(BFW) Air Crashes to Have Impact on 2015 Insurance Tariffs: Axa CEO

BN 08/01 07:58 *AXA HAD EU15M-EU20M CHARGES FROM FOUR AIR CRASHES THIS YEAR
BN 08/01 07:58 *AXA CEO: AIR CRASHES TO HAVE IMPACT ON 2015 INSURANCE TARIFFS
Air Crashes to Have Impact on 2015 Insurance Tariffs: Axa CEO
2014-08-01 08:06:38.598 GMT


By Fabio Benedetti-Valentini
Aug. 1 (Bloomberg) -- “We think that this will have an
impact on tariff levels next year” in the aviation insurance
industry, Axa CEO Henri de Castries said in a call with
journalists today.
* Cost of air crashes this year surpasses premiums in aviation
industry: de Castries
* Axa had between EU15m and EU20m charges from four crashes
this year of Malaysian Airline, Air Algerie and TransAsia
planes, Deputy CEO Denis Duverne told journalists.


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(BoA-ML) S&P down 1.75%, Why ?

With the S&P having its biggest down day in months at down 1.75%, so we thought that some color from our big US Equity franchise in a Q&A would be a help ...

1. What is the tone among equity investors?
Zero panic across the equity floor @ BofAML.

2. Who is selling?
Hedge funds. Zero selling from real money. Hedge funds are forced sellers based on price action, not necessarily they want to sell because of have weak hands. I call this a “buyers strike” rather than anything else.

3. Are the sells short or long sells?
Almost all of the orders that we executed have been long selling. There is no one pressing this tape from the short side. We are seeing shorting however in the yield based sectors: HYG (high yield corporate), JNK (high yield), EMB (emerging market debt), IWM and RTY Index (Small Cap), and IYR (REITs), NBI Index (Biotech). All large cap, tech, industrial, energy selling has been orderly and through ETFs, long sells.

4. Is the equity sell off fixed income or FX driven?
No. Fixed Income is flat and G10 FX is flat, the sell off started in equities and ends in equities today. Investors are reducing risk ahead of both month end and tomorrows Non Farm Payrolls print. Most of them are going to take off all of August anyway.

5. Is this the start of the autumn correction?
We don’t think so. However I do think however this comes into play here: Consensus from everyone is that we sell off 5%-10% post the summer. Although valuations still look cheap, equity investors think excesses in the credit market will spill over and we correct before a large Q4 equity rally. The mentality is to sell early before everyone else. Traders are running to the sell button even faster.

6. How much technical damage is done today?
Key technical levels were broken today 1944 on SPX and 4341 on NDX. In SPX, we are trading around this 1944 level, if this were to hold upside risks remain. If we will fail to hold this level going into the bell, then next stop is 1925 and 1902. The VIX Index breaks out from the base and may need to get into low 20s to suggest elevated vol levels are here to stay. Dealers are long a significant amount of gamma, look for this hedging flow to lend a bid to the market as we head into the close on SPX.

7. How big is the vol move?
Heading into the afternoon, we will have to see if the trend of the afternoon melt-up continues, On the margins we have seen some protection buying, but most of the downside flow has been rolling existing hedges; and the largest trade of note was another bullish risk reversal trade. Vols are up, as you might expect, with the front months increased 60/75 bps and the longer dates adding about 25bps; however speaking with the index desk they think the price action reflects the long gamma of the dealing community and like the chances we close higher than here. That massive option trade went up again, same exact trade as yesterday, buying the Oct 2050 calls ($3.5B) and Dec 2125 ($3.5B) vs selling puts. Someone is clearly bullish. The biggest trades today are calls, not puts.

8. What is the flow in programs?
Programs are seeing “opportunistic” buyers of the dip from real money accounts in smaller size. We expect this to ramp up into the bell. Seeing very active day on the corporate buy back desk, both here and away. Coporates taking advantage of these levels to buy stock back.

9. What triggered the move, what is actually new?
Argentina default, Banco Espirito capital raising, Samsung Earning miss, more unrest overseas, data was overall mixed. Chicago PMI significantly below expectations, dropping 10 points to 52.6. This contrasts with the Philly Fed and Empire State manufacturing surveys which were both quite strong in July. Within the Chicago PMI, new orders and order backlogs are both at one year lows. GDP, FOMC, NFP, and ISM when does this normally happen in the same week?

10. Is this all macro driven?
EMFX selling pressure continues, also seeing unwinds of Euro, and interest to buy $calls vs everything else CAD, AUD, JPY. In fixed income literally accounts have literally traded in and out in the same day, now we are better to buy. Swap flow has been more one way receiving. In commodities everyone is selling oil and buying vol, mostly puts.
Bottom Line: No equity panic, selective buyers of the dip, I am waiting for this2:30 bid to the markets, I think we close higher then here (time stamp 1940), as real money fills their orders for month end. Tomorrows Non Farm Payroll print is extremely important. One of the biggest firms clients told me that they are unable to actually process all of this data and it takes 3 days for the reaction to take place in the market, really stuck with me. Too much data this week. Good data, bad data, no matta. Be bullish heading into the print tomorrow, selectively adding here on the lows.

(BFW) Air France Says Ground Crew Strike to Go Ahead on Aug. 2

BN 08/01 06:43 *AIR FRANCE SAYS DELAYS ARE TO BE EXPECTED ON AUG.2
BN 08/01 06:43 *AIR FRANCE: 'VAST MAJORITY' OF SHORT, MID HAUL FLIGHTS TO RUN
BN 08/01 06:42 *AIR FRANCE SAYS ALL LONG-HAUL FLIGHTS TO OPERATE AUG. 2
BN 08/01 06:42 *AIR FRANCE SAYS GROUND CREW STRIKE AUG 2. TO GO AHEAD
Air France Says Ground Crew Strike to Go Ahead on Aug. 2
2014-08-01 06:46:28.857 GMT


By David Whitehouse
Aug. 1 (Bloomberg) -- The strike will go ahead at Charles
de Gaulle, Orly, and some regional airports, Air France says in
a statement.
* All long-haul flights will run, as well as the vast majority
of short and mid haul flights, Air France says, adding that
delays are to be expected.

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Tesla Motors 2Q Adj. EPS 11c, Est. 4c

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BFW 07/31 20:09 Tesla Sees Delivering 7,800 Model S Vehicles in 3Q; Shrs Lower BN 07/31 20:11 *TSLA SEES NO SIGNIFICANT IMPACT ON SCHEDULED DELIVERIES BN 07/31 20:11 *TSLA: PRODUCTION ON NEW LINE BEGINS NEXT WEEK BN 07/31 20:11 *TSLA: NEW LINE HAS CAPACITY TO PRODUCE OVER 1,000 VEHICLES/WK BN 07/31 20:10 *TSLA: TRANSITION TO RESULT IN 2,000 FEWER UNITS PRODUCED IN 3Q BN 07/31 20:09 *TSLA:TO SLIGHTLY ACCELERATE INVESTMENT IN CAPACITY, GIGAFACTORY BN 07/31 20:08 *TSLA SEES TO BE MARGINALLY PROFITABLE IN 3Q ON NON-GAAP BASIS BFW 07/31 20:08 *TSLA EXPECTS TO BE ABLE TO DELIVER 7,800 MODEL S VEHICLES IN 3Q BN 07/31 20:07 *TSLA PLANS TO INVEST BETWEEN $750M & $950M IN '14 BN 07/31 20:06 *TSLA SEES 3Q ADJ AUTO GROSS MARGIN ABT CONSISTENT W/ PRIOR QTR BN 07/31 20:06 *TESLA MOTORS FORM 8-K INC: 8-K 07/31/14 BN 07/31 20:06 *TESLA MOTORS 2Q ADJ. REV. $857.5M, EST. $813.0M BN 07/31 20:06 *TSLA EXPECTS TO BE ABLE TO DELIVER 7,800 MODEL S VEHICLES IN 3Q BN 07/31 20:05 *TESLA MOTORS 2Q ADJ. EPS 11C, EST. 4C BN 07/31 20:05 *TESLA PLANS TO PRODUCE ABOUT 9,000 CARS IN 3Q BN 07/31 20:05 *TESLA MOTORS ON TRACK FOR OVER 35,000 DELIVERIES IN '14 BN 07/31 20:05 *TESLA MOTORS 2Q ADJ. EPS 11C BN 07/31 20:05 *TESLA ON TRACK FOR OVER 35,000 DELIVERIES IN '14 BN 07/31 20:05 *TESLA 2Q NON-GAAP REV. $858M :TSLA US BN 07/31 20:05 *TESLA 2Q REV. $769M :TSLA US

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Tesla Motors 2Q Adj. EPS 11c, Est. 4c 2014-07-31 20:07:31.90 GMT

By Brad Skillman July 31 (Bloomberg) -- TSLA on track for more than 35k deliveries in 2014 * 2Q Model S deliveries 7,579 vehicles, est. 7,548 * Shrs down 5.5% * Preview: {NSN N9KZFL6JTSFD <go>}

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VIX Up 27.2% to 16.95

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VIX Up 27.2% to 16.95 2014-07-31 20:15:53.148 GMT

By Brian Welcher July 31 (Bloomberg) -- Aug 14 futures up 12.2% to 15.2; Sep 14 futures up 8.4% to 15.5.

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>>> US Close Dow-1,88% S&P -2% Nasdaq -2,09%

Closing Market Summary: Stocks Surrender July Gains

The stock market punctuated July with a broad-based retreat that sent the S&P 500 lower by 2.0% with all ten sectors ending in the red. The benchmark index posted a monthly decline of 1.5%, while the Russell 2000 (-2.3%) underperformed to end the month lower by 6.1%.

To get a better feel for what led to today's retreat, we'd like to look back to Wednesday, when the market had ample reason to rally, but did not. Instead, it ended basically flat after a sloppy day of trading where good news was marveled at -- Q2 GDP and earnings results -- but not acted on with any real conviction from buyers. A spike in long-term rates and worries the Fed could raise the fed funds rate sooner than expected (a worry the FOMC directive didn't refute in unequivocal fashion) garnered most of the blame for the lackluster response.

That inability to rally on a batch of good economic and earnings news left the stock market increasingly vulnerable to a larger pullback in the event any bad news came its way. Sure enough, there were some overnight headlines that rattled weak-handed positions:

* Eurozone CPI was up just 0.4% year-over-year in July (expected 0.5%), triggering renewed worries about deflation  * Argentina was deemed to be in default on its bond payments  * Portuguese bank Banco Espirito Santo reported a big net loss for the first half of the year that wiped out its capital buffer and drove its stock price down 50%, reminding investors that there are still issues present in the European banking system 

With the sentiment taking a turn for the worse, a batch of poor quarterly results from a handful of global players contributed to the slide. Samsung kicked things off overnight with below-consensus earnings that sent the stock lower by 3.7% in Seoul. Things did not get much better during the European session with Adidas and Deutsche Lufthansa posting respective earnings-driven losses of 15.4% and 6.4% in Frankfurt. The DAX Index, meanwhile, lost 1.9%.

Back in the U.S., market participants received a set of earnings that did not quite live up to the high standard that was set during the first two weeks of the reporting period with earnings growth pushing 9.0%, according to S&P Capital IQ.

On that note, 3D Systems (DDD 50.13, -5.94), Mosaic (MOS 46.11, -1.07), Beazer Homes (BZH 15.35, -1.95), and Ocwen Financial (OCN 30.17, -4.49), registered losses between 2.3% and 13.0% after disappointing with their results. Furthermore, even above-consensus earnings from the likes of Akamai Technologies (AKAM 59.02, -1.71), MasterCard (MA 74.15, -1.76), and Yelp (YELP 67.16, -8.44) were met with selling activity.

The ten economic sectors registered losses between 1.7% (utilities) and 2.4% (energy). Rate-sensitive telecom services (-2.3%) and utilities outperformed in the early going as participants sought cover in the defensively-oriented sectors, but the two groups could not avoid being engulfed in the selling activity.

Elsewhere, the top-weighted sector—technology (-2.0%)—suffered from broad pressure. Influential listings like Apple (AAPL 95.60, -2.55), Google (GOOGL 579.55, -15.89), Facebook (FB 72.65, -2.03), and Qualcomm (QCOM 73.72, -2.32) lost between 2.6% and 3.1%, while chipmakers also tumbled. Notably, Micron (MU 30.55, -1.98) plunged 6.1% amid cautious comments from Goldman Sachs, while the broader PHLX Semiconductor Index fell 2.1%.

Biotechnology did not fare much better with the iShares Nasdaq Biotechnology ETF (IBB 250.83, -6.42) sliding 2.5%. For its part, the health care sector lost 2.0%, surrendering its entire monthly gain.

Only technology and telecom services were able to post July gains of 1.4% and 2.6%, respectively, while the utilities sector lost 6.9% for the month.

Treasuries ended flat after regaining their early morning losses. The 10-yr yield settled at 2.56%.

The selloff invited above-average participation with more than 900 million shares changing hands at the NYSE.

Economic data included Initial Claims, the Employment Cost Index, and the Chicago PMI report:

* The initial claims level increased to 302,000 from a downwardly revised 279,000 (from 284,000) 

* The consensus expected the initial claims level to increase to 310,000 

* The Employment Cost Index increased 0.7% in Q2 2014, up from a 0.3% increase in the first quarter, while the consensus expected an increase of 0.4% 

* Wages and salaries rose 0.6% in the second quarter, up from a 0.3% increase in Q1  * Benefits spending rose 1.0% and is up 2.5% year-over-year 

* Manufacturing activities in the Chicago region softened significantly in July as the Chicago PMI fell to 52.6 from 62.6 in June 

* The consensus expected a more modest decline to 61.8 

Tomorrow's session will be full of economic data starting with the 8:30 ET release of the Nonfarm Payrolls report for July (Briefing.com consensus 220K). Personal Income/Spending (consensus 0.4%) data and Core PCE Prices (expected 0.2%) will also be reported at 8:30 ET, while the final reading of the Michigan Sentiment survey for July (consensus 82.0) will cross the wires at 9:55 ET. Finally, the July ISM Index (consensus 55.9) and June Construction Spending (expected 0.3%) will both be reported at 10:00 ET.

* S&P 500 +4.5% YTD  * Nasdaq Composite +4.6% YTD  * Dow Jones Industrial Average -0.1% YTD  * Russell 2000 -3.7% YTD