FT : Jack Ma’s Ant defies pressure from Beijing to share more customer data

Jack Ma’s Ant defies pressure from Beijing to share more customer data
Central bank frustrated with drip feed of user information in crackdown following pulled $37bn IPO

Ant Group has shared just a fraction of its consumer data with China’s central bank, defying intense government pressure to hand over more information after it was forced to pull its record $37bn initial public offering last year.

The data dispute is the latest front in a fight between Beijing and the financial technology group founded by Jack Ma, the country’s best-known entrepreneur, after officials halted the company’s IPO days before it was set to list in November.

Beijing’s intervention followed a speech by Ma in which he sharply criticised China’s regulators and state-owned banks. The billionaire, who previously founded ecommerce group Alibaba, has largely disappeared from public view since making the remarks. His fight with the authorities is the most prominent example of the growing tensions between the state and China’s private sector as President Xi Jinping seeks to exert tighter control over the economy.

The People’s Bank of China has long wanted to create a pool of credit data to help big state-owned banks assess creditworthiness as consumer loan defaults have increased.

The PBoC has also flagged concerns about the size of private companies such as Ant, hitting out at the “inappropriate collection and control of data” by “leading internet platforms that have abused their market monopoly".

Ant is China’s largest holder of consumer credit data and its Alipay app is the country’s biggest payments platform. The company offers two consumer-lending products: Huabei, which is similar to a conventional credit card; and Jiebei, which offers small unsecured loans through Alipay.

Ant had agreed to provide some information to a state-backed database on the 500m customers who have taken out loans, including their personal identities, monthly borrowing amounts and debt repayment statuses.

But the company has shared little of its data and the PBoC is unhappy with its progress, according to people with knowledge of the matter.


Ant has blamed privacy laws, as users must give their approval before the company can send their information to the central bank and only a fraction have agreed to do so. China’s data protection standards require companies to obtain consumers’ consent on how they use their data, including passing it on to third parties.

But the PBoC is pushing companies to find ways to share data, such as requiring consumers to agree to data-sharing as a condition of using their services — a measure Ant is loath to implement for fear of scaring off customers, according to former and current employees.

Chinese officials have also complained of a lack of detail in the data Ant has shared and the frequency with which it does so. The group submits condensed transaction records, which only include an aggregate figure, once a month to the central bank’s Credit Reference Center, the official collector of individual and corporate credit information. But officials said the frequency is too low from a risk management standpoint.

“A person who borrows once a month has a different risk profile from a person who borrows 10 times,” said a former PBoC official involved in fintech policymaking. “The current data sharing schedule isn’t enough for us to figure out who is more creditworthy.”

Beijing has asked Ant for greater disclosure, with the PBoC calling data collected by internet platforms a “public good” that should be regulated more closely.

Ant has agreed to share its consumer credit data on Jiebei and Huabei with the CRC in a “step-by-step” manner, said people with knowledge of the situation.

Ant and PBoC declined to comment.

Ant began reporting some transaction data on Jiebei to the CRC as early as 2018, according to public records.

The company also began sharing some data on Huabei shortly before the IPO was pulled.

Handling Ant’s data, however, poses a significant challenge for the PBoC, which lacks the expertise and technology to analyse it, people familiar with the matter said.

“While Ant has thousands of data scientists, we have a fraction of that number,” said a former PBoC official. “How do you expect us to understand and maintain what they have created?”

Another former PBoC official said: “No one has ever dealt with so much consumer finance data as Ant did. It requires expertise the central bank lacks.”

This is one reason some of Ant’s users have refused to share their data with the regulator.

“I don’t want to make my credit history at Ant available to the CRC as that may prevent me from taking bigger loans, like mortgages, from banks,” said David Wu, an office manager. “I have borrowed too many times from Jiebei and banks may see this as a red flag even though I have repaid my debt on time.”

Beijing’s attempts to take control of China’s privately held fintech data has led to criticism from analysts and industry participants that it could hamper financial innovation.

“Ant may become less active in collecting and analysing its user data if all of them end up in the hands of the government,” said Zou Chuanwei, an internet finance expert at Wanxiang Blockchain in Shanghai. “That could drag the industry down.”

FT : Spac led by tech founders targets Europe’s unicorns for US listings

Spac led by tech founders targets Europe’s unicorns for US listings
Tailwind International looks to bypass EU and UK markets to build a European tech franchise

Tailwind International, the New York-listed special purpose acquisition company, is searching for European tech unicorns to list in the US as part of plans to bypass EU and UK markets and build a multibillion-dollar franchise of Europe-based businesses.

Tailwind, which says it is the first Spac where a group of European tech founders will focus on investing in the region’s tech companies, raised $345m on the New York Stock Exchange last month with the intention of taking a European tech group public in the US. 

Tommy Stadlen, co-founder of venture capital fund Giant and the Spac’s chair, said: “We will bring one of Europe’s iconic technology companies to the US public markets.”

Pierre Denis, former Jimmy Choo chief executive and Coty board member, is the chief executive. Nathalie Gaveau, co-founder of French ecommerce site PriceMinister, is president and other sponsors include the co-founders of luxury online retailer MatchesFashion and German meal kit delivery business HelloFresh.

Philip Krim, the co-founder of online mattress start-up Casper, is a co-founder.

The number of Spacs — which list on the stock exchange before they find a business to buy — has grown rapidly in the US in the past few months as investors have piled in with the hope of acquiring stakes in promising target businesses.

In February alone a total of 174 Spacs filed or priced for expected gross proceeds of $56bn, according to data from FactSet.

So far this year, there have been more than 180 Spac filings, against last year’s total of nearly 250, which was the highest in five years.

European tech groups, including the UK’s used car site Cazoo and health app Babylon, have already held talks with US Spacs. 

The Tailwind team is planning to launch a series of Spacs to build out the franchise. The minimum size of any target would be $1bn, Stadlen said, ranging up to $15bn, with the potential to raise additional equity.

He said the UK would be a focus owing to the larger numbers of promising tech companies, alongside France, Germany and the Nordic nations.

In a sign of booming demand among investors, Tailwind increased the size of the listing from $250m to the maximum of $300m, and also exercised the “greenshoe option” that allowed its underwriters to buy up further shares, taking the total to $345m. People close to the process said there was $3bn of demand for the initial public offering. 

Stadlen said Tailwind would have an advantage in being run by tech founders — pointing out that operator-led Spacs outperformed peers — and that a “multi-Spac” platform was more likely to succeed because of access to resources.

Tailwind has already had conversations with European venture capital firms and founders to discuss potential US listings of their businesses, he said.

He added that European exchanges had been unattractive to tech listings because they offered lower potential returns. Only two have listed in Europe so far this year, according to Refinitiv. A US Spac offers founders access to US markets where there were “more capital and better valuations”. 

Bankers in London are keen for the UK government to change the listing rules on Spacs to compete with New York and rival cities in Europe. At present, a Spac acquisition in the UK is considered a reverse takeover and the shares are suspended. Trading cannot resume until a deal prospectus is published, for which there is no specified deadline, so investors who want to sell their shares can find themselves locked in.

Bankers in London have talked up Amsterdam as Europe’s hub for Spacs, while German venture capitalist Klaus Hommels launched a European tech-focused Spac, Lakestar, in Frankfurt last week, the first on the Xetra market in a decade.

“We are open to Spacs as a product and have all the conditions in place for more of these to go public in Germany. They have been the go-to topic in most calls with issuers, banks, and lawyers over the past six months so we expect Spac listings to accelerate in Europe,” said Renata Bandov, head of capital markets at Deutsche Börse.

“In the post-Brexit environment, UK-listed companies cannot currently passport their prospectuses into the EU so we anticipate a higher influx of dual listings.”

FT : Private equity chiefs get bumper payouts on back of Fed stimulus

Private equity chiefs get bumper payouts on back of Fed stimulus
Stephen Schwarzman and Leon Black take home nine-figure sums for 2020 — despite faltering economy

Private equity executives who rank among the richest men on Wall Street received hundreds of millions of dollars in payouts even as the US economy faltered last year, helped by central bank stimulus that wiped out the investment losses they recorded early in the pandemic.

Blackstone founder Stephen Schwarzman received at least $615m, most of it in dividends. That is one-fifth more than he earned the previous year, as strong investment returns and inflows of fee-paying capital boosted earnings at the world’s biggest private equity firm.

At Apollo Global Management, Leon Black took home at least $225m — slightly more than the amount he has pledged to donate to causes that “protect and empower women” following revelations of his professional ties to the late sex offender Jeffrey Epstein.

Top executives at private equity firms typically receive salaries that are modest by the standards of public companies. But many of them are also entitled to receive “carried interest”, giving them a share of the profits on successful investments. And some are significant shareholders, meaning that they receive sizeable dividends.

That arrangement has proved especially lucrative for the firms’ ageing founders, who retain outsize equity stakes even as a new generation of executives begin to take centre stage.

KKR co-founders Henry Kravis and George Roberts took home roughly $90m each.

The bumper payouts contrast with staggering paper losses that the private capital sector recorded early in the pandemic, as businesses were forced to close, unemployment hit record highs and credit markets seized up in anticipation of a wave of business failures.

As markets plummeted in late March last year, Apollo calculated that its partners and employees would have had to hand back $390m in performance-related pay if its portfolio had been liquidated at pandemic-hit valuations.

That prospect receded within weeks, as the Federal Reserve announced an unprecedented programme of monetary stimulus. By the end of 2020, shares in Blackstone, Apollo and KKR roughly doubled from their March lows.

A leading advocate of aggressive Fed action was Marc Rowan, the Apollo co-founder who is due to take over from Black as chief executive this year.

In correspondence with President Donald Trump’s son-in-law Jared Kushner, he urged an expansion of the Fed’s purchases of securitised debt, which was buoying the price of assets similar to those held or managed by Apollo and its peers.

Rowan received dividends of at least $89.5m.

Meanwhile, private equity firms have found new ways to profit from frenzied markets. Apollo provided rescue financing to the online travel agency Expedia and the stricken car rental company Hertz. Blackstone is set to earn billions of dollars in profits from the initial public offerings of the dating app Bumble and the milk substitute brand Oatly, fast-growing businesses that it backed over the past two years.

Jonathan Gray, Blackstone’s chief operating officer and president, took home $93m in dividends last year, in addition to $86m in cash earnings and a $37m stock award.

Blackstone said that pay for its executives was “directly tied to investor and shareholder performance. Our investment performance is driven by thoughtfully deploying capital in the right sectors and delivering for our clients over the long term.”

FT : Chinese electric carmaker Nio warns of hit from global chip shortage

Chinese electric carmaker Nio warns of hit from global chip shortage
US-listed shares in China’s leading Tesla challenger slide after quarterly loss widens

Nio, China’s leading challenger to Tesla, warned that battery and chip supply constraints would limit production as the electric vehicle maker tries to sustain sales growth amid fierce domestic competition.

New York-listed Nio’s revenue rose to Rmb6.64bn ($1.02bn) in the fourth quarter, up 46.7 per cent from the preceding three-month period, the company said after US markets closed on Monday, as vehicle sales increased 111 per cent year on year to 17,353.

However, the company posted a net loss of Rmb1.4bn in the final quarter of last year, 33 per cent wider than the previous quarter and larger than the Rmb576m loss analysts expected, according to Bloomberg. Shares in Nio fell as much as 7 per cent in after-hours trading.

Nio has predicted sales growth of 15 to 18 per cent for the first quarter of 2021, after notching record sales in January as China’s economy continued its recovery from the coronavirus pandemic.

However, William Li, chief executive, said disruption from global chip shortages and battery supply constraints had the potential to limit production in the second quarter. “We should have the chip supply to meet domestic demand but the risk is still quite high,” he said.

Edison Yu, a New York-based analyst for Deutsche Bank, said chip supply issues would probably be resolved by the third quarter and battery constraints were mainly due to heavy demand for a new larger battery pack model.

“In the autos ecosystem, you are only as strong your weakest link and in this case you have two weak links but I don’t think that will be disappointing for investors, as it also shows the magnitude of demand [for Nio],” he said.

While Nio is riding high again after a $1bn cash infusion from state-owned enterprises last April that averted a cash crunch, competition is mounting — particularly from Tesla’s China-manufactured Model Y, an electric crossover that began deliveries in January.

A flood of funding into Chinese electric vehicle start-ups last year boosted local rivals Xpeng and Li Auto. The two have begun encroaching on Nio’s lead at home: Xpeng’s sales rose 470 per cent in January from the previous year, while Li Auto’s climbed 355.8 per cent.

Nio shares soared more than 1,000 per cent last year, though they have retreated from February highs, as have those of many rivals.

Li downplayed any threat from the Model Y, saying Tesla pumped up sales by cutting prices to spur short-term demand. “We believe we will be able to secure a strong footing in the market rather than using those short term practices,” he said.

To boost sales, Nio will extend its network of fancy — and expensive — showrooms that double up as libraries, coffee shops and shared office spaces, adding 20 locations across China this year to its current 23.

Sales in China’s electric car market, the world’s largest, recovered rapidly in the second half of 2020, fuelled by the country’s success in containing Covid-19. However, the increasingly crowded sector accounts for only about 5 per cent of China’s total car sales.

>>> Europe : Brokers Upgrades & Downgrades - 2nd of March 2021

>>> Up
* Befesa PT Raised to 68 euros from 41 euros at Berenberg
* Daimler Raised to Reduce at AlphaValue
* Huhtamaki Raised to Hold at Jefferies; PT 38.30 euros
* ICADE Raised to Overweight at Morgan Stanley; PT 69 euros
* I-RES Raised to Buy at Berenberg; PT 1.75 euros
* Kerry Group Raised to Overweight at JPMorgan; PT 120 euros
* Nestle Raised to Buy at AlphaValue
* L'Oreal Raised to Overweight at Morgan Stanley; PT 350 euros
* Prudential Raised to Outperform at RBC; PT 1,800 pence
* Stellantis NV Raised to Buy at AlphaValue
* Temenos Raised to Overweight at Barclays; PT 150 Swiss francs
* Uniper Raised to Equal-Weight at Barclays; PT 30 euros
* Virbac Raised to Buy at Jefferies; PT 260 euros
* VW Raised to Add at AlphaValue

>>> Down
* ADS Maritime Holding Cut to Hold at Arctic Securities
* CA Immo Cut to Hold at Wood & Company; PT 41 euros
* Dechra Pharma Cut to Hold at Jefferies; PT 3,740 pence
* Entra Cut to Hold at DNB Markets; PT 195 kroner
* Remy Cointreau Cut to Equal-Weight at Barclays; PT 173 euros
* SIG Combibloc Cut to Neutral at Citi
* Software AG Cut to Underweight at Barclays; PT 31.50 euros

>>> Initiation
* Embracer Group AB Rated New Buy at HSBC; PT 290 kronor
* Grand City Properties Rated New Buy at SocGen; PT 25 euros
* MDxHealth Rated New Outperform at Oppenheimer; PT 2 euros
* Stillfront Rated New Reduce at HSBC; PT 80 kronor
* TAG Immobilien Rated New Buy at SocGen; PT 28.60 euros
* Technip Energies Rated New Neutral at Exane; PT 10.70 euros
* Tritax EuroBox Rated New Buy at Peel Hunt

>>> Call

>>> What to look at today - 2nd of February 2021

Most Asian stocks slipped Tuesday along with U.S. and European equity futures as investors weighed the impact of the recent climb in bond yields and a Chinese official’s warning about asset bubbles. The dollar rose.
Shares in China and Hong Kong led the regional decline. S&P 500 and Nasdaq 100 futures turned lower. China is “very worried” about bubbles in overseas financial markets, China Banking and Insurance Regulatory Commission Chairman Guo Shuqing said at a briefing. Treasury yields were steady.
Guo also said he’s worried about risks in China’s property sector, sparking fresh concerns about further tightening in the world’s second-biggest economy.
Oil retreated to trade just below $60 a barrel ahead of a key OPEC+ meeting this week. Metals including copper, silver and gold slid. In Australia, bond yields rose after the central bank left its asset purchase plan unchanged.
US After Hours ZM +8.6%, TTEC +8.3% jump on earnings; AI -11.4%, INSG -11.1%, MBI -11%, LMND -7.8% fall on earnings

Nikkei -0.86% Hang Seng -0.97% CSI -1.32% Shanghai -1.21% Shenzen -0.75%

Eur$ 1.2021 CNH 6.4797 CNY 6.4722 JPY 106.84 GBP 1.3886 CHF 0.9159 RUB 74.5589 TRY 7.3021 WTI$ 59.99 -1.07% GOLD 1,721.85 -0.18% BTC 48,700 +86

S&P -0.30% Nasdaq -0.30% EuroStoxx -0.24% FTSE -0.22% Dax -0.28% SMI

Macro :
- China Warns on Asset Bubbles and Stocks Retreat
- Dan Loeb Is Latest Billionaire to Dive Into the World of Crypto
- Ant Tells Staff It Will Find Solution for Unsellable Shares

SPAC :
- Microsoft-Backed Bukalapak Is Said to Mull U.S. Listing Via SPAC
- Goldman’s Kostin Says SPACs Are Getting ‘Bigger, Louder, Faster’

Keep an eye on :
- ARBN SW : Arbonia FY Adjusted Ebitda CHF159.2M
- ATL IM : Atlantia to Send Letter to CDP Seeking Revised Bid: Messaggero
- BMW GY : VW and BMW’s Car-Charging Venture Plots Europe Network Expansion
- ACA FP : Credit Agricole: Block Purchase Pact for 800,000 Creval Shares
- CSGN SW : Greensill Discussing Insolvency After Credit Suisse Fund Freeze
- BN FP : Danone to Separate Chairman, CEO Roles
- DIE BB : Belgian February Car Registrations Drop 22%; D’Ieteren Has 20.4%
- EDEN FP : Edenred Sees 2021 Organic Ebitda At Least +6%
- EMMN SW : Emmi Sees 2021 Ebit CHF275M to CHF290M
- HFG GY : HelloFresh 4Q Revenue Beats Estimates
- IFX GY : Infineon to Replace Nokia in Euro Stoxx 50 Index: Qontigo
- INPST NA : InPost Jumps as DPD Confirms Strong Growth of Volume in Poland
- ITP FP : Interparfums FY Operating Margin 12.8%
- ISN SW : Intershop FY Net Income CHF78.4M Vs. CHF71M Y/y
- KER FP : Vestiaire Collective Gets EU178m Round Backed by Kering, Tiger
- KGX GY : Kion Sees 2021 Adjusted Ebit EU720M to EU800M, Est. EU761.4M
- LISN SW : Lindt & Spruengli FY Ebit CHF420.3M Vs. CHF593M Y/y
- ML FP : Michelin to Raise Prices by Up To 8% on Some Tires in N. America
- MOR GY : MorphoSys Prelim FY Ebit EU27.4M
- NOKIA FH : Infineon to Replace Nokia in Euro Stoxx 50 Index: Qontigo (1)
- OERL SW : Oerlikon Sees 2021 Sales CHF2.35B to CHF2.45B, Est. CHF2.38B
- ORSTED DC : Orsted Chairman Expects to Keep Market-Leading Position: Borsen
- SAP GY : SAP to Pay $2.2m to Settle U.S. False Claims Act Allegations
- SBBB SS : SBB Outlook Revised to Positive From Stable at S&PGR
- SIX2 GY : Sixt FY Pretax Loss EU81.5M, Est. Loss EU85.7M
- SIX2 GY : Sixt Says Chairman Erich Sixt to Resign; Appoints Co-CEOs
- SLHN SW : Swiss Life FY Adj. Oper Profit CHF1.57B Vs. CHF1.69B Y/y
- STLN SW : Swiss Steel Expects ~EU200m Gross Proceeds From Capital Increase
- SEV FP : Suez-Veolia Takeover Talks May Happen in Coming Days, Camus Says
- THIN NO : ThinFilm Offering of 68.9m Shares Prices at NOK82/Share
- VOLVB SS : Volvo Cars to Go Electric-Only And Shift Sales Online From 2030
- VOW3 GY : VW and BMW’s Car-Charging Venture Plots Europe Network Expansion

>>> US After Hours Summary: ZM +8.6%, TTEC +8.3% jump on earnings; AI -11.4%, IN

After Hours Summary: ZM +8.6%, TTEC +8.3% jump on earnings; AI -11.4%, INSG -11.1%, MBI -11%, LMND -7.8% fall on earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: ZM +8.6%, TTEC +8.3% (also to acquire Avtex and increases dividend by 7.5%), AMRC +6.6%, NCMI +6.4%, HLIO +5.8%, RPAY +1.9%, DDD +1.6%, AIV +1.1%

Companies trading higher in after hours in reaction to news: INUV +35.9% (Vertro unit enters into Google Services Agreement), TMDX +10.2% (announces scheduling of FDA Advisory Committee meeting for OCS Heart System), PSN +7.7% (awarded Air Force contract with shared value of $2 bln), GSX +7.4% (says its internal review did not uncover evidence that would have a material impact on financial statements), NLSN +5.3% (ROKU and NLSN announce strategic alliance; Roku to acquire NLSN's Advanced Video Advertising business), ROKU +3.7% (ROKU and NLSN announce strategic alliance; Roku to acquire NLSN's Advanced Video Advertising business), EDIT +1.4% (files for mixed securities shelf offering), CORT +1.3% (names new CFO), POOL +1% (CFO to retire), IGT +1% (IGT and SGMS announce cross-licensing agreement for cashless gaming), M +0.9% (COO to depart), MS +0.4% (stock offering), QURE +0.4% (files for mixed securities shelf offering), JBT +0.1% (acquires AutoCoding Systems for $17 mln), FRC +0.1% (stock offering), JELD +0.1% (stock offering), COO +0.1% (acquires Safe Obstetric Systems), KR +0.1% (COO retires), SHW +0.1% (COO to resign), KNL +0.1% (stock offering), AMK +0.1% (to acquire Voyant for $145 mln), ACN +0.1% (acquires Australia-based GRA), CDAY +0.1% (convertible notes offering)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: FGEN -20.8% (also FGEN and AZN regulatory update on roxadustat; FDA to hold advisory committee meeting to review NDA), AI -11.4%, INSG -11.1%, MBI -11%, LMND -7.8%, RGNX -7%, NIO -6.1%, NVAX -5.9%, SWCH -5.5%, CLOV -4.1%, SRPT -3.9%, OSUR -3.7%, INO -3% (also announces "positive" results from Phase 3 REVEAL 1 trial), MELI -2.6%, SILK -2.4%, APPF -2.4%, NSTG -1.7%, OOMA -0.5%

Companies trading lower in after hours in reaction to news: NTAP -29.1% (files for mixed securities shelf offering), RDHL -11.5% (enters into underwriting agreement with H.C. Wainwright), MORF -8.5% (stock offering), SLQT -5.4% (stock offering), COHU -5.3% (stock offering), ASLN -4.8% (stock offering), SITC -3.5% (stock offering), EAF -3.2% (stock offering), BYND -2.9% (convertible notes offering), WSC -2.5% (stock offering), ATRA -2.4% (announces earnings; also files for mixed securities shelf offering), BCRX -1.5% (files for mixed securities shelf offering), GMDA -1.2% (stock offering), CDLX -1% (commences public offering of $500 mln of shares; also files for mixed securities shelf offering), PRU -0.6% (files for mixed securities shelf offering), AZN -0.2% (FGEN and AZN regulatory update on roxadustat; FDA to hold advisory committee meeting to review NDA), ORA -0.1% (says "comments in short seller report are inaccurate, false and misleading")

>>> US Close Dow +1.95% S&P +2.38% Nasdaq +3.01% Russell 3.37%

Closing Stock Market Summary

The S&P 500 rallied 2.4% on Monday, as investors indiscriminately bought last week's dip amid a host of positive-sounding developments. The Nasdaq Composite (+3.0%) and Russell 2000 (+3.4%) rose at least 3.0%, while the Dow Jones Industrial Average (+2.0%) followed behind with a 2.0% gain.

All 11 S&P 500 sectors contributed to the steady advance, eight of which advanced more than 2.0%. The information technology (+3.2%) and financials (+3.1%) sectors finished as influential leaders, while the real estate sector (+0.2%) underperformed with a modest gain after a strong start.  

From a news perspective, sentiment was boosted after the FDA authorized Johnson & Johnson's (JNJ 159.32, +0.86, +0.5%) COVID-19 vaccine for emergency use, the House passed the $1.9 trillion stimulus bill (handing it over to the Senate), manufacturing PMIs for February out of the U.S., Europe, and Japan exceeded expectations, and Warren Buffett reminded investors to "never bet against America" in his annual shareholder letter. 

Specifying the U.S. data, the ISM Manufacturing Index for February jumped to 60.8% (Briefing.com consensus 58.8%) from 58.7% in January, matching the August 2018 reading as the highest since May 2004. It's also worth noting that February was the ninth straight month of expansionary activity (above 50.0%).

Other supporting factors included a calmer Treasury market, first-of-the-month inflows, and a fear of missing on further gains. The latter was likely exacerbated by the recognition that the S&P 500 bounced so strongly off its 50-day moving average (3813) after closing just above it last Friday, which ended on a disappointing note. 

In corporate news, United Airlines (UAL 53.31, +0.63, +1.2%) reportedly ordered 25 additional 737 MAX planes from Boeing (BA 224.39, +12.38, +5.8%), Exxon Mobil (XOM 56.40, +2.03, +3.7%) named two new board members, and Royal Caribbean (RCL 91.31, -1.96, -2.1%) priced a common stock offering at $91 per share. 

The 2-yr yield decreased two basis points to 0.12%, and the 10-yr yield decreased one basis point to 1.45%. The U.S. Dollar Index increased 0.2% to 91.04. WTI crude futures decreased 1.5%, or $0.91, to $60.54/bbl ahead of an OPEC+ meeting later this week. 

Reviewing Monday's economic data:

  • The ISM Manufacturing Index for February jumped to 60.8% (consensus 58.8%) from 58.7% in January, matching the August 2018 reading as the highest since May 2004. The dividing line between expansion and contraction is 50.0%. February marked the ninth straight month the ISM Manufacturing Index has been above 50.0%.
    • The key takeaway from the report is the recognition that all 18 industries reported paying higher prices for raw materials in February. That contributed to the Prices Index hitting its highest level since May 2008 and should continue to fuel concerns about potential pass-through pressures to end users.
  • Total construction spending increased 1.7% m/m in January (consensus 0.6%) after increasing an upwardly revised 1.1% (from 1.0%) in December. Total private construction spending rose 1.7% m/m and total public construction spending increased 1.7%.
    • The key takeaway from the report is that the strength was driven by gains in both private and public construction spending.
  • The February IHS Markit Manufacturing PMI increased to 58.6 from 58.5 in January.

Looking ahead to Tuesday, investors will receive the ISM Non-Manufacturing Index for February, the ADP Employment Change report for February, the final IHS Markit Services PMI for February, the Fed's Beige Book for March, and the weekly MBA Mortgage Applications Index. 

  • Russell 2000 +15.2% YTD
  • Nasdaq Composite +5.4% YTD
  • S&P 500 +3.9% YTD
  • Dow Jones Industrial Average +3.0% YTD

>>> Europe : Brokers Upgrades & Downgrades - 1st of March 2021 V2(+)

>>> Up
* Adevinta Raised to Buy at Deutsche Bank; PT 160 kroner
* *AMADEUS RAISED TO NEUTRAL FROM UNDERPERFORM AT ODDO; PT EU57 (+)
* Carlsberg Raised to Buy at Handelsbanken; PT 1,100 kroner
* Cibus Nordic Real Estate Raised to Buy at Pareto Securities
* Just Eat Takeaway Raised to Buy at Deutsche Bank; PT 116 euros
* Kering Raised to Buy at Jefferies; PT 630 euros
* Lundbergforetagen Raised to Hold at Pareto Securities
* Orsted Raised to Hold at ABG; PT 1,100 kroner
* Pennon Raised to Overweight at Barclays; PT 1,060 pence
* Pennon Raised to Buy at Citi; PT 1,034 pence (+)
* RTL Raised to Buy at Deutsche Bank; PT 53 euros
* Schibsted Raised to Buy at Deutsche Bank
* Solarpack Corp. Tecnologica Raised to Buy at SocGen; PT 28 euros
* Swatch Raised to Buy at Stifel; PT 315 Swiss francs
* Verdipapirfondet Storebrand Stat Raised to Buy at Deutsche Bank
* Wolters Kluwer Raised to Neutral at Goldman; PT 72.60 euros

>>> Down
* AMS Cut to Hold at Deutsche Bank
* Fortum Cut to Hold at Nordea
* Prosegur Cash Cut to Hold at Mirabaud Securities
* Superdry Cut to Hold at Jefferies; PT 280 pence
* TechnipFMC Cut to Equal-Weight at Morgan Stanley; PT $8.80
* VW Cut to Hold at Independent Research; PT 184 euros (+)

>>> Initiation
* Carnival Plc Rated New Buy at Peel Hunt; PT 1,850 pence
* Granges Rated New Buy at Nordea; PT 140 kronor (+)
* Ocado Rated New Reduce at Kepler Cheuvreux; PT 1,646 pence
* Royal Mail Rated New Hold at Peel Hunt; PT 475 pence
* Technip Energies Rated New Overweight at JPMorgan
* Technip Energies Rated New Overweight at Morgan Stanley

>>> Call
* Carlsberg Offers Upside Potential Post Pandemic: Handelsbanken
* Logitech’s Outlook Prompts New Street-High PT at Vontobel (+)
* Ocado Initiated With Reduce at Kepler on Tougher Competition (+)
* Pennon Upgraded at Barclays on Sector-Leading Returns, Valuation
* Swatch Upgraded at Stifel on China Exposure, Margin Trend (+)
* Wm Morrison’s Extended Pact Shows Wholesale Progress: Jefferies (+)