>>> Asian Update

Asia Mid-Session Market Update: Minutes show RBA is comfortable with policy stance; BOJ begins 2-day meeting as speculation of easier and more flexible settings swirl

***US markets on close: Dow flat, S&P500 flat, Nasdaq -0.2%***
- Best Sector in S&P500: Utilities
- Worst Sector in S&P500: Healthcare
- Biggest gainers: KORS +3.7%, RHT +2.9%, OKE +2.8%, COH +2.6%, GM +2.4%
- Biggest losers: CHK -7.4%, WYNN -4.3%, SRCL -4.0%, ENDP -3.8%, MU -3.0%

***VIX 15.53 (+0.16pts); Treasuries: 2-yr 0.78% (flat), 10-yr 1.70% (-1bp), 30-yr 2.44% (-1bp)***

***US movers afterhours***
- CYH: Apollo Global Management said to be interested in acquiring assets of Community Health Systems - financial press; +3.7% afterhours
- STLD: Guides Q3 $0.63-0.67 v $0.70e; -2.4% afterhours
- HNI: Cuts Q3 $0.74-0.79 v $0.95e (prior $0.90-0.95), cuts FY16 $2.50-2.70 v $2.87e (prior $2.80-2.95); -7.8% afterhours
- ASNA: Reports Q4 $0.08 v $0.17e, R$1.81B v $1.78Be; -23.0% afterhours
- SEAS: Reduces dividend to $0.10 from $0.21; To suspend subsequent dividend payments; -6.2% afterhours

***After extended session***
- GE: Announces over $800M in digital industrial power orders for Asia-Pacific region
- FWRD: Lowers Q3 $0.48-0.52 v $0.63e (prior $0.61-0.65); Rev at -2% to +2% y/y (implies $242-252M v $252Me, prior +1-5%)

***Equity Futures (23:30ET): S&P e-mini +0.1%, Dax +0.1%, FTSE100 +0.1%***

***FX / Commodities ranges (23:30ET): ***
- EUR 1.1160-1.1180; JPY 101.80-102.05; AUD 0.7530-0.7555, NZD 0.7290-0.7320
- Gold +0.1% at 1319; Oil -0.6% at $43.62 / brl; Copper -0.2% $2.15/lb

**** Asian Equity Markets (23:30ET) ****
- Nikkei +0.1%, Hang Seng -0.2%, ASX -0.2%, Shanghai -0.1%, Kospi flat

***Key economic data: ***
- (AU) AUSTRALIA Q2 HOUSE PRICE INDEX Q/Q: 2.0% V 2.8%E; Y/Y: 4.1% (3-year low) V 5.1%E

***Speakers / Press / Key Themes***
China:
- China Commerce Ministry (MOFCOM) spokesperson: China trade continues stabilizing and improving
- PBOC SETS YUAN MID POINT AT 6.6595 V 6.6786 PRIOR; strengthens by most in 2 weeks
- China Premier Li: Yuan exchange rate to stay basically stable at a reasonable and balanced level; no basis for sustained devaluation of yuan - Chinese press
- Goldman Sachs: China YTD actual FX outflows are estimated at $420B v PBoC data of $190B

Japan:
- Japan PM Abe: Govt to leave monetary policy to BOJ; important for policy to fight deflation
- Nikkei speculates BOJ will likely adjust the policy framework at its meeting this week; may be forced to abandon its 2-year target timeframe and switch to a longer view; Negative rates are expected to be the centerpiece of BOJ future policy expansion, but because of their negative impact on financial sector, the BOJ will need to communicate consideration of side effects. One option is communicating it will prevent downturns in superlong interest rates.

Australia:
- RBA Sept Meeting Minutes: Data indicates growth near potential; Policy stance consistent with meeting CPI target over time; Lower AUD continues to support activity in traded sector; Demand uncertainty still weighing on non-mining investment; Conditions in established housing market had generally eased; China growth has eased a little further

Asia movers:
- Financials: Country Garden Holdings Co 2007.HK +1.4% (YTD result, share buyback); China Construction Bank 939.HK +0.3% (plans to sell first bad MBS)
- Technology: Tokyo Electron 8035.JP +2.5%, Sumco 3436.JP +3.4% (Intel raised 3Q sales outlook)
- Materials: Tokyo Steel Mfg Co 5423.JP -8.4% (cuts Oct steel prices); St Barbara SBM.AU +1.7% (Macquarie raised to Outperform); Western Areas WSA.AU +1.4% (nickel prices rose overnight); Galaxy Resources GXY.AU -8.4% (update on Mt Cattlin); China Sandi Holdings 910.HK +32.7% (conversion of convertible securities); New Hope Corporation NHC.AU -1.6% (FY16 result)
- Telecom: China Unicom 762.HK -1.7% (Aug result); China Mobile 941.HK -0.4% (Aug result); TPG Telecom TPM.AU -19.1% (FY16 result)

>>> DOW/DD spoke to DOW

DOW/DD spoke to DOW IR, said still optimistic will close 2016 , they have been working with the EC and hoping clock will restart there very soon. Was asking about dividends, we were getting some questions about coordination earlier today, DOW said that DD will  have until mid-nov to declare their 4Q div so if not closed by then or an indication that will be able to close by year end each company will declare on their own in accordance with past practice (guess similar to how HOT/MAR did it) and then coordinate 1Q17 divs.

 

 

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>>> US Close Dow-0.02% S&P+0.00% Nasdaq -0.18% Russell +0.63%

Closing Market Summary: Indices Flat as Participants Eye Central Bank Meetings

The stock market began the week on a flat note as participants displayed a lack of conviction ahead of key policy statements from the Federal Reserve and Bank of Japan. The Nasdaq Composite (-0.2%) settled behind both the Dow Jones Industrial Average (UNCH) and the S&P 500 (UNCH). 

The major averages advanced at the start of the session as a rebound in crude oil futures and a positive bias in global markets facilitated a higher start to the trading week. Oil was in focus as renewed speculation surrounding a production cap agreement boosted the energy component. Venezuelan President Nicolas Maduro made headlines over the weekend, stating that oil producers are close to reaching a deal to stabilize oil markets. However, the comments were taken with a grain of salt following contradictory reports from OPEC Secretary General Mohammed Barkindo. The oil cartel is scheduled to meet on September 26-28.

The benchmark index notched a session high in the first half hour of trade, testing but failing to clear technical resistance near the 2150/2151 price level. The broader market walked back early gains through the session as the heavily-weighted technology (-0.2%) and health care (-0.4%) sectors came under pressure. The broader market notched a session low shortly after midday, but managed to settle above that level. Four sectors ended in the green with industrials (+0.3%), financials (+0.5%), and utilities (+1.0%) leading. Conversely, technology (-0.2%), health care (-0.4%), and telecom services (-0.7%) underperformed. 

The financial space (+0.5%) finished ahead of the benchmark index, rebounding from recent losses. Wells Fargo (WFC 46.01, +0.58) jumped 1.3% after Robert W. Baird upgraded the stock to Outperform from Neutral. The broader sector displayed relative strength as participants assessed the rate hike picture in coming months. The implied probability of a rate hike at the September meeting sits at 12.0% while the odds of a rate hike at the December meeting registers at 55.0%. Rate hike expectations increased last week following some firming inflation data. 

In the energy sector (-0.1%), refining names outperformed amid reports of gasoline shortages on the East coast of the United States. Phillips 66 (PSX 80.35, +1.26) and Tesoro (TSO 83.54, +1.56) ended higher by 1.6% and 1.9%, respectively. Separately, Dow component Chevron (CVX 98.04, +0.20) finished ahead of the price-weighted index. For its part, crude oil settled higher by 0.6% ($43.90/bbl; +$0.28).

Homebuilders outperformed in the consumer discretionary space (-0.1%), evidenced by the 0.9% gain in the iShares Dow Jones US Home Construction ETF (ITB 27.52, +0.25). The sub-group gained following a stronger-than-expected reading of the NAHB Housing Market Index for September. Lennar (LEN 45.09, +0.75) jumped 1.7% ahead of tomorrow morning's earnings report. Separately, General Motors (GM 31.72, +0.75) rallied 2.4% after being upgraded to "Overweight" at Morgan Stanley.

In the health care space (-0.4%), biotechnology gained after Sarepta Therapeutics (SRPT 48.94, +20.79) received conditional approval from the FDA for the company's muscular dystrophy treatment. On the flipside, Merck (MRK 61.33, -0.95) ended lower by 1.5%. 

On the M&A front, Infoblox (BLOX 26.35, +3.52) spiked 15.4% after announcing that Vista Equity Partners will acquire the company for $26.50 per share or approximately $1.6 billion. Separately, Isle of Capri (ISLE 22.04, +5.11) rallied 30.2% after Eldorado Resorts (ERI 13.84,- 0.41) agreed to acquire the name for $23.00 per share or approximately $1.7 billion.

Treasuries ended on a lower note with yields rising through the curve. The yield on the 2-yr note rose one basis point to 0.77% while the yield on the 10-yr note also increased one basis point (1.70%). 

Today's participation was below the recent average as fewer than 760 million shares changed hands on the NYSE floor.

Today's economic data was limited to the NAHB Housing Market Index for September: 

  • The NAHB Housing Market Index for September rose to 65 from a revised 59 in August (from 60) while the Briefing.com consensus expected the reading to come in at 59.

Tomorrow's economic data will include Housing Starts (consensus 1186k) and Building Permits (consensus 1160k) for August, which will each be released at 8:30 ET. 

  • Russell 2000: +8.5% YTD
  • S&P 500: +4.7% YTD
  • Nasdaq: +4.6% YTD
  • Dow Jones: +4.0% YTD

WSJ : Siemens Takes Cautious Approach to 2017

Siemens Takes Cautious Approach to 2017
CEO says geopolitical uncertainties are clouding the investment environment

BERLIN— Siemens AG’s Chief Executive Joe Kaeser said he was wary about the outlook for the German industrial conglomerate over the next year, because geopolitical uncertainties were clouding the investment environment.
“We are taking a very cautious approach to 2017,” Mr. Kaeser said in an interview on Monday.
Mr. Kaeser said the company did well in fiscal 2016, ending on Sept. 30, but that “2017 is a new game.” Geopolitical uncertainties are on the rise, which makes it difficult to assess investment risks, he said.
“Meanwhile, we see this also in the U.S., where very strong elements are surfacing that aren’t exactly encouraging for investments,” he added.
The U.S. presidential election is causing the country to look inward, Mr. Kaeser said. The economic momentum in the U.S. is waning, he said, “and we need to look at whether this is a short-term effect or of a longer-term, structural nature.”
Mr. Kaeser added that global investment opportunities exist but require hunting. Last week, Siemens said it plans to participate in up to $5.6 billion of energy, transportation and infrastructure projects in Argentina. At the time, Mr. Kaeser said Siemens would offer around $3 billion in financing for the projects, targeting energy generation of about 5 gigawatt.
“Such opportunities are out there all over the world, one just has to find them,” Mr. Kaeser said.

>>> Google : This access point is not currently authorized for transactional pro

Announces new app Google Trips 
- introducing a new mobile app to help you instantly plan each day of your trip with just a few taps of your finger: Google Trips.
- Google Trips is a personalized tour guide in your pocket. Each trip contains key categories of information, including day plans, reservations, things to do, food & drink, and more, so you have everything you need at your fingertips. The entire app is available offline simply tap the Download button under each trip to save it to your phone.
- For the top 200 cities in the world, Google Trips shows you a variety of day plans featuring the most popular daily itineraries
- With Google Trips, all your travel reservations are automatically gathered from Gmail and organized for you into individual trips, so you dont have to search and dig up those emails.