>>> What to look at today - 20th of November 2019

Asian stocks and American equity futures fell after the U.S. Senate passed legislation supporting Hong Kong protesters, triggering a renewed warning of retaliation from China and potentially complicating U.S.-China trade talks.
Treasuries rose and the offshore yuan hit session lows after China’s unspecified warning. Hong Kong shares fell along with Japanese and South Korean benchmarks. Australian equities saw the biggest declines, after allegations of financial crimes at Westpac Banking Corp. hit financial stocks. The S&P 500 Index ended flat on Tuesday amid disappointing reports at some American retailers, though the Nasdaq Composite eked out a fresh high. Oil steadied after sliding more than 3%.
US After Hours URBN -14%, ALC -1.7% following earnings/guidance

Nikkei -0.62% Hang Seng -0.75% CSI -1.01% Shanghai -0.77% Shenzen -0.71%

Eur$ 1.1070 CNH 7.0339 CNY 7.0307 JPY 108.54 GBP 1.2913 CHF 0.9905 RUB 63.9071 TRY 5.7193 WTI$ 55.15 -011%

S&P -0.18% EuroStoxx -0.27% Dax -0.39% SMI *0.08%

Macro :
- U.S., China Explore Tariff Relief Using Failed Proposal From May
- Two Officials Say Trump Ukraine Call Was Unusual, Inappropriate
- China Reiterates Retaliation Threat Over U.S. Bill on H.K.

Keep an eye on :
- ACS SM : ACS Board-Member Manuel Delgado Solis Quits
- ATL IM : Atlantia Says Conditions for Alitalia Rescue Bid Not in Place
- BBVA SM : BBVA Receives Bank of Spain MREL Requirement
- BME SM : Six Doesn’t ‘Rule Out’ Increasing BME Offer Price: Cinco Dias
- CO FP : Casino Outlook to Negative by Moody’s on Constrained Quality (1)
- DMP GY : Dermapharm Nine-Month Adj. Ebitda Up 25.1%, Confirms FY Forecast
- DOV IM : Italy’s DoValue Leads Race for Eurobank Loan Recovery Unit: Rtrs
- EQNR NO : Equinor Says Sverdrup Oilfield Daily Output Exceeds 300k Barrels
- FCT IM : Fincantieri Signs EU300m Pact for 2 Cruise Ships With Ponant
- GMAB D : Genmab Gets European Marketing Approval for Darzalex Combi
- GETIB SS : FDA Gets Over 60 More Getinge IABP Shutdown Reports, 2 Deaths
- ISP IM : Nexi Could Buy Intesa’s SP Unit in Share Deal: Messaggero
- KTCG AV : Kapsch TrafficCom First Half Ebit EU8.8 Mln, -51% Y/y
- KYG ID : *KERRY CO-OP SELLS 800,000 SHARES IN KERRY GROUP: TERMS
- KOJAMO FH : Kojamo 10m Share Block Trade Offering Is Said to Be Covered
- KNIN SW : Kuehne + Nagel Buys Dutch Business From Rotra
- MS IM : *MEDIASET MULLS SPECIAL DIVIDEND IN DEAL WITH VIVENDI: CORRIERE
- SAB SM : Banco de Sabadell Receives Bank of Spain MREL Requirement
- SAMPO FH : Sampo Raised as Dividend Headwind Is Removed: Morgan Stanley
- SESG FP : Intelsat, SES Fall Most Ever as Investors Assess FCC Proposal
- SXS LN : Spectris Sues Waters for Patent Royalties on Lab-Analysis Tools
- SSO NO : Scatec Solar, FMO in Equity Partnership for Chigirin Project
- SWEDA SS : U.S. Investigating Swedbank for Potential Sanctions Breach: SVT
- TINC BB : Tinc to Raise up to EU113M Issuing New Shares at EU12.40 Each
- UQA AV : Uniqa Nine Month Net Income EU167.1 Mln, +0.5% Y/y
- VOD LN : Vodafone’s German Cable Unit Accused of Obstructing Inquiry: FT
- WDI GY : EY Refuses to Approve Wirecard Singapore Accounts From 2017: HB

>>> Europe : Brokers Upgrades & Downgrades - 20th of November 20

>>> Up
* Aeroports de Paris Raised to Outperform at RBC; PT 200 euros
* EasyJet Raised to Equal-Weight at Barclays; PT 1,250 pence
* Novozymes Raised to Buy at Citi
* L'Oreal Raised to Reduce at AlphaValue
* Sampo Raised to Overweight at Morgan Stanley; PT 45 euros
* Vesuvius Raised to Buy at Berenberg

>>> Down
* Burford Capital Cut to Hold at Berenberg
* SES GDRs Cut to Equal-Weight at Morgan Stanley; PT 14.90 euros
* Sonova Cut to Hold at Deutsche Bank; PT 218 Swiss francs
* Zurich Ins. Cut to Hold at Jefferies; PT 400 Swiss francs

>>> Initiation
* Boostheat Rated New Buy at Berenberg
* BRAIN Biotech Rated New Buy at Pareto Securities
* CAF Rated New Neutral at Oddo BHF; PT 43.50 euros
* EasyJet Reinstated Sell at Goldman; PT 1,240 pence
* IAG Reinstated Buy at Goldman; PT 665 pence
* Knorr-Bremse Rated New Neutral at Oddo BHF; PT 88 euros
* Lufthansa Reinstated Sell at Goldman; PT 14.80 euros
* Meggitt Reinstated Outperform at Exane; PT 770 pence
* MorphoSys Rated New Buy at Guggenheim; PT 126 euros
* Ryanair Reinstated Buy at Goldman; PT 17 euros
* Seplat Nigeria Reinstated Buy at Renaissance Capital
* Stadler Rail Rated New Buy at Oddo BHF; PT 58 Swiss francs
* Talgo Rated New Buy at Oddo BHF; PT 7 euros


>>> Call
* Novozymes Well-Placed to Hit Targets on New Growth Sources: Citi
* Sampo Raised as Dividend Headwind Is Removed: Morgan Stanley
* Vesuvius Downside Now More Limited; Berenberg Upgrades to Buy

>>> Asian Update

Asia Market Update: Asian indices decline in the face of continued US/China tariff uncertainty, China reiterated warning after US Senate’s passage of HK bill; PBOC continues to ease policy

General Trend:
- Hang Seng drops over 1% as trade uncertainty persists, US Senate passed HK bill;
- HK-listed banks generally decline after PBoC rate cuts, the central bank also did not inject liquidity in daily OMO
- Chinese banks also decline
- Shanghai IT index outperforms amid PBoC rate cut, China has created a $21.0B investment fund (press)
- Decliners in Japan include the trade-sensitive Marine/Transportation and auto sectors; Japanese banks also track recent declines in Treasury yields
- Westpac declines over 2% in Australia on accusations related to money laundering, weighs on ASX 200 index
- Rio Tinto declines over 1%, there is merger speculation related to Rio Tinto and Glencore (Aussie press)
- Alibaba may price HK IPO at HK$176/share, below the HK$188 maximum price; the final pricing may occur later today
- FOMC Oct meeting minutes to be released later on Wed


***Headlines/Economic Data***
Australia/New Zealand
-ASX 200 opened -0.2%
- GLEN.UK Speculation that Rio Tinto is considering a takeover of Glencore after Glencore CEO Ivan Glasenberg and CFO Steve Kalmin visited Australia – AFR
- ALL.AU Reports FY19 normalized (A$) Net 752.8M v 699.9M y/y; Rev 4.4B v 4.1B y/y
- MET.NZ Has received a highly conditional, non-binding preliminary expression of interest from a credible third party to acquire the company; Suspends share buyback program
- (AU) Australia government plans to accelerate infrastructure projects worth $2.6B, PM Morrison is expected to announce the spending plan later on Wed - US financial press
- (AU) Australia sells A$800M v A$800M indicated in 2.50% May 2030 bonds, avg yield 1.1191% v 1.2603% prior, bid to cover 4.13x v 3.56x prior

Japan
-Nikkei 225 opened -0.5%
- (JP) JAPAN OCT TRADE BALANCE: ¥17.3B V ¥229.3BE; ADJ TRADE BALANCE: -¥34.7B V ¥248.1BE; Exports Y/Y: -9.2% v -7.5%e (largest drop in 3 years and 11th consecutive decline)
- (JP) Japan and South Korea failed to narrow differences in second round of trade talks relating to Japan's export restrictions - Yonhap
- (JP) Japan major insurers expected to be negatively impacted by the typhoon and flooding damage, Tokio Marine, MS&AD Insurance and Sompo expected to have catastrophe reserves at the end of FY19/20 of ¥385B v ¥538.3B in FY18/19 and -50% from 2 years ago – Nikkei
- (JP) Reportedly Japan FSA council seeks to rejigger Tokyo Stock Exchange's TOPIX Index into a more selective listing of popular blue chip stocks – Nikkei
- (JP) Japan LDP coalition seeks ¥10T for extra budget [in line with prior statements] – Nikkei
- (JP) Japan PM Abe: Supplemental budget will help farmers hurt by US trade deal - speaking in parliament
-(JP) Japan MoF sells ¥899B v ¥900B indicated in 0.30% 20-year bonds; avg yield 0.266% v 0.245% prior; bid to cover 4.21x v 3.91x prior

Korea
-Kospi opened -0.6%
- (KR) US Defense Sec Esper will not speculate if the US will consider reducing troops in South Korea if a deal cannot be reached with South Korea on cost sharing, after the US walked out of talks – Yonhap
- (KR) South Korea Oct PPI M/M -0.2% v +0.1% prior, Y/Y: -0.6% v -0.8% prior (4th consecutive decline)
- (KR) North Korea again demands that US and South Korea cease all military drills as a precondition to resuming talks

China/Hong Kong
-Hang Seng opened -0.6%; Shanghai Composite opened -0.2%
- (CN) According to Antaike's senior analyst Shen Lingyan China consumption of aluminum in 2019 will be 36.55Mt, -1.2% y/y (1st decline in 30-years) - speaking from conference at Qingdao city
- (CN) China PBoC sets 1-year loan prime rate (LPR) at 4.15% v 4.20% prior (4.20%e); sets 5-year LPR at 4.80% v 4.85% prior (4.85%e)
- (CN) Fitch affirms China sovereign rating A+; Outlook stable; Recent progress towards reaching a phase 1 trade deal with the US suggests possible postponement or eventual removal of some existing tariffs
- (CN) China PBoC Open Market Operation (OMO): Skips v injects CNY120B prior in 7-day reverse repos prior; Net CNY0B v inject CNY120B prior
- (CN) China PBOC sets Yuan Reference Rate: 7.0118 v 7.0030 prior (weakest fix since Nov 5th)
- (HK) Hong Kong Govt expresses regret of US Senate passing Hong Kong bill, it is ungrounded and unnecessary; bill will have negative impact on US interests
- (CN) China Foreign ministry: Opposes US senate passing of Hong Kong Bill; reiterates will retaliate if bill is passed
- (HK) Growing speculation that Sunday's Hong Kong district council elections could be postponed due to escalating violence; some polling locations have already been moved from locations including universities - HK press
- (CN) China Stats Bureau (NBS) deputy chief Li: planning to revised economic indicators in line with census result; to revise main economic indicators based on 2018 national economic census results, to publish 2018 GDP revision in coming days
-(CN) Regulators in China are 'naming and shaming' certain banks in relation to loan rule violations; banks mentioned include China Construction Bank and Ping An Bank - Chinese press
-9988.HK May price Hong Kong IPO at HK$176/shr v HK$188/shr max price indicated for HK$12.9B; the final pricing is expected to occur later today - US financial press

North America
- (US) Weekly API Oil Inventories: Crude: +6M v -0.5M v prior
- (US) SEMI: Oct North America Manufacture Billings: $2.11B, +7.7% m/m, +3.9% y/y
- (US) Senate passes the 'Hong Kong Human Rights and Democracy Act of 2019' (as expected)
- (US) Commerce Sec Ross: Reiterates we think there's hope we can get a China deal done; deal is still a work in progress; optimistic we can get something done on China - speaking on Fox

Europe
-(UK) PM Johnson: reiterates UK will leave EU on Jan 31st - comments at election debate
- (UK) General election poll: Tories 36%, Labour 25%, Lib Dems 17%, Brexit 11% - Lord Ashcroft Polls

***Levels as of 01:20ET***
- Hang Seng -0.7%; Shanghai Composite -0.5%; Kospi -1.2%; Nikkei225 -0.8%; ASX 200 -1.4%
- Equity Futures: S&P500 -0.1%; Nasdaq100 -0.3%, Dax -0.1%; FTSE100 -0.1%
- EUR 1.1070-1.1082; JPY 108.36-108.58; AUD 0.6810-0.6832; NZD 0.6414-0.6436
- Commodity Futures: Gold 0.0% at $1,474/oz; Crude Oil +0.1% at $55.38/brl; Copper -0.2% at $2.65/lb

>>> US After Hours Summary: URBN -14%, ALC -1.7% following earnings/gu

After Hours Summary: URBN -14%, ALC -1.7% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to guidance: AVID +10.6%

Companies trading higher in after hours in reaction to news: FLNT +21.1% (authorizes the repurchase of up to $5 mln shares of common stock), BCRX +9.6% (Point72 increases passive stake), STNG +4.4% (announced its President purchased call options), CTMX +3.7% (initiated with a Buy at Guggenheim), ENDP +3.1% (announces FDA acceptance of BLA for collagenase clostridium histolyticum in patients with cellulite), MYOV +2.9% (continued strength), SLB +0.3% (initiated with a Buy at Deutsche Bank)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: URBN -14%, ALC -1.7%

Companies trading lower in after hours in reaction to news: ORGO -8.9% (to sell 9 mln shares of its Class A common stock in an underwritten public offering), CRSP -4.9% (announces public offering of 4.25 mln common shares), AMRN -3.6% (initiated with Underperform at Oppenheimer; tgt $7), AEO -3.5% (following URBN results), MGP -3% (commences public offering of 24.0 mln Class A shares), NYMT -2.7% (announces public offering of 25 mln shares of common stock), MAC -2.6% / SPG -0.9% (Carl Icahn touted as likely largest short-seller of mall debt in Wall Street Journal report), MSEX -2.1% (proposes public offering of ~$35 mln of shares of common stock), RIG -2.1% (initiated with a Sell at Deutsche Bank), MTZ -1.9% (attributed to block trade pricing), QTT -1% (files for $80 mln Class A Ordinary Share offering)

>>> US Gapping down

In reaction to disappointing earnings/guidance:

  • KSS -11.8%, WWD -6.1%, HD -4.5%, ASH -3.4%, ZTO -2.6%, ARMK -1%, TDG -0.5%

Other news:

  • KRTX -10.3% (files for 2.6 mln share common stock offering)
  • DHT -5.6% (DHT announces that BW Group has begun an offering of 14.68 mln shares )
  • M -5.1% (in sympathy with KSS)
  • GSX -4.5% (files for offering of 15 mln ADS representing 10 mln Class A ordinary shares by selling shareholders), I -3.7% (continued weakness; also downgraded to In-line from Outperform at Evercore ISI)
  • PFGC -3.2% (commenced a public offering of an aggregate of 9,200,000 shares of its common stock on a forward sale basis)
  • EGHT -3% ( files for $75 mln shelf offering of 0.50% Convertible Senior Notes due 2024 )
  • EFC -2.7% (commences public offering of 4.2 mln shares of common stock)
  • LOW -2% (in sympathy with HD)
  • DUK -1.3% (prices offering of 25 mln shares of common stock at $86.45 per share in connection with the forward sale agreement)
  • ROKU -1.2% (files for 571,459 share Class A common stock offering by holders)
  • SPCE -0.9% (files for offering of 30,999,976 shares of common stock underlying warrants)
  • TGT -0.9% (in sympathy with KSS)
  • WMT -0.4% (in sympathy with HD)

Analyst comments:

  • MSGN -5.3% (downgraded to Sell from Neutral at Guggenheim)
  • BLUE -2.6% (downgraded to In-line from Outperform at Evercore ISI)
  • T -1.3% (downgraded to Sell from Neutral at MoffettNathanson)
  • LEG -1.1% (downgraded to Hold from Buy at Stifel)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:

  • CRMT +10.2%, JKS +5.8%, BILI +4.8%, WUBA +4%, MDT +1.9%, ASND +0.9%

M&A news:

  • MDCO +28.4% (reports the company is fielding takeover interest from several parties)
  • DIOD +4.4% (pending acquisition of Lite-On Semiconductor said to be scrutinized by Chinese regulators, according to Bloomberg)

Other news:

  • MYOV +51.8% (Phase 3 HERO study of once-daily, oral relugolix (120 mg) met its primary efficacy endpoint)
  • NOW +4.1% (to join S&P 500, effective prior to the open on November 21)
  • ACHN +2.2% (EMA has granted access to support through the PRIME program for danicopan)
  • CLVS +2.1% (continued strength)
  • ADS +2.1% (announces Ralph Andretta as new CEO and President, effective February 3, 2020)
  • AMC +1.9% (extending late move higher after the WSJ reported that the DOJ will kill the Paramount consent decree which prevented studios form owning exhbitors)
  • CNK +0.9% (extending late move higher after the WSJ reported that the DOJ will kill the Paramount consent decree which prevented studios form owning exhbitors)
  • TMO +0.7% (to join S&P 100)

Analyst comments:

  • BOLD +2.7% (upgraded to Outperform from In-line at Evercore ISI)
  • OKTA +2.4% (upgraded to Buy at DA Davidson)
  • SPLK +1.4% (initiated with a Buy at DA Davidson)
  • GBDC +0.7% (upgraded to Outperform from Mkt Perform at Keefe Bruyette)