>>> TradeGate Pre-Market Indications

DAX:
  • Daimler Truck (DTG TH) -1.1%
  • Commerzbank (CBK TH) -1.2%
  • Fresenius SE (FRE TH) -1.4%
  • Deutsche Bank (DBK TH) -1.4%
    • Deutsche Bank Fined for Late Suspicious Transactions Reports
  • Zalando (ZAL TH) -1.9%
MDAX:
  • United Internet (UTDI TH) -1.5%
  • Evotec SE (EVT TH) -1.6%
  • Wacker Chemie (WCH TH) -1.9%
    • Wacker Chemie Dividend Forecast Falls 42% in Bloomberg Model
  • SMA Solar (S92 TH) -5.9%
  • Duerr (DUE TH) -10%
    • Duerr Cuts 2024 Adj. Ebit Margin on Fall in HOMAG Order Intake
SDAX:
  • SGL (SGL TH) +0.6%
  • Metro (B4B TH) -0.6%
    • Metro 4Q Sales Misses Estimates
  • flatexDEGIRO (FTK TH) -0.8%
  • Traton (8TRA TH) -1.2%
  • Suess MicroTec (SMHN TH) -1.6%
  • PNE AG (PNE3 TH) -1.8%

WWD : The Adidas Vs. Thom Browne Court Battle Heats Up

The Adidas Vs. Thom Browne Court Battle Heats Up
The German sporting goods giant is asking for a new trial in its trademark infringement case due to "bad faith emails" that recently surfaced.

Adidas believes it found a smoking gun in its ongoing battle with Thom Browne over the designer brand’s use of stripes — enough to warrant a new trial.

According to court papers filed in the U.S. District Court for the Southern District of New York on Thursday, Thom Browne “improperly withheld several e-mail chains in which Thom Browne admits to the ultimate liability issue in this case — a likelihood of confusion between the company’s ‘four bar’ design and Adidas’s three-stripe mark.”

The documentation included four emails between Browne, the company’s chief executive officer Rodrigo Bazan and other executives, discussing the potential confusion it could cause in the market if four bars were used on sport-related products, Adidas alleges.

These “bad faith emails” were all dated between 2016 and 2019, the court papers said, and not disclosed during the discovery period for the original trial.

“Thom Browne’s concealment of these highly relevant — and highly damaging — e-mails denied Adidas a fair trial,” the brief read. “Adidas is therefore entitled to relief under Federal Rule of Civil Procedure 60(b)(2), which provides for relief when a party uncovers evidence that likely would have changed the outcome of trial.”

The emails, Adidas alleged, “undeniably would have changed the outcome of the trial and would have been overwhelmingly probative on critical issues the jury was asked to decide.”

Adidas said the emails did not surface until August, seven months after the trial was completed, when Thom Browne’s lawyers in the U.K. produced them during a separate trademark dispute there involving the same marks and many of the same products, the court papers detailed.

The Adidas brief specifically cited the correspondence between Thi Wan, head of menswear for the company, and Browne. Adidas alleges that in the email, Wan said he “wanted to raise a flag now” that the designs Browne had created for the FC Barcelona soccer club featured four bars and they would “inevitably” be viewed as Adidas since that company “has such a presence in the sporting world.”

The judge has not yet ruled on Adidas’ request and a spokesperson for Thom Browne said its legal team will file a response with the court before Nov. 2.

In January, an eight-person jury in Manhattan Southern District Court came back with a verdict that found the luxury designer was not liable for damages or profits that it made selling product with four stripes or its trademark grosgrain ribbon.

Adidas America and Adidas AG had been seeking damages in the amount of $867,225 — the amount the companies agree it would have received in licensing fees from Thom Browne Inc., if the two had worked together — as well as more than $7 million in profits it alleges the American designer made from selling apparel and footwear with stripes.

>>> What to look at today - 20th of October 2023

Asian stocks broadly fell as volatility gripped global markets from an escalation in tensions in the Middle East, driving oil and gold to further advances.  Chinese indexes pared earlier losses as policymakers pumped a record amount of short-term cash into its financial system. MSCI’s Asia Pacific Index - a gauge for benchmarks in the region - lost 0.4% and is set for its biggest weekly drop in two months. Contracts for US equities declined in Asia after the S&P 500 fell on Thursday. Oil traded over the $90-a-barrel mark and gold approached the $2,000-an-ounce level following a report US bases in Iraq and Syria were targeted in drone attacks. Investors were also on edge after an American destroyer in the Red Sea intercepted cruise missiles and drones fired toward Israel by Houthi rebels in Yemen.   Currency markets remain on tenterhooks as Japan’s finance minister Shunichi Suzuki said it was important the yen moved stably and in line with fundamentals, just as the currency approached 150 per dollar. Eyes will also be focused on unscheduled Bank of Japan bond buying operations should the 10-year yield reach 0.85%. Earlier, markets largely shrugged off Japan’s inflation that slid below 3% for the first time in more than a year.  The Treasury curve flattened after gains in the previous session when Federal Reserve chairman Powell said it will proceed carefully with rate hikes, while citing evidence that policy isn’t “too tight.” Swaps trimmed the implied odds of another Fed rate increase to under 50%, and priced a start to cuts in July, compared with September previously.  China’s injection of extra cash will offer a much-needed boost to maintain the nation’s growth momentum. This year, the economy has been challenged by a lack of demand and a downturn in the property market. Earlier this week, the PBOC made the largest liquidity injection since late 2020 with one-year policy loans via the so-called medium-term lending facility. Fed Bank of Chicago President Austan Goolsbee said he’s hopeful the US is able to avoid a recession despite rapid and steep interest-rate hikes over the past 18 months. He emphasized the need for the Fed to ensure inflation was on track to ease to its 2% goal and for inflation expectations to stay anchored. Thursday’s economic reports were mixed. Applications for US unemployment benefits dropped to the lowest level since January as the labor market kept powering ahead. Sales of previously owned US homes fell to the lowest level since 2010 as affordability worsened even further.  US After Hours SEDG -20.6% down sharply on weak Q3 guidance, drags down ENPH -14.5% and other solar names; ISRG -7.1% lower on earnings; HPE -3.7% on weak guidance; KNX +14.4% higher on earnings.

Nikkei -0.37% Hang Seng -0.60% CSI -0.76% Shanghai -0.76% Shenzen -0.82%

Eur$ 1.0575 CNH 7.3327 CNY 7.3166 JPY 149.85 GBP 1.2135 CHF 0.8926 RUB 96.78 TRY 28.0283 WTI$ 90.59 +1.37% Gold 1,978 +0.16% BTC 29,295 +1.98% ETH 1,588 +1.35%

S&P -0.21% Nasdaq -0.39% EuroStoxx -0.78% FTSE -0.51% Dax -0.73% SMI -0,60%

Macro :
- BIDEN $100B AID REQUEST TO INCLUDE $10B FOR ISRAEL: POLITICO
- Higher-Duration Stock Valuations Taking a Beating as Yields Rise
- Israel Latest: US Downs Missiles Targeting Israel From Yemen
- EU September Car Registrations Rise 9.2% Y/y to 0.861m Units

Keep an eye on :
- ALLFG NA : Allfunds Assets Under Administration EU1.32T Vs. EU1.29T Y/y
- ARGEO NO : Argeo Offering of 78.1m Shares Prices at NOK3.20/Share
- AZA SS : Avanza 3Q Operating Income Meets Estimates
- BALN SW : Baloise Says Claudia Dill Is Stepping Down From Board on Oct. 31
- BFIT NA : Basic-Fit 9M Revenue EU765M Vs. EU563M Y/y
- BOL SS : Boliden 3Q Adjusted Operating Profit Matches Estimates
- BC IM : Brunello Cucinelli Sees FY Revenue +20% to +22%
- COV FP : Covivio SA/France 9M Occupancy 96.1%
- DBK GY : Deutsche Bank Fined for Late Suspicious Transactions Reports
- DUE GY : Duerr Cuts 2024 Adj. Ebit Margin on Fall in HOMAG Order Intake
- ECONB BB : Econocom 9M Revenue EU1.93B
- EDF FP : EDF Reimburses More Than EU2b of Bilateral Term Loans
- ELEC FP : EDF Reimburses More Than EU2b of Bilateral Term Loans
- ERICB SS : Ericsson, Nokia Eye Open RAN Shift to Counter Gloomy Sales View
- EL FP : EssilorLuxottica 3Q Revenue Meets Estimates
- FDJ FP : FDJ Sees FY Revenue About +5%
- FRVIA FP : Forvia SE 3Q Revenue Beats Estimates
- GJF NO : Gjensidige 3Q Net Income Misses Estimates
- HUH1V FH : Huhtamaki 3Q Adjusted Ebit Beats Estimates
- HUQB SS : Husqvarna 3Q Adjusted Operating Profit Misses Estimates
- LIFE NO : Lifecare Offering of 17m Shares Prices at NOK2.50/Share
- LSEG LN : LSE Invokes Halt & Close for Affected Instruments
- MNG LN : M&G Prudential May Lead Fresh Udaan Equity Funding Round: ET
- B4B GY : Metro Faces New Test After Rising Costs Drop 2023 Ebitda: React
- NORION SS : Norion Bank AB 3Q Operating Profit Beats Estimates
- NSKOG NO : Norske Skog 3Q Ebitda Beats Estimates
- OR FP : L'Oreal 3Q North Asia Comparable Sales Misses Estimate
- RXL FP : Rexel 3Q Same-Day Sales Misses Estimates
- RIEN SW : Rieter Sees FY Ebit Margin 5% to 7%, Saw About 5% to 7%
- SFER IM : Salvatore Ferragamo 9M Revenue EU844.2M Vs. EU920.7M Y/y
- SIKA SW : Sika 9M Sales in Local Currencies +12.4%
- SOLB BB : Solvay to Call Its €300M Perp-NC5.25 Bonds on Dec. 4
- SONG LN : Hipgnosis Songs Holder Metage Recommends Vote Against Directors
- TKTT FP : Tarkett SADIR 3Q Net Sales EU984.3M Vs. EU1.01B Y/y
- TIT IM : Telecom Italia-KKR Plan to Be a Success, Minister Says: Radiocor
- TKO FP : Tikehau AuM Reach €41.96B at End-Sept., Up 12% Y/Y
- TOM NO : Tomra 3Q Revenue Misses Estimates, Puts Cyberattack’s 3Q Cost at NOK120 Million
- VRLA FP : Verallia Sees FY Adjusted Ebitda Above EU1.1B, Est. EU1.18B
- VIV FP : Vivendi 3Q Revenue Beats Estimates

>>> Europe : Brokers Upgrades & Downgrades - 20th of October 2023

>>> Up
* Alma Media Raised to Buy at SEB Equities; PT 10.60 euros
* America Movil ADRs Raised to Buy at HSBC; PT $21.50
* BBVA Raised to Overweight at Barclay<Cell 38, 0>s
* Elisa Raised to Accumulate at Inderes; PT 47 euros
* Kainos Raised to Buy at Panmure Gordon; PT 1,450 pence

>>> Down
* Alcoa Cut to Strong Sell at CFRA
* eQ Cut to Reduce at Inderes; PT 16.50 euros
* Exel Composites Cut to Sell at Inderes; PT 2.50 euros
* Holcim AG Cut to Hold at Octavian; PT 85 Swiss francs
* HSBC Cut to Market Perform at KBW; PT 725 pence
* KBC Cut to Hold at Deutsche Bank; PT 70 euros
* Millicom GDRs Cut to Hold at HSBC; PT 185 kronor
* Millicom Cut to Hold at HSBC; PT $17
* Nokia Cut to Reduce at Inderes; PT 3.20 euros
* SIG Cut to Reduce at Numis; PT 27 pence
* Telefonica Cut to Reduce at HSBC; PT 3.30 euros

>>> Initiation
* ARM Holdings PLC ADRs Rated New Hold at SocGen; PT $58
* Lenzing Reinstated Hold at Deutsche Bank; PT 45 euros
* Sunrun Rated New Outperform at BNPP Exane; PT $20

>>> Call

FT : With Israeli normalisation talks stalled, what is Saudi Arabia’s next move?

With Israeli normalisation talks stalled, what is Saudi Arabia’s next move?
Iran’s so-called axis of resistance as the ‘real’ defender of the Palestinians has reclaimed the narrative

On the afternoon of October 7, as the extent of the carnage in southern Israel was becoming clear, Hamas’s political leader Ismail Haniyeh warned Arab countries that Israel couldn’t protect them. 

Haniyeh’s words highlighted the weakness of the Israeli army and state in that moment but — coming amid the talk of normalisation between Israel and Saudi Arabia — it also worked as a veiled threat to Arab countries: you could be next. This must have cast a chill over Riyadh. Iran not only has a nuclear programme, drones that its clients in Yemen, the Houthis, have used against Saudi Arabia and, in Hizbollah, a powerful paramilitary that is active in Syria, Lebanon, Yemen and Iraq — but now another of its allies is showing vastly improved military capabilities. 

Which is why it was so notable that five days later, Iranian president Ebrahim Raisi initiated a phone call to Saudi Crown Prince Mohammed bin Salman — their first conversation since the detente between the two countries in March and the first at this level since ties ruptured in 2016. On Wednesday, the Iranian foreign minister also held a meeting with his Saudi counterpart in Jeddah on the sidelines of an urgent meeting of the Organisation of Islamic Co-operation. 

Clearly, Saudi-Iran rapprochement is not dead. In fact, the Saudis are probably relieved they have a channel to Tehran. Riyadh was clear-eyed earlier this year about Iranian promises yet felt they had no choice but to defuse rising tensions. The same applies now: with Haniyeh’s threat hanging in the air, it is best to keep the Iranians close.

For the Iranians, the rapprochement was meant to buy breathing space as pressure, regional and domestic, was piling on. Now it provides a release valve. Iran and Hizbollah appear to have been taken aback by the scope of the Hamas operation and what it unleashed, including two US carrier strike groups in the Mediterranean. Western diplomats and Arab officials have indicated that, despite the public bombast, Iranian officials are privately seeking a way out of the escalation. What that requires or might look like is still unclear.  

Much hinges on how Israel’s military campaign against Gaza unfolds. Arab officials expressed frustration with Washington even before Jordan cancelled a summit with President Joe Biden, including over America’s refusal to call for a ceasefire. In the immediate aftermath of the Hamas attack, private appeals for the US to restrain Israel’s retaliation were dismissed.

Last month, normalisation talks between Israel and Saudi Arabia had been progressing. “Every day we get closer,” the Saudi crown prince said in September. But the Saudis expressed frustration that Israel was unwilling to give more to the Palestinians in exchange for ties with the kingdom. A senior Saudi official denied the talks had been suspended even though there’s been no contact since October 7 — the priority now, he told me, was dealing with the crisis.

Headlines about trade corridors and normalisation between the two dominated most of the year, though it felt like a race to outpace the tensions bubbling across the occupied West Bank, Tel Aviv and Tehran. Now the so-called axis of resistance led by Iran, posing as the “real” defender of the Palestinians, has reclaimed the narrative. 

If, or when, normalisation talks between Israel and Saudi resume, with either Israeli prime minister Benjamin Netanyahu or his successor, the Palestinian component of the equation will have to be considerable. So far, the Saudis may have been content with the minimum possible for the Palestinians as part of a greater deal more focused on the kingdom’s needs. After this cycle of violence, however, that will no longer suffice.

The Saudis will have to extract substantial concessions from the Israelis, not so much out of support for the Palestinians but out of self-interest. Saudi Arabia, but also others, such as the UAE, Egypt and Jordan, will want to show that they can deliver a political horizon for the Palestinians and help end the occupation. This is in contrast to Iran’s approach, relying on groups such as Hamas whose actions attract Israel’s retaliatory wrath.

It’s a tall order. The war on Gaza will probably be long, the death toll will only grow. Netanyahu is in no mood to compromise and will hang on to power for as long as he can. The Palestinian Authority is at its weakest. Biden may not have the desire, credibility or bandwidth to do much beyond containing the conflict. But wrestling the Palestinian card away from Tehran is in everyone’s interest — not least, the Palestinians. 

FT : Beauty group Puig says potential IPO would bring ‘discipline’

Beauty group Puig says potential IPO would bring ‘discipline’
Paco Rabanne owner says ‘having to be accountable to the market’ can benefit family-owned businesses

Puig, the deal-hungry beauty group that owns the brands Paco Rabanne and Charlotte Tilbury, says a stock listing would impose market “discipline” without relinquishing the founding family’s control as it considers a multibillion-euro share sale.

Marc Puig, the chair who is the third generation of his family to lead the Spanish perfume and make-up group, told the Financial Times an initial public offering was one of several options under review to bring new investors to the company, which bankers value at €8-10bn.

The flotation of Puig, which bills itself as an “affordable luxury” player, would be the biggest in the sector since Ermenegildo Zegna in 2021 and follow in the footsteps of rivals such as LVMH, Kering, L’Oréal and Estée Lauder, whose founders have gone on to list shares.

Despite a global slowdown in luxury spending, Puig — grandson of the company founder, chief executive since 2004 and chair since 2007 — said his business was on track to record more than €4bn in sales this year, putting it ahead of schedule in its plan to reach €4.5bn by 2025.

Name-checking listed peers including Hermès and Prada, Puig said they showed that continued success depended on founding families remaining in control. But family-owned businesses faced “traps” that outside investors and external scrutiny could help them avoid, he said.

“Difficulties can arise, especially in the transition between generations — the search for leadership, a lack of understanding, a loss of passion,” he said. “Having to be accountable to the market brings a discipline and rigour that ensures those issues don’t arise.”

“Sometimes family businesses can lose their position in the market. They can start to die slowly and nobody inside the company is aware of it,” he added. “If you’re accountable [to investors] those things can be noticed.”

Puig, whose Catalan name is pronounced “poodge”, has acquired 10 brands in the past 12 years, broadening its range to include everything from Charlotte Tilbury eye shadow to Jean Paul Gaultier high heels.

It has accumulated a significant amount of debt in the process, but the chair said this did not limit its firepower and that raising capital from outside investors was not a precondition for doing more deals.

“We manage the business with prudence from a financial point of view, so there is less flexibility today than we might have had a year or two ago. But we are still looking at things,” he said. “In our sector when you have strong and healthy brands, as we do, you have a high ebitda margin, you have a lot of cash and relatively small capital expenditure.”

The group’s debt load at the end of last year was equal to 1.6 times its 2022 earnings before interest, tax, depreciation and amortisation, which stood at €638mn.

Puig, which is still based in Barcelona where it was founded in 1914, expanded in the last century as manufacturer of fragrances under license for other brands such as Paco Rabanne and Carolina Herrera.

But it has changed tack under the leadership of Marc Puig, using acquisitions to accumulate a portfolio of its own brands — which now account for more than 90 per cent of all sales — and expand in fashion, make-up and skincare.

On the possible initial public offering, he stressed that the company was “still in the reflection phase” and that no decision had been made.

“One option would be to open up the capital and opening the capital could mean a private equity shareholder, it could mean a much longer-term shareholder, or it could mean the market,” he said. Maintaining the status quo was also possible.

He said the company would implement any changes “within the next few years” but was in no rush. Asked whether the process was related to any plans he might have to step down he said no. “I still consider myself to be quite young.”

Earlier this month LVMH, which is valued at more than €330bn, signalled an end to the post-pandemic luxury boom when it reported slowing sales growth.

Puig said: “We are more in ‘affordable luxury’ rather than luxury because the beauty segment has a much lower unit price . . . We have traditionally been a bit more immune to these slowdowns.”

But he added: “The biggest challenge we have is how to continue to attract, retain and motivate talent and [maintain] creativity and imagination in our business when we compete with big companies that are all number one in the world in something, while in our case people hardly know how to pronounce the name.”

>>> US After Hours Summary: SEDG -20.6% down sharply on weak Q3 guidance, drags

After Hours Summary: SEDG -20.6% down sharply on weak Q3 guidance, drags down ENPH -14.5% and other solar names; ISRG -7.1% lower on earnings; HPE -3.7% on weak guidance; KNX +14.4% higher on earnings

After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: KNX +14.4%, OZK +4.6%, WAL +3%, GBCI +0.1%
Companies trading higher in after hours in reaction to news: BOWL +10.8% (BOWL completes sale-leaseback transaction with VICI), PACW +2.3% (BANC receives final regulatory approval for merger with PACW), TM +1.2% (TM reaches deal with TSLA to adopt NACs on its BEVs in North America), DNA +1% (collaboration with Serbia), WE +1% (COO to depart), STLD +0.8% (US and EU stall on steel according to Bloomberg), AEON +0.5% (topline results from Phase 2 trial of ABP-450), BANC +0.2% (BANC receives final regulatory approval for merger with PACW), DISH +0.2% (DISH amends previously disclosed spectrum purchase with TMUS), DOOR +0.1% (acquires Fleetwood Aluminum for $285 mln)

After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: SEDG -20.6% (slashes Q3 revenue outlook), ISRG -7.1%, WDFC -5.5%, AMTB -4.5%, HPE -3.7% (issues downside FY24 EPS guidance), ASB -2.4%, CSX -1%
Companies trading lower in after hours in reaction to news: ENPH -14.5% (in sympathy with weak SEDG guidance), ARQT -8.9% (commences $100 mln stock offering), RUN -7.4% (in sympathy with weak SEDG guidance), BLFS -6.2% (CEO to retire; names new CEO; provides guidance), SPWR -5.4% (in sympathy with weak SEDG guidance), FSLR -4.9% (in sympathy with weak SEDG guidance), JKS -4.3% (in sympathy with weak SEDG guidance), MAXN -3.8% (in sympathy with weak SEDG guidance), CSIQ -3.3% (in sympathy with weak SEDG guidance), NUE -2.1% (US and EU stall on steel according to Bloomberg), TSLA -1% (TM reaches deal with TSLA to adopt NACs on its BEVs in North America), LDOS -0.7% (awarded $180 mln Defense Health Agency task order), TMUS -0.5% (DISH amends previously disclosed spectrum purchase with TMUS), X -0.4% (US and EU stall on steel according to Bloomberg), MCB -0.2% (reaches settlement with the Federal Reserve), KVUE -0.1% (CVS voluntarily pulling some cold medicines from KVUE from store shelves according to CNBC), LLY -0.1% (files complaint with ITC to stop cos from distributing tirzepatide)