>>> FCA Would Benefit Most From Deal With VW, Morgan Stanley Says

FCA Would Benefit Most From Deal With VW, Morgan Stanley Says
FCA would benefit most from a deal with Volkswagen, Morgan Stanley says in note, citing recent comments by CEO Sergio Marchionne and noting both sides have denied talks.
  • Questions whether VW would want to add to its current challenges by taking on FCA restructuring and integration
    • VW doesn’t need another European brand, but would benefit FCA’s U.S. presence, especially Jeep SUVs
    • Technology benefits would flow mostly to FCA, which hasn’t matched VW’s R&D spend
    • VW unions may be too strong to allow consolidation
    • FCA probably will continue to explore all possible routes to maximizing value

>>> Luxury Overheated, Says Bernstein; Downgrades Kering and Prada

Luxury Overheated, Says Bernstein; Downgrades Kering and Prada
Luxury’s improving fundamentals are “more than reflected” in current multiples, says Bernstein, and takes a “more cautious” stance on the sector.
Short interest down for most luxury stocks, meaning share support from short squeezes has diminished
Swatch and Ferragamo exceptions with more than 10% of free float shorted
LVMH, Ferragamo good picks for investors with 1-2 year investment horizon; for longer-term investors (3 years +) prefer LVMH and Richemont
Downgrades Kering to market perform from outperform as believe Gucci turnaround “almost all priced in”
Downgrades Prada to underperform from market perform as “do not see the good fundamental improvements as strong enough to sustain the current short-squeezed valuation”

>>> What to look at today - 20th of March 2017

Asia equity markets are mixed after modest gain on Wall St on Friday, as investor focus turns from central bank statements last week to US policy under Pres Trump. The White House is heading for a busy week, with anticipated House health care legislation coming to the floor and the Senate starting hearings on Supreme Court nominee Gorsuch. In the mean time, there was tension at Trump's meeting with German Chancellor Merkel over the weekend as US leader claimed Germany "owes vast sums of money to NATO", to which German Defense Min replied "There is no debit account in NATO". Beijing raised the downpayment requirement for buyers of 2nd homes from 50% to 60%. PBoC Gov Zhou: China's growth prospects have improved and we are focused on structural adjustment of the economy - G20 meeting.

Nikkei -0.35% Hang Seng +0.66% CSI -0.10% Shanghai +0.13%

Eur$ 1.0769 CNH 6.8909 CNY 6.9049 JPY 112.64 GBP 1.2392 CHF 0.9963 RUB 57.3275 WTI$ 48.91 -0.79%

S&P -0.20% EuroStoxx -0.09% Dax -0.21% FTSE SMI -0.07%

Macro :
- China, U.S. Agree Korea Tensions at Dangerous Level: Tillerson
- U.S. Banks Fall to February Lows as Market Reverses Gains
- G-20 Nations Renew Commitment to Global Bank-Capital Overhaul
- Germany Social Democrats (SPD) officially elected Martin Schulz as their leader and challenger to Chancellor Angela Merkel for the national election in September


Keep an eye on :
- ADS GY : Adidas Sues Asics Over Patents for Fitness Tracking
- AZA IM : Alitalia’s Bank Investors in Talks on State Guarantee: Corriere
- AKZA NA : Elliott Said to Urge Akzo Nobel to Engage With PPG in Deal Talks
- AKZA NA : AkzoNobel could eye large-scale takeover or series of smaller acquisitions - telegraaf.nl
- ATC NA : Teads in talks with News Corp after rejecting offer from Altice
- AMGN US : Amgen’s Repatha Doesn’t Hurt Mental Ability, Study Shows
- AAL LN : Volcan Plans to Raise $2.4b Via Bond Sale for Anglo Stake: ET
- AAPL US : Apple’s Cook: Worst Thing We Can Do Is Say Globalization Bad
- MT NA : ArcelorMittal, Marcegaglia Said Offering EU1.6b for Ilva:Reuters
- ARYN VX : Aryzta to Cut Debt by EU1B, Chairman Tells Sunday Times
- AZN LN : AstraZeneca May Reduce U.K. Drug Research Program (by 2bil) : Sunday Times
- AV/ LN : Aviva Said to Pursue Sale of Friends Life’s Asian Operations
- BMPS IM : ECB Agrees to Paschi Extended Restructuring Plan: Messaggero
- BVN LN : Bovis bidder Redrow weighs revised offer; Galliard decides against bid - reports
- BLVN LN : BowLeven Chairman Seeking Offers for Company, Sunday Times Says
- KO US : Indian State Bans Sale of Coca-Cola Zero at McDonald’s: Times
- CSGN VX : Credit Suisse Said to Decide in April on Swiss Bank IPO: Reuters
- CRST LN : Crest Nicholson Bonuses Said to Be Opposed by ISS: Telegraph
- DBK GY : Deutsche Bank Review by ECB Shows Risk Management Weakness: Sole
- DBK GY : Deutsche Bank TERP ~EU15.79 Based on March 17 Price, Sale Terms
- DBK GY : Deutsche Bank to Raise $8.6 Billion After Pricing Share Sale
- DTE GY : T-Mobile Polish Unit CEO Sawicki to Leave This Week: Parkiet
- DIS US : Disney Sees ‘Beauty and the Beast’ 3-Day Sales of $155m-$165m
- ELI BB : Elia Rises, Sofina Declines Ahead of BEL20 Index Reshuffle
- ENI IM : Eni CEO at Photovoltaic Plant Foundation Stone Laying in Algeria
- XOM US : Point Resources, the Norwegian oil company, controlled by the PE firm, Hitecvision, is in final talks to acquire Texas-based ExxonMobil's Norwegian offshore oil operations - to Dagens Naeringsliv.
- GXI GY : Gerresheimer Makes Preliminary Offer for Bormioli Rocco: Il Sole
- GBLB BB : GBL Raises Dividend 2.4%; Asset Rotation Cuts Cash Earnings 4.6%
- GKN LN : GKN May Issue GBP250m Bonds to Plug Pension Gap: Sunday Times
- Hengdeli (3389 HK) : -4.24% in HK
- LDO IM : Profumo Named Leonardo CEO as Italy Reshuffles State-Owned Firms
- MONC IM : Moncler to Focus on Commercial Network, Strengthen Retail: Sole
- PARG SW : Pargesa Swings to Loss on Engie Disposal, GBL Impairement
- PHIA NA : PHILIPS RECLASSIFIED TO STOXX EUROPE 600 HEALTH CARE INDEX
- PUB FP : PUBLICIS BOUGHT BACK EU36.5M OF STOCK MARCH 14-17
- RIO LN : Rio CEO Says Key Iron Ore Uncertainty Is Chinese Capacity: CNBC
- SFQ GY : SAF-Holland Looking at 1-2 Takeover Targets, Borghardt Tells BZ
- SIE GY : Siemens Boosts Commitment to U.S. After Meeting With Trump
- SNAP US : Snap’s Inclusion in FTSE Indexes Said Opposed by U.K. Investors
- SL/ LN : Standard Life CEO Defends Aberdeen Deal in Telegraph Interview
- SFM US : Sprout Farmers Market Climbs for Second Day; Upside Calls Active
- UHR VX : Swatch’s Tissot Aims to Double Stores in Japan: Nikkei
- SREN VX : Swiss Re rumoured to be eyeing UK acquisitions
- TESB BB : Picanol Unit Buys Additional EU0.39m of Tessenderlo Chemie Stock
- FP FP : Seeking a 50% stake in a $4B project in Iran's giant South Pars gas field - filing
- TWTR US : CEO Dorsey said to be under pressure to resign after a report last week that estimated 15% of its 319M users were robots - UK press
- UBSG VX : UBS ‘Very Pessimistic’ About Settling Tax Case in France: JDD
- UNA NA : Unilever could divest spreads arm at approximate brand value; CD&R, CVC and Bain work on bids
- UNA NA : Unilever Said to Call on Investors to Increase Stake, FD Says
- VIV FP : Vivendi CEO to Speak to Italy’s Agcom on March 23: Corriere
- VIV FP : Vivendi CEO Says Mediaset Misled Company During Talks: FT
- VOw3 GY : Volkswagen Seeks U.S. Market Share Gains: Automobilwoche
- VOW3 GY : Piech Sale of Porsche Stake May Be Finalized in April: Bild
- WG/ LN : Wood, Amec Assets Attract Possible Bids After Merger Deal: FT
- ZC FP : TCI steps up campaign to block Zodiac takeover

>>> Europe : Brokers Upgrades & Downgrades - 20th of March 2017

>>> Up
*AB Foods Raised to Buy at Goldman
*Aryzta Raised to Buy at Berenberg, PT CHF45
*EDF Raised to Neutral at Goldman
*Maisons France Confort Raised to Buy at SocGen, PT EU60
*National Grid Raised to Hold at SocGen
*Volvo Raised to Buy at UBS, PT SEK140

>>> Down
*ASOS Cut to Neutral at Goldman, PT 5800p
*Casino Guichard Cut to Neutral at Credit Suisse
*Forbo Cut to Hold at Kepler Cheuvreux, PT CHF1620
*G4S Cut to Reduce at HSBC, PT GBP2.59
*H&M Cut to Sell at Goldman
*Investec Cut to Neutral at UBS, PT 610p
*Kering Cut to Market Perform at Bernstein, PT EU255
*SRP Groupe Cut to Neutral at Goldman, PT EU25

>>> Initiation

>>> Call
>> Index
*S&P 500 MID-YEAR TARGET UPPED FROM 2,350 TO 2,400 AT CREDIT SUISSE
*S&P 500 YEAR-END TARGET UPPED FROM 2,300 TO 2,500 AT CREDIT SUISSE
*EURO STOXX 50 YEAR-END TARGET UPPED FROM 3,450 TO 3,700 AT CREDIT SUISSE
**FTSE 100 YEAR-END TARGET UPPED FROM 7,000 TO 7,500 AT CREDIT SUISSE
>> Stock
*TOTAL, SANTANDER ENTER BARCLAYS EUROPEAN RECOMMENDED PORTFOLIO
*LUXOTTICA, NORDEA EXIT BARCLAYS EUROPEAN RECOMMENDED PORTFOLIO