>>> Mattel misses by $0.13, misses on revs

Mattel misses by $0.13, misses on revs

Reports Q4 (Dec) earnings of $1.07 per share, $0.13 worse than the Capital IQ Consensus Estimate of $1.20; revenues fell 6.3% year/year to $2.11 bln vs the $2.37 bln consensus.

Commentary: "Overall, the global toy industry held up pretty well, but we did not meet our growth expectations for the fourth quarter, or the full year, mainly driven by weakness in the U.S. market..."

Mattel Girls & Boys Brands
For the fourth quarter, worldwide gross sales for the Mattel Girls & Boys Brands business unit were $1.35 billion, down 4% versus a year ago. Worldwide gross sales for the Barbie brand were down 13% and worldwide gross sales for Other Girls Brands were up 12%, primarily driven by Disney Princess™. Worldwide gross sales for the Wheels business, which includes the Hot Wheels, Matchbox® and Tyco R/C® brands, were down 11% for the quarter.

Fisher-Price Brands
For the fourth quarter, worldwide gross sales for the Fisher-Price Brands business unit, which includes the Fisher-Price Core, Fisher-Price Friends, and Power Wheels brands, were $647.4 mln, down 13% versus the prior year.

American Girl Brands
For the fourth quarter, gross sales for the American Girl Brands business unit were $331.6 mln, up 3% versus the prior year, primarily driven by Saige, the 2013 Girl of the Year.

Capital Deployment
The Company announced that its Board of Directors declared a first quarter cash dividend of $0.38 per share on the Company's common stock, which represents an increase of 6% versus last year's dividend of $0.36 per share. The dividend will be payable on March 7, 2014 to stockholders of record on February 20, 2014.
For the fourth quarter 2013, the Company repurchased 2.0 mln shares of its common stock at a cost of ~$83 mln, and for the year, the Company repurchased 11.0 mln shares of its common stock at a cost of ~$469 mln.

>>> Simon Properties beats by $0.04, beats on revs; guides FY14 FFO above consen

Simon Properties beats by $0.04, beats on revs; guides FY14 FFO above consensus; raises quarterly dividend 8.7% to $1.25/share

Reports Q4 (Dec) funds from operations of $2.47 per share, $0.04 better than the Capital IQ Consensus Estimate of $2.43; revenues rose 5.4% year/year to $1.42 bln vs the $1.4 bln consensus. Co issues upside guidance for FY14, sees FFO of $9.50-9.60 vs. $9.49 Capital IQ Consensus Estimate.

Spin Off

In December, 2013, Simon Property Group announced a plan to spin off all of its strip center business and 44 smaller enclosed malls into an independent, publicly traded REIT. In conjunction with this transaction, we filed a Form 10 on December 24, 2013. We continue to expect the transaction will be effective in the second quarter of 2014.

Today the co announced that the Board of Directors declared a quarterly common stock dividend of $1.25 per share. This is an increase of $0.05 from the previous quarter, and a year over year increase of 8.7%. The dividend will be payable on February 28, 2014 to stockholders of record on February 14, 2014.

>>> Tyco beats by $0.02, reports revs in-line

Tyco beats by $0.02, reports revs in-line

Reports Q1 (Dec) earnings of $0.47 per share, excluding non-recurring items, $0.02 better than the Capital IQ Consensus Estimate of $0.45; revenues rose 1.8% year/year to $2.65 bln vs the $2.63 bln consensus.

Organic revenue grew 1.5% in the quarter, with 2% growth in service and 2% growth in products. Installation revenue was unchanged from the prior year on an organic basis. Acquisitions contributed two percentage points of growth, which was mostly offset by the impact of divestitures and changes in foreign currency exchange rates.

"I am very pleased with the progress we are making on our growth initiatives and we are beginning to see some momentum on the front end of the business, with order rates increasing almost 7% year over year. There are also signs of a recovery in non-residential construction markets in North America, stability in Europe, and we continue to capture double-digit growth in our Growth Markets. During the quarter, we also completed the acquisition of Westfire, which builds on our fire protection capabilities and provides a platform for further growth in Latin America, while continuing to return capital to shareholders through share repurchases and dividends. We are well positioned across our businesses and markets to continue to deliver strong results in 2014 and for the longer term."

(GS) Strategy Matters : Emerging Markets & the impact on european eq,

Focus on emerging markets has increased. We find that EM equity markets have not typically troughed until after current account balances have made major adjustments. At an overall P/B valuation of 2.2x, the most vulnerable EMs do not look cheap. European markets have high EM sales exposure (18% for SXXP). The underperformance of EM exposed companies has been meaningful but remains modest relative to their previous outperformance; valuations are not at a discount to the market. EM industrial and commodity exposed companies are at risk in our view.

* Further need for EM rebalancing suggests more EM weakness
Several EM current account deficits have deteriorated since the GFC, driven by rapid domestic demand growth which has in turn been fueled by unconventional monetary policy in DM. “Rebalancing” suggests domestic activity needs to cool in order for these deficits to improve. Examples from the 1990s (Mexico, Brazil, Russia, Asia) suggest that EM equities bottom only after current account balances have improved meaningfully – a process which may take vulnerable EMs several quarters to achieve.

* C/A deficit EMs’ valuations are well above historical trough levels
EMs have troughed at low valuations during previous rebalancing periods (between 0.2x and 1.6x P/B). The current environment may be less severe than historical examples, but the five EMs with most significant c/a deficits are trading at 2.2x P/B ratio, and further de-rating is probable there.

* European EM exposed companies are not yet cheap
While the underperformance of European EM exposed stocks has been significant over the past year, it is modest relative to the outperformance that preceded it, particularly between 2008 and 2010 when EMs were viewed as relative ‘safe havens’. In addition valuation is not cheap; our EMexposed basket GSSTBRIC trades at a similar P/E to the European market.

* Differentiate; remain cautious on EM industrial exposure
From a European perspective not all EM-exposed names have performed equally. The relative performance has varied depending on whether companies are facing consumers or industry: it is the industrial and commodity exposed parts of the market (GSSTBRCI) that have suffered the most. We expect this to continue as EM infrastructure and commodity capex slows. We take off our long recommendation on FTSE 100 vs. SMI; FTSE 100 is very exposed to these parts of EM. Near-term uncertainties lead us to remove our relative long on luxury goods versus food products.

(ECR) Bear Market Inevitable?

Summary 
* Many economies are picking up; most of all the US and the UK. Therefore, the financial markets are anticipating an end to the period when more money was created than the real economy could absorb, causing asset prices to soar.
* Equities are becoming oversold. Before long, a rally could be on the cards. Nevertheless, there is a more than 50/50 chance that we are seeing the start of a bear market (i.e. price drops exceeding 20%). 
* We think the emerging economies and the weak Eurozone countries will be hardest hit.
* Likely, prices will plunge until the economic prospects of various countries are impaired. If so, central banks may reopen the liquidity spigots. We think the ECB and the Bank of Japan will take action long before the Fed does. 
* Weirdly, in this situation the yields on 10-year US and German government bonds could drop. After all, they are seen as safe havens in tumultuous times. Most other bonds are considered risky so these yields will not fall far; they could even start to rise.
* In our view, it is unwise to assume that the yen will continue to weaken. We expect the Japanese currency to strengthen in the coming months, on the back of unwinding carry trades. 
* Growth differentials between the US and Europe, an improving US trade balance, and rising Eurozone tensions could put downward pressure on EUR/USD, albeit gradually. The pair has not dropped yet; mainly because central banks in the emerging markets are selling dollars on a large scale in order to defend their currencies.

(UBS) Global Equity strategy : Staying the course through EM Storms

* Submerging Markets…
We stick with our underweight of Global Emerging Markets in a Global Equity Portfolio.
We have moved to the fast-paced stage of the sell-off in Emerging Market assets and
Central Banks have begun to step in - such as the Central Bank of Turkey's emergency
rate hike. This makes for volatile markets and risks of whipsaw moves - the worse it
gets, the more likely a dramatic policy response will emerge. But we would wait before
adding to EM positions, as much of the fundamental backdrop has yet to improve. We
need to see signs of FX and equity volatility subsiding, before turning more Bullish.

* Valuations in EM: Mind the Gap
The headline 12mth forward P/E multiple for Emerging Markets is now sub-10x (9.8x as
of this writing). But the headline number hides a big gap between the winners and the
losers: the dispersion between the high and low P/E stocks in EM is the widest we've
seen since the Tech bubble. Meanwhile, the correlation between Emerging Markets
and Developed markets is close to decade lows, reflecting EM's markedly weaker macro
trends and earnings momentum. Fundamental weakness appears likely to persist in EM,
so we expect continued de-coupling (see page 3 for more detail).

* Bullish on Europe-ex-UK and Japan
We stay Overweight Europe ex-UK on our expectations for an improvement in
depressed earnings and margins. We upgraded Japan to Small Overweight on January
21, as it had given up close to half its "Abenomics" outperformance, and we see
escalation of QE by the BoJ. We downgraded the UK to Small Underweight: the UK
economy is moving out of the policy "sweet spot," and political risk is on the rise.

* Global Portfolios: What's driven out/underperformance so far in 2014?
The most important drivers of positive relative performance year to date have been US
Healthcare, US Tech, and Eurozone Financials. The biggest drags on portfolios have
included a few lagging US sectors (e.g. Cons Discretionary & Energy) but also Chinese
Financials (see full table of global relative performance drivers on page 12).

(BofA-ML) Flow show : First Signs of Panic - Largest Emerging Outflow....

* Stampede out of equity ETF’s this week (SPY, EEM, XLF, XLI); $12.3bn redemptions are largest since Jul’12.
* Largest EM equity fund outflows since Aug’11 ($6.4bn); $15bn outflows over next 2-3 weeks triggers contrarian “buy” signal from our EM Flow Trading Rule
* Largest EM debt fund outflows since Jun’13 ($2.7bn); selling concentrated in LDM (local debt markets).
* EM debt & equity funds see combined outflows of $9.1bn; magnitude almost rivals outflows during Taper (May’13), Debt Ceiling (Aug’11) & Lehman (Sep’08)

** Asset Class Flows
- Equities: $10.4bn outflows; note divergence between $12bn out of ETF’s and $2bn into long-only funds
- Bonds: modest $1.9bn outflows (Table 1)
- Commodities: largest outflows in 5 weeks ($1.3bn)

** Equity Flows
- $6.4bn outflows from EM equity funds (largest since Aug’11) (14 straight weeks of outflows = tied for longest outflow streak on record – Table 3)
- 4-week outflows from EM equities = 1.4% of AUM; another $15bn outflows over next 2-3 weeks would triggercontrarian “buy” signal from our EM Flow Trading Rule (3.0% is threshold)
- $9.7bn outflows from US equity funds (largest since Oct’13, but all via ETF’s)
- Business as usual for Europe (31 straight weeks of inflows) and Japan (6 straight weeks of inflows)

** Fixed Income Flows
- Largest weekly outflows from EM debt funds since Jun’13 ($2.7bn); 18 straight weeks and outflows concentrated in LDM
- Outflows from EM debt & equity funds over past 3 months are a substantial $42bn or 4% of AUM (Chart 3)
- First outflows in 6 weeks from HY bond funds ($0.8bn)
- 37 straight weeks of outflows from MBS
- 84 straight weeks of inflows to floating-rate debt (Table 2)
- 2nd straight week of Muni inflows following 4 months of redemptions
- IG bond funds see 6th straight week of inflows

(GS) Europe Tobacco - IMT upgrade to CL-Buy

Goldman Sachs Global Investment Research


Valuation now hard to resist: IMT up to Buy/on CL; BAT Buy

Sentiment (and valuation) at lows; a buying opportunity
Since July 2012, the MSCI Europe tobacco index has underperformed the MSCI Europe index by 30% and the staples sector by 19%, highlighting: 1) a low investor appetite for defensive stocks during the ‘hope’ phase of the cycle; 2) unfavourable volatility of key currencies; and 3) challenging consumer conditions driving above-average cigarette volume declines, particularly in the EU where investors are also concerned about the volume impact from smokers migrating to e-cigarettes. BAT and IMT now trade on significant P/E discounts of 29% and 45%, respectively, to the European-based staples multinationals. We do not share concerns over growth sustainability as over 80% of cigarettes sold globally still retail for less than $2/pack of 20 (versus >$10 in the UK), providing significant profit pool growth opportunities for the tobacco industry. Over the next five years, we expect CROCI to expand by 230 bp for EU cigarette makers, compared with a 20 bp average decline for EU food, HHPC and alcohol producers. We believe the pull-back offers an attractive investment opportunity.

Imperial Tobacco is our top pick; new PT is 2840p (28% upside)
We upgrade our rating on IMT to Buy (from Neutral) and add the stock to our Conviction List, with a new 12-month price target of 2840p (from 2545p). We believe IMT is now at the end of the earnings downgrade cycle, as encouraging unemployment trends in Western Europe drive an improvement in organic growth. We also expect the company to distribute £8.8 bn of cash over the next four years, representing 34% of the current market cap, and we do not rule out IMT being viewed as an attractive M&A target. Our valuation now incorporates an M&A weighting.

BAT remains Buy despite FX headwinds; new PT 3420p (15% upside)
We remain positive on BAT, which in our view remains well positioned to the key drivers of long-term shareholder returns. However, we lower our 12-month price target to reflect EM currency risk (c.10% earnings drag in 2014E); as a result, our FY14 EPS forecasts are 6% below Reuters consensus estimates. We note the stock is down 13% over the last 3 months.

Key risks
Rising unemployment, intensified competition, regulatory changes affecting investor sentiment, currency volatility.

>>> What to look at today - 31/01/2014

US MArket closed Higher, near their highs of the day, Tech was leading the move after FB numbers, Volume were still below average @ 641mil shares...VIX @17.29 -0.52%...After Hours ZNGA +16.9%, CMG +12.4%, GOOG +4.2%, DLLR -24.2%, AMZN -4.7%, RVBD -2.9%...Wide set of economic data out of Japan was mixed. Manufacturing PMI hit its best level since early 2006, but economists indicated the rise was driven by temporary expansion ahead of the sales tax rise in April. Jobless rate fell to 5-year lows and Dec national Core CPI rose to its highest levels since Oct 2008, but the forward looking Jan CPI for Tokyo region slowed amid reversal of the weak-Yen trend. Japan stocks turned for the worse in the afternoon session on reports that Japan fund managers have reduced their equity exposure in January....Nikkei -0.62%...China & HK closed for Golden Week

Eur$1.3536 S&P Fut -0.04% European Fut +0.17%

Keep an eye on :
- ABE SM : Abertis May Bid For $5.7b Australian Highway, Expansion Reports
- ATC NA : Altice Raises EU1.3B in IPO Priced at EU28.25 a Share (€5.7b Mkt cap)
- BKIA SM : Spain to Hire Adviser to Sell 17% of Bankia, Expansion Reports
- BBVA SM : BBVA 4Q Net Loss EU849 Mln; Analyst Est. EU946 Mln Loss
- BBVA SM : BBVA Seeks Shareholder Authorization for Four Scrip Dividends
- CABK SM : Caixabank 4Q Net EU45 Mln; Analyst Est. EU84.3 Mln
- CSS FP : Vivarte Mandates Bourbouloux to Renegotiate Debt, Figaro Says
- DAI GY : Ex-Daimler Manager Renschler Can’t Work for Competitor: Zetsche
- DTE GY : Deutsche Telekom Still Seeks to Raise OTE Stake: Kathimerini
- GATES GLOBAL : Blackstone, TPG, CVC Mull $5b-$6b Buy of Gates Global: Reuters
- GFK GY : GfK 2013 Prelim. Rev. EU1.50b, Est. EU1.53b
- HMB SS : Hennes & Mauritz to Sell Online in France, Les Echos Says
- MC FP : LVMH 2013 Profit Recurring Ops., Organic Sales In Line With Ests, 4Q Fashion & Leather-Goods Organic Sales Up 7%, ADR in NY closed up 4.6% @ €128.49
- OERL SW : Oerlikon Agrees to Buy Sulzer’s Metco Unit Valued at CHF1b
- RNO FP : Renault-Nissan Yielded EU2.8B in Savings in 2013: Les Echos
- SAN FP : Sanofi Files Suit Vs Lilly in U.S. Over Lantus Patents
- SUNW SW : Oerlikon Agrees to Buy Sulzer’s Metco Unit Valued at CHF1b
- TIT IM : Telecom Italia network will only be spun off as last resort, says Prime Minister
- UPM1V FH : UPM-Kymmene Plans EU150 Mln Investment, Kouvolan Sanomat Says
- UPM1V FH : UPM says need for mergers; deal with Stora Enso expected in 1H - Kauppalehti
- ZIGGO NA : Ziggo, UPC May Need to Give Others Access to Network: Telegraaf