>>> Europe : BRokers Upgrades & Downgrades - 12th of April 2017

>>> Up
*Carlsberg Raised to Hold at HSBC, PT DKK670
*Ericsson Raised to Neutral at Credit Suisse, PT SEK57
*Kuehne + Nagel Raised to Buy at Baader-Helvea, PT CHF165
*Lululemon Raised to Buy at Stifel, PT $60
*Tenaris Raised to Outperform at MedioBanca (Double Upgrade)
*TomTom Raised to Buy at Kepler Cheuvreux, PT EU10
*Yara Raised to Buy at Goldman, PT NOK460

>>> Down
*CaixaBank Cut to Sector Perform at RBC, PT EU3.70
*Fugro Cut to Hold at ING
*Gazprom Cut to Sell at Goldman, PT $4
*LVMH Cut to Hold at SocGen, PT EU230

>>> Initiation
*Deutsche Boerse Reinstated Neutral at Goldman
*U.S. Steel New Neutral at Longbow
*Under Armour New Neutral at Wedbush, PT $18

>>> Call
>> Stock
*ITV REMOVED FROM CONVICTION LIST AT GOLDMAN, REMAINS BUY
*VIVENDI ADDED TO CONVICTION BUY LIST AT GOLDMAN
*YARA ADDED TO CONVICTION BUY LIST AT GOLDMAN

>>> US After Hours Summary: NBIX +18% following INGREZZA FDA approval.

After Hours Summary: NBIX +18% following INGREZZA FDA approval... TSCO -3% on guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: HCSG +4.6% (light volume; also increases dividend)

Companies trading higher in after hours in reaction to news: NBIX +18.4% (confirms FDA approval of INGREZZA capsules as the first and only approved treatment for adults with Tardive Dyskinesia), NADL +9.3% (continued strength), NAK +8.7% (Pebble Project land use permit approved by State of Alaska), ADPT +7.4% (Wexford Capital discloses 8.54% active stake), DRYS +6.9% (announces 2nd consecutive common stock dividend for the quarter ended March 31, 2017), ARLZ +5.3% (Aralez Pharma and the US Government extend contract by one year to April 28, 2018 with modified pricing for the duration thereof), TNXP +3% (after seeing pullback in late trade), TNP +2% (Tsakos Energy initiates a new 'strategic alliance' with a major US oil company for the chartering of a series of crude tankers, primarily VLCCs and suezmaxes, for periods of up-to three years ), NSH +1.8% (following NS acquisition news/guidance; also NuStar Energy to conduct 10.5 mln common unit offering including $15 mln to William Greehey, Chairman of the board of directors of NuStar GP), VNDA +1.5% (initiated with an Outperform at Oppenheimer), AB +0.9% (upgraded to Outperform at Keefe Bruyette ), DECK +0.3% (following late move higher on reports of strategic review)

After Hours Losers:

Companies trading lower in after hours in reaction to guidance: TSCO -3% (sees Q1 below consensus; comps fell 2.2%)

Companies trading lower in after hours in reaction to news: NS -6.9% (to acquire Navigator Energy Services for ~$1.475 billion; expects Q1 net income $55.0 -62.0 mln, EBITDA $149.0-159.0 mln and distributable cash flow $100.7-108.2 mln; NuStar Energy to conduct 10.5 mln common unit offering including $15 mln to William Greehey, Chairman of the board of directors of NuStar GP), ONVO -6.3% (Keith Murphy will be stepping down as CEO to pursue entrepreneurial opportunities effective April 21 ), X -1.5% and AKS -0.8% (still checking)

>>> Asian Update

Asia Mid-Session Market Update: China inflation still weighed down by food prices; BOJ's Kuroda steps up jawboning of exchange rate as Yen rises to fresh 2017 highs

***US Session Highlights***
- (US) Mar NFIB Small Business Optimism: 104.7 v 104.7e
- (US) FEB JOLTS JOB OPENINGS: 5.743M V 5.65ME
- (US) President Trump tweets: “I explained to the President of China that a trade deal with the U.S. will be far better for them if they solve the North Korean problem! North Korea is looking for trouble. If China decides to help, that would be great. If not, we will solve the problem without them! U.S.A.”
- (US) Fed's Williams (moderate, non-voter): we need to bring rates back to normal this year and next year; Reiterates there could be three or four rate hikes this year - press interview

***US markets on close: Dow flat, S&P500 -0.1%, Nasdaq -0.2%***
- Best Sector in S&P500: Real Estate
- Worst Sector in S&P500: Technology
- Biggest gainers: AAL +3.8%; STX +3.1%; JWN +2.6%
- Biggest losers: ADS -3.8%; SWN -3.1%; RCL -2.7%
- At the close: VIX 15.1 (+1.0pts); Treasuries: 2-yr 1.24% (-2bps), 10-yr 2.30% (-6bps), 30-yr 2.93% (-6bps)

***US movers afterhours***
- NBIX: FDA approves INGREZZA (valbenazine) capsules as the first and only approved treatment for adults with tardive dyskinesia (TD); +19.3% afterhours
- DRYS: Declares dividend of $2.5 million (1% of market cap); dividend per share amount to be paid by the Company to be determined later; +6.9% afterhours
- TSCO: Guides Q1 $0.45-0.46 v $0.53e, R$1.56B v $1.58Be; SSS -2.2%; -3.5% afterhours
- ONVO: Announces CEO transition; -6.6% afterhours
- NS: Agrees to acquire Navigator Energy Services, LLC for $1.48B; -6.8% afterhours

***Politics***
- (US) President Trump: US sending a very powerful armada to North Korea - Fox interview
- (US) House Fin Services Chairman Hensarling (R-TX): will unveil Dodd-Frank overhaul bill by the end of the month
- (US) John Sullivan nominated by Pres Trump as Deputy State Secretary - press

***Key economic data***
- (CN) CHINA MAR CPI M/M: -0.3% (2nd straight decline) v -0.2% PRIOR; Y/Y: 0.9% V 1.0%E
- (CN) CHINA MAR PPI Y/Y: 7.6% V 7.5%E; 7th consecutive increase
- (AU) AUSTRALIA APR WESTPAC CONSUMER CONFIDENCE INDEX: 99.0 V 99.7 PRIOR, M/M: -0.7% (first decline in 4 months) V +0.1% PRIOR
- (JP) JAPAN FEB CORE MACHINE ORDERS M/M: 1.5% V +3.6%E; Y/Y: 5.6% V +2.5%E
- (JP) JAPAN MAR PPI (CGPI) M/M: 0.2% V 0.3%E; Y/Y: 1.4% V 1.4%E
- (KR) South Korea Mar Unemployment Rate: 3.7% v 3.8%e; 466K new jobs created, biggest gain since Dec 2015

***Asia Session Notable Observations, Speakers and Press***
- Safehaven flows remain the prevalent theme in Asian trade as geopolitical risks related to conflicts in Syria and saber-rattling by North Korea are not abating. Ahead of his arrival in Moscow, US State Sec Tillerson is calling on Putin to denounce his support for Syria's Assad, just as Kremlin continues to hint that chemical attacks were actually done by the rebels to garner international sympathy. US President Trump has also tweeted that "North Korea is looking for trouble" and added today that US is "sending a powerful armada", while Pyongyang warned of a nuclear attack on the US at any sign of American aggression. Vix has spiked up to a 2-week high, US benchmark Treasury yield is testing a key long-term support of 2.30%, and Nikkei225 is the worst performing major index on Yen strength (both Nikkei and USD/JPY are at lowest levels since mid-Nov). Gold prices have also extended their gains on safehaven demand, while Dalian Iron Ore price decline is weighing on the high-beta Aussie Dollar currency. AUD/USD has fallen back below $0.75 near its 2 1/2 month lows going into tomorrow's critical Australia employment data.
- China consumer inflation remained underwhelming in March, as m/m CPI fell for the 2nd straight month and y/y was near its 2-year lows below 1%. Food CPI component fell again by over 4%, while non-food rose slightly by 2.3% v 2.2% prior. Recall China has a formal 2017 CPI target of 3%. Conversely, rising input costs have continued to prop up wholesale inflation, with PPI up for the 7th straight month at +7.6% - close to consensus.
- Ahead of tomorrow's employment data, Australia Westpac Consumer Confidence index registered its first decline in 4 months to 99.0 from 99.7 - implying contracting conditions. Westpac economist still remarked that confidence is holding up well media attention over housing affordability and growing geopolitical tensions globally.

China
- (CN) China Banking Regulatory Commission (CBRC) urges banks to reduce exposure
- (CN) China Insurance Regulatory Commission (CIRC) vice chairman Chen Wenhui: Insurance industry exposed to solvency, liquidity, corporate governance, and external risks - press

Japan
- (JP) BOJ Gov Kuroda: BOJ easing not aimed at FX level; Further weakening in Yen would help to meet CPI target sooner
- (JP) Japan Fin Min Aso: Drafting free trade rules is a key goal for US-Japan dialogue
- (JP) US said to be planning to talk about trade deficit with Japan - Nikkei

Australia/New Zealand
- (NZ) New Zealand's Aon Hewitt: 1-year inflation expectations unchanged at 1.7%; 4-year unchanged at 2.0%

Korea
- (US) President Trump: US sending a very powerful armada to North Korea - Fox interview
- (KR) South Korea presidential frontrunner Jae-In Moon: to draft extra budget immediately if getting elected
- (KR) Japan Foreign Ministry issues short-term alert on South Korea travel due to North Korea nuclear tests


***Asian Equity Indices/Futures (23:30ET)***
- Nikkei -1.2%, Hang Seng -0.1%, Shanghai Composite -0.3%, ASX200 flat, Kospi +0.1%
- Equity Futures: S&P500 -0.2%; Nasdaq -0.2%, Dax -0.2%, FTSE100 -0.3%

***FX ranges/Commodities/Fixed Income (23:30ET)***
- EUR 1.0595-1.0615; JPY 109.25-109.75; AUD 0.7485-0.7510; NZD 0.6930-0.6960
- June Gold +0.2% at 1,277/oz; May Crude Oil +0.3% at $53.54/brl; May Copper -0.3% at $2.60/lb
- (US) Weekly API Oil Inventories: Crude: -1.3M v -1.8M prior; second straight draw
- SPDR Gold Trust ETF daily holdings rise 4.1 tonnes to 842.4 tonnes; highest since Mar 2nd
- iShares Silver Trust ETF daily holdings rise to 10,208 tonnes from 9,862 tonnes prior; First rise since Mar 20th
- (CN) PBOC SETS YUAN MID POINT AT 6.8940 V 6.8957 PRIOR; 2nd straight firmer fix
- (CN) PBoC skips open market operations for 13th straight session; drains net CNY40B
- (CN) China MoF sells 5-yr Govt bonds at 3.1264% v 3.12%e; bid-to-cover 1.62x
- (AU) Australia MoF (AOFM) sells A$800M in 1.75% 2020 Bonds; avg yield: 1.8675%; bid-to-cover: 3.74x
- (JP) BOJ announces amounts to buy in upcoming QE operation: cuts 3-5yr to ¥350B (prior ¥380B)


***Asia equities / Notables / movers***
Australia
- NST.AU Northern Star +2.1%, SAR.AU Saracen +4.9%, RSG.AU Resolute Mining +1.8% (gold price gains)
- SPK.NZ Spark NZ +2.6% (offer to buy TeamTalk has lapsed)
- TLS.AU Telstra -6.8% (TPG plans rival Australian mobile network)
- SFR.AU Sandfire Resources -2.4% (Morgans Financial downgrade)

Japan
- 8028.JP FamilyMart Uny -4.5% (annual result)
- 6502.JP Toshiba Corporation -1.5% (may need govt support, 9-month result)
- 7752.JP Ricoh Co +1.6% (to shrink camera business)
- 6796.JP Clarion Co -6.4- (annual result speculation)
- 6146.JP Disco Corp -3.4% (annual result speculation)
- 2726.JP Pal Co +5.4% (annual result)
- 7649.JP Sugi Holdings % (annual result)
- 9948.JP Arcs Co -3.7% (annual result)
- 2670.JP ABC-MART -5.5% (annual result)

Hong Kong
- 2009.HK BBMG Corp +0.2% (guidance)
- 6837.HK Haitong Securities -0.9% (Mar result)
- 6030.HK CITIC Securities -0.6% (Mar result)
- 1888.HK Kingboard Laminates Holdings -5.3% (shareholder placement)

China
- 000507.CN 600185.CN Gree Real Estate +10.0% (SMBC upgrade)
- 600340.CN China Fortune Land Development +2.2% (Xiongan new district)

>>> US Close -0.03% S&P -0.14% Nasdaq -0.24% Russell +0.72%

Closing Market Summary: Equities End Tuesday Little Changed

Geopolitical tensions spooked investors on Tuesday, but the S&P 500's 50-day moving average provided support to keep losses in check. The Dow (unch) and the Nasdaq (-0.2%) settled on opposite sides of the benchmark index (-0.1%) while the small-cap Russell 2000 (+0.7%) outperformed.

Stocks retreated out of the gate, hitting their lowest levels of the day about an hour after the opening bell. By noon, equities had reclaimed about half of their earlier losses, but they still had difficulty shaking the risk-off sentiment until the final minutes of action. Even still, the late rally left the cash market short of its flat line.

Sector standings echoed the day's risk-off sentiment as countercyclical groups held the upper hand over their more-risky, cyclical peers. The real estate (+0.4%), consumer staples (+0.1%), and telecom services (+0.1%) spaces closed in the green while the utilities sector (unch) finished flat.

On the cyclical side, the heavily-weighted financials (-0.3%) and technology (-0.4%) sectors were hit the hardest. The financial group suffered from a flattening of the yield curve as increased buying interest within the Treasury market was unequally distributed; the 10-yr yield (2.30%) lost six basis points while the 2-yr yield (1.24%) gave up only four basis points. 

For technology, the sector's top component by market cap, Apple (AAPL 141.63, -1.54), gave back some of its huge first quarter gain (+24.0%), falling 1.1%. Meanwhile, chipmakers showed relative weakness, evidenced by the 0.8% decrease in the PHLX Semiconductor Index, after Qualcomm (QCOM 55.35, -1.17) filed its Answer and Counterclaims to the January lawsuit brought by Apple against the company.

The energy sector (-0.1%) performed roughly in line with the broader market despite an uptick in crude oil. The energy component climbed out of negative territory following reports that Saudi Arabia favors extending the OPEC/non-OPEC production cut agreement beyond June. WTI crude settled 1.6% higher at $53.88/bbl, marking the commodity's sixth consecutive win.

Although the S&P 500 managed to close above its 50-day moving average (2349), the sharp rise in the CBOE Volatility Index (VIX 15.26, +1.21) provides evidence that investors are putting the pro-growth trade into question. The VIX Index now sits at its highest level since the presidential election.

Investor participation was a bit below average again today in light of the abbreviated week; 933.3 million shares changed hands at the NYSE floor.

On the data front, investors received only one economic report--February JOLTS--on Tuesday:

  • The February Job Openings and Labor Turnover Survey showed that job openings increased to 5.743 million from a revised 5.625 million (from 5.626 million) in January.

Tomorrow, investors will receive a batch of economic data, including the MBA Mortgage Applications Index at 7:00 ET, March Export/Import Prices at 8:30 ET, and the March Treasury Budget at 14:00 ET.

  • Nasdaq Composite +9.0% YTD
  • S&P 500 +5.1% YTD
  • Dow Jones Industrial Average +4.5% YTD
  • Russell 2000 +1.5% YTD

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance:
  • HUBG -10.3%, SLP -5.2%, SEAC -3.3%, (light volume), MTSC -2.8%
Other news:
  • CYTX -22.7% (commences common stock offering)
  • NAKD -17.8% (raises $5.5 mln from at the market offering agreement, further amends letter of intent with Bendon Limited)
  • AVGR -9.4% (has been conducting a review of various strategic alternatives focused on maximizing shareholder value; announces preliminary first quarter results)
  • UAL -2.6% (reports March traffic)
  • STM -1.7% (continued weakness)
  • FRO -1.4% ( files for $300 mln mixed securities shelf offering)
  • UNFI -0.9% (after seeing late decline on JANA / WFM news)
  • MU -0.6% (prosecutors in Taiwan have been conducting ongoing investigations)
Analyst comments:
  • ABB -0.7% (downgraded to Sell from Neutral at UBS)
  • CYS -0.6% (downgraded to Market Perform from Outperform at Wells Fargo)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance:
  • AGX +9.2%, AKER +4.6%, OZRK +0.6%
M&A news:
  • SALE +49% (RetailMeNot to be acquired by Harland Clarke Holdings for $11.60 per share in cash)
  • PNRA +1% (3G Capital (BRK.B) might make rival bid for PNRA, according to NY Post)
Select metals/mining stocks trading higher:
  • MTL +5%, HMY +2.3%, RIO +2%, GOLD +2%, SBGL +1.8%, GFI+1.6%, AU +1.4%, AUY +0.9%
Other news:
  • SALE +49% (RetailMeNot to be acquired by Harland Clarke Holdings for $11.60 per share in cash)
  • NADL +45.6% (NADL receives 10-year contract from ConocoPhillips Skandinavia AS (COP) for the jack-ups West Elara and West Linus)
  • TNXP +40.9% (receives official minutes from its Initial Cross-Disciplinary Breakthrough Meeting held with the FDA)
  • MXWL +19.3% (signs stock purchase agreement with SDIC Fund; purchase price is $6.32/share and is anticipated to represent approx 19.9% of co's common stock)
  • CBIO +16.3% (achieves key milestone under collaboration with ISU Abxis to advance the Factor IX program; Milestone payment received)
  • FPP +13.5% (LeRoy Landhuis discloses 8.29% active stake)
  • SDRL +13% (SDRL's NADL receives 10-year contract from ConocoPhillips Skandinavia AS (COP) for the jack-ups West Elara and West Linus)
  • IDRA +11.8% (provides update on IMO-2125 trials; enrollment has begun for the Phase 2 portion of the trial with the 8mg dose)
  • SVU +6.1% (Supervalu to acquire Unified Grocers for approx $375 mln; expected to be accretive to EPS in the first full fiscal year following closing)
  • NTLA +5.5% (announces European Patent Office's Decision to grant CRISPR/Cas9 Genome editing technology patent)
  • VEON +3.4% (modestly rebounding following recent declines following offering by Telenor)
  • AXON +3.3% (prices 6,742,179 common stock offering at $18.54/share)
  • QUOT +3.2% (SALE sympathy)
  • COUP +3% (announces the launch of a proposed follow-on public offering of 3,700,000 shares of its common stock; offering includes 91,535 shares to be offered by Coupa and 3,608,465 shares to be offered by certain selling stockholders)
  • HOG +1.5% (after spiking in late trade on renewed PE rumor)
  • AAL +1% (reports March traffic; raises Q1 unit revenue, margin guidance)
  • GRPN +0.8% (SALE sympathy)
Analyst comments:
  • PUMP +4% (initiated with a Buy at Goldman, among others)
  • AUPH +3.9% (initiated with a Overweight at Cantor Fitzgerald; tgt $14)
  • ARCO +3.8% (upgraded to Buy from Underperform at BofA/Merrill)
  • YELP +2.6% (upgraded to Overweight from Sector Weight at Pacific Crest)
  • WDC +2% (upgraded to Overweight from Neutral at JP Morgan)
  • STX +1.4% (upgraded to Buy from Neutral at Longbow)
  • RNG +1.4% (upgraded to Overweight from Equal-Weight at Morgan Stanley)
  • SBAC +0.6% (upgraded to Buy from Neutral at Guggenheim)
  • HES +0.5% (added to US 1 List at BofA/Merrill)