>>> Weekly Update

Weekly Market Update: French Election and Solid Earnings Restore Reflation Trade

The week opened with a bang as markets breathed a sigh of relief that the polls accurately predicted Emmanuel Macron’s win in the first round of the French election, sparking a global scramble for risk assets. Global indices surged Monday and into Tuesday, Treasury yields moved up, and gold prices backed down from the $1,300 level. The VIX careened back down to briefly touch the lowest level since 2007 as traders unwound hedging trades from last week. The NASDAQ crossed above 6K for the first time ever, as the technology sector took center stage during earnings season, while other indices got back within striking distance of their all-time highs. For the week, the DJIA gained 1.9%, the S&P added 1.5%, and the Nasdaq rose 2.3%.

By Wednesday, focus shifted back to Washington DC, as speculation of a revived healthcare agreement picked up and the Trump administration unveiled an outline for its massive tax cut plans. But the winds coming from Washington were not entirely helpful to sentiment when the Trump administration repeatedly struck an aggressive posture on foreign trade, including setting tariffs on Canadian timber, initiating a trade investigation of the aluminum market, and a threat to withdraw from NAFTA. Equity trading leveled off into week's end, and Treasury yields made little headway to the upside.

In corporate news this week, tech names seemed to be the big winner on earnings boosted by the cloud. Amazon, Microsoft, and Alphabet all said that their cloud computing divisions were growing faster than their larger, mainline businesses, with Amazon notably making most of its profits from its AWS unit. Twitter reported a reassuring beat on its top and bottom line, as its user numbers spiked surprisingly, and the social media giant noted it’s seeing less abuse reported across the service. General Motors posted its highest profits since emerging from bankruptcy in 2009, thanks partly to an increase in North American sales, while Ford saw a 35% drop in profit due to the effects of recalls and rising material prices, and it warned about pricing falling for new and used cars. Caterpillar reported surprisingly strong results and raised guidance, but did caution that geopolitical and market uncertainty along with volatility in commodity prices continue to present risks for the rest of the year.

SUNDAY 4/23
BCR: BD to acquire Bard for $317.00/shr in cash and stock in a $24B deal

MONDAY 4/24
(DE) GERMANY APR IFO BUSINESS CLIMATE: 112.9 V 112.4E (highest since summer 2011); CURRENT ASSESSMENT: 121.1 V 119.2E
(UK) APR CBI INDUSTRIAL TRENDS TOTAL ORDERS: 4 V 6E
AA Reports Q1 $0.63 v $0.55e, R$2.7B v $2.97Be; Raises 17 demand outlook
(CA) US President Trump warns may put import tax on Canada dairy products - financial press
Hynix Semiconductor Reports Q1 Net KRW1.9T v KRW1.8Te; Op KRW2.5T v KRW2.4Te; Rev KRW6.3T v KRW6.0Te

TUESDAY 4/25
NOVN.CH Reports Q1 $1.13 v $1.10e, Core Op profit $3.01B v $3.26B y/y, R$11.54B v $11.6Be
SAP.DE Reports Q1 Non-IFRS Net €887M v €886Me, non-IFRS Op profit €1.20B v €1.23Be, Rev €5.29B v €5.18Be
(FR) FRANCE APR BUSINESS CONFIDENCE: 104 V 104E; MANUFACTURING CONFIDENCE: 108 V 105E
LMT Reports Q1 $2.61 v $2.76e, R$11.1B v $11.3Be
CAT Reports Q1 $1.28 v $0.62e, R$9.8B v $9.36Be
FCX Reports Q1 $0.15 adj v $0.17e, R$3.34B v $3.52Be
(US) Apr Philadelphia Fed Non-Manufacturing General Regional Business Conditions: 30.1 v 35.4 prior
(US) APR RICHMOND FED MANUFACTURING INDEX: 20 V 16E
(US) MAR NEW HOME SALES: 621K V 584KE
(US) APR CONSUMER CONFIDENCE: 120.3 V 122.5E
(US) Goldman Sachs chief economist Hatzius: not expecting US to reach 3% GDP growth in 2017 or 2018
TXN Reports Q1 $0.97 v $0.83e, R$3.40B v $3.30Be
(US) Trump administration drops support for border adjustment tax (BAT) on imports - NYT
BHP.AU Reports Q3 iron ore production 54.0Mt v 57.0Mte; Updates on US shale asset sale
(AU) AUSTRALIA Q1 CONSUMER PRICES (CPI) Q/Q: 0.5% V 0.6%E; Y/Y: 2.1% (highest since Q2 of 2014) V 2.2%E; TRIMMED MEAN Q/Q: 0.5% V 0.5%E ; Y/Y: 1.9% (5-quarter high) V 1.8%E

WEDNESDAY 4/26
SAN.ES Reports Q1 Net €1.87B v €1.73Be, Rev €12.0B v €11.1B q/q
CSGN.CH Reports Q1 Net CHF596M v CHF336.1Me, Pretax profit CHF889M v CHF648Me, Rev CHF5.5B v CHF5.39Be; Announces CHF4B rights offering, to retain full ownership of Swiss Bank
(FR) FRANCE APR CONSUMER CONFIDENCE: 100 V 100E
STAN.UK Reports Q1 Adj Pretax profit $1.05B v $850Me, Op Income $3.61B v $3.64Be
TWTR Reports Q1 $0.11 v $0.02e, R$548M v $512Me; DAU +14% y/y, +11% q/q
(TR) TURKEY CENTRAL BANK (CBRT) LEAVES BENCHMARK REPURCHASE RATE UNCHANGED AT 8.00%; AS EXPECTED
(US) Freedom Caucus says group is now in support of House Obamacare replacement bill following modifications - press
(US) Association of American Railroads weekly rail traffic report for week ending April 22nd: 515.1K carloads and intermodal units, +4.7% y/y (15th straight week of gains)
(US) White House econ adviser Cohn: look forward to working with House and Senate on tax proposal in weeks ahead; in agreement on the core principles
(US) White House: President Trump agrees to not terminate NAFTA at this time after conversations with Mexico's Nieto and Canada's Trudeau
(JP) BOJ LEAVES INTEREST RATE ON EXCESS RESERVES (IOER) UNCHANGED AT -0.10% AND 10-YEAR JGB YIELD TARGET AT AROUND 0.0%; AS EXPECTED

THURSDAY 4/27
AIR.FR Reports Q1 Adj EBIT €240M v €326Me, Rev €13.0B v €12.2B y/y
BAS.DE Reports Q1 EPS €1.97 v €1.81e, EBIT (before items) €2.46B v €2.38Be, Rev €16.9B v €15.7Be
ROG.CH Reports Q1 Rev CHF12.9B v CHF12.7Be
NOK1V.FI Reports Q1 adj Net €203M v €164Me, adj Op €341M v €329.5Me, Rev €5.39B v €5.28e
DBK.DE Reports Q1 Net €575M v €475Me, Pretax €878M v €579M y/y, Rev €7.34B v €8.07B y/y
BAYN.DE Reports Q1 Net profit €2.08B (adj) v €1.51M y/y, EBITDA adj €3.89B v €3.67Be, Rev €13.2B v €12.7Be; CFO Johannes Dietch to leave company effective end of May, 2018
ORA.FR Reports Q1 EBITDA €2.60B v €2.55B y/y, Rev €10.1B v €9.99B y/y
(DE) GERMANY APR GFK CONSUMER CONFIDENCE: 10.2 V 9.9E (matches highest level since Oct 2001)
RMS.FR Reports Q1 Rev €1.35B v €1.32Be
AZN.UK Reports Q1 Core EPS $0.99 v $0.82e, Rev $5.41B v $5.41Be
LLOY.UK Reports Q1 PBT £1.30B v £654M y/y, Underlying profit £2.08B v £1.96Be, Total Income £4.41B v £4.38B y/y
(DE) GERMANY APR CPI SAXONY M/M: -0.1% V +0.2% PRIOR; Y/Y: 2.1% V 1.8% PRIOR
(SE) SWEDEN CENTRAL BANK (RIKSBANK) LEAVES REPO RATE UNCHANGED AT -0.50%; AS EXPECTED
(SE) SWEDEN CENTRAL BANK (RIKSBANK) AMENDS QE BOND BUYING SCHEME; extends QE by SEK15B during H2 of 2017
(EU) EURO ZONE APR BUSINESS CLIMATE INDICATOR: 1.09 V 0.82E; CONSUMER CONFIDENCE (FINAL): -3.6 V -3.6E
(IT) ITALY DEBT AGENCY (TESORO) SELLS TOTAL €5.25B VS. €4.25-5.25B INDICATED RANGE IN 5-YEAR AND 10-YEAR BTP BONDS
POT Reports Q1 $0.18 v $0.10e, R$1.11B v $928Me
DOW Reports Q1 $1.04 v $0.99e, R$13.2B v $12.4Be
F Reports Q1 $0.39 v $0.34e, R$39.1B v $34.7Be
(EU) ECB LEAVES MAIN 7-DAY REFINANCING RATE UNCHANGED AT 0.00%; AS EXPECTED
UPS Reports Q1 $1.32 v $1.30e, R$15.3B v $15.2Be
(DE) GERMANY APR PRELIMINARY CPI M/M: 0.0% V -0.1%E; Y/Y: 2.0% V 1.9%E
(US) MAR PRELIMINARY DURABLE GOODS ORDERS: 0.7% V 1.3%E; DURABLES EX-TRANSPORTATION:-0.2 % V +0.4%E
(EU) ECB chief Draghi: Reiterates forward guidance that rates to stay low or lower for an extended period beyond the end of QE until ECB sees a sustain pick up in inflation - Prepared remarks
(EU) ECB chief Draghi: Things are going better but did not discuss any exit strategy at today's meeting- Q&A
(US) Atlanta Fed cuts Q1 GDP to 0.2% from 0.5% on 4/18
AMZN Reports Q1 $1.48 v $1.03e, R$35.7B v $35.4Be
GOOGL Reports Q1 $7.73 v $7.48e, R$24.8B (includes $4.6B TAC) v $19.7Be
INTC Reports Q1 $0.66 v $0.65e, R$14.8B v $14.8Be; approves $10B increase to buyback program (5.7% of market cap)
MSFT Reports Q3 $0.73 v $0.69e, R$22.1B v $23.6Be
BIDU Reports Q1 $1.00 v $0.85e, R$2.45B v $2.32Be; CFO to step down, effective on appointment of successor
(JP) JAPAN MAR JOBLESS RATE: 2.8% V 2.9%E (matches lowest rate since Jun 1994)
(US) President Trump: North Korea is my biggest worry; Would love to resolve situation diplomatically, but it's "very difficult" - press interview

FRIDAY 4/28
UBSN.CH Reports Q1 Net CHF1.27B v CHF953Me, Adj Pretax profit CHF1.93B v CHF1.37B y/y, Adj Op Rev CHF7.53B v CHF7.06B y/y
(FR) FRANCE Q1 ADVANCE GDP Q/Q: 0.3% V 0.4%E; Y/Y: 0.8% V 0.9%E
SAN.FR Reports Q1 Business EPS €1.42 v €1.26e, Business Op €2.44B v €2.12B y/y, Rev €8.65B v €8.38Be
(UK) APR NATIONWIDE HOUSE PRICES M/M: -0.4% V +0.1%E; Y/Y: 2.6% V 3.3%E
RBS.UK Reports Q1 Net profit £259M v loss £968M y/y, adj Op £1.37B v £931M y/y, Rev £3.21B v £3.06B y/y
BARC.UK Reports Q1 Net £190M* v £433M y/y, adj Pretax £1.68B v £793M y/y, Core Net Rev £5.82B v £5.04B y/y
(FR) FRANCE APR PRELIMINARY CPI M/M: 0.1% V 0.1%E; Y/Y: 1.2% V 1.2%E
(EU) EURO ZONE MAR M3 MONEY SUPPLY Y/Y: 5.3% V 4.7%E
(UK) Q1 ADVANCE GDP Q/Q: 0.3% V 0.4%E; Y/Y: 2.1% V 2.2%E
(EU) EURO ZONE APR ADVANCE CPI ESTIMATE Y/Y: 1.9% V 1.8%E (returns to ECB target); CPI CORE Y/Y: 1.2% V 1.0%E (highest level since mid-2013)
GM Reports Q1 $1.70 v $1.45e, R$41.2B v $40.3Be
(US) Q1 EMPLOYMENT COST INDEX (ECI): 0.8% V 0.6%E
(US) Q1 ADVANCE GDP ANNUALIZED Q/Q: 0.7% V 1.0%E; PERSONAL CONSUMPTION: 0.3% V 0.9%E
(US) Q1 Advance GDP Price Index: 2.3% v 2.0%e; Core PCE Q/Q: 2.0% v 2.0%e
(US) APR CHICAGO PURCHASING MANAGER: 58.3 V 56.2E
(US) APR FINAL MICHIGAN CONFIDENCE: 97.0 V 98.0E
(US) New York Fed Nowcast: maintains Q1 GDP forecast at 2.7%, unchanged from 4/21; raises Q2 GDP forecast to 2.3% from 2.1% from 4/21

>>> US Close Dow -0.19% S&P -0.19% Nasdaq -0.02% Russell -1.18%

Closing Market Summary: Stocks Tick Down On Friday

Investors took some money off the table on Friday, cashing in on the stock market's best week in over two months. However, a handful of upbeat earnings reports from heavy hitters like Alphabet (GOOGL 924.52, +33.08) and Amazon (AMZN 924.99, +6.61) kept losses in check. The S&P 500 and the Dow both settled lower by 0.2% while the Nasdaq finished flat. For the week, the S&P 500 finished with a gain of 1.5%.

Only three of eleven sectors finished in positive territory on Friday, but, luckily, one of those three was the top-weighted technology sector (+0.3%). The sector combated the eight laggards by leaning heavily on Alphabet, which added 3.7% on better than expected earnings and revenues. Microsoft (MSFT 68.46, +0.19) eventually came around, but the company spent the majority of Friday's session in the red despite beating earnings estimates. Like Microsoft, Intel (INTC 36.15, -1.28) beat bottom-line estimates. However, unlike Microsoft, INTC never reversed early selling pressure, settling lower by 3.4%. The company's negative performance rippled throughout the semiconductor industry, evidenced by the 1.7% decline in the PHLX Semiconductor Index.

The influential health care (+0.2%) and energy (+0.1%) sectors also finished in the green. Exxon Mobil (XOM 81.65, +0.39) and Chevron (CVX 106.70, +1.23) helped the energy sector in its outperformance, adding 0.5% and 1.2%, respectively, following their latest earnings reports. XOM beat earnings estimates while CVX reported below-consensus revenue on earnings of $1.41 per share, which may not be comparable to consensus estimates.

On the flip side, the heavily-weighted financial sector weighed on the broader market, losing 0.9%. A flattening of the yield curve certainly didn't help matters, but the loss was more a result of profit taking efforts in light of the 2.6% week-to-date gain that the financial group carried into Friday's session. Selling pressure at the short end of the yield curve paired with some buying at the long end left the 2-yr yield (1.27%) one basis point higher and the 10-yr yield (2.28%) one basis point lower.

While the action in the Treasury market failed to clearly assign a risk-on or risk-off tone to today's session, the domestically-oriented Russell 2000 (-1.2%) and the CBOE Volatility Index (10.78, +0.42, +4.1%) pointed to slight softening in investor sentiment.

Lightly-weighted sectors like telecom services (-1.1%), real estate (-0.6%), and materials (-0.7%) populated the bottom half of the leaderboard while the remaining groups finished with losses of no more than 0.4%.

Investors received several economic reports on Friday, including the advance estimate of first quarter GDP, the first quarter Employment Cost Index, April Chicago PMI, and the final reading of the University of Michigan Consumer Sentiment Index for April:

  • The first reading of first quarter GDP pointed to an expansion of 0.7%, while the consensus expected a reading of 1.1%. The first estimate of first quarter GDP Deflator came in at 2.2%, which above the consensus of 2.1%.
    • The key takeaway from the report, however, was that the growth in personal consumption expenditures (PCE) was decidedly weak, increasing just 0.3%, which was the weakest growth in more than seven years.
  • The first quarter Employment Cost Index rose 0.8%, while the consensus expected an uptick of 0.6%.
    • The key takeaway from the report is that compensation costs are moving higher, which will create some profit margin constraints while at the same time lending employees some increased spending potential.
  • Chicago PMI for April increased to 58.3 from 57.7 in March while the consensus expected a reading of 56.9.
    • The key takeaway from the report is that the New Orders Index moved to an almost three-year high in April, offering an encouraging signal about the economic outlook for the Chicago Fed region.
  • The final reading of the University of Michigan Consumer Sentiment Index for April declined to 97.0 (consensus 98.0) from 98.0 in the preliminary reading.
    • The key takeaway from the report is that consumer sentiment remains high notwithstanding partisan political views among consumers about the economic outlook.

On Monday, investors will receive March Personal Income consensus 0.3%) and Personal Spending (consensus 0.1%) at 8:30 ET while March Construction Spending (consensus 0.4%) and the April ISM Index (consensus 56.5) cross the wires a little later at 10:00 ET.

  • Nasdaq Composite +12.3% YTD
  • S&P 500 +6.5% YTD
  • Dow Jones Industrial Average +6.0% YTD
  • Russell 2000 +3.2% YTD

FT : How transparent is the art market?

How transparent is the art market?
Increased regulation could mean greater protection for buyers, but less privacy for vendors

One of the hottest topics in today’s art market is regulation. Numerous recent cases have shaken public confidence in the trade, and led to a growing clamour for better oversight of what is traditionally a murky field.

The issues concern the opacity that surrounds transactions, particularly at the top end of the market. One of the most egregious examples is that of New York’s 165-year-old Knoedler Gallery, which snapped shut in 2011. It had been selling fakes for decades, with buyers told only they were the property of “Mr X” and his son, “Mr X Junior”. The Michigan art dealer Eric Spoutz was recently convicted of selling dozens of counterfeit artworks to unsuspecting buyers. Lawrence Salander of the now defunct Salander O’Reilly gallery in New York defrauded customers to the tune of millions before what was dubbed the “art world’s Ponzi scheme” collapsed.

The issue of money-laundering has also triggered widespread concern, particularly in the light of the ongoing 1MDB scandal, where art was apparently bought with money allegedly looted from a Malaysian sovereign fund.

At issue are two apparently irreconcilable forces. Dealers and galleries need to respect vendors’ requests to remain unidentified; otherwise they will simply take their business elsewhere.

Yet many collectors, as well as of course the taxman and law enforcement officials, believe that increased regulation and transparency would not only control wrongdoing but would actually boost the art market by bringing in greater consumer protection.

Anyone who buys at auction will be familiar with the designations “Property of a Lady of Title”, “From a distinguished European collection” and other such smokescreens. In addition, catalogues can be economical with the verité, omitting unattractive provenances or previous failures at auction. To add to the confusion, there is no agreed standard for condition reports.

Things can be no more transparent in art galleries: a plethora of legal cases have shown that buyers often don’t know who is selling and at what price. The billionaire Ronald Perelman attempted to sue Larry Gagosian in 2014 for what he claimed, in court documents, was a “sham” sale of an $8m painting by Cy Twombly, which he said was taken for a secret round trip via another buyer before being offered back to him at a higher price. The case was dismissed before it got to court, but it served as a peek behind the normally tightly closed curtains of high-end art transactions.

Nevertheless, “There are perfectly legitimate reasons for consignors of art wanting to protect their privacy, generally for reasons of security,” says art lawyer Megan Noh, until recently senior counsel for Bonhams and now with Cahill Partners. Noh recently spoke about the subject of balancing transparency and anonymity at the first Art Business Conference held in New York. Also speaking was Julian Radcliffe, chairman of the Art Loss Register of stolen art, who has attracted some controversy in the marketplace.

Radcliffe argues that better regulation would boost the art market as a whole. “The lack of proper standards are a disincentive to many potential collectors, [who] just don’t trust the art trade,” he said. When things go wrong, he pointed out, the biggest losers are actually dealers and auction houses: “Collectors can usually get their money back from dealers or auction houses but the trade can’t get money back from insurers.”

Certainly, art dealers have been facing losses in recent forgery cases, not least that of the German faker Wolfgang Beltracchi whose works were filtered into the trade across Europe and the US.

Today’s more complex art market contains new players such as art agents. Thus there can be several layers of dealers between the buyer and seller, who might never know who the other is. This is underlined by the ongoing case in which the family trust of the Russian businessman Dmitry Rybolovlev spent about $2bn on art purchased through the Swiss entrepreneur Yves Bouvier, but apparently did not know the identity of the vendors of the works.

There are issues over the actual ownership of the art, which may be held by offshore companies, as well as tax and investment issues. The fundamental problem, according to the FBI’s art and antiquities special agent Meridith Savona, is the lack of records of ownership. “Even for cars, I can see who owned it for a certain period of time,” she says. “In the art market there is nothing, no regulation. If someone will not tell you who was the previous owner there’s a reason. There needs to be a way of having records maintained for, say, 20 or 30 years.”

This chimes with the stand taken by Nanne Dekking, a Dutch entrepreneur whose start-up Artory aims to bring more transparency to the market through catalogue raisonnés and provenance research.

“In Holland there is a digital registry for second-hand cars — it’s obligatory to register, so if you buy the car you know exactly what you are getting,” he says. “And if the exhaust falls off, you know where to go. That’s the kind of transparency we’re after.”

So, should regulation be imposed from above or come from the trade itself? Radcliffe would like to see ownership details, after a sale, put in some sort of escrow for a decade or so, to be made available to buyers if a dispute arises. Further, he favours a levy — he suggests 0.01 per cent on art transactions — to create an independent committee to establish and maintain standards.

But Clinton Howell, president of the International Confederation of Art and Antique Dealer Associations, argues for self-regulation. “Top-down government regulation would be a huge threat to transparency. It would make inappropriate decisions about how to ‘regulate’ the art trade, based solely on popular support.”

Savona disagrees. “In my opinion, self-regulation does not work because the individuals who work in galleries and auction houses have differing moral and ethical standards. Sadly, we will always have a job, but we would like to see more integrity in the market.”
999

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:
  • VNCE -33.3%, ATHN -16.4%, GIMO -15.3%, CLD -12.2%, ARAY -12%, PCMI -11.1%, VCRA -11.1%, MTRX -10.2%, (Matrix Service issues downside guidance citing negative impacted by charge on a large power project as well as continuing market softness and project delays), TNDM -9.5%, ELLI -9.2%, SYF -7.7%, FTNT -6.7%, RMD -6.5%, VFC -5.8%, GHL -5.1%, BCS -4.7%, SBUX -4.5%, TMST -4.5%, IRMD -4%, ORC -3.9%, ABAX -3.7%, CYTK -3.2%, ATEN -3.1%, CL -3.1%, MHK -2.9%, INTC -2.8%, KLAC -2.8%, BIDU -2%, EXPE -2%, SWKS -1.9%, DRAD -1.9%, RGA -1.5%, LYB -1.5%, CSL -1.4%, COHU -1.3%, FLEX -1.1%, .
M&A news:
  • TIME -19.1% (reviewed a number of expressions of interest and has determined that the co will continue to pursue its strategic plan), .
Other news:
  • CRMD -37.5% (lower on light volume after filing for offering of shares of common stock Warrants to purchase up to shares of common stock under Form 424B5)
  • FCEL -28.1% ( will offer shares of common stock and warrants to purchase shares of common stock in an underwritten public offering)
  • CYTR -20.5% (prices common stock public offering of approx. 30 mln shares at a purchase price of $0.50/share)
  • TRXC -11% (commences unit offering, each consisting of one share of its common stock, one Series A warrant to purchase one share of common stock and one Series B warrant to purchase 0.75 shares of common stock)
  • STAY -4.3% (prices 30 mln paired share offering by selling stockholders)
  • QCOM -3.8% (informed by Apple (AAPL) that Apple is withholding payments to its contract manufacturers for the royalties those contract manufacturers owe under their licenses with Qualcomm for sales during quarter ended March 31; co lowers Q3 and FY 17 guidance)
Analyst comments:
  • AZN -1.1% (downgraded to Sell from Hold at S&P Global)
  • ZBH -0.7% (downgraded to Market Perform from Outperform at Wells Fargo)
  • X -0.5% (downgraded to Underperform from Neutral at Macquarie)wei

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:
  • ALGN +16.6%, WDC +8.8%, SYNA +7.6%, TRMB +7.3%, BJRI +7.2%, LPLA +6.8%, TRVG +6.1%, (increases full-year guidance after Expedia (EXPE) releases first quarter results), RBS +5.5%,SWN +5.3%, MOBL +4.5%, CERN +4.1%, ZEUS +4.1%, GOOG +4%,UBS +3.8%, AMZN +3.6%, HLS +3.4%, IDXX +3.4%, SMCI +2.9%,APO +2.9%, WETF +2.7%, MMSI +2.6%, HMC +2.6%, SNE +2.5%,RCL +2.5%, VDSI +2.2%, BRKS +2.2%, EHTH +2.2%, AVHI +2.1%,ASX +2.1%, VRTX +2%, GM +1.9%, TEAM +1.6%, AEM +1.6%, GT +1.6%, GLPG +1.5%, HST +1.4%, SNY +1.4%, XOM +1.4%, PSX +1.3%, MITK +1.2%, TRI +1.2%, PXLW +1.1%, ROP +1.1%, FHB +1%, MDXG +0.9%, SRPT +0.8%, GPRO +0.7%, .
Select metals/mining stocks trading higher:
  • SBGL +2.4%, CLF +2.4%, MT +2.3%, VALE +2%, AU +1.9%, GFI+1.8%, BBL +1.5%, AUY +1.5%, BHP +1.4%, RIO +1.3%, ABX+1.2%, GDX +0.9%, .
Other news:
  • PER +4.8% ( increases quarterly distribution to $0.13/unit from $0.12/unit)
  • BLDP +3.8% (signs a follow-on contract with an unnamed global automotive OEM for Technology Solutions)
  • HON +3.6% (higher on Third Point stake news; Honeywell responds to Third Point's investment thesis; intends to take the time necessary to ensure a comprehensive, informed and objective review of the potential separation of the Aerospace business)
  • DELT +3.1% (continued strength after closing near highs)
  • CEI +2.8% (cost-cutting initiatives to significantly reduce overall general and administrative costs)
  • STM +2.2% (in sympathy with WDC)
  • MU +2.1% (in sympathy with WDC)
  • FLXN +1.4% (presents results from two new analyses of its Zilretta for the treatment of osteoarthritis related knee pain)
  • RXDX +1.1% (announces program update on entrectinib; based on FDA feedback, co intends to pursue an NDA submission for entrectinib to support a TRK fusion-positive, tissue agnostic indication)
  • AMD +1% (in sympathy with WDC)
Analyst comments:
  • RRC +3.8% (upgraded to Outperform from Market Perform at Wells Fargo)
  • URI +1% (upgraded to Buy from Neutral at BofA/Merrill)
  • SAM +0.9% (upgraded to Positive from Neutral at Susquehanna)
  • CHKP +0.5% (upgraded to Equal Weight from Underweight at Barclays)

>>> Earnings Are goods BUT WE Start to have some cautious comments :

Today :
- AUTOLIV INC ALV.N SAYS UNCERTAINTIES INCLUDE HIGH INVENTORY LEVELS AND SLOWER SALES MOMENTUM, ESPECIALLY IN NORTH AMERICA AND CHINA
- COLGATE-PALMOLIVE CO - "AS WE LOOK AHEAD, UNCERTAINTY IN GLOBAL MARKETS AND SLOWING CATEGORY GROWTH WORLDWIDE REMAIN CHALLENGING"

Last Week :
- Semiconductor Stocks Dip as Maxim Sees U.S. Auto, China Slowdown


SXAP could be a good hedge on this level . still a gap lower 579/580 to go quickly on the 558.85/560.20 (Gap & 50d MA) first support...546 next level.

We started to see also some profit taking on Mining, Copper was under pressure yesterday and Oil is quite volatile with csome pressure recently
SXXP

Copper - 263 look to be a strong resistance

Crude - trading on strong support - 200d MA (traded below yesterday) - important level to watch

>>> Microsoft: Color on Quarter --> +0.12% pre open

Microsoft: Color on Quarter (68.27)
  • BMO raises tgt to $75 from $71. They believe that Azure will help Intelligent Cloud (IC) generate more than 10% growth in FY18. Moreover, they believe Microsoft's advantage in the cloud includes a higher level of services, established sales relationships, and a portfolio of enterprise-ready software, demonstrated by Azure's premium revenue growth in the triple digits and 80% of the Azure customers using premium services. They believe that MSFT's diverse portfolio, including cloud leadership, warrants a premium valuation.
  • RBC raises tgt to $77 from $72. MSFT delivered upside to all key metrics and guided implied 4Q17 EPS above consensus. Importantly, adjusted operating income grew Y/Y CC in all three segments for the first time and they think they are just getting started. They think MSFT's center of gravity is getting larger across cloud, collaboration and enterprise apps and the pace of innovation demands respect.
  • MSFT unchanged premarket after falling to the 66 level right after the print