>>> Mediaset drops court action to seize 3.5% stake in Vivendi

Mediaset drops court action to seize 3.5% stake in Vivendi

Mediaset [MS:MI] notes that while its suit against Vivendi [VIV:EN] will continue with the timetable foreseen, the urgent action regarding the precautionary seizure of part of the French group's treasury stock is no longer deemed necessary after Mediaset received assurances in documents filed by Vivendi with the court.
Such documentation shows that a large proportion of the company's shares are held as treasury stock for a period of time compatible with the expected legal proceedings.
Consequently, Mediaset has decided to withdraw its application for urgent action, as it no longer considers existing the danger that its contractual rights be jeopardised by the duration of the suit whose judicial requests remain confirmed
As previously reported, Mediaset had launched the court action after Vivendi refused to go through with a purchase of Mediaset Premium, Mediaset's pay-TV arm, agreed earlier this year.
According to the report, Mediaset was to receive a 3.5% stake in Vivendi worth EUR 820m as part of the deal.

Weekly update

Weekly Market Update: Post-Election Reflation Trade Continues


The post US election money flows largely extended into a second week, but moderation was seen across various sectors and asset classes. The Trump reflation trade continued to push interest rates higher and was aided by economic data and Federal Reserve commentary that essentially clinched a rate hike is coming at next month's monetary policy meeting. Outside of the chatter surrounding the President-elect's rumored cabinet picks, the question markets shifted most of their focus onto was just how many more hikes could follow in 2017. Against that backdrop the US benchmark 10-year yield rose above 2.3% for the first time since ealry 2015. The spread over the comparable German 10-year yield widened to levels not seen since the late 1980's. The US Dollar continued to surge, particularly against emerging market currencies, including another 1% move against the Chinese Yuan this week. Currency traders prepared for seasonal FX liquidity to ebb which could allow for further aggressive moves. The Euro is within striking distance of the post financial crisis low of 1.0460 and after that potentially parity. Japan's Nikkei touched a fresh 10-month high powered by the USD/JPY which rose to a level not seen since June. WTI crude futures bounced 6% off a Monday low to surpass $46 as producers met in Doha on Friday and by most accounts remained adamant an output deal will be reached by the November 30th meeting.

The Dow Jones Industrial average largely traded sideways, consolidating the outsized move into banks and financials since the election. Transports have traded up 15 of the last 18 sessions, emboldening bullishness by Dow theorists. The rotation into small caps continued, exhibited by the Russell 2000 which bumped up against lifetime highs at 1313. The NASDAQ saw money slosh back to many of the large cap tech names that so severely underperformed in the wake of the Trump victory and thus the overall index played a bit of catch up. The S&P encountered some resistance just below new all-time highs as traders try to handicap just how much and how fast Trump's pro-growth agenda can be enacted. Corporate bond issuance picked up to the most active levels in a couple weeks spurred by the move up in rates along with the calendar. For the week, the DJIA gained 0.1%, the S&P500 rose 0.8%, and the Nasdaq added 1.6%.

The last of the major quarterly earnings reports continued to paint a mixed picture. Cisco Systems reported solid results but shares dropped 5% after guiding next quarter down on lower spending by service provider customers. Shares of Home Depot and Lowe's fell after their earnings reports and Lowe's cuts its guidance for the year. Discount retailer TJX beat expectations and raised guidance, sending shares to their best level in two months. On the M&A front, Samsung jumped into the automotive technology segment with the $8 billion acquisition of Harman International.

SUNDAY 11/13
(JP) JAPAN Q3 PRELIMINARY GDP Q/Q: 0.5% (matches 6-quarter high) V 0.2%E; ANNUALIZED GDP Q/Q: 2.2% (6-quarter high) V 0.8%E

MONDAY 11/14
HAR: To be acquired by Samsung Electronics for $112/shr cash; deal valued at $8.0B
(RU) Kremlin spokesperson: Russia President Putin and President-elect Trump agree on phone call that Russia-US relations are unsatisfactory, aim to normalize relationship - Russia press

TUESDAY 11/15
(UK) Govt said to have no common Brexit strategy due to divisions within Cabinet - financial press (DE) GERMANY Q3 PRELIMINARY GDP Q/Q: 0.2% V 0.3%E; Y/Y: 1.7% V 1.8%E; GDP NSA Y/Y: 1.5% V 1.6%E
VOD.UK: Reports H1 EBITDA €7.91B v €8.04B y/y, Rev €27.1B v €28.2B y/y, Organic Service Revenue Growth: +2.4% y/y
(UK) OCT PPI INPUT M/M: 4.6% V 2.0%E; Y/Y: 12.2% V 9.3%E
(EU) EURO ZONE Q3 PRELIMINARY GDP Q/Q: 0.3% V 0.3%E; Y/Y: 1.6% V 1.6%E (2nd reading of data)
(DE) GERMANY NOV ZEW CURRENT SITUATION SURVEY: 58.8 V 61.6E; EXPECTATIONS SURVEY: 13.8 V 8.1E
HD: Reports Q3 $1.60 v $1.58e, R$23.2B v $23.0Be
(US) OCT IMPORT PRICE INDEX M/M: 0.5% V 0.4%E; Y/Y: -0.2% V -0.3%E
(US) OCT ADVANCE RETAIL SALES M/M: 0.8% V 0.6%E ; RETAIL SALES EX AUTO M/M: 0.8% V 0.5%E
TJX: Reports Q3 $0.91 v $0.87e, R$8.29B v $8.27Be
(US) Atlanta Fed GDPNow: raises Q4 GDP forecast to 3.3% from 3.1% on Nov 9th

WEDNESDAY 11/16
700.HK: Reports Q3 Net CNY10.6B v CNY10.7Be, Rev CNY40.4B v CNY26.6B y/y
(UK) SEPT ILO UNEMPLOYMENT RATE 3M/3M: 4.8% V 4.9%E
(UK) OCT JOBLESS CLAIMS CHANGE: 9.8K V +2.0KE; CLAIMANT COUNT RATE: 2.3% V 2.3%E
(US) OCT PPI FINAL DEMAND M/M: 0.0% V 0.3%E; Y/Y: 0.8% V 1.2%E
(US) OCT INDUSTRIAL PRODUCTION M/M: 0.0% V 0.2%E; CAPACITY UTILIZATION: 75.3% V 75.5%E
(US) NOV NAHB HOUSING MARKET INDEX: 63 V 63E
(US) Association of American Railroads weekly rail traffic report for week ending Nov 12th: 541.1K carloads and intermodal units, -0.5% y/y
CSCO: Reports Q1 $0.61 v $0.59e, R$12.4B v $12.3Be
(JP) BOJ CONDUCTS FIXED-RATE JGB PURCHASE OPERATION (1st time under new policy framework) FOR JGBs WITH 1-5 YEAR MATURITIES

THURSDAY 11/17
(ID) INDONESIA CENTRAL BANK (BI) LEAVES 7-DAY REVERSE REPO UNCHANGED AT 4.75%, AS EXPECTED
(UK) OCT RETAIL SALES EX AUTO FUEL M/M: 2.0% V 0.4%E; Y/Y: 7.6% V 5.4%E
(UK) OCT RETAIL SALES INC AUTO FUEL M/M: 1.9% V 0.5%E; Y/Y: 7.4% V 5.3%E (highest annual pace since 2002)
(EU) EURO ZONE OCT CPI M/M: 0.2% V 0.3%E; Y/Y (FINAL): 0.5% V 0.5%E; CPI CORE Y/Y (FINAL): 0.8% V 0.8%E
BBY: Reports Q3 $0.62 v $0.47e, R$8.95B v $8.84Be
(US) OCT CPI M/M: 0.4% V 0.4%E; CPI EX FOOD AND ENERGY M/M: 0.1% V 0.2%E; CPI NSA INDEX: 241.729 V 241.785E
(US) INITIAL JOBLESS CLAIMS: 235K (lowest since 1973) V 257KE; CONTINUING CLAIMS: 1.98M V 2.03ME (lowest since 2000)
(US) OCT HOUSING STARTS: 1.323M V 1.156ME; BUILDING PERMITS: 1.229M V 1.193ME
(US) NOV PHILADELPHIA FED BUSINESS OUTLOOK: 7.6 V 7.8E
(US) Atlanta Fed GDPNow: raises Q4 GDP forecast to 3.6% from 3.3% on Nov 15th
(MX) MEXICO CENTRAL BANK (BANXICO) RAISES OVERNIGHT RATE BY 50BPS TO 5.25%; AS EXPECTED
(CL) CHILE CENTRAL BANK (BCCH) LEAVES OVERNIGHT RATE TARGET UNCHANGED AT 3.50%; AS EXPECTED
AMAT: Reports Q4 $0.66 v $0.66e, R$3.30B v $3.31Be
CRM: Reports Q3 $0.24 v $0.21e, R$2.14B v $2.12Be
GPS: Reports Q3 $0.60 v $0.59e, R$3.80B v $3.77Be
(CN) CHINA OCT PROPERTY PRICES M/M: RISE IN 62 OUT OF 70 CITIES VS 63 PRIOR; Y/Y: RISE IN 65 OUT OF 70 CITIES V 64 PRIOR

FRIDAY 11/18
(IR) Iran OPEC Gov Kazempour: Remains optimistic for an OPEC deal after talks with Russia
(IQ) Iraq Oil Min Luaibi: optimistic OPEC will clinch output deal; differences are narrowing over OPEC output data - press
(US) New York Fed Nowcast: raises Q4 GDP forecast to 2.4% from 1.6% on 11/4

>>> US Close Dow -0.19% S&P-0.24% Nasdaq -0.23% Russell +0.47%


Closing Market Summary: Stocks Inch Lower at the End of an Upbeat Week

The stock market ended an upbeat week on a modestly lower note as the major averages consolidated after an impressive post-election run. The S&P 500 lost 0.2%, narrowing its weekly gain to 0.8%. Separately, the Russell 2000 (+0.5%) and the Nasdaq Composite (-0.2%) outperformed, rising a respective 2.6% and 1.6% this week.

The major averages jumped out of the gate as the S&P 500 (-0.2%) and the Nasdaq Composite (-0.2%) each zeroed in on their respective all-time highs. The tech-heavy index notched a new all-time intraday high (5346.80), but was unable to establish a new closing high. The benchmark index, however, reversed just below the 2190 price level.

Equities were unable to regain their footing as investors assessed whether the broader market has risen too far, too fast. An appreciating US Dollar Index (101.28, +0.39, +0.39%), rising market rates, and volatility from the oil pit also worked to keep the broader market in check.

The long-end of the yield curve has been on the rise in recent days as investors mull rising inflation concerns and improving economic data. The combination has prompted an exodus from longer-dated issues. The yield on the benchmark 10-yr note increased four basis points to 2.34%, leaving the yield up 51 basis points since the end of October. An improving rate hike outlook has also dampened buying interest in the bond market.

Per the CME's FedWatch Tool, the implied probability of an interest rate hike at the December FOMC meeting has increased to 95.4% from yesterday's 90.6%. A number of Federal Reserve speakers contributed to the uptick, indicating that the FOMC will likely go ahead with its next rate hike in December.

The benchmark index finished just below its flat line with seven sectors ending in negative territory. The health care (-1.1%) space outpaced today's losses in the broader market while energy (+0.5%), telecom services (+0.5%), and financials (+0.1%) finished at the top of the sector leaderboard.

Biotechnology demonstrated relative weakness in the health care space (-1.1%), evidenced by the 1.3% loss in the iShares Nasdaq Biotechnology ETF (IBB 284.72, -3.80). The industry group has narrowed its gain in recent days as investors walk back their post-election reaction. Mylan (MYL 36.47, -1.09) ended lower by 2.9% after Mizuho trimmed its price target from $49 to $47. The broader sector lost 1.2% this week, but remains up 3.2% in November.

In the consumer discretionary space (-0.3%), Gap (GPS 25.61, -5.10, -16.6%) and Abercrombie & Fitch (ANF 14.60, -2.33, -13.8%) weighed on the broader retail sub-group. The two demonstrated relative weakness after disappointing participants with their quarterly results and guidance. Conversely, casual restaurant names outperformed after Yum! Brands (YUM 62.36, +1.60, +2.6%) added $2 billion to its share repurchase program.

The financial (+0.1%) group extended its recent winning streak as banking names continued to outperform. The industry group has surged in the aftermath of the election as steepening in the yield curve boosted the earnings prospects for the group. The SPDR S&P Bank ETF (KBE 40.41, +0.24) gained 0.6%, extending its November gain to 16.6%. This compares to a gain of 12.1% in the broader sector.

The commodity-sensitive energy sector (+0.5%) led the pack as investors reevaluated the likelihood of an OPEC supply cap agreement. WTI crude finished the day higher by 1.0% ($46.38/bbl; +$0.45). 

Today's trading volume was below the recent average of one billion as fewer than 926 million shares changed hands at the NYSE floor.

Today's economic data was limited to Leading Indicators for October:

  • The Conference Board's Leading Economic Index increased 0.1% in October after increasing 0.2% in September.
    • It was noted by the Conference Board that the six-month growth rate has moderated, but that the index still points to the economy continuing to expand into early 2017.

Investors will not receive any noteworthy data on Monday.

  • Russell 2000: +15.9% YTD
  • Dow Jones: +8.3% YTD
  • S&P 500: +6.8% YTD
  • Nasdaq Composite: +6.3% YTD

>>> Foot Locker On Call sees Q4 comps up mid-single digits, in-line w/ expectati

--> FL -1.90% pre open 165k shares traded

Foot Locker On Call sees Q4 comps up mid-single digits, in-line w/ expectations
  • Foot Locker Canada led stores division followed by Champs sports, both low double-digit sales gains
  • Mid-single digit comps for Foot Locker in the US,
    • Foot Locker in Europe and Asia and Footaction also achieved msd comps
  • lady foot locker comped down low-single
    • apparel down double digits
  • stores softer in Germany than other markets
  • Eastbay sales declined hsd
  • Footwear up mid-single digits
  • asp and units were both up in the quarter
  • Men's apparel up msd, kids apparel up double digits
  • QTD comps up msd, in-line w/ expectations for Q4 comps to be up mid-single digits for the quarter

>>> Caterpillar reports October 2016 retail data; Total Machines Worldwide fell

Caterpillar reports October 2016 retail data; Total Machines Worldwide fell 18% YoY vs a 17% decline in the prior month, Total Energy & Transportation was unchanged from the prior month (92.78)
Total Machines (October 2016 vs September 2016)
  • Asia Pacific +12% vs +3%
  • EAME: -14% vs -17%
  • Latin America: -24% vs -23%
  • North America: -16% vs -23%
  • World: -12% vs -18%
Total Energy & Transportation (October 2016 vs September 2016)
  • Power Gen -33% vs -26%
  • Industrial -29% vs -28%
  • Transportation -32% vs -44%
  • Oil and gas -21% vs -15%
  • Total -28% vs -25%