>>> Europe : Brokers Upgrades & Downgrades - 28th of August 2018

>>> Up
* Axel Springer Upgraded to Overweight at Barclays; PT 70 Euros
* Barry Callebaut Raised to Buy at Kepler Cheuvreux
* Faurecia Upgraded to Buy at Kepler Cheuvreux; PT 65 Euros
* Kinepolis Upgraded to Buy at Berenberg
* RWE Upgraded to Buy at Jefferies; PT 29 Euros
* Signify Raised to Neutral at Kempen & Co; Price Target 21 Euros
* TI Fluid Upgraded to Overweight at JPMorgan; PT 3.70 Pounds

>>> Down
* Continental Downgraded to Neutral at JPMorgan; PT 184 Euros
* Petrofac Downgraded to Hold at Kepler Cheuvreux; PT 6.60 Pounds
* u-blox Downgraded to Reduce at Kepler Cheuvreux; PT 147 Francs

>>>> Initiation
* Coats Rated New Buy at Citi; PT 1.09 Pounds
* EON Downgraded to Hold at Jefferies; PT 10.20 Euros
* Lehto Group Rated New Buy at SEB Equities; PT 12.60 Euros

>>> What to look at today - 28th of August 2018

Asian stocks extended Monday’s advance after U.S. equities climbed to fresh all-time highs, as the Trump administration said it was negotiating a bilateral trade deal with Mexico. The dollar recovered against major peers and the yen slipped.
Stocks in Japan, Hong Kong and Australia gained, while Chinese shares underperformed. Earlier, U.S. equities ended higher after President Donald Trump unveiled details of the agreement that he says will replace Nafta. The Mexican peso fell after initially rallying on the news as investors clamored for details of any pact and clarity on where it leaves Canada. Treasury yields ticked higher and U.S. futures pointed to modest gains. The yuan dipped in the offshore market and oil pulled back under $69 a barrel.
US After Hours HEI +6%, PAHC -1% following earnings/guidance, AFMD +147% on Genentech collaboration news

Nikkei +0.25% Hang Seng +0.18% CSI -0.19% Shanghai -0.11% Shenzen -0.01%

Eur$ 1.1670 CNH 6.8063 CNY 6.8151 JPY 111.22 GBP 1.2871 CHF 0.9804 TRY 6.1756 RUB 67.5703 WTI$ 68.84 -0.04%

S&P +0.00% EuroStoxx +0.03% Dax +0.06% FTSE +0.52% SMI -0.07%

Macro :
- Asymmetric Upside Risks Coming to Yields Near You: Macro View
- German, Swiss Lenders Change Strategy on Negative Interest Rates
- Theresa May Says No Deal Will Not Be 'End of the World', And Appears to Distance Herself From Chancellor's Warnings

Keep an eye on :
- AGN NA : Aegon U.S. Units Reach Settlement With SEC, to Pay $97.6m
- ALLN SW : Allreal First Half Net Income CHF61.3 Mln
- AGFB BB : Agfa-Gevaert in Pact W/ Lucky HuaGuang for Graphics Prepress
- ATC NA : Altice Is Said to Mandate Lazard on SFR Network Finance: Figaro
- ATRS AV : Atrium European Real Estate Buys Warsaw Retail Site for EU301.5m
- EQNR NO : Aibel Wins Equinor Contract Valued at About NOK500M
- AGFB BB : Active Ownership Capital Boosts Agfa Stake to 10.32% on Aug. 22
- CRG IM : Banca Carige shareholder Mincione says Banco BPM and UBI are ideal partners
- BALN SE : Baloise First Half Combined Ratio Reported Beats Estimates
- BCART BB : Biocartis Gets Exclusive Global License Rights in EGFR Mutations
- BSGR NA : B&S Group Buys 75% of U.S. Online Retailer FragranceNet.com
- DOM SS : Dometic CEO Expects Sales, Share Price to Double: DI
- GAM SW : GAM to Start Liquidation of Some of Its Bond Funds
- FCT IM : Fincantieri Should Rebuild Fallen Genoa Bridge, Di Maio Says
- JST GY : Jost Werke First Half Revenue Meets Estimates
- SDF GY : Fertilizer Stocks Jump as Indian Potash Price Beats Estimates
- KNEBV FH : Kone Remains Elevators Top Pick at Morgan Stanley
- KTMI AV : KTM Industries Sees Full Year Revenue About EU1.57 Bln
- KIN BB : Buy Kinepolis Undervalued on Canada Deal, Film Slate: Berenberg
- NESN SW : Closes deal for the perpetual global license of Starbucks Consumer Packaged Goods and Foodservice products
- NRS NO : Norway Royal Salmon Cuts Full Year Harvest Forecast
- RBREW DC : Royal Unibrew Boosts Full Year Net Revenue Forecast
- ROG SW : Roche Diagnostics CEO Roland Diggelmann to Step Down in Sept.
- SCHP SW : Kone Remains Elevators Top Pick at Morgan Stanley
- SSM SS : SSM Says Stockholm Housing Market Is Stabilizing Somewhat
- TAMN SW : Tamedia First Half Ebitda CHF85.4 Mln
- FTI US : TechnipFMC Wins Large Contract for Vietnam Olefins Plant
- TPS1V FH : Kildare Offers to Buy Technopolis in $850 Million Deal
- 7203 JP : Toyota Confirms $500m Investment in Uber for Self-Driving Tech
- VAR1 GY : Varta First Half Revenue EU134.0 Mln
- VET SW : Vetropack First Half Sales Beat Estimates

>>> Europe : Brokers Upgrades & Downgrades - 28th of August 2018

>>> Up
* Axel Springer Upgraded to Overweight at Barclays; PT 70 Euros
* Barry Callebaut Raised to Buy at Kepler Cheuvreux
* Faurecia Upgraded to Buy at Kepler Cheuvreux; PT 65 Euros
* Kinepolis Upgraded to Buy at Berenberg
* RWE Upgraded to Buy at Jefferies; PT 29 Euros
* TI Fluid Upgraded to Overweight at JPMorgan; PT 3.70 Pounds

>>> Down
* Continental Downgraded to Neutral at JPMorgan; PT 184 Euros
* Petrofac Downgraded to Hold at Kepler Cheuvreux; PT 6.60 Pounds
* u-blox Downgraded to Reduce at Kepler Cheuvreux; PT 147 Francs

>>>> Initiation
* Coats Rated New Buy at Citi; PT 1.09 Pounds
* EON Downgraded to Hold at Jefferies; PT 10.20 Euros
* Lehto Group Rated New Buy at SEB Equities; PT 12.60 Euros

>>> Altice plans to divest Meo as part of restructuring

Altice plans to divest Meo as part of restructuring - report (translated)
28 AUG 2018
Altice [AMS:ATC], the French telco listed in the Netherlands, plans to sell its Portuguese cable TV operator Meo as part of a restructuring aimed to lower debts of EUR 50bn, reported Expresso. Sources told the paper that Miguel Relvas, a former minister in Portugal’s previous PSD centre-right government, is leading efforts to find a buyer for Meo.
Ricardo Silva, a friend and business partner and private equity investor, could be part of a consortium that acquires Meo, the same sources said. A trade publication reported last month that Orange [EPA:ORA] of France and Telefonica [LON:TDE] of Spain were the potential suitors. But these reports were denied by Altice.
Meo posted 1H18 sales of EUR 516m and net losses of EUR 157m in 2017, down 5.4% year-on-year, the item said.

>>> US After Hours Summary: HEI +6%, PAHC -1% following earnings/g

After Hours Summary: HEI +6%, PAHC -1% following earnings/guidance, AFMD +147% on Genentech collaboration news

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: HEI +5.8%

Companies trading higher in after hours in reaction to news: AFMD +146.9% (announces collaboration with Genentech to develop novel NK cell engager-based immunotherapeutics for multiple cancer targets; Affimed will receive $96 million upfront and committed funding and is eligible for up to an additional $5.0 bln), BRKS +14.9% (to sell its semiconductor cryogenics business to Atlas Copco for $675 mln in cash), LSCC +6% (appoints Jim Anderson CEO effective September 4), TTPH +5.5% (announces FDA approval of XERAVA for complicated intra-abdominal infections), ALNY +3.6% (following AKCA / IONS CRL news), ICHR +1.8% (CFO disclosed the purchase of 5.2K shares), AMD +1.3% (names Saeid Moshkelani as SVP of Client Compute Group; Darren Grasbya named SVP of global Computing and Graphics sales, replacing Jim Anderson who leaves to pursue other opportunities)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: MITK -4.1% (CEO and CFO will be departing; co reaffirms full-year guidance), PAHC -0.9%

Companies trading lower in after hours in reaction to news: AKCA -24.1% and IONS -14.3% (Akcea Therapeutics and Ionis receive Complete Response Letter for WAYLIVRA from FDA), WMGI -4.3% (announces $440 mln stock offering from existing shelf registration)

>>> US Close Dow +1.01% S&P +0.77% Nasdaq +0.91% Russell +0.16%


Closing Market Summary: More Records Following U.S.-Mexico Trade Deal

Wall Street extended Friday's push into record territory on Monday, with the S&P 500 (+0.8%) registering its second straight record close. The tech-heavy Nasdaq (+0.9%) and the small-cap Russell 2000 (+0.2%) also notched new records, while the blue-chip Dow (+1.0%) finished roughly 2.0% below its January 26 all-time high.

News of a trade deal between the U.S. and Mexico helped underpin Monday's advance, removing some of the trade uncertainty that's plagued the market at times this year. With a U.S.-Mexico deal in place, Canada will now come to the negotiating table as the three nations look to fully replace their three-way NAFTA deal.

Monday's gains were broad-based, with nine of eleven sectors finishing in the green. The top-performing groups were financials (+1.3%), industrials (+1.2%), and materials (+1.5%); the top-weighted technology sector (+1.0%) also outperformed, with Advanced Micro (AMD 25.26, +1.28, +5.3%) extending a 12-yr high.

Conversely, the lightly-weighted utilities (-0.6%) and real estate (-0.1%) sectors finished at the back of the pack.

In corporate news, Tesla (TSLA 319.27, -3.55, -1.1%) slid after its CEO, Elon Musk, announced that he's abandoned plans to take the electric automaker private -- which he controversially floated as a possibility on August 7, saying that he's secured funding for a deal at a price of $420 per share.

Away from equities, U.S. Treasuries fell on Monday, sending yields higher across the curve; the benchmark 10-yr yield climbed two basis points to 2.85%. Meanwhile, the U.S. Dollar Index slid 0.5% to 94.65, challenging its August low, and WTI crude futures ticked up 0.2% to $68.87/bbl, hitting a three-week high.

Investors did not receive any economic data on Monday, but will receive several reports on Tuesday, including Advanced International Trade in Goods and Advanced Wholesale Inventories for July, the S&P Case-Shiller Home Price Index for June, and the Consumer Confidence Index for August.

  • Nasdaq Composite +16.1% YTD
  • Russell 2000 +12.6% YTD
  • S&P 500 +8.4% YTD
  • Dow Jones Industrial Average +5.4% YTD

WSJ : U.S. to Pay Farmers Up to $4.7 Billion to Offset Trade-Conflict Losses

U.S. to Pay Farmers Up to $4.7 Billion to Offset Trade-Conflict Losses
U.S. soybean farmers to receive the biggest share of payments, up to $3.6 billion

*U.S. Department of Agriculture to Make $4.7 Billion in Payments to Farmers to Offset Trade Losses

U.S. Soybean Farmers to Receive $3.6 Billion, Biggest Share of USDA Payments

USDA to Purchase Food Worth Up to $1.2 Billion to Help U.S. Farmers Mitigate Trade Losses

*USDA to Spend $200 Million on Trade Promotion Programs

*USDA Secretary Perdue: On Trade, China and Others Remain “Recalcitrant and Intransigent”

*USDA to “Continue to Evaluate” Trade Landscape to Determine Additional Payments

WSJ : Toyota Investing $500 Million in Uber in Driverless Car Pact

Toyota Investing $500 Million in Uber in Driverless Car Pact
Auto maker and ride-hailing company will jointly work on driverless-vehicle development as part of investment

Toyota Motor Corp. TM 3.01% is set to invest about $500 million in Uber Technologies Inc. as part of an agreement by the two companies to work jointly on driverless-vehicle development, according to people familiar with the matter.

Toyota’s investment values Uber at about $72 billion, slightly higher than where SoftBank Group Corp. valued the ride-hailing company earlier this year with its funding.

Uber and Toyota declined to comment.

Uber has been seeking ways to lower development costs and losses in its autonomous-vehicle unit after a fatal crash involving one of its cars earlier this year in Arizona. Last year, the Uber division spent about $750 million on self-driving car development before making cuts this year, according to people familiar with the matter.

In recent months, Uber has closed its Arizona autonomous-vehicle operations and laid off about 400 test drivers, some of whom it will rehire after undergoing new training. Uber also has taken its self-driving vehicles off the roads in the San Francisco Bay Area, Pittsburgh and Toronto while investigators look into the circumstances of the Arizona crash.

Technologists believe self-driving vehicles could greatly reduce travel time and save lives by eliminating human error.

For ride-sharing concerns like Uber and Lyft Inc. the development could cut their biggest expense: paying human drivers. For auto makers such as Toyota, the potential of self-driving cars to power car-sharing services represents a major challenge to an industry dominated by individual car ownership.

Toyota’s investment is reminiscent of General Motors Co.’s $500 million bet on Lyft in early 2016 as part of a plan to jointly development autonomous vehicles. That deal marked the first time a major car maker joined forces with a ride-hailing company, and accelerated a confusing array of alliances between Detroit and Silicon Valley in a race to seize a stake in the future of personal transportation.

GM only a few months later in 2016 acquired startup Cruise Automation Inc., maker of a system for retrofitting existing vehicles with autonomous-driving software. That acquisition enabled GM to go its own way and become an able competitor to Uber, Alphabet Inc.’s Waymo and others in the effort to get driverless cars on the streets.

SoftBank’s Vision Fund, a big backer of Uber, in June bought a nearly 20% stake in GM’s Cruise as the auto maker plans to launch a robot ride-hailing service next year.

Last month, Ford Motor Co. carved out its self-driving car program into a subsidiary known as Ford Autonomous Vehicles LLC, to make it easier to attract third-party investors.

Meanwhile, Fiat Chrysler Automobiles N.V . is providing some vehicles used by Waymo’s autonomous car program, and has joined with BMW Group and Intel Corp. to develop technology for a self-driving car by 2021. It expects to launch its own autonomous vehicles early next decade.

Toyota hasn’t been as quick to embrace autonomy as rivals such as GM, but has moved quickly recently to bolster its research into self-driving capabilities. The Japanese company has set a goal for debuting an autonomous vehicle by 2020 and earlier this year Toyota and two affiliates earmarked nearly $3 billion to build software for such vehicles.

WSJ : Report on Volkswagen’s Changes Since Emissions Scandal Cites Lack of Trans

Report on Volkswagen’s Changes Since Emissions Scandal Cites Lack of Transparency
Audit evaluates VW’s efforts to prevent another scandal since 2015 disclosure the company rigged diesel cars to cheat emissions tests

WOLFSBURG, Germany—Nearly three years since U.S. authorities charged Volkswagen AG VOW3 2.51% for cheating on emissions tests, the German auto maker is only starting to implement changes needed to prevent another scandal, according to a report by a Justice Dept.-appointed monitor.

The report, published on Monday, is the work of Larry Thompson, a former deputy U.S. attorney general appointed as independent compliance auditor after Volkswagen pleaded guilty to violations of U.S. law in connection with the diesel scandal.

Mr. Thompson criticized the company for being insufficiently transparent, citing a “reluctance to share certain information.” Volkswagen, he wrote, routinely “included the use of redactions” in documents provided to the auditor. Often, company officials would claim attorney-client privilege and invoke German privacy laws.

Addressing journalists at the company’s headquarters in central Germany, Mr. Thompson and Hiltrud D. Werner, a Volkswagen board member, said the company had pledged to be more open in the future.

The report is the first audit of Volkswagen’s efforts to comply with its agreement with the Justice Dept. and the state of California since its guilty plea in the wake of the September 2015 disclosure that the company had rigged nearly 11 million diesel-powered cars to cheat emissions tests.

Mr. Thompson, who oversaw the federal investigation of Enron, which went bankrupt in 2001, has been critical of the sluggish pace of change at Volkswagen in the past.

Ms. Werner told reporters that the sheer magnitude of the scandal might have initially created some inertia at the company but that outsiders may underestimate the magnitude of the internal changes undertaken by the company.

“It is not easy to come from shock to shame to change,” Ms. Werner said.

Even as Volkswagen moves to implement enterprise-wide compliance systems, a code of conduct, and various technical changes to improve its ability to prevent another scandal, German prosecutors have asserted that some company officials were meddling with their ongoing investigation.

As recently as May, Audi AG , the luxury car maker owned by Volkswagen, said it had found illegal software that manipulates emissions in about 60,000 of its best-selling diesel-powered vehicles, acknowledging that the car maker continues to struggle to get control of an emissions-cheating scandal.

Audi CEO Rupert Stadler was later arrested and is still being detained on suspicion of trying to tamper with witnesses and impede the criminal investigation.

Volkswagen maintains that the diesel scandal was carried out by a small group of lower-level engineers without the knowledge of higher executives and the management board.

But Mr. Stadler’s arrest and detention and a federal indictment in May of Martin Winterkorn, the former CEO who resigned under pressure in the days after disclosure of the scandal, are undermining VW’s rogue engineer narrative.

Mr. Thompson heads a team of as many as 60 people, all experienced with such compliance investigations, he said.

“Given the enormity and seriousness of what happened, my team is absolutely dedicated to pursuing its review in a rigorous and professional manner,” he said.