>>> What to look at today - 11th of January 2019

Asian equities posted modest gains Friday and were on course for the strongest week since early November, bolstered by continued signs of flexibility from the Federal Reserve and optimism over U.S.-China trade negotiations. The yuan climbed to the strongest since July.
Shares in Tokyo led the region, with more muted gains in South Korea and Hong Kong, while European futures pointed to a higher start. The dollar was set for four weeks of losses as Fed Chairman Jerome Powell underscored the message of patience with further interest-rate hikes, while saying the central bank will keep shrinking its balance sheet to a more normal level -- a remark that sparked an intraday slide in U.S. stocks. Later, Vice Chair Richard Clarida said any sustained headwinds to the U.S. economy should be offset by policy.
US After Hours PVH +6%, SNX +5% following earnings/guidance, NFLX +1.7% boosted by analyst upgrade

Nikkei +0.97% Hang Seng +0.36% CSI +0.61% Shanghai +0.60% Shenzen +0.58%

Eur$ 1.1523 CNH 6.7565 CNY 6.7555 JPY 108.38 GBP 1.2757 CHF 0.9829 TRY 5.4431 RUB 66.9472 WTI$ 52.54 -0.10%

S&P -0.01% EuroStoxx +0.39% FTSE +0.42% Dax +0.40% SMI +0.20%

Macro :
- Activist Hohn Erases Most of His Gains for Worst Year Since 2008
- Fed’s Bullard Fears Being on the ‘Precipice of a Policy Mistake’
- Fed Should Try to Offset Headwinds If They Persist, Clarida Says
- Pictet Says Stock/Bond Diversification Will Fail Again This Year

Keep an eye on :
- ABI BB : Anheuser-Busch InBev Boosts Tender Offers to $16.5B
- AC FP : Accor Raises Orbis Offer Price to 95 Zloty/Share
- ALO FP : Germany’s Altmaier Pressuring Vestager on Siemens-Alstom: HB
- AMS SW : Apple Suppliers Among Biggest Gainers as Chip Rally Persists
- BAYN GY : Appeals Court Dismisses Challenge to EPA Dicamba Renewal
- CRG IM : UniCredit Open to Carige Deal if Bankrolled by State: Rtrs
- CLASB SS : Clas Ohlson Has Asked Suppliers to Lower Prices, DI Reports
- CSGN SW : Credit Suisse to Start at Least CHF1b Share Buyback Jan. 14
- DEB LN : Debenhams Holders Vote Against Chairman and CEO From Board Post
- DKSH SW : DKSH Plans Parnership With Thai Meiji Pharmaceutical in Myanmar
- FLYB LN : Virgin to Be Largest Holder in New Flybe, Stobart Group: Sky
- HLE GY : Weak Market Weighs on Hella’s Adj. Sales, Ebit Growth View
- HIS SM : Hispania Says Price of Alzette Purchase Order Is EU17.8012/Shr
- IHG LN : InterContinental Trades at Discount, Appealing for Takeover: UFP
- KU2 GY : Kuka Cuts 2018 Forecast on Industry Slowdown and Uncertainties
- MULTI NO : Multiconsult CEO Christian Norgaard Madsen Resigns
- NDA SS : Cevian’s Gardell Joins Nordea’s Nomination Committee
- NDX1 GY : Nordex Gets 150 MW Order From U.S.
- RENE PL : REN: Constitutional Court Sees 2014 Extraordinary Levy as Legal
- RNO FP : Prosecutors Indict Ghosn for Breach of Trust; Ghosn to Seek Bail
- RNO FP : Renault Board Won’t Decide on Ghosn’s Fate at Thu. Meeting: AFP
- RNO FP : Renault Exec Got Six-Figure Salary Unknown to Board: Reuters
- CFR SW : Richemont Third Quarter Sales Meet Estimates
- RUI FP : Rubis Takeover Offer for KenolKobil Wins Regulatory Approval
- SGO FP : Saint-Gobain Sells Glass Businesses in Norway & Sweden
- SDRL NO : Seadrill CFO Morris to Step Down in June 2019, Seadrill Partners CEO to Step Down in June
- GLE FP : SocGen Buys InfraVia Capital Partners’ Holding in Regaz
- SNH GY : Steinhoff Europe Says LSW Challenges Voluntary Arrangement
- SNH GY : Steinhoff: LSW GmbH Issued Application Challenging Arrangement
- STMN SW : Straumann Chairman Sees CHF5b Sales in Next 10 Years: NZZ
- VOW3 GY : VW Files Damage Claim Against Oliver Schmidt: Handelsblatt
- VOW3 GY : Bosch to Pay $103.7M in Emission Test Settlement With States

>>> Europe : brokers Upgrades & Downgrades - 11th of January 201

>>> Up
* Cairn Energy Upgraded to Outperform at BMO
* Coloplast Upgraded to Hold at Jefferies
* Gima TT Upgraded to Hold at Kepler Cheuvreux; PT 6.80 Euros
* Hunting Upgraded to Overweight at JPMorgan; PT 7.29 Pounds
* Straumann Upgraded to Buy at Jefferies; PT 755 Francs
* Suedzucker Upgraded to Neutral at Goldman; PT 12 Euros
* Topdanmark Upgraded to Hold at SEB Equities; PT 316 Kroner
* Virbac Upgraded to Hold at Jefferies; PT 112 Euros
* William Demant Upgraded to Hold at Jefferies

>>> Down
* ABB ADRs Downgraded to Sell at Vertical Research; PT $17
* Bittium Downgraded to Reduce at Inderes; Price Target 7.50 Euros
* Georgia Healthcare Downgraded to Hold at Jefferies
* Ion Beam Downgraded to Hold at Jefferies
* Orion Downgraded to Underperform at Jefferies; PT 23.40 Euros
* Raiffeisen Downgraded to Neutral at JPMorgan; PT 28 Euros
* Soco Downgraded to Underperform at BMO
* Telia Downgraded to Sell at SocGen; PT 35 Kronor
* UDG Downgraded to Hold at Jefferies; PT 6.20 Pounds

>>> Initiation
* Akzo Nobel Rated New Outperform at MainFirst; PT 73 Euros
* Intervest Offices Rated New Hold at Kepler Cheuvreux
* Recordati Reinstated at Jefferies With Buy
* Ubisoft Rated New Equal-weight at Stephens; PT 75 Euros

>>> Call

>>> US After Hours Summary: PVH +6%, SNX +5% following earnings/guidan


After Hours Summary: PVH +6%, SNX +5% following earnings/guidance, NFLX +1.7% boosted by analyst upgrade

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: PVH +5.9% (also announces restructuring for Calvin Klein), SNX +5.3%

Companies trading higher in after hours in reaction to news: CRBP +15.7% (tgt raised to $38 from $36 at Cantor Fitzgerald), ERJ +4.6% / BA +0.4% (Boeing and Embraer announce Brazilian government approval of strategic partnership), OCUL +2.5% (submits supplemental New Drug Application to FDA for DEXTENZA), NFLX +1.7% (upgraded to Buy from Neutral at UBS), BKS +1.6% (modestly rebounding from 16% decline from its holiday sales update), SRPT +1.4% (light volume - mentioned positively on CNBC Fast Money), GLUU +1% (initiated with Overweight at Stephens), CDXS +0.9% (FDA completed safety review of CDX-6114 IND - co may proceed with its clinical trial protocol CDX6114-003), LEN +0.5% (authorized the repurchase of up to $1 bln or 25 mln shares of Class A or Class B common stock)

After Hours Losers:

Companies trading lower in after hours in reaction to sales update: URBN -1.4%

Companies trading lower in after hours in reaction to news: ATVI -6.8% (says Bungie will assume full publishing rights and responsibilities for the Destiny franchise), PCG -4.3% (Moody's downgrades Pacific Gas & Electric to Ba3 and PG&E Corp. to B2; assigns Ba3 CFR; ratings remain on review for downgrade), CGC -2.1% (ongoing volatility - was up 12% on the day)

>>> Gartner says Q4 worldwide PC shipments declined 4.3% to 68.6 mln with Lenovo

Gartner says Q4 worldwide PC shipments declined 4.3% to 68.6 mln with Lenovo, HP and Dell accounting for 63%
"Just when demand in the PC market started seeing positive results, a shortage of CPUs (central processing units) created supply chain issues. After two quarters of growth in 2Q18 and 3Q18, PC shipments declined in the fourth quarter," said Mikako Kitagawa, senior principal analyst at Gartner. "The impact from the CPU shortage affected vendors' ability to fulfill demand created by business PC upgrades. We expect this demand will be pushed forward into 2019 if CPU availability improves."

>>> GS Banque and Banca Arner to merge (Switzerland)

GS Banque and Banca Arner to merge
10 JAN 2019
GS Banque SA, a Geneva-based private bank, and a Lugano-based private bank Banca Arner today (10 January) announced their merger. Financial terms were not disclosed. The new entity’s shareholders’ equity and assets under management will be around CHF 30m and CHF 2bn respectively.
Millenium Associates acted as exclusive advisor to Arner.
Press release:
GS Banque and Banca Arner are pleased to announce their merger today.
Effective in March 2019, the operation will give birth to a new single legal entity with offices in Geneva and Lugano. Its new identity will be revealed in March.
The operation brings together the shareholders of GS Banque (the Pennone family) and those of Banca Arner (the Schrämli, Del Bue and Sciorilli Borrelli families) who know each other well and share the same entrepreneurial values, namely agility, perseverance and integrity. It is above all a union of people who appreciate each other and willing to develop a common project.
The shareholders of both institutions will remain involved with positions at the operational management level and on the board of directors of the new entity. The Lugano office will be an important development centre, targeting in particular the Ticino, Italian and Eastern European markets. The operational management of the new entity will be managed by an Executive Committee chaired by Grégoire Pennone, currently CEO of GS Banque.
“This mutual decision is based on strong personal relationships and shared values. Our two establishments are also imbued with a strong entrepreneurial culture, which, in some respects, unites us even more. This merger is also in line with the external growth operations successfully carried out by GS Banque which have enabled us to quadruple our assets under management in two years and significantly strengthen our shareholders’ equity,” comments Grégoire Pennone.
With this merger, the two banks intend to jointly develop their wealth management activities and strengthen their presence in their target markets. The new entity’s shareholders’ equity and assets under management will be around CHF 30m and CHF 2bn respectively.
“While ensuring that we will continue to offer the same quality of service to our clients, it is necessary to answer to the needs of a new generation, including entrepreneurs, who expect more from private banks than the conservation and transmission of their assets. This merger will therefore enable us to continue our efforts in this direction in order to offer modern private banking services through the integration of new technology and the development of innovative investment solutions,” explains Jean-Jacques Schrämli, member of Banca Arner’s Executive Committee.

>>> US Close Dow +0.51% S&P +0.45% Nasdaq +0,52% Russell +0.46% VIX -2.4%(19.50)

Closing Market Summary: Stocks Brush Past Retail Weakness, Powell Comments

The S&P 500 gained 0.4% on Thursday, extending its winning streak to five straight sessions. The Dow Jones Industrial Average gained 0.5%, the Nasdaq Composite gained 0.4%, and the Russell 2000 gained 0.5%.

10 of the 11 S&P 500 sectors finished higher with real estate (+1.5%), utilities (+1.4%), and industrials (+1.4%) leading the advance. Conversely, the consumer discretionary sector (-0.2%) underperformed.

It wasn't easy, as investors wrestled with some earnings warnings and some comments from Fed Chair Jerome Powell, but the story of the day once again involved buying the intraday dips and the market remaining resilient to selling efforts.

The S&P 500 lost as much as 0.9% shortly after the start of trading amid a prevailing sense that the broader market may have gotten overbought on a short-term basis. Entering the session, the benchmark index was up 10% from its Christmas eve low. 

In addition, earnings warnings from department store Macy's (M 26.11, -4.61, -17.7%) and airline operator American Airlines (AAL 32.04, -1.38, -4.1%) helped catalyze the opening selling activity, as they provided ample excuses to take some money off the table. Macy's also acted as an influential drag on the SPDR S&P Retail ETF (XRT 43.60, -0.71, -1.6%).

Despite these warnings, stocks staged a morning rebound effort into positive territory. This resilience to selling efforts presumably drew in sidelined participants fearful about missing out on further gains and pushed out weak-handed short sellers expecting a downturn.

The second dip brought the S&P 500 from a gain of 0.3% to a loss of 0.5% in afternoon trading. The dip occurred during Fed Chair Powell's participation in a Q&A session at the Economic Club of Washington and following a tweet from President Trump to say he is canceling his trip to the Davos World Economic Forum on account of matters related to the partial government shutdown. 

Headlines would suggest the dip was attributed to Mr. Powell's observation that the Fed's balance sheet will be substantially smaller than it is now, but larger than before. However, the market managed to regroup, cognizant that Mr. Powell wasn't suggesting anything the market didn't already know. 

The balance sheet will eventually be "substantially smaller," because it got bloated on the other side of the 2008 financial crisis.  Since the economy and financial system are no longer in the dire straits of that perilous time, it only makes sense that the balance sheet would one day be substantially smaller.  Moreover, it was only last week that Mr. Powell conceded that the Fed "wouldn't hesitate to make a change" to its balance sheet normalization plan if it was necessary.

True to recent form, the S&P 500 climbed back into positive territory and closed near its session high, which was just below the 2600 level.

Reviewing the weekly Initial and Continuing Claims report, which was the only economic data to be released on Thursday:

  • Initial claims decreased by 17,000 to 216,000 (consensus 225,000) for the week ending January 5. Continuing claims for the week ending December 29 decreased by 28,000 to 1.722 million.
    • The key takeaway from the report is that it fits neatly with the market's latest awareness that the labor market has held up fine despite the burgeoning concerns about the economy slowing.

Looking ahead, investors will receive the Consumer Price Index for December and the Treasury Budget for December on Friday.

  • Russell 2000 +7.2% YTD
  • Nasdaq Composite +5.3% YTD
  • S&P 500 +3.6% YTD
  • Dow Jones Industrial Average +2.9% YTD