>>> Up
* BAE PT Raised to 736 pence from 670 pence at Citi
* Brown-Forman Raised to Buy at Berenberg
* Encavis Raised to Buy at Stifel; PT 20.80 euros
* Genmab Raised to Buy at DNB Markets; PT 2,950 kroner
* Genmab Raised to Buy at DNB Markets; PT 2,950 kroner
* Iberdrola Raised to Buy at Mirabaud Securities; PT 11 euros (+)
* Interparfums Raised to Buy at Bryan Garnier; PT 74 euros
* Kingspan Raised to Buy at Shore Capital (+)
* Know IT Raised to Buy at Pareto Securities; PT 383 kronor
* PostNL Raised to Buy at KBC Securities; PT 4.90 euros (+)
* Publicis Raised to Outperform at Oddo BHF; PT 70.50 euros
* SANOFI RAISED TO BUY VS HOLD AT LIBERUM, PT EU109
* Siemens Gamesa Raised to Buy at Citi (+)
* Stora Enso Raised to Outperform at Exane; PT 19 euros
* THG PLC Raised to Outperform at RBC; PT 500 pence (+)
* Uniper Raised to Sector Perform at RBC; PT 40 euros
>>> Down
>>> Down
* Boohoo Cut to Sector Perform at RBC; PT 150 pence
* Holmen Cut to Hold at Nordea (+)
* Hyve Group Cut to Hold at Peel Hunt; PT 140 pence
* National Grid Cut to Sector Perform at RBC; PT 1,100 pence
* Novartis Cut to Hold at Liberum; PT 87 Swiss francs
* Novo Nordisk Cut to Sell at Liberum; PT 570 kroner
* Orsted Cut to Sector Perform at RBC; PT 800 kroner
* Pierce Group Cut to Hold at Nordea (+)
* REN Cut to Hold at SocGen; PT 2.50 euros
* REN Cut to Hold at SocGen; PT 2.50 euros
* WPP Cut to Neutral at Oddo BHF; PT 1,240 pence
>>> Initiation
>>> Initiation
* Amundi Rated New Neutral at Credit Suisse (+)
* Auto Trader Rated New Neutral at Davy
* DWS Rated New Underperform at Credit Suisse (+)
* Hargreaves Lansdown Rated New Outperform at Credit Suisse (+)
* Polymetal Rated New Buy at Wood & Company; PT 1,540 pence (+)
* Purplebricks Rated New Neutral at Davy
* Rightmove Rated New Outperform at Davy
* Rightmove Rated New Outperform at Davy
* Schroders Rated New Neutral at Credit Suisse (+)
>>> Call
>>> Call
* Berenberg Strategists Back ‘Crash Protection’ Against Equities (+)
* Boohoo Downgraded at RBC on Higher Conviction Elsewhere (+)
* Credit Suisse 4Q Pretax Loss Double the Estimate, Vontobel Says (+)
* Hyve Downgraded at Peel Hunt on Ukraine-Russia Uncertainty (+)
* Logitech Guidance Raise Impressive Considering Disruptions: Citi
* Sanofi New Top Pharma Pick; Novartis, Novo Nordisk Cut: Liberum
* Swatch Sales Trail Expectations, Free Cash Flow Strong: Vontobel (+)
* THG Raised to Outperform at RBC on Ingenuity’s Potential (+)
* U.S. Short Futures Positioning Dominates Flows: Citi Strategists (+)
Credit Suisse investment bank warns of trading slowdown
Swiss lender says fourth-quarter results will be weighed down by a SFr500m litigation provision
Credit Suisse has warned that its investment bank will report a loss for the fourth quarter as trading revenues slowed, marking the latest blow to a lender reeling from the exit of António Horta-Osório earlier this month.
The final quarter of 2021 saw a slowdown in “transaction based revenues” at its investment bank, Credit Suisse said on Tuesday, adding that this partly reflected “a reversion to more normal trading conditions”.
Alongside the slowdown in revenues, the lender also said it would take a SFr500m provision in the fourth quarter to cover litigation settlements, mostly tied to its investment banking business.
The charge will affect fourth-quarter results, the bank said, but did not give further details of the litigation. It added that the charge would be partly offset by gains of SFr225m from real estate sales.
The warning comes a week after Horta-Osório, who was installed as chair last year to overhaul the bank’s culture following a series of crises, resigned after repeated breaches of coronavirus quarantine rules.
In its trading update on Tuesday, the bank also said that its wealth management division, where it is racing to catch up with Swiss rival UBS, had experienced a “significant slowdown in transaction activity” in the Asia-Pacific region.
Credit Suisse had already announced that it would take a SFr1.6bn goodwill impairment in the quarter. Before that, the bank as a whole is expected to break-even for the period.
- Thyssenkrupp (TKA TH) +3.2%
- AUTO1 (AG1 TH) +3%
- Evraz (EVZ TH) +2.8%
- Voestalpine (VAS TH) +2.4%
- HelloFresh (HFG TH) +2.1%
- Prosus (1TY TH) +2.1%
- TUI (TUI1 TH) +2%
- Grifols (OZTA TH) +1.9%
- ASML (ASME TH) +1.9%
- Adyen (1N8 TH) +1.9%
- Ubisoft (UEN TH) -0.4%
- HeidelbergCement (HEI TH) -0.4%
- Bank of Ireland (BIRG TH) -0.4%
- Hannover Re (HNR1 TH) -0.5%
- Ferrari (2FE TH) -0.5%
- Veolia (VVD TH) -0.5%
- BP (BPE5 TH) -0.6%
- Repsol (REP TH) -0.6%
- Glencore (8GC TH) -0.9%
DAX:
- HelloFresh (HFG TH) +2.8%
- Deutsche Bank (DBK TH) +2%
- Porsche SE (PAH3 TH) +1.7%
- Airbus (AIR TH) +1.6%
- Infineon (IFX TH) +1.6%
MDAX:
- AUTO1 (AG1 TH) +5.4%
- Thyssenkrupp (TKA TH) +4.1%
- Jungheinrich (JUN3 TH) +4.1%
- Wacker Chemie (WCH TH) +3.6%
- Varta (VAR1 TH) +2.6%
- Vantage Towers (VTWR TH) -0.7%
SDAX:
- Heidelberger Druck (HDD TH) +6%
- SUSE (SUSE TH) +3.8%
- Schaeffler (SHA TH) +3.6%
- Global Fashion Group (GFG TH) +3.4%
- flatexDEGIRO (FTK TH) +3.4%
- Synlab (SYAB TH) -0.6%
Unilever: Trian has entered the chat
DD doesn’t envy the task ahead for Unilever’s investor relations department.
Chief executive Alan Jope has landed in the line of fire of angry investors, following an abortive tilt at a £50bn deal that intensified focus on the company’s weak share price performance in recent years.
Now the UK consumer goods group, which had been seeking to buy GlaxoSmithKline’s consumer health business to drive a transformation of its portfolio of products, has another potential headache on the horizon: Trian Partners, the US-based activist hedge fund co-founded by Nelson Peltz.
The FT’s Arash Massoudi, Harriet Agnew and Judith Evans revealed on Sunday that the activist fund, which has pushed for change at several other large consumer companies over the past decade, has built a stake in Unilever.
The revelation, at least initially, has brought a bit of respite. During a tumultuous trading day where European markets swung to heavy losses, shares in Unilever climbed 7.3 per cent and pushed the company’s market cap back above £100bn.
Unilever also jumped into action, with news coming out that it is planning to cut thousands of management jobs as it accelerates a push to improve sales growth.
Jope will be hoping that his response has been swift enough to show Unilever’s growing chorus of disgruntled investors that he’s got the message. Otherwise, he risks leaving the door open to Trian and Peltz, who have yet to comment publicly, to give them a reason to switch up their loyalties.
It’s still unclear what kind of demands Trian would make should it choose to stage a campaign.
While Peltz’s efforts to push for change haven’t always gone as planned, the activist investor has waged successful campaigns at some of the consumer industry’s largest corporations including Procter & Gamble and Sysco.
Martin Deboo, analyst at Jefferies, wrote on Monday: “We have long been of the view that the right path to unlock value at Unilever is via a faster rate of disposals from its slow-growing foods businesses, or a separation between foods and [the household and personal care division], via a sale or spin [off]. We think that Trian might take a similar view.”
For further reading on Peltz, DD’s Rob Smith recommends this excerpt from Connie Bruck’s seminal 1988 book The Predators’ Ball detailing the billionaire’s alleged risqué Long Island tennis matches with the late corporate raider Saul Steinberg.
>>> Up
* BAE PT Raised to 736 pence from 670 pence at Citi
* Brown-Forman Raised to Buy at Berenberg
* Encavis Raised to Buy at Stifel; PT 20.80 euros
* Genmab Raised to Buy at DNB Markets; PT 2,950 kroner
* Genmab Raised to Buy at DNB Markets; PT 2,950 kroner
* Interparfums Raised to Buy at Bryan Garnier; PT 74 euros
* Know IT Raised to Buy at Pareto Securities; PT 383 kronor
* Publicis Raised to Outperform at Oddo BHF; PT 70.50 euros
* SANOFI RAISED TO BUY VS HOLD AT LIBERUM, PT EU109
* Stora Enso Raised to Outperform at Exane; PT 19 euros
* Uniper Raised to Sector Perform at RBC; PT 40 euros
>>> Down
>>> Down
* Boohoo Cut to Sector Perform at RBC; PT 150 pence
* Hyve Group Cut to Hold at Peel Hunt; PT 140 pence
* National Grid Cut to Sector Perform at RBC; PT 1,100 pence
* Novartis Cut to Hold at Liberum; PT 87 Swiss francs
* Novo Nordisk Cut to Sell at Liberum; PT 570 kroner
* Orsted Cut to Sector Perform at RBC; PT 800 kroner
* REN Cut to Hold at SocGen; PT 2.50 euros
* REN Cut to Hold at SocGen; PT 2.50 euros
* WPP Cut to Neutral at Oddo BHF; PT 1,240 pence
>>> Initiation
>>> Initiation
* Auto Trader Rated New Neutral at Davy
* Purplebricks Rated New Neutral at Davy
* Rightmove Rated New Outperform at Davy
>>> Call
* Rightmove Rated New Outperform at Davy
>>> Call
* Logitech Guidance Raise Impressive Considering Disruptions: Citi
* Sanofi New Top Pharma Pick; Novartis, Novo Nordisk Cut: Liberum
Asian stocks and U.S. equity futures slid Tuesday amid concerns about tightening monetary policy, geopolitical tension and breathtaking volatility on Wall Street. S&P 500 and Nasdaq 100 contracts fell about 1%, while an Asia-Pacific share gauge hit the lowest since November 2020. European futures pushed higher, providing a sliver of relief from the gloom. Asian equity gauges face grim metrics. Japan’s Topix entered a correction, down 10% from a September high. China’s CSI 300 is close to entering a bear market, while Hong Kong’s Hang Seng has been in one since August. U.S. stocks erased a 4% drop to close up Monday on high volumes. The wild swings highlighted investor nerves over the prospect of Federal Reserve interest-rate hikes and balance-sheet reduction to tackle inflation. U.S.-Russia tension over Ukraine is also buffeting sentiment. The dollar and yen ticked up. Global shares are enduring their worst month since the pandemic roiled markets, buffeted by ebbing stimulus as well as an uneven start to the company earnings season. The question now is whether the slide is a buying opportunity or portends wider stress across more asset classes. The Cboe Volatility Index, a gauge of implied equity swings for the S&P 500, at one point Monday spiked to the highest level in over a year before receding. A team of Oppenheimer strategists led by John Stoltzfus wrote Monday that the stock recovery may come sooner than expected and “it’s time to make shopping lists and look for ‘babies that got thrown out with the bath water.’” But Jeremy Siegel, a professor at the Wharton School of the University of Pennsylvania and author of “Stocks for the Long Run,” said investors should brace for challenges this quarter. “I’m still very positive on long-term equities but I think it’s in for a rocky time the next two or three months,” he said. “We have to get used to the fact that the Fed is going to be much more hawkish.”
Nikkei -1.66% Hang Seng -1.85% CSI -1.98% Shanghai -2.28% Shenzen -3.04%
Eur$ 1.1310 CNH 6.3339 CNY 6.3271 JPY 113.86 GBP 1.3482 CHF 0.9165 RUB 78.4305 TRY 13.4781 WTI$ 83.98 +0.79% Gold 1,841.55 -0.09% BTC 35,870-2.61% ETH 2,365 -3.15%
S&P -0.95% NAsdaq -1.24% EuroStoxx +1.34% FTSE +0.81% Dax +1.20% SMI +0.83%
Macro :
- Deutsche Bank Sees Deeper Selloff in U.S. Stocks, Ups China Call
- MOBIUS SEES ‘STORM CLOUDS’ FOR BRAZIL, EXPECTS LULA TO WIN VOTE
Keep an eye on :
- MOBIUS SEES ‘STORM CLOUDS’ FOR BRAZIL, EXPECTS LULA TO WIN VOTE
Keep an eye on :
- BNP FP : BNP Studies Sale of Spanish Private Banking Unit: Expansion
- BPT LN : *TEMASEK BUYS BRIDGEPOINT'S ELEMENT MATERIALS; VALUE UNDISCLOSED
- CLNX SM : *CELLNEX TO REFINANCE EU2.5B LOAN, CINCO DIAS REPORTS
- CSGN SW : Credit Suisse Sees 4Q Pretax Income at Breakeven on Charges
- DIA IM : Diasorin Confirms Confidence in CEO Carlo Rosa
- DIA IM : Diasorin Confirms Confidence in CEO Carlo Rosa
- ERICB SS : Ericsson 4Q Adjusted Operating Profit Beats Estimates
- EVT GY : Evotec in Drug Discovery Partnership With Boehringer Ingelheim
- H24 GY : Home24 Cuts FY Revenue in Constant Currency Forecast
- ITP FP : Interparfums 2021 Sales Beat Estimates
- KAMNBI SS : Kambi Group Signs Multi-Year Sportsbook Agreement With MaximBet
- KOMN SW : Komax FY Ebit Margin 10.5% Vs. 3.4% Y/y
- LOGN SW : Logitech Boosts FY Adjusted Operating Income Forecast
- LHA GY : MSC Group Interested in Buying Majority of Italy’s ITA Airways (yesterday)
- LHA GY : Lufthansa Has No Short-Term Plan to Buy ITA Stake: Sole
- LUN DC : Lundbeck’s Vyepti Approved in Europe for Migraine in Adults
- NETC DC : Netcompany FY Revenue Matches Estimates
- NOVN SW : Novartis Pledges up to 100 Doses Zolgensma Under Managed Access
- PNL NA : PostNL Prelim 4Q Normalized Ebit Beats Estimates
- RCO FP : Remy Cointreau 3Q Revenue Beats Estimates
- RIV LN : Martin Gilbert’s AssetCo Nears River and Mercantile Deal: Sky
- ROG SW : Roche, PTC’s Evrysdi Gets FDA Priority Review In Babies With SMA
- STG DC : Scandinavian Tobacco Board Intends to Elect Brandt as Chairman
- SSE LN : U.K. to Allocate GBP61 Million for Floating Wind Farm Technology
- UHR SW : Swatch Reaches Pre-Pandemic Earnings on U.S., China Demand
- TRYG DC : Tryg 4Q Profit After Tax Beats Estimates
- ULVR LN : Unilever Plans to Cull Thousands of Jobs as Peltz Builds Stake
- UCG IM : Bain, CRC Bid for Parts of UniCredit’s Leasing Unit: Reuters
- VACN SW : VAT Raised, Inficon Stays Buy, Berenberg Sees Good Fundamentals
After Hours Summary: IBM initially pops on earnings, but comes back down to earth during call; SDC pops +11.1% on strategic reviewAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: CFB +4.8%, IBTX +4.4%, MDRX +1.1% (issues upside Q4 rev guidance, also approves new $250 mln share repurchase program), IPAR +1% (guides Q4 revs above consensus; guides FY22 earnings and revs above consensus), IBM +0.2%, CR +0.1% (also increases dividend)
Companies trading higher in after hours in reaction to news: SDC +11.1% (announces series of strategic actions, including reduction of workforce; reaffirms FY21 rev guidance), CPLP +2.9% (increases dividend), SON +2.2% (to increase prices for all paperboard tubes and cores), HLGN +1.2% (stock offering), FTI +0.2% (awarded EPCI contract from Petrobras), CSX +0.1% (names new CFO), HESM +0.1% (increases dividend)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: BRO -1.3%, STLD -0.5%, PETS -0.5%, HOPE -0.3% (also authorizes new $50 mln stock repurchase program)
Companies trading lower in after hours in reaction to news: DCPH -2% (presents results from the INTRIGUE Phase 3 study), FB -0.7% (provides details on new financial reporting structure), PCG -0.4% (proposes nine new battery energy storage projects), LULU -0.4% (stock offering), JNJ -0.3% (Janssen Pharma announces conclusions comparing TREMFYA to advanced therapies), IIPR -0.3% (files mixed securities shelf offering), EFTR -0.2% (provides pipeline updates; establishes investment agreement with Lincoln Park Capital), LXFR -0.2% (CFO to retire; names new CFO), AGX -0.1% (increases existing share repurchase program to $50 mln from $25 mln), WMT -0.1% (Mexico unit considering strategic alternatives, according to Reuters citing company)
Closing Stock Market SummaryThe S&P 500 increased 0.3% on Monday in a furious buy-the-dip trade after being down as much as 4.0% intraday. The Nasdaq Composite gained 0.6% after being down 4.9% intraday, and the Dow Jones Industrial Average gained 0.3% after being down 3.3% intraday.
The Russell 2000 outperformed with a 2.3% gain after being down as much as 2.8%. The small-cap index traded in bear market territory today, or down at least 20% from a recent high, so its outperformance stemmed from the fact that it was hit the hardest.
Eight of the 11 S&P 500 sectors closed higher after all 11 traded with steep losses. The consumer discretionary sector (+1.2%) led the recovery effort with a 1% gain, while the defensive-oriented utilities (-1.0%), health care (-0.4%), and consumer staples (-0.4%) sectors closed lower.
The session opened on a weak note, which gave way to a steady decline that accentuated the market's concerns on the Fed's tightening plans, the Russia-Ukraine situation, and peak earnings growth, among others. The selling itself was a concern, too, leading to expectations for more downside -- the CBOE Volatility Index (29.90, +1.05, +3.6%) spiked as much as 35% before calming down.
There's no doubt the market was oversold on a short-term basis and was due for a bounce, but no one really knew when that would happen. Fortunately for the bulls, the bounce happened today on no specific news and some short-covering activity in front of an eventful week in earnings, the Fed, and economic data.
It's worth noting that the Nasdaq Composite bottomed just before it could enter bear market territory. The tech-sensitive index was down 19.2% from its all-time high while the S&P 500 was down 12.4% from its all-time high.
Strikingly, the Treasury market never really exhibited a flight for safety, suggesting that the early weakness was more technically-oriented. The 10-yr yield declined just one basis point to 1.74% after trading at 1.71% during the day while the 2-yr yield declined two basis points to 0.97%. The U.S. Dollar Index rose 0.3% to 95.92. WTI crude fell 2.2%, or $1.86, to $83.30/bbl.
Separately, Kohl's (KSS 63.71, +16.87, +36.0%) stood out with a 36% gain after confirming takeover interest from PE firms, which are reportedly willing to acquire the company for at least $64 per share.
Reviewing Monday's economic data:
- The preliminary IHS Markit Services PMI for January fell to 55.0 from 57.7 in the final reading for December. The preliminary IHS Markit Services PMI for January fell to 50.9 from 57.6 in the final reading for December.
Looking ahead, investors will receive the Conference Board's Leading Economic Index for January, the S&P Case-Shiller Home Price Index for November, and the FHFA Housing Price Index for November on Tuesday.
- Dow Jones Industrial Average -5.4% YTD
- S&P 500 -7.5% YTD
- Russell 2000 -9.4% YTD
- Nasdaq Composite -11.4% YTD