Advance Auto Parts Confirms to acquire General Parts for $2B cash; Guides Q3 $1.42 v $1.30e, R$1.52B v $1.55Be - The deal creates the largest auomotive aftermarket parts provider in North America with combine sales of $9.2B - Sees about $160M in annual synergies within 3 years of cloing.
*DEUTSCHE TELEKOM CONSIDERS STAKE IN SPOTIFY: MANAGER MAGAZIN
EU Commission to investigate Gibraltar's corporate tax regime for possible breach of EU rules - press - Spain says Gibraltar tax gives an unfair advantage to companies
Lot of sellers out there... F IM : -2.35% RNO FP : -0.1% VOW3 GY : -0.06%
Shareholder foundation said to be in talks related to possible sale of stake
German govt advisor institutes said to cut both 2013 and 2014 GDP growth forecasts - Handelsblatt - To cut 2013 GDP growth to +0.4% from +0.5% - To Cut 2014 GDP growth to +1.8% from +1.9%
Gilead’s Stribild for HIV Shows Viral Supression Through 3 Yrs
Gilead’s Stribild shows comparable efficacy to standard-of-care regimens Atripla and ritonavir-boosted atazanavir plus Truvada in three-year Phase 3 efficacy and safety study of treatment-naive patients with HIV-1 infection. Data to be presented this week at European AIDS Clinical Society Conference (EACS), Brussels NOTE: Stribild was approved by FDA Aug. 2012, by European Commission in May 2013 NOTE: Sept. 16, ISI said Stribild may see price cut if German proposal holds
US Market closed on lows as still no clear solution announced, Fitch put US AAA Rating on Watch negative...on Earnings INTC -2.1% & YHOO +0.8% After hours..VIX 18.66 (+16%)...Brazil +1.50%...S&P Fut +0.4% this morning on n ews of US House Panel also announced it would "postpone" the action on the recent House Republican bill to raise the debt ceiling and fund the government. Asia trading lower with Nikkei -0.03%, HS -0.43%...Shangahi -1.4%...with market tracking Washington headlines...European earnings BN WArned, MC disap., ASML Looks better after INTC worst yest, PUB Better..Eurppean Auto : EU27 September Car Registrations Rise 5.4% Y/y to 1.159m Units, biggest gain in 2y
Eur$ 1.3512 European Fut. Indicated 15bps lower
Keep an eye on : - ASML NA : ASML Sees 4Q Gross Margin Above Ests., Says EUV on Track - BN FP : Danone 3Q LFL Sales Growth Misses Ests., Lowers 2013 Forecast - DUFN VX : Dufry, World Duty Free Merger Would Create Value, UBS Says - EZJ LN : Easyjet Experienced `Significant Problems' With Reservations - GEM IM : Meddiobanca sold 1.3% satke and cut interest to aprox 10% - GLE FP : Nomura prefer GLE over Unicredit (ROE by 2015 for GLE by 2018 for UC Div Yield) - MC FP : LVMH Growth Misses Estimates as Fashion and Leather Goods Slow - MELE BB : Melexis 3Q Sales Rise 11% to EU71.3m; Sees 4Q Rev. ~ Same Level - NK FP : Natixis to Cut 700 French Jobs by 2015, Les Echos Says - NOVN VX : Novartis Gets FDA Orphan Designation for Esophagitis Treatment - PUB FP : Publicis Keeps Full Year Forecast; Omnicom Merger Going to Plan - RHK GY : Braun Melsungen Boosts Stake in Rhoen Klinikum to 10.98% of Shrs - SAN FP : Sanofi, Regeneron Drug Alirocumab Meets Main Goal in Trial - SKFB SS : SKF Continues to Be One of 2013 Top Sell Ideas, Citi Says - TIT IM : Telecom Italia's Short Interest Surges Amid Strategy Limbo (SI 6.1%) - UL FP : Unibail Retail Centers Are Outperforming Market, CEO Tells Echos - VALN SW : Names Michael Mueller as the new CEO; confirms 2013 op profit forecast of CHF75m
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*DEUTSCHE POST RAISED TO NEUTRAL VS UNDERWEIGHT AT HSBC *IPSOS RAISED TO BUY VS HOLD AT SOCGEN *KBC RAISED TO BUY VS HOLD AT SOCGEN *KENTZ RAISED TO OVERWEIGHT VS NEUTRAL AT HSBC *PEARSON RAISED TO HOLD VS SELL AT SOCGEN *RTL GROUP RAISED TO BUY VS HOLD AT SOCGEN *SERCO RAISED TO OVERWEIGHT VS NEUTRAL AT HSBC *SWISSCOM RAISED TO BUY VS NEUTRAL AT CITI *TELECOM ITALIA ADDED TO CONVICTION BUY LIST AT GOLDMAN *VIMPELCOM RAISED TO OVERWEIGHT AT MORGAN STANLEY, PT $14.5 *WOLTERS KLUWER RAISED TO BUY VS HOLD AT SOCGEN
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*BALOISE HOLDING CUT TO UNDERWEIGHT VS NEUTRAL AT JPMORGAN *BOUYGUES CUT TO NEUTRAL VS BUY AT GOLDMAN *CENTAMIN CUT TO NEUTRAL VS BUY AT NOMURA *DIA CUT TO NEUTRAL VS OUTPERFORM AT MACQUARIE *GL EVENTS CUT TO HOLD VS BUY AT SOCGEN *HOLCIM CUT TO UNDERWEIGHT VS NEUTRAL AT JPMORGAN *JAZZTEL CUT TO NEUTRAL VS BUY AT GOLDMAN *LIBERTY GLOBAL CUT FROM CONVICTION BUY AT GOLDMAN, STILL A BUY *LVMH CUT TO NEUTRAL VS BUY AT BOFAML *MARINE HARVEST CUT TO BUY VS STRONG BUY AT NORDEA *MEDICA CUT TO HOLD VS BUY AT SOCGEN *NEXANS CUT TO UNDERWEIGHT VS NEUTRAL AT JPMORGAN *NOVATEK CUT TO MARKET PERFORM VS OUTPERFORM AT BERNSTEIN *POLYMETAL INTL CUT TO NEUTRAL VS BUY AT NOMURA *SWISSCOM CUT TO NEUTRAL VS BUY AT GOLDMAN *TELENOR CUT FROM CONVICTION BUY AT GOLDMAN, STILL A BUY *TNT EXPRESS CUT TO UNDERWEIGHT VS NEUTRAL AT HSBC *YARA CUT TO HOLD VS BUY AT NORDEA *ZURICH INSURANCE CUT TO MARKET PERFORM AT RAYMOND JAMES
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*MEGAFON RESUMED EQUAL WEIGHT AT MORGAN STANLEY, PT $38
Country Sector Stock Call
*BT ADDED TO CONVICTION BUY LIST AT GOLDMAN *TELECOM ITALIA ADDED TO CONVICTION BUY LIST AT GOLDMAN *TELENOR CUT FROM CONVICTION BUY AT GOLDMAN, STILL A BUY *TELIASONERA ADDED TO SELECTED LIST AT KEPLER CHEUVREUX
Asian Market Update: Fitch place US rating on Watch Negative; Political deadlock resolution back in the hands of the US Senate
***Observations/Insights*** - Political ping-pong of budget crisis resolution roiled the market heading into the US close, sending the Dow Industrials down 0.9% and the S&P500 index down 0.7% after the announcement by Sen Durbin that upper chamber negotiations have been suspended until House Republicans work out a plan to proceed on debt limit and government funding. Matters were made worse after market close when Fitch placed US AAA sovereign rating on watch negative and cut its projections for 2013 and 2014 GDP. While Fitch was still convinced lawmakers would not allow the clock to expire, it cited "prolonged negotiations over raising the debt ceiling risks undermining confidence in the role of the U.S. dollar as the preeminent global reserve currency." S&P echoed that sentiment, reiterating that it saw heightened brinkmanship in Washington as the main reason behind its 2011 downgrade of US rating. - In the early Asian session, the US House Panel also announced it would "postpone" the action on the recent House Republican bill to raise the debt ceiling and fund the government, but that largely reflected House Speaker Boehner failing to corral the Heritage Action for America adherents in the caucus. Republican leaders were thus forced to cancel a planned Tuesday night vote and bring the Democrat-led Senate leaders back into fold. Shortly thereafter, Senate Majority Leader Reid and Republican leader McConnell announced they resumed negotiations that had been lobbed to the House for support earlier. Aides for both Senate Leaders have given an indication that the two side were optimistic that an agreement could be reached before the deadline - now less that 24 hours away. One report went as far as suggesting that a deal may be announced on Tuesday evening before a separate report negated that possibility. S&P futures are back up on the announcement, rising 8 handles above the 1,700 level. - Outside of the beltway, New Zealand Q3 CPI came in above expectations - notably the y/y print returned to the RBNZ target range for the first time in over a year. Analysts suggested this latest figure could decisively pave the way to an RBNZ tightening in early 2014. - In Australia, Westpac leading index for August fell for the first time since 2011, as the bank's chief economist noted the apparent loss of momentum was justifiable for the RBA to cut rates that month, also favoring more "boosts to support momentum through the difficult transition from mining to non-mining led growth."
***Economic Data*** - (NZ) NEW ZEALAND Q3 CPI Q/Q: 0.9% V 0.8%E (2-yr high); Y/Y: 1.4% V 1.2%E (1st rise above the lower end of RBNZ's 1-3% target range in 5 quarters) - (AU) AUSTRALIA AUG WESTPAC LEADING INDEX M/M: -0.1% V +0.4% PRIOR (1st decline since late 2011) - (KR) SOUTH KOREA SEPT UNEMPLOYMENT RATE: 3.0% V 3.1%E
***Fixed Income/Commodities/Currencies*** - (JP) Japan's MoF sells ¥2.45T in 0.2% 5-yr notes; Avg yield: 0.230% v 0.263% prior; Bid to cover: 4.83x v 3.30x prior - (AU) Australia MoF (AOFM) sells A$800M in 4.50% 2020 Bonds; avg yield: 3.7951%; bid-to-cover: 3.01x - (AU) Yield on Australia 10-yr note rises over 10bps above 4.23%; 18-month high - USD/CNY: Yuan reaches record high at 6.0997 per dollar - SLV: iShares Silver Trust ETF daily holdings fall to 10,391 tonnes (lowest since 10,284 on July 23rd) from 10,445 tonnes prior
- Sentiment pendulum has once again swung in favor of optimism of a quickly approaching resolution to the Washington stalemate after the latest set of comments from Senate aides, boosting USD across the board but particularly at the expense of the yen. USD/JPY is up nearly 50pips in the afternoon Asia trade above 98.60, EUR/JPY is up 50pips above 133.20, and AUD/JPY hit a 4-week high above the $0.94 handle. EUR/USD and GBP/USD closely tracked the Washington headline roulette as well but on a smaller scale, clinging to 30pip ranges around 1.3520 and 1.5980. AUD/USD rose as high as $0.9540, while NZD/USD was bolstered by higher than expected Q3 CPI data, reaching a 4-week high above the $0.84 handle.
***Speakers/Political/In the Papers*** - (US) FITCH PLACES US SOVEREIGN AAA ON RATING WATCH NEGATIVE; Cuts 2013 GDP forecast to 1.6% from 1.9% prior; Cuts 2014 GDP forecast to 2.6% from 2.8% prior
- (CN) Chairman of Shanghai International Port: Expects Shanghai throughput to grow 3% this year; Container volume may reach 33.5M TEUs in 2013 vs 32.5M in 2012 - Shanghai Daily - (CN) China Cabinet to receive debt audit findings around Oct 20th - China Daily - (CN) China Securities Regulatory Commission (CSRC) Chairman Xiao: Protecting small investors is equivalent to protecting financial market - Chinese press - (CN) JP Morgan China Chief Economist Zhu: sees no financial crisis in next 3-5 yeas in China
- (KR) South Korea to curb forex volatility if needed - financial press - (KR) South Korea Fin Min Hyun: concern over US QE causing financial market volatility; FY14 GDP projection at 3.9% is neutral
- (DE) German Chancellor Merkel's CDU/CSU does not see common ground to form coalition with Greens Party after today's talks - financial press
***Equities*** Market Snapshot (as of 03:30 GMT): - Nikkei225 -0.2%, S&P/ASX +0.1%, Kospi -0.1%, Shanghai Composite -1.4%, Hang Seng -0.3%, Dec S&P500 +0.6% at 1,702, Dec gold +0.5% at $1,279, Nov crude oil +0.1% at $101.27/brl
US markets: - WTSL: Cuts Q3 guidance to -$0.12 to -$0.10 v -$0.02e (previously guided -$0.03 to -$0.02); -8.9% afterhours - INTC: Reports Q3 $0.58 v $0.53e, R$13.5B v $13.4Be; -1.7% afterhours - IBKR: Reports Q3 $0.32 v $0.32e, R$326M v $321Me; -1.5% afterhours - CSX: Reports Q3 $0.46 v $0.42e, R$3.00B v $2.96Be; +1.5% afterhours - YHOO: Reports Q3 $0.34 v $0.33e, R$1.08B (ex-TAC) v $1.08Be; enters amended share purchase with Alibaba, reducing number of shares Yahoo is required to sell in Alibaba IPO; Guides Q4 Rev $1.18-1.22B(ex TAC) v $1.25Be, FY13 Rev $4.40-4.45B v $4.48Be; +1.7% afterhours
Notable movers by sector: - Consumer discretionary: Wumart Stores Inc 1025.HK +3.4% (announces acquisition); Cochlear Ltd COH.AU -2.0% (analyst action) - Consumer staples: Kweichow Moutai Co Ltd 600519.CN +1.2% (Q3 results) - Industrials: Daewoo Shipbuilding & Marine 042660.KR +1.8% (awarded order); Gome Electrical Appliances Holdings 493.HK +6.2% (Q3 guidance) - Materials: Mount Gibson Iron MGX.AU +5.8% (Q1 results); Iluka Resources ILU.AU -3.4% (Q3 results) - Technology: Hynix Semiconductor 000660.KR +0.5% (established R&D center in Taiwan) - Financials: Tokio Marine Holdings 8766.JP +3.3% (merger announcement) - Utilities: Sichuan Minjiang Hydropower Co Ltd 600131.CN -3.0% (sees YTD loss); Datang International Power Generation -2.3% 991.HK (Q3 guidance); Inner Mongolia MengDian HuaNeng Thermal Power Co Ltd 600863.CN +4.2%, Huaneng Power International Inc 600011.CN +0.2%, Huadian Power International Corp Ltd 600027.CN +2.8% (China thermal electric industry sees profit rise) - Healthcare: CSL Limited CSL.AU +1.4% (expands share repurchase) - Telecom: Softbank Corp 9984.JP +1.5% (speculation on acquisition); PCCW Ltd 8.HK +9.8%, i-Cable Communications 1097.HK +148.9%, City Telecom HK -33.9% (PCCW, i-Cable receives license, City Telecom application rejected)