>>> Europe Pre-Market

Merrill
* HELLO FRESH - HFG GY - deal priced at e10.25/sh, trades today, 27m shares....
* JUST EAT - STM selling a 2% stake; Jefferies the sole bookrunner.............
* LADBROKES - Apollo Credit, Cerberus selling 49.3m shrs @ 124.5p/shr; MS sole.

TATE - Look fine, pretax £25m better than ests but sales just inline (688)+3-4%
DANSKE - Solid results and new FY guidance likley drives small u/gs (250)...+3%
INTU - Guiding to slightly +ve LFL's having been guiding towards zero (217).+2%
BOSS - Retail comp stores sales a beat +5% v cons +3%. Guidance okay (77)...+2%
HOWDEN - Good trading statement with last 16 weeks revs are up 8.2% (419).+1-2%
BT - Solid, EE the standout with good nos and KPIs. Guidance reit'd (264).+1-2%
CENTAMIN - Overall ok although financials a small miss, EPS is inline (145).+1%
FRESENIUS - Akorn results broadly inline yday. Maintains FY17 guidance (71).+1%
CS - High quality beat with PBT 15% ahead on beats in both WM and PB (15.8).+1%
SWISSCOM - May squeeze. Beat,reits guidance that now looks conservative(508)+1%
TENARIS - Beat with EBITDA of US$225m v BAML US$197m & vols up 35% YoY(11.5)+1%
DSM - Sales +3.6% v +2.8% cons and EBITDA also ahead. Mix looks good (74)...+1%
ROYAL DUTCH - 3Q17 clean net income $4.2b v cons $3.7b and DPS in unch(2383)+1%
FRAPORT - Group EBITDA €387.7m v €376.3m cons. Reit outlook for FY17 (83).+0.5%
MINERS - Copper -0.2%, Iron Ore fut -0.6% with BHP OZ +1.5% & RIO OZ +3.3%..u/c
RSA - Positive u/lying continues and balance sheet is healthy,161% SII (633)u/c
RED ELECTRICA - Nos exactly inline, net income €496m v bbg cons €497m (18)..u/c
RYANAIR - Oct traffic stats; Traffic grew 8% YoY & load factor +1% point(17)u/c
FMC - Inline with EPS slightly ahead. Outlook been maintained for rev (83)..u/c
IWG - Statement not a factor as they pre-announced warnings already (217.4).u/c
LUPE - Beating EBITDA cons, increasing prodn guidance and cutting capex(208)u/c
SWISS RE - 1bn buyback starts tomorrow, corso takes the shine off Q3 (93.9).u/c
REPSOL - Hires Alantra to study renewables purchase; El Economista (16.2)...u/c
ACACIA - CEO and CFO have resigned, separately. Interims been appointed(182)u/c
MORRISON - Group LFL (ex fuel) +2.5% v +2.8% & retail LFL +2.1% v +2.4 (222)-1%
SANOFI - EPS small light. Diabetes guidance slightly worse than exp (79.7)..-1%
RANDGOLD - Small miss even v flagged weaker prodn. EBITDA is 8% light (7400)-1%
GN STORE - Inline with org growth 7% v 7.4% cons.Maintained org growth (209)-1%
ING - Not good enough. 9% pretax beat, lower provisions, NII 1% ahead (15.8)-1%
CARLSBERG - Miss although raised guidance, org sales growth -1% v -0.3%(715)-2%
LANCASHIRE - Pretax loss of $134.2m v $125.8m. No special divi as exp (728).-3%
PLAYTECH - Warning. Cut nos to c5% below bottom end of market exp (814).-15-20%

CS
BT +2% Numbers inline, no dividend cut
Carlsberg -1% Q3 revs 2.9% miss, org vol growth -4% vs -3.9% exp
Danske Bank +1-2% Q3 Net 4% beat, NII 2% ahead, CET1 ahead at 16.7%
Fraport +1-2% Sales inline, Ebit a beat €299.5m vs cons €283.5m
Fresenius R 3Q adjusted Ebit EU1.13 billion, estimate EU1.14 billion
Fres Med -1-2% Sales miss, Q3 Rev EU 4.34bln est EU 4.39bln
GN Store -2% Numbers mixed, 3Q revs miss, but audio growth better
Howdens +2% Short trading statement reads fine
Hugo Boss +1-2% Q3 LFL better, EBITDA touch light, sales guidance raised
ING Group -1% Low quality beat driven by one-offs
Intu +2-3% Announced JV, +ve rental comment, large short interest
IWG +1-2% October sales said to be very strong
DSM +1% EBITDA beat. Nutrition organic strong.
Lancashire -2-3% Small beat vs cons, but no special dividend
Meyer Burg. -15-20% CHF50m re-structuring charge for Thun to be discontinued
Morrisons -1% Retail LFL +2.1% vs Cons 2.4%, total sales +2.3% cons 2.9%
Playtech -10% Ad Hoc profit warning Expect FY 5% below cons
Randgold -1-2% Q3 EBITDA of $186m, down 8% QoQ (vs CS at $215m)
RDS +1-2% Beat across the board, cash flow very strong
Rio Tinto +1-2% Aussie line well bid, rallying further than London close
RSA +1% Q3 IMS shows YTD Revenues at 5.1bn, +3% CFX, +8% nominal
Sanofi -1% Q3 Miss, diabetes guidance lowered
Swiss Re +0.5% Hurricane claims slightly lower, buyback announced
Swisscom +1% Revs & EBITDA beat vs Cons. FY17 guidance reiterated
Tate & Lyle +2% Pre-tax GBP 161mln. est GBP 146ml, sales inline
Tenaris UNCH Numbers last night were broadly inline with cons
Valiant +1-2% Q3 CHF83.8m vs cons 77.2m, operationally all reads fine
Macquarie
UK:
* Acacia- CEO/CFO to leave, still seeking Tanzania tax resolution; -3-4%
* BT- Small Ebitda beat, FY outlook maintained, no warning. +1-2%
* Centamin- Production 156koz, +26% vs Q2, maintains FY production and cost guidance; +2%
* CYBG- CYBG to Lift Provisions for Legacy Conduct Costs by £403m, taking 20bps off CET1. -4% in Oz.
* GVC- Sells Headlong for €150m. Strong start to year has continued, NGR in Oct 26% ahead of last year. +2-3%
* Howden- Good trading performance, On track to meet FY forecasts. +1%
* Just Eat- STM Fidecs Trust selling 13.5m via ABB. -1%
* Ladbrokes Coral- Apollo & Cerberus selling 49.3m shs at 124.5p. (close 127.1p). -1-2%
* Lancashire- Q3 GWP $143m, Net Loss from disasters this year $165m. Will pay standard divi but no special divi in 2018. -1%
* Morrisons- Q3 LfL’s up 2.1% & Sales up 2.3% both a miss vs consensus. -2%
* Playtech- FY Performance to be 5% below bottom end of est’s due to Sun Bingo & Asia problems. -5-10%
* RDS- Q3 Profit beats due to downstream, but Net debt higher. May temper upside move +1%
* Rio- Strong in Oz. +2%
* RSA- Profits ahead of last year but lower than their targets after Natural Catastrophes. -1%
* Tates- H1 sales inline, bulk ingredients strong, positive outlook with FY PBT “slightly higher” than anticipated; +1-2%
EURO:
* Bureau Veritas- Acquisition to expand Building & Infrastructure service offering; +0.5%
* Carlsberg- No’s light but raising guidance. +1%
* Credit Suisse- Q3 beats across board. +2%
* Danske- PTP of DKK6.23bn 5% ahead of consensus. Raising FY Profit guidance. +3%
* Fraport- 9M revenue +13.7%, keeps FY guidance; +0.5%
* Fresenius SE- Numbers all bang in line and guidance confirmed. +1-2%
* Fresenius Medical- Q3 Revenue a touch light and EBIT c2% ahead. Confirms FY outlook. Unch
* GN Store- Boosts FY Audio revenue growth to +7% from +6%; +2%
* ING- Pre-tax income of €1.99bn for Q3, 2% of Macq est’s. Beat driven by impairments & NII. +1%
* Red Electrica- Bang inline with previous guidance. Unch
* Sanofi- Diabetes outlook worsened.-1-2%
* Swisscom- 9M Ebitda CHF 3.35bn. FY Outlook unchanged.+1%
* Suisse Re- Confirm of buyback despite Disaster Loss. +2%
MainFirst
*SANOFI-Net EPS €1.71(1.72),Diabetes sales to drop 6-8% to '18.......-2%
*DANSKE-FY Net 19-21b(18-20),Q3 NII 5.96b(5.84),NI 4.73b(4.53).......+2%
*CS-Net Rev 4.97b(4.97),Net 244m(201),Global grth strong in Q4.......+1%
*SWISS RE-9m -$468m(-558),Comb Ratio P&C 114.1%(120.5),B/B 3/11......+1%
*CARLSBERG-Q3 Rev 16.7b(17.21),Sees Org Pft Gth 7-8%(mid-single).....-2%
*ING-Q3 NI 1.38b(1.33),PT 1.995b(1.86),CET1 14.5%(inline),low qual...-1%
*FRAPORT-Q3 Sales 873m(875),Ebit 300m(288),FCF 388m,o/lk inline......+0.25%
*DSM-Q3 Sales 2.14b(2.08),Adj Ebitda 365m(351.3),Exps good FY........+2%
*FRES MED-Q3 Rev 4.34b(4.39),Net 319m(301.4),Ebit 624m(607.6)........+0.5%
*FRES SE-Q3 Sales 8.3b(8.29),Adj Ebit 1.13b(1.14),Net 423m(422)......+0.5%
*SWISSCOM-9m Rev 8.6b(8.56),Ebit 1.77b(1.74),Net Inc 1.27b(1.23).....+0.5%
*GN STORE-Q3 Rev 2.28b(2.31),Ebita 406m,FY ORG +7% vs +6% prev.......+1%
*TENARIS-Q3 Net Sales 1.30b(1.32),EPS 9c(4.6),Divi 13c...............-0.5%
*HUGO BOSS-Q3 Sales 710.7m(711.9),Ebitda 142.9m(146.4),FY +LSD.......+1%
*VALIANT-9m OP 286m(283),NP 84m(77),Confirms tgts, FY at '16 levels...+0.5%
*DRAGERWERK-Q3 Sales 621m(620),Ebit 24.4m(28),FY outlook ok..........-1%
*FIELMANN-Q3 Sales 364.55m(366),PT 76.27m(76),Net 52.21m(52),o/l up..+0.5%
*P/VAC-Q3 Sales 154.2m(147),Ebit 24.9m(21.9),Net 17.3m(14.9),o/l ok..+1.5%
*RYANAIR-Oct Passengers 11.8m,Oct Load factor 96%....................U/C
*SUEDZUCKER-Read from Tates PT 169m(146),Sales 1.4b(1.41),stk +3%....-0.5%

Jefferies
CARLSBERG: 3Q Org Volume -4%, cons -3.9%, Rev -1%, cons -0.3%, Increases FY Org Op Profit to +7%-+8% vs previous MSD, street at 6% ... flat to +1%
BOSS: 3Q Sales €710.7m vs cons 711.6m, 3Q EBITDA €142.9m, cons 146.4m. Sees FY sales +low single digit, Bbrg cons implies 1% ... may see bounce as weak yday, called +1%
ING: # IN LINE/SLIGHT BEAT - Q3 CET1 14.5%, net inc €1.38bn vs e€1.86bn ... called +1%
SWISS RE: 9m not as bad as feared - net loss $468m v e$558m, starts buyback...called +1%
DANSKE BANK: BEAT & RAISE - Q3 net income DK4.73bn vs (e) DK4.53bn and raises FY net guide to DK19bn-DK21bn (prev DK18bn-DK20bn) .. called +3%
SANOFI: Q3 results POOR - net profit -6.4% on weak diabetes franchise ... called -2%
DSM: Q3 sales €2.14bn vs cons €2.08bn, adj EBITDA €365m ~4% above cons. Expects to deliver FY17 above targets ... called +2%
GN STORE: Q3 EPS DKK2.05 vs cons DKK2.01. Organic growth S/LITE at +7% vs cons +7.4% and confirmed FY outlook ... -1% to -2%
CREDIT SUISSE: Q3 revs IN LINE/NNM strong - net CHF244m vs cons CHF184m, adj pretax CHF400m vs cons CHF541m, core adj pretax CHF620M vs cons CHF1.01bn ... called +1%
FRESENIUS SE: Q3 EBIT and sales inline, guidance confirmed, stock weak going into numbers ... called +1 to +2%
TATE & LYLE: GOOD Q3 print - adj ptp £169m vs JEF(e) £155m, adj EPS 27.6 vs JEF (e) 26. Says expects FY to be modestly higher than expectations ... we think +2%

Shore calls
LADBROKES CORAL - Apollo & Cerberus sell 49m shares @ 124.50p...............
MKT RANDGOLD RES - Q3 production lower than Q2 due to planned decrease in grade.-2%
WILMINGTON - slower start,Q1 revs +6%,PBT marginally lower,n/c to outlook...-1% 
HOWDEN - pick up from H2 2016,total revs +6.3%,margins in line..............+1% 
ACACIA MINING - CEO and CFO resign..........................................-2%
JOHNSTON PRESS - Q3 grp revs flat,digital revs +16%,sees FY in line........UNCH 
INTU PROP - anticipates positive LfL rental growth,inline with g'dance.....UNCH 
LANCASHIRE - comfortable with losses,no special divi,sees rate hardening....-1% 
TATE&LYLE - H1 sales 1.4b(Est1.41b).Ptp 161m(Est146m).Divi 8.4p.............+1% 
BT - Q2 rev 5.95b.Ptp 789m(Est783m).Interim div 4.85p.......................+1% 
MORRISON - Q3 in line,Forecasts unchanged,on front foot for Christmas.......+1% 
SHELL - Q3 adj pft $4.1b(Est3.62b).Output increased 10%y/y to 8.45m Tons....+2% 
RSA - Says ahead od same period in 2016 but less than targeted..............-2% 
PLAYTECH - Sees Fy performance 5% below bottom end of estimates.............-5% 
CENTAMIN - Q3 gold production +26% on Q2,maintains guidance.................+1%

(CS) ITALIAN BANKS: We are selectively constructive on Italian banks as we expec

ITALIAN BANKS: We are selectively constructive on Italian banks as we expect cost of risk to normalize and see restructuring momentum. At an average 2018E P/TBV of 0.8x, Italian banks are trading on a 1% relative premium, with the discount to Eurozone peers more than offset by their lower profitability. This report also includes our proprietary analysis of the ECB’s provisioning guidance and its potential impact on Core Tier 1 ratios. We reinstate coverage of UBI with an Outperform rating, Unicredit with a Neutral and Monte dei Paschi di Siena with an Underperform rating. UBI and Intesa-Sanpaolo (Outperform) are our top picks in Italy.

(CS) UK REGULATED UTILITIES: UK Utilities have been weak performers: Share price

UK REGULATED UTILITIES: UK Utilities have been weak performers: Share prices are c20% off 52-week highs. And the annualised total return since Brexit is negative c2-5% for all stocks. With our expectation of a BoE rate rise to c0.5%, from c0.25% (click here) and increasing political risk (click here) we look at the evidence to see which risks are priced-in. The balance of evidence suggests recent underperformance of regulated utilities may be due to some political risk being priced-in to the shares: 1) UK utilities have traded in-line with long-dated index-linked gilts (>15yrs); yet. 2) UK regulated utilities have underperformed c15% YTD vs. US regulated peers. 3)The pick-up in RPI inflation suggests that share prices should be much higher.

>>> What to look at today - 2nd of November 2017

SPX HIT INTRA-DAY RECORD HIGH BUT FAILED TO HOLD. FOMC nothing new, 2/10y yield curve contracted (USYC2Y10 Index fell -3%) so banks drifted. Crude inventory data supportive, but Crude failed to hold $55, energy subgroups ripped (EPS related). Homes higher on Fed and Const Spending data. Steels led miners on US STEEL +7.8% earnings. Airlines acted well on JPM upgrade of AMERICAN AIRLINES. Also Casinos up after solid Oct GGR data. Autos OK on SAAR data (helped sentiment). SemiCaps gave some back as 2 SmallMid names reported and missed. APPLE TODAY a driver. BoE also today, then focus shifts to Nonfarm Friday. 45 of SPX due today, also some big names report out of Europe. Yesterday's volume was 6.9bn, so +14% above 20day average. US After Hours ESIO +31%, LB +10%, CF +4% higher and PI -22%, OCLR -15.5%, FEYE -14%, GPRO -11%, CYH -10%, SYMC -9%, TSLA -5%, FB -2% lower following earnings/guidance/SSS. ASIAN MARKETS – TRADING LOWER, some loss of momentum with indexes tracking a modest decline in S&P 500 futures. THE NIKKEI is little changed in quiet trade. Honda is outperforming as Japanese earnings season rolls on. MAINLAND MARKETS are weaker with the PBoC draining a net CNY140bn via open market operations. Local media continue to note the central bank is unlikely to maintain a loose liquidity stance. Elsewhere, banks are weighing on the ASX with lower rates cited as a headwind.

Nikkei +0.53% Hang Seng -0.13% CSI -0.05% Shanghai -0.40% Shenzen -0.68%

Eur$ 1.1661 CNH 6.5969 CNY 6.5978 JPY 113.85 GBP 1.3284 CHF 0.9986 RUB 58.1552 WTI$ 54.37 +0.13%

S&P -0.20% EuroStoxx -0.30% FTSE -0.33% DAX -0.31% SMI -0.16%

Macro :
- Switzerland October Consumer Confidence -2 vs Est. Zero
- Apple CEO Tells NBC That U.S. Should Reform Tax Code: CNBC

Keep an eye on :
- ABE SM : ACS Is Said to Hire More Banks for Abertis Bid: Expansion
- BOSS GY : Hugo Boss Third Quarter Sales Meet Estimates
- BG US : Bunge Mulls IPO for Brazil Sugar Business, CEO Says: Reuters
- CARLB DC : Carlsberg Third Quarter Revenue 3.0% Below Estimates
- CLLS US : Cellectis Slumps; Therapy Needs More Improvements: Jefferies
- CHTR US : SoftBank Spoke to Charter About Deal in Recent Days: NYP
- CLVS US : Clovis Oncology Third Quarter Rubraca Revenue Misses Estimates
- CSGN SW : Credit Suisse Legal Risks Weigh On Capital Ratio
- CSGN VX : Credit Suisse CEO Says Will Meet Activist Investor RBR Next Week
- DANSKE DC : Danske Bank Boosts Full Year Net Forecast
- DTE GY : SoftBank Agrees 2.65t Yen Loan to Refinance Sprint, Arm Debt
- DRW3 GY : Draegerwerk Sees Full Year Sales In Local Currencies 0% To +3%
- FB US : Facebook Third Quarter Revenue Beats Highest Estimate
- FRA GY : Fraport Earnings Beat Estimates as Outlook for 2017 Confirmed
- FMC GY : Fresenius Medical Third Quarter Revenue 1.1% Below Estimates
- BGC US : General Cable Third Quarter Adjusted EPS 25c --> Prysman, Nexans...
- GPRO US : GoPro 4Q Forecast Misses Ests; 3Q Adj. EPS, Rev. Beat
- LHN SW : Holcim Rallies as Loma Negra IPO Stokes Argentine Cement Stocks
- LAD LN : Ladbrokes Coral Placement by Holders Prices at 124.5p Per Share
- RB/ LN : Reckitt Continues Slide; UBS Says Resist Temptation to Buy
- RIO LN : Rio Tinto Says Amrun Project on Track for Early 2019 Completion
- SAN FP : Sanofi’s 2015-2018 Sales Outlook Dims for Diabetes Business
- SCMN SW : Swisscom Nine Month Ebitda CHF3.35 Bln
- TEN IM : Tenaris Third Quarter EPS Beats Highest Estimate
- TSLA US : Tesla Sinks on Cash Burn, U.S. Auto Sales Beat: Industrials Wrap
- UCG IM : UniCredit Sees Selling Down Stake to Below 20% by Year End
- DG FP : Vinci Buys Infratek and Horlemann Electrical Grid Specialists
- VOW3 GY : VW Shares Rise Above Diesel Scandal Level for First Time
- XPO US : XPO Logistics Third Quarter Adjusted EPS Beats Estimates

>>> Europe : Brokers Upgrades & Downgrades - 2nd of November 2017

>>> Up
* AMS Upgraded to Overweight at Morgan Stanley; PT 125 Francs
* Evotec Upgraded to Buy at Bankhaus Lampe
* Inmarsat Upgraded to Hold at Berenberg
* Michelin Upgraded to Buy at Jefferies
* Northgate Upgraded to Hold at Berenberg
* UBM Upgraded to Overweight at JPMorgan; PT 8.38 Pounds

>>> Down
* Airbus Downgraded to Sell at Nord/LB; Price Target 75 Euros
* Glaxo Downgraded to Reduce at New Street Research
* Informa Downgraded to Neutral at JPMorgan; PT 7.90 Pounds
* LafargeHolcim Cut From Europe Super Ten After Downgrade: HSBC
* Lundin Petroleum Cut to Equal-weight at Barclays; PT 210 Kronor
* Lundin Petroleum Cut to Hold at DNB Markets; PT 215 Kronor
* Marine Harvest Cut to Sell at Arctic Securities; PT 150 Kroner
* Nokian Renkaat Downgraded to Underperform at Jefferies
* Norma Cut to Hold at Kepler Cheuvreux; Price Target 59 Euros
* Worldline Downgraded to Neutral at Citi

>>> Initiation
* Monte Paschi Reinstated Underperform at Credit Suisse
* Pirelli Initiated at Jefferies With Hold; PT 7 Euros
* Sophos Initiated at Jefferies With Buy; PT 8.50 Pounds
* UBI Banca Reinstated Outperform at Credit Suisse; PT 5.15 Euros
* UniCredit Reinstated Neutral at Credit Suisse; PT 18.60 Euros

>>> Call

>>> US After Hours Summary: ESIO +31%, LB +10%, CF +4% higher and PI -


After Hours Summary: ESIO +31%, LB +10%, CF +4% higher and PI -22%, OCLR -15.5%, FEYE -14%, GPRO -11%, CYH -10%, SYMC -9%, TSLA -5%, FB -2% lower following earnings/guidance/SSS

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance/SSS: ESIO +30.6%, NBIX +19%, TACT +17.3% (thinly traded), WSTL +11.3% (thinly traded), LB +10.1% (October comps of +2% vs LSD decline prior guidance; sees Q3 EPS to be at the high end of its guidance and reiterates FY 17 EPS guidance of $3.00-3.20; expects Q3 sales of $2618 mln vs $2568 mln consensus), KMT +7.4%, EXEL +7.3%, QDEL +6.3%, CFMS +4.5% (light volume), SHAK +4.4%, CF +4.1%, HOS +4.1%, CKH +3.7%, FLT +3.5%, NMIH +3.5% (light volume), ULTI +3.4%, CTRP +3.3%, TTMI +3.2% (light volume), ZAGG +2.5%, DXCM +2.5%, RIG +2.5%, CZR +2.3%, HIIQ +2.1%, RGLD +1.7%, ARRS +1.6%, ZUMZ +1.4% (October comps of +6.6% vs +10.2% year ago and +9.3% last month), PRU +1.3% (light volume)

Companies trading higher in after hours in reaction to news: XTNT +11.7% (enters into a distribution agreement with curasan, ' adding a premium line of synthetic scaffolds to its biologics portfolio'), TURN +8% (after reporting NAV per share of $2.68 as of September 30, 2017; third consecutive quarter of NAV growth), HTGM +4.9% (enters into second statement of work with QIAGEN), ABY +2.7% (Algonquin to purchase 25% interest in Atlantica Yield from Abengoa at price of $24.25 per share, $2,430 million implied total equity value), TRHC +2.1% (ticking higher - was initiated after the close with an Overweight at First Analysis Sec; $41 tgt)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance/SSS: PI -21.6%, TCAP -16.2%, OCLR -15.5%, FEYE -13.9%, GPRO -11.1%, OSUR -10.6%, ATRC -10.5%, CYH -9.9%, SYMC -8.7%, CAKE -7%, HABT -6.9%, YELP -5.4%, TSLA -5%, ALIM -4.8%, HBI -4.6%, CLVS -4.5%, DYN -4.3% (light volume), WPZ -3.3%, FIT -3%, CAVM -3%, TDOC -2.8%, FATE -2.8%, QRVO -2.6%, EQIX -2.5%, CNAT -2.4%, FB -1.8%, GERN -1.8%, WPX -1.7%(light volume), KHC -1.6%, CMPR -1.3%, XPO -1% (light volume)

Companies trading lower in after hours in reaction to news: OBLN -1.4% (files for $100 mln mixed securities shelf offering and 150,000 share common stock offering by the selling stockholder), AQN -0.9% (Algonquin to purchase 25% interest in Atlantica Yield from Abengoa at price of $24.25 per share, $2,430 million implied total equity value; AQN to sell on a bought deal basis, 37.8 mln common shares at a price of CAD$13.25/share),

Cyber security names are lower following FEYE / SYMC results: PANW -1%, CTXS -0.9%, CHKP -0.5%

Optical names are under pressure on the heels of OCLR earnings/guidance: ACIA -2.9%, FNSR -2%, CIEN -1.8%, LITE -1.1%, FN -1%, AAOI -0.6%

>>> Asian Update

Asia Mid-Session Update: Equities decline as tech names in the US fall after reporting; Aussie trade and building approvals higher than expected

***Asia Summary***
-During yesterday’s NY session, equities ended mixed amid the release of the US Fed statement. In Asia, Nasdaq Futures have declined by over 0.2%. Shares of tech firms Facebook, Symantec and Tesla declined in the US afterhours, following their most recent earnings reports.
-As of the time of writing, equity markets are trading mixed. Financials in China and Australia are trading generally weaker, following earnings. Standard Chartered has declined by more than 5% amid weaker than expected Q3 results. National Australia Bank (NAB) has declined by over 2% after reporting FY17 cash earnings below market expectations.
-At the same time, Boral, which produces building and construction materials in Australia, has gained over 3% after it said Q1 earnings were better than expected.
-In the auto sector, Honda has gained over 4% after the company reported financial results and raised its FY sales forecast. Steel maker Kobe Steel has continued to rise after the company issued its earnings report on Monday, while JFE has gained over 1% following its earnings release.
-The Aussie has gained over 0.3%, following better than expected Sept Trade Balance and Building Approvals data with Sept retail sales due for release on Friday. Overall, the US dollar is trading with a generally weaker tone following the most recent FOMC statement.
-At the same time, US government bond yields are lower, with Long Bond Futures up over 0.1%. Later on Thursday (at 3:00 PM EST), US President is expected to confirm that Jay Powell will be named as the next Fed Chair.
-On the tax front, the US House GOP members are also expected to release their tax plan at 9:00 AM EST. The plan may include a 12% repatriation tax on cash held overseas and 5% tax for non-cash foreign holdings, according to a press report. Under the 2016 GOP tax blueprint, a tax rate of 8.75% was proposed for cash and cash equivalent profits repatriated from overseas and 3.5% on other overseas profits.
-US corporate earnings expected for Thursday include, Apple. Earlier in the Asian session, retailer Costco reported better than expected Oct US SSS.

***Key economic data***
- (AU) AUSTRALIA SEPT TRADE BALANCE: $1.75B V $1.2BE
- (AU) AUSTRALIA SEPT BUILDING APPROVALS M/M: +1.5% V -1.0%E; Y/Y: +0.2% V -2.4%E
- (JP) Japan investors net sold ¥1.08T in foreign bonds v bought ¥10.9B in prior week; Foreign investors net bought ¥697B in Japan stocks v bought ¥686B in prior week; Japan sold most foreign bonds on weekly basis since April.
***Speakers and Press***
Japan
- (JP) Japan govt reportedly plans to widen tax on foreign online retailers - Nikkei
- (JP) Follow Up: Japan PM Abe seeking ¥2T supplementary budget - Japan press

Korea
- (KR) North Korea said to be working on an ‘advanced’ version of its KN-20 intercontinental ballistic missile (ICBM) which could possibly reach the US – CNN
- (JP) Japan Chief Cabinet Sec Suga: Watching for possible of collapse at North Korea nuclear site

China/Hong Kong
- (CN) PBoC official Zeng Hui calls for stronger regulations related to public-private partnership (PPP) projects
- (HK) Hong Kong HKMA: Announces USD bonds eligible yuan liquidity facility collateral, effective immediately
- (HK) Macau Oct Gaming Rev MOP22.6B, +22.1% y/y v 14.5%e (yesterday)

US
- (US) President Trump to announce Fed Chairman nominee Thursday 15:00ET

***Asian Equity Indices/Futures (00:00ET)***
- Nikkei +0.2%, Hang Seng -0.2%; Shanghai Composite -0.6%; ASX200 -0.1%, Kospi -0.5%
- Equity Futures: S&P500 -0.2%; Nasdaq100 -0.3%, Dax -0.1%; FTSE100 -0.1%

***FX ranges/Commodities/Fixed Income (00:00ET)***
- EUR 1.1672-1.1614; JPY 114.21-113.73; AUD 0.7726-0.7672;NZD 0.6942-0.6883
- Dec Gold +0.3% at $1,280/oz; Dec Crude Oil +0.0% at $54.30/brl; Dec Copper +0.3% at $3.15/lb
- (CN) PBoC OMO: skips v injects CNY240B combined in 7-day, 14-day and 63-day reverse repos prior; Net injection CNY140B v CNY0B prior
- USD/CNY *(CN) PBOC SETS YUAN REFERENCE RATE AT 6.6196 V 6.6300 PRIOR

***Equities notable movers***
Australia/New Zealand
- ASH.AU Reports Q1 (A$) net 1.1M v v 1.2M y/y; EBITDA 1.9M v 2.7M y/y; Rev 81.7M v 78.4M y/y – AGM; +29%
- MBE.AU Guides FY18 well placed to deliver improved EBITDA y/y +14%

Japan
- 4091.JP Reports H1 Net ¥17.7B v ¥16.5B y/y; Op ¥29.6B v ¥26.0B y/y; Rev ¥305.7B v ¥268.8B y/y; +7.5%
- 7951.JP Reports H1 Net profit ¥19.6B v ¥27.2B y/y, Op profit ¥23.9B v ¥24.7B y/y, Rev ¥210B v ¥199B y/y; -10.5%

Hong Kong/China
- 1378.HK Chairman raises stake to 81.65%; +12%

>>> US Close Dow +0.25% S&P +0.16% Nasdaq -0.17% Russell -0.67%

Closing Market Summary: Mixed Outing in the Midweek Session

Stocks touched record highs at Wednesday's opening bell, but the bullish sentiment was quickly stifled, leaving the market little changed. The major indices finished the session mixed, settling in the lower half of their trading ranges. The Dow and the S&P 500 added 0.3% and 0.2%, respectively, while the Nasdaq slipped 0.2%. Small caps struggled, sending the Russell 2000 lower by 0.7%.

The Federal Open Market Committee announced its latest policy decision on Wednesday afternoon, but the event came and went without much impact on the financial markets. As expected, the FOMC voted unanimously to leave the fed funds target range at 1.00%-1.25% and reiterated its belief that the economy will continue to expand at a moderate pace.

Wednesday's policy statement did little to alter the market's belief that the Fed will hike rates at the December FOMC meeting, evidenced by the CME FedWatch Tool--which places the chances of a December rate hike at 98.2%. On a related note, President Trump is expected to unveil his Fed Chair nominee on Thursday, with reports indicating that it'll likely be Fed Governor Jerome Powell.

In addition, House Republicans say they'll release their tax reform bill on Thursday--one day later than their original self-imposed deadline.

Energy stocks led Wednesday's modest rally, even though WTI crude futures declined 0.4% to $54.18/bbl. Crude oil held a gain of more than 1.0% early in the session, but moved back to its flat line after the Energy Information Administration reported that U.S. crude stockpiles declined by 2.4 million barrels last week. Still, the commodity finished near an eight-month high.

The S&P 500's energy sector added 1.1%, but gains from the other groups were pretty modest. The consumer staples space was one of the top performers outside of energy, adding 0.3%, thanks in part to cosmetic giant Estee Lauder (EL 122.12, +10.31), which surged 9.2% on better-than-expected earnings and revenues.

Meanwhile, the materials sector (+0.6%) also outperformed, with DowDuPont (DWDP 73.32, +1.01) adding 1.4% before its Thursday morning earnings release.

On the flip side, Apple (AAPL 166.89, -2.15) struggled on Wednesday, losing 1.3%, following three straight sessions of big gains. The tech giant will report earnings on Thursday evening and goes into Thursday's session with an incredible year-to-date gain of 44.1%. With a market cap of around $860 billion, Apple is the largest component within the S&P 500.

Telecom stocks continued their bearish 2017 campaign in the midweek session, with CenturyLink (CTL 17.85, -1.14) pacing the retreat. The company finished with a loss of 6.0% after completing its acquisition of Level 3 Communications--a process that took nearly a year. The S&P 500's telecom services sector declined by 0.5%, extending its year-to-date loss to 16.4%.

In the bond market, U.S. Treasuries finished mostly lower, but longer-dated issues showed relative strength. The yield on the 2-yr Treasury note climbed four basis points to 1.63%, while the benchmark 10-yr yield finished flat at 2.38%. Generally speaking, Treasuries ticked lower following the Fed's policy release. Meanwhile, the U.S. Dollar Index finished higher by 0.3% at 94.69.

Reviewing Wednesday's economic data, which included the October ADP Employment Change Report, the October ISM Index, September Construction Spending, and the weekly MBA Mortgage Applications Index:

  • The ADP National Employment Report showed an increase of 235,000 in October (consensus 215,000). The September reading was left unrevised at 135,000.
  • The ISM Index for October declined to 58.7 from an unrevised reading of 60.8 in September, while the consensus expected a downtick to 59.0.
    • The key takeaway from the report is that manufacturing conditions remain solid, as the October dip is most likely just a cooling off from what was a very hot September reading.
  • The Construction Spending report for October rose 0.3%, while the consensus expected a decrease of 0.2%. The prior month's increase was revised to 0.1% from 0.5%.
    • The key takeaway from the report is that overall construction spending remains modest and an inhibitor of stronger real GDP growth.
  • The weekly MBA Mortgage Applications Index decreased 2.6% to follow last week's 4.6% decline.

On Thursday, investors will receive the weekly Initial Claims Report (consensus 235K), third quarter Productivity (consensus 2.8%), and third quarter Unit Labor Costs (consensus 0.0%)--all of which will be released at 8:30 ET.

  • Nasdaq Composite +24.8% YTD
  • Dow Jones Industrial Average +18.6% YTD
  • S&P 500 +15.2% YTD
  • Russell 2000 +10.0% YTD

WSJ : Disney Lays Down the Law for Theaters on ‘Star Wars: The Last Jedi’

Disney Lays Down the Law for Theaters on ‘Star Wars: The Last Jedi’
Exhibitors say the studio’s top-secret terms are the most onerous they have ever seen

LOS ANGELES—The box-office domination of the “Star Wars” franchise has given Walt Disney Co. DIS +1.52% unprecedented power over the nation’s movie theaters.

Before exhibitors can begin screening “Star Wars: The Last Jedi” this December, they must first commit to a set of top-secret terms that numerous theater owners say are the most onerous they’ve ever seen. Disney will receive about 65% of ticket-sales revenue from the film, a new benchmark for a Hollywood studio. Disney is also requiring theaters to show the movie in their largest auditorium for at least four weeks.

Ignoring the terms carries an unusual penalty. If a theater violates any condition of the distribution agreement, Disney can charge it an additional 5%, bringing the studio’s total haul to 70% of sales on a movie likely to gross more than $500 million at the domestic box office.

The case of “The Last Jedi” highlights a perpetual but growing tension between the business partners who bring movies to the public: studios and theaters. Negotiations between the two parties have grown pitched as Disney has become one of the most powerful studios in Hollywood and theaters have lost leverage as box-office sales fall. Box-office revenue is down 5% so far this year.

The depressed box office is accelerating plans at other studios to shorten the theatrical window, so movies would be available to watch at home sooner. But Disney has said it wants to preserve the theatrical model as it currently stands, making the studio an even more indispensable supplier for exhibitors over the long term.

That dynamic has exhibitors across the country resigning themselves to a new condition of doing business: If you want to play Disney’s blockbuster movies, get used to Disney’s rules.

“They’re in the most powerful position any studio has ever been in, maybe since MGM in the 1930s,” said one film buyer.

A Disney spokesman declined to comment on the negotiations.

The studio’s slate of surefire hits this year has included “Beauty and the Beast” and “Guardians of the Galaxy Vol. 2,” with “Thor: Ragnarok” coming this weekend.

Last year, with just 13 new releases, Disney had a 26% market share in total domestic box office, according to Box Office Mojo. The No. 2 studio, Time Warner Inc.’s Warner Bros., had a 17% market share with 23 movies. Disney is expected to top the market-share ranking this year, too.

Disney’s string of hits in recent years—fueled by its acquisition of Marvel Entertainment in 2009 and Lucasfilm in 2012—gives it sway over theater owners, many of whom described the studio as exercising more control over every detail of a film’s release than any of its rivals.

Few operators can afford to turn away a Disney windfall. But some independent theaters have decided not to screen “Last Jedi” when it’s released, saying the company’s disproportionate share of ticket sales and four-week hold make little economic sense—especially in small towns.

“There’s a finite number of moviegoers in my market, and I can service all of them in a couple of weeks,” said Lee Akin, who operates a single-screen theater in Elkader, Iowa (population: 1,213).

Toward the end of a monthlong run, Mr. Akin said he would be unable to swap in more popular titles and instead have to play “Last Jedi” to near-empty auditoriums—while still giving Disney 65% of those paltry sales. The studio is applying the 65% split across all weeks of the film’s release, rather than some studios’ practice of beginning a split at a high figure and then lowering it in subsequent weeks.

“When [studios] get much bigger than the other guys, that’s when all these wacky rules come into place,” said Mr. Akin.

Most theatrical releases send about 55% of ticket sales back to studios, though the average split is about 60% on major hits. Hollywood makes more money on tickets sold in the U.S. than in overseas markets, where the split averages about 40%. Disney has deals with some exhibitors that give it less than 65% on “Last Jedi.”

Disney’s rules on “Star Wars” begin before tickets go on sale online, when the studio outlines presale terms to theaters in contracts that are individually watermarked to prevent exhibitors from leaking them. Previous “Star Wars” installments gave Disney 64% of ticket sales and included four-week holds, and other releases from the studio usually require theaters to commit to a minimum of two weeks of screenings.

But Disney’s 5% penalty for not meeting terms on “Last Jedi” is unusual. The charge will be implemented for various violations, including if a theater pulls even one “Star Wars” screening from its schedule or begins marketing the movie before Disney gives the OK, according to theater operators.

The four-week hold in a theater’s largest auditorium, meanwhile, has frustrated distribution executives at rival studios that also have major releases hitting theaters around Christmastime. Soon after the “Last Jedi” opens on Dec. 15, movies such as Sony Pictures Entertainment Inc.’s “Jumanji: Welcome to the Jungle” and Twentieth Century Fox’s “The Greatest Showman” will begin jockeying for screen times. Twentieth Century Fox’s owner, 21st Century Fox Inc., and Wall Street Journal parent News Corp share common ownership.


Of course, most exhibitors make more money on concession sales than box office, and a theater receiving 35% of ticket sales on a hit that grosses $700 million is in better shape than one receiving 50% on a $200 million movie.

Disney’s terms on “Last Jedi” kick in if the movie collects more than $500 million in the U.S. and Canada, which box-office prognosticators say is a near certainty. The studio’s first installment of the space opera, “The Force Awakens,” opened in December 2015 to $248 million and became the highest-grossing domestic movie of all time, collecting $937 million in 2015. “The Last Jedi,” which has Mark Hamill returning as Luke Skywalker, is expected to draw gargantuan crowds.