>>> TradeGate Pre-Market Indications

DAX:
  • Deutsche Wohnen (DWNI TH) +16%
    • German Landlord Vonovia to Buy Deutsche Wohnen for $23 Billion
  • Siemens Energy (ENR TH) +2.1%
    • Aker Solutions Signs Contract for East Anglia 3 Wind Project
  • HeidelbergCement (HEI TH) +2%
  • Infineon (IFX TH) +1.7%
  • Deutsche Bank (DBK TH) +1.3%
    • Deutsche Bank’s Days of Dysfunction Finally Retreat Under Sewing
  • Vonovia (VNA TH) -1.7%
MDAX:
  • MorphoSys (MOR TH) +2.2%
  • Thyssenkrupp (TKA TH) +1.9%
  • Hugo Boss (BOSS TH) +1.7%
  • Porsche SE (PAH3 TH) +1.3%
    • Volkswagen, GM Named in Trade Complaint Seeking EV Import Ban
  • Hochtief (HOT TH) +1.3%
SDAX:
  • flatexDEGIRO (FTK TH) +9.7%
    • FlatexDEGIRO Raises Mid-Term Goals, Sees >EU1B Operating FCF
  • LPKF (LPK TH) +3.1%
  • Home24 (H24 TH) +2.9%
  • SMA Solar (S92 TH) +2.7%
  • Jenoptik (JEN TH) +2.4%
  • Suess MicroTec (SMHN TH) -2.2%

>>> What to look at today - 25th of May 2021

Asian stocks and U.S. equity futures rose Tuesday after technology shares spurred a Wall Street rally amid soothing Federal Reserve comments on inflation. Bitcoin trimmed a bounce from last week’s slump.
An MSCI Inc. index of Asia-Pacific equities was set for a fourth straight advance, with shares higher in Japan, Hong Kong and China. European and U.S futures edged up after the S&P 500 climbed and the Nasdaq 100 outperformed amid a jump in Apple Inc. and Tesla Inc. Bitcoin pared a rally stoked partly by Elon Musk’s support for an effort to improve its green credentials.
The Fed comments aided sentiment, as officials reiterated they expect transitory rather than lasting price pressures from the U.S. economic rebound. Treasury yields were stable following a retreat and the dollar slipped.
Oil held an advance after Iran said that gaps remain in negotiations aimed at reaching a deal to end U.S. sanctions on its crude. The Bloomberg Commodity Spot Index rose the most in about a week.
US After Hours NDSN +3.5%, CRMT +2.9% higher on earnings; RIDE -9.9% lower on earnings; JYNT +11.1% jumps on news it will be added to S&P SmallCap 600

Nikkei +0.65% Hang Seng +1.42% CSI +2.57% Shanghai +2.03% Shenzen +1.52%

Eur$ 1.2230 CNH 6.4053 CNY 6.4114 JPY 108.70 GBP 1.4184 CHF 0.8962 RUB 73.4867 TRY 8.3946 WTI$ 66.14 +0.14% Gold 1,879.56 -0.08% BTC 38,000 +600 ETH 2,560 +90

S&P +0.28% Nasdaq +0.41% EuroStoxx +0.27% FTSE +0.24% Dax +0.12% (Close yesterday) SMI +0.39%

Macro :
- EU Warns U.K. There’s No Alternative to Northern Ireland Deal
- Turkey’s Erdogan Fires Another Central Bank Deputy Governor
- Upside-Down World of Negative Bond Yields Is Shrinking at Last

Keep an eye on :
- ABVX FP : Abivax’s ABX464 Drug Helps Patients With Ulcerative Colitis
- ANA SM :! Acciona Gets Approval to Build 188 MW Solar Farm in Kentucky
- ADYEN NA : U.S. Federal Reserve Says It Approves Adyen Branch Application
- AF FP : *AIR FRANCE SAYS IT WILL SUSPEND FLIGHTS OVER BELARUS
- AKSO NO : Aker Solutions Signs Contract for East Anglia 3 Wind Project
- AT IM : Borsa Italiana Says 89.1% ASTM Shares Tendered to Offer
- BOL FP : Maersk Denies Claims That Port Deal Is Harmful for Ghana: Finans
- BRINB SS : Brinova Fastigheter Offers 8.2m Shares via Swedbank, @ SEK32.5/Share
- BWO NO : BW Offshore 1Q Operating Revenue Beats Estimates
- CSGN SW : Credit Suisse Asks NYC Staff to Return to Office: Bus. Insider
- DAI GY : Mercedes-Benz to Use Green Steel in Vehicles in 2025
- DBK GY : Deutsche Bank Said to Relocate 100 Bankers From London: FT
- DWNI GY : Vonovia to Acquire Deutsche Wohnen: M&A Snapshot
- DIA IM : DiaSorin Launches Quick Detect Covid-19 Test
- DIE BB : CD&R Seeks to Sell Quarter of Its Stake in Belron: Tijd
- ETL FP : EU Investigating Eutelsat Role in LEO Over OneWeb Stake, FT Says
- FTK GY : FlatexDEGIRO Raises Mid-Term Goals, Sees >EU1B Operating FCF
- HSBA LN : HSBC Has No Plans for Crypto Trading Desk, Reuters Says~
- MAERSKB DC : Maersk Denies Claims That Port Deal Is Harmful for Ghana: Finans
- NANOV NO : Nordic Nanovector Says Betalutin With Rituximab Trial Promising
- ONCO SS : Oncopeptides: Positive Topline Results in Phase 3 Ocean Study
- RNK LN : Cites speculation spurred by U.S. companies’ interest in British gambling firms - Daily Mail
- SINCH SS : Sinch Offers 7.2m Shares, @ SEK1.3k/share
- REC BB : Recticel Says Greiner’s EU13.50/Share Offer Undervalues Company
- RDSA NA : Shell to Sell Deer Park Refinery Stake to Pemex for $596M
- RMG LN : Royal Mail on Course for FTSE 100 Comeback After Two-Year Hiatus
- SDRL NA : Seadrill Partners Reports Emergence From Chapter 11
- SHBA SS : Sweden’s Biggest Bank Sees ‘Red Hot’ Home Prices Cooling in Fall
- SW FP : Sodexo: ICSID Upholds Arbitration Ruling in Company’s Favor
- SQ US : Square Takes Aim at JPMorgan With Checking, Savings Accounts
- SUN SW : Sulzer Says Hasn’t Made Decision on Applicator Systems Spin-Off
- TE FP : Technip Energies Wins Contracts From Neste Worth Up to EU250m
- UDG LN : Elliott Takes Stake in Takeover Target UDG Healthcare
- VOW3 GY : Volkswagen, GM Named in Trade Complaint Seeking EV Import Ban
- VNA GY : Vonovia to Buy Deutsche Wohnen for Value of EU53.03 Per Share
- ZEG LN : Zegona Plans to Return GBP335m to Holders

>>> Europe : Brokers Upgrades & Downgrades - 25th of May 2021

>>> Up
* Gjensidige Raised to Buy at HSBC; PT 225 kroner
* Royal Mail Raised to Buy at Peel Hunt; PT 680 pence
* Sartorius Raised to Buy at SocGen; PT 533 euros
* Wizz Air Raised to Buy at Wood & Company; PT 5,400 pence

>>> Down
* Cimarex Cut to Inline at Evercore ISI
* Poste Italiane Cut to Hold at Deutsche Bank; PT 11.90 euros

>>> Initiation
* A.G. Barr Rated New Add at Peel Hunt; PT 575 pence
* Coinbase Rated New Overweight at JPMorgan; PT $371
* Getinge Reinstated Buy at Jefferies; PT 340 kronor
* Quantum Genomics SAS Rated New Outperform at Oddo BHF
* Wallstreet:Online Rated New Buy at Bankhaus Metzler; PT 35 euros

>>> Call
* Nel Shares May Drop After Iberdrola/Cummins Pact: Morgan Stanley
* Royal Mail Discount Looks Unjustified, Upgrade to Buy: Peel Hunt
* Shell’s Refinery Stake Sale Shows Improving Metrics: Jefferies

(ZH) Wisconsin Police Tell Residents "Do Not Call 911" When Starlink Satellite T

Wisconsin Police Tell Residents "Do Not Call 911" When Starlink Satellite Train Passes By

The Outagamie County Sheriff's office told residents of Appleton, a city just north of Lake Winnebago, to avoid calling the police when a train of lights appears in the night sky because they're just satellites.
"We have seen a lot of questions about the long strings of lights appearing in the night sky lately. These lights are satellites, and are part of a new internet service called, Starlink. Starlink provides internet to rural and typically hard-to-service areas," Outagamie County Sheriff Facebook post read.
The post continued: "There is no concern to the publics safety and we ask that you please do not call the Outagamie County Communications Center - 911 about them."
The Facebook post was likely prompted by an uptick in 911 calls when a train of Starlink satellites illuminate the night sky that may frighten some people into believing an alien invasion is imminent.
Starlink satellites are providing internet to rural America and are reportedly faster than land-based internet. But with the Starlinks so bright, it hasn't just frightened some people but also become an optical nuisance to astronomers.
Over the next few years, SpaceX plans to launch at least 12,000 Starlink satellites. The increase of UFO sightings could due to Starlink satellites gliding through low Earth orbit at thousands of miles per hour.
Here's footage of Starlink satellites over the skies of Mississauga, a city neighboring Toronto on Lake Ontario.

To the average person unfamiliar with Starlink could easily mistake the satellites for an alien invasion and warrant a 911 call.

FT : Deutsche accelerates overhaul of corporate bank after Brexit

Deutsche accelerates overhaul of corporate bank after Brexit
German lender relocating about 100 staff from London to cities within the EU and Asia

Deutsche Bank is relocating 100 bankers from London to offices in the EU and Asia as Germany’s largest lender accelerates a restructuring of its corporate bank following Brexit.

Under the plan, a quarter of the division’s 400 UK staff are being made redundant, with their roles moved to Dublin, Berlin, Frankfurt and cities across Asia, according to people familiar with the decision.

Some of the London-based staff able to work within the EU can reapply for their jobs, but must take a 25 per cent pay cut, one of the people added.

Financial services was largely left out of the UK-EU trade deal that came into force in January, leaving some UK-based employees unable to directly serve clients in the 27-member bloc.

Deutsche had previously said it will move a “low hundreds” number of people from London — put at around 250 to 300 by people familiar with the matter. The changes at the corporate bank, run by Stefan Hoops, will increase this figure.

The corporate bank provides clients with services from basic lending to payments, foreign exchange, trade finance and cash management.

Deutsche employs about 7,500 people in Britain. Although largely based in London, the lender has a growing office of around 1,000 support staff in Birmingham with roles including compliance, technology and HR.

“We remain strongly committed to the UK, which will continue to be an important centre for our corporate bank as well as our other divisions,” Deutsche said in a statement. “It will continue to serve our many UK corporate bank customers and to provide services to our clients globally.”

Not all of the relocations within the corporate bank are directly the result of Brexit, however.

Deutsche is also using Britain’s exit from the EU as a broader opportunity to cut office costs in expensive cities such as London, shift staff to cheaper locations, hire locally and base bankers closer to their regional clients.

The bank also has a political incentive to hire more employees in Frankfurt and Berlin, according to one of the people familiar with its plans, as it seeks to rebuild its reputation with the country’s politicians.

For years it endured scandals and racked up billions in losses, but the bank has shown signs of improvement during the past 18 months under chief executive Christian Sewing.

Deutsche is not alone in relocating employees from London. HSBC plans to move as many as 1,000 traders and support staff to Paris, while Citigroup is moving 250 people from London, 150 of whom are going to Frankfurt. Consultancy EY estimates that London has lost 7,600 jobs and £1.3tn in assets since Brexit was announced.

But despite the moves, the UK capital remains by far the biggest financial centre in Europe.

FT : The Federal Reserve is no longer markets’ best friend (M EL-ERIAN)

The Federal Reserve is no longer markets’ best friend
Central bank and markets face tricky pivots to avoid damage from a policy mistake

I vividly remember a meeting in late 2007 with the head of a major US bank. The executive drew an inverted U in response to me asking where financial markets stood. When told that we were near the top, I immediately asked about the bank’s risk positioning. “Max risk on” was the rather surprising answer.

Surely, it was prudent to reduce risk ahead of an expected turning point? No, I was told. The bank needed “unambiguous evidence” that the markets were turning before altering its strategy. After all, it is hard to time inflection points, competitors also had lots of risk on, the bank feared short-term underperformance and the authorities were not ringing any alarm bells. In the event, the bank had to be rescued in the 2008 financial crisis.

Today, this institution (with a different chief executive) is better capitalised and more constrained in the risk-taking it takes. But the mindset and risk behaviour in play have not disappeared. They have morphed, migrated to, and grown in non-banks. Moreover, until very recently, central banks and other regulatory agencies have stood on the sidelines, acting as inadvertent enablers.

While the systemic threats in play are smaller, the financial system is vulnerable to market accidents that expose the economy to unnecessary risks. Already, the system has navigated three near-accidents this year: the sudden January surge in yields; the February retail investor uprising focused on retailer GameStop; and the March demise of a little-known family office Archegos that inflicted some $10bn in known losses on banks.

In all three cases, the disruptive spillovers on the financial system were contained by luck rather than crisis prevention measures. Lacking evidence of anything beyond a temporary disruption, the enormous risk-taking encouraged by the provision of liquidity by central banks resumed.

This was accompanied by a big slice of opportunistic positioning by some investors — an approach well captured by hedge fund manager Leon Cooperman’s cleverly-worded observation that he is a “fully invested bear”.

Yet the drivers of these near accidents should not be ignored. They are part of dry tinder that, if ignited, could risk a consequential financial accident. Fortunately, the central banking community is waking up, jolted by the spectre of inflation as well as financial instability.

As usual, the Bank of England is among those leading the pack with its recent statement that “continuing purchases” of assets under its quantitative easing programme could now slow somewhat. This lays down a marker for hiking interest rates down the road.

For its part, the European Central Bank warned last week of “remarkable exuberance” in markets, adding to earlier small signs of something many deemed unthinkable: The possibility of the ECB tapering QE before the Federal Reserve.

Fed officials had adopted a virtually universal adherence to a common set of speaking points dismissing inflation concerns and reiterating that the central bank was “not thinking about thinking” about tapering. However, the Fed policy meeting minutes released last week indicated that some officials would like to talk about the possibility “in upcoming meetings”.

The good news is that the Fed may now consider embarking on a policy correction that would help reduce the probability of a policy mishap similar to the mistake banks made back in 2007-08.

Less good is that the minutes suggested that only a few members of the Fed’s policy-setting committee are there; and that does not seem to include the chair. The timeline is vague and open ended. No wonder markets have paid little attention.

Having already waited for too long, the Fed faces a tricky policy pivot — especially as it is now hostage to a “new monetary framework” that is ill-suited for the pandemic-related structural changes to the economy.

As such, the pivot involves the twin risks of market volatility and loss of Fed credibility. Yet the alternative of dogmatically holding on to a backward-looking policy stance would threaten far greater damage.

For their part, investors should be encouraging the Fed to pivot rather than just focus on the continued joy of surfing the liquidity wave. Learning from the experience of banks in the financial crisis, it is better to risk some short-term discomfort than the durable larger damage that a bigger policy mistake would inflict on asset values, the functioning of markets, and economic and social wellbeing.

FT : Wellington hedge fund Salthill suffers losses in biotech missteps

Wellington hedge fund Salthill suffers losses in biotech missteps
Fund drew in large inflows but has struggled to navigate sector since pandemic struck

A biotechnology-focused hedge fund run by $1tn investment giant Wellington Management has been left nursing double-digit losses since the start of last year, even as the pandemic has sent the price of the biotechnology stocks it trades soaring.

Boston-based Wellington suffered a loss of around 11.6 per cent in its Salthill Partners hedge fund from the end of 2019 until the end of last month, according to investor documents seen by the Financial Times.

Over the same period the Nasdaq Biotech index has risen 28.5 per cent. Salthill’s loss shows that some funds have struggled to profit from the biotech sector even though stocks with higher growth prospects have rallied sharply and biotech has received a fillip from positive news on coronavirus vaccines.

The fund focuses on smaller-cap companies and was running low levels of risk at the end of the first quarter because of concerns about the impact of coronavirus on smaller-cap companies, said a person familiar with the fund’s positioning. 

Wellington declined to comment.

The Salthill fund, which has been running for nearly 20 years, raised hundreds of millions of dollars in early 2018, helping lift its assets to close to $1bn, according to fund documents seen by the FT. That came after five years of double-digit gains in the previous six years.

But the fund gained just 2.8 per cent last year, while the Nasdaq Biotech index rose 25.7 per cent, as it was slow to capitalise on the sharp market rebound from mid-March driven by central bank stimulus. It lost 8 per cent in March 2020’s market slump and suffered further losses in April and July that year. Documents show that while the fund made money on its bets on rising prices, it suffered from its bets on falling prices.

In the first four months of this year the fund has fallen 14 per cent, the documents show, while the Nasdaq Biotech index has gained 2.2 per cent. Some of the fund’s biggest positions have been hard hit this year, including Kodiak Sciences, down 45 per cent since the start of the year, and Seagen, down 11 per cent.

This year has proved particularly difficult for traders as the rally in biotech and other sectors with high valuations has started to fade. After a strong rally in the first five weeks of the year, managers have had to cope with a sharp sell-off as investors have switched out of more expensive so-called “growth” areas of the market and into beaten-down, so-called “value” sectors as lockdowns start to lift and economies rebound.

Salthill suffered losses of more than 8 per cent in January and March this year. It is now down 1.3 per cent over the past three years, whereas the Nasdaq Biotech index has gained more than 14 per cent.

Other hedge funds have also struggled this year. New York-based Perceptive Advisors’ $3.1bn Life Sciences fund has lost just over 25 per cent to mid-May, according to figures sent to investors, compared with a 1.3 per cent fall in the Nasdaq Biotech. That comes after it gained around 29 per cent last year.

Perceptive did not respond to a request for comment.

>>> US After Hours Summary: NDSN +3.5%, CRMT +2.9% higher on earnings; RIDE -9.9

After Hours Summary: NDSN +3.5%, CRMT +2.9% higher on earnings; RIDE -9.9% lower on earnings; JYNT +11.1% jumps on news it will be added to S&P SmallCap 600

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: NDSN +3.5%, CRMT +2.9%, ARCE +2.7%

Companies trading higher in after hours in reaction to news: JYNT +11.1% (to be added to the S&P SmallCap 600), HYFM +5% (to acquire House & Garden), SRRK +4.7% (apitegromab granted Fast Track designation for Spinal Muscular Atrophy), HCA +2.8% (Florida hospitals will adopt HCA Florida Healthcare brand starting in Sept), OCN +2% (to acquire $48 bln in bulk servicing rights from AmeriHome Mortgage), IRTC +0.8% (announces two new 510K clearances), BALY +0.6% (enters mobile sports betting market with launch of beta version of mobile sportsbook in Colorado), SQ +0.2% (preparing to offer checking and savings accounts, according to Bloomberg), CRS +0.1% (to increase base prices 6-9% on specialty alloys), SGMO +0.1% (names new CFO), BKR +0.1% (files mixed securities shelf offering)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: RIDE -9.9%, API -3.4%, ZY -2.5%

Companies trading lower in after hours in reaction to news: TLMD -10.7% (stock offering), OSH -5.1% (stock offering), THRY -4.6% (stock offering), GLOB -4% (stock offering), AZEK -3.3% (stock offering), EAF -2.8% (stock offering by selling shareholders), WOOF -2.7% (files for 22 mln share offering by selling shareholder), ALK -2.5% (provides update on its Q2 outlook for various measures), RIOT -1.8% (names new Exec Chair), REXR -0.7% (stock offering), LYTS -0.2% (acquires JSI Store Fixtures for $90 mln), KKR -0.1% (acquires three building industrial portfolio), LW -0.1% (names new CFO)