>>> What to look at today - 28th of March 2022

Sovereign bonds and U.S. equity futures fell Monday as economic risks from inflation and tightening monetary policy sapped sentiment. A key section of the Treasury yield curve inverted, stoking fears of a growth downturn.  The U.S. 10-year Treasury yield climbed past 2.5%, above a technical trendline that has served as a ceiling since the late 1980s. The yield on the five-year note rose above the 30-year -- an inversion that’s heralded recessions in the past, and raises concerns about a policy misstep as the Federal Reserve hikes interest rates. S&P 500 and Nasdaq 100 contracts dipped and those for Europe climbed as investors also monitored Russia’s war in Ukraine, now in its second month. Asian shares were mixed, with a technology rally bolstering Hong Kong.  China’s mobility curbs to stem a Covid outbreak weighed on crude oil. West Texas Intermediate slid to around $110 a barrel as a Covid-linked lockdown in Shanghai stirred concerns that China’s virus resurgence imperils oil demand. The yen declined after the Bank of Japan said it will purchase an unlimited amount of 10-year bonds at a fixed rate to check yields. The dollar rose. The war continues to disrupt supplies of key commodities, stoking inflation risks that are contributing to expectations of more aggressive Fed tightening. Traders are pricing in two full percentage points of Fed rate rises over the rest of 2022. Mobility restrictions in China may fan worries about rising costs. In cryptocurrencies, Bitcoin scaled $46,000 following a recent rally that’s enabled the digital token to erase losses and turn positive for the year.

Nikkei -0.55% Hang Seng +1.19% CSI -0.80% Shanghai -0.17% Shenzen -0.88%

Eur$ 1.0951 CNH 6.3919 CNY 6.3755 JPY123.10 GBP 1.3143 CHF 0.9338 RUB 99.4909 TRY 14.8355 WTI$110.30 -3.20% Gold 1,941.40 -0.96% BTC 47,250 +2.40% ETH 3,330 +2.85%

S&P -0.42% Nasdaq -0.58% EuroStoxx +0.16% FTSE +0.07% Dax +0.11% SMI +0.04%

Macro :
- Moscow Exchange to Expand Limited Trading to All Stocks Monday
- IPO Market Plunges 70% as Higher Rates, War Curb Risk Appetite
- Stocks Defying Bond-Market Danger Put Wall Street On Notice
- Kaspersky, China Telecom, China Mobile Added to FCC Threat List
- Roth Sees 95% Chance U.S. Opens China Solar Import Investigation

Keep an eye on :
- AED BB : Aedifica Buys German Care Home for About EU7.5m at 5% Yield
- ALTA FP : Primonial Shareholders Sue Altarea After Deal Dropped: Echos
- AMUN FP : Amundi Sets Up Equity Capital Markets Desk to Capture More Deals
- AAPL US : Apple Pays Another Round of Rare Bonuses to Some Staff
- CS FP : AXA Halts Insurance Deals on Russian-Owned Assets in Russia
- BATS LN : Scottish Widows to Exit Investment in Some Tobacco Firms: Times
- BAYN GY : Temasek Is Said to Push for Removal of Bayer CEO Werner Baumann
- BPT LN : Bridgepoint Acquires Majority Stake in U.K.’s Inspired Thinking
- IAG LN : British Airways Slows Flight Ramp-Up on New-Hire Logjam
- CPRI US : Versace Owner Capri Looking at Isabel Marant: Miss Tweed
- CSGN SW : Credit Suisse Pressured Over Absolving Execs on Greensill: FT
- ELM LN : Chemical Maker Elementis Said to Explore Sale of Chromium Unit
- ENG SM : Enagas, Omers to Sell Respective Stakes in Chile’s GNL Quintero
- ENGI FP : France to Build New LNG Terminal in Le Havre: Echos
- EVD GY : CTS Eventim-Kapsch JV Wins Germany Compensation Arbitration
- INPST NA : InPost Is Said to Draw Takeover Interest From Buyout Firms
- INSTA NO : Lunar to Buy Instabank for NOK3.75/Share in Cash
- KORI FP : France's Korian to Launch Shareholding Operation for Employees
- 3690 HK : Meituan Shares Surge as Much as 14% After Earnings Report
- NG/ LN : Macquarie Buys Stake in National Grid’s $13 Billion Gas Unit (1)
- QFUEL NO : Quantafuel Reaches Proof of Concept for Skive Recycling Plant
- RLF SW : Relief’s APR: Data Shows Possible Benefits for PKU Treatment
- RR/ LN : Rolls-Royce Shares Jump After Betaville ‘Uncooked Alert’ Mention
- SPM IM : Saipem Said to Be in Talks With KCA Deutag on Onshore Asset Sale
- UHR SW : Low-Priced Omega Speedmaster Prompts Global Swatch Store Chaos
- TIT IM : Telecom Italia Says Talks With KKR Still On, Received CVC Offer
- TIT IM : CVC Is Said to Bid for Stake in Telecom Italia’s Enterprise Unit
- TTE FP : France to Build New LNG Terminal in Le Havre: Echos
- UCB BB : UCB’s Fintepla Oral Solution Gets U.S. FDA Approval

>>> Europe : Brokers Upgrades & Downgrades - 28th of March 2022

>>> Up
* BASF Raised to Buy at HSBC; PT 65 euros
* Moonpig Raised to Add at Peel Hunt; PT 300 pence
* Temple Bar Investment Trust PLC Raised to Buy at Investec
* VIB Vermoegen Raised to Buy at SRC Research; PT 51 euros

>>> Down
* Heineken Cut to Underweight at Barclays; PT 81 euros

>>> Initiation
* Hertz Rated New Buy at Tigress; PT $32
* MorphoSys Reinstated Buy at Berenberg; PT 65 euros

>>> Call
* Solid Cash Flow, Low Leverage Boost European Cash Returns, M&A

FT : Zelensky says Ukraine ready to discuss neutrality in talks with Russia

Zelensky says Ukraine ready to discuss neutrality in talks with Russia

Ukraine is ready to declare neutrality, abandon its drive to join Nato and vow to not develop nuclear weapons if Russia withdraws troops and Kyiv receives security guarantees, President Volodymyr Zelensky has said.

Zelensky told Russian independent journalists yesterday that Kyiv was prepared to meet some of Moscow’s demands on the condition that the changes were put to a referendum and third parties promised to protect Ukraine. He said his main goal was to end the war as quickly as possible.

Washington, meanwhile, denied that it was seeking to overturn Vladimir Putin’s regime after Joe Biden appeared to call for the Russian president’s ousting in a speech in Warsaw on Saturday, saying: “For God’s sake, this man cannot remain in power.”

The US president’s increasingly vitriolic descriptions of Putin have raised concerns that Washington is losing control of its message. Biden also warned democracies of a “long fight ahead” to protect freedom in Europe.

FT : Oscars ceremony delivers drama as Will Smith slaps Chris Rock

Oscars ceremony delivers drama as Will Smith slaps Chris Rock
Netflix hopes dashed as Apple’s ‘CODA’ becomes the first Best Picture winner for a streaming service


Will Smith slapped Chris Rock after the comedian a joke about Jada Pickett Smith, Smith’s wife © Chris
After the miserable ratings of last year’s coronavirus-tainted Oscars show, the Academy of Motion Picture Arts and Sciences looked for ways to speed up the ceremony and reconnect with the zeitgeist.

Sunday’s broadcast of the Oscars certainly succeeded in making headlines — though not in ways the Academy could have expected — after an extraordinary moment when the actor Will Smith charged the stage and slapped comedian Chris Rock. Rock had made a joke about Smith’s wife, Jada Pickett Smith, who has a shaved head and has spoken publicly about her hair loss.

In the US, audio was cut from the broadcast as Smith yelled profanities at Rock after returning to his seat. Later in the show, Smith won the Best Actor award for his performance in King Richard and gave a long, rambling speech in which he called himself “a fierce defender of his family”. The actor also apologised to the Academy, but not to Rock.

Going into the ceremony, the focus was on the contest between Apple and Netflix, which were vying to become the first streaming service to win the Best Picture award. Both had spent tens of millions of dollars campaigning for the Oscar, which would send a strong message to filmmakers and A-list actors about the ability of tech groups to deliver Hollywood’s top prize.

In the end, CODA, Apple’s first-ever Oscar nominee, emerged as the Best Picture winner. It was the first film to win the top Oscar after debuting at Sundance, the independent film festival, and as with other streaming nominees, was released in a limited number of cinemas to qualify for the award. CODA also earned the Oscars for Best Adapted Screenplay and Best Supporting Actor.

The win by Apple, the world’s most valuable company, will be seen as deeply symbolic in Hollywood, where traditional studios have been disrupted by streaming services.

It also came after a tumultuous year for the industry. Not only did Covid-19 weigh heavily on cinema attendance, but 2021 marked a moment when the financial underpinnings of the film business began to unwind. Big film studios, including Disney and Warner Bros, released movies directly on to their streaming services instead of allowing an exclusive run in theatres, threatening the performance-related bonuses that top talent have come to expect.

This has created tension in Hollywood between the studios, which view streaming as the future of the industry, and directors, producers and actors

Netflix, the streaming industry pioneer, had been the favourite at this year’s Oscars with The Power of the Dog, which entered the ceremony with 12 nominations after enjoying a strong run at the Golden Globes. Netflix also had a Best Picture nominee in the political satire Don’t Look Up, starring Leonardo DiCaprio and Jennifer Lawrence.

But The Power of the Dog took home only one Oscar, with Jane Campion winning the award for Best Director.

In contrast with Apple, a relative newcomer to streaming, Netflix has worked for years to enter Hollywood’s bloodstream. Ted Sarandos, its co-chief executive, serves as the head of the Academy Museum, which opened last autumn to great fanfare. The company also waged an expensive campaign for its first Best Picture nominee, Roma, in 2019.

Some Academy members have blamed the ceremony’s rating decline — only 10.4mn Americans watched last year’s awards, a 56 per cent drop from a year earlier — on a failure to nominate commercially popular films. But Dune, which has taken in more than $400mn, was the biggest winner of the night, with 10 awards.

(ZH) Nava Capital: Fasten Your Seat Belts

Nava Capital: Fasten Your Seat Belts

Submitted by Damien Cleusix of NAVA Capital
Why we have never felt more bearish in our 25 years career.
The background:
Households and non-financial companies’ health are deceiving. First you must analyze the distribution. Few households own an incommensurate share of assets and few companies earn an incommensurate share of profits. The asset side of both balance sheet contain many items whose valuation are in unchartered territory so every debt to asset ratios looks good by definition. Don’t be fooled.
One of the poster children of increasing debt for the purchase of existing capital is buybacks and M&A. While both can be justified when they are done in a price sensitive, opportunistic way, today’s binge buying cannot be justified (https://corpgov.law.harvard.edu/2020/10/23/the-dangers-of-buybacks-mitigating-common-pitfalls/).
Buybacks and dividends are not yet siphoning 100 % of operating earnings (https://www.yardeni.com/pub/bbdivepsyield.pdf) but remember that earnings have been pushed way above trend thanks to the huge recent fiscal deficits which are now waning ().
Buybacks are one of the current best example of passive, value agnostic, buying activity pushing the markets higher.
To the Passive, value agnostic buying and selling, we also have to had risk-parity and other target volatility strategies and trend following. All of them also bolstered by the rise of the robot advisors.
The explosion of option trading where the notional traded in options is now surpassing the trading in the stock markets has add also profound implications in sustaining the current boom (https://www.zerohedge.com/markets/shocked-goldman-trader-admits-after-following-market-18-years-i-could-never-imagine-typing) If buying such large amount of extremely short-term options is not market manipulation then what is?
A final point to consider (and we are not exhaustive we know…) is the fact that households have embraced the stock market again, big ways. Households have increased their share of the overall stock market by USD 1.6 Trillion in 2021 (in comparison the whole Hedge Fund US equity holding is 2.3 trillion)!
Some people (SPACs?) have taken advantage (literally) of this.
OK now enough for the background and let’s look at what has been happening recently
  • In November, our LT warning models (we have many of them) triggered sell signal one after the other. We ended up with a total which was making the other historical precedent (beginning of 2000, Summer 2007, Spring 2015, September 2018 and December 2019) look trivial.
  • Since the start of the year we have witnessed a flurry of +1% and -1% days. When we see such concentration of volatility after a long period of calm, the probability is high that we have entered a cyclical bear market.
  • The Fed which has been the chief enabler of the current massive bubble seems to understand that it is now cornered and won’t be able, as long as inflation remains high, to offer the now expected Fed put anytime soon. J. Powell even said that it could continue to raise rate in a recession if inflation remains sticky. The Fed restrictive policy will not be limited to aggressively raise rate but with an accelerated Quantitative Tightening. We doubt that it will deliver everything the market expect if a cyclical bear market materialize but the damage to investors psychology would be large enough that even a reversal would not save the market immediately.
  • This brings us to the recession debate. While our recession indicators have yet to flash a definitive signal, most of them are very close to trigger. Given what we have said about the Fed above and the fragility of the markets, our guess is that the lead time of those indicators will be shorter than what they have been historically and the recession could well start in 2022 in the US. It is significant because bear markets tend to be much more severe when a recession occurs (https://www.yardeni.com/pub/stmktsp500recess.pdf)
We have now entered the buyback blackout period where opportunistic buybacks are not allowed.
At the same time the S&P 500 has staged an impressive rebound from last week low and yet we are still seeing more 52 weeks new lows than highs. This (almost) only happen in bear markets.
Given the quarterly bonds and equities relative performance we should witness some sizable rebalancing towards bonds (even if bonds increased volatility could make it less sizable than some commentators are expecting).
With the S&P 500 slightly more than 5% below its all time high we see it as a perfect opportunity for those who haven’t yet done so to aggressively de-risk their portfolio.

>>> Russia oligarch and Rusal owner Deripaska: 'These' people preparing to fight

Russia oligarch and Rusal owner Deripaska: 'These' people preparing to fight for a few more years as all participants in the conflict have at least 2 more years before the next election
- Personally, it always seemed to me that this particular armed conflict is madness (for which we will be ashamed of it for a long time before our descendants) could have been ended three weeks ago through reasonable negotiations.
- Now some hellish ideological mobilization is taking place from all sides.

TechCrunch : Netflix buys independent game developer Boss Fight in latest gaming

Netflix buys independent game developer Boss Fight in latest gaming acquisition

Netflix has acquired Texas-based independent game developer Boss Fight Entertainment, the company announced in a blog post. The financial terms of the deal were not disclosed. The deal, which marks Netflix’s third acquisition of a gaming company, is part of the streaming service’s ongoing push toward gaming.
Boss Fight was founded in 2013 by former Zynga Dallas and Ensemble Studios employees. Netflix says the studio’s experience with building games across genres will help accelerate its ability to provide Netflix users with more titles. The Boss Fight team will continue to operate out of their current studios in Dallas, Austin and Seattle.
“Boss Fight’s mission is to bring simple, beautiful, and fun game experiences to our players wherever they want to play,” said Boss Fight Entertainment founders David Rippy, Bill Jackson and Scott Winsett, in a statement. “Netflix’s commitment to offer ad-free games as part of members’ subscriptions enables game developers like us to focus on creating delightful game play without worrying about monetization. We couldn’t be more excited to join Netflix at this early stage as we continue doing what we love to do while helping to shape the future of games on Netflix together.”

Earlier this month, Netflix announced that it was acquiring Finland’s Next Games, a developer of mobile games, for a total value of €65 million ($72 million). The free-to-play mobile games publisher already has developed titles related to some of Netflix’s biggest draws, such as “Stranger Things” and “The Walking Dead.” The deal is expected to close in Q2 2022.
Last September, Netflix acquired Night School Studio, the independent game developer known for narrative-driven titles like “Oxenfree.” The financial terms of the deal were not disclosed. Night School executives had said that the studio would continue to work on Oxenfree II and other Night School titles.
The acquisitions are part of Netflix’s bigger strategy to build out its gaming content to complement its video catalog.
“We’re still in the early days of building great game experiences as part of your Netflix membership,” Amir Rahimi, the vice president of game studios at Netflix, said in a statement. “Through partnerships with developers around the world, hiring top talent, and acquisitions like this, we hope to build a world-class games studio capable of bringing a wide variety of delightful and deeply engaging original games – with no ads and no in-app purchases – to our hundreds of millions of members around the world.”

Netflix has been building out its gaming service since late last year, when the company debuted its initial lineup that included a couple of “Stranger Things”-themed titles and other casual games.
Since then, Netflix has rolled out several other titles, including “Arcanium: Rise of Akhan,” “Asphalt Xtreme,” “Bowling Ballers,” “Card Blast,” “Dominoes Café, “Dungeon Dwarves,” “Hextech Mayhem: A League of Legends Story,” “Knittens,” “Krispee Street,” “Shooting Hoops,” “Teeter (Up)” and “Wonderputt Forever.” Earlier this week, the company expanded its lineup with two games called “Shatter Remastered” and “This Is A True Story.” Netflix also teased its first upcoming first-person shooter title called “Into the Dead 2: Unleashed.”
The company explained to investors during its Q4 earnings call that these initial gaming launches are more about setting up Netflix to better understand what consumers want from the new service. Netflix has yet to detail how well its games are performing, only saying that it has a “growing number” of both daily active and monthly active users on its gaming titles. Netflix has also hinted that it’s open to licensing larger game IP that people will recognize in the future.

(ZH) How The West's Ban On Russian Gold Could Backfire

How The West's Ban On Russian Gold Could Backfire

  • The latest round of sanctions imposed on Moscow by the West is drawing some mixed reactions from experts.
  • The U.S. announcement to block gold transactions was done alongside Group of Seven and European Union allies that will also impose the gold reserve ban.
  • “Any sanctions on Russia’s gold reserves would do little more than reveal the degree to which government bureaucrats don’t understand gold.”
Following Russia's invasion of Ukraine about a month ago, the U.S. and its western allies swiftly imposed a raft of economic and trade sanctions on Russia, notably on buying oil, a partial SWIFT ban and against billionaire oligarchs seen as close to President Vladimir Putin. Russia hit back by imposing export bans including telecoms, medical, vehicle, agricultural, and electrical equipment, as well as some forestry products such as timber.

But it’s the latest round of sanctions that has been drawing mixed reactions across the board: the U.S. ban on gold transactions with Russia.
On Thursday, the U.S. made it clear that any transaction involving gold related to the Central Bank of the Russian Federation is already covered by existing sanctions, and any violations were likely to attract secondary sanctions.
Russia has an estimated $132 billion in gold stockpiles, roughly 20% of the holdings in the Russian Central Bank, thanks to heightened buying activity since the 2014 annexation of Crimea. Those reserves, coupled with Russia’s $630 billion in foreign exchange reserves, can help finance its war machine.
“U.S. persons, including gold dealers, distributors, wholesalers, buyers, individual traders, refineries, and financial institutions, are generally prohibited from engaging in or facilitating prohibited transactions, including gold-related transactions in which blocked persons have an interest,” according to a release from the Treasury on frequently asked questions.
The U.S. announcement to block gold transactions was done alongside Group of Seven and European Union allies that will also impose the gold reserve ban. Putin’s foreign minister Sergey Lavrov has termed the foreign reserves ban ‘thievery,’ with finance minister Anton Siluanov revealing earlier this month that about $300 billion had been frozen.
A cross-section of experts, however, is not optimistic that a gold ban will be equally effective while others say that Putin might have unveiled the ultimate countermeasure against all sanctions.
Propping the ruble
There’s growing speculation by U.S. officials that Russia is using its vast gold reserves to support its currency as a way to circumvent the impact of sanctions. One way to do that is by swapping the gold for a more liquid foreign exchange that is not subject to current sanctions. Another way would be to sell the bullion through gold markets and dealers. The gold could also be used to directly purchase goods and services from willing sellers.
However, some experts are now questioning the rationale behind banning Russian gold transactions.
“Any sanctions on Russia’s gold reserves would do little more than reveal the degree to which government bureaucrats don’t understand gold. The beauty of gold, unlike currencies, is that it is an untrackable store of value that has no counterparty,” Brien Lundin, editor of Gold Newsletter, has told MarketWatch.
“At least in smaller amounts, Russia could easily sell gold on the open market. In bulk quantities, it could just as easily sell the gold to China with no record of the transaction,” Lundin has added, noting that China has demonstrated that it is an “eager buyer of gold.”
Jeff Wright, chief investment officer at Wolfpack Capital, says selling gold is probably not Russia’s first choice anyway because it could effectively signal a complete collapse of its economy and a sign of weakness by Russian leadership. Rather, Russia is more likely to resort to selling discounted oil to Russian-aligned countries, rather than selling gold, according to Wright.
And, these experts might be right on the money.
A couple of days ago, Putin instructed Russian oil and gas companies to sell their oil and gas to unfriendly countries exclusively in rubles.
Rubles for oil
Putin has ordered that gas contracts with "unfriendly" countries--those responsible for sanctions against Russia--be settled in rubles rather than in foreign currencies and gave Russia's central bank and gas suppliers like Gazprom one week to implement the change.
Last year, about 97% of Gazprom’s foreign gas sales were in euros and dollars.
Maybe Putin need not have gone that far thanks to the western heavy reliance on Russia’s energy commodities.
Energy payments are a lifeline for Russia’s increasingly isolated economy, and western gas sales have been softening the blow by harsh sanctions. After crashing as much as 40% in the wake of Russia’s invasion of Ukraine, the ruble has managed to claw back much of its losses against the dollar, though it’s still trading nearly 30% below pre-invasion levels. The ruble briefly strengthened to a three-week peak of 95 rubles to the U.S. dollar on news of Putin's order, before settling weaker at 98 rubles to the dollar.
It’s not clear how far Putin is willing to go to enforce the order. Last week, Russia made a critical bond payment in U.S. dollars despite speculation that it might choose to pay in rubles or even default altogether.
"In an extreme scenario, insisting on ruble payments may give buyers cause to re-open other aspects of their contracts--such as the duration--and simply speed up their exit from Russian gas altogether," Vinicius Romano, senior analyst for Rystad Energy, has told Fortune.
In the final analysis, sanctions are likely to deal a big blow to the Russian economy, but Russia still might have significant leverage to soften the blow.

(ZH) Exxon Is Using Its Excess Natural Gas To Mine Bitcoin

Exxon Is Using Its Excess Natural Gas To Mine Bitcoin

In a move that is surely going to be some type of new microaggression for environmental activists, Exxon has begun a pilot program to use its excess natural gas to power power cryptocurrency-mining operations.
The oil and gas supermajor has started to program using excess gas that would "otherwise be burned off from North Dakota oil wells", according to a new report from Bloomberg. But the company has plans to potentially expand the idea globally, if it catches on and is found to be worthwhile.
Exxon has a new agreement with Crusoe Energy Systems, the report says, to use gas from an oil well pad in the Bakken shale basin to power mobile generators. The pilot project reportedly began in January 2021 and expanded in the summer of last year.
The mining operation uses "up 18 million cubic feet of gas per month" that otherwise would have been burned off or flared.
Exxon is considering similar projects in places like Alaska, Nigeria, Argentina, Guyana and Germany, the report says.
An official Exxon spokesperson said: “We continuously evaluate emerging technologies aimed at reducing flaring volumes across our operations.” She said the company wouldn't comment on “rumors and speculations regarding the pilot project."
Exxon has said it intends to meet the World Bank's call to end routine flaring by 2030.
Its partner, Crusoe, is backed by Bain Capital, the Winklevoss brothers and former Tesla VC Valor Equity Partners. The company has 20 portable engines permitted for use in North Dakota, of which Bloomberg notes that 11 have operators. Crusoe also has similar projects in place for Equinor and Devon Energy.
“It is creating use of what would be otherwise wasted,” said Danielle Fugere, president of As You Sow, an environmental shareholder-activist group. But still, her praise was qualified by stating that it would "be better if the company worked more aggressively to transition away from fossil fuels".
Can't say we're surprised...