(Pimco) Investment Look - The Second Coming

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Treasury's Bills & overnight Repo...are in the centre of "Pimco's Concentric Circles"...Change the price of Credit at the center and you change the price of assets at the outer extremities...If the center holds, if global central bankerscan caonvice investors that their abnormal policies can ecreate a semblance of the old economy, then risk assets at the outer edges of our cricle will have higher future returns than otherwise... As long as artificially low policy rates persist, then artificially high-priced risk assets are not necessarily mispriced. Low returning, yes, but mispriced? Not necessarily...

WSJ : Oil Drillers Heading Into Deep Water

Swimming in the open water can feel liberating, but it is scary when you realize there is nothing solid beneath you.

It is starting to feel that way for deep-water drillers, companies providing rigs to oil companies when the latter want to punch holes in the abyssal seabed. In the past six months, the broad oil-field-services sector has remained pretty flat. Within it, though, deep-water-weighted stocks like those of Transocean RIG +0.31% and SeaDrill SDRL -0.12% have been slipping.

They are indirect casualties of the battle being waged, and largely won, by shareholders of major oil companies to force cutbacks in swollen exploration and production budgets. In recent strategy and fourth-quarter-results presentations, the likes of Royal Dutch Shell, Chevron and Exxon Mobil XOM +0.83% have signaled flat or lower capital spending after running high for several years.

Deep-water projects are expensive. On average, renting a deep-water rig costs roughly half a million dollars a day, about five times the rate for a simple rig used in the shallow areas of the Gulf of Mexico. So, despite being a key growth area for large oil companies, deep-water spending also makes for a big target when it comes to saving cash.

While announcing Shell's 2013 results, its finance chief identified deep-water projects as one of the company's "growth priorities" and then said spending in that area would drop by $1.5 billion this year. Speaking to analysts last week, Chevron said high rates on deep-water equipment are "impacting some of the projects," suggesting a desire to rein in costs there.

In part, such comments are part of the wider negotiation process between the big oil companies and the drillers they contract with. But pricing is slipping. Having peaked near $600,000 at about the end of 2012, average daily rates for deep-water rigs have slipped back to about $500,000, according to Morgan Stanley. MS +1.35%

ISI Group's Jud Bailey expects rates on even the most modern ultradeep-water rigs to slip to $440,000 within a year, down from north of $500,000, as weakening demand meets increasing supply.

With their biggest customers appeasing cash-conscious shareholders, drillers' stocks look set to sink further or tread water at best this year.

—Liam Denning

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: JASO +15.1%, YONG +5%, KIOR +2.6%, PTX +2.3%, .

M&A news: DRAD +5.3% (acquires Telerhythmics for ~$3.6 mln), TGA +4.5% (Co and and Caracal Energy announce proposed business combination), VOD +1.1% (to acquire Grupo Corporativo Ono for EUR7.2 bln), WWE +0.4% (may be a takeover target by Comcast (CMCSA) or Madison Square Garden (MSG), according to Bloomberg).

Select solar names trading higher in sympathy with JASO earnings: YGE 5.7%, JKS 4.9%, SOL 4.7%, TSL 4.5%, FSLR 1.6%

Other news: FPRX +19.2% (and Bristol-Myers Squibb (BMY) Sign Collaboration Agreement to Discover Novel Immuno-Oncology Therapies for Two Immune Checkpoint Pathways), STAA +19.1% (FDA Advisory Panel votes in favor of STAAR Surgical's Visian Toric Implantable Collamer Lens), KIPS +13.7% (announces FDA approval for U.S. expansion of its eMESH I clincal feasibility study), SINA +8.9% (filed initial F-1 to IPO its Weibo micro-blogging service), FMCC +8.2% (prices third multifamily securities offering this year, K-037), HTZ +7.7% (planning spin off its construction equipment rental business valued at about $4.5 bln, according to FT reports), CANF +5.2% (announces Phase II study protocol to treat patients with advanced liver cancer with CF102 has been approved by the IRB in Israel), BLDP +4% (Anglo American Platinum Limited has converted its $4 million non-interest bearing promissory note into common shares), SUNE +3.9% (Hoplite Capital Management disclosed 5.99% passive stake in 13G filing), FCEL +3.6% (cont volatility, ie PLUG), YHOO +3.5% (Alibaba.com (ALBCF.PK) has chosen the US for IPO, according to reports), SHLD +3.2% (approves the separation of its Lands' End business), PLUG +3.1% (cont volatility), GMCR +2.7% (to join the S&P 500), DRYS +2.1% (announces Ocean Rig UDW's proposed offering of $500 mln senior notes due 2019), YRCW +1.7% (Solus Alternative Asset Management disclosed 8.91% passive stake in 13G filing), GWPH +1.6% (provides update on cannabinoid pipeline), TSLA +1.4% (still checking), RSH +1.3% (possibly cont momentum from Friday).

Analyst comments: WYY +5.6% (initiated with a Buy at B. Riley & Co), ALDW +3.6% (upgraded to Buy from Neutral at Citigroup), SI +3.1% (upgraded to Overweight from Neutral at JP Morgan and to Buy from Neutral at BofA/Merrill), SAP +2.6% (upgraded to Buy from Neutral at Citigroup), LO +2.5% (upgraded to Buy from Neutral at Goldman), REGN +2% (upgraded to Buy from Neutral at Citigroup), KOG +1.4% (upgraded to Buy from Accumulate at KLR Group), POT +1.3% (upgraded to Mkt Perform from Underperform at Cowen), FTNT +0.9% (target raised to $28 at Oppenheimer), CVLT +0.8% (upgraded to Buy from Neutral at Mizuho)

>>> US Gapping down

Gapping down

In reaction to disappointing earnings/guidance: HNR -10.1%, IIVI -6.4%, BTH -4.8%, BLRX -3.2%, ICPT -3.1%, CCE -1.1%, TA -0.8%.

Select metals/mining stocks trading lower: HMY -1.6%, AEM -1.2%, GFI -1.1%, ABX -0.9%, GDX -0.8%, SLW -0.8%, AUY -0.6%.

Other news: CALI -5.3% (reports services agreement with the Tianjin International Automall has not been renewed; cites competition with recently acquired Airport International Automall), ISBC -3.8% (to commence stock offering), SCMP -2% (announces update on Liquid Formulation Program for AMITIZA).

Analyst comments: VRSN -7.9% (downgraded to Mkt Perform from Outperform at Cowen), SBGI -1.4% (downgraded to Market Perform from Outperform at Wells Fargo), GNC -1.2% (downgraded to Neutral from Outperform at Credit Suisse), GTN -1.1% (downgraded to Market Perform from Outperform at Wells Fargo), NOV -0.5% (downgraded to Neutral from Buy at Goldman), KMR -0.4% (downgraded to Market Perform from Outperform at Wells Fargo).

Porsche Wins Dismissal of EU1.4b Hedge-Fund Suit Over VW Bid

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BN 03/17 12:25 Porsche Wins Dismissal of Hedge Funds’ Suit Over VW Bid (1) BN 03/17 12:04 *STUTTGART COURT ISSUES PORSCHE RULING BFW 03/17 12:03 *PORSCHE WINS DISMISSAL OF HEDGE FUND SUIT OVER VW BID BN 03/17 12:03 *STUTTGART COURT DISMISSES SUIT SEEKING EU1.4B FROM PORSCHE BN 03/17 12:03 *PORSCHE WINS DISMISSAL OF HEDGE FUND SUIT OVER VW BID

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Porsche Wins Dismissal of EU1.4b Hedge-Fund Suit Over VW Bid 2014-03-17 12:05:09.275 GMT

By Karin Matussek March 17 (Bloomberg) -- Lawsuit brought by 23 hedge funds alleging Porsche manipulated VW shares in 2008 as part of a takeover bid. * Stuttgart court issued ruling * NOTE: Suit is one of half a dozen Porsche is facing in courts in four German cities; combined damages sought totals more than EU5b * NOTE: Feb. 10: Porsche Hedge Funds Suit Has High Risk of Loss, Judge Says {NSN N0SIN56JIJWJ <GO>} * NOTE: Porsche, Piech Sued in Frankfurt by Hedge Funds Over VW Deal {NSN N0DPRD6JTSEC <GO>}

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To contact the reporter on this story: Karin Matussek in Berlin at +49-30-70010-6218 or kmatussek@bloomberg.net

To contact the editor responsible for this story: Anthony Aarons at +44-20-7673-2227 or aaarons@bloomberg.net

>>> US Early premarket gappers

Early premarket gappers

Gapping up: 
SINA +8.7%, HTZ +7.8%, PLUG +5.1%, RSH +4.9%, BLDP +4.7%, JASO +4.2%, TSL +3.9%, JKS +3.6%, FCEL +3.3%, YHOO +2.8%, NBG +2.7%, YGE +2.3%, TWTR +1.9%, FSLR +1.8%, TSLA +1.7%, BHP +1.3%, VOD +1.2%, CS +1.1%, RIO +1%, DB +0.6%

Gapping down: 
ICPT -7%, WUBA -1.6%, DATA -1.5%, LPSN -1.4%, GFI -0.9%