After Hours Summary: MDXG +5.5%, CYBR / ATEN -17% following guidance, cybersecurity names lowerAfter Hours Gainers:
Companies trading higher in after hours in reaction to guidance: MDXG +5.5% (preannounces Q2 revenue above guidance)
Companies trading higher in after hours in reaction to news: CLIR +16.7% (receives order from supermajor oil company to qualify Duplex technology), CGI +14.9% (appoints Paul Svindland as CEO effective on or about July 24; Michael Miller to become Chairman), CTIC +11.8% (announces EMA validated the Marketing Authorization Application for pacritinib for the treatment of patients with myelofibrosis who have thrombocytopenia), GNW +10.5% (Genworth Financial and Oceanwide provide CFIUS update; timing of regulatory reviews will likely delay the completion of the transaction to later than the originally targeted time frame), BLFS +10.2% (Kolon Life Science, TissueGene's exclusive licensee for Asia, including Korea, has received marketing approval for Invossa-K Inj for degenerative arthritis from the Korea Ministry of Food and Drug Safety), AFMD +6.3% and EXEL +1.4% (initiated with Buy at Suntrust), SGMO +3.2% (FDA has granted Fast Track designation to SB-318 and SB-913, the Co's clinical stage in vivo genome editing product candidates for the treatment of Mucopolysaccharidosis Type I and MPS II), MYL +2.4% (Oncologic Drugs Advisory Committee votes unanimously to recommend MYL-1401O -- proposed biosimilar to RHHBY Herceptin), SPWH +1.4% (Director disclosed purchase of 10000 shares), MNK +0.9% (light volume; Phase 3 terlipressin trial achieves its enrollment target ahead of schedule - marks halfway point toward interim analysis of trial data),
After Hours Losers:
Companies trading lower in after hours in reaction to guidance: CYBR -17.1% (lowers Q2 sales, profit guidance primarily because deals in EMEA did not close in time), ATEN -17.1% (sees Q2 results below consensus),
Companies trading lower in after hours in reaction to news: WY -4.5% (ticking lower; announced effective immediately the ban of all campfires on its lands in Flathead, Lake, Lincoln, Missoula, Sanders and Ravalli counties in Western Montana due to high fire danger), AIN -1.9% (ticking lower; announces expected $16 mln charge; outlook for AEC remains unchanged), INSY -1.1% (WSJ reporting Anthem has launched civil suit against Insys)
Cybersecurity/software names lower following CYBR guidance (etf HACK -0.7%): FEYE -3.2%, FTNT -2.7%, PANW -1.4%, SYMC -0.9%, IMPV -0.8%
Closing Market Summary: Stocks Move Modestly Higher; Dow Notches Another Record CloseThe stock market moved higher in a range-bound trade on Thursday with the S&P 500's most influential sectors--technology (+0.3%) and financials (+0.6%)--leading the charge. The Dow Jones Industrial Averaged (+0.1%) notched another record close (21,553) while the Nasdaq (+0.2%) finished in line with the benchmark index (+0.2%).
Fed Chair Janet Yellen wrapped up her semiannual testimony on monetary policy today with an appearance before the Senate Banking Committee. The highlights of Ms. Yellen's testimony--namely, her acknowledgement that the federal funds rate would not have to rise all that much further to get to a neutral policy stance--were largely found in the prepared remarks she released on Wednesday morning.
However, it's worth pointing out that Ms. Yellen stated today that it's premature to conclude that the underlying inflation trend is falling well short of the Fed's 2.0% target. In addition, the Fed chair noted that the Fed will consider the yield curve when setting rates, which created a sense that the central bank would like to see a steepening of the curve predicated on rising inflation expectations.
As it so happens, the yield curve did steepen a bit on Thursday as the Treasury market gave back a good portion of Wednesday's advance. The 2-yr yield climbed two basis points to 1.36% while the 10-yr yield jumped three basis points to 2.35%.
The steepening of the yield curve benefited the heavily-weighted financial sector (+0.6%), which typically responds well to widening spreads due to the favorable impact on net interest margins for lenders. The financial group outperformed for the vast majority of Thursday's session, but picked up even more steam in the final stretch to finish at the top of the sector standings by a comfortable margin.
Meanwhile, Apple (AAPL 147.77, +2.03) shrugged off yesterday's underperformance to advance 1.4% and help the top-weighted technology sector (+0.3%) cruise to its fifth-consecutive victory. Apple's mega-cap peer Microsoft (MSFT 71.77, +0.62) also outperformed, settling higher by 0.9%.
The health care sector (+0.1%)--which comes just after the technology and financial groups in terms of weight--was a late bloomer on Thursday, spending the majority of the session in the red, but eventually rode an afternoon biotech rally into positive territory. The iShares Nasdaq Biotechnology ETF (IBB 316.24, +2.23) settled with a gain of 0.7% following headlines that the Independent Payment Advisory Board, which was created by the Affordable Care Act to reign in Medicare costs, will not be activated.
On a related note, Senate Republican leaders released their updated version of a health care reform bill on Thursday that is aimed at bridging the gap that currently exists between centrist-leaning and more-conservative members of the GOP. However, reports indicate that, despite the revisions, the GOP still doesn't have enough votes to pass the measure.
As for the remaining sectors, the consumer discretionary (+0.1%), energy (+0.4%), real estate (+0.2%), and consumer staples (unch) groups settled in the green while the industrials (-0.1%), materials (-0.1%), utilities (-0.4%), and telecom services (-0.6%) spaces finished in the red.
In corporate news, Target (TGT 53.31, +2.44) jumped 4.8% after raising its second-quarter forecast for earnings per share and comparable sales. The positive sentiment caught on within the broader retail industry, sending the SPDR S&P Retail ETF (XRT 39.93, +0.90) higher by 2.3%.
Reviewing Thursday's economic data, which included June PPI, the weekly Initial Claims Report, and the June Treasury Budget:
- June producer prices came in at +0.1%, which is above the consensus of -0.1%. Core producer prices rose 0.1% while the consensus expected an increase of 0.2%.
- The key takeaway from the report is that producer price trends are also seeing some disinflation, which will likely keep the Fed in observation mode, as opposed to action mode, when it comes to the policy rate.
- The latest weekly initial jobless claims count totaled 247,000 while the consensus expected a reading of 245,000. Today's tally was below the revised prior week count of 250,000 (from 248,000). As for continuing claims, they declined to 1.945 million from the revised count of 1.965 million (from 1.956 million).
- The key takeaway is that a low level of initial jobless claims reflects a tight labor market.
- The Treasury Budget for June showed a deficit of $90.2 billion versus a surplus of $6.3 billion for June 2016. The Treasury Budget data is not seasonally adjusted, so the June deficit cannot be compared to the $88.0 billion deficit registered in May.
On Friday, investors will receive a slew of economic reports, including June CPI (consensus 0.0%) at 8:30 ET, June Retail Sales (consensus +0.1%) at 8:30 ET, June Industrial Production (consensus +0.4%) and Capacity Utilization (consensus 76.8%) at 9:15 ET, May Business Inventories (consensus +0.3%) at 10:00 ET, and the preliminary reading of the University of Michigan Consumer Sentiment Index for July (consensus 95.1) at 10:00 ET.
Also of note, JPMorgan Chase (JPM 93.10, +0.59), Wells Fargo (WFC 55.60, +0.43), and Citigroup (C 67.02, +0.10) will release their latest earnings reports on Friday morning before the opening bell.
- Nasdaq Composite +16.6% YTD
- S&P 500 +9.3% YTD
- Dow Jones Industrial Average +9.1% YTD
- Russell 2000 +5.1% YTD
Sears Canada shareholders intend to table offer for company
13 JUL 2017
Sears Canada (TSE:SCC) executives intend to table an offer for a portion of or all of the insolvent Toronto, Ontario-based retail chain, reported The Globe and Mail on 13 July.
An item from the newspaper's Report on Business section, which cited a court document filed by the company's insolvency monitor, indicated that north of 20 groups have signed non-disclosure pacts connected to a potential takeover of Sears Canada. The company was, on 22 June, granted court protection from creditors.
According to the report, Sears Canada's majority shareholders in the U.S., ESL Partners -- an organization run by Sears Holdings CEO Edward Lampert -- and Fairholme Capital Management are also in talks to sign non-disclosure pacts as part of the sale process.
Meanwhile, a press release on 10 July confirmed that ESL Partners, Edward S. Lampert and certain affiliated entities announced that ESL and Fairholme Capital Management have engaged Canadian legal counsel to represent them in connection with Sears Canada's proceedings under the Companies' Creditors Arrangement Act. In connection with such engagement, ESL and Fairholme are evaluating, discussing and considering a potential negotiated transaction with the Issuer and its subsidiaries.
Sears Canada's market cap is CAD 63.1m (USD 49.4m).
The report explains that Apple’s 3D laser system sensor will allow for the iPhone 8 to offer better depth detection for augmented reality. This would help the company increase the precision of ARKit applications and thus make the technology even more powerful.
In addition to the augmented reality benefits, the 3D system will make for “a more accurate type of autofocus for photography.”
Specifically, Apple is said to be using the VSCEL laser system for the 10th anniversary iPhone:
VCSEL laser systems calculate the distance the light travels from the laser to the target and back to the sensor, and generate a Time of Flight (TOF) measurement. The system consists of a source (the VCSEL laser), a lens, detector (sensor), and a processor. The whole thing costs about $2 per phone, our source says.
Essentially, the laser sends out beams of light that bounce off objects and help identify the depth of each object. For augmented reality, this means that things would become even more lifelike. Whereas for camera tech, the lens can better focus on a specific aspect of the filed of view.
This evening’s report shouldn’t come as too big of a surprise for anyone who has been following iPhone 8 rumors. The device has long been said to feature advanced augmented reality capabilities. Fast Company, however, adds a few more details and a technical explanation as to how the technology works.
Throughout the last week, there have been several reports attesting to potential delays for the iPhone 8 and it’s reportedly up in the air as to whether this 3D laser system will be ready in time for the device. Today’s report explains that it’s up to the “progress Apple engineers make in integrating the laser system into the phone” and that it could come this year or it could come next year.
Fast Company also adds this little tidbit in its report:
The new phone is expected to pack several new features that are brand new to iPhones, including wireless charging, an edge-to-edge OLED display, and–possibly–sealed buttons on the side of the phone that respond with haptic feedback and are completely waterproof.
Would an advanced AR system further entice you to buy the iPhone 8? Let us know in the comments.
Boucheron Reveals Ambitious Program for 160th Anniversary
Over the next 12 months, the Place Vendôme jeweler will unveil a new advertising campaign, a fresh store concept and a renovated Paris flagship.
PARIS — As it prepares to celebrate its 160th anniversary, Boucheron is getting a facelift.
Over the next 12 months, the Place Vendôme jeweler will unveil a new advertising campaign, a fresh store concept and a renovated Paris flagship as part of a wide-ranging overhaul orchestrated by chief executive officer Hélène Poulit-Duquesne in preparation for the milestone next year.
Since joining the company in September 2015, the former Cartier executive has set about attracting a younger customer with the launch of a more accessibly priced collection, in addition to conquering new territories such as China, where the brand has no stores.
“Very little had been done to grow the house in the last few years. There was not a lot of investment,” Poulit-Duquesne told WWD. “There are entire regions of the world where we still don’t have a presence, so that’s one of our key priorities.”
The most visible sign of change is at 26 Place Vendôme, where founder Frédéric Boucheron set up shop in 1893, becoming the first jeweler with a presence on the historic square.
The 18th-century building, known as the Hôtel de Nocé, is undergoing a one-year renovation under the supervision of Michel Goutal, chief architect of historic monuments, who has previously worked on the Louvre museum.
The store, which will double in surface to 7,400 square feet, will be opened up to include an additional floor and incorporate the building’s monumental staircase. It will feature an interior design by Pierre-Yves Rochon, who has worked on hotels including the Four Seasons George V in Paris and the Savoy in London.
“We want this to be one of the most beautiful buildings in Paris, but it’s about the experience, rather than purely retail. That is why we chose someone specialized in hotels,” said Poulit-Duquesne.
The building is owned by Kering, parent company of Boucheron, which has been on a renovation spree of late. The French conglomerate last year unveiled its new headquarters on the site of the former Laennec Hospital, and is building offices for its Saint Laurent brand in a former Cistercian abbey.
The Boucheron store is set to reopen in the fall of 2018 and will be located directly opposite Louis Vuitton’s future flagship, operated by rival LVMH Moët Hennessy Louis Vuitton.
Before then, the brand will unveil its new store concept with the opening of a boutique in Geneva in November, to be followed by a flagship in Moscow. Based on the concept of a Parisian apartment, the design is the work of Yann Le Coadic and Alessandro Scotto.
“I am hunting for vintage furniture because I want each store to feel different,” said Poulit-Duquesne, who has also reviewed the way that jewelry is presented. “Central displays should always be horizontal. In a lot of stores, the tables have been renovated and we have removed bell jar displays, which I don’t find inviting.”
Boucheron, which has 60 stores worldwide, has a strong following in Russia and the Middle East, but has yet to open its first store in China. It is looking for a suitable location in Shanghai or Beijing.
“We don’t plan to double the number of points of sale over the next five years. We will continue to grow our network, but we expect most of the revenue increase to come from organic growth,” she said, adding that some underperforming boutiques will be relocated.
“We have launched a training program for our sales teams focused on assessing key performance indicators and improving the selling ceremony — things many other houses have worked on in recent years, and which had not necessarily been done at Boucheron,” Poulit-Duquesne added.
The executive has also set about upgrading Boucheron’s high jewelry collections, designed by creative director Claire Choisne, with a greater attention to finishing and the addition of more investment-grade gemstones. The first results could be seen in the house’s Hiver Impérial collection, which was presented at Kering’s headquarters during Paris Couture Week in a winter wonderland setting, complete with a soundtrack of howling wind.
It was designed in view of the Russian store opening later this year, but Poulit-Duquesne says an even more striking collection will be unveiled next year.
When she joined the house, she asked to see its gemstone stocks. “I realized that we didn’t necessarily have the level of quality I expected, and that there were stones that had been in stock for 70 years and weren’t really useful. So we cleaned up those stocks and started buying new stones,” she said.
She asked Choisne to continue working with unusual materials, something of a house trademark, but to start incorporating more large central stones. Hence, the Rostov medallion, inlaid with wood and diamonds to represent a dome as seen from above, is crowned with a round 4.14-carat diamond.
Among the other standout pieces in the collection were a diamond ring set with a 10.54-carat Zambian emerald, and the Baïkal necklace, made from rows of Akoya cultured pearls and moonstone beads, and set with a 78.33-carat Santa Maria oval aquamarine.
The spectacular piece was first worn by Salma Hayek, wife of Kering chairman and ceo François-Henri Pinault, at the Cannes Film Festival in May. Boucheron, which says it does not pay actresses to wear its creations, has increased its presence on the red carpet since Kering became an official partner of the festival in 2015.
“It’s extremely important, because it gives the designs a human dimension,” said Poulit-Duquesne. “I always say that jewelry is meant to be worn.”
She tries on every creation to make sure it is as wearable as it is beautiful. “A pair of earrings that is too heavy can give you a migraine and ruin your evening,” she said. “As a woman, I value the importance of avoiding shoes that hurt, a dress that’s too tight or jewelry that’s uncomfortable.”
For everyday wear, Boucheron recently launched a new variation on its signature Serpent Bohême line featuring colored stones such as lapis lazuli, onyx and amethyst. Its core price range of 1,500 euros to 3,000 euros compares with an average price of around 5,000 euros for the Quatre ring, another house pillar.
“For the moment, the sales results are very good — largely above expectations,” she reported.
Boucheron is increasing brand awareness through a greater focus on digital communications, which this year will account for 50 percent of its media spend, compared with almost nothing two years ago.
The jeweler recently launched targeted campaigns with the local editions of Vogue magazine in Japan and China — the latter including an edgy short film called “All That You Can’t Leave Behind,” featuring model and actress Du Juan.
It will roll out a new global advertising campaign in September centered on its brand identity, as opposed to any particular product. The company plans to work with several brand ambassadors for next year’s anniversary, in addition to staging exhibitions in a few cities, including Paris, and publishing a coffee table book with Editions de la Martinière.
“It’s the first time Boucheron will speak to a general audience,” said Poulit-Duquesne. “Of course, we are going to talk about our past, because 160 years of history is magical, but we don’t want it to be limited to that — we also want to position ourselves for the future.”
London’s market: open for business, or open for rent?
Opening the stock market to vast state-owned businesses appeals in post-Brexit world
Money talks. Opening the London stock market to vast state-owned businesses such as Aramco of Saudi Arabia — the world’s biggest oil company — appeals financially and politically in a post-Brexit world.
Now, the Financial Conduct Authority is bringing forward its consultation on introducing a new premium segment that would give such enterprises the cachet of a premium listing, while disabling some of the requirements that other premium-listed companies must adhere to.
The FCA nods to fears expressed by many of the market’s biggest investor groups that it would open the market once again to the kind of delinquent businesses that ravaged their portfolios only a few years ago.
Eurasian Natural Resources Company — which was owned and controlled by a tangle of Kazakh government interests and oligarchs — springs to mind.
The FCA says there is a difference between companies that are sovereign-owned and those controlled and owned by private sector entities. Andrew Bailey, the regulator’s chief executive, argues investors are grown up and, if given enough information, should be well able to work out what they are getting into.
“Capital markets are well adapted to assess the treatment of other investors by sovereign countries,” he says. They should be after their experiences at the hands of ENRC.
The London stock market can’t look back and nurse past hurts forever. However, the rules on controlling shareholders and related party transactions were refined in 2014 for very good reason: to protect minority shareholders. Crucially, they must approve related party transactions. The FCA seems shy about fettering the interaction between the state and state-owned enterprises in this way.
That is a poor rationale for setting a knockdown price for a premium listing. The fees that Aramco will pay for a London quote may put dollar signs in the eyes of the LSE and bankers. But it seems that taking the money leaves the UK market open to the claim that “open for business” actually means, in the words of one investor, “open for rent”.
Gapping up
In reaction to strong earnings/guidance:
In reaction to strong earnings/guidance:
- XGTI +20.4%, TGT +5.4% (Q2 guidance)
M&A news:
- YNDX +21.8% (Yandex N.V. and Uber to combine their ridesharing businesses in Russia, Kazakhstan, Azerbaijan, Armenia, Belarus and Georgia into a new company valued at $3.725 bln), CCCR +9.7% (enters non-binding Letter of Intent to acquire Sorghum Investment Holdings)
Other news:
- IMNP +16.5% (files a patent protecting the use of Ceplen in hematologic cancers)
- PQ +16.3% (increases Q2/Q3 production guidance and reports Cotton Valley initial rate of 38.2 MMcfe/d)
- CIE +13.5% (enters into a definitive agreement with its co-owners in the Anchor development)
- NAO +5.7% (comments on Tradewinds article; rebukes articles accusation of on going matter with SEC)
- COL +1.8% (receives favorable commentary on Wednesday's Mad Money)
- ALDR +1.7% (prices offering of 15 mln shares of common stock at $10.00 per share)
- VNTV +1.6% (Cramer highlighted the co's anticipated Worldpay merger as overlooked deal)
- BLUE +1.4% (extending afternoon gains on NVS CAR-T FDA Panel news)
- KITE +1.3% (extending afternoon gains on NVS CAR-T FDA Panel news)
- BOX +1.2% (Box President and COO Dan Levin will step down; Stephanie Carullo will succeed Levin as COO)
- WMT +1.2% (in sympathy with TGT)
- JUNO +1.1% (following NVS CAR-T FDA Panel news)
- COST +1% (in sympathy with TGT)
- MAT +1% (said to be seeking a replacement for CFO Kevin Farr, according to the WSJ)
- SHOP +0.9% (Shopify and eBay announced that Shopify merchants will soon be able to list and sell their products on eBay directly from their Shopify account)
- EBAY +0.8% (Shopify and eBay announced that Shopify merchants will soon be able to list and sell their products on eBay directly from their Shopify account)
Analyst comments:
- SNAP +2.9% (upgraded to Buy from Hold at Stifel)
- HAIN +1.5% (upgraded to Buy from Hold at Maxim Group)
- IP +1.4% (upgraded to Buy from Neutral at Goldman)
- TWTR +1.1% (upgraded to Mixed from Negative at OTR Global)
- ARNC +1% (upgraded to Buy from Neutral at Seaport Global Securities)
- PYPL +1% (target raised to $70 from $54 at Monness Crespi & Hardt)
- NGG +0.8% (upgraded to Buy from Hold at HSBC)
- PHM +0.6% (upgraded to Neutral from Underperform at Wedbush)
- A +0.5% (upgraded to Outperform from Market Perform at Wells Fargo)