>>> What to look at today - 8th of January 2019

Stocks in Asia were mixed Tuesday as investors waited to see whether the outcome of fresh talks on trade will be productive and ahead of a televised address from U.S. President Donald Trump. The dollar snapped three days of declines and Treasuries steadied.
Equities posted modest gains in Japan and Australia and slipped in South Korea and China. U.S. and European futures advanced. The Trump administration expressed optimism it can reach a “reasonable” trade deal with China as President Xi Jinping dispatched one of his top aides to negotiations in Beijing. Traders are also anticipating Trump’s TV address Tuesday for any clues to an end of the ongoing government shutdown.
US After Hours UNP +6% on COO appointment, VIVO -6.7% following prelim sales guidance

Nikkei +0.82% Hang Seng +0.11% CSI -0.24% Shanghai -0.27% Shenzen -0.11%

Eur$ 1.1444 CNH 6.8627 CNY 6.8590 JPY 108.85 GBP 1.2766 CHF 0.9811 RUB 67.0023 TRY 5.3988 WTI$ 48.49 -0.04%

S&P +0.31% EuroStoxx +0.33% FTSE +0.12% Dax +0.33% SMI +0.46%

Macro :
- Four Option Trades Leave Marks of $1 Billion Stock Liquidation
- Fed’s Bostic: Government Shutdown May Affect Data and Hinder Fed
- China Is Said to Be Back in Market Buying U.S. Soybean Cargoes
- Gilead, Pfizer Execs Suggest Even More Pharma M&A Is On the Way

Keep an eye on :
- AIR FP : India May Ask Carriers to Hold Back Planes With P&W Engines: ET
- AI FP : Air Liquide Sees Currency Impact on Group Sales Neutral in 4Q
- ALO FP : Siemens-Alstom Assets Are Said to Draw Bids Amid Push to Sway EU
- CS FP : AXA May Exit Mutual Fund Venture With Bank of India: ET
- CS FP : ESR, AXA IM, Sovereign Wealth Fund Buy $1B Logistics Portfolio
- BHP LN : China Stimulus to Offer New Boost to BHP and Rio, Macquarie Says
- BMPS IM : Monte Paschi Withdraws From Euribor Bank Panel
- BMW GY : BMW to Showcase Riderless Motorcycle in U.S. For First Time
- BC IM : Brunello Cucinelli Full Year Revenue EU553 Mln
- CRG IM : Italy May Consider Precautionary Recap Request for Carige: Ansa
- CRG IM : Italian Cabinet to Meet Monday to Discuss Carige: Reuters
- CC1 GY : Consus Real Estate Signs Forward Sale Pact for About EU100m
- DAI GY : Daimler Offers Self-Driving Big Rigs as Tesla Plots Truck Debut
- DAI GY : Daimler Expects ‘Some Moderation’ in U.S. Truck Demand in 2H
- DAI GY : Daimler Trucks to Invest EU500m in Highly Automated Trucks
- DBK GY : Deutsche Bank Hires Wells Fargo’s Agarwal for Buyout Deals
- DIA SM :
- RACE IM : Ferrari Names Binotto As New Head of Formula 1
- GSK LN : Glaxo CEO Sees ‘Tremendous’ Growth Opportunity With Tesaro Drug
- KID NO : Kid ASA Fourth Quarter Revenue Beats Highest Estimate
- NANO FP : Nanobiotix & MD Anderson Cancer in Clinical Pact on NBTXR3
- NISSAN (7201 JP) : Nissan Again Refuses Renault’s Request for EGM: Nikkei
- NAS NO : Norwegian CFO Says Nothing Suggests Covenants Breached in 4Q: DN
- NOKIA FH : Orange Won’t Work With Huawei in France, Richard Says
- NOVN SW : Novartis’s Crizanlizumab Gets Breakthrough-Therapy Designation
- ORA FP : Orange Won’t Make the First Move in French Consolidation: CEO
- RNO FP : French Minister Penicaud Says Ghosn Remains Renault Head
- RNO FP : Nissan CEO Says Will Discuss Possible Alliance Changes: Mainichi
- RDSA LN : Shell to Invest $1b-$2b/Yr to 2020 in New Energies: CEO (Jan. 7)
- SAB SM : Cerberus, Oaktree to Bid for Solvia Land Assets: Confidencial
- SIKA SW : Sika Full Year Sales Meet Estimates
- SIKA SW : Sika Makes Binding Offer to Buy Parex; Enterprise Value CHF2.5B
- SOFTBANK (9434 JP) : SoftBank Sees $2b WeWork Investment, Had Discussed $16b: FT
- STM FP : Samsung Profit, Sales Miss Could Put Pressure on EU Chip Stocks
- TEVA IT : Generic Drugmakers Rise as Teva CEO Forecasts Stabilizing Prices
- UBSG SW : UBS Considers Replacing Asset Management Chief Koerner: Finews
- FR FP : Valeo Plans Further Cost Cuts, CEO Says: FT

>>> After Hours Summary: UNP +6% on COO appointment, VIVO -6.7%

After Hours Summary: UNP +6% on COO appointment, VIVO -6.7% following prelim sales guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to news: UNP +6.1% (names former Canadian National Railway exec Jim Vena as COO effective Jan 14), ETSY +2% and QEP +1.9% (continued strength), NUVA +1.2% (modestly rebounding from today's 9% decline), NVDA +0.8% (introduces DRIVE AutoPilot, world's first commercially available Level 2+ automated driving system)

After Hours Losers:

Companies trading lower in after hours in reaction to guidance: VIVO -6.7% (sees Q1 revs $51-51.5 mln vs $53.7 mln consensus driven by weakness in the Diagnostics segment)

Companies trading lower in after hours in reaction to news: SPWR -4.2% (ticking lower; was initiated with Underweight at Barclays), NLY -2.5% (to make public offering of 75 mln shares of common stock), CFX -0.8% (commenced public offering of 4 mln tangible equity units with an aggregate stated amount of $400 mln)

>>> Europe : Brokers Upgrades & Downgrades - 8th of January 2019

>>> Up
* Bankia Upgraded to Hold at Jefferies; Price Target 2.60 Euros
* Capital & Counties Upgraded to Add at Peel Hunt
* Electrocomponents Upgraded to Buy at Jefferies; PT 7 Pounds
* Keywords Studios Upgraded to Outperform at Davy
* Nokia ADRs Raised to Outperform at Raymond James; PT $7.50
* Outotec Upgraded to Buy at Goldman; PT 4.30 Euros
* Prysmian Upgraded to Buy at Goldman; PT 21 Euros
* SMCP Upgraded to Buy at Jefferies; Price Target 17.20 Euros
* Storebrand Upgraded to Overweight at JPMorgan; PT 72.30 Kroner
* Swiss Life Upgraded to Overweight at JPMorgan; PT 440 Francs

>>> Down
* Celanese Downgraded to Market Perform at BMO; PT $107
* Geberit Downgraded to Sell at Goldman; PT 339 Francs
* Grenke Downgraded to Hold at Berenberg
* Kion Downgraded to Sell at Goldman; PT 42 Euros
* Kone Downgraded to Neutral at Goldman; PT 51 Euros
* Mapfre Downgraded to Neutral at JPMorgan; PT 2.62 Euros
* Ryanair Downgraded to Sell at Berenberg
* Schneider Downgraded to Sell at Goldman; PT 60 Euros
* Telia Downgraded to Neutral at JPMorgan; PT 44 Kronor
* Unipol Downgraded to Neutral at JPMorgan; PT 4.10 Euros
* Vodafone Downgraded to Underperform at RBC; PT 1.25 Pounds

>>> Initiation
* Kone Rated New Buy at SocGen; PT 50 Euros
* Schindler Rated New Buy at SocGen; PT 235 Francs
* SSE Reinstated at Goldman With Buy

>>> Call

>>> US Close Dow +0.42% S&P +0.70% Nasdaq +1.26% Russell +1.78% VIX +0.09%(21.4)

Closing Market Summary: Stocks Still in Rally Mode

The S&P 500 gained 0.7% on Monday, securing its fourth day of gains in the last five sessions. The Dow Jones Industrial Average gained 0.4%, the Nasdaq Composite gained 1.3%, and the Russell 2000 outperformed with a gain of 1.8%.

The major averages opened the session to some tepid buying interest. The S&P 500 briefly dipped into negative territory (-0.3%), but the pullback didn't gain any traction as the benchmark index steadily climbed to session highs (+1.4%) by early afternoon.

This resiliency to selling efforts following huge gains last Friday created some fear of missing out on further gains that helped drive up prices.

Stocks, however, began to lose steam at around 1:45 p.m. ET, shortly after President Trump tweeted that he will address the nation over border security Tuesday evening.

Nevertheless, selling didn't gain much traction, as nine of the 11 S&P 500 sectors finished the session with gains. The consumer discretionary (+2.4%) and energy (+1.3%) sectors outperformed, while the consumer staples (-0.3%) and utilities (-0.7%) groups dragged on the broader market.

Retail was a consistent group that outperformed and helped lift the consumer discretionary sector. The SPDR S&P Retail ETF (XRT 43.56, +1.31) rose 3.1%.

Notable movers included PG&E (PCG 18.95, -5.45) plunging 22.2% amid a possible bankruptcy filing and Loxo Oncology (LOXO 232.65, +92.78) soaring 66.3% after an offer to be acquired by Eli Lilly (LLY 115.28, +0.62, +0.5%) at a 68% premium over its Friday closing price. PG&E was an influential drag on the utilities sector. 

U.S. Treasuries started the session in positive territory, but spent the bulk of the day in a retreat that coincided with a rally in the stock market. The 2-yr yield rose four basis points to 2.52%, and the 10-yr yield added two basis points to 2.68%. The U.S. Dollar Index fell 0.5% to 95.70, reaching its lowest close since mid-October.

Separately, the U.S. and China kicked off a two-day round of trade talks in Beijing on Monday.

Reviewing Monday's lone economic report, the ISM Non-Manufacturing Index for December:

  • The ISM Non-Manufacturing Index slipped to 57.6% in December (consensus 58.8%) from 60.7% in November. The dividing line between expansion and contraction is 50.0%, so the December reading reflects a deceleration in non-manufacturing business activity in the final month of 2018.
    • The key takeaway from the report is that it follows form with the ISM Manufacturing Index in showing a slowdown in activity in December. That is in keeping with the market's perception of economic matters and threatens to bleed into a slowdown in earnings growth.
    • According to ISM, the past relationship between the overall economy and the non-manufacturing index corresponds to a 3.2% increase in real GDP on an annualized basis.

Looking ahead, investors will receive the NFIB Small Business Optimism Index for December, the JOLTS - Job Openings and Labor Turnover report for November, and Consumer Credit for November on Tuesday.

  • Russell 2000 +4.2% YTD
  • Nasdaq Composite +2.8% YTD
  • S&P 500 +1.7% YTD
  • Dow Jones Industrial Average +0.9% YTD

>>> Shire bidder Takeda to continue pursuit of M&A after deal completion - trans

Shire bidder Takeda to continue pursuit of M&A after deal completion - translated
07 JAN 2019
Takeda Pharmaceutical [TYO:4502] will continue to pursue M&A deals after the completing the acquisition of Shire Plc [LON:SHP], the Nihon Keizai Shimbun reported.
The Japanese-language report cited CEO Christophe Weber, who said at a press conference on 7 January concerning the acquisition of Shire that going forward the field of immunotherapy will be a focus of investment, adding that it will be difficult to avoid pursuing M&A due to the long time commitment required for research in the sector.
However, there are risks to conducting large-scale M&A deals, the report said, noting that as a result of the JPY 6trn (USD 55bn) deal for Shire, which is set to complete today (8 January) Takeda will have around JPY 5.4trn in interest-bearing debt, or roughly eight times what the company had at the end of March 2018, to consider.