>>> Europe : Brokers Upgrades & Downgrades - 23rd of January 201

>>> Up
* Baloise Upgraded to Hold at HSBC; PT 155 Francs
* Deutsche Post Upgraded to Buy at DZ Bank; Price Target 32 Euros
* Euronav Upgraded to Overweight at JPMorgan
* Grenke Upgraded to Buy at Bankhaus Lampe
* Logitech Upgraded to Overweight at JPMorgan
* NSI NV Upgraded to Buy at ABN Amro Bank
* PGS Upgraded to Buy at SocGen; Price Target 28 Kroner
* Saipem Upgraded to Buy at Citi
* Teva ADRs Upgraded to Neutral at Piper Jaffray; PT $16

>>> Down
* Equinor Cut to Underperform at Credit Suisse; PT 230 Kroner
* Henkel Downgraded to Hold at Berenberg
* Nibe Downgraded to Hold at SEB Equities; Price Target 106 Kronor
* Nokian Renkaat Downgraded to Accumulate at Inderes; PT 32 Euros
* OMV Cut to Underperform at Credit Suisse; Price Target 50 Euros
* Pandora Downgraded to Underperform at RBC; PT 230 Kroner
* Scatec Solar Cut to Hold at SEB Equities; Price Target 70 Kroner
* SGS Downgraded to Hold at Kepler Cheuvreux; PT 2,320 Francs
* Thales Downgraded to Neutral at Credit Suisse; PT 108 Euros

>>> Initiation
* Acerinox Reinstated at Oddo BHF With Reduce; PT 9 Euros
* Anglo American Rated New Neutral at Oddo BHF; PT 18 Pounds
* Aperam Reinstated at Oddo BHF With Buy; PT 32 Euros
* ArcelorMittal Reinstated at Oddo BHF With Buy; PT 26 Euros
* Autogrill Reinstated at MainFirst With Outperform; PT 9.50 Euros
* BHP Group PLC Rated New Buy at Oddo BHF; PT 19 Pounds
* Cineworld Rated New Buy at Jefferies; PT 3.90 Pounds
* Compass Rated New Neutral at MainFirst; PT 17.40 Pounds
* Elior Group Rated New Neutral at MainFirst; PT 12.50 Euros
* Eramet Reinstated at Oddo BHF With Reduce; PT 63 Euros
* Euskaltel Rated New Neutral at Goldman; PT 8 Euros
* Grupo Ezentis Rated New Buy at Berenberg; PT 75 Cents
* Masmovil Rated New Buy at Goldman; PT 25 Euros
* Outokumpu Reinstated at Oddo BHF With Buy; PT 5 Euros
* Rio Tinto Reinstated at Oddo BHF With Reduce; PT 38 Pounds
* Salzgitter Rated New Reduce at Oddo BHF; PT 26 Euros
* Sodexo Reinstated at MainFirst With Outperform; PT 107 Euros
* SSAB Rated New Neutral at Oddo BHF; PT 36 Kronor
* Voestalpine Rated New Buy at Oddo BHF; PT 31 Euros

>>> Call
* Grenke Growth Story Fully Intact, Stock is Cheap, Lampe Says

Fwd:>>> US After Hours Summary: EHTH +8%, NAVI +7%, IBM +6%, CNMD +5%, COF


After Hours Summary: EHTH +8%, NAVI +7%, IBM +6%, CNMD +5%, COF -4% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: EHTH +8.3%, ARAY +7.8%, NAVI +7.4%, IBM +6.1%, CNMD +5%, AMTD +1.7%

Companies trading higher in after hours in reaction to news: LABL +9.7% (attributed to reports that the company hired advisor to consider sale), NTLA +4.5% (light volume after closing 7% lower on the day), APHA +3.4% (halted in Canada with news pending), SYF +1.7% (ahead of earnings tomorrow before the open), VIAB +0.9% (confirms plans to acquire Pluto TV, the free streaming television service in U.S., for $340 million in cash), ROL +0.7% (ticking higher - approved 12.5% increase in the quarterly cash dividend)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: COF -4.1%, QUOT -2.6%, IBKR -1.3%

Companies trading lower in after hours in reaction to news: AVCO -8.8% (after closing up more than 120% on the day), PTCT -6.7% (light volume; commences offering of $200 mln in common stock), CWST -4.8% (proposed underwritten public offering of 3.1 mln shares of its Class A common stock), CPLP -2.7% (lowers qtrly cash distribution to $0.045 per common unit, prior $0.08 per common unit), QCOM -1.7% (weakness being attributed to Kerrisdale short speculation and ahead of earnings next week on Jan 30 after the close)

>>> US Close Dow -1.22% S&P -1.42% Nasdaq -1.91% Russell -1.69% VIX +15,7%

Stock Market Wrap Up: Stocks Pull Back as Narrative Shifts Back towards Growth Concerns

The S&P 500 lost 1.4% on Tuesday, pulling back from short-term overbought conditions, with the narrative shifting back towards growth concerns. The Dow Jones Industrial Average lost 1.2%, the Nasdaq Composite lost 1.9%, and the Russell 2000 lost 1.7%.

10 of the 11 S&P 500 sectors finished lower with energy (-2.2%), industrials (-2.1%), and communication services (-2.0%) underperforming the broader market. Conversely, the utilities sector (+0.2%) was the only group to finish with gains.

The benchmark index came into the session up 13.6% since its Dec. 24 low and was arguably due for a pullback. Strikingly, the market's rally up to this point had brushed past many of the issues that were highlighted in Tuesday's headlines, which were nothing new to the market.

Some of those headlines included (1) a slowing Chinese economy, evidenced by China's 2018 6.6% GDP growth being its lowest pace since 1990; (2) the IMF cutting its 2019 and 2020 global growth forecasts by 0.1 each to 3.5% and 3.6%, respectively; and (3) a slowing U.S. housing market, evidenced by existing home sales sinking 6.4% in December to a seasonally adjusted annual rate of 4.99 million (Briefing.com consensus 5.25 million).

The stock market's seeming vulnerability to those headlines fostered a sense that the rally from deeply oversold conditions has run its course, such that the stock market will now be more attuned to stories highlighting weak growth or sticking points in trade negotiations with China.

Tuesday's selling efforts sent the S&P 500 below its 50-day moving average (2623). However, the benchmark index would close above that important technical support level after NEC Director Larry Kudlow, in a CNBC interview late in the day, refuted earlier reports that a preparatory US-China trade meeting had been cancelled.  Mr. Kudlow stated simply that the earlier reports were not true.

Separately, some weaker-than-expected corporate guidance also provided an excuse to take some profits off the table.

Dow component Johnson & Johnson (JNJ 128.92, -1.77, -1.4%) fell after it guided full-year 2019 sales below Wall Street's estimates. In addition, Stanley Black & Decker (SWK 115.69, -21.19) dropped 15.5% after it guided fiscal year 2019 earnings below consensus estimates.

Stanley Black & Decker's outsized loss, and a large downturn in shares of Arconic (ARNC 17.09, -3.25) after the company said its Board is no longer considering a sale of the company, contributed to the industrial sector's (-2.1%) underperformance.

Travelers (TRV 122.36, -1.65, -1.3%) was another Dow component that released its earnings report. The company missed earnings estimates and reported in-line revenue.

U.S. Treasuries saw increased buying interest, sending yields lower across the curve. The 2-yr yield decreased four basis points to 2.57%, and the 10-yr yield decreased five basis points to 2.73%. The U.S. Dollar Index was flat at 96.34. WTI crude fell 3.5% to $52.16/bbl.

Reviewing Tuesday's economic data, which featured Existing Home Sales for December as the only report:

  • Existing home sales decreased 6.4% month-over-month in December to a seasonally adjusted annual rate of 4.99 million (consensus 5.25 million) from an upwardly revised 5.33 million (from 5.32 million) in November. Total sales were 10.3% lower than the same period a year ago.
    • The key takeaway from the report is that it reflects a softening housing market, evidenced by the deceleration in the median selling price growth rate and sales declines across all regions despite a decline in the average commitment rate for a 30-year, conventional, fixed rate mortgage (4.64%) versus November (4.87%).

Looking ahead, investors will receive the weekly MBA Mortgage Applications Index and the FHFA Housing Price Index for November on Wednesday.

  • Russell 2000 +8.1% YTD
  • Nasdaq Composite +5.8% YTD
  • S&P 500 +5.0% YTD
  • Dow Jones Industrial Average +4.6% YTD