TheChek News Flow

Asian Market Update: Asia equities decline as US announces budget deal

***Observations/Insights*** - Asia markets were broadly lower in cautious trading as US equities fell overnight on renewed concerns on the possibilities of a reduction in US stimulus. Investors are weighing whether or not the Fed will begin scaling back its easing program after US budget negotiators announced a provisional two-year budget deal. All eyes will also be on the US November retail sales data. - New Zealand's dairy giant Fonterra cut its FY14 earnings and dividend forecast due to high milk prices, dragging down the NZD. Analysts were expecting Fonterra to hike payouts because of higher dairy prices - The S&P/ASX extending its decline for the fifth consecutive day as OZ Minerals fell by more than 30% on weak 2014 production guidance. Early during the session, Australia's consumer confidence indicated a sharp drop for December. The Westpac survey fell from 110.3 to 105.0, the biggest decline since July 2013.

***Economic Data*** - (AU) AUSTRALIA DEC WESTPAC CONSUMER CONFIDENCE INDEX M/M: 105.0 V 110.3 PRIOR; M/M: -4.8%V +1.9% PRIOR (largest decline in 7 months) - (JP) JAPAN OCT MACHINE ORDERS M/M: 0.6% V 0.7%E; Y/Y: 17.8% V 15.0%E - (JP) Japan Oct Conference Board Leading Economic Index: 100.6; m/m: +0.2% v +1.3% prior - (KR) SOUTH KOREA NOV EXPORT PRICE INDEX M/M: -0.8% V -1.9% PRIOR; Y/Y: -2.5% V -4.5% PRIOR; IMPORT PRICE INDEX M/M: -0.5% V -2.4% PRIOR; Y/Y: -4.9% V -7.3% PRIOR - (KR) SOUTH KOREA NOV BANK LENDING TO HOUSEHOLD (KRW): KRW477.5T V KRW474.4T PRIOR - (KR) SOUTH KOREA OCT MONEY SUPPLY L: 0.7% V 0.4% PRIOR; M2 M/M: 0.4% V 0.8% PRIOR - (KR) SOUTH KOREA NOV UNEMPLOYMENT RATE: 2.9% V 3.0%E - (US) API PETROLEUM INVENTORIES: CRUDE: -7.5M (2nd consecutive draw) v -2.5Me; GASOLINE: +6.3M v +2Me; DISTILLATE: +1.2M v +1Me

***Fixed Income/Commodities/Currencies*** - (CN) PBoC sets yuan mid point at 6.1100 v 6.1114 prior setting (record high setting for Yuan, 4th consecutive high setting) - (JP) BOJ offers to buy ¥110B in JGB with maturity below 1-yr and ¥200B in JGB with maturity over 10-yr - (AU) Australia MoF (AOFM) sells A$800M in 2025 bonds; avg yield 4.4572%, bid to cover 2.47x

***Speakers/Political/In the Papers*** - (CN) Credit Suisse: China housing supply to surge in 2014, demand uncertain - financial press - (CN) Asian Development Bank (ADB): Raises China 2013 target to 7.7% from 7.6% prior; Raises 2014 GDP target to 7.5% from 7.4% prior - (CN) Barclays: China likely to keep its GDP target of 7.5% and CPI cap of 3.5% unchanged for 2014 - financial press - (CN) China National Development and Reform Commission (NDRC): continue to implement coal-electricity price linkage - Chinese press - (CN) China Ministry of Commerce (MOFCOM) issues statement on elimination of China domestic regional trade protection and industrial monopolies - (CN) China studying amendment on Securities Act and Futures Act; to release the revised securities law as soon as H2 2014 - Chinese press - (CN) China should terminate proactive fiscal policy - Chinese press

- (JP) Japan govt earmarked ¥100B for temporary storage facilities for nuclear-tainted soil - Japanese press - (JP) TPP trade negotiations to resume in Jan - financial press - (JP) Japan minicar tax increase to apply to new autos - Japanese press - (JP) According to Japan Business Federation (Keidanren) survey of large companies, winter bonuses will rise by an average of 5.8% - first increase in 5 years - Nikkei

- FCG.NZ: Maintaining its forecast Farmgate Milk Price for the 2013/14 season at NZ$8.30 per kgMS. - (NZ) RBNZ: New Zealand home-loan approvals decline accelerates - financial press

- (US) SENATOR MURRAY (D-WA) AND REP RYAN (R-WI) ANNOUNCE BUDGET DEAL - PRESS CONFERENCE - (US) S&P lower US 2014 GDP forecast to 2.6% from 3.1% prior, citing sequester impact - (US) PIMCO's Gross: Treasury bond holdings fell to 37% in Nov v 38% in Oct - financial press

***Equities*** Market Snapshot (as of 04:30 GMT): - Nikkei225 -1.1%, S&P/ASX -0.7%, Kospi -0.7%, Shanghai Composite -1.1%, Hang Seng -1.2%, Dec S&P500 flat at 1,804, Feb gold -0.4% at $1,256, Jan crude oil % at $98.46/brl

US markets: - SNI: Discovery said to be considering a bid for Scripps - financial press; +13.0% afterhours - SWHC: Reports Q2 $0.28 v $0.21e, R$139.3M v $137Me; +5.9% afterhours - MA: Board of Directors Announces Capital Actions: 10-1 stock split, 83% dividend increase and $3.5B share buyback program (4% of shares outstanding); +4.8% afterhours - CBI: Awarded two contracts for design & retooling $5B LNG liquefaction terminal in Texas; +1.8% afterhours - LH: Guides initial FY14 EPS $6.50 v $7.55e, Rev growth of approx 2% y/y; -6.7% afterhours - AVNR: Phase II PRIME Study did not meet the primary efficacy endpoint; -12.6% afterhours

Notable movers by sector: - Consumer discretionary: Seven Group Holdings SVW.AU +9.0% (announces shares buyback); Weifu High-Technology Group Co Ltd 000581.CN +3.6% (China issues statement on air pollution control) - Industrials: Kia Motors 000270.KR +0.5%, Hyundai Motors 005380.KR flat (production guidance); Shenzhen Jiawei Photovoltaic Lighting Co Ltd 300317.CN +4.7% (awarded contract); Ningbo Cixing Co Ltd 300307.CN +1.2% (enters JV on robots); Xiandai Investment Co Ltd 000900.CN +6.0%, Hunan Corun New Energy Co Ltd 600478.CN +1.8% (applies for private banking); Zhejiang Southeast Space Frame Co Ltd 002135.CN +2.2% (awarded contract) - Materials: Zijin Mining 2899.HK flat (share repurchase); OZ Minerals OZL.AU -11.8% (provides outlook); Yancoal Australia YAL.AU +3.8% (Australia Treasurer comments); BHP Billiton Ltd BHP.AU -1.9% (Exec comments) - Technology: Tsinghua Unisplendour Co Ltd 000938.CN +3.5% (launches cloud computer) - Financials: China Everbright International Ltd 257.HK +4.4% (to invest in environmental protection); Guangdong Highsun Group Co Ltd 000861.CN +5.4% (enters strategic alliance with China Unicom) - Utilities: TEPCO 9501.JP -1.3% (to announce official shutdown of two Fukushima facilities decision)

After Hours Summary: VIMC +22.2%, MLNK -11.5%, BLIN -9.1%, AVNR -13.8%, LH -6.7%, CENT -4.4% following earnings/guidance

After Hours Gainers: Companies trading higher in after hours in reaction to earnings: VIMC +22.2%, MLNK -11.5%, BLIN -9.1%, PPHM +7.9%, SWHC -5.6%, PLAB +4.7%

Companies trading higher in after hours in reaction to news: VIMC +22.2% (received larger order for a SVAC solution deployment in Baoding City, Hebei Province; co also provided Q4 rev guidance), SNI +16.6% (Variety reporting that Discovery (DISCA) is interested in acquiring the company), ECTE +16.4% (announced strategic partnership with Medical Technologies Innovation Asia), NSTG +11.7% (announced adoption of the Prosigna Breast Cancer Assay by leading US clinical laboratories and cancer centers), NRF +10.7% (announced plan to spin-off Asset Management Business into a separate publicly traded company in a tax-free transaction), BLDP +3.7% (to supply ElectraGen-ME fuel cell systems for a polot project in Idea Cellular's India telecom network), APAM +3.5% (reported November 2013 AUM of $103 bln), MA +3.0% (announced capital actions: 10-for-1 split, 83% increase in quarterly dividend, $3.5 bln share repurchase program), URBN +3.0% (disclosed thus far Q4 comparable retail segment net sales are mid single-digit positive), OME +2.3% (announced strategic plan to streamline Gulf of Mexico operations), CBI +1.8% (awarded contract for LNG liquefaction terminal)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: AVNR -13.8%, LH -6.7%, CENT -4.4%, MIND -2.8%, HRB -1.9%, MILL -1.5%, CNI -1.1%, IRET -0.2%

Companies trading lower in after hours in reaction to news: AVNR -13.8% (announced that PRIME, its phase II clinical trial of the investigational drug AVP-923 (dextromethorphan / quinidine) for the treatment of central neuropathic pain in patients with multiple sclerosis did not meet the primary efficacy endpoint; co also reported earnings), EJ -4.8% (announced proposed offering of $180 mln convertible senior notes), AWAY -4.8% (announces intention to file registration statement for public offering of common stock: HomeAway to offer 5.5 mln, selling stockholders to offer 518,630), AMID -4.1% (announced public offering of 2.4 mln common units), ALSN -3.0% (announces sale of 12.5 mln shares of common stock by selling stockholders), TRLA -1.5% (announced proposed $150 mln convertible senior notes offering)

House, Senate Negotiators Set to Announce Budget Deal *Rep. Ryan Says He and Sen. Murray Have "Reached an Agreement" on Federal Budget

*Ryan: Deal Will Avoid Government Shutdown In 2014

*Ryan: Deal Reduces Deficit, Does Not Raise Taxes

*Ryan and Murray Are Budget Chairs in the U.S. House and Senate

*Sen. Murray: Deal Rolls Back Some Sequester Cuts to Military and Other Programs in 2014, 2015

*Sen. Murray: House to Vote on Budget Deal First, Followed by Senate

(UPDATE TO COME)

House and Senate negotiators are on the verge of announcing a budget agreement that would avert a government shutdown and bring a rare dose of stability to Congress's fiscal policy-making over the next two years, according to lawmakers briefed on the negotiations.

Sen. Patty Murray (D., Wash.) and Rep. Paul Ryan (R., Wis.) worked through the day Tuesday to put the finishing touches on a two-year budget agreement and briefed colleagues on the broad outlines of the emerging deal.

Senate Democrats who met midday with Ms. Murray said the deal's announcement was imminent. Negotiators aim to bring the bill to the House for a vote before week's end, when the House is scheduled to adjourn for the year. A Senate vote likely would follow next week.

The goal of the Murray-Ryan talks has been to find a way to ease the next round of across-the-board spending cuts, which are slated to reduce the budget for most domestic and defense programs to $967 billion in 2014, down from $986 billion in 2013.

The deal is expected to raise that budget target to about $1 trillion in 2014 and 2015. But to keep that from increasing the deficit over the long term, the deal calls for offsetting the increased spending by raising government fees and cutting spending in other parts of the budget, such as on federal employee pensions.

The agreement is expected to include an increase in fees charged to airline passengers, higher premiums that employers pay to guarantee pensions through the Pension Benefit Guarantee Corporation, as well as a requirement that federal employees pay larger contributions to their pension plans.

Closing Market Summary: Russell 2000 Leads Stocks Lower

The major averages spent the entire session in a steady downtrend, but despite persistent selling pressure, today's losses were limited in scope. TheDow, S&P 500, and Nasdaq shed between 0.2% and 0.3% while the Russell 2000 lagged, falling 0.9%. The underperformance of the Russell 2000 was likely owed in part to tax-loss selling, which tends to pick up this time of year. Small-caps often feel that pinch in a stronger fashion than large-cap issues since individual retail investors factor more prominently in the behavior of small-cap stocks. Large-cap stocks, on the other hand, have a stronger institutional shareholder base that may be less sensitive to the timing of tax-loss harvesting at year-end due to being tax exempt or having different taxable years.

U.S. equities began the session with modest losses, tracking the performance of their European counterparts. An early bid lifted the Nasdaq and S&P 500 briefly into positive territory, but a second round of selling into the European close pushed the indices back into the red where they spent the remainder of the session. Countercyclical sectors lagged throughout the day with consumer staples and health care falling 0.9% and 0.4%, respectively. The health care space was pressured by biotechnology as the iShares Nasdaq Biotechnology ETF (IBB 219.64, -1.85) lost 0.8%. Meanwhile, the other two defensively-geared sectors—telecom services (-0.8%) and utilities (-1.0%)—ended at the bottom of the leaderboard. Things looked a bit different on the cyclical side where all six groups finished in-line or ahead of the broader market. However, only materials (+0.3%) and discretionary shares (+0.1%) were able to register gains.

The materials sector received significant support from miners. The Market Vectors Gold Miners ETF (GDX 22.03, +0.82) jumped 3.9% as gold futures advanced 2.3% to $1262.00 per troy ounce. Elsewhere, the discretionary space drew strength from momentum names as Amazon.com (AMZN 387.78, +2.89), eBay (EBAY 51.92, +0.23), and Netflix (NFLX 363.10, +7.43) gained between 0.4% and 2.1%. Also of note, financials settled in-line with the broader market even as Goldman Sachs (GS 169.73, +2.06) outperformed with a gain of 1.2%. It is worth mentioning that the Volcker Rule received clearance from all five regulatory agencies today, but CFTC Commissioner Bart Chilton said the Rule is unlikely to be implemented before 2015. Treasuries climbed throughout the day with the 10-yr yield falling five basis points to 2.80%. Trading volume was well below average as only 619 million shares changed hands on the floor of the New York Stock Exchange. In today's economic data, wholesale inventories increased 1.4% in October after increasing an upwardly revised 0.5% (from 0.4%) in September. The consensus expected wholesale inventories to increase 0.3%. The increase in inventories followed a sizable gain in overall inventories in the third quarter. It was expected that inventory growth would slow considerably throughout the fourth quarter. Durable inventories increased 0.4% in October. Big gains in autos (2.7%) and furniture (1.3%) offset declines in computer (-5.7%) and professional (-1.4%) equipment. Meanwhile, nondurable inventories increased 3.0% in October, up from a 1.4% September gain. Almost two-thirds of the increase in nondurable goods inventories was the result of a 17.0% increase in farm product inventories. Separately, the Job Openings and Labor Turnover Survey came in at 3.925 million, which follows the prior reading of 3.913 million.

Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET and the November Treasury Budget will cross the wires at 14:00 ET.

o Nasdaq +34.5% YTD o Russell 2000 +31.8% YTD o S&P 500 +26.4% YTD o DJIA +21.9% YTD

BlackRock discloses new 10%+ passive positions in 13G filings o BlackRock reported stakes in ALU (10.26%; as of 9/30), CBK (10.18%; as of 11/29), and TI (10.14%; as of 11/29)

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BFW 12/10 16:57 *FININVEST SELLING 5.6% OF MEDIOLANUM IN BOOKBUILDING BN 12/10 16:56 *FININVEST SAYS MEDIOLANUM STOCK SALE TO STRENGTHEN FINANCES BN 12/10 16:56 *FININVEST SAYS UNICREDIT MANAGING MEDIOLANUM STOCK SALE BN 12/10 16:55 *FININVEST SAYS BOOKBUILDING FOR 5.6% OF MEDIOLANUM BN 12/10 16:55 *FININVEST SAYS ACCELERATED BOOKBUILDING FOR MEDIOLANUM STAKE

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Fininvest Says Accelerated Bookbuilding for 5.6% of Mediolanum 2013-12-10 17:01:41.555 GMT

By Dan Liefgreen Dec. 10 (Bloomberg) -- Berlusconi family’s investment co. Fininvest will use proceeds from Mediolanum stock sale to strengthen finances, according to stock-exchange statement. * UniCredit managing stock sale: statement * Fininvest owns 35.7% of Mediolanum: statement

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