>>> After Hours Summary: KBH +6.4%, AIR +3.7%, NKE -3.9%, CTAS

After Hours Summary: KBH +6.4%, AIR +3.7%, NKE -3.9%, CTAS -3.5% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: KBH +6.4%, AIR +3.7%

Companies trading higher in after hours in reaction to news: EGY +12% (granted 10 year extension of Exclusive Exploitation Authorizations in the Etame Marin Permit), VSTM +9.5% (Verastem and CSPC Pharmaceutical Group enter into exclusive licensing agreement for the development and commercialization of COPIKTRA in China), ALDX +7.1% (extended higher after confirming it will host call tomorrow Sept 26 at 8am ET to provide the results from its dry eye disease Phase 2b clinical trial), VNDA +4.4% (ticking higher; to join S&P SmallCap 600), AUPH +2.5% (higher after completing enrollment for AURORA Phase 3 trial ahead of schedule), NLSN +2.3% (attributed to reports of PE interest), IGT +2% (Intl Game Tech and William Hill US (WIMHY unit) entered into multi-year agreement to offer US lotteries a full service solution for sports betting)l PTLA +1.1% (ticking higher; FDA has granted Orphan Drug Designation to cerdulatinib)

A few homebuilders are higher on the heels of KB Homes (KBH) earnings guidance: PHM +1.4%, TOL +1%, etf - ITB +0.2%

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: NKE -3.9%, CTAS -3.5%

Companies trading lower in after hours in reaction to news: UPL -21.3% (was unable to reach agreement on the terms of senior secured first lien term loan; lender talks have ceased), NITE -4.4% (commences underwritten public offering of 4.0 mln ADSs), CONE -3.4% (commences offering of 8.0 mln shares of common stock offered by CyrusOne and forward purchaser), ROL -0.5% (Rollins to replace Andeavor [ANDV] in the S&P 500)

Nike (NKE) earnings related weakness is weighing on athletic related retailers: FL -2.4%, UAA -1.2%, LULU -0.6%

>>> US Close Dow -0,26% S&P -0,13% Nasdaq +0,18% Russell +0,20%

Closing Market Summary: Mixed Outing Ahead of Wednesday's Fed Decision

Stocks had a mixed outing on Tuesday, with the major averages settling little changed. The S&P 500 lost 0.1%, the Nasdaq ticked up 0.2%, and the Dow slid 0.3%. The flat performance happened as the Federal Reserve kicked off a two-day policy meeting in D.C., and as President Trump appeared before the UN General Assembly in New York.

The utilities (-1.2%), consumer staples (-0.7%), and materials (-0.5%) sectors led to the downside, while communication services (+0.1%), consumer discretionary (+0.6%), and energy (+0.6%) led to the upside. The energy space is now +2.1% for the week, a performance that's been underpinned by a jump in the price of crude oil -- although crude did pull back amid President Trump's UN speech.

Addressing world leaders, President Trump criticized OPEC on Tuesday, saying the oil cartel is "ripping off the rest of the world" by colluding to limit supply and prop up prices. WTI crude futures were up as much as 0.9%, but fell to their flat line following the president's comment. WTI crude closed +0.2% at $72.28/bbl.

President Trump also criticized Iran, which is currently the target of U.S. economic sanctions, calling its government a "corrupt dictatorship" and saying its leaders "sow chaos, death, and destruction." The president also touched on North Korea, ISIS, and Syria, and reiterated his administration's hard stance on fair trade.

Meanwhile, in Washington, Fed officials began their September meeting, which is all but certain to end on Wednesday afternoon with a rate hike of 25 basis points. The Fed-sensitive yield on the 2-yr Treasury note rose three basis points to 2.83% on Tuesday, while the benchmark 10-yr yield climbed two basis points to 3.10%.

In corporate news, semiconductor giant Intel (INTC 45.91, -1.00) lost 2.1% after being downgraded to 'Underperform' from 'Market Perform' at Raymond James. Chipmakers underperformed as a whole, with the Philadelphia Semiconductor Index dropping 1.7%. Separately, Century Link (CTL 21.05, -1.85) lost 8.1% following the resignation of its CFO, Sunit Patel.

Reviewing Tuesday's economic data, which included the Consumer Confidence Index for September, the FHFA Housing Price Index for July, and the S&P Case-Shiller Home Price Index for July:

  • The consumer confidence reading for September increased to 138.4 (consensus 131.0) from the prior month's revised reading of 134.7 (from 133.4).
    • The key takeaway from the report is that the high level of consumer confidence, which was fueled by an uptick in expectations, creates a good backdrop for healthy consumer spending activity that is the driver of GDP growth.
  • The FHFA Housing Price Index rose 0.2% in July (consensus +0.2%), and the June increase was revised to 0.3% from 0.2%.
  • The Case-Shiller 20-City Index increased 5.9% in July (consensus +6.2%), and the June increase was revised to 6.4% from 6.3%.

Looking ahead, investors will receive the weekly MBA Mortgage Applications Index and August New Home Sales on Wednesday morning. As mentioned above, the Fed's latest policy directive will be released in the afternoon, with the CME FedWatch Tool placing the chances of a rate hike at 100%.

  • Nasdaq Composite +16.0% YTD
  • Russell 2000 +11.3% YTD
  • S&P 500 +9.1% YTD
  • Dow Jones Industrial Average +7.2% YTD

FT Lex : Comcast/Sky/Disney: wanted, dead or alive

Comcast/Sky/Disney: wanted, dead or alive
The cable group is livin’ on a prayer

Halfway there but livin’ on a prayer? Bouffant rocker Jon Bon Jovi could have been singing about Brian Roberts, not blue-collar Americans. Comcast, the business run by Mr Roberts, grabbed a third of Sky in the market for £8.6bn on Monday. The group lodged the highest bid for the UK-listed broadcaster and broadband group at the weekend.

Any lingering doubts rival bidders had about Mr Roberts’ seriousness have evaporated, like a puff of hairspray. He craves Sky’s content, technology and European reach. These are ingredients in a possible antidote to the malady of “cord-cutting”.

Mr Roberts’ difficulty is that Fox, underbidder in the auction run by the UK Takeover Panel, already has 39 per cent of Sky. Disney has promised to purchase the stake with other 21st Century Fox media assets.

The lyrics of New Jersey’s sixth-best singer are therefore apt. Comcast needs just over 50 per cent of all Sky’s shares to gain control. UK takeover rules give it a clear run until October 11, as Jefferies notes. But unless Fox and Disney capitulate, Comcast can buy only from the 60 per cent owned by minorities. A 29.1 per cent market purchase at the £17.28 offer price means Comcast is halfway to that target.

The cable group is livin’ on a prayer because minorities with 10 per cent could deny Comcast control, through inertia or design. The shock and awe of the market purchase is meant to discourage that. Mr Roberts is telling Disney to play ball, too. He wants Bob Iger to sell into his bid via Fox. Disney’s debts are rising. Proceeds of £11.6bn would reduce them.

A disposal might also put Mr Roberts in a good mood to discuss selling Comcast’s 30 per cent of streaming service Hulu. Disney will have 60 per cent following its purchase of Fox assets. Legal threats preclude a back-to-back deal. But Hulu might naturally come up if Mr Roberts and Mr Iger meet in a month or so to josh about that nail-biting auction in London.

FT : Digicel request for bond repayment delay rejected

Digicel request for bond repayment delay rejected
Investors dismiss Irish tycoon’s proposal to extend debt as worries rise over default

A push by Ireland’s richest man to refinance his heavily indebted Caribbean telecoms company has hit a wall after big investors rejected his bid to postpone repaying $3bn in bonds.

Denis O’Brien’s effort to buy more time for Digicel to repay the debt comes at a critical time for the company, amid anxiety about a possible default on a $2bn bond due in 2020.

Now bondholders have dismissed Mr O’Brien’s proposal to extend by two years this debt and a $1bn 2022 note, saying the terms he has offered were “unacceptable”.

A statement from a bondholder committee suggests it will take a robust approach to talks with Mr O’Brien, who took Digicel into 31 markets after founding the company in Jamaica in 2001.

Digicel’s bondholders are known to include Ashmore, BlackRock and Eaton Vance but their precise stance is unknown and it is not clear whether they are represented on the committee.

Mr O’Brien faces the prospect of having to sweeten the terms of a restructuring proposal that has led to downgrades from rating agencies Moody’s and Fitch.

The company has been a lucrative investment for Mr O’Brien but its bonds have been trading at 60 cents and 70 cents on the dollar, as concern mounts about its indebtedness at a time of anxiety over risks to emerging markets more generally.

Revenues and earnings have declined and Digicel has cut tariffs for data to boost the slow uptake of services introduced after a $2.4bn investment in networks.

Law firm Akin Gump, which is advising the bondholder committee, said investors holding more than 60 per cent of each bond have “entered into a lock-up agreement” in which they resolved not to tender their notes in response to Mr O’Brien’s proposal to prolong the debt.

In response, Digicel said that it was extending by three weeks the early tender deadline for the offer until October 19.

This move, days before the Friday deadline for acceptance of the offer, was the second extension. “Digicel continues constructive discussions with an ad hoc group of noteholders regarding the exchange offers,” the company said.

Without naming any Digicel investors, Akin Gump said it has held two teleconferences for multiple financial institutions who together hold $2.8bn of bonds issued by the company.

“Based on the strong feedback received from Digicel Group Ltd noteholders, Akin Gump has informed Digicel Group Ltd and its advisers that the current terms of the proposal set out in the offering memorandum are unacceptable to . . . noteholders,” it said.

The committee has directed Akin Gump to communicate a request to other bondholders to refuse to tender their notes “and thereby further increase the already sizeable majority of Digicel Group Ltd noteholders” who oppose it.

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:

  • FDS -7.2%, INFO -2.7%, EBF -1.4%, MANU -0.6%

M&A news:

  • KORS -1% (confirms agreement to acquire Versace for $2.12 bln)

Other news:

  • TGTX -27.6% (provides update regarding UNITY-CLL Phase 3 trial -- interim analysis of Overall Response Rate could not be conducted at this time as the data were not sufficiently mature to conduct the analysis)
  • SNDX -12.9% (announces updated results from ongoing Phase 2 ENCORE 601 trial of Entinosat in combination with KEYTRUDA in NSCLC; ORR results rate failed to meet prespecified endpoint)
  • PETQ -4.6% (commences public offering of 2.0 mln shares of common stock; selling shareholders also intend to offer 3.0 mln shares upon exchange of membership units of PetIQ Holdings)
  • AMRN -4.4% (modestly pulling back)
  • CWEN -2.8% (commenced offering of 3,916,449 shares of Class C common stock)
  • BJ -2.7% (commences underwritten follow-on public offering of 28.0 mln shares of common stock by selling stockholders)
  • CTL -2.6% (Chief Financial Officer Sunit Patel has resigned after accepting an executive leadership role at another company)
  • DLR -2.5% (prices public offering of 8.5 mln shares of its common stock at a price of $113.00 per share)
  • FB -2.3% (Instagram Co-founders Kevin Systrom & Mike Krieger to resign)
  • ANAB -1.9% (announces $200 million common stock offering)
  • CNP -1.2% ( announces public offering of $1.5 bln in common stock and $750 mln in depositary shares)
  • NRE -1.1% (NorthStar Realty Europe shareholder Senvest Management sends letter to the Board, proposes several potential solutions to the company stock trading at a significant discount to net asset value)

Analyst comments:

  • DCPH -5.1% (initiated with Underperform at Leerink Partners)
  • DFIN -4.1% (downgraded to Underweight from Neutral at JP Morgan)
  • CY -2.7% (downgraded to Sector Weight from Overweight at KeyBanc Capital Mkts)
  • ON -1.2% (downgraded to Mkt Perform from Outperform at Raymond James)
  • INTC -1% (downgraded to Underperform from Mkt Perform at Raymond James)
  • CACI -0.8% (downgraded to Hold from Buy at Jefferies)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:

  • ASNA +18.5%, JBL +4.1%

Other news:

  • TLRY +18.7% (announces successful export of medical cannabis from Canada to Australia for distribution to critically ill pediatric patients)
  • ARNA +6.3% (Arena Pharma reports positive phase 2a Results for olorinab in patients with abdominal pain associated with Crohn's Disease; intends to progress the olorinab clinical program targeting gastrointestinal pain)
  • BAS +4.8% (Key Energy Services proposed to combine with Basic Energy Services in an all-stock merger; to be accretive to both sets of shareholders after consideration of cost synergies)
  • PSTI +4.6% (Pluristem Therapeutics granted Orphan Drug Designation by the FDA for the Company's PLX cell therapy for the treatment of graft failure and incomplete hematopoietic recovery following hematopoietic cell transplantation)
  • VSTM +3% (announces FDA approval for COPIKTRA)
  • SNAP +2.2% (Snap +3% amid turmoil at Facebook's (FB) Instagram, with co-founders Kevin Systrom and Mike Krieger having resigned)
  • SBGL +2% (announces milestones reached in terms of the Altar transaction)
  • RETA +2% (announces positive, final results from the IgA nephropathy and type 1 diabetic chronic kidney disease (T1D CKD) cohorts of PHOENIX)
  • TNC +1.3% (to acquire Gaomei Cleaning Equipment Company)
  • KIRK +1.1% (appoints Steve Woodward as CEO, effective October 22; authorizes new $10 mln stock repurchase program)

Analyst comments:

  • WK +4.2% (upgraded to Outperform from Neutral at Robert W. Baird)
  • CGC +3.4% (initiated with a Buy at The Benchmark Company)
  • SQ +2.7% (target raised to new Street-high $125 from $86 at Nomura-Instinet)
  • SAIC +1.5% (upgraded to Buy from Hold at Jefferies)
  • CLX +1.5% (upgraded to Buy from Hold at Argus)
  • HP +1.1% (upgraded to Buy from Neutral at B. Riley FBR)
  • DG +1.1% (resumed with a Buy from Neutral at Buckingham Research)
  • BCPC +0.9% (initiated with a Buy at H.C. Wainwright)
  • WELL +0.8% (initiated with a Overweight at Barclays)