>>> Europe : Brokers Upgrades & Downgrades - 5th of January 2021

>>> Up
* Bank of Ireland Raised to Outperform at KBW; PT 4.70 euros
* Borr Drilling Raised to Neutral at SpareBank; PT 7.50 kroner
* Continental AG Raised to Overweight at JPMorgan; PT 140 euros
* Delivery Hero PT Raised to 158 euros from 140 euros at Citi
* ElringKlinger Raised to Neutral at JPMorgan; PT 9 euros
* Infineon PT Raised to 38 euros from 35 euros at Liberum
* LVMH Raised to Buy at China Renaissance; PT 590 euros
* Permanent TSB Raised to Market Perform at KBW; PT 1.20 euros
* Royal Mail Raised to Hold at Berenberg; PT 280 pence
* SCA Raised to Hold at Jefferies; PT 131 kronor
* Solvay Raised to Buy at Berenberg; PT 125 euros
* Spire Healthcare Raised to Hold at Jefferies; PT 159 pence
* Uniper Raised to Hold at SocGen; PT 28 euros

>>> Down
* AIB Group Cut to Market Perform at KBW; PT 2.50 euros
* Aker Solutions Cut to Sell at Arctic Securities; PT 12 kroner
* BMW Cut to Neutral at JPMorgan; PT 85 euros
* British Land Cut to Underweight at Morgan Stanley
* Codemasters Cut to Hold at Shore Capital
* Great Portland Cut to Equal-Weight at Morgan Stanley
* HSBC Cut to Hold at Investec; PT 390 pence
* Jost Werke Cut to Hold at Stifel; PT 47 euros
* Jost Werke Cut to Neutral at JPMorgan; PT 42 euros
* Land Sec. Cut to Underweight at Morgan Stanley
* Norsk Hydro Cut to Neutral at SpareBank; PT 42 kroner
* Pirelli Cut to Underweight at JPMorgan; PT 4 euros
* TI Fluid Cut to Neutral at JPMorgan; PT 260 pence
* UPM-Kymmene Cut to Underperform at Jefferies; PT 25 euros

>>> Initiation
* E.On Reinstated Neutral at JPMorgan; PT 10 euros
* Nagarro Rated New Buy at Jefferies; PT 110 euros
* Nordnet Rated New Buy at Berenberg; PT 145 kronor
* Nordnet Rated New Buy at Citi; PT 155 kronor
* Nordnet Rated New Neutral at JPMorgan; PT 137 kronor

>>> Call
* Spire Healthcare Raised to Hold at Jefferies on New NHS Contract
* Office Outlook Tough to Call, MS Downgrades Three U.K. Landlords
* Royal Mail Risks More Balanced, Cautious Longer-Term: Berenberg
* Solvay Raised to Buy; Berenberg Sees Re-Rating Potential
* Stora Enso Preferred Pulp/Forest Stock, UPM Cut at Jefferies

>>> What to look at today - 5th of January 2021

Asian stocks were mixed and U.S. equity futures were steady as traders weighed concerns about the impact of rising coronavirus cases and braced for key U.S. runoff elections. The dollar fell and gold held gains.
Shares dipped in Japan on Tuesday but rose in Hong Kong, China and South Korea. S&P 500 contracts fluctuated after the benchmark suffered its worst drop at the start of a year since 2016. European futures slipped. Treasuries were little changed, and the pound recouped some of the losses sparked by England’s third lockdown.
In a surprise U-turn, the New York Stock Exchange said it no longer plans to delist China’s three big telecommunication companies, backtracking on a plan that had threatened to escalate tensions between the world’s largest economies. The firms, China Mobile Ltd., China Telecom Corp. and China Unicom Hong Kong Ltd., rallied in Hong Kong.
US After hours JEF +4.2% rises on earnings; BPFH +21.7% jumps on SIVB takeover; SRAC -13.8% falls as Momentus will delay launch

Nikkei -0.37% Hang Seng +0.30% CSI +1.47% Shanghai +0.44% Shenzen +1.05%

Eur$ 1.2267 CNH 6.4391 CNY 6.4578 JPY 102.92 GBP 1.3595 CHF 0.8804 RUB 74.2046 TRY 7.4158 WTI$ 47.35 -0.61%

S&P +0.23% Nasdaq +0.18% EuroStoxx -0.10% FTSE -0.24% Dax -0.02% SMI -0.

Macro :
- FDA’s Hahn Says Suggesting Changes to Covid-19 Dosing Premature
- NYSE Says No Longer Plans to Delist China Telco Giants
- China Could Ask U.S. Firms to Reveal Military Ties: Global Times
- Andurand Hedge Fund Soared 154% in 2020 as Pandemic Roiled Oil
- Ackman’s Pershing Square Returns 70% in 2020 (1)

Keep an eye on :
- ACA FP : Credit Agricole Sells Unit to Vista Bank Romania; No Terms
- ACA FP : Credit Agricole Invests EU100M in Fund Managed by Ace Capital
- ARBN SW : Arbonia Sells Windows Business to Dovista; Funds Inflow ~CHF350M
- ARYN SW : Veraison Cuts Stake in Aryzta to ‘Significantly’ Below 3%
- BAKKA NO : Bakkafrost 4Q Prelim Harvest Volume in Faroe Islands 16,000 Tons
- CRL IM : Carel Holder Luigi Nalini to Offer 3.58m Shrs
- DTE GY : 5G Airwave Bids Surge Past $76 Billion to Set Auction Record
- DLG GY : Dialog Semi Chooses Germany as New EU Home Member State
- DLG GY : Dialog Semi 4Q Revenue Forecast Beats Estimates
- DIE BB : Belgian Car Registrations Drop 21.5% in Worst Year Since 1997
- EZJ LN : EasyJet to Review Flight Schedule After New U.K. Restrictions
- EDP PL : EDP Gets Two Power Purchase Agreements for U.S. Solar Projects
- ERICB SS : Ericsson Patent Fight With Samsung Pits Courts in U.S, China
- FCT IM :
- GFC FP : Office Outlook Tough to Call, MS Downgrades Three U.K. Landlords
- GLJ GY : Grenke FY Leasing New Business Volume EU2.03B Vs. EU2.85B Y/y
- HOT GY : Hochtief, Implenia Win EU580M Contract for A7 Tunnel in Hamburg
- LHN SW : LafargeHolcim Said in Advanced Talks to Buy Bridgestone Unit (1)
- MLP GY : MLP Sees FY Ebit Above EU34M to EU42M, Saw EU34M to EU42M
- KN FP : Natixis Names Francois Codet as Head of Insurance
- NXI FP : Nexity Sees 2021 Revenue About EU4.7B
- SAVE SS : Nordnet Gets Buy Ratings as Analysts See Profitable Growth Ahead
- ORA FP : French Telecom Regulator Arcep to Name Raudiere New Head: Figaro
- ROG SW : Roche’s Tiragolumab Gets FDA Breakthrough Therapy Designation
- SAN FP : Innate Pharma: Sanofi Selects Drug Candidate for Further Study
- TEF SM : Telefonica Speeds up Talks to Sell Chile Unit: El Economista
- TKO FP : Credit Agricole Invests EU100M in Fund Managed by Ace Capital
- TUI LN : Germany Wins EU Approval for EU1.25B TUI Recapitalization
- VOW3 GY : QuantumScape Sinks, Bucking Optimism Among EV-Related Stocks

WSJ : EPA to Give Preference to Scientific Studies That Disclose Data

EPA to Give Preference to Scientific Studies That Disclose Data
Agency head says change is aimed at boosting transparency; some public-health experts say it could undermine effectiveness

WASHINGTON—The Environmental Protection Agency is issuing new rules that will give preference in future decisions about public health to scientific studies that disclose their underlying data.

Administrator Andrew Wheeler said the changes are aimed at increasing transparency so that the public has a chance to scrutinize findings that underlie major regulations.

“By shining light on the science we use in decisions, we are helping to restore trust in government,” Mr. Wheeler wrote in a commentary published by The Wall Street Journal late Monday. “We want the EPA to be able to say, ‘you can check our work.’”

The policy change, in the works since the start of the Trump administration, has been opposed by public-health experts, scientists and former staff who say it could undermine the agency’s effectiveness.

Many public-health studies rely on information about individual patient health that is required to be kept confidential, which may now exclude groundbreaking health findings from EPA consideration, these critics say.

The rules apply to the EPA’s consideration of “dose-response studies,” used to figure out how much exposure to a chemical or pollutant increases the risk to a person’s health. Those determinations are fundamental to many core EPA rules on public health.

In future decisions the agency must now give greater consideration to studies in this area in which underlying dose-response data is available for independent validation. And when it proposes new regulations it must make available to the public that science that informs the rule.

The rule won’t categorically exclude any data, Mr. Wheeler wrote, adding that the new practices can be done without releasing personal information or violating confidentiality.

The rule will prevent agency leaders from trying “to cherry pick research to derive politically helpful results,” he wrote. It outlines specific criteria for when the administrator can make case-by-case exemptions to these requirements.

Several scientists and health experts have questioned Mr. Wheeler’s claims and say it is in many cases impossible to require these types of disclosures without violating patient confidentiality. In the end that is more likely just to narrow what research will be considered, they said.

“If left unchallenged, this rule would essentially bar the agency from using the most relevant medical studies when creating rules about air pollution, toxic chemicals, water contaminants,” Chris Zarba, a former director of the EPA’s Science Advisory Board, said in a statement. “The rule…doesn’t ensure transparency in science, but rather is detrimental to high-quality impartial decision-making.”

Mr. Zarba was joined in the statement by other former EPA employees, who say the change will benefit industrial interests by excluding certain types of studies.

They noted the EPA has long had a public review process for the science it uses, one that includes several review boards and committees of outside experts from academia and industry to ensure transparency and scientific quality.

>>> US Close Dow -1.25% S&P -1.48% Nasdaq -1.47% Russell -1.47%

Closing Stock Market Summary

The major indices were down more than 2.0% on the first trading day of 2021, as investors took profits, but they pared losses in the afternoon. The S&P 500 (-1.5%), Dow Jones Industrial Average (-1.3%), Nasdaq Composite (-1.5%), and Russell 2000 (-1.5%) declined between 1.3-1.5%. The S&P 500 and Dow briefly set all-time highs at the open.

The short-lived positive open was attributed to Tesla (TSLA 729.77, +24.10, +3.4%) reporting record Q4 deliveries, expansionary December manufacturing PMIs out of the eurozone and Asia, M&A activity, and positive momentum. Tesla, foreign equities, and acquired companies still had positive outings, but the positive momentum in the broader market quickly dissipated. 

There weren't any specific selling catalysts, suggesting investors came back from the holidays ready to take profits while others preferred to hold off until the outcome of the Senate election runoffs in Georgia tomorrow. Selling was widespread with ten of the 11 S&P 500 sectors finishing in negative territory.

Influential weakness came out of the information technology (-1.8%) and industrials (-2.6%) sectors, although the real estate (-3.3%) sector was the weakest link. The energy sector (+0.1%) eked out a slim gain despite lower oil prices ($47.59/bbl, -0.68, -1.4%).

Hedging interest to protect against further downside was manifested in the four-point increase in the CBOE Volatility Index (26.97, +4.22, +18.6%), while safe-having positioning brought longer-dated Treasury yields down from intraday highs.

The 2-yr yield finished flat at 0.12%, and the 10-yr yield finished flat at 0.92% after touching 0.95% in the morning. The U.S. Dollar Index finished flat after being down 0.6% intraday. 

In M&A activity, FLIR Systems (FLIR 52.24, +8.41, +19.2%) agreed to be acquired by Teledyne (TDY 362.39, +10.80, +13.0%) in a cash and stock deal valued at $8.0 billion. Magellan Health (MGLN 93.64, +10.80, +13.0%) agreed to be acquired by Centene (CNC 62.09, +2.06, +3.4%) for $95 per share, or a total enterprise value of $2.2 billion, in cash.

Reviewing Monday's economic data:

  • Total construction spending increased 0.9% in November (consensus 0.9%) after increasing a revised 1.6% (from 1.3%) in October. Total private construction spending rose 1.2% m/m and total public construction spending decreased 0.2%.
    • The key takeaway from the report is that residential construction spending showed strength for another month as mortgage rates remained low, supporting demand for homes outside urban areas.
  • The December IHS Markit Manufacturing PMI increased to 57.1 from 56.5 in November.

Looking ahead, investors will receive the ISM Manufacturing Index for December on Tuesday.

  • Dow Jones Industrial Average -1.3% YTD
  • Nasdaq Composite -1.5% YTD
  • Russell 2000 -1.5% YTD
  • S&P 500 -1.5% YTD

>>> US After Hours Summary: JEF +4.2% rises on earnings; BPFH +21.7% jumps on SI

After Hours Summary: JEF +4.2% rises on earnings; BPFH +21.7% jumps on SIVB takeover; SRAC -13.8% falls as Momentus will delay launch

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: JEF +4.2% (also increases quarterly dividend by 33%; increases stock buyback authorization to $250 mln)

Companies trading higher in after hours in reaction to news: BPFH +21.7% (SIVB to acquire BPFH), GRTS +14.7% (EcoR1 Capital discloses 9.99% stake), AIH +11% (terminates deal to acquire a 51% equity interest in Guangdong Hanfei), JAMF +1.6% (ends 2020 running on more than 20 mln Apple devices globally), NFLX +1.3% (tweets that holiday viewership represented its "biggest viewing week between Christmas and New Year's ever!"), SU +0.5% (announces 2021 production outlook and capital allocation; also to record impairment charge on White Rose assets) TMUS +0.4% (to acquire Sprint-branded wireless operating assets of Brookings Municipal Utilities), NMFC +0.4% (extends authorization for $50 mln repurchase program), SWN +0.2% (CFO passes away), KAMN +0.1% (new COO), ATH +0.1% (files for mixed securities shelf offering), GVA +0.1% (recently opened its Solari Aggregate Plant)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: None

Companies trading lower in after hours in reaction to news: SRAC -13.8% (Momentus (merging with SRAC) reaffirms 2021 revs, but will delay January launch until further into 2021), VRAY -9% (stock offering), GBIO -5.3% (stock offering), FATE -5.2% (stock offering), NGM -2.6% (stock offering), APA -0.6% (to create a holding company structure), SIVB -0.6% (SIVB to acquire BPFH), LMT -0.1% (awarded $4.9 bln Air Force contract)