Gapping down
In reaction to disappointing earnings/guidance:
- N/A.
Select metals/mining stocks trading lower:
- HMY -3.4%, KGC -2.7%, AUY -2.3%, GOLD -1.6%, GDX -1.6%, GG -1.6%, SLV -1.6%, NEM -1.5%, NEM -1.5%, ABX -1.5%, GFI -1.3%, AG -1.1%, RGLD -0.9%, GLD -0.9%
Other news:
- ACHN -25.3% (Achillion Pharma receives termination notice of Worldwide Collaboration for Hepatitis C With JnJ's Janssen)
Analyst comments:
- OC -2.6% (downgraded to Neutral from Buy at Nomura)
- STX -2.5% (downgraded to Sector Perform from Outperform at FBN Securities)
- SNAP -1.6% (downgraded to Hold from Buy at Deutsche Bank)
- MGM -1.4% (downgraded to Hold from Buy at Deutsche Bank)
- GRUB -1.2% (downgraded to Neutral from Outperform at Credit Suisse)
- NWL -0.8% (downgraded to Hold from Buy at Jefferies)
- KR -0.7% (downgraded to Hold from Buy at Deutsche Bank)
Gapping up
In reaction to strong earnings/guidance:
- N/A.
Select actively traded names showing strength:
- EA +1.7%, TSLA +1.6%, AMD +1.3%, AAPL +1.2%, NVDA +1%, NFLX +1%, FB +0.7%
Select Chinese related stocks trading higher:
- YNDX +2%, BABA +1.3%, BIDU +1.2%, MOMO +1.2%, WB +0.6%
Other news:
- MRNS +29.8% (announces top-line data from the Phase 2 open-label study in patients with CDKL5 disorder support advancing ganaxolone into a definitive late-stage clinical trial)
- CTRV +23.5% (announces that the FDA has approved an Investigational New Drug Application in the U.S. for its lead HBV compound, TXL for the treatment of chronic hepatitis B)
- IDRA+20.5% (presents positive Phase 1 data for Intratumoral IMO-2125 )
- RNN +13% (presents preliminary efficacy data from the Ongoing Phase IIa Clinical Trial of RX-3117 )
- TEVA +11.4% (present late-breaking present data presented highlighting primary and secondary outcome measure results from chronic and episodic migraine Phase III clinical trials; also appointed new CEO)
- RXDX +9.5% (confirms completion of enrollment of the efficacy data sets for both the NTRK tissue-agnostic cohort and the ROS1 NSCLC cohort to support dual NDA submissions in 2018)
- ARRY +7.5% (present Phase 3 COLUMBUS Part 2 results in BRAF-Mutant Melanoma)
- VKTX +4.3% (announces results from a gene expression analysis conducted as part of its recently completed study of VK2809),
- INO +3.8% (announces that an interim data analysis for its INO-5150)
- EXEL +2.2% (Exelixis and Ipsen report results from Phase 2 CABOSUN trial of Cabozantinib versus Sunitinib confirms primary endpoint analysis per investigator)
- INCY +2% (Incyte and Merck present progression-free survival data from ECHO-202 Trial )
- CBIO +2% (issued patents covering its coagulation Factor IX hemophilia product candidate from the State Intellectual Property Office (SIPO) in China)
- AZN +1.7% (presents results from a subgroup analysis of the SIROCCO and CALIMA Phase III trials)
- IONS +1.5% (presents new data from IONIS-STAT3-2.5Rx demonstrating antitumor activity in combination with Imfinzi)
Analyst comments:
- ATI +3.4% (upgraded to Buy from Underperform at BofA/Merrill )
- FEYE +2.8% (upgraded to Overweight from Equal-Weight at Stephens)
- MA +1.7% (upgraded to Buy from Neutral at Guggenheim)
- MU +1.1% (initiated with a Outperform at FBN Securities)
- TXT +0.9% (upgraded to Buy from Hold at Drexel Hamilton)
Early premarket gappersBriefing note: Early premarket gappers was reposted due to inaccuracies. That post has been taken down and replaced with this
Gapping up:
- IDRA +13.8%, TEVA +11.2%, ARRY +7%, KURA +6.4%, OKTA +3.2%, AMD +2.6%, YNDX +2.3%, INCY +2%, EXEL +2%, TSLA +1.8%, CLF +1.8%, MZOR +1.6%, AZN +1.6%, ACH +1.5%, GRFS +1.4%, AAPL +1.3%, OPK +1.3%, EA +1.3%, MU +1.2%, MT +1.2%, WB +1.1%, NFLX +1.1%, NVDA +1%, MOMO +1%, FB +0.8%, RIO +0.8%
Gapping down:
- AOBC -17.2%, ACHN -13%, GG -2%, HMY -1.9%, CYAD -1.8%, UTHR -1.7%, GOLD -1.3%, GDX -1.3%, SLV -1.2%, RGLD -1.1%, ABX -1%, AG -1%, NEM -0.8%, GLD -0.8%, NEM -0.8%
APPLE’S IOS 11 WILL MAKE IT EVEN HARDER FOR COPS TO EXTRACT YOUR DATA
SINCE APPLE LOCKED down its iPhones three years ago with encryption that even the company itself can’t break, it has been in a cold war with the cops—one that has occasionally turned hot. Exhibit A: its legal standoff with the FBI over the seized iPhone of San Bernadino killer Syed Rizwan Farook. Now, 18 months after that showdown, Apple is adding yet more features that are designed to guard your digital privacy from anyone who nabs your iPhone—whether it's a mugger on the street or the policeman who just threw you in jail.
Security researchers and forensic analysts who've seen early developer versions of iOS 11, expected to be announced at Apple's launch event tomorrow, say its new features include tweaks designed to make extracting the data from a seized phone far more difficult without the phone's six-digit passcode. And while those changes seem aimed at protecting iPhone users' data from run-of-the-mill thieves and snooping boyfriends, it could also mark another escalation in Apple's tensions with law enforcement officials and customs agents who want the ability to extract data wholesale from the phones of criminal suspects and travelers at the border.
From the perspective of those government agents, "this will be a major pain in the ass," says Nicholas Weaver, a security researcher at the International Computer Science Institute at the University of California at Berkeley. "Apple wants to live in a world where the phone in your hands is super valuable, but in anyone else’s hands is a brick...If that messes up police's and customs' forensic dumps? So what. The benefits outweigh the harm."
A Less Promiscuous Port
According to a blog post from Russian forensics software firm Elcomsoft on Thursday, Apple has made at least two significant changes to iOS 11 that will create new hurdles for those trying to access the innards of a seized iPhone. First, they've added a crucial step to the process of moving a phone's contents to a forensic analyst's desktop computer, a change that could significantly reduce the amount of data police can access on seized phones—even if they manage to confiscate them in an unlocked state.
In recent versions of iOS, any iPhone plugged into an unfamiliar computer would ask the user if he or she was willing to trust that new machine before exchanging any data with it. That meant if cops or border agents were able to seize an unlocked iPhone or compel its owner to unlock a locked one with a finger on its TouchID sensor, they could simply plug it into a desktop via a cable in its lightning port, choose to trust the new machine with a tap, and upload its contents using forensic software like Elcomsoft or Cellebrite. (That's particularly important because courts have found criminal suspects can't plead the Fifth Amendment and refuse to offer their fingerprints, as they sometimes can with a password or passcode.)
But in iOS 11, iPhones will not only require a tap to trust a new computer, but the phone's passcode, too. That means even if forensic analysts do seize a phone while it's unlocked or use its owner's finger to unlock it, they still need a passcode to offload its data to a program where it can be analyzed wholesale. They can still flip through the data on the phone itself. But if the owner refuses to divulge the passcode, they can't use forensic tools to access its data in the far more digestible format for analysis known as SQLite. "There’s a huge amount of data that can’t be effectively analyzed if you have to look at it manually," says Vladimir Katalov, Elcomsoft's co-founder. "On my phone, I have more than 100,000 messages and several thousand call logs. The manual review of that data is not possible."
Just as key, argues Berkeley's Weaver, will be how that passcode requirement changes the iPhone's security during a border crossing: Customs and Border Protection agents can take advantage of a bizarre loophole in the fourth amendment to search Americans' devices at the border without even obtaining a warrant. For past versions of iOS, that's meant they could take your phone, copy its contents to their own computer, and analyze that private data at their leisure. Now, they can only look at a phone's data manually on the spot, while you're physically present at the border, or by taking the more drastic step of seizing the device. "Customs is going to hate this," says Weaver. "And to be honest, good riddance."
Sending Out An S.O.S.
Apple's developer beta for iOS 11 also reveals a more straightforward protection against searches of a seized iPhone, too, in the form of a new iOS feature called "S.O.S. mode." Tap the phone's home button five times, and it will launch a new lockscreen with options to make an emergency call or offer up the owner's emergency medical information. But that S.O.S. mode also silently disables TouchID, requiring a passcode to unlock the phone. That feature could be used to prevent someone from using the owner's finger to unlock their phone while they're sleeping or otherwise incapacitated, for instance. But it also provides a quick way to disable TouchID before, say, police kick in your door or pull you out of a car and arrest you. (Powering the device off works too, though it may be slightly slower.)
Apple declined to comment ahead of its Tuesday launch event. But both of the new security changes may have less to do with Apple tightening the screws on law enforcement than with another new feature expected in the iPhone 8: face recognition. As Facebook chief security officer Alex Stamos hinted in a tweet Friday, unlocking your iPhone by showing it your face may not be a terribly secure method of authentication, given that your face sits out in plain view and can easily be photographed or accessed by police. Disabling that feature (along with TouchID) and falling back on requiring a passcode in some situations where the phone is likely to be out of the user's control could serve as a smart way to balance the convenience of facial recognition against the privacy risks it creates. "This is a case where they can increase security without negatively impacting usability, against real-world threats people face," Weaver adds.
In other words, unlocking your phone with your face or finger may be slick, but when that phone is out of your hands you may be glad those aren't the only features protecting your secrets.
Richmont Mines to be acquired by Alamos Gold (AGI) (9.55)
Under the terms of the Agreement, all of the Richmont issued and outstanding common shares will be exchanged on the basis of 1.385 Alamos common shares for each Richmont common share.
- The Exchange Ratio implies consideration of C$14.20
- Concurrent with the announcement of the Transaction, Richmont announced the sale of the Beaufor Mine, the Camflo Mill and the Wasamac development project located in Quebec.
- Island Gold is a long-life, high-grade underground mine with growing production and first quartile cash costs, located in Ontario, Canada.
- Combined entity is expected to have diversified gold production of over 500,000 ounces in 2017, anchored by three core, low-cost, long-life operations in Canada and Mexico.
- Island Gold provides immediate cash flow accretion and stronger operating cash flow to support internal growth initiatives of the pro forma company.
- Upon completion of the Transaction, existing Alamos and Richmont shareholders will own approximately 77% and 23% of the pro forma company, respectively.
What’s a Bank Research Report Worth? $50,000 or $50?
Tug of war playing out between banks, asset managers over the value of research
How much are investment research reports actually worth?
The answer: less than the banks that produce them think.
In Europe a tug of war is playing out between banks and asset managers over the value of research that floods investors’ inboxes every day urging them to buy or sell securities.
Currently banks dole out reports to asset managers for free, hoping to recoup the cost through commissions on trading. But as of Jan. 3 this opaque pricing system will be altered in Europe. New rules mean asset managers will have to disclose how much they spend on research every year.
That means putting a price on research. And banks and asset managers aren’t seeing eye-to-eye.
As the haggling gets under way a price-war has broken out. Earlier this year, banks were quoting Olivier de Larouzière, head of interest rates at Natixis Asset Management, an annual fee of as much as €300,000 for his firm to have unfettered access to fixed-income research and meetings with analysts. Since then, most banks’ prices have plummeted, he said, to around €70,000 on average, though some are still trying to charge about €150,000.
“The gap has clearly narrowed a lot,” said Mr. de Larouzière. But he still gets “very, very different proposals,” he added.
Overall total spending on research and trading execution could fall by up to $3 billion, according to consultancy Oliver Wyman.
Banks are increasingly at odds over the scope of research coverage to offer clients—and how much to charge for it. Some are still hoping to negotiate big fees into the millions of dollars a year with the biggest asset managers. Others are looking to give away some of their research reports for free.
Credit Suisse Group AG is exploiting a loophole in the new regulations to offer some basic bond research free of charge online, according to a person familiar with the matter. The Swiss bank hopes to make money by charging for access to analysts instead, this person said. Dutch bank ING Groep said Tuesday it will be giving away some of its economics analysis for nothing, as a way to promote its brand.
For equity research banks are hoping to charge a little more. J.P. Morgan Chase & Co. is toward the bottom of the pack, quoting basic access to read-only equity reports for $10,000 a year, according to a person familiar with the matter, with prices steadily increasing for clients who want more face-time with top analysts.
At the other end of the scale, Barclays PLC is trying to price its research as a premium product, according to several clients.
Asset managers are working out how much of this research they actually want.
“It’s made us have quality control. How much do I really need?“ said Chris Iggo, chief investment officer for fixed income at AXA Investment Managers.
Several investment firms asked their fund managers to rank research based on what was essential, helpful or useless. The results showed a lot of research is never read.
The new rules are “very bad for the price of bad research,” said Neil Scarth, principal at Frost Consulting & Advisory. But they could also make the cost of access to top quality analysis increase, he adds.
Under the current system, equity investors pay a commission fee to a broker when they trade. Part of that fee goes toward executing the trade and a portion is retained to pay for additional services, including equity research.
So there is some idea of how much equity research should cost. The U.K.’s Financial Conduct Authority estimates U.K. investment managers pay around £3 billion of dealing commissions a year to brokers, of which half is spent on research.
In fixed-income investing, however, the two sides are heading into uncharted waters. Banks currently provide fixed-income research to clients for free in the hope they’d direct business their way in the form of trading bonds or currencies.
The new rules are part of a revision of an EU law that is implemented by regulators across the trading bloc. One of its aims is to stop asset managers receiving “inducements” to trade with certain brokers and guarantee value for investors.
Fixed income managers aren’t delighted at the prospect of transparency. Many see paying for research as an extra cost that must either be passed onto their clients or taken from their own profits.
“Spreads will not come down because of this,” said Craig MacDonald, global head of fixed income at Standard Life Aberdeen , adding that it costs a similar amount to trade with some brokers who don’t provide research as those that do.
To push down research prices, fund managers are telling the banks: You need us more than we need you. Meeting bank analysts may be helpful to gauge the mood in the broader investment community, but the exchange of information cuts both ways.
They also exploited banks’ overriding concern that if money managers didn’t buy their research, they would trade with them less. “If you have no relationship in terms of research, how strong will your relationship stay in terms of execution?” said Mr. de Larouzière.
Mr. de Larouzière said his business uses around 50 research providers now, but he intends to cut that by more than half. He said he was now getting research quotes “at very low prices because they need to be on that list.”
The adoption of the new European rules is complicated by the fact that in the U.S. the rules are in conflict. EU asset managers will have an obligation to pay for research. However U.S. firms, that aren’t registered investment advisers, are prohibited from receiving direct payments. But analysts expect this to change.
“Research is a product that is going to be sold everywhere,” said Elliot Hand, a manager at PricewaterhouseCoopers LLP. “This will become standard.“