors were unable to keep pace with the broader market, energy (+0.04%) and materials (+0.1%) outperformed amid strength in the underlying commodities. Crude oil rose 0.6% to $102.34, while metals displayed strength as well. Copper futures advanced 0.7% and gold futures rose 0.9% to their respective $3.16/lb and $1306.10/ozt.

On the countercyclical side, consumer staples (-0.6%) lagged, while rate-sensitive telecom services (+0.5%) and utilities (+0.4%) finished in the lead. Both sectors likely benefitted from today's session-long retreat in yields. The 10-yr note advanced 18 ticks, pressuring its yield seven basis points to 2.54%. The benchmark yield settled at its lowest level since late October 2013.

Participation was well below average, which has been the case for the past week. In fact, daily NYSE volume has been trending lower all week with today's tally (607 million) representing the second-lowest total of the week.

Economic data was limited to the April PPI report and the weekly MBA Mortgage Index:

* Producer prices increased 0.6% in April, up from a 0.5% increase in March. The consensus expected producer prices to increase 0.2%. The economic consensus is once again having difficulties estimating producer inflation using the new methodologies. Final demand for services, which increased by its largest amount (0.7%) in March since January 2010, was anticipated to fall back in April. That did not happen. Services prices rose another 0.6% in April, which was one of the largest two-month gains in the history of the index. Final demand for goods increased 0.6% in April, up from being flat in March. Food prices, which jumped 1.1% in March, increased 2.7% in April. Energy costs, which were expected to be a primary factor for April inflation gains, increased a minute 0.1% in April after falling 1.2% in March. Excluding food and energy, core PPI increased 0.5% in April, down from a 0.6% increase in March. The consensus expected these prices to increase 0.2%.  * The weekly MBA Mortgage Index rose 3.6% to follow last week's increase of 5.3%. 

Tomorrow, weekly initial claims (consensus 325,000), April CPI (consensus 0.3%), and the Empire Manufacturing survey for May (consensus 4.8) will all be released at 8:30 ET, while March Net Long-Term TIC Flows will be announced at 9:00 ET. April Industrial Production (consensus 0.0%) and Capacity Utilization (consensus 79.2%) will be announced at 9:15 ET, while the Philadelphia Fed survey for May (consensus 9.1) and the May NAHB Housing Market Index (consensus 48) will cross the wires at 10:00 ET.

* S&P 500 +2.2% YTD  * Dow Jones Industrial Average +0.2% YTD  * Nasdaq Composite -1.8% YTD  * Russell 2000 -5.0% YTD

(BFW) Tod’s 1Q Rev., Ebit Beats Ests., YTD Comp Sales Down 6.7%

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Tod’s 1Q Rev., Ebit Beats Ests., YTD Comp Sales Down 6.7% 2014-05-14 15:45:25.401 GMT

By Heather Burke May 14 (Bloomberg) -- Tod’s 1Q sales EU253.8m, est. EU246.3m. * 1Q Ebitda EU56.8m, est. EU54.9m * 1Q Ebit EU46.3m, est. EU45.1m * 1Q total sales constant FX up 2.2%, est. down 1.4% (median of 12) * Same store sales down 6.7% in 1st 19 wks to May 11 * 1Q Italy sales down 10% constant FX, Europe ex-Italy up 12% * Earnings preview here * Call 6pm CET

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

To contact the reporter on this story: Heather Burke in London at +44-20-7673-2044 or hburke2@bloomberg.net To contact the editor responsible for this story: James Ludden at +44-20-7673-2645 or jludden@bloomberg.net

(BFW) BG, Tullow ‘Very Unlikely’ to Face Takeover: Tudor Pickering

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BG, Tullow ‘Very Unlikely’ to Face Takeover: Tudor Pickering 2014-05-14 14:43:33.847 GMT

By Benjamin Dow May 14 (Bloomberg) -- Not expecting S-T M&A among Kurdistan-exposed E&Ps, Tudor Pickering says in M&A note. * Names main large E&P takeover candidates as Africa Oil, Amerisur, Maurel & Prom, Ophir; smaller E&Ps Lekoil, Panoro, Providence, Rockhopper, Salamander, Xcite also join list * Sees Dragon, Genel, Lundin, Maurel, Ophir, Soco among potential buyers

Link to Company News:RKH LN <Equity> CN <GO> Link to Company News:GENL LN <Equity> CN <GO> Link to Company News:AOI CN <Equity> CN <GO> Link to Company News:AFR LN <Equity> CN <GO> Link to Company News:MAU FP <Equity> CN <GO> Link to Company News:WZR CN <Equity> CN <GO> Link to Company News:SNM CN <Equity> CN <GO> Link to Company News:OXC CN <Equity> CN <GO> Link to Company News:AMER LN <Equity> CN <GO> Link to Company News:XEL CN <Equity> CN <GO> Link to Company News:LEK LN <Equity> CN <GO> Link to Company News:SIA LN <Equity> CN <GO> Link to Company News:LUPE SS <Equity> CN <GO> Link to Company News:PRP ID <Equity> CN <GO> Link to Company News:PEN NO <Equity> CN <GO> Link to Company News:BG/ LN <Equity> CN <GO> Link to Company News:TLW LN <Equity> CN <GO>

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

To contact the reporter on this story: Benjamin Dow in Moscow at +7-495-771-7735 or bdow2@bloomberg.net

To contact the editor responsible for this story: James Ludden at +44-20-7673-2645 or jludden@bloomberg.net

>>> Deere on conf call gives an industry outlook for the agriculture & turf reta

Deere on conf call gives an industry outlook for the agriculture & turf retail sales
* U.S. and Canada Ag: 2014 forecast sees down 5-10%; previous forecast called for down 5-10% (reaffirms)
* EU 28: 2014 forecast calls for Ag Down ~ 5%; previous forecast called for down ~ 5% (reaffirms)
* South America Ag (Tractors and Combines): forecast calls for down ~ 10%; previous forecast called for down 5-10% (lowers guidance)
* CIS Countries Ag: forecast call for down significantly; previous forecast called for down slightly (lowers guidance)
* Asia Ag: forecast calls for up slightly; previous forecast called for up slightly (reaffirms)
* U.S. and Canada Turf and Utility Equipment: 2014 forecast sees flat to up 5%; previous forecast called for up ~ 5% (lowers guidance)

(BFW) *MARFIN INVEST SAID TO ISSUE 5-YEAR EU250M CONVERTIBLE BOND

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BN 05/14 14:19 *PIRAEUS BANK SAID TO BUY 5-YEAR MARFIN INVESTMENT GROUP BOND

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*MARFIN INVEST SAID TO ISSUE 5-YEAR EU250M CONVERTIBLE BOND 2014-05-14 14:19:07.342 GMT

--MARCUS BENSASSON

-0- May/14/2014 14:19 GMT

FT : Investors lift cash holdings to two-year highs

Investors lift cash holdings to two-year highs

Investors have increased their holdings of cash to the highest in nearly two years and scaled down risk-taking, amid fears of geopolitical instability and questions about the strength of the global economic recovery.
Despite Wall Street and European indices hitting record and near-record highs, investors are sitting on more cash and have reduced equity holdings compared with a month ago, the latest BofA Merrill Lynch fund manager survey shows.

Investors also see two significant risks to market stability. One-third of the global panel believes the possibility of Chinese debt defaults poses the biggest risk, while 36 per cent say a geopolitical crisis is the greatest threat.
“Investors are showing belief in the economy but with two big question marks: Are we on the brink of a disruptive event? And why, at this point in the cycle, isn’t this recovery stronger?” said Michael Hartnett, chief investment strategist at BofA Merrill Lynch Global Research.
Average cash levels have reached 5 per cent of portfolios, the highest since June 2012 and up from 4.8 per cent in April. A net 22 per cent are taking below normal levels of risk, up from 11 per cent a month ago. The proportion of asset allocators overweight equities has fallen to a net 37 per cent from a net 45 per cent last month.
European equities have bucked the broader monthly trend of seeing allocations scaled down and investors have indicated the positive flows should continue.
A net 36 per cent of global asset allocators say they are overweight eurozone equities, up from a net 30 per cent in April. Allocations to other developed markets, namely the US and Japan, fell month-on-month.
“Specifically, within Europe, investors are all aboard the periphery train, and there’s now simply no margin for error. Spanish and Italian equities are preferred over those in the UK and Switzerland, while eurozone periphery debt is seen as the most crowded trade globally,” said Obe Ejikeme, European equity and quantitative strategist.
Europe is the region most in favour, looking ahead. A net 28 per cent say it is the region they most want to be overweight in the coming 12 months, up from a net 23 per cent a month ago. A net 14 per cent say European equities are undervalued.
The US is the least-favoured region, with a net 18 per cent saying it is the region they most want to be underweight in, up from a net 9 per cent in April. Forward-looking sentiment for emerging markets has improved slightly over the past month and a net 3 per cent say it is the region they most want to be overweight in.

>>> Allergan: CRT Capital believes that VRX could up their b

Allergan: CRT Capital believes that VRX could up their bid for AGN by $5bn on the cash side (161.28)

CRT Capital believes that VRX could up their bid for AGN by $5bn on the cash side to make it a $52bn offer -- they say this would still give them 18-20% eps accretion in year 1, as well as $2.7bn in cost synergies equaling $9-10 in upside to AGN.