BofA-ML
SHAWBROOK - Cont strong growth. NIM is stable & asset quality benign (222p).+5%
BEIERSDORF - Strong print with OSG of 3.1%, despite tough comps in qtr(81)+3-4%
VONOVIA - Guide raised to top end of prev range @€760m. Up divi guide (32.5)+3%
REGUS - Stock been weak of late. Update looks inline with H1 result (250p)..+3%
MORRISON - Beat. Total sales exc fuel -1.2% with LFL +1.6% v +1.4% (227.9)..+3%
TATE - Beat across the board. Expects FY PBT to be ahead of guidance (800p).+3%
SOCGEN - Strong with revs 3% & NI 35% ahead. Should drive o/performance (35)+3%
LANCASHIRE - 3Q PBT of 42.9m v 33.7m cons. Combined ratio is -4% (727p)...+2-3%
PROSIEBEN - EBITDA +13%, guidance was for >10%. Revs +15% v 15% cons (e39)..+2%
SHIRE - We add to Europe 1 (our best ideas) list. Stock is too cheap (45.2).+2%
INMARSAT - Revs 2.1% ahead driven by good perf at the Govt segment (745p)...+2%
JRP GROUP - Relief. DB de-risking sales of £414m 12% ahead of cons (125.5p).+2%
OPHIR - Shell commenced drilling of 1st two offshore commitment wells (72p).+2%
HERMES - Sales 2% beat. Growth of 8.8% cFX v est 7%. FY guide upped (374)...+2%
FRAPORT - Inline. FY EBITDA guide raised to E1040-1080m on Manila comp (55).+1%
GAMESA - Secured five new orders for the supply of a total of 304 MW (20.3).+1%
ING - Very small beat v cons. CET1 ratio rises, should be enough (11.7).....+1%
DSM - P&L 4% beat at EBITDA line on inline sales. EPS broadly inline (57.7).+1%
HOCHTIEF - Slightly ahead of Q3 cons, FY2016 guidance fully confirmed (124).+1%
SWISS RE - Beat with NI $1175m v $961m cons & announce 1bn buyback (90.9)...+1%
MINERS - Brent +1.6%, Iron ore +0.5% with BHP OZ +0.4%, RIO OZ -0.5%........u/c
GLENCORE - YTD prodn inline to small beat. Good perf copper & zinc (247)....u/c
CRODA - Constant FX sales +2.5% inline with Q2 trends. Confirm FY (3461p)...u/c
VEOLIA - Mixed. EBIT/NI slightly above cons while Rev/EBITDA 0.5% miss(19)-0.5%
ROCHE - 2 'Dear Investigator Letters' sent on the PIII trial drug (CHF222).-1%
CS - Mixed results, not as good as peers. PBT beat, CET1 10bps better (13)-1-2%
ASML - Announcing a 1.75bn investment in one of its suppliers Zeiss (92)..-1-2%
RANDGOLD - 15% earnings miss v cons & EBITDA 5% miss. Gold output +7% (7425)-2%
DIALOG - Guidance $360m at mid point v cons $373m. Announce buyback (e34.5).-2%
REPSOL - NI €307m looks like small miss,€1.14b EBITDA 3% below our ests (12)-2%
SWISSCOM - Light with revs 0.5% & EBITDA 0.9% below cons but FY reitd(436)-2-3%
EUROPRIS - Rev 3% and EBITDA 10% miss. Expect to see downgrades today (32)..-3%
ADIDAS - Inline with revs +17% cFX v 16.6% cons. FY guidance unch (144.9)...-3%
CS
Adidas -2-3% Operating profit 563m cons 564.9m, sales ahead
Adidas -2-3% Operating profit 563m cons 564.9m, sales ahead
Alstom +0.5% Alstom/Bombardier are only bidders left for E3.7b contract
Ascom +2% Long term targets ahead of investor day look ahead
Axel Sprngr +2% 3Q Sales 801.5m cons 796m, confirms FY forecasts
Beiersdorf +2-3% Q3 organic inline, margin guidance upgraded
Credit Suisse R 3Q net CHF41M, est loss CHF150M
Croda -2% Maintained FY guidance but FX helping
Dufry +1-2% Q3 revs 1.4% ahead, organic growth better
Dialog Semi -1-2% Had pre-announced, Q4 guidance is a little light
Draegerwerk -1-2% EBIT slightly ahead and sales slightly below
DSM +1-2% Q3 EBITDA 323m Cons 310m, Guidance reiterated
Glencore UNCH No's broadly inline small upgrade in marketing guidance
GN Store Nord +2% Organic growth better, guidance confirmed
Fraport -1% Numbers inline guidance small ahead
Genmab +3-5% Guidance raised on strong Darzalex uptake
Howden +2% Solid performance in 2H, on track to meet expectations
Hermes +3% Q3 sales up 8.8% on constant FX vs est +7%
Hochtief M/P Q3 EBT slightly ahead of cons, confirms FY guidance
ING Groep +3-4% PTP at 1.88b cons 1.56b, CET1 at 13.5% vs cons 13.1%
Inmarsat +2-3% Mixed with Maritime weak but Govt & Aviation very strong
Lancashire +3% PBT better, special dividend ahead of expectations
Miners -1% Copper UNCH, Brent +1.85%, Iron Ore UNCH, China +0.95%
Morrison +1% 3Q LFL sales ex-fuel up 1.6%, est up 1.4%
Next -1% CS DOWNGRADE to UNDERPERFORM (Margin worries)
Novo Nord +1% Negative note from Bernstein on Roche's Haemophilia drug
Orpea +1-2% Sales in third quarter increased 16.8%, confident outlook
Randgold -1-2% Guidance challenging, larger mine behind on production
Repsol -2-3% Adj net of 307m, cons of €320m, cashflow weaker
Regus UNCH Marture continues to moderate, stock has been weak
Rheinmetall +2-3% Sales inline, earnings c7.5% ahead, guidance better
Roche -0.5% Negative note from Bernstein on ACE910 which is Haemophilia
Schroders +3-4% AuM and PBT a good beat, inflow encouraging
Scandi Tob -2-3% Q3 revs inline, cuts FY outlook
Shawbrook M/P Net loan growth Q3 is £157m, looking for £300m for FY
Shire +2% Negative note from Bernstein on Roche's Haemophilia drug
Soc Gen +1-2% Q3 net of €1099m cons €886m, beat came from FICC
Swiss Re +2% Net income 22% better vs cons, better performance in P&C
Swisscom -2% Revs ahead, FY16 Guidance Reiterated
Tates +3% Pretax 140m cons circa 125m
Valiant +1-2% 9-month net income CHf81.4m cons 77.3m
Veolia UNCH EBITA 0.6% light, Net 1.7% ahead of cons
Volkswagen +0.5% VW Financial Services raises forecast for 2016
Vonovia +2% LFL rental grwoth +2.8%, Strong valuation uplift
Jefferies first thoughts:
Howden +2% in line update, relief after TPK
Inmarsat +2% numbers good enough, Govt strong, nothing for bears
Morrison +1% Q3 lfl ex-fuel +1.6% vs cons +1.4%
Spirent -2% revenue expectations may have to come down
Tate & Lyle +1% 1H revs in line ..sees FY adj pretax higher
Adidas -2% in line numbers, confirm FY guidance
Beiersdorf +2% 9m TESA org sales +1.2% vs cons +0.6%, raise FY guidance
Cr Suisse +2% Q3 net 41mn v e-150mn, long way to go, outlook challenging
Dialog -3% Q3 in line, but cut Q4 rev guidance
DSM +1% organic growth & EBITDA strong. outlook maintained
Dufry +1% in line Q3s, or growth +1.3% vs our est unch
Genamb +3% Darzalex better than exp
Hermes +3% rev and org growth beat
ING +3% Q3 CET1 13.5%, adj net 1.34bn v e1.15bn, higher interest income
Kloeckner +1% Sl 3Q EBITDA beat, but no increase to FY guidance implies weaker 4Q
Pro7 +1% in line Q3s, upbeat guidance
Repsol -2% Q3 net in line, but net debt worse
Soc Gen +2% Q3 net 1.1bn v e790mn, CET1 11.4%
Swiss Re +2% Q3 net $1.18bn v e931.8m, confirm chf 1bn buyback
Swisscom +1% net income nad EBITDA better, see growing competition domestically
Veolia -1% rev guidance cut but have increased cost savings.
Adidas -2-3% Operating profit 563m cons 564.9m, sales ahead
Alstom +0.5% Alstom/Bombardier are only bidders left for E3.7b contract
Ascom +2% Long term targets ahead of investor day look ahead
Axel Sprngr +2% 3Q Sales 801.5m cons 796m, confirms FY forecasts
Beiersdorf +2-3% Q3 organic inline, margin guidance upgraded
Credit Suisse R 3Q net CHF41M, est loss CHF150M
Croda -2% Maintained FY guidance but FX helping
Dufry +1-2% Q3 revs 1.4% ahead, organic growth better
Dialog Semi -1-2% Had pre-announced, Q4 guidance is a little light
Draegerwerk -1-2% EBIT slightly ahead and sales slightly below
DSM +1-2% Q3 EBITDA 323m Cons 310m, Guidance reiterated
Glencore UNCH No's broadly inline small upgrade in marketing guidance
GN Store Nord +2% Organic growth better, guidance confirmed
Fraport -1% Numbers inline guidance small ahead
Genmab +3-5% Guidance raised on strong Darzalex uptake
Howden +2% Solid performance in 2H, on track to meet expectations
Hermes +3% Q3 sales up 8.8% on constant FX vs est +7%
Hochtief M/P Q3 EBT slightly ahead of cons, confirms FY guidance
ING Groep +3-4% PTP at 1.88b cons 1.56b, CET1 at 13.5% vs cons 13.1%
Inmarsat +2-3% Mixed with Maritime weak but Govt & Aviation very strong
Lancashire +3% PBT better, special dividend ahead of expectations
Miners -1% Copper UNCH, Brent +1.85%, Iron Ore UNCH, China +0.95%
Morrison +1% 3Q LFL sales ex-fuel up 1.6%, est up 1.4%
Next -1% CS DOWNGRADE to UNDERPERFORM (Margin worries)
Novo Nord +1% Negative note from Bernstein on Roche's Haemophilia drug
Orpea +1-2% Sales in third quarter increased 16.8%, confident outlook
Randgold -1-2% Guidance challenging, larger mine behind on production
Repsol -2-3% Adj net of 307m, cons of €320m, cashflow weaker
Regus UNCH Marture continues to moderate, stock has been weak
Rheinmetall +2-3% Sales inline, earnings c7.5% ahead, guidance better
Roche -0.5% Negative note from Bernstein on ACE910 which is Haemophilia
Schroders +3-4% AuM and PBT a good beat, inflow encouraging
Scandi Tob -2-3% Q3 revs inline, cuts FY outlook
Shawbrook M/P Net loan growth Q3 is £157m, looking for £300m for FY
Shire +2% Negative note from Bernstein on Roche's Haemophilia drug
Soc Gen +1-2% Q3 net of €1099m cons €886m, beat came from FICC
Swiss Re +2% Net income 22% better vs cons, better performance in P&C
Swisscom -2% Revs ahead, FY16 Guidance Reiterated
Tates +3% Pretax 140m cons circa 125m
Valiant +1-2% 9-month net income CHf81.4m cons 77.3m
Veolia UNCH EBITA 0.6% light, Net 1.7% ahead of cons
Volkswagen +0.5% VW Financial Services raises forecast for 2016
Vonovia +2% LFL rental grwoth +2.8%, Strong valuation uplift
British satellite communications group Inmarsat has warned its customers are set to feel the pinch from “economic and budgetary” pressures as it reported a climb in its third quarter revenues.
Inmarsat reported a 5.8 per cent rise revenues of $341.9bn in the three months to the end of September, growth of $18.8m from the same period last year.
The company’s significant maritime and enterprise businesses have suffered a 5 per cent decline in sales on the back of a recession in the commercial shipping industry and weakness in international trade.
Sales to global governments rose 9.8 per cent to $84.8m in the quarter, driven by the US market where Inmarsat provides high capacity satellites called Global Xpress (GX). It kept its revenue guidance unchanged at $1.175bn-$1.25bn.
Rupert Pearce, chief executive said:
Trading continues to be challenging, with economic and budgetary pressures affecting our customers generally. We are nevertheless competing aggressively and successfully in each of our core markets and making steady progress with both the commercialisation of GX and in Aviation cabin connectivity.
Last month, Inmarsat announced a landmark deal with telecoms giant Vodafone to provide internet connectivity to far flung parts of the world only accessible to satellite communications for the so-called “internet of things” sector.
The deal has been hailed as the first time the satellite and traditional wireless networks have worked together to provide connectivity for machines and autonomous software applications.
UK Property
1st month of property fund inflows this year
Latest data on property funds show inflows in September for
the first time this year. Normally these flows correlate with
NAV valuation in the listed sector, but this relationship has
recently broken down, as we show.
Property funds saw inflows in September, for the first time this year. Flows into
retail property funds were mildly positive in September, totalling £100 million,
as per data from the IMA (Exhibit 1). This follows a flat showing in August, £0.8
billion outflow in July, and £1.5 billion of outflows in June. So far this year, nearly
£3 billion has been withdrawn from these funds.
Previous months' outflows have been unprecedented. 2016 outflow levels have
been unprecedented; we experienced a quarter with £0.5 billion of net outflows
in the run-up to the global financial crisis (1Q07), and the worst quarter during
the crisis was 4Q08 with a total of £0.3 billion of net outflows (Exhibit 3), which
is nothing like what has happened in 2016.
Some funds have reportedly been cancelling sales as a result. An article in the
Financial Times earlier this week highlighted that some UK open-ended funds are
no longer trying to sell some of their central London buildings as investors have
started putting money back into the sector. It highlights Zurich's Property Fund,
managed by Columbia Threadneedle, which has halted a £100 million sale of
two office buildings in Camden after receiving bids to buy them; while Blackrock's
UK Property Fund has scaled back a portfolio sale known as Project Rio from
£200 million to £85 million following a return to inflows, the article said. Neither
company has commented on the article.
Is search for yield trumping Brexit risk? Spreads in the listed sector vs bond
yields are now at historically wide levels (see Exhibit 4 and Exhibit 5). On an
absolute basis, this has historically been a good moment to invest in the listed
sector, as our backtest shows (Exhibit 6).
Normally flows are correlated with NAV valuation. Normally, outflows from
property funds correlate with NAV valuation in the listed sector. Unless this
inflow month turns out to be a one-off (possible – note that sterling weakness in
October is not captured in these figures), we think this should support NAV
valuation, which is already close to trough levels in a historical context.
Investment thesis – 2017 PE <10x offering a 2017-22e EPS CAGR of 19% (sector
on 14x offering 9%). A push back to our bullish call has been Shire’s high leverage
(>4x net debt/ pro-forma EBITDA though we forecast 2.7x in 2017). We note Shire
is now on a 2017e EV/EBITDA of 10.9x, offering a FCF yield of 8-13% (10%
discount to sector offering 5-8%). With a DCF valuation of £70 and bull-bear of £84-
35 we find the risk-reward compelling. Other favoured pharma plays include
AstraZeneca, Bayer, BMY, Genmab, GSK, LLY, Merck KGaA, and Roche.
Post-Q3 EPS cuts still leave us 7-15% ahead of 17-19e consensus – we
prudently reduce our Hematology forecasts to reflect potential
pricing/reimbursement pressures. We model faster delivery of the $700m Baxalta
synergies, and a stronger outlook for the ADHD and GI franchises. We maintain our
Xiidra estimates; $1.1bn in 2020, $1.8bn in 2025e and a peak in 2030e of $2.5bn.
Given prodigious cash flow we continue to model buybacks of $3-6bn from 2019e.
Share price discounting an overly bearish Hematology outlook. Safety
concerns for ACE910? – we forecast Hematology revenues of $4bn in 2017, with
growth thereafter of 0-3% per annum. All else being equal one needs to assume
Hematology revenue declines of -10% per annum from 2018, at a 100%
contribution margin, for our NPV valuation to fall to the current share price. We view
this as overly pessimistic given underlying volume growth, pipeline considerations
and potential ACE910 safety concerns. Roche has confirmed 4 serious adverse
events in patients treating breakthrough bleeds with a bypassing agent (we assume
FEIBA vs. NovoSeven). A Dear Investigator letter has been issued advising not to
use FEIBA when treating ACE910 patients experiencing breakthrough bleeds.
Thoughts into Nov 10th CMD - We expect Shire to deep dive its Hematology and
IVIG franchises (40% of sales), as well as highlight pipeline assets SHP647 (modsevere
IBD), SHP607 (RoP) and SHP621 (eosinophilic esophagitis). Our current
peak sales forecasts are modest at $400m, $100m and $80m (2% of group).
Dow -0.43% S&P -0.65% Nasdaq -0.93% Russell -1.31%
US Market continue to trade lower as US Election take the lead over FOMC. Oil was also a negative catalyst today, EIA confirmed a larger-than-expected build in crude oil inventorie. The energy component settled lower by 2.9% ($45.31/bbl; -$1.37). FOMC opted to leave the target range for the fed funds rate unchanged at 0.25% to 0.50% while stating that the case for moving rates higher had strengthened. Interestingly enough, only two FOMC members dissented at this meeting as Boston Fed President Eric Rosengren rejoined the majority. Tech under pressure before FB numbers. Volume were above average a 970mil shares. US After Hours ZUMZ +10%, WMGI +5%, WFM +5% following earnings/guidance/SSS, IQNT +34% on acquisition news, MSCC +12% on sale speculation... FIT -30%, DPLO -27%, FB -7%, WYNN -6% following earnings/guidance/SSS. Mexican Peso fall and safe-haven JPY / US Treasuries rise as both Fox News and CNN report citing sources that FBI is considering indictment of Hillary Clinton related to her use of private server; "99% confidence" that server has been hacked by 5 foreign intelligence agencies. China Caixin Services PMI hits a 4-month high and Composite a 3-year high; Rate of employment reduction the slowest in 17 months and input prices rise at fastest rate in over 5 years. Hong Kong PMI falls to 3 month low and remains in contraction for 20 straight months.
Nikkei -1.76% Hang Seng -0.17% CSI +0.92% Shanghai +0.75%
Eur$ 1.1124 CNH 6.7688 CNY 6.7590 JPY 102.61 GBP 1.2355 CHF 0.9697 RUB 63.4938 WTI$ 45.66 +0.71%
S&P -0.25% EuroStoxx -0.17% Dax -0.15% FTSE -0.14% SMI -0.36%
Macro :
- SocGen Aims to Limit Market Risks Ahead of US, European Votes
- Switzerland October Consumer Confidence -13 vs Est. -13
- U.S. Individual Investor Bulls at Lowest Since Brexit Vote: AAII
- Fed Fund Futures Pricing Around 78% Odds of December Rate Hike
Keep an eye on :
- ADS GY : Adidas 3Q Operating Profit In Line With Ests., Confirms Outlook Adidas Confirms Outlook, 3Q FX-Neutral Sales Up 17%
- AF FP : Air France Said to Create New Co. for Long-Haul Flights: Figaro
- SPR GY : Axel Springer 9M Ebitda Rises on Continued Growth in Classifieds
- BMPS IM : Atlas Showed Interest for Paschi in Bank Road Show, MF Reports
- CRG IM : Banca Carige Said to Object to ECB Request on NPL Plan: Il Sole
- CSGN VX : Credit Suisse 3Q Net Revenue Drops 9.8%; GM Revenue Down 14%
- DL NA : Delta Lloyd Asked Adviser to Find Other Bidders: Telegraaf
- DBK GY : Deutsche Bank Seen Hardest-Hit by New Capital Rules: Reuters
- DBK GY : Deutsche Asset Management Said to Seek EU1t AuM: Handelsblatt
- DLG GY : Dialog Semi 4Q Rev. Outlook Midpoint Misses Ests.
- DSM NA : DSM 3Q Ebitda Beats Estimates, 2016 Outlook Maintained
- DUFN VX : Dufry Posts Positive 3Q Organic Sales Growth, Rev. In Line
- DRW3 GY : Draegerwerk Confirms 3Q Pre-Released Results; Posts 3Q Profit
- ENGI FP : Engie to Announce Closure of Australia’s Hazelwood Plant: ABC
- EVK GY : Evonik Faces Increasing Methionine Risk, Cut to Hold: Berenberg
- FRA GY : Fraport 3Q Revenue Beats, Raises FY Ebitda Guidance
- FPE3 GY : Fuchs Petrolub 9-Mo. Sales Rise Y/y; Adjusts Guidance Higher
- GFS LN : G4S Raised to Hold at Deutsche Bank, PT 220p
- GN DC : GN 3Q Net Misses Estimates, Revenue Beats; Outlook Maintained
- RMS FP : Hermes 3Q Total, Leathergoods Sales Growth Beats Estimates
- HOT GY : Hochtief 3Q Operational Profit Rises, Confirms Forecast
- INGA NA : ING 3Q Underlying Profit Beats Ests.; CET1 Ratio Rises
- KCO GY : Kloeckner 9-Month Ebitda Doubles; FY Ebitda Guidance Narrowed
- NOVOB DC : Novo Poised for Competition in Hemophilia Market From Roche
- ORP FP : Orpea 3Q Rev. EU725M; Co. Says Will Exceed FY Growth Forecast, Orpea Says It Will Exceed 2016 Sales Target as 3Q Revenue Gains
- QIA GY : Qiagen Plans Restructuring, Hurting 2016 EPS Guidance
- RBI AV : Raiffeisen Landesbank CEO Declines to Head Merged Unit: Presse
- RHM GY : Rheinmetall Raises FY Sales Forecast, 9-Mo Profit Increases
- GLE FP : SocGen 3Q Net Income Beats, Declines 2.4% Y/y; CET1 Ratio 11.4%
- GLE FP : SocGen Aims to Limit Market Risks Ahead of US, European Votes
- SHP LN : Shire Rises; Bernstein Says Roche Has Adverse Events on ACE910
- SOP FP : Sopra Steria 3Q Organic Growth Up 4.7%; Confirms 2016 Forecast
- SCMN VX : Swisscom 3Q Profit Beats Ests.; Keeps Outlook Unchanged
- SREN VX : Swiss Re 3Q Net Better Than Expected, to Buy Back Up to CHF1b
- VIE FP : Veolia 9-Month Rev. Falls, Sees Stable Revenue for FY 2016
- VONN SW : Vontobel Sells 4% Helvetia Stake to Patria
- VOW3 GY : Volkswagen Financial Services Raises Forecast: Boersen-Zeitung
- VOw3 GY : VW Said to Near Agreement on Cost Savings Plans: Handelsblatt
>>> Up
*BAT Raised to Overweight at Morgan Stanley
*BAE Raised to Overweight at Morgan Stanley, PT 630p
* Dixons Carphone Raised to Equal-Weight at Morgan Stanley
*Imerys Raised to Buy at AlphaValue
* Shell Raised to Overweight at JPMorgan
*Statoil Raised to Overweight at JPMorgan
*SYDBANK RAISED TO BUY AT NORDEA
>>> Down
*Eni Cut to Underweight at JPMorgan
*Galp Cut to Neutral at JPMorgan
*ISS CUT TO HOLD AT NORDEA
*Next Cut to Underperform at Credit Suisse, PT 4600p
* Repsol Cut to Underweight at JPMorgan
* Saras Cut to Equal Weight at Barclays
* Total Cut to Neutral at JPMorgan
>>> PT Change
>>> Initiation
*Cineworld Group Rated New Buy at HSBC, PT 720p
* Nets Rated New Neutral at UBS, PT DKK140
* Nets Rated New Overweight at Morgan Stanley, PT DKK160
* Nets Rated New Buy at Deutsche Bank, PT DKK150
>>> Call
>> Stock
*SHIRE ADDED TO EUROPE 1 LIST AT BOFAML
Asia Mid-Session Market Update: China Caixin Services PMI improves while Hong Kong Composite PMI slumps; Sentiment stressed by reports of expanded FBI investigation of Clinton server
***US Session Highlights***
- (US) Oct ISM New York: 49.2 v 49.6 prior (3rd straight month below 50, in contraction)
- (US) OCT ADP EMPLOYMENT CHANGE: +147K V +165KE; back month revised above 200K
- (US) DOE CRUDE: +14.4M V +1ME; GASOLINE: -2.2M V -1ME; DISTILLATE: -1.8M V -1.5ME (largest crude build on record)
- FOMC holds target rate range at 0.25-0.50%; Statement repeats: case for rate hike has strengthened; near-term risks to economy 'roughly balanced'; **Dec rate hike probability still just under 70%
***US markets on close: Dow -0.4%, S&P500 -0.7%, Nasdaq -0.9%***
- Best Sector in S&P500: Consumer Goods
- Worst Sector in S&P500: Basic Materials
- Biggest gainers: ABC +8.8%, HSIC +6.2%, ZTS +6.1%, MCK +5.1%, DVN +4.9%
- Biggest losers: FTR -13.7%, CERN -7.3%, TGNA -7.2%, NRG -7.0%, EL -5.5%
- At the close: VIX 19.3 (+08pts); Treasuries: 2-yr 0.83% (flat), 10-yr 1.80% (-2bps), 30-yr 2.56% (-1bps)
***US movers afterhours***
- IQNT: Agrees to be Acquired by GTCR for $23/shr cash (37% premium) in $800M deal; 30 day go shop period; +34.1% afterhours
- ZUMZ: Reports Oct SSS +10.2% y/y; Raises Q3 $0.35-0.36 v $0.30e (prior $0.29-0.30); +9.5% afterhours
- TTWO: Reports Q2 $0.45 v $0.29e, R$420.2M v $405Me; +4.8% afterhours
- WFM: Reports Q4 $0.28 v $0.24e, R$3.5B v $3.51Be; Increases dividend; eliminates Co-CEO structure; appoints John Mackey CEO, effective immediately; +3.5% afterhours
- MRO: Reports Q3 -$0.11 (adj) v -$0.19e, R$1.23B v $1.09Be; +1.7% afterhours
- CAR: Reports Q3 $2.47 v $2.34e, R$2.66B v $2.62Be; +1.2% afterhours
- FSLR: Reports Q3 $1.22 v $0.69e, R$688M v $967Me; -0.8% afterhours
- ZNGA: Reports Q3 -$0.05 v $0.01e, R$182.4M v $188Me; Adds $200M buyback (8.5% of market cap); -2.6% afterhours
- WYNN: Reports Q3 $0.75 v $0.79e, R$1.11B v $1.13Be; -6.2% afterhours
- FB: Reports Q3 $1.09 (adj) v $0.98e, R$7.01B v $6.92Be; -7.1% afterhours
- DPLO: Reports Q3 $0.21 v $0.24e, R$1.18B v $1.26Be; -27.4% afterhours
- FIT: Reports Q3 $0.19 v $0.19e, R$503.8M v $504Me; CUTS FY16 guidance; -29.7% afterhours
***Asia Session Notable Observations, Speakers and Press***
- S&P500 futures, Mexican Peso fall and safe-haven JPY / US Treasuries rise as both Fox News and CNN report citing sources that FBI is considering indictment of Hillary Clinton related to her use of private server; "99% confidence" that server has been hacked by 5 foreign intelligence agencies.
- China Caixin Services PMI hits a 4-month high and Composite a 3-year high; Rate of employment reduction the slowest in 17 months and input prices rise at fastest rate in over 5 years; Resident economist urges supportive monetary/fiscal policies to continue so as to sustain the recovery.
- Hong Kong PMI falls to 3 month low and remains in contraction for 20 straight months; rate of decline in new work from mainland China the sharpest in 4 months and staffing costs rise for 2nd month amid lower new business inflows.
- Australia trade balance in deficit for 29th straight month, but deficit the smallest in 20 months; Imports fall 1% m/m while exports rise 2%, as shipments of Coal and value of exports to China rise to 1-year highs.
- ANZ up slightly despite lower Profit and Rev in FY16. NIMs down 4bps, ROE down 160bps, and final dividend reduced by 16% y/y.
***Asia Key economic data:***
- (CN) CHINA OCT CAIXIN CHINA SERVICES PMI: 52.4 V 52.0 PRIOR; 4-month high
- (HK) HONG KONG OCT COMPOSITE PMI: 48.2 V 49.3 PRIOR; 20th consecutive month of contraction; 3-month low
- (SG) SINGAPORE OCT PMI COMPOSITE: 50.5 V 52.9 PRIOR; lowest since May 2016
- (AU) AUSTRALIA SEPT TRADE BALANCE (A$): -1.2B V -1.7BE; 29th consecutive month of deficit, smallest deficit in 20 months
- (AU) AUSTRALIA OCT AIG PERF OF SERVICES INDEX: 50.5 V 48.9 PRIOR; first expansion in 3 months
***Asian Equity Markets (00:30ET)***
- Nikkei -1.8%, Hang Seng -0.1%, Shanghai Composite +0.6%, ASX200 flat, Kospi +0.3%
***FX ranges/Commodities/Futures/Fixed Income (00:30ET):***
- EUR 1.1090-1.1125; JPY 102.55-103.45; AUD 0.7635-0.7685; NZD 0.7280-0.7310
- Dec Gold +0.2% at 1,306/oz; Dec Crude Oil +0.9% at $45.74/brl; Copper +0.1% at $2.22/lb
- SLV: iShares Silver Trust ETF daily holdings fall to 11,148 tonnes from 11,235 tonnes prior ; 2-month low
- Equity Futures: S&P e-mini -0.3%, Dax -0.3%, FTSE100 -0.2%
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.7491 V 6.7562 PRIOR; 2nd straight firmer setting; strongest Yuan setting since Oct 20th
- (CN) PBOC to inject CNY30B in 7-day reverse repos, CNY20B in 14-day reverse repos, and CNY20B in 28-day reverse repos
***Asia movers***
- Consumer discretionary: Wynn Macau 1128.HK -4.2% (Q3 result); Fairfax Media FXJ.AU -3.7% (guidance); Domino's Pizza DMP.AU +4.3% (Morgan Stanley raises PT); Reliance Worldwide Corp RWC.AU +0.7% (JPMorgan raised to overweight); Nine Entertainment Co Holdings NEC.AU +5.3% (Credit Suisse raised to outperform)
- Consumer staples: Warrnambool Cheese & Butter WCB.AU +5.2% (H1 result)
- Financials: Vanke 000002.CN +0.2% (Oct result); Hong Kong Exchanges & Clearing 388.HK -1.1% (Q3 result); BT Investment BTT.AU +4.5% (FY16 result); Guangzhou R&F 2777.HK +0.4% (Oct result); Scentre Group SCG.AU -0.6% (Q3 result); ANZ Bank ANZ.AU +0.5% (FY16 result)
- Industrials: Geely Automobile Holdings175.HK +0.7% (Oct result); Virgin Australia VAH.AU -1.3% (UBS cuts to sell); CSR CSR.AU +3.6% (Ord Minnett raised to hold); Boral BLD.AU -5.5% (guidance)
- Technology: Xero XRO.AU +2.7% (H1 result)
- Materials: Whitehaven Coal WHC.AU +1.5% (Credit Suisse raised to outperform)
- Energy: Sinopec Shanghai Petrochemical 338.HK -0.8% (JPMorgan cuts to neutral)
- Healthcare: Mayne Pharma MYX.AU +8.2% (starts selling sulfate extended-release tables in US);Unilife Corp UNS.AU -4.8% (Q4 result)
After Hours Summary: ZUMZ +10%, WMGI +5%, WFM +5% following earnings/guidance/SSS, IQNT +34% on acquisition news, MSCC +12% on sale speculation... FIT -30%, DPLO -27%, FB -7%, WYNN -6% following earnings/guidance/SSSAfter Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance/SSS: AREX +22.2% (also announces strategic alliance and deleveraging transactions), HIIQ +14.7%, XENT +10.8%, KTOS +10.3%, ZUMZ +9.5% (reports October same store sales of +10.2%, raises Q3 EPS guidance), QGEN +7.8% (ticking higher), XPO +6.9%, AMRS +5.8%, AHP +5.6% (also appoints Richard J. Stockton as the CEO effective November 14, 2016), HUBS +5.6%, HDSN +5.6%, WMGI +4.9% (also enters into a Master Settlement Agreement to settle 1,292 specifically identified CONSERVE, DYNASTY or LINEAGE revision claims; final MSA settlement amount), TTWO +4.8%, UVE +4.8% (ticking higher), HBM +4.7%, ALL +4.1% (ticking higher), AVD +4%, WFM +5.2% (also announces changes to the leadership structure, including transitioning from co-Chief Executive Officers to a sole Chief Executive Officer, with co-Founder John Mackey to serve in that capacity), HOLX +3.2%, DVA +3.1%, APTI +3.1%, RIG +2.9%, OME +2.1% (also discloses in 10Q that in October it received a Civil Investigative Demand from the U.S. Department of Justice requesting information in connection with a False Claims Act investigation), KGC +1.8% (ticking higher), MRO +1.7%
Companies trading higher in after hours in reaction to news: TLOG +43.2% (TetraLogic Pharmaceuticals to sell its SMAC mimetic program, including its clinical stage asset birinapant, and its topical HDAC inhibitor, SHAPE, to Medivir for $12 mln in cash as well as future milestones of up to $153 mln), IQNT +34.1% (Inteliquent to be acquired for $23.00/share in cash or approx. $800 mln by an affiliate of GTCR), AUPH +20.2% (plans for a single Phase III clinical trial for voclosporin in the treatment of lupus nephritis), MSCC +12.1% (reports Microsemi has seen interest from Skyworks, may seek other bidders)
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: FIT -29.7%, DPLO -27.4%, PLPM -21% (also authorized additional share repurchase), PACB -14.4% (also filed a complaint with the U.S. International Trade Commission against Oxford Nanopore Technologies Ltd. and its affiliates), ALIM -12.9%, RUBI -11.1% (also announces workforce reduction), ACLS -9.3%, TVIA -9.3% (light volume), PEIX -8.7%, FB -7%, FRSH -7%, WYNN -6.2%, TNH -5.8% (thinly traded), UNIS -4.7%, HOS -4.1%, PAGP -3.4%, DWCH -3.4% (earnings and update of strategic review of alternatives process), XEC -2.8%, CF -2.8%, FTK -2.7% (also announced a cooperative agreement with Anton Oilfield Services Group of Hong Kong providing a key entrance in the China and other key Eastern Hemisphere markets), AIG -2.6%, ZNGA -2.6%, GNK -2.6% (thinly traded), CLR -2.4%, GDDY -2.3%, HABT -1.8%
Companies trading lower in after hours in reaction to news: GPRO -5.4% (FIT sympathy), WING -2.5% (announces that a stockholder intends to offer for sale in an underwritten secondary offering 6,765,858 shares of the co's common stock pursuant to the co's shelf registration statement filed with the SEC), GPS -0.7% (announces CFO Sabrina Simmons will be leaving the company at the end of the year), SWKS -0.7% (reports Microsemi has seen interest from Skyworks, may seek other bidders), MRVL -0.5% (announces restructuring actions, including the elimination of approx. 900 positions, that it expects will lower annual operating expenses from a current annualized run rate of $1.08 billion to the $820-840 million range)
Casino/gaming names are under pressure following Wynn Resorts (WYNN) earnings: MGM -1.3%, MPEL -1.2%