- LVMH (MOH TH) +1%
- LVMH Better Placed Than Luxury Peers, HSBC Upgrades to Buy
- ASML (ASME TH) +0.7%
- Nokia (NOA3 TH) -0.8%
- Vestas (VWSB TH) -0.8%
- Symrise (SY1 TH) -0.9%
- Novo Nordisk (NOVC TH) -0.9%
- Lundin Energy (LYV TH) -0.9%
- Fresenius SE (FRE TH) -0.9%
- Alstom (AOMD TH) -1%
- Atos (AXI TH) -1.1%
- Covid Test Maker Eurofins To Replace Atos in France’s CAC 40
- CD Projekt (7CD TH) -1.1%
- Fresenius Medical (FME TH) -2.3%
- Fresenius Medical Cut at Barclays, JPMorgan on Near-Term Issues
DAX:
- Fresenius Medical (FME TH) -1.9%
- Fresenius Medical Cut at Barclays, JPMorgan on Near-Term Issues
MDAX:
- Nordex (NDX1 TH) +1.1%
- Telefonica Deutschland (O2D TH) +1%
- Symrise (SY1 TH) -0.9%
SDAX:
- Vossloh (VOS TH) +2.1%
- Vossloh PT Raised to 58 euros from 50 euros at Berenberg
- VERBIO Vereinigte (VBK TH) -1%
>>> Up
* Dermapharm PT Raised to 94 euros from 82.50 euros at Berenberg
* Hamburger Hafen Raised to Buy at Nord/LB; PT 23 euros
* LVMH Raised to Buy at HSBC; PT 760 euros
* Nordic Semiconductor PT Raised to 350 kroner at Deutsche Bank
* Norma Raised to Buy at HSBC; PT 49 euros
* Norma Raised to Buy at HSBC; PT 49 euros
* SIG Raised to Buy at Liberum; PT 65 pence
* Spire Healthcare Raised to Overweight at Barclays; PT 280 pence
* Vossloh PT Raised to 58 euros from 50 euros at Berenberg
>>> Down
>>> Down
* Aker BioMarine ASA Cut to Hold at Arctic Securities
* BNP Paribas Cut to Neutral at JPMorgan; PT 61 euros
* Cerved Cut to Reduce at Equita; PT 10.50 euros
* Cerved Cut to Reduce at Equita; PT 10.50 euros
* EasyJet Cut to Add at AlphaValue/Baader
* Fresenius Medical Cut to Underweight at JPMorgan; PT 60.80 euros
* Snam Cut to Hold at SocGen; PT 5.20 euros
* Somfy Cut to Hold at SocGen; PT 180 euros
>>> Initiation
>>> Initiation
* Endeavour Mining Rated New Equal-Weight at Morgan Stanley
* Diversified Energy Co PL Rated New Buy at Peel Hunt
>>> Call
* Diversified Energy Co PL Rated New Buy at Peel Hunt
>>> Call
* Dermapharm PT to Street-High at Berenberg on Vaccine Outlook
* Endeavour Mining a Quality Stock at Fair Value: Morgan Stanley
* LVMH Better Placed Than Luxury Peers, HSBC Upgrades to Buy
* SIG’s Strategy Could Double Stock Price, Raise to Buy: Liberum
* SIG’s Strategy Could Double Stock Price, Raise to Buy: Liberum
Asian stocks rose Friday along with U.S. and European futures as rallies in Japan and Chinese technology shares brought some relief from the economic growth concerns that shadowed global equities this week.
A Hong Kong gauge of Chinese tech names jumped more than 2% in the wake of a clarification by a newspaper that China has slowed rather than frozen new game approvals, the latest twist in Beijing’s regulatory crackdown.
Traders were also evaluating a telephone call between President Joe Biden and China’s Xi Jinping to see if the increasingly adversarial relationship between the two sides could be repaired. The Shanghai Composite Index was on track for the highest close since 2015 and the offshore yuan ticked higher.
The S&P 500 overnight posted its longest losing streak since June, hurt by concerns about slower economic reopening due to the delta virus strain. Treasuries trimmed gains and the dollar dipped. Oil trimmed a weekly loss and a broad rally in base metals gathered steam.
US After Hours After Hours Summary: Biden releases COVID plan ahead of speech tonight; APLS -31.1% falls on clinical data; AFRM +19.5% and PLAY +7.4% rise on earnings; AOUT -7.2% and ZUMZ -3.7% fall on earnings
Nikkei +1.04% Hang Seng +1.67% CSI +1.12% Shanghai +0.59% Shenzen +0.52%
Eur$ 1.1829 CNH 6.4429 CNY 6.4473 JPY 109.88 GBP 1.3849 CHF 0.9168 RUB 72.85 TRY 8.4477 WTI$ 68.52 +0.56% Gold 1,797.80 +0.18% BTC 46,700 +445 ETH 3,465 +33
S&P +0.26% Nasdaq +0.20% EuroStoxx +0.24% FTSE +0.32% Dax +0.18% SMI -0.28%
Macro :
Macro :
- BofA’s Subramanian Likens S&P 500 to 36-Year, Zero-Coupon Bond
- Fed’s Bowman: Taper Likely This Year If Economy Stays on Track
- Fed’s Bowman: Taper Likely This Year If Economy Stays on Track
- ECB Slows Crisis Stimulus in Shift Lagarde Says Isn’t Taper
- Bain Capital Files to Create Crypto Investment Fund: The Block
Keep an eye on :
Keep an eye on :
- AZA IM : Italy to Sell Alitalia Assets to Avoid EU Sanctions: Messaggero
- ATO FP : Eurofins Scientific to Replace Atos in CAC 40, Euronext Says
- BMPS IM : Paschi Brand Unlikely to Be Part of Deal w/UniCredit: Repubblica
- BMW GY : Mercedes, BMW, Volkswagen Set for Weak 3Q as the Chips Are Down
- CPINV FP : Care Property to Spend EU11.6m on Vulpia Care Project in Ixelles
- CTM SS : Catena Media Buys Assets From I15 Media for $45m Cash and Stock
- DAI GY : Mercedes, BMW, Volkswagen Set for Weak 3Q as the Chips Are Down
- DECB BB : Deceuninck Holders Allacha, Evalli to Offer Shares
- DTE GY : SoftBank to Borrow Almost $4 billion Against T-Mobile Stake
- DMYDB SS : Diamyd Medical Offering of 5.4m Shares Prices at SEK28/Share
- EQT SS : EQT Infrastructure Is Said to Explore Fenix Marine Services Sale
- EL FP : Facebook’s Smart Glasses Can Take Calls and Photos, But Lack AR
- ERF FP : Eurofins Scientific to Replace Atos in CAC 40, Euronext Says (1)
- ENX FP : Euronext to Add Malin Corp. to ISEQ Index in Quarterly Review
- HOLN SW : Holcim to Sell Brazil Ops to CSN for $1.025b Enterprise Value
- LXI LN : LXi Is No Longer Pursuing Potential Merger With Secure Income
- MOVE SW : Medacta 1H Adjusted Ebitda EU56.6M Vs. EU32.1M Y/y
- NESN SW : Nestle Targets Mature Businesses for M&A, Not Startups, CFO Says
- NDA SS :Nordea’s Top Holder Continues Exit With $880 Million Stake Sale
- NDA SS : Nordea Bank Offering by Holder Prices at About EU10.21/Share
- NHY NO :New Fortress to Supply Gas to Norsk Hydro’s Alunorte Refinery
- ROG SW : Roche Voting Shares Hit 10-Year High Versus Non-Voting Stock
- RUI FP : Rubis 1H Net Income EU136M Vs. EU139M Y/y
- SAMPO FH : Sampo to Launch Share Buy-Back Program No Later Than Nov. 3
- SAN FP : EU Regulator Gives Nod to Two Added Sites for Pfizer Vaccine
- SAN FP : EU Regulator Gives Nod to Two Added Sites for Pfizer Vaccine
- TTALO FH : Terveystalo Offering by HC Holding Prices at EU11.20/Share
- TTE FP : TotalEnergies Port Arthur Oil Refinery Shuts on Steam Loss
- UCG IM : Paschi Brand Unlikely to Be Part of Deal w/UniCredit: Repubblica
- VOW3 GY : Mercedes, BMW, Volkswagen Set for Weak 3Q as the Chips Are Down
U.S. Sets a Summer-Heat Record This Year
Average temperature of 74 degrees Fahrenheit was 0.01 degree above previous record in 1936
The U.S. had its hottest summer on record, narrowly beating out highs set during the Dust Bowl in 1936.
The average temperature for the Lower 48 states from June to August was 74 degrees Fahrenheit—or 2.6 degrees above average, the National Oceanic and Atmospheric Administration said Thursday. That average is just 0.01 degree Fahrenheit above the previous record, set in the summer of 1936.
NOAA said a record 18.4% of the contiguous U.S. experienced its warmest temperatures. Five states—California, Nevada, Utah, Oregon and Idaho—reported their hottest summers, and 16 had their top-five warmest summers on record, according to the federal agency’s U.S. Climate Report for August 2021. No state had a below-average temperature for the summer.
A record-breaking heat wave in the Pacific Northwest in June left more than 100 people dead, as temperatures soared into the triple digits.
Most of the U.S. West is in severe drought conditions, according to the National Interagency Fire Center. Over half the region is classified as “extreme” to “exceptional” drought, the highest category designated by the National Weather Service.
Large fires have broken out in California, Oregon and Washington, including the Dixie Fire, the second largest in California’s history.
Meanwhile, rain was above average across parts of the Great Basin and Southwest as well as from the southern Plains to the Great Lakes, according to the NOAA report.
“Mississippi had its wettest summer on record, with Alabama, Michigan, New York and Massachusetts ranking among their five wettest summers on record,” the report said.
The high levels of rain meant that flooding, including deadly flash floods, was also an issue this summer, according to the report. “With 35 fatalities accounted for during August, it was the deadliest month for flooding across the U.S. since Hurricane Harvey in 2017,” NOAA said.
Real euro junk yields are not negative so much as pathetic
On Tuesday the FT reported the following, under the headline “Real yields on European junk bonds go negative for first time”:
The yield on ICE BofA index of European high-yield bonds was pushed down to 2.34 per cent this week, marking the first time buyers of so-called high yield European currency bonds have accepted payments below consumer price inflation in the eurozone, which hit a decade high of 3 per cent in August.
All true, but if I buy a junk-rated bond with (say) five years to maturity, I don’t care about the inflation rate now; I care about the rate of inflation over the next five years. And expectations for inflation in the eurozone over the next five years are lower than 2.34 per cent. As of Thursday, according to the five-year five-year euro inflation swap, inflation is expected to run at 1.75 per cent over that period. The junk yield has surged back to 2.4 per cent, leaving a princely real junk yield (the nominal yield minus expected inflation) of 65 basis points.
Tomas Hirst of CreditSights made this point on Twitter, pointing out that euro junk traded at slightly lower real yields back in 2017:
My question for him was, yes, real yields are positive, but how is anyone going to make money buying this stuff with 65bp of real yield? This seems bonkers. He said:
You are not jumping up and down saying there is great value here. We all understand that if defaults pick up, that is a problem, because you are not being compensated for that . . . you are not even being compensated for supply risk. We think there is a lot of leveraged buyout financing coming — perhaps €25bn to €30bn worth — and a lot of that is going to hit the B tier [the second-highest rung of high yield] . . . It doesn’t take a lot to make investors say, do we want to own this stuff, or do we want to own the stuff that is coming to market, which has to pay [a higher yield]?
We live in a world priced for very, very, very low returns.
Uranium prices soar as investors scoop up nuclear power fuel
Bets on clean energy and economic rebound drive yellowcake prices to their highest level since 2014
Nuclear power companies are facing competition for supplies of uranium from financial investors, who are betting on sharply higher prices and demand for the radioactive material used to fuel reactors.
The price of raw uranium, known as yellowcake, has risen to its highest level since 2014, driven by a newly launched investment trust run by Canadian asset manager Sprott.
Investors are betting that nuclear power will be a key part of the move away from fossil fuels and that a lack of new uranium mines will mean the price has to move higher.
The Sprott Physical Uranium Trust has snapped up around 6m pounds of physical uranium, worth around $240m, since launching on July 19, helping to push uranium prices to over $40 per pound, up from $30 at the start of the year. Global mine supply is expected to be around 125m pounds in 2021.
Its aggressive buying will put pressure on utilities who need to secure supplies of the commodity for electricity generation. It also comes as China is planning a big increase to its nuclear power capacity over the next decade. Added to the holdings of a fund it acquired, Sprott currently holds 24m pounds of uranium, worth around $1bn, in the form of yellowcake.
Other financial players have also been buying the commodity in a bet that its price will rise. Yellow Cake Plc, a vehicle listed in London in 2018, holds around 16m pounds of uranium.
“This has been a key driver of the 30 per cent increase in the price of the metal in 2021,” Nick Lawson, chief executive at brokerage Ocean Wall, said.
Demand for uranium is expected to climb from around 162m pounds this year to 206m pounds in 2030 — and even further to 292m pounds in 2040 — according to the World Nuclear Association, largely driven by increased power generation in China as Beijing seeks to cut emissions.
At the same time, the supply of uranium is set to fall 15 per cent by 2025 and by 50 per cent by 2030 due to a lack of investment in new mines.
“Financial players are clearly accelerating price discovery, but this would not be occurring if there was not a fundamental and substantial deficit,” analysts at Canaccord Genuity said.
The pandemic has also disrupted supply from some of the largest mining operations in Canada and Kazakhstan. In December, Canada’s Cameco temporarily suspended production at its Cigar Lake mine due to a shortage of workers, before restarting it in April.
“This is against a backdrop of growing energy demand as the economy recovery and a focus on carbon free generation with nuclear being a key element of non-fossil fuel baseload generation,” said Jonathan Guy, analyst at Berenberg.
Shares in Cameco have risen by 70 per cent year-to-date on the Toronto Stock Exchange. Overnight, shares in Japanese utility companies rose sharply after Fumio Kishida, a leading contender to become the country’s next prime minister, said restarting nuclear power plants was necessary to achieve the country’s net zero goals. Nuclear power was shut down in Japan after the Fukushima Daiichi disaster in 2011 and has only slowly been restored.
Last month, the Sprott fund announced it would issue $300m worth of new shares, which would be backed by new purchases of physical uranium.
Currently listed on the Toronto Stock Exchange, the Sprott uranium trust is also looking to list on the New York Stock Exchange next year, which could spur further purchases, according to Canaccord.
The Sprott trust buys uranium through WMC Energy, which stores it in Canada, the US, and France. Sprott receives a management fee of 0.35 per cent, as well as a commission of 1 per cent on the gross value or any purchases or sales of uranium.
If investors keep buying uranium, analysts expect utility companies will come under pressure to replace long-term supply agreements before they expire.
At the moment, long-term contracts cover 98 per cent of the uranium needed by US utility companies. But that figure drops to 84 per cent next year, and 55 per cent by 2025, according to Yellow Cake.
“There are now no meaningful volumes available,” said Nick Clarke, founder at Curzon Uranium. “Utilities will be forced to re-evaluate their procurement strategies.”
Tencent-Backed Tech Giant Sea Taps Investors for About $6 Billion
Sea says some of the proceeds would help expand its business, while funds could also be deployed on investments and acquisitions
Southeast Asia’s most valuable listed company, Sea Ltd., plans to raise about $6 billion or more in new funds, capitalizing on investor enthusiasm for the region’s fast-growing technology industry.
The Tencent Holdings Ltd. -backed gaming, e-commerce and digital-finance company said in a filing late Wednesday that it would raise the capital by selling new shares and convertible bonds. Sea said some of the proceeds would help expand its business, while funds could also be deployed on “potential strategic investments and acquisitions.”
The company says its Shopee unit, which competes with Alibaba Group Holding Ltd. ’s Lazada unit and others, is the largest e-commerce platform in Southeast Asia and Taiwan.
Sea, which is listed on the New York Stock Exchange, plans to sell 11 million American depositary shares and $2.5 billion of five-year convertible bonds. Based on Wednesday’s closing price for Sea shares, of $343.80, the stock sale would be worth close to $3.8 billion, although deals like this are typically sold at a discount to the market price. Sea and its banks expect the final price to be set Thursday, according to a term sheet seen by The Wall Street Journal. The deal’s underwriters have the option to increase the size of both offerings by 15%, via a green shoe.
Based on Wednesday’s closing price for Sea shares of $343.80, the stock sale would be worth close to $3.8 billion, although deals like this are typically sold at a discount to the market price. Sea and its banks expect the final price to be set Thursday, according to a term sheet seen by The Wall Street Journal. The deal’s underwriters have the option to increase the size of both offerings by 15%, via a green shoe.
Like other e-commerce and gaming groups, Sea has enjoyed rapid growth, with the Covid-19 pandemic spurring customers to live more of their lives online.
Compared with the year-earlier period, Sea’s revenue in the three months to June more than doubled to nearly $2.3 billion, while paying users for its digital-entertainment business and gross merchandise value for its e-commerce unit both leapt by more than 80%.
The business remains unprofitable however, reporting a net loss of $434 million for the quarter, or $321 million excluding share-based pay to staff. It generated cumulative annual net losses of more than $4 billion in 2018 through 2020.
Sea’s shares have surged in recent years, giving it a market capitalization of roughly $185 billion. That makes it the region’s biggest listed company, according to S&P Global Market Intelligence data, and has allowed it to pull ahead of some of China’s big tech companies, such as JD.com Inc. and Pinduoduo Inc., as the Chinese tech industry confronts a series of government crackdowns.
Sea itself is one of many tech groups backed by China’s Tencent, and it publishes Tencent games such as “League of Legends” and “Arena of Valor” in the region. Tencent held a 22.9% stake as of March 5, according to Sea’s annual report.
The planned issuance is the latest in a series of fundraising deals by big tech groups in Asia. In April, Meituan, one of China’s most valuable technology companies, raised roughly $10 billion by selling stock and convertible bonds. Meituan, which competes with Alibaba and others, said it would spend some of the proceeds on researching and developing autonomous delivery vehicles, drone deliveries and other technology.
Southeast Asian tech is also drawing more interest from investors, with some seeing the planned U.S. listing of Grab Holdings Inc., operator of a superapp that offers services including ride-hailing and delivery, as a watershed moment. In May, Singapore-based Grab said it planned to raise about $4.5 billion in a tie-up with a special-purpose acquisition company, or SPAC, and go public in the U.S. at a valuation of nearly $40 billion. Grab expects the deal to close in the fourth quarter.
Units of Goldman Sachs Group Inc., JPMorgan Chase & Co. and Bank of America Corp. are handling Sea’s offerings.
Grubhub, DoorDash, Uber Eats Sue New York City Over Fee Caps
Food-delivery companies say cap sets a dangerous precedent
DoorDash Inc., DASH 3.39% Grubhub Inc. and Uber Technologies Inc.’s UBER 0.70% Eats division are suing New York City over its law permanently capping the amount of commissions the apps can charge restaurants to use their services, the latest move in a growing clash between the platforms and local regulators.
The three largest food-delivery companies filed the suit in federal court in New York late Thursday, contending that the fee cap is harmful and constitutes government overreach. The limit on fees has cost the companies hundreds of millions of dollars combined through July, they said in the suit.
A permanent cap will likely require them to rewrite contracts with restaurants, reduce marketing in the city and raise fees for consumers, the companies said in the complaint.
The companies are seeking an injunction that would prevent New York from enforcing the fee-cap ordinance adopted last month, unspecified monetary damages and a jury trial.
Councilman Mark Gjonaj, chairman of the city’s Small Business Committee, which has pushed for more oversight on the apps, said the council intends to move forward with the fee limits and other regulation of the services.
“The laws simply seek to bring fairness to a system that all too often lacks it,” Mr. Gjonaj said in a statement Thursday evening.
The companies are suing New York amid heightened scrutiny from local regulators across the U.S. after the Covid-19 pandemic fueled a broad consumer shift to the platforms. Many restaurants adopted app delivery to stay afloat last year, and some cities instituted guidelines around fees to help them survive.
The food-delivery companies say they are seeking to prove the illegitimacy of the caps more broadly, alleging that they are unconstitutional and interfere with negotiated contracts. They also question capping marketing services charged by the apps, when the city doesn’t do so for other online platforms that provide advertising to companies.
“Left unchecked, the ordinance sets a dangerous precedent,” the companies said in the complaint.
Now that restaurants can operate their dining rooms again, the New York City ordinance “bears no relationship to any public-health emergency,” the companies said. It also “interferes with freely negotiated contracts between platforms and restaurants by changing and dictating the economic terms on which a dynamic industry operates,” they said.
The apps can charge restaurants commissions as high as 30% per order. New York City temporarily capped what apps could charge restaurants during the pandemic. Last month, it made the cap permanent, saying that food-delivery companies are prohibited from charging restaurants more than 23% an order: 15% for delivery, 5% for listing on apps, and 3% for credit-card processing fees. That means Grubhub, which often relies on restaurants fulfilling deliveries received on its app, would be limited to an 8% commission on such orders.
Many of those caps expired as Covid-19 cases lessened earlier this year, but some lawmakers have sought to extend them given complaints about the charges overall.
San Francisco’s board of supervisors enacted a permanent 15% cap per order on food-delivery fees in June, the first city to institute a ceiling with no end date. The apps have also filed suit there.
The apps say they have had to pass costs to consumers when restaurant fees are limited, and the companies say in the suit the trend will likely continue in New York City with a fixed cap.
Cities are scrutinizing the companies for other reasons too. Last month, Chicago filed twin lawsuits in state court against Grubhub and DoorDash, alleging that the companies weren’t transparent with fees charged to customers for delivery, used deceptive advertising and added restaurants to their platforms without consent.
The city is seeking to ensure the companies abide by its laws, restitution for consumers and restaurants and civil fines within the range of $500 to $10,000 per violation.
Grubhub and DoorDash have said that the allegations are false and that they plan to fight the suits.