TheChek News Flow

Asian Market Update: Japan PMI hits multi-year high, but sentiment turns amid falling optimism among pension managers; New Zealand trade balance supported by strong dairy exports

***Economic Data*** - (JP) JAPAN JAN MARKIT/JMMA MANUFACTURING PMI: 56.6 V 55.2 PRIOR (highest reading since Feb 2006) - (JP) JAPAN DEC NATIONAL CPI Y/Y: 1.6% V 1.5%E; CPI EX FRESH FOOD Y/Y: 1.3% V 1.2%E (highest since Oct 2008) - (JP) JAPAN JAN TOKYO CPI Y/Y: 0.7% V 0.8%E; TOKYO CPI EX-FRESH FOOD Y/Y: 0.7% V 0.7%E - (JP) JAPAN DEC VEHICLE PRODUCTION Y/Y: 12.2% V 10.2% PRIOR - (JP) JAPAN DEC PRELIM INDUSTRIAL PRODUCTION M/M: 1.1% V 1.3%E (1st rise in two months); Y/Y: 7.3% V 7.3% - (JP) JAPAN DEC OVERALL HOUSEHOLD SPENDING Y/Y: 0.7% V 1.1%E (4th consecutive increase) - (JP) JAPAN DEC JOBLESS RATE: 3.7% V 3.9%E (lowest since Oct 2008); JOB-TO-APPLICANT RATIO: 1.03 V 1.01E - (JP) JAPAN DEC ANNUALIZED HOUSING STARTS: 1.06M V 1.00ME; HOUSING STARTS Y/Y: 18.0% V 13.6%E (16th consecutive rise) - (NZ) NEW ZEALAND DEC TRADE BALANCE (NZ$): 523M V 500ME (9-month high) - (AU) AUSTRALIA Q4 PPI Q/Q: 0.2% V 1.3% PRIOR; Y/Y: 1.9% V 1.9% PRIOR - (AU) AUSTRALIA DEC PRIVATE SECTOR CREDIT M/M: 0.5% V 0.4%E (biggest rise since Mar 2012); Y/Y: 3.9% V 3.7%E - (NZ) NEW ZEALAND DEC M3 MONEY SUPPLY: 5.8% V 6.7% PRIOR - (TH) THAILAND DEC CUSTOMS TRADE BALANCE: -$0.3B V -$0.7BE - (UK) JAN GFK CONSUMER CONFIDENCE: -7 V -12E (highest since Sept 2007)

***Observations/Insights*** - Google rallies over 4% afterhours despite missing on the bottom line on strong rise in paid clicks; Amazon comes off its extended session low ($360s) but still falls over 4% after missing on Q4 top and bottom lines and forecasting a Q1 op income mid-point at breakeven; Zynga a surprising top performer afterhours after announcing strong top line in Q4, acquisition of NaturalMotion for $527M, and 15% workforce reduction. - 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. - New Zealand trade data saw a slightly higher than expected surplus, briefly boosting NZD across the board. Exports rose 16% y/y, with shipments of dairy products rising at a 48% annual pace. Exports to China were also notably impressive, rising 66.5% on the year. Later in the day, comments from RBNZ Gov Wheeler expressing continued discomfort with the high rate of NZD knocked the currency lower.

***Fixed Income/Commodities/Currencies*** - (JP) BOJ offers to buy ¥250B in 1-3 yr JGB, ¥250B in 3-5yr JGB, ¥400B in 5-10yr JGB as well as ¥2.0T in T-bills outright - GLD: SPDR Gold Trust ETF daily holdings rise 0.6 tonnes to 793.2 tonnes (second consecutive rise) - (US) Weekly Fed Balance Sheet Total Assets Week ending Jan 29th: $4.10T v $4.10T prior; Reserve Bank Credit: $4.06T v $4.05T prior; M1 y/y change: 8.2% (4-week high) v 7.9% w/w; M2 y/y change: 5.7% (6-week high) v 5.3% w/w

- NZD currency was in focus among the majors - NZD/USD rose over 30pips as high as 0.8180 after the New Zealand trade data before falling below $0.8130 in the afternoon session. Comments from RBNZ Gov Wheeler and general retreat in risk-on sentiment weighed on the kiwi as well as AUD, with AUD/USD down 70pips from its highs around $0.8760 and AUD/JPY below 89.70 - down over 100pips from the highs. USD/JPY saw some pronounced downside on Japan pension managers' equity reduction report, sliding over 50pips below 102.40.

***Speakers/Political/In the Papers*** - (JP) Japan fund managers reduce global stock allocation in Jan to 45.0% from 45.3% prior month - (JP) Japan Econ Min Amari: Inflation reflects Japan is moving smoothly towards price target - financial press - (JP) Japan PM Abe: Tax panel to start mulling corporate tax cut as early as next month - financial press - (CN) China considers air defense identification zone in South China Sea - Asahi News - (AU) Australia Bureau of Meteorology: Australia ex-tropical cyclone Dylan makes Queensland landfall; heavy rains expected - (NZ) New Zealand RBNZ Gov Wheeler: Rates must return to more normal levels; adjustment coming soon; Would like to see NZD lower even as current levels are sustainable - press conf

***Equities*** Market Snapshot (as of 04:30 GMT): - Nikkei225 -1.1%, S&P/ASX -0.1%, Kospi closed, Shanghai Composite closed, Hang Seng closed, Mar S&P500 -0.1% at 1,780, Apr gold +0.1% at $1,243, Mar crude oil -0.2% at $98.00/brl

US markets: - ZNGA: Reports Q4 -$0.03 v -$0.04e, R$176.4M v $140Me; to acquire NaturalMotion for $527M; Begins 15% workforce reduction; to expand cost savings plan; CEO: Expects sequential earnings to rise throughout the year; Sees mobile revenue to surpass online this year; +18.0% afterhours - CMG: Reports Q4 $2.53 v $2.52e, R$844.1M v $825Me; +13.3% y/y - CPHD: Reports Q4 $0.03 (adj) v -$0.12e, R$113.3M v $102Me; +10.2% afterhours - UIS: Reports Q4 $2.82 (adj) v $1.96e, R$996M v $947Me; +9.2% afterhours - JDSU: Reports Q2 $0.19 v $0.14e, R$447.6M v $438Me; +4.6% afterhours - WYNN: Reports Q4 $2.27 v $1.74e, R$1.52B v $1.43Be; +4.2% afterhours - GOOG: Reports Q4 $12.01 v $12.39e, R$13.6B v $13.4Be; +4.1% afterhours - N: Reports Q4 $0.08 v $0.07e, R$115.0M v $112Me; +3.6% afterhours - EMN: Reports Q4 $1.35 v $1.25e, R$2.27B v $2.23Be; +2.7% afterhours - CSC: Reports Q3 $0.98 v $0.83e, R$3.23B v $3.24Be; +1.5% afterhours - MSFT: Said to be preparing to name Satya Nadella as new CEO; Board may also replace Bill Gates as Chairman; +0.7% afterhours - BRCM: Reports Q4 $0.60 v $0.56e, R$2.06B v $2.03Be; +0.5% afterhours - NEM: Achieves 2013 Production Target of 5.1M oz v 4.8-5.1M prior guidance; Guides 2014 gold production 5.0-5.3M oz; Copper 160-175M; +0.2% afterhours - YHOO: Discloses some unauthorized access into email accounts - Yahoo blog; -0.1% afterhours - BYD: Guides Q4 lower to -$0.27 to -$0.21 v -$0.16e, adj EBITDA $15-17M (EPS -$0.20 to -$0.15, EBITDA $22-24M prior); -0.6% afterhours - RVBD: Reports Q4 $0.31 v $0.29e, R$285M v $281Me; -2.9% afterhours - AMZN: Reports Q4 $0.51 v $0.68e, R$25.59B v $26.0Be; CFO: Considering plans to increase price of 'Amazon Prime' service by $20-40/yr (currently $79/yr for free 2-day shipping and video library) - conf call comments; -4.6% afterhours - GDOT: Reports Q4 $0.18 v $0.22e, R$144.9M v $142Me; -11.1% afterhours - DLLR: Reports Q2 $0.04 v $0.19e, R$262.3M v $270Me; -22.8% afterhours

Notable movers by sector: - Consumer Discretionary: Japan Tobacco 2914.JP +5.0% (9M results; to raise cigarette prices); Casio Computer 6952.JP -5.8% (9M results); David Jones Ltd DJS.AU +4.2% (Approached by Myer last year on merger) - Financials: Nomura Holdings 8604.JP -1.4% (Q3 results) - Materials: Medusa Mining Ltd MML.AU -9.0% (Q2 guidance) - Energy: Tohoku Electric 9506.JP +7.0% (9M results) - Technology: Fujitsu Ltd 6702.JP +10.2% (9M results); NEC Corp +8.5% (9M results; proposes acquisition); FujiFilm Holdings 4901.JP +3.9% (9M results); Toshiba Corporation 6502.JP -7.3% (9M results); Konica Minolta Holdings 4902.JP +8.1% (9M results) - Industrials: Topre 5975.JP -3.7% (9M results); Nippon Express 9062.JP +2.3% (9M results); Tsugami Corp 6101.JP -3.5% (9M results)

Notable after hours earnings movers: ZNGA +20.2%, CORT +12.6%, UIS +12.4%, DLLR -25.3%, LTRX -11.7%, GDOT -11.1%

Companies trading higher after hours following earnings/guidance:

ZNGA +20.2%, CORT +12.6%, UIS +12.4%, PFPT +12.2%, ARAY +12%, CPHD +10%, CMG +9.4%, MTW +8.3%, AZPN +5.8%, JDSU +4.8%, N +4.1%

Companies trading lower after hours following earnings/guidance:

DLLR -25.3%, LTRX -11.7%, GDOT -11.1%, AMZN -8.7%, TXTR -5.1%, BYD -3.2%, MCHP -3%, CNI -3%, RVBD -1.2%, CB -0.9%, PMCS -0.8%

Closing Market Summary: Nasdaq Leads Broad Bounce

The major averages finished the Thursday session near their highs as the volatile week continued. The Nasdaq surged 1.8% while the S&P 500 gained 1.1% as all ten sectors ended in the green. As a result of the advance,the S&P 500 will enter Friday's session with a slim week-to-date gain of 0.2% while the Nasdaq remains lower by 0.1% for the week.

Stocks jumped out of the gate and continued climbing steadily into the early afternoon. The S&P 500 notched a session high of 1798.77 just before 13:00 ET, and spent the rest of the trading day near that level. The upbeat start to the session was aided by overnight gains in index futures which rallied while the Japanese yen weakened. The futures market received an additional boost an hour before the cash open when it was reported that fourth quarter GDP rose 3.2%, per the advance estimate.

The Nasdaq Composite spent the entire session in the lead with the likes of Amazon.com (AMZN 403.01, +18.81), Google (GOOG 1135.39, +28.47), Facebook (FB 61.08, +7.55), and Qualcomm (QCOM 73.26, +2.14) providing support. Amazon.com and Google rallied ahead of their earnings while Facebook and Qualcomm posted respective gains of 14.1% and 3.0% after reporting better-than-expected results.

Biotechnology also factored into the outperformance of the Nasdaq as the iShares Nasdaq Biotechnology ETF (IBB 249.96, +7.16) rose 3.0%. In turn, this underpinned the health care space (+1.8%), which ended in the lead.

Similar to health care, other heavily-weighted sectors like consumer discretionary (+1.7%), financials (+1.3%), and technology (+1.5%) ended ahead of the broader market.

Elsewhere, the energy sector (+0.2%) finished behind the remaining groups as Dow component ExxonMobil (XOM 93.99, -1.12) lagged after missing on earnings.

Speaking of the Dow (+0.7%), the price-weighted index was unable to keep pace with the broader market as 3M (MMM 128.05, -2.20) and Boeing (BA 126.53, -3.25) weighed. 3M lost 1.7% after reporting in-line earnings on below-consensus revenue while Boeing fell 2.5% after cautious guidance overshadowed its earnings beat.

Treasuries ended near the middle of their range with the 10-yr yield up two basis points at 2.70%.

Trading volume was below average as 641 million shares changed hands at the NYSE.

Today's economic data included initial claims, fourth quarter GDP, and the pending home sales report for December.

* Most notably, GDP increased 3.2% in the fourth quarter, according to the advance estimate. That was down from a 4.1% gain in the third quarter but slightly above the Briefing.com consensus estimate of a 3.0% increase. Despite the above-consensus reading, the report was actually a disappointment. Real final sales, which our model was tracking to be near a 4.0% gain, only increased 2.8%. That was the largest increase since a 3.4% gain in Q1 2012, but it was within the same trends that we have been seeing for the past couple of years. Contrary to the headline numbers, there has been no real acceleration in growth over the last few quarters. 

* Weekly initial claims unexpectedly spiked to 348,000 from an upwardly revised 329,000 (from 326,000) while the consensus expected the claims level to fall to 325,000. 

* Pending home sales for December tumbled 8.7%, which was worse than the 0.2% decrease forecast by the Briefing.com co nsensus. The reading followed last month's revised decrease of 0.3% (from +0.2%). 

Tomorrow, December Personal Income, Personal Spending, Core PCE Prices, and the fourth quarter Employment Cost Index will all be released at 8:30 ET while the final reading of the University of Michigan Consumer Survey for January will be reported at 9:55 ET.

* Nasdaq Composite -1.3% YTD  * Russell 2000 -2.0% YTD  * S&P 500 -2.9% YTD  * Dow Jones Industrial Average -4.4% YTD

Bullish Call Activity:

* AMCC Aug 12.5 calls are seeing interest with the underlying stock lower by 5% (volume: 3030, open int: 190, implied vol: ~59%, prev day implied vol: 55%) -- co reported earnings last week.  * LF Jun 7.5 calls (volume: 3270, open int: 950, implied vol: ~44%, prev day implied vol: 40%)  -- co is confirmed to report earnings Feb 12 after the close (peer MAT reports tomorrow before the open).

Notable Call Activity following M&A speculation:

* GPS calls are outpacing puts by ~3x (15.8K total calls have traded vs 4.6K total puts) with the underlying stock +3.5% following renewed activist speculation. Most notable is seen in the GPS Jan31 37.5 calls (volume: 4680, open int: 330, implied vol: ~33%, prev day implied vol: 30%)  

Bearish Put Activity:

* CBL Mar 15 puts are seeing interest ahead of earnings next week Feb 4 after the close (volume: 5130, open int: 10, implied vol: ~44%, prev day implied vol: 35%) -- two transactions of ~1880 contracts traded at or near the offer. * NWL Feb 30 puts activity is picking up again for the second consecutive day ahead of earnings tomorrow Jan 31 before the open (volume: 3360, open int: 1610, implied vol: ~34%, prev day implied vol: 28%)  -- NWL was initiated (along with several peers) with Buy rating at BTIG.  * FOXA Feb 32 puts are seeing interest with strength in the underlying stock (along with other broadcasting peers following peer BSYBY earnings) and ahead of earnings next week Feb 6 before the open (volume: 5410, open int: 5070, implied vol: ~27%, prev day implied vol: 26%) -- nearly 4K traded in single transaction on the offer.

Sentiment: The CBOE Put/Call ratio is currently: 0.78... VIX: (16.07 -1.28, -7.4%). February 21 is options expiration -- the last day to trade February equity options

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Liberty, Ziggo Deal May Cost Hundreds of Jobs: Dutch Minister 2014-01-30 16:51:30.644 GMT

By Elco van Groningen Jan. 30 (Bloomberg) -- Ziggo and Liberty Global have about 4,000 workers in the Netherlands, Dutch Economy Minister Henk Kamp tells lawmakers in The Hague. * Liberty repeats it’s too early to comment on possible job losses: spokesman Bert Holtkamp says in phone interview * Liberty Global’s UPC unit has ~1,700 full-time employees in the Netherlands: Holtkamp * Ziggo had 2,257 FTEs at end of 4Q: Ziggo earnings report

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

--Editors: Maud van Gaal, Kenneth Wong

To contact the reporter on this story: Elco van Groningen in Amsterdam at +31-20-589-8517 or vangroningen@bloomberg.net

To contact the editor responsible for this story: Frank Connelly at +33-1-5365-5063 or fconnelly@bloomberg.net

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Spain Says Indra Stake Isn’t for Long Term: Reuters 2014-01-30 15:49:05.576 GMT

By Brian Lysaght Jan. 30 (Bloomberg) -- Spain’s defense minister says govt’s 20% stake in Indra isn’t for long term, was made to ensure co. stays in “Spanish hands,” Reuters says. * Shares unchanged, pare earlir gains * Link

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

--With assistance from Joshua Fineman in New York. Editor: Gaurav Panchal

To contact the reporter on this story: Brian Lysaght in London at +44-20-7330-7908 or blysaght@bloomberg.net

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

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VW Chairman Signals Offer to Hire Renschler, Stuttgarter Reports 2014-01-30 15:52:58.719 GMT

By Christoph Rauwald Jan. 30 (Bloomberg) -- Volkswagen’s supervisory board will vote on an offer to hire former Daimler AG executive Andreas Renschler, Stuttgarter Zeitung reports, citing remarks by VW Chairman Ferdinand Piech at an automotive conference. * “First the supervisory board has to decide on something” before any comment is possible on Renschler, then “afterward you can say, the best go after the best”: Stuttgarter Zeitung, citing Piech * NOTE: Daimler’s Renschler Won’t Go to Rival in Near Term: Die Welt NSN N07PKW6TTDS9 <GO> * NOTE: Daimler CEO Candidate Renschler Resigns After Swapping Jobs NSN N05P926K50YR <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: Christoph Rauwald in Frankfurt at +49-69-9204-1146 or crauwald@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at +49-30-70010-6232 or cthomas16@bloomberg.net