TheChek News Flow

Closing Market Summary: Stocks End October on Lower Note

The S&P 500 ended with a modest loss of 0.4%, trimming its October gain to 4.5%. Small caps displayed notable weakness during morning trade, but the Russell 2000 ended not far behind the S&P with a loss of 0.5%.

Equity indices spent most of the session near their respective flat lines even after more than 250 companies reported their quarterly results between yesterday's close and today's opening bell. Trading volume was subdued until the last 30 minutes of action when a surge in trading activity sent equity indices to lows while pushing the final NYSE volume tally over 900 million shares. The benchmark index displayed early weakness as the broader market followed in the footsteps of the financial sector (-1.1%), which slipped out of the gate and spent the entire session in the red. Financials finished at the bottom of the leaderboard while also ending the month behind the remaining nine sectors with an October gain of 3.2%. Following the early dip, the S&P returned to its flat line, where it hovered until selling accelerated during the final hour. Only the consumer discretionary space posted a gain (+0.2%) with media names providing support after Time Warner Cable (TWC 120.15, +3.27) reported better-than-expected results. Homebuilders did not take part in the rally as the iShares Dow Jones US Home Construction ETF (ITB 22.52, -0.46) lost 2.0%.

Elsewhere, the energy sector outperformed (-0.2%), receiving support from Exxon Mobil (XOM 89.62, +0.81) after the Dow component reported results ahead of analyst expectations. Another Dow member, Chevron (CVX 119.96, -0.34), also announced above-consensus earnings, but ended lower by 0.3%.

Among other earnings of note, Facebook (FB 50.20, +1.20) posted a gain of 2.4% after enduring some after-hours drama yesterday. The social media stock jumped as high as 14.0% in reaction to its solid quarter, but relinquished the gain after company management said during the conference call that a decline in daily traffic among younger users has been observed. Treasuries ended modestly lower with the 10-yr yield up one basis point at 2.55%. In overseas news of note, eurozone unemployment (12.2% actual versus 12.0% expected) and CPI (0.7% actual versus 1.1% consensus) came in well-below estimates, which stoked expectations for additional liquidity provisions from the European Central Bank. On that note, governing council member Ewald Nowotny said the ECB will ensure a smooth transition once long-term refinancing operations come to an end. The euro was under pressure throughout the session, falling over 150 pips against the dollar to 1.3584.

Investors received just two economic data points today. Weekly initial claims decreased to 340,000 from 350,000 (consensus 335,000). This initial claims report represented the first clean reading for the labor market since August as issues with California's numbers have now been ironed out.Unfortunately, the report reflected a modest increase in layoff levels over the past couple of months. An initial claims reading of 340,000 is enough to keep the unemployment rate steady but not enough to drive steady payroll gains above 200,000. The continuing claims level increased to 2.881 million from a downwardly revised 2.859 million (from 2.874 million). The consensus pegged the continuing claims level at 2.850 million. Separately, the October Chicago PMI registered its largest one-month spike in more than 30 years, jumping to 65.9 from 55.7 (Briefing.com consensus 55.0). We are skeptical that the sharp increase is legitimately showing vast improvement in the manufacturing sector. Most of the Federal Reserve regional manufacturing surveys were either flat or softened slightly from lost demand due to the government shutdown. In contrast, the manufacturers in the Chicago region recorded their strongest activity since March 2011.

Tomorrow, the October ISM Index will be released at 10:00 ET.

o Nasdaq +29.8% YTD o Russell 2000 +29.5% YTD o S&P 500 +23.2% YTD o DJIA +18.6% YTD

NQ Mobile: Shares spike to HoD as Longbow Research files 13G disclosing an 8.04% stake 

* TCI’s Hohn Says EADS Stock Has 50% Likely Upside in 18 Months {NSN MVJIXD6KLVRI <go>}

* TCI’s Chris Hohn Says He’s Long Aurizon {NSN MVJIDF6KLVRT <go>}

* Naya Management’s Siddiqui Says he is Long Ferragamo {NSN MVJHU06KLVVC <go>}

* Egerton Capital’s Armitage Says Buy Nordea {NSN MVJHMG6KLVRV <go>}

* Naya Management’s Siddiqui Says He Is Short Essilor {NSN MVJGJ76KLVSB <go>}

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BFW 10/31 15:04 Naya Management’s Siddiqui Says He Is Short Essilor

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MORE: Naya Management’s Siddiqui Says He Is Short Essilor 2013-10-31 15:59:41.991 GMT

By Fabio Benedetti-Valentini Oct. 31 (Bloomberg) -- Naya’s Masroor Siddiqui cites slow organic growth, pricing pressure. * Sees ‘not much in the way of organic growth’ and a ‘long term degradation of this company’s business’ * Speaking at Sohn London Investment Conference * An Essilor official didn’t immediately return a call seeking comment

Story Link:NSN MVJGJ76KLVSB<GO>

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

--Editor: Frank Connelly

To contact the reporter on this story: Fabio Benedetti-Valentini in Paris at +33-1-5365-5095 or fabiobv@bloomberg.net

To contact the editors responsible for this story: Frank Connelly at +33-1-5365-5063 or fconnelly@bloomberg.net; Edward Evans at +44-20-3525-3190 or eevans3@bloomberg.net

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TCI’s Hohn Says EADS Stock Has 50% Likely Upside in 18 Months 2013-10-31 15:56:01.249 GMT

By Chris Larson Oct. 31 (Bloomberg) -- TCI’s Chris Hohn says EADS has an “exceptional franchise.” * Sees Airbus profit margin doubling 2012-2015 * Says co.’s prices are increasing as costs remain flat * Hohn says EADS has “massive” order backlog * Stock can ‘‘easily’’ achieve Boeing’s 15x multiple, he says * Says TCI bought EADS shares late 2012 * Hohn Speaking at Sohn London Investment Conference

Link to Company News:{BA US <Equity> CN <GO>} Link to Company News:{EAD FP <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: Chris Larson in London at +44-20-3525-8840 or clarson22@bloomberg.net

To contact the editor responsible for this story: Edward Evans at +44-20-3525-3190 or eevans3@bloomberg.net

L’Oreal buyback of stake held by Nestle could take several years

A buyback by L’Oreal [OR FP] of the shares held by Nestle [NESN VX] could be stretched out over more than four years if the French personal care group buys the entire stake and wants to avoid launching a public tender offer open to all of its shareholders, according to several legal and banking sources.

The shareholder pact between the French cosmetics company’s two main shareholders, the Bettancourt family and Swiss food and consumer group Nestle expires in April 2014, opening up the opportunity for one of the parties to buy the other out.

L’Oreal has publicly stated that it has the financial means to buy the 29.3% stake held by Nestle, which has a current market value of EUR 22.22bn.

But French law prevents L’Oreal from buying back the full stake in one go, legal sources said. According to the “Code de Commerce”, companies can buy back a maximum of 10% of their own shares in private placements. They are permitted to exceed this amount if they launch a public buyback offer, open to all shareholders.

To avoid triggering a public offer, L’Oreal can use the mandate granted to it by its shareholders to buy back 10% of its share capital through market or off-market transactions. This authorisation is routinely granted at the annual shareholders meeting, said one lawyer.

But it may be possible to call more than one ordinary general meeting in the year, allowing the company to launch more than one 10% buyback in the period, speculated a legal source familiar with the situation.

But attempts to accelerate the buyback would still be hindered by legal limitations on the cancellation of shares. The “Code de Commerce” prevents companies holding more than 10% of its share capital at any one time. At the same time, companies are only permitted to cancel up to 10% of their shares every 24 months, sources said.

When French advertising company Publicis [PUB FP] bought the some 15% stake held by its Japanese peer Dentsu [4324 JP], three transactions were launched between May 2010 and February 2013 to buy Dentsu’s stake.

Publicis explained in its release in February 2012, that of the 18m shares it had purchased up to that date, the group cancelled 10.76m, given a previous cancellation of shares in May 2010. “Thus a total of 10% of the Group’s shares (the maximum permitted by law) has been cancelled over the past 24 months,” the statement said.

This means it would take L’Oreal over four years to buy back and cancel the entire stake.

The legal source familiar said there was possibly a way around this law, but would not be specific, other than to say the deal could be structured so that it would not be a buyback as such.

This source said it was also possible that L’Oreal could decide to launch a public buyback with a discount that would make it appealing to Nestle and not other shareholders. The large stake held by the Swiss food group means that most disposal routes would be impacted by some form of discount.

But this would be a gamble, as several shareholders could still opt into the offer, the source pointed out.

Analysts have previously predicted that L’Oreal is unlikely to buy back the stake in one go. Nestle may also be open to a gradual sell down of its stake in the absence of any transformational acquisition targets. The Swiss company is cash rich, reporting cash and cash equivalents of CHF 3.8bn and CHF 2.5bn in short term investments in its first half results for 2013.

Nestle has publicly stated it is keeping all options open in relation to the stake, including maintaining the status quo.

Nestle and L’Oreal declined to comment.

L’Oreal shares on Thursday morning were trading at EUR 125.01, giving it a market capitalisation of EUR 75.84bn.

Federal aviation regulators on Thursday unveiled steps to lift restrictions on fliers' electronic devices, concluding that tablets, e-readers and other gadgets generally can be used during all phases of flight by the end of this year. The Federal Aviation Administration's decision, embracing recent recommendations by a high-level agency advisory group, effectively ends years of safety debates over the use of the devices. The FAA said it is providing airlines with guidelines to carry out the new policy. The agency said it expects many carriers to be able to allow their fliers to use devices gate to gate by yearend. Specific implementation plans and timetables will vary among airlines, the FAA said. The new rules require passengers to hold electronic items or put them in the seatback pocket during takeoffs and landings. Wi-Fi and Bluetooth connections will be allowed below 10,000 feet, but the agency said cell phones must be switched to airplane mode for the entirety of flights, as inflight cellular signals remain banned by the Federal Communication Commission.

The Afghan Money Pit: How Millions of Dollars Were Wasted Link : {http://thebea.st/Hubqax}

Hundreds of millions in U.S. aid money provided to supply Afghan security forces has been lost—and now oversight is about to get even worse.

The war in Afghanistan is transitioning to its endgame. But the drawdown hasn’t stopped the billions in U.S. aid flowing into the country, and after 12 years of spending on this scale, we’re still losing money—hundreds of millions unaccounted for—almost as fast as we can write the next check. The spotty oversight of U.S. aid to Afghan forces is now set to get even worse as the main auditing group is in the country is about to have its presence dramatically reduced. The majority of the Department of Defense money spent in Afghanistan that doesn’t pay for U.S troops goes into projects for infrastructure and funding the Afghan security forces. The U.S. legacy in Afghanistan will be defined in large part by the success of those institutions, the Afghan army most of all, where we have focused our funding and resources. A series of recent reports detailing the loss of hundreds of millions of dollars spent on the U.S. cornerstone efforts—some of it gone to waste, corruption, and misallocation, the rest simply missing and unaccounted for—offer a troubling picture of the return on U.S. investments and underscore how deeply the key Afghan institutions still rely on U.S. funding for daily operations. The Special Inspector General for Afghanistan Reconstruction (SIGAR), an independent agency created by Congress to monitor U.S. spending in Afghanistan, has detailed the money wasted in the Afghan supply process in a series of audits focused on procurement of fuel and vehicle parts for Afghan security forces. As of March 2013, the U.S. has spent (PDF) about $54 billion funding security forces in Afghanistan and $92 billion on reconstruction, agriculture, and other development projects, according to a SIGAR report. Two October reports (PDF) on funding and supply of the Afghan National Security Forces highlight the severity of the oversight problems in transactions in Afghanistan. In Afghan bases funded by the Combined Security Transition Command-Afghanistan (CSTC-A), SIGAR counted about $370 million in unaccounted spare vehicle parts for the Afghan army and found that fuel purchases and budget needs had been overestimated by nearly a third. Since 2010, America’s mission in Afghanistan had moved away from unilateral military operations. The first shift was to training and developing Afghan forces. Now, in the war’s final stage, the focus is on supporting those forces as the Afghans take the lead in security operations and building up the civic and economic institutions that were neglected when the country was too violent for them to take root. The DOD’s own funding request (PDF) for 2014) lays out the realignment of U.S. priorities in Afghanistan: “The campaign in Afghanistan has shifted, with the Afghan National Security Forces (ANSF) taking over the primary responsibility for fighting insurgents and International Security Assistance Forces (ISAF) moving into a supporting role. Although the ANSF is already leading over 80% of operations they remain dependent on ISAF for many support functions.” “The U.S. government is giving hundreds of millions of dollars to the Afghan government without even knowing if they’re in the right ballpark of what they actually need.” “The strength and success of the [Afghan National Security Forces] is critical to the overall success of the reconstruction effort, so they want to make sure they have the supplies they need,” said Elizabeth Field, the assistant inspector general for audits and inspections for SIGAR who played a key role in both the fuel purchases audit as well as the spare parts audit. The problem of money disappearing into Afghan projects without anyone being held accountable for the loss is not new, but the widespread acknowledgement of past losses has not prevented the same funding processes from being repeated throughout the course of the war. According to Todd Harrison, a senior fellow at the Center for Strategic and Budgetary Assessments, the problem is ingrained in the U.S. approach to funding in Afghanistan. “A lot of the money is spent with little regard for the effectiveness of it,” Harrison said. “We don’t actually try to do small-scale experiments to figure out what type of programs are effective at achieving our objectives before rolling out large programs.” In one case (PDF), the U.S. purchased $138 million worth of spare parts for the ANA despite not being able to account for $200 million worth of parts that had already been purchased. According to Field, the SIGAR auditor, the disappearing funds stem from U.S. forces’ heavy reliance on Afghan record-keeping without measures to ensure that the money appropriated is being spent as originally intended. For instance, according to Field’s audit, U.S. forces requested $134.6 million in funds to provide fuel for the Afghan National Police during the 2013 fiscal year despite having little reliable information from the Afghan forces on how the money would be spent or distributed. To make these requests, CSTC-A relied on past ANP fuel orders as well as internal assumptions about Afghan forces’ fuel consumption. Though CSTC-A had purchased fuel for the ANP for six years, it could not provide information on the number of ANP vehicles and generators in use or the rate of consumption, according to SIGAR. Similarly, in the case of vehicle parts CSTC-A, relied on the ANP to keep an accurate record of spending and equipment on the bases under its supply program, while keeping no separate records. “CSTC-A is essentially guessing at how much money they need to be obligating to buy vehicle spare parts of the ANSF,” Field said. “I really think that’s the most stunning and disappointing findings in both the fuel report and the spare parts report. The U.S. government is giving hundreds of millions of dollars to the Afghan government without even knowing if they’re in the right ballpark of what they actually need.” CSTC-A has approved $243 million in direct funding for Afghan forces for the current 2014 fiscal year, even though officials believed that such contributions would be at “high risk” for abuse. Direct funds are given straight to the Afghan government to be spent through its budget and can be very difficult to keep track of. “We have a lot of concerns about how on budget and direct assistance is going to be monitored,” Field said. The U.S. cannot count on the help of local oversight bodies in Afghanistan, either. “There are some oversight bodies in Afghanistan. They’re in their infancy, I would say,” Field said. “We have…found concerns about the capabilities and integrity of those agencies,” she said. Corruption remains a pervasive problem in the Afghanistan security forces and among the politicians who control the Afghan military’s budget. “Individuals are pocketing the money to sell fuel bought by the U.S. government that should be going to the Afghan National Police but are instead being used to line their pockets,” Field said. In spite of these issues, the U.S. plans to contribute $1.4 billion in fuel to the ANP from now until the end of the 2018 fiscal year. The U.S. drawdown is already leaving at least $7 billion of equipment and waste behind for Afghan residents as scrapped and too expensive to transport back home. These reports are only the latest in a series of SIGAR reports that have sparked action in Congress. Rep. Jason Chaffetz (R-UT), who leads the House Subcommittee on National Security Oversight, is one of the members of Congress pushing for accountability in funding Afghan forces. “This is yet another report in a series about the massive fraud and abuse in Afghanistan,” Chaffetz said. “This has been highlighted by Congress as well as the SIGAR multiple times, and yet there doesn’t seem to be the imperative in the Obama administration to fix it.” Chaffetz introduced the Accountability of Taxpayer Funding for Afghanistan Fuels Act of 2013 in September 2012, calling for more transparency in U.S. funds to Afghan police. The legislation gained momentum in Congress when it was first introduced, but the act had to be reintroduced when Congress reconvened in 2013 and now is awaiting review in committee. CSTC-A has acknowledged its weaknesses in response to SIGAR recommendations and is making efforts to amend the oversights. A CSTC-A spokeswoman, Capt. Isabelle Bresse, said the organization “is in the process of refining and strengthening the controls contained in Ministry of Interior fuel policy. Some of the focus areas include an overhaul of the national distribution plan creation process, as well as implementation of tighter controls over the monthly maximum amount each unit is authorized to order.” In an October 15 press release, officials announced that new data mining and organizational structures are being put into place at Afghan bases to ensure proper inventory of spare parts. “It’s important that the Afghan forces have systems and procedures in place to demonstrate that funds are spent on critical spare parts needed to win the fight,” Maj. Gen. Dean Milner, deputy commanding general of the NATO Training Mission-Afghanistan, said in a press release. “It’s equally vital that practices are in place to ensure the Afghan forces can effectively order, inventory and forecast future needs regarding spare parts for their vehicles,” Milner said. As part of its response to SIGAR’s recommendations for oversight in fuel purchases, CSTC-A also has agreed to review all fuel requirements for the 2015 fiscal year. In an October 10 letter to Secretary of State John Kerry, SIGAR inspector general John Sopko said auditors’ access to U.S. construction projects, some totaling more than $72 million, is dwindling to an all-time low for SIGAR investigators. “It is clear that everyone working in Afghanistan, including SIGAR, will struggle to continue providing the direct U.S. civilian oversight that is needed in Afghanistan,” Sopko wrote in his letter, projecting that oversight will fall to 21 percent of Afghanistan territory post-2014. Of the chances that U.S. would be able to stem the continuing loss of aid in the war’s final year, Todd Harrison, the defense budget expert, said: “We’re on our way out of Afghanistan now, so it’s too late to fundamentally reform the way we do things there.”

Link to translation : {http://bit.ly/HrxlyX}

First it was little belligerent competitor, the Nespresso capsule made a part of the business dispute. Now all seem like barriers: According to Masters and Blenders Mondelez Aldi and Lidl assault on the lucrative market cap - and teach the Great to fear.

Hamburg - Special offers were not yet the thing of Nespresso. But for the Swiss coffee provider that has so far attracted its clientele with elegant club atmosphere, art-deco ambience and noble kredenzten Grand Cru capsules, new times seem dawned. On the home page on the Internet moves towards a the special offer: Up to 100 Euros customers can save money by buying a Nespresso machine.

It is not long ago, as a loss leader would have been unthinkable even damaging brand. Finally, the Swiss sold with their advertising icon George Clooney not only zemlich expensive coffee capsules, but also an exquisite lifestyle. But if the Swiss during the important Christmas business does not want to lose valuable ground to its competitors, it also leads to attractive discounts no other way. Times have changed. First it was mainly small independent producers such as the Ethical Coffee Company, the former Nestlé manager Jean-Paul Gaillard, the Swiss manufacturer or Delica, which with its competitors capsules a cheap alternative offered for Nestlé Nestlé capsules and with a patent battle supplied by one.

Now there Nestlé line of defense seems finally broken through , even dare front of the other: both the former and the power Mondelez daughter in the hands of billionaire Reimann family located Senseo Manufacturer Master Blenders mix now with capsule in the lucrative business.

Now mix well with Aldi and Lidl

And now even the discounters want a piece of the pie. The discount chain Lidl, which had temporarily taken their capsules after problems again from the shelves is a new version of Nespresso compatible capsules back of the party. Since Wednesday, Aldi is now also part of the game - with its own system, including capsules, the German manufacturer of K-fee has developed for the discount chain. The daughter of the powder group Kruger is not unknown in the capsule market. She has already developed its own system for Starbucks and is also its own program on the market.

In total, there are now estimated to have more than 50 vendors who advertise in Europe with their capsules for the favor of espresso drinkers. Many of them, however, mainly or even exclusively on the Internet, such as the Berlin capsule Gourmesso sender or the Swiss Erwin Meier, who has developed the CoffeeMate a refillable stainless steel capsule.

2 Item: Double-digit growth rates But the Internet sales channel has its limits. "With Internet sales alone will not manage to turn the big wheel," says Gaillard, The Frenchman knows whereof he speaks: he has experienced himself how hard it is to come on the market, if you record it with the established . He has dared anyway - and not only legal but a lot of headwind Nestlé harvested, also wanted to get rid of the pesky competitors change their machines. Gaillard has persevered - and can now reap the labors of success - with growth rates of 35 percent. "We are satisfied," he says. But the game, the Gaillard played with Nespresso, now still others play with it and benefit from it, that he has freed up the way for them in legal battles. How well it works for the big business in the capsule, can only be guessed.When it comes to numbers, the whole industry is very secretive. But the market is booming - like no other. While the coffee is slightly overall sales on the decline, the capsule industry puts down a success year after year. Already have an estimated market of researchers in more than two million households capsule machines. Whopping margins 16 percent of the market cap has grown according to the German Coffee Association last year alone - an estimated 300 million euros. And the end is not in sight: By 2017, in four years, the market researchers estimate of EUR monitor, it would be 24 percent more again. Here, the capsule is lucrative segment like no other. With sometimes more than 40 cents per capsule, the customer send the Nespresso single serve loose pay ten times as much as for normal filter coffee. And it also be based competitors.Both the capsules of Senseo as well as master blender will be around the 30 cents per cup. Aldi with his lies clearly with just under 19 cents. But here is - even in the face of the last massive drop in coffee prices - even a generous margin. Shopping in the companies currently pay for coffee that is about as much as last 2009.

3 Part: How manufacturers are fighting for the top spots That now the discounter want to play, might bring to market heavily in motion - and Nestlé market shares cost more vigorously. Nespresso has now ceased to communicate figures on its activities. But the golden days of the years of double-digit sales gains are likely to be there. "We believe that the positive development could have passed their peak, says Helvea analyst Andreas von Arx. First of all, that the future customers will find in the supermarkets a whole range of different providers, should make for strong motion and also make it for providers such as Tchibo not necessarily easier. For the majority of customers who buy their espresso specialty business decreases steadily, while sales via supermarkets and discounters down more and more. Capsule Rebel Gaillard's given the glut of competition on a clear segmentation of the business. "How in the car market, it is also in the coffee business in future BMW and Daimler - but also give seats," said the manager, who of course sees his own company in the luxury segment. That Aldi supplier K-Fee also works for Starbucks and the Aldi capsules - at least theoretically - also fit the devices of the American coffee chain, but not the whole thing makes it easier.

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