Gapping up
In reaction to earnings/guidance:
- SBBP +6.9%, CALM +5.4%, TGNA +2.3%, ACMR +2.2%, SMPL +1.1%, PROF +0.9%
M&A news:
- CHNG +35.4% (Optum, a diversified health services company and part of UnitedHealth Group (UNH) and Change Healthcare (CHNG) have agreed to combine)
- ABC +4.3% (AmerisourceBergen (ABC) will acquire the majority of Walgreens Boots Alliance's Alliance Healthcare businesses for ~$6.5 bln ($6.275 bln in cash and 2 mln shares of AmerisourceBergen))
- WBA +2% (AmerisourceBergen (ABC) will acquire the majority of Walgreens Boots Alliance's Alliance Healthcare businesses for ~$6.5 bln ($6.275 bln in cash and 2 mln shares of AmerisourceBergen))
- ASB +1.8% (to sell wealth management unit)
- FIX +1% (to acquire Tennessee Electric Co)
Other news:
- VLRS +6.4% (Dec Traffic)
- MRNA +4.3% (EMA recommends COVID-19 Vaccine Moderna for authorisation in the EU )
- CHU +3.9% (continued volatility after NYSE said to weigh reverting to original decision to delist CHL, CHA, CHU, according to Bloomberg)
- WFC +3.9% (Office of the Comptroller of the Currency terminates AML-Related Consent Order)
- RDHL +3.3% (RHB-204 granted FDA Fast Track designation for NTM disease)
- AHCO +3% (prices offering of 8 mln shares of common stock at $33.00 per share)
- PAC +2.8% (Dec Traffic)
- CLDT +2% (commences $100 mln at the market offering program to sell common shares of beneficial interest)
- PRSC +1.8% (announces new name ModivCare)
- AWH +1.6% (reports that 3,849 OVA1 plus tests were performed in the three month period ending December 31, 2020, representing a 7% increase compared to the three month period ending September 30, 2020)
- CHL +1.4% (continued volatility after NYSE said to weigh reverting to original decision to delist CHL, CHA, CHU, according to Bloomberg)
- AZN +1.3% (receives Priority Review from FDA for Farxiga)
- OII +1.3% (Oceaneering Intl integrity management and digital solutions segment announces recent contract wins exceeding $250 million)
Analyst comments:
- MET +3.5% (upgraded to Overweight from Neutral at Piper Sandler)
- COF +2.9% (upgraded to Buy from Hold at Deutsche Bank)
- CLR +2.3% (upgraded to Buy from Neutral at BofA Securities)
- AMRS +2.2% (upgraded to Outperform from Market Perform at Cowen)
- NSTG +1.6% (upgraded to Overweight from Equal Weight at Barclays)
- PPC +1.2% (upgraded to Buy from Neutral at BofA Securities)
- MA +1% (upgraded to Buy from Neutral at BofA Securities)
- ACN +0.9% (upgraded to Neutral from Underperform at BofA Securities)
Early premarket gappers
- Gapping up:
- CHNG +37.7%, CALM +8.2%, CHU +4.4%, WFC +2.9%, PAC +2.8%, CHL +2.4%, ACMR +2.2%, CLDT +2%, MYGN +1.9%, PRSC +1.8%, AWH +1.6%, AZN +1.1%, FIX +1%, FATE +1%, GRBK +0.9%, PROF +0.9%, CHA +0.7%, T +0.5%
- Gapping down:
- TMDI -18.1%, OCN -8.5%, GBX -5.2%, ARE -3.6%, NEO -3.4%, PLAN -1.6%, QQQ -1.6%, MSM -1.6%, NKTR -1.5%, HSIC -1.1%, LMT -1%, GPS -0.8%, NGM -0.5%
>>> Up
* Hannover Re Raised to Buy at Deutsche Bank
* LVMH PT Raised to 590 euros from 455 euros at Jefferies
* Patrizia PT Raised to 31 euros from 28.50 euros at M.M. Warburg (+)
* Robert Walters Raised to Neutral at Credit Suisse; PT 485 pence (+)
* Siemens Healthineers Raised to Buy at Stifel; PT 51 euros
* Tesla PT Raised to $810 from $540 at Morgan Stanley
* Vodafone Raised to Buy at Berenberg; PT 155 pence
* WPP PT Raised to 1,300 pence from 1,050 pence at Citi
>>> Down
* AAP Implantate Cut to Hold at M.M. Warburg; PT 3.77 euros (+)
* ASR Nederland Cut to Hold at Deutsche Bank
* Bunzl Cut to Underperform at Credit Suisse; PT 2,250 pence (+)
* ElringKlinger Cut to Sell at M.M. Warburg; PT 12.50 euros (+)
* Hays Cut to Underperform at Credit Suisse; PT 125 pence (+)
* Intertek Cut to Neutral at Credit Suisse; PT 5,900 pence (+)
* LPKF Cut to Hold at HSBC; PT 32 euros
* Maersk Drilling Cut to Neutral at JPMorgan; PT 224 kroner
* NN Cut to Hold at Deutsche Bank
* Securitas Cut to Underperform at Credit Suisse; PT 125 kronor (+)
>>> Initiation
* Acacia Pharma Rated New Buy at Jefferies; PT 7.50 euros
* Nanobiotix SA ADRs Rated New Outperform at Evercore ISI
* ReNeuron Resumed Buy at Stifel; PT 400 pence (+)
* Sensorion Rated New Buy at Jefferies; PT 2.30 euros
* S4 Capital Rated New Buy at Peel Hunt; PT 630 pence
* Swiss Life Rated New Buy at Citi; PT 474 Swiss francs
>>> Call
* Recovery of Insurers Should Continue This Year: Deutsche Bank (+)
* LVMH Outlook Remains Strong, More Cautious on Kering: Jefferies (+)
* Tesla Gets Street-High Target at Morgan Stanley on Strong Sales
* Vodafone Simplifying Can Drive Re-Rating, Up to Buy: Berenberg
Warnock Defeats Loeffler in Georgia Runoff, Bringing Democrats Closer to Senate Control
A second Senate runoff remained too close to call, with the result set to determine the scope of President-elect Joe Biden’s agenda
ATLANTA—Democrat Raphael Warnock, the pastor of Rev. Martin Luther King Jr.’s former church in Atlanta, defeated Republican Sen. Kelly Loeffler in a hotly-contested runoff election, making him the first Black American to represent Georgia in the Senate and the first Democrat to do so since 2005.
The Associated Press declared Mr. Warnock the winner, while another Senate runoff race in Georgia between Republican David Perdue and Democrat Jon Ossoff remained too close to call. Democrats need to win both races to take control of the U.S. Senate for the first time since Republicans gained power in 2015.
In an address to the public early Wednesday, Mr. Warnock promised: “I am going to the Senate to work for all of Georgia.”
While the fate of the balance of power in the Senate now rests on the Perdue-Ossoff result, Democrats achieved one significant accomplishment: They’ve demonstrated that President-elect Joe Biden’s narrow win over President Trump in Georgia in November wasn’t a fluke and that Georgia will become a battleground state in future elections.
Mr. Warnock’s victory came as Mr. Trump has alleged widespread voting irregularities in the state, which he lost to Mr. Biden in November by about 12,000 votes, but no evidence of significant fraud has been found after two recounts.
The contests were also held a day before a group of Republican lawmakers—including Ms. Loeffler—are planning to object to the Electoral College vote count during a joint session of Congress, an effort pushed by Mr. Trump as part of his last-ditch bid to overturn the outcome of the presidential race.
Mr. Warnock’s win cuts the GOP majority to 50 seats, while Democrats will hold at least 49 seats. If Mr. Perdue, whose term expired on Jan. 3, can’t hold his seat, a win by Mr. Ossoff would put Democrats in control because Vice President-elect Kamala Harris would cast tie-breaking votes.
The runoffs, held because none of the four top finishers won 50% of the vote in November, drew hundreds of millions of dollars in campaign spending as well as the nation’s political attention for the past two months.
More than three million votes were cast before Tuesday in early in-person voting and mail-in ballots, underscoring the high interest in the two races. Given that attention, the number of people at polling places was said to be relatively light early on Tuesday, in a state where lines at polling stations during high-interest elections have been common. Still, more than 1 million people voted on Election Day, a state official said.
Democrats were encouraged by the results. DeKalb County—home to a chunk of Atlanta, a Democratic stronghold—saw Election-Day voting surpass the turnout on Nov. 3, county officials said.
In the afternoon, voting also picked up in several Republican strongholds, including Cherokee County. In a briefing to donors Tuesday, GOP operative Karl Rove said he was confident of the turnout, a person familiar with his remarks said. With the results largely counted, the exurbs on the outer ring of the Atlanta area didn’t appear to be delivering margins as large as they have in the past for the GOP candidates.
President Trump weighed in late in the evening, pre-emptively rebuking the specter of late-reporting counties in Democratic areas overcoming Republican leads. “Looks like they are setting up a big “voter dump” against the Republican candidates. Waiting to see how many votes they need?” Mr. Trump tweeted, without providing any evidence of election fraud.
Top Georgia election officials, who are Republicans, have repeatedly said they have run free and fair elections. On Tuesday, they urged Georgians—and all Americans—to have confidence in the outcome. “I can assure you that it’ll be a fair and honest election,” Georgia Secretary of State Brad Raffensperger said on Fox News earlier in the day.
Both parties believed Democrats likely had an advantage in the early vote, making the Tuesday turnout important for Republicans. Mr. Ossoff said he felt confident about Democrats’ chances of winning thanks to party infrastructure that has allowed them to run competitive races, especially after the close but unsuccessful race of the 2018 Democratic nominee for governor, Stacey Abrams. “This is the culmination of many years of work and struggle,” Mr. Ossoff said.
The head of the Americans for Prosperity Action, a conservative political action committee that campaigned for Mr. Perdue in the runoffs, said Tuesday that same-day voting was key.
“We’ve got to make up a lot of ground today,” said Tim Phillips of the Virginia-based group long funded by the Koch family.
The campaigns of Ms. Loeffler and Mr. Perdue said in a joint statement Tuesday that they were encouraged by turnout but urged more of their supporters to get out and vote. “Make no mistake about it: this is going to be a very close election and could come down to the difference of just a few votes in a few precincts across the state,” the pair said.
Election workers in Georgia’s 159 counties were processing the day’s votes as well as absentee and early-voting ballots after the polls closed Tuesday evening. In November, final results took weeks to be certified. With spending exceeding $500 million, the races are among the most expensive Senate contests in history.
Since 1988, Republicans have won every statewide runoff in Georgia except one, in 1998, as Democratic turnout declined more steeply than that of Republicans for the second election, according to a nonpartisan report on the state’s history of runoffs. Democrats are aware of that history and built an unprecedented turnout operation for these runoffs, hoping to best the Republicans’ own aggressive effort.
The races were overshadowed by Mr. Trump’s claims since November that the results of the presidential election—which showed him narrowly losing in Georgia—were false.
He has directed much of his ire at Republican state officials, including Gov. Brian Kemp and Mr. Raffensperger, who launched a statewide hand recount of all five million ballots cast, a process observed by representatives from both parties. That recount found Mr. Biden won. A second recount, requested by the Trump campaign and this time a scan of the paper ballots, also found Mr. Biden won.
Still, Mr. Trump’s efforts to sow doubt about the legitimacy of the 2020 presidential results are finding fertile ground among Republicans in Tuesday’s runoff, according to preliminary results from AP VoteCast, a large survey of voters.
While about three quarters of independents and nearly all Democrats in the survey said they are somewhat or very confident that the presidential votes were counted accurately, only 30% of Republicans said the same.
As voting was under way Tuesday, Mr. Trump, who has criticized fellow Republican Mr. Raffensperger and other state officials after he lost the state, called attention in a tweet to a reported problem with voting machines in Columbia County, near Augusta.
The Georgia secretary of state’s office said a few pieces of equipment, known as poll-worker cards and keys, were programmed incorrectly but that the issues were resolved and voting wasn’t stopped.
The lack of success in efforts to overturn the Georgia results has infuriated Mr. Trump. On Sunday, media outlets obtained a recording of a roughly hourlong conversation the president and advisers held Saturday with Mr. Raffensperger in which the president told the state official that he could face legal action and said he wanted him to find nearly 12,000 votes so he could reverse Mr. Biden’s victory.
The candidates’ closing arguments echoed those in November. Republicans have pledged that Georgia’s Senate seats were “the last line of defense” stopping Mr. Biden and the Democrats from having complete control of Congress and the White House.
Democratic voters in Atlanta said they were hopeful Messrs. Warnock and Ossoff could win following Mr. Biden’s November victory, but some were still skeptical it would mean Democrats could enact whatever legislation they want.
Lamar Person of Atlanta, who is Black, wants Democrats to be able to put forth legislation addressing the use of force by police officers and getting better control over the Covid-19 pandemic, which has hit communities of color particularly hard.
“That’ll all at least be on the forefront…more so than with the Republicans,” Mr. Person said.
Ashley Pearson waited to vote in person on Tuesday at a school in rural Guyton so she could fill out, print and check her ballot, and insert it into the counting machine with her own hands.
The hospitality manager, who is white, considered for a short time not voting in the runoff but said the stakes were too high in Congress on issues she cares about, such as gun rights and funding for law enforcement. “This state is not blue,” she said, of Mr. Trump’s narrow loss here in November.
- Nibe (NJBC TH) +3.8%
- Imperial Brands (ITB TH) +3.1%
- Glaxo (GS7 TH) +2.4%
- Siemens Gamesa (GTQ1 TH) +2.3%
- CD Projekt (7CD TH) +2.1%
-
Vodafone (VODI TH) +2%
- Vodafone Simplifying Can Drive Re-Rating, Up to Buy: Berenberg
- Delivery Hero (DHER TH) +1.8%
- HeidelbergCement (HEI TH) +1.7%
- Novo Nordisk (NOVC TH) +1.5%
-
BP (BPE5 TH) +1.4%
- Saudis Take Charge of Oil Market With Surprise Production Cut
- Ferrari (2FE TH) -1%
- Barclays (BCY TH) -1.1%
- Elekta (EJXB TH) -1.8%
DAX:
- Continental AG (CON TH) +1.8%
- Delivery Hero (DHER TH) +1.7%
- HeidelbergCement (HEI TH) +1.6%
- SAP (SAP TH) +1.1%
- BMW (BMW TH) +1%
MDAX:
- Hannover Re (HNR1 TH) +1.5%
- Hannover Re Raised to Buy at Deutsche Bank
- Deutsche Lufthansa (LHA TH) +1.2%
- Siemens Healthineers (SHL TH) +1.2%
- Siemens Healthineers Raised to Buy at Stifel; PT 51 euros
- K+S (SDF TH) +1.1%
- Varta (VAR1 TH) +1.1%
SDAX:
- Nordex (NDX1 TH) +1.9%
- Global Fashion Group (GFG TH) +1.1%
- Schaeffler (SHA TH) +1.1%
- LPKF (LPK TH) -1.4%
- LPKF Cut to Hold at HSBC; PT 32 euros
Hedge fund Winton’s assets plunge $26bn from peak after 2020 rout
David Harding’s firm was among biggest hedge funds but suffered in coronavirus crisis
Winton Group, once one of the world’s biggest and most successful hedge fund firms, has suffered a nearly 80 per cent drop in its assets over the past five years, with poor returns and client withdrawals accelerating in a tough 2020.
Investor assets at the London-based firm, founded in 1997 by billionaire scientist and quantitative investing pioneer David Harding, tumbled from $33.7bn at the end of 2015 to $7.3bn by late 2020, according to an investor letter seen by the Financial Times. Much of the decline came in last year’s market turmoil, when assets fell by around $12.5bn.
The firm has been one of the highest-profile hedge fund casualties of a coronavirus crisis that has produced a huge divergence between winning and losing managers. Its main Winton fund, which frequently made double-digit gains in the decade before the financial crisis, lost around 20.5 per cent last year — by far its worst year on record.
“To investors, it must have seemed in recent months that everything that could go wrong has”, wrote Mr Harding in a confidential investor update late last year.
Its Diversified Futures fund fell 16 per cent, although its $650m China fund gained 25 per cent and its $300m Trend fund rose 7.4 per cent.
In the letter, Mr Harding described investment performance as “disappointing” and the drop in assets as “substantial”, but said the scale and manner of the losses were in proportion to the risks it had been running.
Many computer-driven hedge funds, which often base their investment decisions on historical scenarios, were caught out in a wild year for financial markets when the coronavirus pandemic hit in 2020. Human traders were often able to react quickly to the brutal sell-off in risky assets in February and March and the subsequent huge rebound following central bank and government stimulus. Many quants, in contrast, were cutting their exposure to stocks just as markets were soaring.
Winton’s recent losses stand in sharp contrast to its fortunes in the wake of the financial crisis. Its main fund made a return of around 21 per cent in 2008, as many investors were suffering big losses, and in 2011 the firm sucked in $1 out of every $8 invested into hedge funds globally. The following year Mr Harding was estimated by the Sunday Times Rich List to be Britain’s highest-paid person.
At the start of 2016, the firm was ranked by HFM’s Global Billion Dollar Club as the world’s seventh-biggest hedge fund, ahead of Renaissance Technologies, DE Shaw and Elliott.
Winton’s losses in the first nine months of last year came from areas such as equities and currencies, according to another investor update seen by the FT. It also lost on so-called fundamental macro bets, driven by data on the underlying performance of economies.
Winton has suffered from a bold but controversial call by Mr Harding several years ago to turn away from a style of quant investing he helped develop in the 1980s when he co-founded rival fund manager AHL. So-called trend-following, which aims to profit from persistent market trends, had delivered lacklustre returns for years but in 2020 often performed better than other quant styles. In September Mr Harding told the FT he did not regret his decision and he was “quietly confident” in the longer term.
Niel 1 - Orange 0
Treasuries declined with U.S. equity futures Wednesday amid concerns about the implications of a potential Democrat victory in a tight Senate race in Georgia. Asian stocks were mixed.
The yield on 10-year Treasuries rose past 1% for the first time since March and S&P 500 contracts retreated. Nasdaq 100 futures tumbled more than 1%. Democrat Raphael Warnock edged ahead of incumbent Senator Kelly Loeffler in one of the two Senate runoffs, lifting the party’s hopes for retaking the chamber from the GOP even as the two races remained too close to call. Some strategists argue that a Democratic double win would mean additional stimulus, tax hikes and more regulation. The dollar was little changed after touching its lowest since February 2018 against major peers.
Stocks saw a modest advance in Japan, while South Korea’s Kospi index topped the 3,000 level for the first time before paring gains. Australia fell. Shares in Hong Kong fluctuated amid sweeping arrests under a national security law. Chinese equities traded around a 13-year high, shrugging off concerns after President Donald Trump signed an order banning U.S. transactions with eight digital Chinese payment platforms including Ant Group Co.’s Alipay.
US After Hours CALM +4.6% higher on strong earnings; SGH -0.2% basically flat on earnings; NEO -4.8% falls on offering
Nikkei -0.38% Hang Seng -0.04% CSI +0.69% Shanghai +0.41% Shenzen -0.29%
Eur$ 1.2322 CNH 6.4358 CNY 6.4558 JPY 102.74 GBP 1.3643 CHF 0.8774 RUB 73.6063 TRY 7.3654 WTI$ 50.17 +0.48%
S&P -0.14% Nasdaq -1.17% EuroStoxx +0.99% FTSE +0.87% Dax +0.87% MIB +0.98% SMI +0.54%
Macro :
- NYSE Weighs Reverting to Original Plan to Delist China Shares
- Norway Seafood Exports Dropped 1% in 2020 From Record
- 5G Upgrade Offers Chance For Greater Cloud Profits
Keep an eye on :
- AI FP : Air Liquide, Cobham Settle Patent Suit on Fuel-Safety Technology
- BABA US : Alibaba Plans to Raise at Least $5B Through USD Bond: Reuters
- BIOTALYS IPO : Belgium’s Biotalys Considers Stock Listing, L’Echo Reports
- BMPS IM : UniCredit May Seek Incentives for up to EU6b to Buy Paschi: Ansa
- ALCAR FP : Carmat Plans Commercial Launch in 2Q; Has Funding Through 3Q
- CLNY US : Colony Capital to Move Headquarters to Boca Raton, Florida
- ECONB BB : Econocom Reached Target to Reduce Debt to Zero Per Dec. 31
- ENT LN : MGM Said to Discuss Ways to Win Over Entain Investors With Bid
- FCA IM : Fiat Chrysler Dec. U.S. Auto Sales -8%
- FCA IM : *STELLANTIS TO REMAIN IN FTSE MIB INDEX, FTSE RUSSELL SAYS - Press Release attached
- MC FP : Tiffany Holiday Comp. Sales Down 4% in U.S., Up 27% in APAC, Tiffany Holiday Sales Sparkle, Smoothing LVMH Betrothal: React
- MKS LN : Marks & Spencer Nearing Deal to Buy Fashion Brand Jaeger: Sky
- MB IM : Del Vecchio Increases Mediobanca Stake to Almost 12%
- PHIA NA : Philips Said to Shortlist Asian Suitors for $4 Billion Unit
- ALPIX FP : Pixium Vision, Second Sight Medical Plan Business Combination
- SLIGR NA : Sligro FY Sales Beat Estimates
- TEL2B SS : Tele2 to Appeal Court Decision on Kazakhstan JV Exchange Loss
- TIK1V FH : PPG Boosts Offer Price for Tikkurila to EU 27.75 Per Share
- VLTSA FP : Voltalia to Sell About EU200M Green Unsecured 2025 Bonds
- VOW GY : Bentley Global Car Sales Hit Record on Strong China Growth
- VOW GY : Volkswagen CEO Delivers Wake-Up Call on Capital Markets Dilemma