>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:
  • CRBP -2.8%, JP -2.6%, VRAY -1.7%
Other news:
  • OREX -69.3% (plans for near-term sale using structured process through Chapter 11 Of U.S. Bankruptcy Code)
  • SVRA -16.2% (fails to meet primary endpoint in the indie Phase 2 clinical study conducted by the heart failure clinical research network)
  • ESPR -7.7% (following news from SNY and REGN to make Praluent more accessible and affordable for patients)
  • BGCP -1% (entered into Controlled Equity Offering for up to $300 mln of shares of class A common stock)
Analyst comments:
  • BK -0.7% (downgraded to Neutral from Buy at Goldman)
  • RHT -0.8% (downgraded to Neutral at Mizuho)
  • NEM -1.1% (downgraded to Underperform from Sector Perform at RBC Capital Mkts)
  • HUBS -1.4% (downgraded to In-line from Outperform at Evercore ISI)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:
  • QD +6.7%, ZYNE +3.9%, RNN +1.2%, MACK +1%, SYRS +1%
M&A news:
  • OCLR +23.7% (to be acquired by Lumentum (LITE) for $9.99 per share)
  • CPRT +4.1% (acquires a salvage auto auction company based in Finland doing business as AVK)
  • BXC +2.3% (to acquire Cedar Creek for $413 mln)
  • LITE +2% (to acquire OCLR for $9.99 per share)
  • JCI +1.5% (exploring strategic alternatives for its Power Solutions business)
  • NTNX +1.4% (to acquire Netsil)
  • GE +0.7% (may sell its power conversion unit, according to Reuters Exclusive)
Fiber Optical related names showing strength following OCLR/LITE merger:
  • NPTN +6%, ACIA +4.2%, AAOI +3.2%, FNSR +2.4%, IPHI +1.2%, VIAV +1.0%
Other news:
  • LTBR +8.1% (receives notice of allowance for a divisional patent in Japan related to the manufacturing of its metallic nuclear fuel design)
  • SRPT +3.7% (received final minutes from a February 2018 Type C meeting held with the Division of Neurology Products)
  • AVGO +2.3% (WSJ report that Intel (INTC) is weighing Broadcom bid)
  • REGN +1.8% (Sanofi and Regeneron Pharmaceuticals (REGN) announced that the odyssey outcomes trial met its primary endpoint)
  • ATVI +1.3% (cont strength)
  • ALB +1.1% (received approval from Chile for an increase in lithium quota for production to as much as 145,000 metric tons of lithium carbonate equivalent annually through 2043)
  • BMY +1.1% (Findings released from largest real-world data analysis of non-valvular atrial fibrillation patients receiving direct oral anticoagulants), .
Analyst comments:
  • PAGS +2.7% (upgraded to Positive from Neutral at Susquehanna)
  • ADM +1.6% (upgraded to Buy from Neutral at Goldman)
  • ETFC +1.2% (upgraded to Strong Buy from Outperform at Raymond James)
  • MRK +1% (upgraded to Outperform from Mkt Perform at Leerink Partners)
  • TWX +0.8% (upgraded to Buy from Neutral at UBS)

>>> What to look at today - 12th of MArch 2018

Asian stocks gained as trade-war concerns took a backseat to economic optimism following a U.S. jobs report Friday that showed the American economy continued to strengthen without the prior month’s rapid wage gains that stoked inflation fears. The MSCI Asia Pacific Index of stocks climbed, with markets from Tokyo to Sydney higher. The Topix index had it’s biggest advance in three weeks. China’s stocks underperformed. The S&P 500 Index rose Friday and the Nasdaq Composite Index soared to a fresh record high after U.S. non-farm payrolls data topped forecasts. The yen was in focus thanks to political concerns surrounding Japan’s Finance Ministry, run by a stalwart ally of Prime Minister Shinzo Abe, whose administration has endorsed a weak currency.

Nikkei +1.65% Hang Seng +1.70% CSI +0.45% Shanghai +0.60% Shenzen +1.23%

Eur$ 1.2328 CNH 6.3246 CNY 6.3266 JPY 106.64 GBP 1.3860 CHF 0.9494 RUB 56.6931

S&P +0.53% EuroStoxx +0.64% FTSE +0.43% CAC +0.40% Dax +0.81% SMI +0.56%

Macro :
- U.K. Water Regulator to Investigate Companies After Outages
- Gundlach Says Volatility ‘Genie’ May Not Be Back in Its Bottle
- JPMorgan Sees Busiest Mideast Year With IPOs, M&A Driving Deals
- JPMorgan AM Downgrades U.S. IG Bonds, Closes Underweight on Cash

Keep an eye on :
- ABE SM : Chairman of Abertis to Remain Spanish Under Buyer Pact: Mundo
- ABG SM : Abengoa Approached by Companies About Stake Purchase: Economista
- AF FP : Jet Airways, Air France-KLM, Delta said to bid on Air India: PTI
- AREVA FP : Areva-Led Group to Pay $554 Million for Finnish Reactor’s Delay
- ARYN SW : Aryzta First Half Revenue Meets Estimates
- AST IM : Astaldi Plans to Raise EU300m in Capital Increase: Sole
- BEAN SW : Belimo Full Year Dividend Per Share 3.8% Above Estimates
- BCP PL : BCP Studies Possibility of Amado Becoming Chairman: Expresso
- CPI LN : Capita Plans GBP700m Sale of Assets to Cut Debt: Sunday Times
- CRG IM : Carige Sees Return to Profit, Lower NPLs in 2018: CEO to Stampa
- CATB SS : Catella AB Signs Share Purchase Agreement to Acquire APAM Ltd
- DBK GY : Deutsche Bank to Raise Up to EU1.8 Billion in Asset Manager IPO
- DBK GY : DWS IPO Price Range Set at EU30-36/Share; Nippon Life to Buy 5%
- DBK GY : Deutsche Bank, Postbank Merger May See Thousands Leaving: WamS
- DBK GY : Deutsche Bank Mgmt Board Waives 2017 Bonuses, Spokeswoman Says
- DTE GY : German Ver.di Union Continues Deutsche Telekom Warning Strikes
- ENI IM : Eni Is Said to Win Stakes in Two Abu Dhabi Oil Concessions
- EOAN GY : Eon Is Said to Be in Advanced Talks to Acquire RWE’s Innogy
- GEA GY : GEA Group Full Year Dividend Per Share 3.7% Above Estimates
- GKN LN : GKN Is Said to Argue Its True Value Closer to GBP5/Share: FT (Earlier)
- GKN LN :*MELROSE RAISES GKN OFFER TO 467P/SHR, VALUING CO. AT GBP8.1B (Just Now)
- IGY GY : Innogy Sees 2018 Adj. Net Income More Than EU1.1B
- MT IM : Maire Tecnimont, JGC Win EPC Contract in Philippines Worth $180m
- NOVN VX : Novartis Says President of Operations Wyss to Leave Company
- OUT1V FH : Outokumpu Favored as Morgan Stanley Initiates on Stainless Steel
- 1913 HK : Prada Shares Climb Most in Six Years After Growth Forecast
- RMS FP : Hermes Sells Hong Kong Store for HK$670M, Ming Pao Reports
- RBS LN : RBS Unit Should Have Faced Independent Probe, FCA Chief Says
- RWE GY : RWE Agrees in Principle to Sell 76.8% of Innogy to EON
- SAN FP : Regeneron, Sanofi Cut Praluent Price as Study Posts 15% Benefit
- SPOTIFY IPO : Spotify Is Said to Plan New York Listing During Week of April 2
- STL NO : Statoil, YPF Extend Argentina Energy Cooperation: Finansavisen
- VACN SW : VAT Full Year Net Sales Beat Highest Estimate
- VIV FP : Vivendi May Ask 8 Telecom Italia Directors to Resign: Messaggero
- VOW3 GY : VW Cars Use More Fuel After Recall Fix, Australian Group Says
- YNAP IM : Farfetch Is Said to Hire Goldman, JPMorgan for U.S. IPO: FT
- ZURN SW : Zurich Insurance Buys Travel Ace, Universal in Latin America

>>> Europe : Brokers Upgrades & Downgrades - 12th of March 2018

>>> Up
* Cairn Energy Upgraded to Overweight at Morgan Stanley
* CYBG Upgraded to Buy at Jefferies
* Hostelworld Upgraded to Buy at Peel Hunt
* Lagardere Upgraded to Buy at HSBC; Price Target 28 Euros
* Poste Italiane Upgraded to Overweight at JPMorgan; PT 9 Euros
* Zalando Upgraded to Outperform at RBC

>>> Down
* Aveva Downgraded to Neutral at Citi
* Just Eat Downgraded to Sell at Deutsche Bank
* Virgin Money Downgraded to Hold at Jefferies

>>> Initiation
* CRH Reinstated at Goldman With Buy; PT 33 Euros
* HeidelbergCement Reinstated at Goldman With Buy; PT 101 Euros
* CRH, Heidelberg Initiated Buy, Returns Seen Improving: Goldman

>>> Call

>>> Asian Update

Asia Market Update: Equities track higher, with broad dollar weakness as political tensions ease and US shows some signs of compromise on tariffs


***Headlines/Economic Data***
General Trend: Asian equities track Friday’s gains in US markets
-Asian steelmakers trade generally higher
-Australia’s Bluescope [BSL.AU] Steel gains over 3% on exemption from US tariffs
-Commodity currencies gain after rise in equity markets
-Shanghai Rebar Steel Futures extend losses amid US steel tariffs announcement

Japan
-Nikkei 225 opened +1.7%; closed +1.7%
- TOPIX Securities Index +1.8%, IRON & Steel +1.6%
- Mega-banks track Friday’s gains in US financials
- (JP) Japan Q1 BSI Large All Industry Q/Q: 3.3 v 6.2 prior; Large Manufacturing: 2.9 v 9.7 prior
- (JP) Japan PM Abe and Finance Min Aso said to face pressure related to Moritomo Gakuen land transaction – financial press
- (JP) Japan LDP Moriyama: Moritomo documents were altered. According to financial press that has seen Moritomo document, 14 places in the doc were altered. Japan PM Abe's name was removed, Fin Min Aso's wife's name was removed
- (JP) Japan Fin Min Aso: confirms Moritomo documents were altered 14 times, apologizes; reiterates no intention to resign - speaking at press conf
-(JP) JAPAN FEB PRELIMINARY MACHINE TOOL ORDERS Y/Y: 39.5% V 48.8% PRIOR

Korea
-Kospi opened +1.1%
- (KR) South Korea preparing to file WTO complaint against the US after request to withdraw its safeguard measures on Korean washers. This is amid intensifying tension over Trump’s decision to impose tariffs on imported steel products - Korean press
-Kia Motors, 000270.KR South Korea tax offices has launched an investigation into the company - Korean press
- (KR) South Korea to decided if it will join the CPTPP in the first half of this year - Korean press
- (KR) Bank of Korea sells KRW800B in monetary stabilization bonds (MSBs): yield 1.96%
-(KR) Bank of Korea (BOK) sells 3-month Monetary Stabilization Bonds (MSB); Yield 1.55% v 1.54% prior

China/Hong Kong
-Hang Seng opened +1.7%, Shanghai Composite +0.4%
- Hang Seng Energy Index +2.2%, Services +1.9%, Information Technology +1.8%, Financials +1.7% Materials +1.6%, Property/Construction +0.7%
- Shanghai Composite Property index declines over 2%
- (CN) China should prepare emergency plan for financial risks - China Daily
- (CN) US government said to have asked China for a $100B plan to cut trade deficit - FT
- (CN) China officially removed presidential term limits form the constitution on Sunday – press
- (CN) China State Assets Supervision and Administration Commission (SASAC) chairman Yaqing: reducing debt and curbing risks remain priorities for China’s state owned enterprises (SOE), will continue with restructuring and deleveraging efforts - Chinese press
- (CN) PBoC Gov Zhou: China has done most of what it takes to pave the way for expanded usage of yuan globally – Xinhua
- (CN) China Foreign Min Wang: Time the China threat theory is permanently laid to rest; despite elements of competition China and US ties are defined more by partnership than rivalry – Xinua
- (CN) PBOC sets yuan reference rate at 6.3333 v 6.3451 prior
- (CN) China PBoC Open Market Operation (OMO): Injects CNY90B in 7 and 28-day reverse repos (first OMO in 6 sessions) :Net injection CNY90B v CNY40B drain prior
-Prada [+19%], 1913.HK Reports FY17 Net €249.9M v €278.3M y/y, EBIT €360M v €431.2M y/y, Rev €3.01B v €3.18B y/y

Australia/New Zealand
-ASX 200 opened +0.7%; closed +0.7%
- ASX 200 Resources Index +1.7%, Financials +0.7%
- Newcrest Mining, NCM.AU Reports limited breakthrough of tailings material was identified at Cadia northern tailings dam embankment; to adversely impact FY18 production
- (AU) Australia PM Turnbull: Australia steel tariff exemptions from US a 'win-win'; will not take WTO complaint related to US tariffs
- Woodside [+1.2%]; WPL.AU Enters into agreement with BHP on proposed development of Scarborough Gas Field; to offer 14.4M entitlements not taken up earlier
-(NZ) New Zealand PM Ardern: Will seek exemption from US steel tariff
-(NZ) New Zealand Debt Management Office: To offer NZ$1.5-2.0B in 3.0% April 2029 bond through syndication (on March 13th), pricing guidance is 16-19bps/April 2027 bond; cancels bond auction planned for March 15th
-(NZ) RBNZ acting Gov Spencer to speak on Tuesday, March 13th; to focus on macro-prudential policy

North America
- (US) Fed’s Bullard (dove, non-voter) reiterated 4 interest rate hikes in 2018 could slow the economy – FT
-(US) White House: Refers issue of raising minimum age to buy rifles to 21 from 18 to commission led by Educational Sec Devos.
-Broadcom [AVGO]: Reportedly Intel considering M&A, including possible bid for Broadcom - financial press

Europe
-(UK) If there is a 'no-deal' Brexit, companies in the UK and EU could face £58B in extra annual costs - Report by Oliver Wyman and Clifford Chance
-(IR) Iran Oil Minister Zanganeh said OPEC could agree in June to begin reducing oil output cuts in 2019 - US financial press
- Deutsche Bank, DBK.DE Said to be planning to cut its retail unit by 20% over the next 4-yrs - German press
-Innogy SE [IGY.DE]: RWE agreed in principle to sell 76.8% stake in co. to E.ON for total value of €40/share (~16% premium to prior close) in exchange for 16.67% stake in E.ON in addition to other business interests; E.ON to also receive €1.5B cash payment
-(UK) Chancellor of Exchequer Hammond (Fin Min): to provide govt's half-yearly update of Britain's public finance figures on Tuesday, Mar 13th - financial press

***Levels as of 02:00ET***
- Hang Seng +1.5%; Shanghai Composite +0.6%; Kospi +1.0%
- Equity Futures: S&P500 +0.4%; Nasdaq100 +0.6%, Dax +0.6%; FTSE100 +0.1%
- EUR 1.2325-1.2305; JPY 106.97-106.35; AUD 0.7873-0.7847;NZD 0.7323-0.7280
- Apr Gold -0.1% at $1,323/oz; Apr Crude Oil +0.1% at $62.09/brl; May Copper -0.1% at $3.14/lb

>>> What to look at this Week-End - 10th & 11th of March 2018




Macro :
- U.K. Water Regulator to Investigate Companies After Outages
- Gundlach Says Volatility ‘Genie’ May Not Be Back in Its Bottle

Keep an eye on :
- ABG SM : Abengoa Approached by Companies About Stake Purchase: Economista
- AF FP : Jet Airways, Air France-KLM, Delta said to bid on Air India: PTI
- AREVA FP : Areva, TVO About to Reach Deal on Finnish Reactor Spat: Le Monde
- AST IM : Astaldi Plans to Raise EU300m in Capital Increase: Sole
- BCP PL : BCP Studies Possibility of Amado Becoming Chairman: Expresso
- CPI LN : Capita Plans GBP700m Sale of Assets to Cut Debt: Sunday Times
- CRG IM : Carige Sees Return to Profit, Lower NPLs in 2018: CEO to Stampa
- CATB SS : Catella AB Signs Share Purchase Agreement to Acquire APAM Ltd
- DBK GY : DWS IPO Price Range Set at EU30-36/Share; Nippon Life to Buy 5%
- DBK GY : Deutsche Bank, Postbank Merger May See Thousands Leaving: WamS
- DBK GY : Deutsche Bank Mgmt Board Waives 2017 Bonuses, Spokeswoman Says
- EOAN GY : Eon Is Said to Be in Advanced Talks to Acquire RWE’s Innogy
- GKN LN : Melrose Likely to Increase Value of Bid for GKN by 5%: S. Times
- GKN LN : GKN Is Said to Argue Its True Value Closer to GBP5/Share: FT
- RMS FP : Hermes Sells Hong Kong Store for HK$670M, Ming Pao Reports
- RBS LN : RBS Unit Should Have Faced Independent Probe, FCA Chief Says
- RWE GY : RWE Agrees in Principle to Sell 76.8% of Innogy to EON
- SAN FP : Regeneron, Sanofi Cut Praluent Price as Study Posts 15% Benefit
- STL NO : Statoil, YPF Extend Argentina Energy Cooperation: Finansavisen
- VIV FP : Vivendi May Ask 8 Telecom Italia Directors to Resign: Messaggero
- YNAP IM : Farfetch Is Said to Hire Goldman, JPMorgan for U.S. IPO: FT

WSJ : Why Blockchain Will Survive, Even If Bitcoin Doesn’t

Why Blockchain Will Survive, Even If Bitcoin Doesn’t
Latest blockchain applications could bring overdue change to critical, if unsexy, functions in shipping, real estate and…diamonds

We’re now awash in “crypto” hype—cryptocurrencies like bitcoin and fundraising efforts like initial coin offerings. For every venture capitalist or technical expert, there’s a half-dozen hype men and fly-by-night startups making the entire space look like a 21st-century version of the Amsterdam tulip mania.

All that noise has obscured the bona fide efforts involving the underlying technology, blockchain. Of all the manifestations of crypto, it’s the most seemingly mundane applications of blockchain that could lead to the biggest and most concrete changes in all of our lives.

These applications can’t be found on a coin exchange, and they aren’t going to turn anyone into an overnight billionaire. But they could bring much-needed change to some of the world’s most critical, if unsexy, industries. This means new ways of transferring real estate titles, managing cargo on shipping vessels, mapping the origins of conflict materials, guaranteeing the safety of the food we eat and more. Using blockchain, you could prove that a particular diamond on sale in a Milan boutique came from a particular mine in Russia.

What is blockchain? It’s essentially a secure database, or ledger, spread across multiple computers. Everybody has the same record of all transactions, so tampering with one instance of it is pointless. “Crypto” describes the cryptography that underlies it, which allows agents to securely interact—transfer assets, for example—while also guaranteeing that once a transaction has been made, the blockchain remains an immutable record of it.


Blockchain has the power to transform all these industries for three reasons. First, it’s genuinely well-suited to transactions that require trust and a permanent record. Second, blockchain typically requires the cooperation of many different parties. In cases where it’s implemented as open source software, it avoids the collective-action problem—the disincentives that prevent individuals from adopting something that would benefit them collectively—that occurs when a single company tries to push, and benefit from, a new standard.

The third reason is that hype I mentioned. The current excitement around cryptocurrency gives blockchain the visibility to attract developers and encourage adoption. Companies that have taken an “If it ain’t broke, don’t fix it” attitude toward back-office processes and logistics IT might be ready to spend big on updating those systems when they hear the buzzword “blockchain.”

In this way, blockchain resembles another buzzword, “the cloud.” While detractors argued that the cloud was just “someone else’s computer,” it gave many industries new business processes, new ways to charge for services, disruptive startups and new divisions within existing companies and an ecosystem of supporting technologies. Blockchain has the same potential.

Blockchain All the Things
Take logistics. Already, 1.1 million items sold or on sale at Walmart are on a blockchain—including chicken and almond milk—helping the company trace their journey from manufacturer to store shelf. Global shipping giant Maersk uses the same technology from IBM to track shipping containers, making it faster and easier to transfer them and get them through customs.

While these projects are still a fraction of the overall tracking that goes on at these giants, they are expanding rapidly both within the organizations and across their industries. Other companies using blockchain technology to track goods include Kroger, Nestlé, Tyson Foods and Unilever, with many more yet to be announced, says Bridget van Kralingen, senior vice president of platforms and blockchain at IBM.

Everledger, a company started in April 2014 with the intention of creating a blockchain-based registry of every certified diamond in the world, already has 2.2 million diamonds in its registry. It’s adding about 100,000 diamonds a month, says Leanne Kemp, chief executive and founder.

By recording 40 different measures of each stone, including “physically unclone-able features,” Everledger is able to trace the journey of a stone from when it’s pulled from the earth to the day it’s purchased by a consumer. Every participant in that chain, from the miner to the cutter to the retailer, maintains a node—with a complete copy of the database—in the Everledger blockchain network.

CartaSense is an eight-year-old Tel Aviv company that puts internet-connected sensors on freight pallets and uses analytics to determine when goods may be delayed or damaged. CartaSense customers, rather than physically handing off scanned and signed paper documents, use a blockchain database on which freight companies can record every stage of the journey of a package, pallet or shipping container. Kuehne + Nagel, one of the world’s largest freight companies, is one of CartaSense’s clients.

Replacing Regulations With Code

Blockchain is being implemented first within companies and centralized governments that can move quickly on new technologies.

Dubai, for example, has declared its intent to make itself the “first blockchain-powered government in the world by 2020.” That could streamline things in real estate, says Stephen McKeon, an associate professor of finance at the University of Oregon who studies blockchain. By moving the central record of all real-estate transactions onto a blockchain, Dubai could make it faster and easier to transfer property titles.

Because such “smart contracts” on a blockchain are code, they can contain rules about how they can be modified or transferred. In this way, blockchain could become a way to transfer the obligation of enforcement from bureaucrats to computers. For example, to prevent fraud, titles could be transferable only to certain accounts, or might transfer only after another condition, such as the transfer of funds in escrow, is met.

It’s too early to say whether blockchain, as both a technology and a movement, has the power to overcome issues that thwarted generations of software engineers. The most justifiable skepticism is that blockchain is incremental rather than revolutionary. In some cases, it isn’t much more than a marketing term imposed on systems that hardly differ from existing databases. (There’s a healthy debate about what blockchain even means, and even companies like CartaSense call their system a “blockchain-like technology.”)

But if it works, it has the potential to be a fundamental enabling technology, the way new standards for transmitting data across networks led to the internet. More concretely, it could someday underlie everything from how we vote to who we connect with online to what we buy.