>>> US Early premarket gappers

Early premarket gappers

Gapping up: ECTE +26.3%, SNI +14.3%, MLNK +12%, NSTG +11.7%, NRF +10.7%, VIMC +10%, BLIN +9.1%, PPHM +7.9%, SWHC +5.9%, BLDP +4.9%, PLAB +4.8%, MA +4%, ALU +3.3%, QCOR +3.2%, SNE +2.2%, CBI +1.8%, PLUG +1.6%, PDLI +1.5%, MCP +1.2%, RGR +1%, CAM +0.8%, FNSR +0.6%, SPWR +0.6%, TSL +0.6%, JASO +0.6%, CBOE +0.5%, GM+0.5%, COG +0.5%

Gapping down: AVNR -11.4%, CENT -9.4%, LH -6.7%, AWAY -4.8%, COST -4.4%, ALSN -3.9%, AU -3.9%, EJ -3.3%, TTM -2.8%, MIND -2.8%, JOY -2.7%, RBS -2.4%, GOLD -2%, IEP -1.7%, CHL -1.6%, TRLA -1.5%, DGX -1.5%, CNI -1.1%, HRB -1%, BHP -0.9%, GDX -0.6%, SLV -0.5%

>>> PIMCO - New European Perspectives Muddling Through: The 'Realpolitik'of the

Muddling Through: The 'Realpolitik'of the Eurozone Crisis
by Andrew Bosomworth

The long-term cost of Europe's economic recovery is likely to challenge social tolerance and political will to achieve a fully integrated fiscal and political union.
Although able to exploit the untapped potential of European treaties, the soon-to-be-elected 8th European Parliament looks more likely to continue to muddle through.
We see low medium-term risk for government and corporate bonds with maturities of up to three years, but caution may be required for securities with longer maturities and lower down in the capital structure.

>>> Vattenfall's sale of European operations unlikely to occur until after Swedi

Vattenfall's sale of European operations unlikely to occur until after Swedish election
Vattenfall, the Swedish energy giant, has almost concluded splitting the company into a Nordic and a European unit, according to Dagens Industri. The Swedish business daily asked the Swedish minister of financial markets, Peter Norman, whether a sale is on the cards to which he responded that a sale of such a large and important company has to occur with the political approval and help from the Swedish oppositional party Socialdemokraterna which is unlikely until after the Swedish election. Meanwhile, the paper cited Vattenfall’s Managing Director, Oystein Loseth, who confirmed that splitting the company in two parts makes it possible to admit new shareholders into the European business

The paper cited unnamed sources who pointed to a Frankfurt listing of the European unit as the most obvious possibility or even listing a smaller part of the unit to begin with. The item noted that selling the entire unit is another option but that finding a buyer could be difficult.

The paper wrote that Vattenfall’s European include the company’s German fossil operations as well as the Dutch and UK units including gas and wind assets. The item noted further that Citi and Rothschild have calculated the value of Vattenfall’s European operations and it is thought to be around EUR 15bn-EUR 17bn.
Source Dagens Industri

>>> Credit Suisse Pre-Market Indications

Air Liquide +1-2% Comments from ID supportive (stk bn wk, were fears of wng)
BHP -0.5-1% Feedback from O&G tour slightly -ve (lack of capex cut)
Bunzl unch Trading statement inline - reit FY
Carillion unch Stmnt reads fine - FY to be inline with expectations
Firstgroup +1% Activist shareholder Sandell (3%) want co to sell Greyound
HSBC unch Sells 8% stake in Bank of Shanghai to Santander
Imag Tech -10% No's weak across the board & sees lower shipment growth
Inditex unch Q3 trading slightly light @ 4% (c5-6%) but margins ahead
Miners -0.5% China -1.6%, Copper unch, OZ Miners weak (BLT < RIO by 1%)
RBS -2% New Finance Director leaving after 10 weeks in role
Spanish Bks unch Cinco rpts banks to further limit dividends in '14 (expctd)
Stagecoach +1% H1 slightly ahead & reit FY (stk been strong YTD)

>>> What to look at today : 11/12/13 (Makor Xmas Party tonight - Ldn Cafe Royal)

US MArket Closed lower, Small Cap continue to Underperform, trading volume still light @ 619m shares, Market still cautious on renewed concerns of reduction of stimulus...VIX @ 13.91 +3.11%...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...Asia cautious on US comcerns....Nikkei -0.62%...Shanghai -1.65%...

Eur$ 1.3765 S&P Fut -0.01% European Fut -0.15%

>>> Keep an eye on :
- BofAML Sees S&P 500 at 2,000 by End-2014
- Spanish Banks : Spain to Further Limit Banks’ Cash Dividends in 2014, Cinco Says
- FTSE MIB : Yoox to Join FTSE MIB Index; DiaSorin, Parmalat to Be Dropped
- AI FP : Air Liquide Sees Avg Annual Sales Growth 5%-7% in Through 2015
- AZA IM : Etihad May Want to Buy as Much as 49% of Alitalia: Corriere
- BARC LN : Barclays Plans to End ‘Boris Bikes’ Sponsorship: Guardian link
- BC8 GY : Bechtel May Seek Revised U.K. Defense Contracts: WSJ Link
- EAD FP : France to Be ‘Particularly Vigilant’ on EADS Cuts: Moscovici
- EDF FP : EDF May Have to Raise Nuclear Decommissioning Provisions: Echos
- EDP PL : EDP Preferred Southern Europe Utilities at Morgan Stanley
- ENEL IM : Enel, Preferred Southern Europe Utilities at Morgan Stanley
- GBLB BB : Frere Group Buys BNP Paribas Stake in CNP Parent Erbe (39,880sh @ avg €64.12)
- GUR SW : Gurit Revenue to Shrink to CHF280M on Wind Market, CEO Tells FuW
- ITX SM : Inditex 9-Mo. Net EU1.67b, Est. EU1.7b.
- ITX SM : Inditex 3Q Broadly in Line, Still Taking Market Shr, Exane Says
- NDA SS : SEB, Nordea, DNB Preferred Over Swedbank and SHB at Barclays
- NOK1V FH : India’s Delhi High Court Reserves Verdict in Nokia Tax Case
- PVA SM : Pescanova 2012 Net Loss EU791m, Net Financial Debt EU3.2b
- SIE GY : Munich Court Orders Ex-Siemens CFO to Pay EU15m Graft Damages
- SCYR SM : *SACYR REPORTS ACQUISITION OF 5.00465% OF REPSOL YPF
- SCYR SM : Sacyr Agrees to Swap Vallehermoso Property for Debt: Expansion
- STAN LN : Standard Chartered Doesn’t Need Rights Issue, Mizuho Says
- UNI IM : Unipol Near Deal with Ageas on Premiums Sale, Sole Reports
- VOW£ GY : Volkswagen May Build New Car Plant in Poland, Puls Says

>>> Brokers Upgrades & Downgrades : 11/12/13 (Makor Xmas party tonight)

>>> Up
*ALCATEL-LUCENT RAISED TO BUY VS NEUTRAL AT CITI
*ELIA SYSTEM OPERATOR RAISED TO OVERWEIGHT AT MORGAN STANLEY
*MAUREL & PROM RAISED TO BUY VS NEUTRAL AT GOLDMAN---> Full note attached
*NOKIA RAISED TO BUY VS NEUTRAL AT CITI
*VIVENDI RAISED TO OUTPERFORM VS MARKET PERFORM AT BERNSTEIN



>>> Down
*BILFINGER CUT TO NEUTRAL VS BUY AT UBS
*ENZYMOTEC CUT TO UNDERPERFORM VS BUY AT BOFAML
*ERICSSON CUT TO NEUTRAL VS BUY AT CITI
*KENTZ CORP CUT TO HOLD VS BUY AT LIBERUM
*NOBIA CUT TO HOLD VS BUY AT NORDEA
*SOCO INTERNATIONAL CUT TO SELL VS NEUTRAL AT GOLDMAN---> Full note attached

>>> PT Change
*Buzzi Unicem PT Raised to EU16 vs EU13.2 at Deutsche Bank
*Eni PT Cut to EU17.8 vs EU19.1 at Morgan Stanley
*Italcementi PT Raised to EU6 vs EU5.5 at Deutsche Bank
*Pandora Investor Event Positive, JPMorgan Says; Raises PT 5%


>>> Initiation
*ALROSA RATED NEW BUY AT UBS, PT 42 RUBLES
*BLUE SOLUTIONS RATED NEW HOLD AT KEPLER CHEUVREUX; PT EU16
*ERICSSON RATED NEW BUY AT MIZUHO, PT $15
*NOKIA RATED NEW NEUTRAL AT MIZUHO, PT $8
*ROMGAZ RATED NEW NEUTRAL AT GOLDMAN, PT $12.7
*TRUSTBUDDY RATED NEW BUY AT LIBERUM, PT SEK8
*World Duty Free Prospects Strong, Initiated at Buy at Nomura


>>> Country Sector Stock call
>> Stocks
*ASHTEAD REMOVED FROM UBS’S MOST PREFERRED LIST
*AVEVA CUT FROM CONVICTION BUY AT GOLDMAN, STILL A BUY
*MAERSK CUT FROM CONVICTION BUY AT GOLDMAN, STILL BUY
*Enel, EDP Preferred Southern Europe Utilities at Morgan Stanley
>> Strategy
*BofAML Sees S&P 500 at 2,000 by End-2014

>>> Asia Update

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)

>>> US After Hours

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)