>>> Weekly Market Update : Taper Arrives But Stocks Party On

Weekly Market Update: The Taper Is On

- The FOMC surprised markets and announced the taper at its December meeting on Wednesday. In the press conference after the event, Chairman Bernanke said economic growth would pick up in coming quarters but highlighted that even after the reduction in asset purchases, the Fed would still be adding to its holdings at a rapid pace. Beginning in January, the Fed will buy $75 billion in bonds each month, down from the $85 billion it had been buying since September 2012. The Fed will cut back on purchases of mortgage-backed securities and treasuries by $5 billion per month each. The Fed's assessment of the economic outlook was somewhat more upbeat and the statement was more or less in line with expectations. The VIX moved lower back toward 13 while the Dow closed the week near a new all-time high even after adjusting for inflation. On Friday, the third and final reading of Q3 US GDP came in better than the preliminary reading, rising to +4.1% from 3.6% prior, for the strongest rate of growth since the final quarter of 2011. Equities have shot higher after the taper and the GDP news, while selected decent data in Europe helped European indices gain. For the week, the DJIA rose 3.1%, the S&P500 rose 2.5% and the Nasdaq gained 2.6%.

- In the decision issued on Wednesday, the Fed said it would begin to taper QE buys in January and set qualitative conditions for the next round of tapering but left the specific details of the latter point open ended. The challenge now is managing expectations for a rate hike, and to that end the Fed strengthened its forward guidance by saying rates would remain low well after unemployment reached their 6.5% threshold. Helping matters, CPI figures released this week continued to indicate inflation levels remain below the Fed's target.

- Treasury markets were somewhat volatile as the FOMC announcement induced some recalibration. Leading up to the FOMC meeting traders were betting that at the very least tapering would be discussed extensively, even if it were not announced until next year. After the announcement traders appeared to use the news to unwind bets that the yield curve would steepen. The belly of the curve saw outsized selling which backed up yields on the 5-year and 7-year notes. Midweek offerings in those maturities were particularly disappointing, which helped the 5-year yield to reach a high of 1.72% and the 7-year to top 2.4%. Fed fund futures suggest the market believes the Fed will hike rates by the third quarter of 2015, inducing some early hand wringing that the Fed's forward guidance has not fully convinced markets yet. Spot gold hit its lowest price since June on Friday at $1,185 an ounce, closing in on a 3.5-year low touched earlier that month.

- In China, rocketing short-term rates prompted the PBoC to use short-term liquidity operations to inject emergency funding into money markets, echoing the credit crunch seen last June. In Shanghai, the seven-day repo rate rose to a six-month high of 7.6% on Friday, up from 7.06% on Thursday, while overnight interbank rates jumped to 8.2%. The PBoC injected nearly $50B into money markets to calm nerves. The Shanghai Composite fell nine straight sessions through Friday.

- Emerging-market equities plummeted this week, exacerbated by the Fed, the liquidity situation in China and a political and corruption crisis in Turkey. Turkish equities slumped after mass arrests of clients and family members of PM Tayyip Erdogan's ruling party, followed by retaliatory dismissals of police chiefs by the ruling party. The Turkish Lira fell to 2.0970 per dollar, the weakest since at least 1981. One exception was Russia, where the Micex has gained this week after President Vladimir Putin surprised everyone by pardoning Mikhail Khodorkovsky.

- The yen racked up its eighth weekly decline against the greenback after the Bank of Japan sustained its plan to add 60-70 trillion yen a year to the monetary base. The BoJ said it would maintain stimulus until annual inflation is stable at 2 percent. Most analysts anticipate the BoJ will boost stimulus after the national sales tax is raised in April. USD/JPY entered the week at 103 and rose above 104.5 on Friday.

- EUR/USD topped out last week around 1.3810, which is exactly as high as it got after the Fed announcement this week as well. Despite some decent economic reports, including the excellent ZEW and manufacturing PMI data out of Germany, EUR/USD failed to make top its 2013 highs at the 1.3830 level. Traders see more pressure on the single currency as year-end flows wind up and portfolio inflows slow down. In the UK, the ILO Unemployment Rate edged closer to BOE threshold of 7.0% while Jobless Claims declined for the 13th straight month. GBP/USD rose above 1.6350.

- There were several large M&A deals announced this week. After years of back-and-forth negotiations with various potential partners, AIG reached a deal to sell its aircraft leasing business ILFC to AerCap in a cash-and-stock deal valued at approximately $5.4B. This is the last major sale of AIG's non-core businesses in the wake of the financial crisis, which has seen the size of the firm cut in half. Semiconductor manufacturer Avago agreed to buy LSI Corporation for about $6.6B in cash, moving into the world of networking and storage chips as the computing world embraces the cloud.

>>>US Close Dow+0,26% S&P+0,48% Nasdaq+1,15%

Closing Market Summary: Stocks End Strong Week on Upbeat Note

The major averages capped a solid week with a broad advance. The S&P 500 added 0.5%, extending its weekly gain to 2.7%. Equities spent the entire session in a steady climb after the final reading ofthird quarter GDP sparked a broad-based rally. The report pointed to growth of4.1%, which was the strongest reading since the economy expanded by 4.9% in the fourth quarter of 2011, and well above the 2.5% gain reported in the second quarter. Real final sales, which exclude inventory growth, increased 2.5%. That was up from a 1.9% gain reported in the second estimate, and was the largest gain since a 3.4% increase was observed in Q4 2011.

Even though all the key indices rallied, the small-cap Russell 2000 (+1.9%) had the best showing. Meanwhile, the S&P 500 posted a more modest gain as nineof ten sectors finished in the green. The largest S&P 500 sector, technology (+0.9%) played a significant part in the rally. The group received support from large-cap names like Apple (AAPL 549.02, +4.56), Google (GOOG 1100.62, +14.40), and Microsoft (MSFT 36.80, +0.55). Chipmakers also chipped in as the PHLX Semiconductor Index gained 0.8%. On a related note, the tech sector's strength contributed to the outperformance of the Nasdaq (+1.2%), which also received noteworthy support from biotechnology. The iShares Nasdaq Biotechnology ETF (IBB 223.70, +5.71) surged 2.6%. In turn, biotechnology gave a boost to the health care sector (+0.5%), which kept pace with the S&P 500 throughout the session. Another influential group, financials (+0.5%) lagged for the majority of the session, but caught up to the broader market in the late afternoon.

Although most sectors had a strong showing, energy (+0.1%) and materials (+0.3%) struggled to gain traction. The energy sector underperformed as two large members, Chevron (CVX 122.78, -0.44) and Exxon Mobil (XOM 98.68, -0.75) spent the day in the red. The pair of Dow components also factored into the underperformance of the Dow Jones Industrial Average (+0.3%). On the downside, the telecom services sector (-0.6%) was the lone decliner.

Today's participation was well above average as nearly two billion shares changed hands on the floor of the New York Stock Exchange. The final tally wasaided by additional activity associated with quadruple witching and quarterly rebalancing that took place today. Treasuries ended on their highs after staging an intraday reversal. The 10-yr yield tested resistance earlier this morning at 2.95% (September closing high). Despite the stronger-than-expected Q3 GDP revision, the 10-yr came barreling back in a surprising manner that probably stirred some short-covering activity that has exacerbated today's gains. The 10-yr note settled higher by 11 ticks with its yield down four basis points at 2.89%. On Monday, November personal income, personal spending, and core PCE prices will all be reported at 8:30 ET while the final reading of the Michigan Consumer Sentiment Survey will be released at 9:55 ET.

o Nasdaq +35.9% YTD o Russell 2000 +35.0% YTD o S&P 500 +27.5% YTD o DJIA +23.8% YTD

Telecom Italia Investors Reject Motion To Revoke Board

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Telecom Italia Investors Reject Motion To Revoke Board 2013-12-20 18:20:41.860 GMT

By Daniele Lepido Dec. 20 (Bloomberg) -- Telecom Italia investors rejected motion by shareholder Findim to revoke board at meeting today * Telecom Italia investors reject Findim motion 50.3% vs 42.3%, with 7.4% abstentions * 54.26% of co.’s capital present at the meeting

Link to Company News:{TIT IM <Equity> CN <GO>} Link to Company News:{0852578D LX <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: Daniele Lepido in Milan at +39-02-8064-4266 or dlepido1@bloomberg.net

To contact the editor responsible for this story: Dan Liefgreen at +39-02-8064-4204 or dliefgreen@bloomberg.net

*INBEV BELGIUM TO TAKE OVER 10% OWNERSHIP FROM INBEV NEDERLAND

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BN 12/20 18:33 *COFINIMMO COMMENTS ON WEBSITE BN 12/20 18:33 *INBEV BELGIUM TO TAKE OVER 10% OWNERSHIP FROM INBEV NEDERLAND BN 12/20 18:32 *COFINIMMO, INBEV SIMPLIFY PUBSTONE STRUCTURE IN THE NETHERLANDS

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*INBEV BELGIUM TO TAKE OVER 10% OWNERSHIP FROM INBEV NEDERLAND 2013-12-20 18:34:26.705 GMT

--LOUISA FAHY

-0- Dec/20/2013 18:34 GMT

(BFW) *ENI SPA OUTLOOK TO NEGATIVE BY S&P

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BN 12/20 16:36 *ENI SPA OUTLOOK TO NEGATIVE BY S&P

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*ENI SPA OUTLOOK TO NEGATIVE BY S&P 2013-12-20 16:38:34.301 GMT

--JULIE ALNWICK

-0- Dec/20/2013 16:38 GMT

FT : Prada’s profit rise misses expectations

Prada reported a shallower than expected rise in third-quarter net profit to €133m as stronger sales in the US and Japan failed to offset slowing growth in China and Europe, and the effect of currency swings.
In a presentation, Prada, which also makes the MiuMiu and Church’s brands, said its Far East region had seen “moderated growth, notably in Greater China”. A Reuters poll of analyst forecasts had expected a net profit of €154m in the third quarter.
Prada is the latest luxury goods group to report slowing growth in China, which companies including Rémy Cointreau have blamed in part on a clampdown on gift giving and lavish spending by the Chinese authorities.

    Net profit rose to €133m in the three months to the end of October, from €122.1m a year earlier, Milan-based Prada said. Revenues rose 7.1 per cent to €839.6m. Third-quarter sales grew 13 per cent, excluding currency swings.
    Sales in its retail business accelerated in the Americas and Japan over the period, Prada said.
    “Unfavourable exchange rates and softening consumption patterns in some regions could weigh on results and thus will require increasing attention by the management in order to ensure profitability and continue the retail expansion,” Prada said.
    Prada shares have lost nearly 10 per cent over their value over the past month on expectations that the company would be hit by the slowing of sales from China which is being felt across the industry.
    The company, led by designer Miuccia Prada and her husband Patrizio Bertelli, has proved one of the most resilient players in the industry as its fashion forward designs have grown beyond a cult following to one of the world’s fastest-growing luxury brands.
    In a note published this week, Mario Ortelli, an analyst at Bernstein Research, said he believed “investors recent concerns are excessive”.
    Mr Ortelli believes Prada will be able to sustain growth by opening about 200 new stores up until 2015, focusing on emerging market consumers, and growing its leather goods and MiuMiu brand business.
    Prada said it had 516 directly operated stores at the end of October in 70 countries. Since the start of this year it has spent €416m mostly on opening new stores, buying property in London and St Petersburg, and renovating old stores.

    (Telegraph) Mikhail Khodorkovsky release: what are his options now?

    Mikhail Khodorkovsky release: what are his options now?
    Mikhail Khodorkovsky spent a decade in Russia's notoriously tough prison system, only to be released by presidential decree. What are his options now?

    Go Home
    Mr Khodorkovsky was born in Moscow and his parents, wife and children still live in the surrounding region, so the obvious thing to do is get on the first train back to the capital – especially as concern for his mother's illness was apparently the factor that drove him to finally seek a pardon. His parents, Boris and Marina, still live on the grounds of a college for traumatised children and orphans that Mr Khodorkovsky founded before his downfall about 38 miles to the West of the city. His own house in the same compound was never completed – the project ran out of money after his arrests.
    His second wife, Inna, and their three children (a daughter born in 1991 and twin boys born in 1999) live in Istrinsky district, to the city's Northwest of the city. Inna, who has refused to move abroad despite advice to do so, said in a rare 2011 interview that emigration would be "practically impossible" for Mr Khodorkovsky. "He needs more than just a family, he needs to take part in society. And for him it would be very difficult to change his homeland," she said.
    Emigrate
    Mikahil Khodorkovsky has never been one to flee. He is said to have deliberately ignored advice to leave the country ahead of his arrest, despite being fully aware of the consequences. But despite his deep reluctance to move abroad, getting out of Russia would put Mr Khodorkovsky beyond the reach of the Russian authorities if they decided to bring fresh charges against him a third time – a possibility that was hinted at earlier this month by a deputy prosecutor. A base abroad would also prove more secure were he to launch a legal battle to reclaim Yukos's stripped assets.

    An obvious destination would be the United States, where his son from his first marriage, Pavel, lives. But leaving the country could be fraught with difficulty if the authorities decide they would rather keep him in the country. For one thing, he would need to get hold of a valid passport, and laws restricting travel for debtors could easily be manipulated to keep him inside the borders.
    Fight on
    In his decade in prison, Mr Khodorkovsky has been compared more than once to Nelson Mandela – a morally superior political prisoner jailed because of the danger he posed to a thuggish regime. Some still consider him the only man who could head a credible opposition movement to Putin – and many others believe he would find it impossible to quit public life.
    Could he emerge as an ally of younger opposition leaders like Alexei Navalny?
    Maybe. But while jail time has done much to transform him into a martyr, Mr Khodorkovsky is still unflatteringly viewed by many Russians as an oligarch who robbed the nation in the 1990s. Pleading for clemency may also have damaged his standing in the eyes of some hard-line oppositionist. And many are already pondering whether he would have been released if he still posed a threat to Mr Putin – the unspoken question on many minds is, did he do a deal to get out?
    Be a Great Russian Writer
    Prison time has informed many of Russia's greatest literary figures, and Mr Khodorkovsky could be the next to join their pantheon – as a reactionary. At least, that is Liberal democratic Party Leader Vladimir Zhirinovsky's advice to the released prisoner.
    "He reminds me a bit of the Count of Monte Cristo, Solzhenitsyn. He has rich material from his life," Mr Zhirinovsky said on Friday. "We have these very light-weight [thriller writer Boris] Akunin's, [surrealist novelist Victor] Pelevin's But such a venerable writer would write a lot. Maybe [he could write Dostoevsky's] The Possessed and expose the venality of the opposition."