(Gavekal) VIX Flirting with Pre-GFC Lows, Uncertainty at All-Time Highs. Huh?



From: LAURENT CHEKROUN (MAKOR SECURITIES LO) At: 01/11/17 22:13:54
Subject: (Gavekal) VIX Flirting with Pre-GFC Lows, Uncertainty at All-Time Highs. Huh?
VIX Flirting with Pre-GFC Lows, Uncertainty at All-Time Highs. Huh? - http://bit.ly/2j8VwJ5
Recently, we have highlighted a number of divergent trends between ‘soft’ data and ‘hard’ data in both Europe and the US. For the most part, improving survey responses remain unconfirmed by the quantifiable information currently available. The surge in the economic policy uncertainty index is no exception.
In 2016, uncertainty rose around the world, led by the UK (unsurprisingly).
With that rise in policy uncertainty, we would have expected to see an increase in market volatility. After all, through 2015, major spikes in the simple average of the above policy uncertainty indexes coincided with a significant (above 30) rise in the VIX.
Last year, with the exception of a Brexit-related spike to 26 and an even smaller surge in reaction to the US election in November, the VIX averaged just under 16 (about 25% lower than its ten-year average of more than 21).
While the average level of economic policy uncertainty fell somewhat from November to December, it remains quite elevated versus the VIX at 11.49 today (about one point above its low near 10 back in early 2007).
In a reversal of the trends we have observed elsewhere (positive survey data, unconfirmed by the numbers themselves), the ‘hard’ data here seems to be telling us everything is a-ok while the policy uncertainty data would indicate cause for concern.

>>> Mediaset owner Fininvest denies knowledge about offer of Vivendi stake to en

Mediaset owner Fininvest denies knowledge about offer of Vivendi stake to end dispute (translated)

Fininvest, the holding of the Berlusconi family that controls Mediaset [BIT:MS] has denied any knowledge of an offer from Vivendi [EPA:VIV] to end a dispute between Mediaset and Vivendi, Italian-language daily Il Messaggero reported. The report cited a Fininvest spokesperson who was responding to newswire claims that Fininvest had been offered a stake in Vivendi in order to end a dispute between the two companies over Mediaset.
According to a report in Italian language daly Il Sole 24 Ore that cited newswires, Vivendi is offering to make Fininvest a principal shareholder in the French media group in exchange for handing over control of Mediaset to Vivendi.
The report noted that Vivendi has built up a stake of just under 30% in Mediaset following legal action taken by the Italian media group and Fininvest after the French media group decided to pull out of a deal to acquire Mediaset Premium, Mediaset's pay TV arm.
Mediaset has a market cap of EUR 5.15bn.
Il Messaggero article sourced from print copy: page 17
Il Sole article sourced from print copy: page 28

>>> Formula One may have Ferrari as shareholder

Formula One may have Ferrari as shareholder
Ferrari, the luxury car group owned by FCA [BIT:FCA], could take up to a 5% stake in Formula One, the company that runs the Formula 1 racing sport, the Italian-language Carlo Festa blog reported.

The report cited market rumours claiming that Formula One owner Liberty Media [LMCA:NASDAQ] is offering stakes of up to 5% to any Formula 1 racing team. The item said that Ferrari is one of the teams to have come forward and is interested in taking a 5% stake.

The item noted that Liberty Media is selling up to a 22% stake of Formula One to a number of Formula 1 racing teams, with each team restricted to a maximum 5% holding. The report said that Liberty is selling the stakes at a 15% discount to the amount it paid to take control of Formula One last year.

The item said that this would mean that Ferrari would pay EUR 200m for the stake.

>>> What to look at today - 12th of January 2017

Dow +0.50% S&P +0.28% Nasdaq +0.21% Russell +0.17%
US Market closed higher. stock market held a modest gain going into President-elect Trump's first news conference since winning the presidential election. However, the market gave back all of its gains and more after Mr. Trump expressed a desire to bring back pharmaceutical operations to the United States and voiced support for competitive drug price bidding. IBB Closed down -3%. No comments made on infrastructure spending. Telecom services (-0.5%) and real estate (-0.5%) also finished in negative territory, while the remaining eight spaces closed in the green. Energy (+1.2%) topped the day's leaderboard, piggybacking on crude oil's climb. The commodity finished higher by 2.7% at 52.20/bbl amid reports that Saudi Arabia, the world's top exporter, plans to cut supply to Asia. Crude extended its gain despite a big inventory build that was revealed by the latest stockpile data. Technology closed higher again. US After Hours AAOI +20% and KBH +3.4% earnings/guidance strength lifting optical and homebuilder names. Asian equity markets are mixed, but the sentiment may be turning more bearish as evidenced by a 7pt slide in S&P emini futures and a rally in JPY, leading to outsized declines in Tokyo stocks. Shanghai Composite is still marginally positive, though S&P/ASX200 is slightly lower. In FX majors, USD/JPY is down some 100pips from the highs below ¥114.50, GBP/JPY is at 6-week lows below ¥140, and EUR/JPY down 80pips below ¥121.40. Brazil central Bank cut rates by a wider than expected 75bps (50bp expected) to 13.00% - the largest cut since 2012. BCB also lowered its 2017 and 2018 inflation projections as it signalled an intensification of monetary easing to address disinflation, weak economic growth, and expectations of more uncertainty in global economy. MOFCOM spokesman Sun Jiwen: China faces big trade downward pressure this year.

Nikkei -1.19% Hang Seng -0.61% CSI -0.29% Shanghai -0.33%

Eur$ 1.0630 CNH 6.8880 CNY 6.9097 JPY 114.32 GBP 1.2239 CHF 1.0102 RUB 59.73 WTI$ 52.34 +0.17%

S&P -0.25% EuroStoxx -0.12% FTSE -0.07% Dax-0.10% SMI -0.79%

Macro :
- Fed’s Dudley Says Economy Needs Trustworthy Banking System
- U.S. Said to Prepare WTO Complaint Against China on Aluminum
- E&P M&A Not Seen Occurring, SocGen Says; COP, ECA, PXD Upgraded

Keep an eye on :
- ATLN VX : J&J, Actelion Said to Reach Tentative Agreement on Price
- AF FP : Air France CEO Sees ‘Difficult Year’ as Oil, Interest Rates Rise
- AREVA FP : Areva Says French Govt May Offer EU4.5/Shr to Minority Investors (vs 5.20 closed on th 10th of Jan)
- BAYN GY : Bayer, Monsanto CEOs Met With Trump to Pitch Merger: WSJ
- ENI IM : Eni Says EST Plant at Sannazzaro Refinery Still Shut After Fire
- RACE IM : Formula One may have Ferrari as shareholder - Carlo Festa Blog
- FCA IM : Fiat Chrysler Names Daphne Zheng China COO Effective Immediately
- FCA IM : FCA CEO Said to See Good Chance of Hitting 2018 Targets: Reuters
- GSK LN : Glaxo Rejected in IPR Requests of Two FibroGen Patents
- HLE GY : Hella Increases 1H Rev., Adjusted Ebit, Confirms FY Guidance
- HSBA LN : HSBC to Pay $45 Million to Settle Euribor Price-Fixing Case
- LSE LN : Draghi: ECB Must ‘Carefully’ Analyze Deutsche Boerse-LSE Merger
- MS IM : Fininvest Says Co. Didn’t Receive Any Proposal From Vivendi
- MERY FP : Mercialys: 2016 Full-Year Activity: Excellent Performance in a Challenging Market Environment
- NDA SS : Nordea Vice Chairman Ehrling May Leave Board, DI Reports
- NOVN VX : Novartis Drug Backed by U.K.’s NICE for Advanced Kidney Cancer
- CFR VX : Richemont 3Q LFL Sales Rise 5%, Beating Estimates as Asia Gains
- SAND SS : Sandvik May List SMT Unit on Stockholm Stock Exchange, DI Says
- SHP LN : Irish Drugmaker Shire Will Pay $350 Million Over Kickbacks
- SW FP : Sodexo 1Q Sales Decline 2.2%, Hurt by Weakness in France
- SZU GY : Suedzucker Raises Full-Year Profit Forecast
- UBI IM : UBI Offers 1 Euro for ‘Good Banks’ Marche, Etruria, Chieti
- VIV FP : Fininvest Says Co. Didn’t Receive Any Proposal From Vivendi
- VOW3 GY : Lower Saxony Says VW Deal With U.S. ‘Significant Progress’
- VOW3 GY : VW Pleads Guilty as U.S. Charges Five More in Diesel Scandal

>>> Europe : Brokers Upgrades & Downgrades - 12th of January 201

>>> Up
*Adecco Raised to Hold at Deutsche Bank
*Aegon Raised to Buy at SocGen
*Balder Raised to Hold at Nordea Securities, PT SEK175
*Banco Popular Raised to Buy at HSBC, PT EU1.45
*Bankinter Raised to Hold at Fidentiis Equities, PT EU7.75
*CaixaBank Raised to Buy at Fidentiis Equities, PT EU3.60
*Conoco Raised to Buy at SocGen
*Hays Raised to Hold at Deutsche Bank
*Liberbank Raised to Buy at Fidentiis Equities, PT EU1.20
*Pagegroup Raised to Hold at Deutsche Bank
*Prudential Raised to Hold at SocGen
*Randstad Raised to Hold at Deutsche Bank
*SEB Raised to Buy at SocGen, PT SEK107
*UBS Raised to Buy at SocGen
*Unibail-Rodamco Raised to Buy at ING

>>> Down
*CaixaBank Cut to Hold at HSBC, PT EU3.24
*Cobham Cut to Sell at SocGen, PT 132p
*Disney Cut to Sell at Pivotal, PT $85
*Handelsbanken Cut to Sell at Arctic Securities, PT SEK108
*Hanover Cut to Underperform at KBW, PT $81
*Hufvudstaden Cut to Sell at Nordea Securities, PT SEK134
*Inmarsat Cut to Neutral at Citi
*Jumbo Cut to Neutral at Beta Securities, PT EU13.60
*Publicis Cut to Hold at Pivotal, PT EU73
*SEB Cut to Hold at Arctic Securities, PT SEK100
*Wallenstam Cut to Sell at Nordea Securities, PT SEK62
*Wereldhave Cut to Hold at ING
*Wolseley Cut to Hold at Liberum
*WPP Cut to Hold at Pivotal, PT 1820p
*Zurich Ins. Cut to Sell at SocGen, PT CHF235

>>> PT Change


>>> Initiation
*CNP Assurances Rated New Hold at SocGen, PT EU18
*Deutsche Wohnen Rated New Neutral at Natixis, PT EU32
*Elis Rated New Neutral at Credit Suisse, PT EU17.50
*Granges Rated New Buy at ABG Sundal, PT SEK126
*Kaufman & Broad Rated New Buy at Oddo & Cie, PT EU43
*Kid Rated New Buy at Fondsfinans, PT NOK45
*LEG Immobilien Rated New Reduce at Natixis, PT EU68
*Uniper Rated New Buy at Goldman, PT EU16.60
*Volati Rated New Hold at Nordea Securities, PT SEK78
*Vonovia Rated New Neutral at Natixis, PT EU32
*Wirecard Rated New Outperform at KBW, PT EU52
*Worldpay Rated New Outperform at KBW, PT 330p

>>> Call
>> Sector
*European Staffing Sector View Raised to Hold at Deutsche Bank

Elec­tra­bel et EDF en­terrent les re­cours contre la taxe nu­cléaire

Elec­tra­bel et EDF en­terrent les re­cours contre la taxe nu­cléaire

C’est of­fi­ciel: les pro­prié­taires des cen­trales nu­cléaires belges re­noncent à toutes leurs pro­cé­dures contre la taxe nu­cléaire. La fin d’un conflit en­tamé en 2008.

La mi­nistre de l’Éner­gie Ma­rie-Chris­tine Mar­ghem (MR) a reçu ce mardi – à 16 heures 24, pré­cise-t-elle – une lettre d’Elec­tra­bel confir­mant son dé­sis­te­ment pour le re­cours en­core pen­dant contre la taxe nu­cléaire de­vant la Cour consti­tu­tion­nelle. "Nous de­man­dons éga­le­ment le re­trait de la plainte que nous avions in­tro­duite de­vant la Com­mis­sion eu­ro­péenne. Et avec l’État belge, nous al­lons de­man­der la mise au rôle gé­né­ral de l’af­faire en­core pen­dante de­vant la Cour d’ap­pel. Nous re­ti­rons donc toutes nos pro­cé­dures en la ma­tière", confirme Anne-So­phie Hugé, porte-pa­role d’Elec­tra­bel.

EDF Bel­gium et EDF Lu­mi­nus ont confirmé la même dé­marche dans un cour­rier reçu par la mi­nistre le 6 jan­vier: ils re­noncent à tous les re­cours pen­dants et nou­vel­le­ment in­tro­duits contre la taxe nu­cléaire.

La conven­tion d’ap­pli­ca­tion

Avec le vote de la loi sur la taxe nu­cléaire nou­velle mou­ture le 22 dé­cembre der­nier et sa pu­bli­ca­tion au Mo­ni­teur belge le 29 dé­cembre, la conven­tion conclue entre l’État belge et Elec­tra­bel est en effet enfin en­trée en vi­gueur. Une conven­tion si­gnée le 30 no­vembre 2015 au­tour de la pro­lon­ga­tion de Doel 1 et 2, et qui pré­voit qu’une fois la conven­tion d’ap­pli­ca­tion et aussi long­temps que l’État belge res­pecte ses en­ga­ge­ments, Elec­tra­bel et sa mai­son-mère Engie s’en­gagent à sus­pendre leurs re­cours por­tant sur les taxes nu­cléaires pour les an­nées 2008 à 2014, et à ne pas en in­tro­duire de nou­veaux.

"C’est une si­tua­tion com­plète-ment as­sai­nie et clô­tu­rée, ce qui est une bonne nou­velle." Ma­rie-Chris­tine Mar­ghem
EDF Lu­mi­nus, qui dé­tient une par­ti­ci­pa­tion d’un peu plus de 10% dans les quatre ré­ac­teurs les plus ré­cents, et EDF Bel­gium, qui dé­tient 50% de Ti­hange 1, s’étaient en­ga­gés à faire de même, une fois les mo­da­li­tés de la conven­tion d’ap­pli­ca­tion.

"Je tiens à dire que c’est une si­tua­tion com­plè­te­ment as­sai­nie et clô­tu­rée, ce qui est quand même une bonne nou­velle", a sou­li­gné Ma­rie-Chris­tine Mar­ghem mardi en com­mis­sion éco­no­mie de la Chambre, où elle était in­ter­ro­gée par l’Ecolo Jean-Marc Nol­let sur la ques­tion.

Pro­cé­dures en pa­gaille

C’est la fin d’un long bras de fer ju­di­ciaire, qui avait été en­tamé en 2008. À l’époque, le mi­nistre de l’Éner­gie Paul Ma­gnette (PS) avait im­posé une taxe de 250 mil­lions aux pro­duc­teurs d’élec­tri­cité d’ori­gine nu­cléaire. Fin 2011, Mel­chior Wa­the­let (cdH) l’avait fait pas­ser à 550 mil­lions d’eu­ros, avec des ris­tournes en cas d’in­dis­po­ni­bi­lité des ré­ac­teurs.

Une taxe contre la­quelle Elec­tra­bel et EDF se sont bat­tus avec toutes les armes pos­sibles:

• Pas moins de quatre re­cours en an­nu­la­tion ont été in­tro­duits de­vant la Cour consti­tu­tion­nelle concer­nant cette taxe par les pro­prié­taires des ré­ac­teurs – res­pec­ti­ve­ment pour les an­nées 2008, 2012, 2013 et 2014. Les trois pre­miers ont été re­je­tés, la Cour don­nant rai­son à l’État belge. Le qua­trième était tou­jours pen­dant.

• Elec­tra­bel avait aussi ré­clamé le rem­bour­se­ment des sommes ver­sées de 2008 à 2011 de­vant le tri­bu­nal de pre­mière ins­tance de Bruxelles. Sa de­mande avait été re­je­tée, mais Elec­tra­bel avait in­ter­jeté appel – une pro­cé­dure qui était elle aussi tou­jours en cours.

• Elec­tra­bel avait aussi in­tro­duit en sep­tembre 2014 une plainte de­vant la DG Concur­rence de la Com­mis­sion eu­ro­péenne contre les taxes de 2008 à 2013, es­ti­mant que ne viser que les pro­duc­teurs d’élec­tri­cité nu­cléaire re­ve­nait à ac­cor­der une aide d’État illé­gale aux autres pro­duc­teurs d’élec­tri­cité.

• Cou­rant 2016, EDF Lu­mi­nus et EDF Bel­gium avaient in­tro­duit un nou­veau re­cours de­vant la Cour consti­tu­tion­nelle, vi­sant cette fois la taxe de 2015 – mais sans Elec­tra­bel cette fois. Un re­cours in­tro­duit à titre conser­va­toire, ex­pli­quait alors EDF Lu­mi­nus, toutes les lois né­ces­saires pour que la conven­tion entre en vi­gueur n’ayant pas en­core été ef­fec­ti­ve­ment vo­tées.

C’est au­jour­d’hui chose faite. Pour rap­pel, trois sys­tèmes se com­binent dé­sor­mais: une re­de­vance va­riable sur Ti­hange 1, une re­de­vance for­fai­taire de 20 mil­lions sur Doel 1 et 2, et une taxe va­riable sur les autres ré­ac­teurs, fixée à 38% de la marge de pro­fi­ta­bi­lité, avec un mi­ni­mum de 150 mil­lions d’eu­ros pour les trois pre­mières an­nées, 2017, 2018 et 2019.

>>> US After Hours Summary: AAOI +20% and KBH +3.4% earnings/guidance


After Hours Summary: AAOI +20% and KBH +3.4% earnings/guidance strength lifting optical and homebuilder names

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: AAOI +20.1%, LTRX +13.6%, VISI +5.2%, KBH +3.4%

Companies trading higher in after hours in reaction to news: HSGX +41.4% (announces an online publication in the American Journal of Sports Medicine; results from the two studies indicate that NeoCart is a safe & effective treatment for articular cartilage lesions through 5-year follow-up), ALIOY +4.9% (Bloomberg sources indicated Johnson & Johnson / Actelion agreed to price), STM +3.8% (still checking), BW +2.7% (Babcock & Wilcox Enterprises acquired Universal Acoustic & Emission Technologies effective today; expected to be accretive in 2017), GPAC +2.4% (enters into definitive merger with Sequel Youth and Family Services), ELY +1.4% (ticking higher; acquires OGIO International for $75.5 mln in an all-cash transaction; Callaway's management expects the acquisition to be immediately accretive to earnings)

Optical stocks are higher following Applied Optoelectronics guidance raise: OCLR +3.7%, LITE +2.9%, FN +1.4%, NPTN +0.9%, ACIA +0.8%, INFN +0.5%

A few homebuilders are higher following KBH earnings: PHM +0.6%, DHI +0.4%

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: DRWI -25.9%

Companies trading lower in after hours in reaction to news: MYOS -9.4% (after closing near highs -- up 25% on the day --  the company confirmed Court has granted it the preliminary restraints that it requested against RENS Agriculture), NAK -9% (announces $25 mln bought deal; syndicate agreed to purchase 13.52 mln common shares at $1.85/offered share), DXTR -8.2% (after making 80% move higher on Wednesday), BTUUQ -6.9% (modestly pulling back), KOS -4% (announces secondary public offering of common shares), ABIO -3.6% (thinly traded; enters into a Capital on Demand Sales Agreement with JonesTrading Institutional Services to offer and sell shares of common stock having an aggregate offering price of up to $7.3 mln)