(BFW) Prada Poised for 19-Month Low; China to Impose Higher Luxury Tax

Prada Poised for 19-Month Low; China to Impose Higher Luxury Tax
2014-03-06 02:50:25.101 GMT


By Bloomberg News
     March 6 (Bloomberg) -- Shrs fall 2.1%, heading for lowest
close since Aug. 2012.
  * Finance Minister Lou Jiwei says at Beijing briefing China to
    impose higher taxes on luxury goods


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

--Jack Gao. 

To contact Bloomberg News staff for this story:
Jack Gao in Shanghai at +86-21-6104-3030 or
ygao40@bloomberg.net

To contact the editor responsible for this story:
Jan Dahinten at +65-6212-1164 or
jdahinten@bloomberg.net

>>> Asian Update

Asian Market Update: Strong Australia Trade, Retail Sales spark AUD rally; Nikkei outperforms on GPIF reform

***Economic Data*** - (AU) AUSTRALIA JAN TRADE BALANCE: A$1.4B V A$100ME (2-year high) - (AU) AUSTRALIA JAN RETAIL SALES M/M: 1.2% V 0.4%E (11-month high) - (NZ) NEW ZEALAND FEB QV HOUSE PRICES Y/Y: 9.3% V 9.6% PRIOR; Values +1.8% in the past 3 months - (JP) JAPAN FEB TOKYO AVERAGE OFFICE VACANCIES: 7.0% V 7.2% PRIOR

***Market Snapshot (as of 04:30 GMT)*** - Nikkei225 +1.4%, S&P/ASX -0.1%, Kospi flat, Shanghai Composite -0.1%, Hang Seng +0.5%, Mar S&P500 +0.1% at 1,875, Apr gold -0.2% at $1,338, Apr crude oil -0.4% at $101.10/brl

***Highlights/Observations/Insights*** - Nikkei225 is outperforming among the regional indices and JPY is on the back foot after a report from Japan Govt Advisory Panel recommending that GPIF (Japan's largest pension fund) is less focused on JGBs, paving the way to a more aggressive investment in equities. Advisory panel citing Japan making more pronounced progress in emerging out of deflation. - Australia remained in focus in terms of economic data after a much higher than expected GDP overnight. Retail sales growth hit an 11-month high pace, while trade surplus came in at a 2-year high. Exports saw a healthy 4% m/m increase and imports growth slows 1% - trade surplus was thus more of a function of less goods coming into the economy, as shipments to China fell 12.5% m/m and exports of iron ore (the biggest mineral resource) were down nearly 10%. - China finance minister Lou and also a state researcher backtracked from what the markets interpreted as an affirmed 7.5% 2014 GDP target overnight, suggesting the 7.2-7.3% would still be in the neighborhood of intended estimate. Recall NPC saw the 7.5% objective as "elastic", giving policymakers some wiggle room later in the year if economic reform in credit and environment required a softer goal. - PBoC Dep Gov Pan looked to soothe investors' worries over weakness in the Yuan, reiterating previously expressed PBoC position that two-way volatility is normal; PBoC meanwhile continued to mop up post-Lunar New Year excess liquidity with 4th consecutive week of net drain. - Fed's Fisher (hawk, voter): Seeing more signs QE3 overstayed its welcome; Reiterates full support for Fed taper - Fed's Williams (dove, non-voter): Prefers for rates to remain unchanged until mid-2015; Sees GDP above trend growth at 2.5-3.0%; Unemployment will only return to normal 5% in late 2015. - Moody's warns the Russia standoff with Ukraine poses a risk to Russian bank asset quality. Tensions on Crimea peninsula continued to ebb with local press reports suggesting the "mystery green men" (presumed Russian troops shipped in over the weekend) are taking down the barricades blocking local bases of Ukrainian army units.

***Fixed Income/Commodities/Currencies*** - (CN) PBoC to drain CNY43B in 14-day repos and CNY50B in 28-day repos (6th consecutive drain); Drains net CNY70B this week v drained CNY160B prior (4th week of net drain) - (JP) Japan MoF sells ¥554.6B in 1.7% (1.7% prior) 30-yr notes; Avg yield: 1.635% v 1.587% prior; Bid to cover: 4.28x v 3.43x prior - (JP) Japan investors sold ¥759B (1st week of net sales in 3 weeks) in foreign bonds last week vs bought net ¥598.8B in prior week - (AU) Australia Feb Port Hedland exports: 27.8M tons v 28.2M prior; Exports to China 21.3M tons v 23.3M m/m - (CN) China Qinhuangdao coal price falls to CNY540-550/t (8th consecutive decline; lowest since early Nov)

- AUD and JPY were particularly volatile in an otherwise quiet session following the developments summarized above. AUD/USD spiked up about 50pips above $0.9030 on strong retail sales/trade figures from Australia. JPY saw some moderate selling on the GPIF reform reports, with USD/JPY also rising about 50pips above ¥102.70 from session lows.

***Equities*** US markets: - SGMO: Announces 1st clinical study of proprietary zinc finger nuclease (ZFN)-based genome editing technology in humans; +19.8% afterhours - TKMR: Receives Fast Track Designation from FDA for Its Anti-Ebola Viral Therapeutic; +9.6% afterhours - DRIV: Guides Q1 EPS lower, FY EPS slightly higher as a result of repurchases of $150M in convertible debt (approx 27% of market cap); +3.2% afterhours - SPTN: Reports Q3 $0.40 adj v $0.22 y/y, R$1.34B v $789.9M y/y; +3.1% afterhours - EVHC: Reports Q4 $0.20 v $0.17e, R$984.8M v $995Me; +1.0% afterhours - MPW: Announces Public Offering of 8M (5% of shares outstanding) Shares of Common Stock; -3.2% afterhours - BYD: Reports Q4 -$0.24 (adj) v -$0.24e, R$681.5M v $689Me; -4.0% afterhours - WX: Reports Q4 $0.53 v $0.46e, R$157.2M v $151Me; -4.6% afterhours

Notable movers by sector: - Consumer Discretionary: Fengfan Stock Ltd Co 600482.CN -2.1% (FY13 results); Anhui Jianghuai Automobile 600418.CN -3.4% (Jan sales results); YunNan Metropolitan Real Estate Development 600239.CN +2.6% (prelim FY13 results) - Financials: Fantasia Holdings Group 1777.HK +2.3% (Feb sales results); Bank of Queensland BOQ.AU +1.6% (Moody's raises credit rating); Shenzhen Overseas Chinese Town 3366.HK -5.0% (prelim FY13 results); Shanghai Pudong Development Bank 600000.CN +0.9% (acquires wealth management business); AnXin Trust & Investment 600816.CN +2.4% (FY13 results) - Energy: AWE AWE.AU +1.7% (providing drilling updates) - Industrials: Nissan Motor 7201.JP +0.6% (to accept wage hike) - Technology: BestTV New Media 600637.CN +3.6% (strategic alliance with Thunder Network); Carsales.com CRZ.AU +5.8% (acquires online asset in South Korea)

>>> US Close Dow-0,22% S&P-0,01% Nasdaq+0,14%

Closing Market Summary: Stocks Take Midweek Breather Following Tuesday Rally

The major averages posted modest Wednesday losses after spending the entire session inside narrow ranges. The Dow Jones Industrial Average slipped 0.2% while the S&P 500 shed less than a point. For its part, the Nasdaq Composite (+0.1%) ended just above its flat line.

Although today's session did not generate much (or any) excitement, it should be noted that equity indices essentially held their levels after yesterday's broad-based spike that sent the S&P 500 to a fresh record closing high.

Individual sectors were split right down the middle for the entire trading day with five groups posting gains while the other five registered losses.

The financial sector (+0.7%) took the lead shortly after the open and never relinquished its standing as top components rallied notably. Bank of America (BAC 17.25, +0.53) soared 3.2% while other large names like Citigroup (C 49.42, +0.59), JPMorgan Chase (JPM 58.16, +0.90), and Morgan Stanley (MS 31.97, +0.87) gained between 1.2% and 2.8%.

Today's outperformance of financials marked the second consecutive day of relative strength for a vital sector that has been struggling to keep pace with the broader market so far in 2014. Including today's gain, the sector extended its year-to-date advance to 0.9% versus a 1.4% gain for the S&P 500.

Financials notwithstanding, the remaining four advancers—consumer discretionary, industrials, materials, and technology—posted slim gains of no more than 0.3%. Of the four, the discretionary sector (+0.3%) had the best showing thanks to strength among media names.

On the downside, the four countercyclical sectors—consumer staples, health care, utilities, and telecom services—lost between 0.2% and 0.7% while the energy sector (-1.1%) spent the day in a steady retreat while crude oil fell 1.8% to $101.48/bbl.

The energy space slumped amid the weight of ExxonMobil (XOM 93.80, -2.72), which tumbled 2.8%, marking its largest daily decline since November 2012. Meanwhile, the broader sector widened its year-to-date loss to 2.7%. Only the telecom services sector has had a worse showing as it holds a 5.0% loss so far in 2014.

Treasuries ended modestly higher with the benchmark 10-yr yield down one basis point at 2.69%.

Also of note, today featured the release of the March Beige Book from the Federal Reserve. Similar to other reports received during past weeks, the Beige Book highlighted severe weather as a major headwind. To that end, ‘weather' was mentioned 119 times in the entire release versus an average of 14 mentions in each previous Beige Book report dating back to 1997.

Eight out of twelve Fed Districts reported continued expansion from January to February with the growth characterized as ‘modest' to ‘moderate.' Retail sales saw relative weakness across the board, but that was written off as a result of the weather.

With regards to employment, a gradual improvement was reported in most districts while pressure from wages was characterized as ‘stable.'

Investors received two other economic reports:

* The ADP Employment Change report for February indicated an increase of 139K while the consensus called for an increase of 150K. Also of note, the January reading was revised down to 127,000 from 175,000.  * The ISM Non-Manufacturing Index fell to 51.6 in February from 54.0 in January. That was the weakest print since February 2010 while the consensus expected the index to fall to 53.5. Not surprisingly, many sectors reported that extreme winter weather conditions wreaked havoc on business activity in February. The evidence in the hard data, however, suggests a cyclical slowdown is more likely taking place. The Employment Index fell a whopping 8.9 points to 47.5 in February from 56.4 in January. That ended a 25-month expansion cycle. 

Tomorrow, the February Challenger Job Cuts report will be released at 7:30 ET while weekly initial claims, fourth quarter productivity, and unit labor costs will be announced at 8:30 ET. The day's data will be topped off with the factory orders report for January.

* Nasdaq Composite +4.3% YTD  * Russell 2000 +3.8% YTD  * S&P 500 +1.4% YTD  * Dow Jones Industrial Average -1.3% YTD

(TecCrunch) T-Mobile Discovers No One Wants A BlackBerry Anymore

T-Mobile ran a promo last month calling for BlackBerry owners to trade in their device for an iPhone 5s. Zero down. It was legitimately a good deal. But BlackBerry fanboys took the offensive and attacked. BlackBerry’s CEO followed suit and went on to call T-Mobile’s promotion “inappropriate” and an “ill-conceived marketing promotion.”

Well, it looks like T-Mobile’s promotion was an overwhelming success and BlackBerry owners dumped their devices en masse.

According to a leaked internal T-Mobile memo, during the promo, the wireless carrier saw a 15x increase in BlackBerry trade-ins with 94% opting for a non-BlackBerry device. And that’s after T-Mobile modified the program to allow BlackBerry owners to upgrade to a new BlackBerry.

The specific number of trade-ins was not reported.

Expect more moves like this from T-Mobile. As the bottom of the leaked memo states, “If this is what the customers want, this is what customers will get!”

T-Mobile wisely targeted a demographic largely left behind in the smartphone wars. The promo was snarky and brash, but clearly effective. The wireless carrier understands its customers. It’s not like T-Mobile offered to take iPhone trade-ins for BlackBerry devices. That would just be silly.

WWD :Bernard Arnault Receives MoMa's David Rockefeller Award

An understated lunch took place at the Museum of Modern Art in New York Tuesday afternoon that drew about 300 people or so, but they were just the right 300 people, some of New York’s most powerful titans of industry.

On an atrium in the museum’s second floor, one particularly striking huddle consisted of the three amigos of the private equity world — Stephen A. Schwarzman, Leon D. Black and Henry R. Kravis, founders of the firms Apollo Global Management, the Blackstone Group and KKR & Co., respectively. They seemed to be in good spirits, and they had reason to — the day before, securities filings showed them to be among the five highest paid executives in their field, with Black alone earning more than half a billion dollars in dividends last year.

They were there to salute one of their own, if of French extraction, a billionaire several times over, Bernard Arnault, chairman and chief executive officer of LVMH Moët Hennessy Louis Vuitton, “the king of luxury,” as Kravis’ wife, Marie-Josée, referred to him. Arnault was receiving the museum’s annual David Rockefeller Award, which is bestowed on major supporters of the arts and public works.

The high-powered congregation was a reflection of Arnault’s influence — it’s not every day he makes a pit stop in New York, and with a little more than 12 hours to go before the Louis Vuitton debut of Nicolas Ghesquière no less. Also in attendance were David Rockefeller Sr. and Jr.; Steve Schwartz, the ceo of Hearst Corp.; Jerry Speyer, the real estate magnate; Vera Wang; Tory Burch, and artists Jeff Koons, Chuck Close and John Currin. Dick Parsons met Arnault “back when I was still running Time Warner, but that was a long time ago.”

Eli Broad attributed the turnout to the respect the French mogul commands and the award itself, which has gone to some impressive folks in the past, like the late Katharine Graham, Michael Bloomberg and, of course, Broad himself. “Well, this Rockefeller lunch, I was honored a few years ago…you get about 200 interesting people here and it’s a great event, once a year,” he said.

Wang, who came with Alice Tisch, does not know Arnault personally, but came to pay her respects.

“It’s amazing that someone with those resources and the passion and the taste to really influence the art market is being honored in America,” she said. “It doesn’t get better than that. It’s kind of nice it’s not about fashion.”

For Arnault personally, the award also held special significance. He is one of the few, if only, French executives to be honored with such awards from American cultural institutions, a recipient three years ago at the Woodrow Wilson International Center. He set a precedent, of a kind, Tuesday by becoming the first non-U.S. citizen to receive the Rockefeller award.

“I am very honored and very impressed,” he said shortly after he delivered some brief remarks. “Because French philanthropy is coming from the U.S. I may have been one of the first to really do it on a certain scale in Europe. I imagine it’s one of the reasons that I’m getting the prize today.”

In his speech, Arnault paid tribute to the example set by American philanthropy, a tradition he said he has embraced personally in his efforts to make LVMH a socially conscious conglomerate and in the creation of his own museum project, the Louis Vuitton Foundation. He emphasized the project is set to open in October.

“In France today, philanthropy is playing an increasingly important role. We have come to understand that government cannot and should not be responsible for everything,” he said before saying something unintelligible under his breath that drew a huge laugh, presumably a crack about the French government. “And I am pleased to see that private donors determined to contribute to the general well-being are taking their rightful place alongside public initiatives.”

His appearance in New York would be a short one, he told WWD. “Just after lunch, I fly to Paris not to miss Nicolas,” he said.

>>> US Gapping down

Gapping down

In reaction to disappointing earnings/guidance: XOMA -20.6% (also provides
update on gevokizumab proof-of-concept program: Results from two Phase 2
erosive osteoarthritis of the hand studies do not support movement to
pivotal development; downgraded to Neutral from Outperform at Credit
Suisse), IMRS -8.3%, HCI -8.2%, CSIQ -8.2%, CHEF -5.7%, BOBE -5.3% (light
volume), MEMP -4.6%, (light volume), ABM -2.1%, (light volume), ALDW
-1.1%, MCEP -0.9%, (light volume), CTIC -0.3%.

M&A news: YONG -18.0% (Yongye Intl. announces going private proposal not
approved by stockholders).

A few financial related names showing modest weakness: HSBC -1%, BCS -0.9%
and DB -0.3% (Barclays PLC and Deutsche Bank were accused of manipulating
the London gold fix, according to reports ) .

Solar names trading lower: JKS -2.4%, TSL -2.3%, FSLR -1.6%,  

Other news: USU -28.1% (to implement financial restructuring plan; files
voluntary, prearranged plan of reorganization under Chapter 11), CERE
-10.9% (prices 20 mln shares of common stock at $1.00 per share), ETRM
-5.9% (ahead of Cowen conf presentation today), NCLH -5.4% (announces
launch of secondary public offering of 15 mln ordinary shares by selling
shareholders), PAL -3.9% ( provides corporate update), AUDC -3.5%
(announces proposed public offering of ordinary shares, size not
disclosed), THOR -3.3% (issues worldwide urgent medical device correction
letter to update its labeling regarding the use of the HeartMateII LVAS
Pocket System Controller), ANIP -3.3% (intends to offer its common stock
in a registered public offering pursuant to its existing shelf
registration statement ), COWN -2.4% (prices of its offering of $130 mln
of 3.0% cash convertible senior notes due 2019), OAK -2.3% (announces
launch of public offering of 5 mln Class A units), ACAD -2.1% ( prices 6.4
mln shares of common stock at $28.50 per share), BLMN -1.6% (prices
secondary public offering of 18 mln shares of the co's common stock by
selling stockholders at $24.50 per share), SPR -1.4% (prices 6,189,794
shares common stock by selling stockholders $28.62 per share), NLSN -1.2%
(announces secondary offering of 30 mln shares by selling shareholders),
VNTV -1.1% (announces secondary public offering of ~18.78 mln shares of
common stock by selling shareholders), CG -0.9% (prices 12 mln shares of
common units at $33.50 per unit), RATE -0.8% (prices secondary public
offering of 14 mln shares at $18.25 per share), BKU -0.8% (prices
10,307,197 shares of common stock by investment funds affiliated with The
Blackstone Group (BX), The Carlyle Group (CG), WL Ross & Co and
Centerbridge Partners at $33.50 per share), .

Analyst comments: SPLS -0.9% (downgraded to Neutral from Buy at B. Riley &
Co.), FMS -0.9% (light volume, downgraded to Hold from Buy at Berenberg),
SBY -0.4% (downgraded to Market Perform at Keefe Bruyette)

>>> US Gapping up

Gapping up

In reaction to strong earnings/guidance: SWHC +10.2%, BV +8.2%, THRM
+6.4%, XRM +6.2%, AVAV +6.1%, VEEV +3.8%, NYMT +3%, HON +2.5%, (ticking
higher), INXN +2.2%, (light volume), YY +2.1%, IRG +1.9% (light volume),
CKEC +1.7%, (light volume).

M&A news: LO +0.4% /  RAI +0.2% (continued strength with ongoing M&A
speculation).

Battery related names seeing continued momentum: FCEL +22.2%, BLDP +12.6%
(announces that 4,935,600 warrants to purchase shares have been exercised,
generating proceeds of ~$7.6 mln), CBAK +3.2% (ticking higher), KNDI +3%,
 PLUG +2.5%, TSLA +0.5% (higher despite Peugot SA winning 'Car of the
Year' award).  

China related internet names trading higher boosted by YY
results: QIHU +2.5% (Qihoo 360 Tech.'s mobile app content returns to
Apple's (AAPL) China App Store, according to Marbridge), DANG +2.3%
(Dangdang and Yhd.com Form Strategic Partnership), YOKU +1.2%

Other news: STRI +14.9% (continued strength following yesterday's Dutch
tender offer results), NAVB +9.9% (announces acceptance for review of an
additional sNDA to further expand Lymphoseek labeling), ROSG +7.8%
(continued strength following yesterday's 26%+ move higher), ARO +6.5%
(light volume, still looking around for catalyst), LIVE +4.4% (continued
strength), ZNGA +2.7% (continued strength), GOLD +2.6% (still checking),
ARGS +2.4% (presents new data from clinical research for AGS-004
patient-specific immunotherapy in treatment of HIV), HTWR +2.4% (following
THOR news), ACI +2% (Arch Coal sells Hazard thermal mining complex to
Blackhawk for $26.3 mln in cash), JCP +1.9% (still checking), XXIA +1.7%
(announces completion of Audit Committee internal investigation, SEC
filings update, and CFO transition), GLUU +1.7% (continued strength), RGR
+1.6% (following SWHC results), SNTA +0.8% (Synta Pharma has determined
that it will not be presenting at the Cowen Healthcare Conference on March
5 or at ROTH Conference on March 10), PCAR +0.4% (following late
volatility on Class 8 trucking data), .

Analyst comments: ARWR +12.6% (initiated with a Outperform at RBC Capital
Mkts; initiated with a Buy at Deutsche Bank), FMI +2.8% (Foundation
Medicine initiated with Outperform at Wedbush), CYTK +2.8% (re-initiated
with a Buy at ROTH Capital; tgt $25), GTAT +2.4% ( tgt to $18.50 from
$15.50 at BofA/Merrill), GOLD +2.3% ( upgraded to Buy from Neutral at
Nomura), ERIC +1.1% ( upgraded to Outperform at RBC Capital Mkts; tgt
raised to $16 ), FOXA +0.6% ( upgraded to Outperform from Mkt Perform at
BMO Capital Mkts; tgt raised to $40 from $33), VLY +0.6% (upgraded to
Market Perform from Underperform at Keefe Bruyette), TRMB +0.5% (upgraded
to Overweight from Neutral at JPMorgan)