TheChek News Flow

US Market Update: Markets quiet following reopening of US equity trade

***Economic Data*** - (RU) Russia Gold and Forex Reserve w/e Dec 20th: $508.5B v $512.7B prior - (US) Initial Jobless Claims: 338K v 347Ke; Continuing Claims: 2.923M v 2.82Me - (MX) Mexico Nov Preliminary Trade Balance: +$339M v -$742.0Me

Fixed Income: - None Seen

Holiday season trade remained light in the early going with both Europe and Canada closed. US equities are broadly higher following the the DJIA and S&P 500 indices recording high closes on Christmas eve. Nasdaq +0.2%, DJIA +0.34%, and the S&P 500 +0.2%.

Initial jobless claims showed a better than expected result as well as the largest decline week over week seen since Nov of 2012. The volatility can be explained by the usual difficulty the labor department has in accounting for seasonal hiring. Following the open of pit trade the metals rose across the board, with Gold +0.8%, Silver, +2.25%, and Copper +0.4%. Crude is marginally higher (+0.2%) despite reports that Iran lawmakers planned to introduce an uranium-enrichment bill which would force the Govt to increase uranium enrichment to 60% if new sanctions are imposed.

Amazon and Mastercard's SpendingPulse both issued holiday season reports which showed year over year improvement in sales metrics. Amazon indicated that it was a 'record setting' holiday season for the Amazon "Prime" service, while SpendingPulse disclosed larger retailers were benefitting more so than smaller retailers during the holiday season; holiday sales +2.3% y/y. Twitter (TWTR) shares continued their recent volatility seen in recent days, again setting all-time highs (since its IPO in November). Shares throughout the early morning have traded within a 5 point range. Shares of Textura (TXTR) have come under attack from a Citron Research report, now down 9% on the day.

- Most FX price action was muted as expected in the session as year-end conditions affected interest. USD saw little reaction but was overall a bit weaker against the crosses despite a better-than-expected weekly claims data. USD/JPY has yet to break above the 105 handle but was hovering around 5-year highs. -The TRY currency (Lira) hit a fresh record low as pair tested above the 2.10 level earlier today. Turkey Econ Min Caglayan speculated that he saw an attempt to create chaos within the country by using the FX rate.

**Looking Ahead*** All times listed for economic events are denominated in Eastern Standard Time (Add 5 hours for GMT equivalent) - 12:00 (FR) France Nov Net Change in Jobseekers: -5.0Ke v -20.5K prior; Total Jobseekers: 3.27Me v 3.275M prior - 14:00 (AR) Argentina Nov Supermarket Sales Y/Y: No est v 18.4% prior; Shop Center Sales Y/Y: No est v 20.4% prior - 16:00 (KR) South Korea Jan Manufacturing Business Survey: No est v 78 prior; Non-Manufacturing Survey: No est v 72 prior - 18:15 (JP) Japan Dec Markit/JMMA Manufacturing PMI: No est v 55.1 prior - 18:30 (JP) Japan Nov Jobless Rate: 3.9%e v 4.0% prior; Job-to-Applicant Ratio 3.9%e v 4.0% prior - 18:30 (JP) Japan Nov National CPI Y/Y: 1.5%e v 1.1% prior; CPI Ex Fresh Food Y/Y: 1.1%e v 0.9% prior; CPI Ex Food, Energy Y/Y: 0.5%e v 0.3% prior - 18:30 (JP) Japan Nov Tokyo CPI Y/Y: 0.9%e v 0.9% prior; CPI Ex Fresh Food Y/Y: 0.7%e v 0.6% prior; CPI Ex Food, Energy Y/Y: 0.3%e v 0.2% prior - 18:50 (JP) Japan Nov Preliminary Industrial Production M/M: 0.4%ev 1.0% prior; Y/Y: 5.4%e v 5.4% prior - 18:50 (JP) Japan Nov Retail Trade M/M: +1.0%e v -1.0% prior; Y/Y: 3.0%e v 2.3% prior - 20:00 (PH) Philippines Oct Trade Balance: -$700Me v -$666M prior; Imports: No est v $5.7B prior; Imports Y/Y: 8.0%e v 7.2% prior - 20:30 (CN) China Nov YTD Industrial Profits Y/Y: No est v 13.7% prior

10-Year Treasury Yield Hits 3% Threshold May Signal New Baseline for Higher Interest Rates

U.S. Treasury bonds fell Thursday, pushing the yield on 10-year notes to 3%, a threshold that may signal a new baseline for higher interest rates that could send ripples through the U.S. economy and global financial markets. The benchmark 10-year Treasury note's yield was the highest level since September, marking the second time this year that the yield reached the 3% mark. The note's price was about 3/32 lower on Thursday, according to Tradeweb. Trading on Thrusday was thinner than normal due to the holiday week which could exaggerate bond price and yield moves, traders said. The 10-year Treasury yield is a key rate used as a reference point for the cost of borrowed money for U.S. consumers and businesses. It also serves as a rate used to set the terms for foreign governments and companies to sell bonds in U.S. dollars. The rise continues a trend that has set in place more than a year ago when the yield hit a record low of 1.38% in July 2012. The last time the 10-year yield persistently traded above 3% was in 2011. For most of this year, investors bought up Treasurys when prices fell and yields approached 3%, seeing the debt as a bargain at that level given patchy economic data releases for much of the year and uncertainty about the Federal Reserve's plans for pulling back its bond-buying stimulus. The Federal Reserve said in December it will begin at the start of next year to cut back its $85 billion a month bond-buying, citing a stronger job market and economic growth. A 10-year note yield of 3% or higher is a sign that traders believe the U.S. economy is steadily improving and the Fed will keep culling its stimulus, said analysts and traders. "Round numbers like 3% are important for psychological reasons and investors tend to watch those numbers with added interest,'' said Larry Milstein, head of government and agency trading at R.W. Pressprich & Co. in New York. He adds that if the yield rises above 3.05%, there could be "a significant and rapid move higher in yield" toward 3.25%.

Gapping up M&A related: TMUS +4.1% (following reports that Softbank may bid for TMUS), FNF +1.7% (Lender Processing receives all required regulatory approvals for previously announced acquisition by Fidelity National Financial).

Select social media related names showing strength: SINA +2.3%, TWTR +1.3% (extending its recent move to the upside, currently up ~1% just under $71 in the premarket), FB +0.8%, LNKD +0.3%, .

Other news: SPCB +19.9% (completed Smart ID acquisition, Forming a company with a combined 2012 pro-forma revenue of $26.2M and EPS of $0.88), WBAI +3.4% (NYSE cancelling all trades in WBAI executed at or above $33.52 between 9:30 a.m. and 9:31 a.m. today), ARIA +3.1% (still checking), DDD +2% (still checking), TSLA +1.8% (ChinaDaily discusses Tesla's plan to expand in first tier China cities), CBD +1.7% (still checking), HIMX +1.1% (continued strength), BAC +0.3% and JPM +0.3% (still checking).

Analyst comments: EROC +3.9% (Eagle Rock Energy upgraded to Market Perform from Underperform at Raymond James).

Gapping down Select Brazil related names showing early weakness on light volume: GOL -1.4%, PBR -0.9%, VALE -0.7%, BAK -0.6%.

General news: WMC -15.2% (trading ex dividend), ORMP -15% ( has entered into definitive agreements with investors to purchase an aggregate of 1.58 mln shares of common stock at a price of $10.00/share in a registered direct offering), IGLD -7.1% (thinly traded, still checking), TKC -3.5% (Turkcell disclosed announcement regarding the capital increase in subsidiaries), BBRY -1.7% ( Co-founder Michael Lazaridis discloses lowered stake in BBRY; currently shows a 4.99% stake in SC 13D), BP -1.2% (BP: US Court has rejected BP's request for businesses to provide proof of spill related losses, according to reports)

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Lafarge Sells Europe, S.America Gypsum Stake to Etex for EU145M 2013-12-26 10:11:30.834 GMT

By Vidya Root Dec. 26 (Bloomberg) -- Lafarge said in an e-mailed statement that it’s selling its 20% stake in European and South American gypsum operations to Etex for 145 million euros in cash. * Lafarge expects the stake sale to close in coming weeks.

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To contact the editor responsible for this story: Vidya Root at +33-1-5365-5018 or vroot@bloomberg.net

Boxing Day holiday limits participation

***Notes/Observations*** - Japan Nikkei225 Index closed above 16,000 level for first time since Dec 2007 - Japan PM Abe visited the Yasukuni Shrine which angers regional neighbors - BOJ Nov Minutes reiterates that it expected a moderate economic recovery and would adjust policy as needed - China said to have set 2014 GDP growth at 7.6% vs. 7.5% official target

***Economic Data*** - (TR) Turkey Dec Consumer Confidence Index: 75.0 v 77.5 prior - (TW) Taiwan Central Bank (CBC) left its Benchmark Interest Rate unchanged at 1.875%; as expected

Fixed Income: - None seen

*** SPEAKERS/FIXED INCOME/FX/COMMODITIES/ERRATUM *** ***Equities** Indices [Stoxx50 closed FTSE 100 closed, CAC-40 closed, IBEX-35 closed, S&P 500 Futures reopens at 06:00 ET/11:00 GMT)+, DAX closed, SMI closed, FTSE MIB closed]

- Boxing Day holiday kept equity markets closed.

Speakers: - Portugal PM Coelho stated that the country continued to face uncertainties and obstacles to overcome crisis and that all instruments needed to be mobilized to conclude bailout program without disturbances. He saw 2014 as full of challenges - Belgium Fin Min Geens stated that the country was on track to lower debt to GDP ratio below 100%. He added that Budget Deficit to GDP ratio was below 3% with economic growth of approx 1% even with strict fiscal policy - S&P raised Ukraine sovereign outlook to stable from negative and affirmed its B- rating. S&P stated that Russia $15B direct financing announced on Dec 18th should cover govt external financing needs over the next 12 months. It cautioned that it could lower Ukraine's sovereign ratings if Russian financial support became less certain - Russia Fin Min Siluanov stated that he was in talks with Ukraine about instruments other than bonds to support budget and financial markets. Russian banks in talks with Ukraine companies about transport and other projects - Taiwan Central Bank post rate decision statement noted that global economy was seen as stable but Fed tapering would affect the recovery. It noted that liquidity was moderately loose. It saw 2014 GDP growth above 2013 level and forecasted 2014 CPI at 1.2% vs. 0.9% this year. It noted that inflationary pressure would not be significant. Exports to have stable growth in 2014 - Thailand Election Commission said to have asked govt to postpone Feb 2nd .election citing violence - China to keep fuel prices unchanged in current cycle (**Note: NDRC has raised fuel prices during the last two cycles. The most recent was back on Dec 12th) - China Fin Min Lou Jiwei to effectively prevent fiscal risks in 2014. China to push forward resource tax reform and enhance local govt debt management - China Foreign Ministry spokesperson Qin Gang: Shrine visit undermines foundation of China-Japan ties - US Embassy in Japan: Disappointed by shrine visit. PM Abe visit will exacerbate tensions with neighboring countries. Wants Japan to find constructive ways to deal with historical issues. It also asked japan to create conditions to solve island dispute

Currencies/Fixed Income: - The Nikkei225 Index registered its seventh straight gain and hit a fresh six-year high above 16,000 as the yen continued to hit 5-year lows against the USD and Euro currencies. The USD/JPY edged closer to testing the 105 handle; highest level since October 2008. Some dealers noted that better than expected upcoming US jobless claims data could help it test the 105 handle. - The Turkish currency (Lira) continued to hit fresh record lows against the USD and Euro after Turkey PM Erdogan reshuffled his cabinet following an unscheduled meeting with President Gul. The USD/TRY tested above the 2.10.

Political/In the Papers: - Private equity firms to pay over $1.0B to settle collusion case that is winding its way through a Boston federal court - NY Post - Turkey PM Erdogan reshuffled his cabinet following an unscheduled meeting with President Gul. Replaced the three resigning ministers (Interior, economy and the environment) - Japan PM Abe visited the Yasukuni Shrine (seen by Japan's Asian neighbors as a symbol of its past militarism) - BOJ Gov Kuroda stated that Japan was not completely out of deflation but on track to achieve 2% price target. - South Korea Fin Min Hyun stated that its economic recovery was strengthening but monetary policy changes in advance nations were a risk. - Elderly man dies from H7N9 bird flu in Hong Kong

**Looking Ahead*** All times listed for economic events are denominated in Eastern Standard Time (Add 5 hours for GMT equivalent) - 06:00 (RU) Russia Gold and Forex Reserve w/e Dec 20th: No est v $512.7B prior - 06:30 (CL) Chile Central Bank's Traders Survey - 08:30 (US) Initial Jobless Claims: 345Ke v 379K prior; Continuing Claims: 2.83Me v 2.884M prior - 09:00 (MX) Mexico Nov Preliminary Trade Balance: -$742Me v -$128.9M prior - 11:00 (US) Weekly DOE Crude Inventories - 12:00 (FR) France Nov Net Change in Jobseekers: -5.0Ke v -20.5K prior; Total Jobseekers: 3.27Me v 3.275M prior - 14:00 (AR) Argentina Nov Supermarket Sales Y/Y: No est v 18.4% prior; Shop Center Sales Y/Y: No est v 20.4% prior - 16:00 (KR) South Korea Jan Manufacturing Business Survey: No est v 78 prior; Non-Manufacturing Survey: No est v 72 prior - 18:15 (JP) Japan Dec Markit/JMMA Manufacturing PMI: No est v 55.1 prior - 18:30 (JP) Japan Nov Jobless Rate: 3.9%e v 4.0% prior; Job-to-Applicant Ratio 3.9%e v 4.0% prior - 18:30 (JP) Japan Nov National CPI Y/Y: 1.5%e v 1.1% prior; CPI Ex Fresh Food Y/Y: 1.1%e v 0.9% prior; CPI Ex Food, Energy Y/Y: 0.5%e v 0.3% prior - 18:30 (JP) Japan Nov Tokyo CPI Y/Y: 0.9%e v 0.9% prior; CPI Ex Fresh Food Y/Y: 0.7%e v 0.6% prior; CPI Ex Food, Energy Y/Y: 0.3%e v 0.2% prior - 18:50 (JP) Japan Nov Preliminary Industrial Production M/M: 0.4%ev 1.0% prior; Y/Y: 5.4%e v 5.4% prior - 18:50 (JP) Japan Nov Retail Trade M/M: +1.0%e v -1.0% prior; Y/Y: 3.0%e v 2.3% prior - 20:00 (PH) Philippines Oct Trade Balance: -$700Me v -$666M prior; Imports: No est v $5.7B prior; Imports Y/Y: 8.0%e v 7.2% prior - 20:30 (CN) China Nov YTD Industrial Profits Y/Y: No est v 13.7% prior

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BN 12/26 05:13 *BOUYGUES GETS EU96M RENOVATION CONTRACT IN PARIS, ECHOS SAYS

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Bouygues Gets EU96M Renovation Contract in Paris, Echos Says 2013-12-26 05:16:29.961 GMT

By David Whitehouse Dec. 26 (Bloomberg) -- City of Paris has decided to give Bouygues the contract to renovate Le Palais Omnisports de Paris- Bercy, to be called Bercy Arena in future, Les Echos reports, without citing anyone.

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BFW 12/26 05:37 *RENAULT TRUCKS PLANS LAYOFFS AFFECTING 3,500 WORKERS: ECHOS BN 12/26 05:37 *RENAULT TRUCKS PLANS LAYOFFS AFFECTING 3,500 WORKERS: ECHOS BN 12/26 05:37 *RENAULT TRUCKS LAYOFFS TO LAST 5-12 DAYS, ECHOS SAYS

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Renault Trucks Plans Layoffs Affecting 3,500 Workers: Echos 2013-12-26 05:43:41.570 GMT

By David Whitehouse Dec. 26 (Bloomberg) -- Layoffs will last for between five and 12 days at the Blainville plant in Normandy, Les Echos reports, citing an unidentified co. spokesman. * Layoffs will last for five days at Bourg-en-Bresse: Echos * Layoffs may be extended in Feb. and March depending on the order book: Echos * Co. has workforce of 10,000: Echos.

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To contact the editor responsible for this story: David Whitehouse at +33-1-5365-5059 or dwhitehouse1@bloomberg.net

Sprint/T-Mobile: Breaking Bad

T-Mobile US has seen this movie before.

News that Sprint is considering making a bid for the No. 4 U.S. wireless carrier by subscribers has sparked a 27% rally in T-Mobile shares since Dec. 12's close. But it also has inspired comparisons with AT&T's bid to buy T-Mobile in 2011. Regulators rejected that deal, saying they wouldn't allow a move to three national carriers from four.

So T-Mobile is no stranger to the tough sell. Considering the scrutiny and considerable risk of rejection a Sprint takeover bid would face, T-Mobile will likely want it to come with a big breakup fee. In AT&T's case, that amounted to $4 billion in cash and other assets—or about 10% of the overall offer, a huge proportion.

Applying a 30% control premium to T-Mobile's $25.8 billion current market capitalization implies a deal size this time of about $33.5 billion. At that scale, a 10% breakup fee would be $3.4 billion. For Sprint, which analysts estimate will have earnings before interest, taxes, depreciation and amortization of $6.6 billion in 2014, that would be a significant potential payout.

Sprint likely could trim any breakup fee by offering T-Mobile's shareholders a bigger control premium. But they likely would want that in cash, not stock. T-Mobile already trades at 7.4 times 2014 Ebitda, compared with 6.1 times for AT&T and 5.3 times for Verizon Communications. But Sprint's stock looks even pricier, at 9.2 times.

Before any proposal even gets to regulators, Sprint would have to calm T-Mobile's nerves with a hefty insurance premium.

Asian Market Update: Nikkei225 closes above 16,000 for first time in six years; PM Abe visits Yasukuni Shrine

**Economic data - (SG) Singapore Nov Industrial Production M/M: -2.8% v -2.6%e; Y/Y: 4.0% v 5.3%e - (JP) Japan Nov Annualized Housing Starts: 1.033M v 989Ke; Y/Y: 14.1% v 9.2%e; Construction Orders Y/Y: 2.2% v 61.1% prior - (JP) Japan Dec Small Business Confidence: 51.1 v 51.1 prior

Speakers: - BOJ Gov Kuroda stated that Japan was not completely out of deflation but on track to achieve 2% price target. He also reiterated the view to continue current policy until price target was achieved. He spoke with PM Abe on both domestic and global economic situations. (**Reminder: On Dec 23rd The Monthly Cabinet report for Japan dropped the deflation term from economic report for the first time since 2009) - South Korea Fin Min Hyun stated that its economic recovery was strengthening but monetary policy changes in advance nations were a risk. Korea to flexibly allocate bond issuance in 2014 and would make effort to revitalize inflation-linked bonds. He added that 2014 policies target to spread recovery to private sector and that the Govt would soon announce economic policy direction for 2014 - Japan PM Abe visited the Yasukuni Shrine and the Japanese Consulate in Shanghai soonafter issued warning on possible anti-Japanese sentiment; and urged caution to Japanese visiting China (**Note: The shrine is seen by Japan's Asian neighbors as a symbol of its past militarism, as it honors Class-A war criminals along with Japan's war dead. Past visits by prime ministers and Cabinet members have angered China and South Korea) - Taiwan Foreign Affairs official called on Japan PM Abe to refrain from escalting tensions - South Korea expressed anger over Abe's visit to Yasukuni Shrine. Cultural Minister Ryong stated that Japan should build trust with its neighbors by facing history and apoligize to countries that suffered under its colonial rule - China Vice Premier Liu canceled meeting with Japan