>>> US Gapping Up

Gapping up
In reaction to strong earnings/guidance: CETX +10.5%, ALR +10%, III +8.6%,HZNP +7.2%, SKY +6.8%, RESI +6.4%, ON +5.9%, PAH +5.9%, CMRX +5.7%, BID+5.3%, TNXP +3.9%, WLL +3.8%, TSN +3.1%, GMO +2.9%, CVT +2.3%, SN +2.1%,EBIX +1.3%, INO +1%

M&A news: ISNS +155.4% (reported earnings; also evaluating alternatives to further enhance credit and liquidity position), MFRM +114.7% ( Steinhoff (SNHFY) to acquire Mattress Firm Holding for $64/share), EVER +3.1% (to be acquired by TIAA for $19.50/share in cash, or ~$2.5 bln), IHG +1.3% (Sunday Times reported that Anbang Insurance might acquire IHG for $7 bln, but Anbang spokesperson has denied these reports), WMT +0.7% (expected to announce deal today to acquire Jet.com (Amazon.com (AMZN) competitor) for ~$3 bln, according to Re/Code)

Select EU financial related names showing strength: DB +2.8%, PUK +2.6%, ING+2.2%, SAN +1.5%, BBVA +1.1%

Select metals/mining stocks trading higher: BBL +2.6%, FCX +1.9%, RIO +1.6%,BHP +1.4%

Other news: MEIP +51.6% (enters exclusive licensing, development and commercialization agreement with the Helsinn Group), TPX +4.8% (in sympathy with MFRM), X +1.7% (after confirming Friday's Department of Commerce decisions in three trade cases), VRX +1.5% (announces changes to executive management team, licensing agreement with Norgine B.V. for NER1006 in U.S. and Canada)

Analyst comments: BCS +1.7% (upgraded to Outperform from Neutral at Exane BNP Paribas), AIG +0.8% (added to Conviction Buy List at Goldman)

>>> Morgans Hotel Group reports Q2 EPS of ($0.30) vs ($0.30) single analyst esti

Morgans Hotel Group reports Q2 EPS of ($0.30) vs ($0.30) single analyst estimate; revs -6% YoY to $52.8 mln vs $54.20 mln single analyst estimate  

Revenue per available room at System-Wide Comparable Hotels decreased by 1.5% in constant dollars (2.8% in actual dollars) in the second quarter of 2016 as compared to the same period in 2015 due to a decrease of 2.4% in constant dollars (3.8% in actual dollars) in average daily rate offset by an increase in occupancy of 1.0%.
On May 9, 2016, the Company entered into a definitive agreement under which the Company will be acquired by SBEEG Holdings.

(TechCrunch) iPhone 7 could replace the home button with a touch surface

iPhone 7 could replace the home button with a touch surface

If you’ve been following Apple for a few years, you know that the company loves to remove buttons, ports and everything that sticks out. According to a new report from Mark Gurman, Apple plans to replace the good old physical home button with a pressure-sensitive button that provides haptic feedback.
This change would remove a recurring point of failure for iPhone owners. The last time I took the subway in Shanghai, many people couldn’t use the physical home button on their iPhones anymore. Instead, they were using AssistiveTouch, a virtual home button that you can trigger from the phone’s display.
Don’t forget that the home button is also in charge of scanning your fingerprints with Touch ID. Replacing the home button isn’t easy or cheap. If a third-party repair shop replaces your home button, you won’t be able to use Touch ID anymore and it weakens the security of your phone as the secure enclave is disabled.
Here’s how I explained the secure enclave back in February:
“… your fingerprints are stored on a secure enclave. The secure enclave is a coprocessor that utilizes a secure boot process to make sure that it’s uncompromised. It has a secret unique ID not accessible by the rest of the phone or Apple — it’s like a private key. The phone generates ephemeral keys (think public keys) to talk with the Secure Enclave. They only work with the unique ID to encrypt and decrypt the data on the coprocessor.”
And if you don’t want to make the secure enclave useless, you’ll have to pay between $269 and $329 to replace the home button and keep Touch ID — not the best customer support experience. That’s why replacing the home button with a touch surface will make many people happy. And Apple doesn’t want to recreate another ‘Error 53’ iPhone bricking incident.

But how does Apple plan to make it look and feel like a home button? Apple has been using haptic feedback in its MacBook and latest trackpads as well. Instead of a physical click, trackpads generate haptic feedback to trick your mind into thinking that you actually clicked on the surface. And it works remarkably well.
The iPhone 6s already features a Taptic Engine to generate haptic feedback for 3D Touch actions. If you press deeply on an icon, the iPhone subtly vibrates to indicate that you’ve triggered a 3D Touch shortcut.
Apple could go one step further and use the same kind of technology to generate home button clicks without actually shipping a physical button. It would make it easier to improve water resistance as well. There have been multiple reports of a haptic-powered home button already.
As for other rumors, Gurman confirms many things we already reported. The iPhone 7 won’t have a headphone jack. Apple will put a second speaker and try to make people switch to wireless headphones instead. The iPhone 7 Plus will have a dual-camera system to improve image quality, low-light performance and more. And finally, the iPhone 7 will have more or less the same external design as the iPhone 6s without the antenna lines across the back.
Apple is expected to announce the successor to the iPhone 6s in early September.

(BArron's) Billionaire Bears: Gross, Gundlach Fear a Rout

Billionaire Bears: Gross, Gundlach Fear a Rout

Bill Gross says he doesn’t like bonds or stocks. “Sell everything,”Jeffrey Gundlach advises. And Stanley Druckenmiller, George Soros, and Carl Icahn, all have declared themselves negative on stocks.

Can’t buy me love, Lennon and McCartney wrote more years ago than I’d rather count. And an even older saying holds that money doesn’t buy happiness. But you’d think wealth would offer at least a modicum of cheerfulness. So, why are all these big-name billionaires so bearish?

Just in the past week, Bill Gross, who these days heads the Janus Unconstrained Bond fund (ticker: JUCTX), declared that he doesn’t like bonds and doesn’t like stocks. That followed the advice to “sell everything” from Jeffrey Gundlach, head of DoubleLine Capital, warning that both equities and Treasuries are fraught with risk. Meanwhile, other elder statesmen of the markets, including Stanley Druckenmiller, George Soros, and Carl Icahn, all have deemed themselves negative on stocks.

Following their ursine pronouncements, the Standard & Poor’s 500 and the Nasdaq Composite indexes ended the week at record levels, with the Dow Jones Industrial Average winding up just slightly short of its high-water mark. At the same time, the stock market’s so-called fear gauge—the volatility index of options on the S&P 500, the VIX—slumped to a one-year low.

Far from knocking these investors, whose ample net worths attest to their sagacity, the smart money would be expected to be skittish when the market is demonstrating an exuberance that might appear a bit irrational. Yet it would seem that resistance is futile as long as the world’s central banks continue to use the only tool they have—expanding liquidity.

Friday’s rally came in the wake of news of the second consecutive strong monthly employment report; nonfarm payrolls rose by 255,000 in July, approximately half again the consensus estimate, and on top of June’s blowout gain, which was revised up by 5,000, to 292,000. The past two months’ strong showings all but wiped out the shockingly weak May payroll numbers, which now show a 24,000 gain after two rounds of revisions.

The latest data are robust enough to keep the labor market on track, but not so strong as to spur the Federal Reserve to raise interest rates in the near term, according to the conventional narrative. Meanwhile, central banks abroad—most notably last week the Bank of England—continue easing. The United Kingdom central bank lowered its key lending rate 25 basis points (one quarter of a percentage point), to 0.25%, the lowest in its 322-year history, while expanding its bond purchases—even including corporate securities—to counter the economic impact of Brexit.

All that liquidity sloshes around the globe in search of the highest returns, if not the most economic benefit, which lifts asset prices, including U.S. stocks and bonds. Even before Friday’s pop that put the S&P 500 and the Nasdaq at fresh records, Louise Yamada, who heads the technical-advisory service bearing her name, noted a broadening of the rally that pointed to highs—a move to which she alerted clients earlier last month.

That said, the advance has been accompanied by low volume; even Friday’s rally came on below-average turnover. That, Louise warns, should keep investors alert to a “bull trap.” Summer rallies can persist through the dog days of August, but they are followed by the frequently difficult months of September and October—“a time to stay alert,” she suggests.

One thing to be on the lookout for is the Federal Reserve. To be sure, according to the consensus of economists, an interest-rate increase isn’t on the agenda until December, at the earliest. The federal-funds futures market puts slightly less than a 50% probability on a year-end rate hike.

But Barclays economists suggest that the worst of the inventory destocking could be over, opening the path for a September Fed hike, which would be unexpected by the market. The Atlanta Fed’s GDPNow tracking estimate, which has been close to target, now calls for robust 3.8% annualized growth in the current quarter. The New York Fed’s third-quarter tracking estimate is for a more modest, but still respectable, 2.6% growth rate.

Barclays suggests central banks are approaching the limits of their effectiveness, having driven down bond yields and further flattened yield curves. The impact has been especially deleterious to financial intermediaries, as evidenced by the smash to MetLife (MET), whose shares plunged 9.5% on Thursday, in reaction to weak earnings that reflected the effects of low interest rates.

With the U.S. economic expansion seemingly back on track, the nation at full employment, and major stock market averages at record peaks, the supposedly data-dependent Fed would have to explain why it doesn’t intend to deliver on its expectations for rate hikes this year.

Fed Chair Janet Yellen will speak at the Kansas City Fed’s annual Jackson Hole, Wyo., confab on Aug. 26. Her speech will be eagerly awaited for clues. If she does hint at a rate hike sooner rather than later, those rich, old bears may be vindicated.

THE UPPER CRUST ALSO MAY be feeling crummy over what has been happening to another big asset of theirs: high-end residential real estate. Prices have ceased their seemingly limitless ascent, and sales have slowed markedly, especially in those where numbers had become unmoored from reality, such as New York, California, and Florida.

Hints of that can be gleaned from the quarterly earnings report and conference call last week from Realogy Holdings (RLGY), the outfit that controls such high-end property brokers as the Corcoran Group, Sotheby’s International Realty, Coldwell Banker, and Citi Habitats, among others. Earnings per share of 63 cents trailed year-earlier results of 66 cents and analysts’ estimates of 73 cents, according to FactSet. Reflecting that, Realogy shares plunged to $26.14 Thursday, putting them below their 2012 initial-public-offering price of $27. However, they recovered to $27.09 in Friday’s rally.

Realogy cited a slowdown in the high end of the residential market, which it defined as properties worth more than $2.5 million. Weakness in the stock market earlier in the year, plus the strength of the dollar, were blamed for the slowdown in transactions. The key markets hit were the New York metro area, the Hamptons, coastal Florida, and both northern and southern California, according to the conference call transcript. For those of you anchored in the real world, prices in those areas have flown off to fantasy land.

A stronger greenback effectively boosts prices for wealthy foreign buyers, whose pesos, reais, rubles, euros, and now British pounds don’t buy nearly as much U.S. real estate, which many of them treated as virtual safe-deposit boxes with a view—stores of wealth safely situated in America, far from political risk abroad.

Meanwhile, hits to the stock market might not make rich folks start clipping grocery coupons. But dips tend to make them hold off on big-ticket buys if their net worth is affected, as many whose wealth is linked to energy certainly have been. Those who made their fortunes in technology should be feeling no pain, but prices in tech-inflated northern California appear to be affected nonetheless.

The main problem, to paraphrase the eloquent plaint of a former gadfly gubernatorial candidate in New York, is that the price is too damn high.

“There’s also a bit of some market adjustment, because the high-end markets got pretty frothy from a valuation perspective,” commented Realogy’s chairman and chief executive, Richard Smith, on the conference call. Now prices are “settling in” as sellers reduce their demands—“the wish,” as he called it—to something closer to the market.

That “price discovery” happens over time, he continued. High-end property shoppers don’t have any urgency to buy. They also aren’t worried about mortgage rates, because they’re usually cash buyers. “The good news is, when price discovery concludes with a price that both parties are happy with, at a much lower level, obviously, they are transacting.”

In other words, for deals to get done, the “price discovery” is coming up with a lower number. That process is continuing; he said he expects it to run through this year, while the “jury’s out as to whether that continues in the next year.”

While there is a dearth of supply of starter homes, there seems to be an ample inventory of high-end homes on offer in expensive areas of the coasts. Their owners aren’t especially motivated to sell for less than their “wish” price. Buyers at that level also tend not to be under any compulsion to rush into a deal because they’re probably comfortably situated in their current digs.

All of which suggests the tide of liquidity launched by global central banks has lifted this asset class about as far as it can. Price discovery should proceed in coming months. Not that it will cause much concern along East Hampton’s Further Lane this weekend.

(ZH) Weak Chinese Trade Data Confirms Global Slowdown, Imports Tumble

While central banks continue to "print" liquidity, now at a pace of nearly $200 billion per month, they are unable to print trade, perhaps the single best indicator of deteriorating global economic conditions. The latest confirmation came overnight from China, which reported more disappointing trade data for the month of July, as exports and especially imports fell more than expected in July in a rocky start to Q3, suggesting that China's measures have failed to generate a substantial rebound in the economy, and pointing to further and accelerating weakness in global demand, explaining the recent scramble by central banks to unleash even more monetary easing.

The July trade data summary :
  • Exports: -4.4% yoy in July vs consensus: -3.5%. June: -4.9% yoy.
  • Imports: -12.5% yoy in July vs consensus: -7.0%. June: -8.4% yoy.
  • Trade balance: US$52.3bn NSA (GS: US$49.1bn, consensus: US$47.3bn). June: US$47.9bn.
Economists polled by Reuters had expected trade to remain weak but show some signs of moderating as factories gear up for orders heading into the peak year-end shopping season.

That did not happen as imports fell 12.5 percent from a year earlier, the biggest decline since February and suggesting China's domestic demand may be faltering despite a flurry of measures to stimulate economic growth. "I think (the drop in imports) is mainly from the demand side," said Ma Xiaoping, an economist at HSBC in Beijing, quoted by Reuters. Worse, according to Ma government efforts to cut overcapacity could
produce an even bigger hit to demand in the next few quarters.
Also notable is the slowdown in Chinese crude oil demand, as China oil imports fell to a 6-month low: China imported 31.07m mt of crude last month, the General Administration of Customs in Beijing says on website. That’s equivalent to 7.35m b/d, lowest since January.
On the other side of the ledger , exports fell 4.4 percent on-year, the General Administration of Customs said on Monday, while adding that it expects pressure on shipments likely will start to ease in October. That resulted in a trade surplus of $52.31 billion in July, the biggest since January, versus June's $48.11 billion. While oil imports may be declining, oil product exports hit 4.57 million metric tons with net oil product exports at record 2.49metric tons, as China continues to flood the world with diesel and gasoline exports.
For the January to July period, China's exports fell 7.4 percent, while imports fell 10.5 percent, roughly on pace with last year's 8 percent decline. China's imports have now declined for 21 straight months, while exports have fallen for 12 of 13 months, helping to drag economic growth to its slowest in a quarter of a century.
"Signs of stronger manufacturing activity among many of China's key trading partners has so far failed to lift export growth," Capital Economics' China economist Julian Evans-Pritchard said in a note. "The country's export growth is likely to remain subdued for some time."
China's exports underwhelmed despite still-strong shipments of steel and oil products, with the latter hitting a record. China has come under fire from trading partners accusing it of dumping its excess industrial capacity in global markets.
Exports to the United States – China's top market – fell 2.0% in July, while shipments to the European Union – its second biggest market - fell 3.2%. While the decline in shipments to the EU actually moderated slightly from June, economists at ANZ expect Brexit will weigh further on China's exports to Europe in coming months. Meanwhile, China's imports from the U.S. fell 23.2% in July from a year ago, versus a 12.7 percent decline in June. A more than 6% slide in the yuan against the dollar over the past year appears to have done little to help China's exporters in the face of stubbornly soft global demand and weak commodity prices.
Iron ore imports rose 8.1 percent by volume in the first seven months of the year, but factory activity surveys last week showed domestic and export orders cooled in July, while heavy flooding in some areas disrupted business.
While there have been mixed signals on whether China is ready to cut interest rates or banks' reserve requirements again this year, most analysts agree the focus should be on structural reforms. "In the short term I think a lot of changes would depend on the government's structural reform of state-owned companies," said HSBC's Ma.


* * *
Finally, here is Goldman's take:
Both export and import data came in below expectations. Exports by destination data showed mixed performance in July. Export growth to the US was -2.0% in July, vs -10.5% yoy in June. Exports to the EU fell 3.2% yoy in July, vs -3.6% yoy in June. Exports to Japan were down 5.2% in July, vs -3.0% yoy in June. Exports to ASEAN fell 3.9% yoy in July vs -4.5% yoy in June, and exports to Hong Kong fell 9.3% yoy in July, from -7.1% yoy in June.
Import growth in key categories moderated in volume terms. In volume terms, iron ore import volume was +2.7% yoy in July vs +8.9% yoy in June. Crude oil import growth was +1.2% yoy vs +3.8% yoy in June. Unwrought copper import growth was +3.4% yoy vs +20.3% yoy in June. Steel product imports were up 7.7% yoy vs -2.2% yoy in June. In value terms, imports of iron ore were down 8.8% yoy vs +8.2% yoy in June. Crude oil imports growth was -23.7% yoy vs -26.4% yoy in June. Refined petroleum product imports fell 30.2% yoy vs -38.1% yoy in June. Steel product imports were down 11.1% yoy vs -11.4% yoy in June. Unwrought copper import growth was -13.6% yoy vs -4.2% yoy in June.
Export growth slowed in July, on the back of a less supportive external environment. Import growth fell more than exports and was weaker than expectations, likely reflecting a softening of domestic demand growth in July. Data on July trade prices have not been released. Judging from the information on imports of key commodities, moderation in both volume and prices probably contributed to the lower headline import growth. The trade surplus increased due to the relatively larger decline in imports, helping to offset capital outflows (though FX flows were still likely negative in July).

>>> Crude Oil - bullish base above 39.12 / 40.57, i think we can move much high

ZeroHedge Article on Oil 8 Chart below (at the bottom)

ZH : Oil Spikes On Renewed OPEC Supply Cut Chatter, Just As Hedge Funds Turn Record Short

Oil prices rose Monday as modestly stronger margins for refiners provided support to the market despite the continuing glut of crude supply. The October contract for global benchmark Brent gained 1.3% to above $45 a barrel, while U.S. counterpart West Texas Intermediate increased 1.4% above $42.50 for September deliveries.
Several factors have boosted oil prices over the past three trading days. Among the more trivial ones, Olivier Jakob from Swiss-based Petromatrix was cited by the WSJ noting the improvement in the gasoline crack margin, a technical term for the price difference between crude oil and the figure refiners charge for gasoline, as providing a tailwind for the market. “The gasoline crack [margin] has rebounded and stabilized and this has relieved the pressure on oil prices a little bit,” he said. “This week has some upside potential [for oil prices], but the fundamentals are not there for any sustained recovery.” That said, he noted that the fundamentals for gasoline hadn’t changed and there was a large global oversupply, which should keep prices below $45 a barrel.
However, the key catalyst for today's spike is another convenient report by OPEC, according to which the oil exporting organization will hold informal talks at an energy conference in September, the cartel’s president said Monday, as oil-producing nations worry over a recent downturn in the crude market. OPEC is always discussing ways to stabilize the market, said Qatar’s energy minister, Mohammed bin Saleh al-Sada, who is serving as the 14-nation oil cartel’s president this year.
Of course, oil traders are familiar with OPEC strategy of "leaking" such supply cut reports just as oil is headed for key support levels, aimed largely at headline scanning algos, and so far today the verbal intervention has managed to push oil higher. A similar initiative died back in April during talks in Doha, Qatar, when Saudi Arabia backed out over Iran’s refusal to join in a so-called production freeze until it had reached pre-sanctions levels of oil output. Under the freeze, countries would have agreed to limit their production to certain levels in a bid to raise oil prices by constricting the amount of crude on the market.

“OPEC continues to monitor developments closely, and is in constant deliberations with all member states on ways and means to help restore stability and order to the oil market,” Sada said. “Expectation of higher crude oil demand in the third and fourth quarters of 2016, coupled with decrease in availability, is leading the analysts to conclude that the current bear market is only temporary and oil price would increase during later part of 2016,” he added,
Several OPEC members want to revive the idea of setting new limits on oil production this autumn as Iran regains much of the energy-industry might it lost during the years of Western sanctions, The Wall Street Journal reported last week.
The nations—which include Venezuela, Ecuador and Kuwait—want to take another stab at cooperation with non-OPEC members like Russia. What makes today's announcement somewhat different is that unlike last week, when this proposal was first floated, today's iteration seemed to get some tacit approval by Russia, as Reuters reported earlier:
  • ENERGY MINISTER NOVAK: DOESN'T EXCLUDE POSSIBILITY OF MEETING WITH SAUDI COUNTERPART IN SEPTEMBER
  • RUSSIAN ENERGY MINISTER SAYS MOSCOW READY TO DISCUSS FREEZING OIL PRODUCTION
But the biggest threat to oil's recent price decline is that, like in February, hedge funds are now massively short. In fact, according to Bloomberg, hedge funds have gone all-in on lower oil prices, counting on seasonal weakness to play out again this year. Specifically, money managers increased wagers on declining crude prices to a record as futures dropped to the lowest in more than three months.
Hedge funds increased their short position in West Texas Intermediate crude to 218,623 futures and options combined during the week ended Aug. 2, the highest in data going back to 2006, according to the Commodity Futures Trading Commission. Money managers’ short position in WTI rose 38,489 futures and options and have almost doubled in the past three weeks, CFTC data show. Longs, or bets on rising prices, increased 1.6 percent, while net longs dropped 28 percent to the lowest since January.
The reason for the renewed bearish sentiment is fundamentals: crude inventories climbed for a second week as imports arrived at the fastest pace since 2012. The supply gain comes on the cusp of seasonal refinery maintenance that will curb crude demand. Futures have declined in each of the past five Septembers. "We’re are entering a period of seasonal maintenance, which should put some downward pressure on prices," said Scott Roberts, co-head of high yield investments and manager of $2.7 billion at Invesco Advisers Inc. in Atlanta.
The problem, however, is that as recent history has shown, any time shorts pile in, even the smallest trace of bullish news leads to a significant short covering squeeze, one which takes the price of oil materially higher, and juding by the price action this morning, this time may not be any different: at last check WTI had jumped over 1%, in the mid $42 range, and rising rapidly, a move which may continue if incremental shorts fail to appear.

From: LAURENT CHEKROUN (MAKOR SECURITIES LO) At: 08/08/16 11:31:57
Subject: >>> Crude Oil - bullish base above 39.12 / 40.57, i think we can move much high
Crude Oil - bullish base above 39.12 / 40.57, i think we can move much higher.