>>> What to look at today - 12th of January 2021

Asian equities traded mixed Tuesday after U.S. stocks fell for the first time in five sessions with prices near all-time highs. The dollarextended its climb as Treasury yields reached the highest level since March.
Shares were steady in Japan but slid in South Korea after a sharp rally this year. S&P 500 and European futures were little changed. Malaysia’s stocks and currency fell after it declared a state of emergency to help fight a jump in coronavirus cases. Bitcoin steadied after dropping as much as 20% on Monday. Gold halted a losing run, and West Texas Intermediate oil held near $52 a barrel.
With 10-year Treasury yields at about 1.15%, investors are assessing potential risks to the current environment of easy financial conditions and how that could reset expectations for a range of asset classes. Yields have risen on bets that Democratic lawmakers will enact big spending packages to drive the economic recovery out the pandemic.
US After Hours Seeing some movers from earnings/guidance: VOXX +62.6%, MATX +9%, GNMK +6.7%; WMT +1.4% rises as it creates fintech startup

Nikkei +0.07% Hang Seng +0.95% CSI +2.61% Shanghai +1.95% Shenzen +1.64%

Eur$ 1.2144 CNH 6.4699 CNY 6.4706 JPY 104.30 GBP 1.3530 CHF 0.8912RUB 74.7417 TRY 7.4755 WTI$ 52.17 -0.02%

S&P +0.14% Nasdaq +0.19% EuroStoxx +0.17% FTSE +0.11% Dax +0.16% SMI +0.15%

Macro :
- Euro Area Heads for Double-Dip Recession as Lockdowns Drag On
- U.K. Faces Harder Lockdown Restrictions as Covid Infections Soar
- Italy’s Coalition at Risk With Former Leader Threatening to Quit
- FED'S KAPLAN SEES U.S. GDP SHRINKING 2.25% TO 2.5% IN 2020
- Chris Rokos’s Macro Hedge Fund Surges 44% in Best Year Ever

Keep an eye on :
- AIR FP : Former Airbus CEO Joins Board of Electric-Flight Startup Lilium
- BO DC : B&O 2Q Revenue DKK693M
- BME LN : B&M European Value Retail Holder to Sell Up to 40m Shares, Expected to Price at 545p
- BILL SS : Billerudkorsnas Proposes Jan Svensson as New Chairman
- EN FP : Bouygues Wins Rhode Island Tunnel Contract Worth EU256M
- BC IM : Brunello Cucinelli FY Revenue Beats Estimates
- CGG FP : CGG Prelim 4Q Segment Revenue $282M
- DBK GY : Trump’s Long-Favored Banks Pull Back Amid Fallout From D.C. Riot
- EGL PL : Mota Signs $1.8b Contract for Railway Project in Nigeria, Niger
- EUCAR FP : Europcar Financial Safeguard Proceedings Extended (Earlier)
- FBK IM : FinecoBank to Grow on Standalone Basis, No M&A: CEO Tells Sole
- F US : Ford Sees $4.1 Billion Charge on Three Brazil Plant Closures
- GRE SM : Grenergy Closes $91M Senior Secured Facilities Led by Natixis
- HOME SM : Neinor to Buy Rival Quabit in All-Share Deal in Expansion Drive
- INRW SW : Interroll Names Ingo Steinkrueger CEO From May 1
- LUN DC : Lundbeck, Rigshospitalet Form Partnership on Brain Diseases
- MKS LN : Marks & Spencer to Acquire Jaeger: FT
- MAERSKB DC : Maersk Sees Little Change in Tight Shipping Supply in Foreseeable Future
- NIO US : NIO to Offer $1.3B Conv Sr Notes
- PRY IM : Prysmian 10m Share Sale by Clubtre Order Book Is Covered: Terms,
- PUB FP : Publicis Wins L’Oreal China Media Account in 3-Yr Contract
- S30 FP : Solutions 30 Signs EU210M Contract With Telecom Italia
- SAS SS : SAS CEO Gustafson Will Depart by July 1 After 10 Years in Role
- SGRE SM : Siemens Gamesa Starts Proceedings to Close Spanish 2 Plants
- SIKA SW : Sika FY Sales Meet Estimates
- SKFB SS : SKF Names Rickard Gustafson as President, CEO
- STM FP : TSMC’s Surging Profit Cements Kingpin Role in Global Chip Crunch
- SEV FP : Hong Kong’s New World to Raise $840 Million From Asset Sales
- TIT IM : Solutions 30 Signs EU210M Contract With Telecom Italia
- UBER US : SoftBank Sold 38m Uber Shares at $53.46/Share, Holds 184.2m
- UBSG SW : UBS Set to Double Asset Management Footprint in China Expansion
- UBSG SW : UBS to Close One in Five Swiss Retail Branches, NZZ Reports
- VOW3 GY : Volkswagen Considers Recall of All New Golf Vehicles, FAZ Says
- WOSG LN : Apollo to Sell GBP220m Stake in Watches of Switzerland: Terms

>>> Europe : Brokers Upgrades & Downgrades - 12th of January 202

>>> Up
* Abcam Raised to Outperform at RBC; PT 1,750 pence
* BASF Raised to Outperform at Bernstein; PT 78 euros
* Dialog Semi PT Raised to 60 euros from 50 euros at Deutsche Bank
* Infineon PT Raised to 40 euros from 33 euros at Deutsche Bank
* Siltronic PT Raised to 150 euros from 135 euros at Deutsche Bank
* Sodexo Raised to Neutral at JPMorgan; PT 80 euros

>>> Down
* Clarkson Cut to Neutral at JPMorgan; PT 2,960 pence
* DSM Cut to Underperform at Bernstein; PT 121 euros
* Fresenius SE ADRs Cut to Underperform at Jefferies; PT $10.10
* Granges Re-Initiated Buy at Handelsbanken; PT 125 kronor
* Hapag-Lloyd Cut to Neutral at JPMorgan; PT 101.71 euros
* KBC Group Cut to Hold at Deutsche Bank; PT 61 euros
* Partners Group Cut to Neutral at Exane; PT 1,130 Swiss francs

>>> Initiation
* Conduit Holdings/Bermuda Rated New Buy at Jefferies
* Lenzing Rated New Buy at Stifel; PT 109 euros
* Meyer Burger Rated New Add at Baader Helvea
* Peugeot Resumed Equal-Weight at Morgan Stanley; PT 25 euros
* Shell ADRs Rated New Buy at Mizuho Securities; PT $51
* Total SE ADRs Rated New Neutral at Mizuho Securities; PT $49

>>> Call
* Berenberg Sees Mixed 2021 for Media, Cuts CD Projekt, JCDecaux
* Citi ‘Structurally’ Positive on Heineken, With Strategy in Focus
* Peugeot, Fiat Merger Brings Synergy Potential: Morgan Stanley

>>> After Hours Summary: Seeing some movers from earnings/guidance: VOXX +62.6%,

After Hours Summary: Seeing some movers from earnings/guidance: VOXX +62.6%, MATX +9%, GNMK +6.7%; WMT +1.4% rises as it creates fintech startup

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: VOXX +62.6%, MATX +9% (guides Q4 EPS above consensus), GNMK +6.7% (issues upside Q4 rev guidance), CNXC +3%, PSNL +2.4% (issues modest upside Q4 rev guidance), AMN +1.6% (guides Q4 revs above consensus), ACIA +1.3% (issues upside Q4 EPS guidance, inline rev guidance; also files counterclaim against CSCO), THC +0.1%

Companies trading higher in after hours in reaction to news: TTOO +33.1% (says its T2SARS-CoV-2 Panel is capable of detecting multiple variants), FTFT +14.1% (bounces after big drop on Monday; WMT's creation of new fintech startup seen as possible catalyst), PXLW +13.4% (signs new multi-year collaboration agreement with TCL), QTRX +7.9% (receives FDA EAU for Simoa SARS-CoV-2 N Protein Antigen Test), EYPT +3.6% (provides clinical update and product revenue guidance), ANGI +2.1% (reports Dec operating metrics), BGNE +2.1% (BGNE announces a collaboration with NVS), FLR +2% (awarded reimbursable services contract), ADPT +1.9% (ADPT announces collaboration with AZN), WMT +1.4% (creates fintech startup in partnership with Ribbit Capital), NVS +1.1% (BGNE announces a collaboration with NVS), MRUS +1% (announces presentation of Phase 1 Clinical Data), INTC +0.9% (announces four new processor families at CES 2021), TAK +0.8% (provides pipeline update and shares goal to increase revs by 50% by FY2030), USAS +0.7% (declares commercial production at Relief Canyon), IAC +0.5% (reports Dec operating metrics), ET +0.4% (new CFO), DOCU +0.4% (notes offering), RADA +0.4% (files for $100 mln mixed securities shelf offering; also to duel list in Tel Aviv), FB +0.3% (removing content containing the phrase "stop the steal"), NUE +0.3% (steel cos urge Biden to maintain steel tariffs, according to Reuters), X +0.3% (steel cos urge Biden to maintain steel tariffs, according to Reuters), ICE +0.3% (Bakkt unit to go public via SPAC, according to Business Insider), NFLX +0.2% (signs movie deal with Kevin Hart), AZN +0.1% (ADPT announces collaboration with AZN), CNS +0.1% (reports Dec AUM), PBH +0.1% (S&P outlook revised to positive from stable)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SNX -1.3% (also reinstates dividend), ANF -0.2% (raises lower end of JanQ rev guidance), A -0.1%

Companies trading lower in after hours in reaction to news: RDHL -9.3% (announces $10 mln bought deal offering), LMND -6.9% (stock offering), GDOT -3.8% (WMT fintech deal seen as a negative for GDOT), WTI -2.7% (provides operational and financial update), NIO -2.2% (convertible notes offering), O -2% (stock offering), MGI -1.3% (WMT fintech deal seen as a negative for MGI), RRC -1.1% (finalizes contract with US Well Services), AMK -0.2% (reports platform assets), F -0.1% (to cease manufacturing in Brazil, according to FT)

>>> US Close Dow -0.29% S&P -0.66% Nasdaq -1.25% Russell -0.03%

Closing Stock Market Summary

The S&P 500 declined 0.7% on Monday in a tech-driven decline that was more pronounced in the Nasdaq Composite (-1.3%). The Dow Jones Industrial Average (-0.3%) and Russell 2000 (-0.03%) finished closer to their flat lines amid relative strength in health care and cyclical stocks.  

Technology stocks succumbed to profit-taking interest amid a continued rise in interest rates and renewed regulatory concerns after a host of companies like Facebook (FB 256.84, -10.73, -4.0%) and Twitter (TWTR 48.18, -3.30, -6.4%) restricted President Trump's online influence over the weekend. 

Accordingly, the communication services (-1.8%), consumer discretionary (-1.9%), and information technology (-0.9%) sectors joined the rate-sensitive real estate (-1.7%) and utilities (-0.9%) sectors at the bottom of the standings. Tesla (TSLA 811.19, -68.83, -7.8%) shares pulled back 8% despite BoA Securities raising its price target on the stock to a Street-high $900 from $500.

Outside these groups, investors continued to put faith in an economic recovery, evident by the outperformances of the cyclical energy (+1.6%), financials (+0.4%), and materials (unch) sectors. The Philadelphia Semiconductor Index advanced 1.1%. 

The health care sector (+0.5%) also finished higher amid a litany of upbeat guidance issued out of the JPMorgan Health Care Conference and strength in Eli Lilly (LLY 185.94, +19.53, +11.7%) following positive Phase 2 clinical results for treating Alzheimer's disease. 

Exxon Mobil (XOM 46.84, +1.38, +3.0%) powered the energy space after Morgan Stanley upgraded the stock to Overweight from Equal Weight. Walgreens Boots Alliance (WBA 47.70, +2.49, +5.5%), meanwhile, was upgraded to the equivalent of a Buy rating at Guggenheim and Robert W. Baird.

U.S. Treasuries extended last week's retreat, driving yields higher across the curve, amid lingering expectations for more fiscal stimulus. The 2-yr yield increased two basis points to 0.15%, and the 10-yr yield increased three basis points to 1.13%. The U.S. Dollar Index increased 0.5% to 90.51. WTI crude futures declined 0.1% to $52.19/bbl.

Investors did not receive any economic data on Monday. Looking ahead to Tuesday, investors will receive the Consumer Price Index for December, the Treasury Budget for December, the Fed's Beige Book for January, and the weekly MBA Mortgage Applications Index.

  • Russell 2000 +5.9% YTD
  • Dow Jones Industrial Average +1.3% YTD
  • Nasdaq Composite +1.2% YTD
  • S&P 500 +1.2% YTD

(ZH) "Full-Tilt Insanity Mode" - Nomura Warns This Week's OpEx Is "Absolutely Go

"Full-Tilt Insanity Mode" - Nomura Warns This Week's OpEx Is "Absolutely Going To Matter" For 'Weaponized Gamma' Crowd

The world appears to be stock in what Nomura's Charlie McElligott calls "Robinhood / YOLO / 'weaponized gamma'" nonsense as the equity buy-to-open premium is soaring in individual stocks (and indices)...
Specifically, the Nomura MD notes that it is Op-Ex week, and the options positioning is absolutely going to matter, particularly off the back of this recent market heater and potential speculative sentiment overshoot.
Regarding the positioning, McElligott warns that there is a TON of $Gamma set to roll-off, which matters when Delta is this “extreme long” and thus could very likely be monetized as a “supply source” to potential correction in price - IWM net Delta is 98.8%ile with 54% of $Gamma rolling-off; QQQ Delta 98%ile, 60% Gamma coming-off; SPX Delta 90%ile, Gamma 39% rolling-off) - WHERE THINGS COULD GET SLIPPERY LOWER:
  • SPX / SPY Gamma vs spot “flip” at 3667 incl this week / 3679 ex Friday expiry
  • QQQ Gamma vs spot “flip” at 310.53 this week and ex Friday expiry
  • IWM Gamma vs spot “flip” at 201.49 this week / 200.25 ex Friday expiry
Regarding sentiment and outside the Retail proxy insanity, we are in full-blown “overshoot” mode too, with our Nomura Sentiment Index for SPX at last 98.5%ile (since 2004).
Finally, McElligott concludes with a warning: When taking the sentiment extreme in conjunction with options positioning, the very short-term set-up has been for an “UP into” trade thx to the earlier mentioned ‘”Long Dealer Gamma” and Vanna tailwind....but we have to be ready for the “down trade” window opening around Wednesday’s VIX expiration and thereafter, with Gamma coming-off and current “extreme long” Delta position showing potential for monetization to get the ball rolling lower, especially with such a risky sentiment froth clearly established with likely “weak hands” on any impulse correction

FT : Signature Aviation’s bid battle cruises towards a smooth landing

Signature Aviation’s bid battle cruises towards a smooth landing
Bidders circle private jet services group; Ladbrokes owner Entain bruised not broken as another CEO exits

Bidders circle Signature Aviation — BBA as was — like planes used to circle backed-up airports, back in the day when runway bottlenecks were a thing. 

Global Infrastructure Partners’ £3.4bn offer, which secured board approval on Monday, is the Gatwick airport owner’s fifth tilt at the UK-listed private jet company. US private equity group Blackstone, also hovering, has submitted six bids in the past year — the last of which, until GIP upped the stakes, was in pole position. Investors clearly expect more to follow. Monday morning’s 9 per cent rise in Signature’s share price left it a full 40p above GIP’s proffered $5.50 (405p).

Signature runs fixed base operations, mainly across the US, providing fuel and other services to corporate jets. It has facilities at more than 400 locations, nearly half of which it operates. Hence its attractions as a quasi infrastructure play.

The big fixed asset base conferred by its network of airports illustrates the barriers to entry; quasi because, as its model is predicated upon servicing private jets, demand is inevitably cyclical. As proof, check out the Covid-19-dented interim numbers: revenues down by a third, underlying ebitda down 40 per cent; and a nixed dividend.

The business model suggests a more natural home in private equity portfolios and, indeed, the group’s biggest owners as of now are Cascade, part of Bill and Melinda Gates Investments, with just shy of a fifth. Signature’s smaller rival, Atlantic Aviation, is owned by Macquarie Infrastructure Company.

As the Australian fund has demonstrated, private ownership can aid long term investment and also preside over bolt-on acquisitions: as a public company, Signature has spent much of the past several years jettisoning parts. All told, the company — which has an enterprise value of £4.4bn — has made £1.65bn of disposals in the past seven years. The tally would be bigger still if efforts to sell its engine repair and overhaul business did not continue to drag on 20 months after the For Sale sign went up.

This could of course be a pivotal moment for exposure to private jets. If those who can afford to do so opt for this more socially distanced option over commercial flights, demand could again take off.

Still, bidding wars usually play to the advantage of existing shareholders and this one is unlikely to be any different. GIP’s proffered price equates to an enterprise value of 15.7 times trailing ebitda, broadly the level of such transactions — although Signature’s scale makes comparisons less helpful. Investors who have been along for the ride should welcome the opportunity to bail.

Lame ducks, lions and unicorns
Shay Segev, we hardly knew ye. Less than six months after being appointed Entain’s chief executive, Mr Segev plans his exit astride a unicorn and the Ladbrokes Coral owner is looking for its third chief executive in less than a year, writes Bryce Elder.

What does the quick turnover of CEOs say about Entain’s chances of remaining independent? Not much we didn’t already know.

At the margin, the management vacuum will weaken the group’s defence against an £8bn takeover approach from MGM Resorts. Gambling companies are famously bad at recruitment, particularly from outside the sector, and even absent the bid, Entain’s complicated history around tax and legal compliance will act as a deterrent for many candidates. Yet shares hardly budged on Monday’s news, suggesting investors have put very low odds on having to worry too much about business continuity.

It helps that Entain’s explanation for Mr Segev’s departure can probably be read at face value, which is in contrast to a number of its statements over the years.

Chairman Barry Gibson complains that Entain can’t match the riches promised by Mr Segev’s new employer, DAZN. The Len Blavatnik-bankrolled sports broadcaster has been barrelling towards a flotation that could rain money on its management. But DAZN’s refinancing last year hints at ambitious expansion plans with tight deadlines. Its need to secure a boss with public market experience is probably more urgent than MGM’s desire to agree a price for Entain. And, since the latter deal might have left Mr Segev unemployed, it’s understandable that he has chosen certainty.

The City’s formal introduction to Mr Segev came in November, when he presented a rebranding exercise that sought to add a gloss of social responsibility to the legacy of his predecessor Kenny Alexander. It’s a big job for less cash. Mr Alexander claimed a £816,000 base salary in his final year as part of a £4.8m remuneration package. Mr Segev earns £675,000 basic with reduced perks, at least in the short term, the board having surrendered 2020 bonuses and taken a temporary pay cut as penance for cancelling a dividend at the start of the Covid crisis.

Is Entain so weakened by Mr Segev’s exit that MGM might walk away? It’s possible but unlikely. With fellow casino owner Las Vegas Sands now reportedly looking for ways into the global sports betting market, MGM cannot spend six months on the sidelines waiting for a Takeover Panel cooling off period to expire. Nevertheless, the introduction of a lame duck CEO has given investors another reason not to be too greedy, because the potential downside from independence is getting bigger.