From: Pawan Girglani
Sent: 24 November 2016 07:56:32 (UTC+00:00) Dublin, Edinburgh, Lisbon, London
Subject: premarkets (late sorry)
Ml
* U.S. MARKETS closed for Thanksgiving Holiday today...........................
DOMINOS - PBT '16 guidance unch, capex to be £20m v indicated £33m (342)..+3-4%
REMY - +ve, org growth 7% v 6.7% cons. Spirits bucking staples trend (76).+2-3%
SEVERN TRENT - EBIT 2% & EPS 7% ahead. Main beat is interest costs (2255)...+1%
MARSTONS - Current trading inline with EBIT +4% YoY & PBT +7% YoY (137p)..+0.5%
MINERS - Copper +2.9%, Iron Ore unch with BHP OZ unch and RIO OZ +0.25%.....u/c
GENERALI - CEO says merger with Axa is not on the agenda; Les Echos (11.3)..u/c
VINCI - Confirms previously communicated outlook for FY revenue (59.31).....u/c
RIO TINTO - Guiding capex for FY16 "less than" $3.5b, we on $3.5b (3099.5)..u/c
PARAGON - We DOWNGRADE to Underperform, lowering our '17 EPS est 4% (366.8).-1%
LUFTHANSA - CEO says cannot survive if it agrees to union demands (12.65)...-1%
KWS - Cut FY16/17 margin guide, expect EBIT margin 10-10.5% v 11.4% (283)...-2%
THYSSEN - EBIT 9% ahead but conservative outlook, guidance 8% below (21.5)..-2%
PETS - 1H inline with LfL of 2.5% & DPS 2.5p (+25%) but outlook weak (223)..-4%
COUNTRYWIDE - Warning. Slow rental growth, rents falling. LDN biz -26% (184)-5%
CS
Accor +1% Euro RevPAR data +4.1% in last 28 days
Countrywide -10% guiding lower - FY16 EBITDA to be bottom of cons range
Dominos Piz +1-2% CMD - trading update fine, no change to overall guidance
Hss Hire -7-10% Warning - Q4 will be at lower end of expectations
IHG +1% US RevPAR data +6.1% in last 28 days
Linde M/P aid in Talks to Sell Logistics Unit Gist to HNA
Marstons M/P FY underlying rev. GBP905.8m, est. GBP901m
Miners +0.5-1% Copper +3.00%, Brent UNCH, Iron Ore +3.50%, China +0.54%
Mothercare -1-2% Headline inline - stalling margin due to weather
Remy +2% Numbers slightly ahead, confirms targets, US good
Rio S/P CMD - focus on cashflow, guidance unchanged
Severn Trent -2% Numbers inline, pension deficit worse
South32 S/P Headlines out of the AGM look inline
Thyssen -2-3% FY16 in line. FY17 guidance below consensus
UDG M/P Revs slightly light but pre-tax better, outlook inline
ML
*VINCI-Confirms outlook for FY Revenue and Results.................+1% *CS-Courting investors to raise $2b for a fund 2 buy HF Stakes.....U/C *LUFTHANSA-Says it cant survive if it gives into Union demands.....-0.5% *THYSSEN-FY Ebit 1.47b(1.47),Sales 39.3b(39.9),Div 15c(18).........-3% *RENAULT-France to impose trucks solution on Volvo - Tribune.......-1% *GENERALI-CEO says no AXA merger,will make axcquisitions - Echos...+1% *BBVA-Pursues acquistions in Argentina as market consolidates......U/C *BCO POPULAR-Bd reaffirms support Chairman and the Business Plan...+1% *ACS-Seeks to refinance €2.4b loan to reduce costs - Expansion.....+0.5% *KWS SAAT-Q1 Sales 133.3m(124),Ebit -28.8m(-35),FY Ebit lower......-2% *LINDE-Said to be in talks with HNA Grp about selling Gist($400m)..+0.5%
*REMY-H1 OP 123.9m(119.3),Op Margin 24.1%(23.2),FY tgt confirmed...+2% *ACTELION-Local press spec on a takeover bid,US Pharma co..........+3.5% *BNP-New Strategic plan next year,includes Inv Program 2-3bln......+0.5%
>>> Up
*Big Yellow Group Raised to Buy at Goldman
*Direct Line Raised to Overweight at Morgan Stanley, PT 465p
*Eurotunnel Raised to Outperform at RBC, PT EU10
*Ferrovial Raised to Outperform at RBC, PT EU19
*Thomas Cook Raised to Overweight at Barclays, PT 90p
*TURKCELL RAISED TO NEUTRAL VS SELL AT GOLDMAN
*United Internet Raised to Buy at Bankhaus Lampe
>>> Down
*Assa Abloy Cut to Sell at Liberum, PT SEK147
*BBVA Cut to Sell at Bankhaus Lampe
*CNP Assurances Cut to Underweight at JPMorgan, PT EU16.90
*Mitchells & Butlers Cut to Hold at HSBC, PT GBP2.50
>>> PT Change
>>> Initiation
*Takeaway.com Rated New Buy at Goldman, PT EU30
>>> Call
Dow +0.14% S&P +0.08% Nasdaq -0.11% Russell +0.57%
US Market closed on a flat note ahead of long Week end. The minutes from the Federal Open Market Committee's November meeting were also supportive of a rate hike in December. The minutes indicated that most committee members felt that it may soon be appropriate to raise the target range for the fed funds rate. Some FOMC members also argued that rates should be hiked at the December meeting to preserve the central bank's credibility. Per the CME's FedWatch Tool, the implied probability of an interest rate hike at the December meeting is unchanged at 93.5%. Seven sectors settled in positive territory with industrials (+0.8%), telecom services (+0.8%), and financials (+0.6%) leading the pack. Deere (DE) +11% on better ern & guidance. financial sector (+0.6%) continued its recent winning streak as banking names outperformed once again. Heavy tech lagged. IBB started the session lower but after LLY news on Alzheimer drug but closed +0.9%. Volume were below average at 808mil shares. US After Hours +24.3% on Lymphoseek sell, IIIN +5.5% to replace LFUS in S&P small cap 600. Donald Trump expected to pick Billionaire Wilbur Ross as Commerce Sec and Todd Ricketts as his deputy. Trump transition team reportedly studying ways to revive Keystone Pipeline early on in presidential term. PBoC resumed weakening of Yuan fix, setting midpoint at lowest level since mid-2008. Goldman Sachs sees USD/CNY reaching 7.3 level in 2017. Japan Nov prelim manufacturing PMI expanded for the 3rd straight month, although at slower pace. Markit points to strong international demand boosting New Orders component. NAVB+7.3% on ern & acq. of Skyscanner GBP 1.4 bln, CTRP
Nikkei +0.94% Hang Seng -0.27% CSI +0.55% Shanghai +0.14%
Eur$ 1.0542 CNY 6.9201 JPY 112.83 GBP 1.2432 WTI 48.07 +0.25%
S&P -0.06% EuroStoxx Dax SMI FTSE +0.10%
Macro :
- FOMC Discussed Possible ‘Sharp’ Rise in Long-Term Rates: Minutes
- FOMC Generally Agreed in November Case for Hike Had Strengthened
- Portuguese Banks Have EU32b in NPE, Bank of Portugal Says
- Europe Is Facing ‘Serious, Difficult’ Test, Schaeuble Says
- Italian Banks Net Profit Estimates Lowered at Goldman Sachs
- Trump Won’t Change Japan’s Forex Policy, Nikkei Cites Asakawa
Keep an eye on :
- ABI BB : Asahi Considering Overseas M&A, Has 400b Yen Available For Deals
- CS FP : Generali CEO Says Merger With Axa Not on Agenda : Les Echos
- BMPS IM : Monte Paschi Received Approval From ECB on EU5b Capital Increase
- BNP FP : BNP Paribas Plans EU2b-EU3b Investments 2017-20, Les Echos Says
- BPI IM : BPI Shareholder Meeting Suspended Until Dec. 13, Violas Says
- CABK SM : CaixaBank Says Hasn’t Decided on How it Will Vote on BFA Stake
- CO FP : Casino Approves of CBD Decision to Sell Via Varejo Unit
- G IM : Generali CEO Says Merger With Axa Not on Agenda : Les Echos
- HLAG GY : Hapag-Lloyd Wins Conditional EU Approval to Buy UASC
- LIN GY : Linde Said in Talks to Sell Logistics Unit Gist to HNA: Reuters
- LHA GY : Lufthansa Can’t Survive If It Agrees to Union Demands, CEO Says
- NDA SS : Nordea Ranks Lowest in Danish Bank Customer Survey, Borsen Says
- RBREW DC : Royal Unibrew 9M Rev Up 6%; Raises Outlook
- RCO FP : Remy Cointreau 1H Current Operating Profit Beats Estimates
- RIO LN : Rio Lowers 2016 Capital Spending to Less Than $3.5b from ~$4b
- FP FP : Total Energy Services to Make Offer for Savanna Energy Services
Publicis Groupe and Capgemini would be better off merged – analysts (translated)
24 NOV 2016
Shareholders in Publicis Groupe [EPA:PUB], the listed French advertising giant, and listed French IT services specialist Capgemini [EPA:CAP] would be better off after a tie-up between the two groups, French daily Le Figaro reported. The article referred to a report from analysts at Natixis, who claimed that the merger would create value for the shareholders, adding that opportunities of mergers between advertising groups are thin.
The analysts claim that the convergence between the marketing and IT industry is accelerating because of the digitalisation of business, noting that Publicis, via its digital unit Sapient, is already a competitor to Capgemini in numerous invitations to tender. They added that the two companies share a similar culture in terms of size and geographical presence, while they are complementary in the digital industry.
Asia Mid-Session Market Update: Japan manufacturing PMI expands for 3rd straight month; Singapore final GDP better than estimated, but 2016 forecast lowered
***US Session Highlights***
- (IQ) Iraq Prime Min Abadi: Iraq supports OPEC efforts to cut oil output; will shoulder responsibility for some of OPEC's planned production cuts
- (US) OCT PRELIMINARY DURABLE GOODS ORDERS: 4.8% V 1.7%E; DURABLES EX TRANSPORTATION: 1.0% V 0.2%E
- (US) INITIAL JOBLESS CLAIMS: 251K V 250KE; CONTINUING CLAIMS: 2.04M V 2.01ME (90 consecutive weeks of initial claims below 300K)
- (US) NOV PRELIMINARY MARKIT MANUFACTURING PMI: 53.9 V 53.5E (highest reading since Oct 2015)
- (US) NOV FINAL MICHIGAN CONFIDENCE: 93.8 V 91.6E (highest since May)
- (US) OCT NEW HOME SALES: 563K V 590KE (lowest since March); hurt by jump in median prices
- (US) DOE CRUDE: -1.3M V +1ME; GASOLINE: +2.3M V +1ME; DISTILLATE: +0.3M V -1ME
- Strong 7-year Treasury sale stops bleeding momentarily; first stop through in 5 auctions
- FOMC MINUTES FROM NOV 1-2 MEETING: MOST PARTICIPANTS SAID HIKE COULD HAPPEN RELATIVELY SOON
***US markets on close: Dow +0.3%, S&P500 +0.1%, Nasdaq -0.1%***
- Best Sector in S&P500: Industrials
- Worst Sector in S&P500: Utilities
- Biggest gainers: DE +11.0%, FCX +7.2%, SWN +4.0%, JEC +4.0%, URI +3.5%
- Biggest losers: URBN -12.1%, LLY -10.5%, HPQ -6.8%, NEM -5.1%, BIIB -3.8%
- At the close: VIX 12.4 (flat); Treasuries: 2-yr 1.13% (+3bp), 10-yr 2.36% (+4bp), 30-yr 3.02% (+1bp)
***US movers afterhours***
- NAVB: Cardinal Health to purchase Lymphoseek lymphatic mapping product; Navidea to receive $80M at closing, plus opportunity to earn $230M on milestones through 2026; +24.3% afterhours
- IIIN: Insteel to replace Littelfuse in SmallCap 600 after close Nov 28th; +6.6% afterhours
***Politics***
- (US) Donald Trump expected to pick Billionaire Wilbur Ross as Commerce Sec and Todd Ricketts as his deputy - press
- TRP: Trump transition team reportedly studying ways to revive Keystone Pipeline early on in presidential term - press
***Asia Session Notable Observations, Speakers and Press***
- USD extended its gains following strong Durable Goods and Consumer Confidence data in US hours, along with Fed meeting minutes that all but cemented expectations of a rate hike by the FOMC next month; Gold prices tracking firmer USD to the downside, falling to 8-month lows below $1,190.
- PBoC resumed weakening of Yuan fix, setting midpoint at lowest level since mid-2008. Goldman Sachs sees USD/CNY reaching 7.3 level in 2017.
- Japan Nov prelim manufacturing PMI expanded for the 3rd straight month, although at slower pace. Markit points to strong international demand boosting New Orders component. Employment component eased from Octobers 30-month high and was only marginal overall, but cost inflation (input prices) increased for the first time since Dec 2015.
- SGD falls following Q3 final GDP data from Singapore, with USD/SGD rising about 60pips to S$1.4360. Although the q/q decline of -2% was less than consensus -2.5%, MAS also lowered its 2016 GDP target range to 1.0-1.5% v 1-2% prior and set its 2017 target at 1-3%.
China:
- (CN) China CSRC may stop reviews of listing candidates with more than 50% decline of profits before being considered for IPO - Chinese press
- (CN) China Commerce Ministry Spokesperson: China will continue to deepen reform regardless of TPP and Regional Comprehensive Economic Partnership (RCEP) directions
- USD/CNY: (CN) Goldman Sachs 2017 global market forecast seen CNY falling further to CNY7.30; Yuan depreciation to continue amid capital outflow pressure - press
Japan
- (JP) Japan PM Abe: would like to have a summit with China and South Korea
- (JP) Japan Fin Min Aso: Japan banks have stable financial basis and no trouble getting USD - press
- (JP) Bank of Japan (BOJ) Dep Gov Nakaso: Bondholders may see unrealized JGB losses if rates rise - press
- (JP) Japan Vice Fin Min of International Affairs (currency chief) Asakawa: Plan to maintain FX policy; Election of Trump will not change Japan policy - Nikkei
Australia:
- (AU) Morgan Stanley: Australia Q3 GDP may have contracted -0.3% q/q - press
- (AU) S&P/ASX200 extending gains to 5,500; 3-month high
- AUD/USD: Westpac's Speizer: Rising coal and iron ore prices to support AUD - press
***Asia Key economic data:***
- (JP) JAPAN NOV PRELIMINARY PMI MANUFACTURING: 51.1 V 51.4 PRIOR; 3rd consecutive expansion
- (SG) SINGAPORE Q3 FINAL GDP Q/Q: -2.0% V -2.5%E; Y/Y: 1.1% V 1.0%E
***Asian Equity Indices/Futures (00:00ET)***
- Nikkei +1.0%, Hang Seng -0.4%, Shanghai Composite +0.1%, ASX200 flat, Kospi -0.7%
- Equity Futures: S&P e-mini -0.1%, Dax -0.1%, FTSE100 -0.1%
***FX ranges/Commodities/Fixed Income (00:00ET):***
- EUR 1.0525-1.0555; JPY 112.40-112.90; AUD 0.7365-0.7385; NZD 0.6970-0.7010
- Dec Gold -0.2% at 1,185/oz; Jan Crude Oil +0.1% at $47.98/brl; Dec Copper +2.6% at $2.68/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 13.3 tonnes to 891.6 tonnes; 10th straight decline; lowest since June 9th
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.9085 V 6.8904 PRIOR; weakest Yuan setting since June 2008
- USD/CNY: (CN) SWIFT: CNY use in international transactions: 1.67% of total in Oct v 2.03% prior
- (JP) BOJ offers to buy ¥400B in 1-3yr JGBs, ¥420B in 3-5yr JGBs, ¥410B in 5-10yr JGBs
Notable movers by sector:
- Consumer discretionary: Gateway Lifestyle Operations GTY.AU +4.4% (Hometown America considers a bid); Huabao International 336.HK +7.6% (BNP to buy shares)
- Financials: Computershare CPU.AU -1.1% (Evans cuts to neutral); China Life Insurance 2628.HK +2.6% (CICC raises to buy); Mitsubishi UFJ Financial Group 8306.JP -0.2% (Goldman Sachs cuts to neutral)
- Technology: Alibaba Health Information Technology 241.HK -0.7% (H1 result); Samsung SDI Co 006400.KR -3.1%, LG Chem 051910.KR -6.6% (China to tightens battery regulation); NEXTDC NXT.AU +4.1% (guidance); Hansen Technologies HSN.AU +4.6% (guidance)
- Materials: Newcrest Mining NCM.AU -3.6%, Evolution Mining EVN.AU -5.0% (gold prices fall) Marubeni Corp 8002.JP +3.5% (Mizuho raises to buy)
- Healthcare: Sigma Pharmaceuticals SIP.AU +5.7% (guidance)
After Hours Summary: CTRP +7% following earnings, acquisition newsAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: CTRP +7.3% (Also announced deal to acquire Skyscanner Holdings for approximately GBP 1.4 bln)
Companies trading higher in after hours in reaction to news: NAVB +24.3% (Following today's late-day announcement that it would sell its Lymphoseek product to Cardinal Health (CAH)), IIIN +5.5% (To replace Littelfuse (LFUS) in the S&P SmallCap 600).
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: N/A
Companies trading lower in after hours in reaction to news: AIRG -16.3% (Filed registration statement for a proposed underwritten public offering of its common stock consisting of approximately $20 mln of shares to be sold by Airgain and approximately $20 mln by certain of its stockholders), CRBP -6.3% (Entered into a Controlled Equity Offering Sales Agreement to offer and sell, from time to time, shares of its common stock), TOPS -6.2% (Filed for a $200 mln mixed securities shelf offering and offering of 2 mln common shares by selling securityholders), CVO -2.5% (Filed for offering of 12,415,567 warrants to purchase common stock and 1,551,946 shares of common stock on behalf of selling security holders).
Closing Market Summary: Stocks End in Record TerritoryThe stock market ended the pre-holiday affair on a flat note despite a deluge of economic data. The Dow Jones Industrial Average (+0.3%) finished ahead of the S&P 500 (+0.1%) and the Nasdaq Composite (-0.1%). It is also worth noting that the domestically-oriented Russell 2000 (+0.5%) extended its winning streak to a 14th consecutive session.
The major averages diverged at the start of the session as the heavily-weighted technology (-0.5%) and health care (+0.4%) spaces slipped down the sector leaderboard. Meanwhile, another rapid increase in market rates kept "yield play" groups --utilities (-0.9%), real estate (-0.7%), and consumer staples (-0.6%)-- under pressure.
Market rates were on the rise after the latest raft of economic data came in largely above consensus. The Durable Orders report signaled that headline orders jumped 4.8% (Briefing.com consensus 1.1%) while orders excluding transportation increased 1.0% (Briefing.com consensus 0.3%). The data marked the fourth consecutive month of growth, adding support to the rate hike argument.
The minutes from the Federal Open Market Committee's November meeting were also supportive of a rate hike in December. The minutes indicated that most committee members felt that it may soon be appropriate to raise the target range for the fed funds rate. Some FOMC members also argued that rates should be hiked at the December meeting to preserve the central bank's credibility. Per the CME's FedWatch Tool, the implied probability of an interest rate hike at the December meeting is unchanged at 93.5%.
The benchmark index settled just north of its flat line, marking another incremental record high. Seven sectors settled in positive territory with industrials (+0.8%), telecom services (+0.8%), and financials (+0.6%) leading the pack.
Heavy machinery names outperformed in the industrial sector (+0.8%). The group led after Deere (DE 102.17, +10.16, +11.0%) topped consensus estimates for the fourth quarter and issued upbeat sales guidance for the first quarter and full-year 2017. Peer and Dow component Caterpillar (CAT 96.18, +2.56m +2.7%) finished at the top of the price-weighted average. The broader sector has gained 8.7% so far this month.
The financial sector (+0.6%) continued its recent winning streak as banking names outperformed once again. The SPDR S&P Bank ETF (KBE 40.95, +0.22, +0.5%) has surged 18.1% in November on the back of steepening in the yield curve, which improves the earnings prospects for banks. The broader sector has gained 13.2% in November, leaving the group up 15.3% for 2016.
In the technology space (-0.5%), large cap tech names underperformed. Microsoft (MSFT 60.40, -0.72) and Alphabet (GOOG 760.99, -7.28) finished lower by 1.0% apiece. Meanwhile, HP (HPQ 14.87, -1.08) tumbled 6.8% after issuing cautious first-quarter guidance. However, the company did report in-line results for the fourth quarter.
The health care sector (+0.4%) finished in positive territory after biotechnology rebounded from steep opening losses. The iShares Nasdaq Biotechnology ETF (IBB 283.84, +2.48, +0.9%) sank 2.5% after Eli Lilly (LLY 68.00, -7.99, 10.5%) announced that its Alzheimer's drug, solanezumab, failed to reach the primary endpoints in its clinical trial.
Treasuries ended on a broadly lower note as yields jumped across the curve. The yield on the 2-yr note finished up four basis points at 1.13% while the yield on the benchmark 10-yr note also rose four basis points to 2.36%.
Today's trading volume was below the recent average of one billion as fewer than 808 million shares changed hands at the NYSE floor.
Today's economic data included the weekly MBA Mortgage Index, weekly initial claims, Durable Orders for October, the FHFA Housing Price Index for September, New Home Sales for October, and the University of Michigan Consumer Sentiment Survey for November:
- The MBA Mortgage Index indicated that mortgage applications rose by 5.5% in the week ending November 19. This followed a 9.2% decline in the prior week.
- Initial jobless claims increased by 18,000 for the week ending November 19 to 251,000 (consensus 243,000).
- Continuing claims for the week ending November 12 increased by 66,000 to 2.043 million.
- Durable orders for October surged past estimates, jumping 4.8% (consensus 1.1%), thanks to a 12.0% spike in transportation orders.
- Excluding transportation, durable orders increased 1.0% in October (consensus 0.3%) on top of an unrevised 0.2% increase in September.
- The FHFA Housing Price Index for September rose 0.6%, which followed an increase of 0.7% in August.
- Sales of new single-family home sales declined 1.9% in October to a seasonally adjusted annual rate of 563,000 from a revised September rate of 574,000 (from 593,000).
- The October reading was lower than the consensus estimate of 587,000.
- The final reading of the University of Michigan Consumer Sentiment Survey for November increased to 93.8 (consensus 91.6) from the preliminary reading of 91.6.
- The sentiment index jumped 8.2 points after the election, leaving the index 6.6 points above its level from October.
Tomorrow, bond and equity markets will be closed for Thanksgiving while Friday's session will end at 13:00 ET. Two pieces of economic data will be released Friday with October International Trade in Goods and October Advance Wholesale Inventories (consensus +0.2%) each crossing the wires at 8:30 ET.
- Russell 2000: +18.1% YTD
- Dow Jones: +9.5% YTD
- S&P 500: +7.9% YTD
- Nasdaq Composite: +7.5% YTD
After Hours Summary: NMBL, URBN down roughly 10% each following earnings
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: VEEV +6.1%, GME +2.6%, CAL +1.9%.
Companies trading higher in after hours in reaction to news: NSPR +9.5% (Continuing higher following today's 19% rally), JEC +4% (Ticking higher in thin trading), RDUS +3.9% (Rebounding following today's 3.7% drop), PIR +1.8% (Ticking higher in thin trading), AGN +0.2% (Announced deal to acquire Chase Pharmaceuticals for an upfront payment of $125 mln).
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: NMBL -10.8%, URBN -9.6%, HPQ -2.3%, HPE -1.8%.
Companies trading lower in after hours in reaction to news: TCON -13.1% (Announced that it has commenced an underwritten public offering of shares of its common stock), ENBL -9.3% (Announced that it has commenced an underwritten public offering of 10 mln common units representing limited partner interests), FGP -4.5% (Lowered its quarterly distribution to $0.10/unit from $0.5125/unit), AAOI -2.9% (Ticking lower in thin trading), BTE -2.4% (Announced deal to acquire heavy oil assets located in the Peace River area of northern Alberta for CAD 65 mln; enters CAD 100 mln bought deal financing).