>>> Acciona in talks with ContourGlobal to sell solar thermal plants business va

Acciona in talks with ContourGlobal to sell solar thermal plants business valued at EUR 1.5bn

ContourGlobal plc [LON: GLO] the UK owner and operator of contracted wholesale power generation businesses, is in talks to acquire Spanish construction and energy group Acciona's [BME:ANA] solar thermal plants business, ElEconomista reported. The business is valued at about EUR 1.5bn, according to the report.
Acciona has informed its workforce about the negotiations, which were launched last year, the Spanish-language business paper said.
Acciona’s five Spanish plants have a joint investment of more than EUR 1.2bn; they have created 1,750 jobs in the construction phase and 150 permanent jobs to operate them.

(BofA-ML) The Flow Show: Markets stop panicking…


The Flow Show: Markets stop panicking…

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The Flow Show


 The Flow Show: Markets stop panicking…


•   Record equity outflows but BofAML Bull & Bear indicator @ 8.5...still says "sell"
•   Markets stop panicking when central banks start panicking...Fed has become "buyer of vol"
•   Strategy view...SPX 2540 & GT10 3% to represent good entry points in coming weeks

Big Top & Big Low

Record week: $30.6bn equity outflows (Chart 2); $4.0bn into Bonds, $0.5bn out of gold.

Redemption pain: biggest in US large cap equity funds, tech, healthcare, Europe & HY bonds; in contrast big inflows into IG bonds & Japan equity funds.

BofAML Bull & Bear indicator: down from 8.6 to 8.5 (Chart 1) but remains in "excess bullish" territory signaling "sell" for risk assets.

BofAML Bull & Bear indicator: "sell signal" triggered Jan 30th...S&P500 down 10.2% peak-to-trough, global equity market cap down $6tn; unlike prior selloffs, US Treasury yields up 12bps (as opposed to avg down 52bps).

BofAML Bull & Bear indicator: average 3-month drawdown following 11 "sell signals" since 2002 (hit ratio 11/11) = 12.0% = S&P500 2510, i.e. just below 200dma of 2540.

3Ps: Positioning, Policy, Profits key to technical levels of 3% on 10-year US Treasuries & 2540 on S&P500 holding.

Positioning: 1. Feb FMS (Feb 13th) cash levels rise sharply to >4.8% (from 4.4% Jan), signaling fresh bearishness; 2. rally in rate-sensitive UTIL/XHB/REM signals yields/rate vol at peak; 3. trough in credit (JNK, EMB, LQD) and peak in US dollar (DXY) signals deleveraging over (credit leads equities - Chart 3).

Correction chronology: XBT…UTIL…GT5…VIX…JNK…EMD…SPX; last Feb dominoes to fall should be DXY, CNY, SOX & EEM.

Policy: "markets stop panicking when central banks start panicking"...late-cycle crash/correction in 1987, 1998, 2016 all arrested by policy actions; crucial to note Fed now hawkishly selling Treasuries (Chart 4) and rhetoric past few days shows Fed "buyer of vol" not "seller of vol" for 1st time since 1987; two upcoming events to soften Fed stance…1. Jan CPI (Feb 14th) <0.3%mom; 2. Humphrey-Hawkins (Feb' 28th) opportunity for Powell to signal old, cautious Fed back.

Profits: best sign corporations do not see profit peak is resumption of strong corporate buybacks in coming weeks; profits key determinant as to whether this is a correction or a bear market.

Strategy view: SPX 2540 & GT10 3% to represent good entry points in coming weeks.

 

 

FT : L’Oréal ready to buy Nestlé’s €23bn stake in cosmetics group

L’Oréal ready to buy Nestlé’s €23bn stake in cosmetics group
Chief Jean-Paul Agon says French company ‘has what it takes’ to obtain holding

The chief executive of L’Oréal has said that if Nestlé wanted to sell its 23 per cent stake in the French cosmetics company, L’Oréal would be a buyer and “we have what it takes” to do so.

Asked if L’Oréal would be a buyer if Nestlé were to sell the stake, which is worth about €22.6bn, Jean-Paul Agon said in an interview: “Yes, of course.”

He added: “We have all the resources for that. We are cash rich . . . we have our Sanofi stake, we are absolutely financially very solid and we have what it takes to do anything.”

Mr Agon was referring to L’Oréal’s 9 per cent stake in pharmaceuticals company Sanofi, which it could sell to help buy out Nestlé. That holding is valued at about €7.6bn. In addition, L’Oréal had €1.87bn in cash on its balance sheet as of December 31.

His comments on the Nestlé stake, which came as L’Oréal reported a 15.3 per cent rise in net profit during 2017 to €3.58bn, are the first by L’Oréal since activist hedge fund Third Point bought a small position in the Swiss foods group last June.

Dan Loeb, Third Point’s founder, has urged Nestlé to offload the stake, which it has held for more than four decades.

Nestlé’s stake became the subject of further scrutiny following the death last September of Liliane Bettencourt, the matriarch of L’Oréal’s founding family, which analysts said at the time could be a catalyst for a shake-up of L’Oréal’s share capital.

Nestlé declined to comment.

L’Oréal’s profit growth was driven by strong performances from its luxury division — home to brands such as Lancôme, YSL and Giorgio Armani — and from Asia, its fastest-growing region.

Revenue growth accelerated to 5.5 per cent on a like-for-like basis in the fourth quarter, bringing full-year sales to €26bn, up 4.8 per cent year-on-year.

“Chinese consumers everywhere are a large part of the growth of the luxury market,” says Mr Agon: “Chinese in China, Chinese in Hong Kong, Chinese in Japan, Chinese in travel retail, but also Chinese in Europe.”

Growth was more muted in North America, up 1.7 per cent, and in western Europe, up 2.6 per cent. It was also slower in professional products, which includes rands such as Kérastase and Redken, which was up 0.2 per cent in 2017. Consumer products grew 2.2 per cent.

Ecommerce sales grew by a third during 2017 to reach €2bn. China is the group’s top market for online sales, accounting for a quarter of all of its sales in the country.

Mr Agon, 61, who has been chief executive since 2006, said he would retire when he reaches 65. L’Oréal has not publicly commented on his likely successor but the favourite is Nicolas Hieronimus, who joined the company more than 30 years ago and was promoted deputy chief executive last year.

Under the terms of a shareholder agreement, neither Nestlé nor the Bettencourt family can buy more L’Oréal shares until six months after Liliane’s death — a period that runs up until the end of March. Mr Agon said he believed it was “very unlikely” that Nestlé will launch a takeover bid for L’Oréal.

>>> What to look at today 9th of February 2018

Dow -4.15% S&P -3,75% Nasdaq -3,90% Russell -2,93%
Stocks closed sharply lower on Thursday, losing ground for the fifth time in six sessions.  The selling was broad-based and indiscriminate as all 11 S&P 500 sectors finished deep in red figures.  The losses for the sectors ranged from 1.2% (utilities) to 4.5% (financials). Several factors precipitated Thursday's sell-off:
* Budding angst surrounding the reported two-year budget agreement in the Senate
*The lack of key sector leadership.  The financial (-4.5%), information technology (-4.2%), and consumer discretionary (-4.0%) sectors were today's biggest laggards.
* Comments from Fed heads, who continue to emphasize a likely path of gradual rate hikes and who have minimized recent market volatility.
* Following the trend of the tape, which has been biased downward at a time when many participants have been hoping for a rebound. 
Trading was volatile, as it has been in each session this week, with the S&P 500 covering 105 points from its high (+0.1%) to its low (-3.8%).  Twitter (TWTR 30.13, +3.22) spiked 12.1% to its best level since mid-2015 after reporting better-than-expected earnings and revenues and achieving GAAP profitability for the first time ever. Meanwhile, Tesla (TSLA 315.70, -29.34) dropped 8.5% despite reporting above-consensus earnings and saying that it's on track to meet its goal of producing 5,000 Model 3 cars per week by the end of June US After Hours MOBL +16%, FEYE +11%, NVDA +8% higher, while EXPE -19%, ZG -9%, LGF.A -5% lower following earnings/guidance.  The sell-off in global stocks that briefly looked to have ended mid-week has come back, tipping markets from the U.S. to Asia into declines exceeding 10 percent from their January highs. China, where retail investors dominate, got hit particularly hard Friday. Japan’s equity benchmarks were down over 3 percent Friday, though pared the worst of its losses. South Korea’s index fell almost 2 percent and Hong Kong’s slid almost 4 percent. Onshore China gauges at one point exceeded 5 percent losses on the day. U.S. futures were higher, after fluctuating between gains and losses

Nikkei -2.32% Hang Seng -3.13% CSI -4.27% Shanghai -4.05% Shenzen -3.19%

Eur$1.2273 CNH 6.3283 CNY 6.3108 JPY 109.06 CHF 0.9373 RUB 58.1615 WTI$ 60.59 -0.92%

EuroStoxx FTSE -0.51% CAC -0.45% Dax +0.27%

Macro :
- Senate Passes Bill to End Government Shutdown, Sending to House

Keep an eye on :
- ABE SM : Atlantia Is Said to Have Got Funding to Raise Abertis Bid: Rtrs
- ABN NA : ECB, DNB Are Said to Investigate ABN Amro Supervisory Board: FD
- ALO FP : Alstom Wins Tender To Supply Locomotives To ONCF: Medias24.com
- AREVA FP : Areva, Siemens, TVO to Discuss Finnish Reactor Spat, Echos Says
- BEFB BB : Befimmo Full Year Adjusted EPS Forecast Misses Estimates
- CEC GY : Ceconomy Bets on Cost Cuts to Claw Back Profits During Year
- CBK GY : Commerzbank Downside Risk to Revenues Has Fallen - Fitch
- DIX GY : DIC Asset Sees FY Lease Rental Revenue EU95 Mln To EU98 Mln
- DUNI SS : Duni Fourth Quarter Net Sales SEK1.25 Bln
- FINGB SS : Fingerprint Cards Fourth Quarter Operating Loss SEK40.6 Mln
- FLOW NA : Flow Traders Full Year Net Trading Income Meets Estimates
- MB IM : Mediobanca Lifts Dividend Payout Target as Profit Beats Est.
- NPRO NO : Norwegian Property Fourth Quarter Revenue 2.0% Below Estimates
- OR FP : L’Oreal in Focus as CEO Cites Nestle Unit Interest: Jefferies
- OR FP : L’Oreal FY Operating Profit Rises 3%; 4Q LFL Growth Beats Ests.
- RUBIS FP : Rubis Full Year Revenue Meets Estimates
- SHP LN : Shire Therapy for Crohn’s in Children Gets FDA Orphan Status
- TEVA US : Teva Cut to Junk by S&P on Increasing Volatility
- TDC DC : TDC’s Chairman Is Upset Over Leak of Offer to Press: Berlingske
- UMI BB : Umicore Full Year Capital Expenditure 1.2% Below Estimates
- UMI BB : Umicore Places 22.4m Shrs With Investors at EU39.80/Shr
- UNI IM : Unipol Full Year Loss EU345.8 Mln
- US IM : UnipolSai Full Year Net Income 3.4% Above Estimates
- WMT US : Walmart Is Said in Talks to Spend Billions for Flipkart Stake
- VOW3 GY : VW CFO Sees ‘Strong Basis’ for 2017 Result On Record Deliveries

>>> Europe : Brokers Upgrades & Downgrades - 9th of February 2018

>>> Up
* AMS Upgraded to Buy at Baader-Helvea; PT 130 Francs
* Commerzbank Raised to Hold at Independent Research; PT 13 Euros
* Emerson Electric Upgraded to Overweight at JPMorgan; PT $82
* Glaxo Upgraded to Hold at Kepler Cheuvreux
* Outokumpu Upgraded to Buy at Jefferies; PT 7.75 Euros
* Pfeiffer Vacuum Upgraded to Buy at DZ Bank; PT 180 Euros
* Prosafe Upgraded to Hold at Pareto Securities; PT 11 Kroner
* Scor Upgraded to Buy at DZ Bank; PT 39.50 Euros
* Telefonica Upgraded to Hold at Jefferies; PT 8.40 Euros
* Wallenstam Upgraded to Hold at ABG; PT 72 Kronor

>>> Down
* Acerinox Downgraded to Hold at Jefferies; PT 12 Euros
* Citycon Downgraded to Hold at SEB Equities; PT 2.15 Euros
* Citycon Downgraded to Sell at ABG; PT 2 Euros
* Evraz Downgraded to Neutral at Credit Suisse; PT 3.70 Pounds
* Legrand Downgraded to Hold at Berenberg
* Nostrum Oil & Gas Cut to Hold at Otkritie Capital
* TalkTalk Cut to Neutral at New Street Research; PT 1.30 Pounds
* Teva ADRs Downgraded to Underweight at Piper Jaffray; PT $11

>>> Initiation
* Brunello Cucinelli Rated New Buy at Jefferies; PT 31 Euros
* CITY LN Rated New Equal-weight at Barclays

>>> Call

>>> Asian Update

Asia Market Update: Asian equities track declines in US; Spotlight again shifts to US government funding talks as shutdown begins


***Headlines/Economic Data***
General Trend
- Shanghai Composite and Hang Seng decline over 4%
- Currency volatility relativity muted vs equities

Australia/NewZealand
-ASX 200 opened -0.4%: closed -0.9%%
-Energy -2.4%,Telecom -1.8%, Utilities -1.8%, Consumer Discretionary -1.6%, Resources -1.2%, Financials -0.9%
-(AU) RESERVE BANK OF AUSTRALIA (RBA) QUARTERLY STATEMENT ON MONETARY POLICY (SOMP): QUARTERLY INFLATION AND GROWTH FORECASTS LITTLE CHANGED
-(AU) Australia Dec Home Loans M/M: -2.3% v-1.0%e; Investment Lending: -2.6% v +1.5% prior
-(AU) Australia sells A$400M v A$400M indicated in July 2022 bonds, avg yield 2.2838%, bid to cover 5.79x

China/Hong Kong
- Shanghai Composite opened -2.7%, Hang Seng -2.5%
- Hang Seng Materials Index -4.9%, Services -4.1%
- (CN) CHINA JAN CPI M/M: 0.6% V 0.3% PRIOR: Y/Y:1.5% V 1.5%E
- (CN) China Jan PPI Y/Y: 4.3% v 4.3%e
- (CN) China won’t face big inflationary pressure in 2018 – China Securities Journal
- (CN) PBOC SETS YUAN REFERENCE RATE AT 6.3194 V 6.2822 PRIOR
- (CN) China PBoC: Skips OMO (12th straight session)
- (CN) PBoC: Has released Temporary liquidity worth almost CNY2.0T (under previously announced measures); measure seeks to satisfy cash demand before Lunar New Year; Previously announced targeted RRR cuts inject about CNY450B in liquidity.
-(CN) China to cut gasoline by CNY170/ton - Press
Looking Ahead: China Jan Bank Lending data maybe released during the European session

Japan
-Nikkei 225 opened -1.8%; closed -2.3%
-TOPIX Electric Appliances Index -3.4%, Iron & Steel -3.3%, Securities -3%,Real Estate -3%
- Nissan Motors [7201.JP]: Declines over 3.5%after revising FY guidance
- Nexon [3659.JP]: Gains over 14% after reporting FY results and announcing stock split
-Nikkei 225 Feb options said to settle at 21,190
-Japan PM Abe Adviser Hamada: Recent stock declines could make BoJ cautious about raising rates
-Japan Fin Min Aso: Various factors are behind stock market moves; US and global economy’s fundamentals are‘not bad’
-BOJ announcement related to daily bond buying operation: leaves amounts unchanged

Korea
-Kospi opened -2.5%
- Samsung Electronics has declined by over 2.5%
- (KR) South Korea Fin Min Official: Will take action to stabilize financial markets should uncertainties spread; to strengthen monitoring of FX market

Other Asia
-(PH) Philippines Dec Trade Balance: -$4.0B(multi-year high for the deficit) v -$3.0Be
-(PH) Philippines Central Bank(BSP) Gov Espenilla comments after central bank left rates unchanged on Thursday: ‘Inflation spike’does not warrant immediate tightening

North America
-US equity markets ended lower: Dow -4.2%, S&P500 -3.8%, Nasdaq -3.9%, Russell 2000-2.9%
-S&P500 Financials -4.4%, Technology -4.1%
-(US) Fed's Dudley (dove, FOMC voter): Decline inequity markets doesn't have economic implications at this point; so far stock selloff has been 'small potatoes'; Main outlook for three rate hikes is reasonable; could do four hikes if economic outlook gains; Bond yields moving higher is putting pressure on stocks; US govt debt service costs are likely to rise a lot - TV interview
-(US) Fed's George (hawk): 3 rate hikes for 2018 and 2019 would be reasonable unless economic outlook changes
-(US) TREASURY'S $16B 30-YEAR BOND AUCTION DRAWS 3.121%; BID-TO-COVER RATIO: 2.26 V 2.23 PRIOR AND 2.25 AVG OVER THE LAST 4 AUCTIONS (highest yield since March 2017, lowest BTC since Nov)
-(US) House GOP Leaders say next votes [related to funding] to come after 12 AM EST government funding deadline - US financial press
-(US) Office of Management and Budget (OMB) said to direct agencies to prepare for possible shutdown if Congress cannot pass funding bill by the midnight deadline – Washington Post
-(US) President Trump expected to propose reducing some drug costs for Medicare - US press
-(US) US said to consider 'emergency' support for coal plants - US financial press

***Levels as of01:00ET***
- Hang Seng -3.5%;Shanghai Composite -4.8%; Kospi -1.8%
- Equity Futures:S&P500 +0.3%; Nasdaq100 +0.2%, Dax +0.3%; FTSE100 +0.3%
- EUR 1.2240-1.2265 ;JPY 108.49-109.11; AUD 0.7758-0.7794 ;NZD 0.7198-0.7231
- Feb Gold flat at $1,319/oz;Feb Crude Oil -1% at $60.53/brl; Mar Copper -0.2% at $3.067/lb

>>> US After Hours Summary: MOBL +16%, FEYE +11%, NVDA +8% higher, whi


After Hours Summary: MOBL +16%, FEYE +11%, NVDA +8% higher, while EXPE -19%, ZG -9%, LGF.A -5% lower following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: AOI +28.8%, MOBL +16.3%, UIS +15.6%, ROX +15%, FEYE +11.3%, NVDA +8%, ELLI +5.4%, MCFT +4.5%, SKX +3.9%, CTRL +3.2%, NUAN +2.7%, GLUU +2.3%, IMMU +1.9%, COLM +1%

Companies trading higher in after hours in reaction to news: AQXP +1.9% (initiated with a Buy at Guggenheim), UPS +1.8% (increases quarterly dividend), NWL +1.6 (WSJ reporting that Starboard is planning proxy battle), SYMC +1.4% / PANW +1.2% (following FEYE results), RAD +1% (Rite Aid announces progress in sale of assets to Walgreens Boots Alliance), JNJ +0.7% (Johnson & Johnson unit announces new findings from the Phase 3 SPARTAN clinical -- data showed ERLEADA improved median metastasis-free survival by more than two years)

Technology / semi names are rebounding on the heels of NVDA results and QCOM / AVGO news (etfs SMH +1.4%, QQQ +0.7%): QCOM +1.3% (Qualcomm board unanimously rejects revised AVGO proposal), MSFT +1.2%, CY +1%, IBM +0.8%, AMD +1.2%, INTC +0.7%

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: EXPE -18.9%, ZG -9.2%, LGF.A -5.1%, ASYS -4.2%, CBL -3.8%, VCRA -3.6%, SWIR -3.6%, AQ -2.3%, VSAT -1.1%

Companies trading lower in after hours in reaction to news: WWD -10.2% (pulling back after the co says not in discussions with Boeing over a possible acquisition of Woodward), MGEN -5.8% (prices 7 mln share common stock offering at $5.50 per share), CEMI -3.9% (commences underwritten registered public offering of common stock, won a three-year tender from the Ethiopia Pharmaceuticals Fund and Supply Agency to deliver its HIV 1/2 STAT-PAK Assay with total contract value of $15.8 mln; sees 2017 revs $23.7-24 mln vs $23.8 mln est), PACB -1.2% ( receives unfavorable outcome in first phase of patent litigation against Oxford Nanopore), TEVA -0.5% (S&P downgraded Teva Pharmaceutical Industries Ltd. to 'BB' on continued challenges to business)

Expedia (EXPE) earnings is weighing on OTA names: TRIP -2.6%, PCLN -2.6%, CTRP -0.7%

>>> Notable post-earnings movers


Notable post-earnings movers

  • Post-earnings gainers: FEYE +12.8%, MOBL +12.5%, NVDA +10.6%, MTW +8.7%, ELLI +4.5%, ATVI +3.9%, SKX +3.7%, NUAN +2.7%
  • Post-earnings losers: EXPE -14.4%, ZG -7.3%, VRSN -4.4%, SWIR -4.4%, CBL -3.2%, AQ -3.1%