>>> Terex/Zoomlion merger could be announced in a week or two; Konecranes reiter

Terex/Zoomlion merger could be announced in a week or two; Konecranes reiterates still in talks with Terex

The sale of the Connecticut-based industrial equipment supplier Terex [NYSE:TEX] to China-based Zoomlion [SHE:000157] could take place in the next week or two, according to Kauppalehti Online.

The Finnish-language piece cited an unnamed US fund manager who said if Zoomlion manages to secure the cash required, it is likely Terex shareholders would accept the offer. The item said the silence around the companies means a solution is coming in soon. Zoomlion has yet to submit a binding offer for Terex, the item said.

Meanwhile, Konecranes [HEL:KCR1V], the Finland-based rival bidder for Terex, repeated its stance on the merger by saying that it is still in talks with Terex. Large US funds that own Terex shares are not supporting the merger with Konecranes because Zoomlion’s per share offer for Terex is viewed as high in the current market, the item added.

Kauppalehti Online

>>> Credit Suisse - Global Equity Strategy - The macro picture in China has impr

Credit Suisse - Global Equity Strategy - The macro picture in China has improved. However, the ongoing challenge is that there has been no rebalancing. Our 'economic momentum proxy' is mildly positive and only one of our four hard landing indicators is flashing red. Current policy is mildly positive on our proxies. Investment conclusions: We see four China-related buys: (1) We upgrade luxury from underweight to overweight, (2) Non- China-related GEM exposure, (3) Shanghai A (excess liquidity is extreme), (4) Cement. We stay underweight: German autos, China-related capital goods, bulk chemicals and China-related competitive threat plays.

>>> Asian Update

Asian Market Update: China inflation continues to stabilize; Japan cabinet officials step up verbal rhetoric on FX

***Economic Data***
- (CN) CHINA APR CPI Y/Y: 2.3% V 2.3%E (matching its highest level since July 2014)
- (CN) CHINA APR PPI Y/Y: -3.4% V -3.7%E; 50th consecutive month of decline
- (NZ) NEW ZEALAND APR RETAIL CREDIT CARD SPENDING M/M: 0.9% (biggest increase since Sept) V 0.5%E; TOTAL: 1.5% V 0.5% PRIOR
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 113.9 v 113.9 prior
- (NZ) New Zealand Apr ANZ Truckometer Heavy M/M: -2.4% v +3.3% prior
- (UK) APR BRC LFL SALES Y/Y: -0.9% V +0.5%E (2nd consecutive decline)

***Index Snapshot (as of 04:00 GMT)***
- Nikkei225 +1.5%, S&P/ASX +0.3%, Kospi +0.3%, Shanghai Composite +0.2%, Hang Seng -0.2%, Jun S&P500 +0.1% at 2,057

***Commodities/Fixed Income***
- June gold +0.1% at $1,267/oz, June crude oil flat at $43.44/brl, Jul copper +0.3% at $2.11/lb
- GLD: SPDR Gold Trust ETF daily holdings rise 2.0 tonnes to 836.9 tonnes; highest since Dec 2013
- JGB: (JP) Japan MoF sells ¥2.18T in 10-year 0.1% JGBs; Avg yield: -0.096% (record low) v -0.069% prior; bid to cover: 3.44x v 3.89x prior
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.5233 V 6.5105 PRIOR; weakest setting since Mar 4th
- (CN) PBOC to inject CNY70B in 7-day reverse repos
- (AU) Australia MoF (AOFM) sells A$150M in 1.25% 2040 Indexed Bonds; Avg yield 1.005%; bid-to-cover: 3.59
- (HK) Hong Kong may offer inflation bonds beginning May 31st - HK press

***Market Focal Points/FX***
- Asian equity markets are finally seeing some risk-on flows come in after 4 straight losing sessions, with the latest China inflation figures bolstering the case for price recovery along with reports of govt support of the trade sector. Safe-haven yen also remains under pressure as overextended long positioning is unwound as govt officials step up their verbal campaign to stall JPY advance. Nikkei225 is the top performing index as USD/JPY rose 50pips from the lows above 108.80. In other FX majors, AUD/USD rose some 30pips above 0.7330, NZD/USD retreated 40pips below $0.6740 on Fin Min English comments, and EUR/USD traded in a 20pip range below $1.14.

- China April CPI was in line with consensus at 2.3%, matching its highest level since mid-2014. Food CPI remained elevated at 7.4% v 7.6% prior and non-food component remained underwhelming at 1.1% v 1.0% prior. On sequential basis, m/m declined at a slower pace of -0.2% v -0.4% prior. Wholesale or PPI inflation measures was once again more notable, printing its 50th straight month of y/y decline but at the smallest margin in 16 months. M/M PPI also rose for 2nd straight month at +0.7% v +0.5% prior. Analysts noted that recovery in the property market has spurred demand for commodities, resulting in the inflection in PPI data. Also of note in China, there were reports overnight that the State Council has issued guidelines to facilitate recovery of trade after recent soft figures, offering tax breaks and incentives from lenders to industries active in the trade sector.

- In Japan, Fin Min Aso noted that rapid FX moves, such as 2-yen spike vs USD in past 5 days, are undesirable. In the past, Japan govt officials have been vague about what they consider as "rapid" Fx volatility. Econ Min Ishihara also stated that the govt is closely monitoring market moves, calling for a combination of monetary easing and fiscal stimulus to tackle slow progress on inflation. Over the past week, USD/JPY pair is now up over 300pips from the lows of just over 105.50.

- Despite the rally in AUD after China inflation data, NZD/USD has tracked somewhat lower. NZ Fin Min English said that RBNZ Financial Stability Report coming out tomorrow may feature further macroprudential measures on housing. Property inflation has been the primary factor in keeping RBNZ at bay from deeper easing, and that announcement could eliminate a major hurdle to another RBNZ rate cut.

***Equities***
US equities / ADRs:
- STMP: Reports Q1 $1.72 v $1.07e, R$81.8M v $69.7Me; Raises FY16 guidance; +17.7% afterhours
- HTZ: Reports Q1 -$0.12 v -$0.03e, R$2.31B v $2.35Be; +2.2% afterhours
- RAX: Reports Q1 $0.34 v $0.22e, R$518M v $519Me; -7.7% afterhours
- BLOX: Cuts Q3 R$81-82M v $92.3Me (prior $91-93M); -13.0% afterhours
- GPS: Reports Apr SSS -7% v +0.5%e; Guides Q1 $0.31-0.32 v $0.44e, R$3.44B v $3.53Be; considering store closures; -13.5% afterhours
- SCTY: Reports Q1 -$2.56 v -$2.30e, R$122.6M v $105Me; -20.4% afterhours

Notable movers by sector:
- Consumer discretionary: Yamada Denki 9831.JP +5.1% (FY15/16 result)
- Consumer staples: CJ CheilJedang Corp 097950.KR +2.5% (Q1 result); NH Foods 2282.JP +5.4% (FY15/16 result)
- Financials: Gemdale Corp 600383.CN +0.1%(Apr result); Sumitomo Corp 8053.JP -2.1% (FY15/16 result)
- Industrials: Takata Corp 7312.JP -6.8% (cuts guidance); Mitsubishi Heavy Industries 7011.JP -2.1% (Fy15/16 result); Incitec Pivot IPL.AU +10.8% (H1 result)
- Technology: HTC Corp 2498.TW +3.2% (Q1 result); Advanced Semiconductor Engineering 2311.TW +1.0% (Apr result); Mesoblast MSB.AU -1.9% (Q3 result)
- Materials: LIXIL Group Corp 5938.JP +3.4% (FY15/16 result)

>>> US After Hours Summary: SCTY -20%, MNKD -15%, NVCR -15% following


After Hours Summary: SCTY -20%, MNKD -15%, NVCR -15% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: AEZS +13.2%, HTZ +1%

Companies trading higher in after hours in reaction to news: LC +2.4% (The SEC will review LendingClub's disclosures following today's announced irregularities, according to Bloomberg), NLS +2.3% (authorizes $10 mln million share repurchase program, bringing the total authorization under its existing program to $25 million)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SCTY -19.8%, MNKD -15.2%, NVCR -14.8%, SSNI -13.6%, BLOX -13%, GPS -12.8%, INVN -10.4%, AAOI -10%, FRGI -9.5%, SEDG -8.4%, RAX -8%, JUNO -3%

Companies trading lower in after hours in reaction to news: NLNK -35.2% (results of its Phase 3 clinical trial for algenpantucel-L for patients with resected pancreatic cancer did not achieve primary endpoint), TSE -4.2% (Bain Capital Everest Manager to sell 8 mln ordinary shares pursuant to shelf registration), ZTS -2.5% (Bill Ackman's Pershing Square is selling nearly 17 mln shares of Zoetis, according to the NYTimes), ED -2% (to commence registered underwritten public offering of 8.8 mln common shares)

>>> US Close Dow-0.20% S&P+0.08% Nasdaq+0.30% Russell+0.32%

Closing Market Summary: Biotech Rallies and Oil Slides to Begin Week

The stock market began its week on a flat note as a rebound in the heavyweight health care (+1.1%) sector compensated for a downturn from the oil pit. Additional focal points for today's trade included strengthening in the dollar, weakness in commodities, and the outperformance of the heavy-weighted consumer discretionary space (+0.3%). The Nasdaq Composite (+0.3%) ended ahead of the S&P 500 (+0.1%) and the Dow Jones Industrial Average (+0.1%).

The major averages slipped from their opening levels as investors focused their attention on a persistent downturn in crude oil. The energy component abandoned its early gains as participants weighed a four-month rally in oil against the impact of an ongoing wildfire in Canada's oil-sands region. Early estimates project that the fire near Fort McMurray will result in production losses between 645,000 and one million barrels per day. However, the energy component has already rallied 66.2% since its closing low of $26.14/bbl on February 11.

To be fair though, dollar-denominated gold (-2.1%; 1,226.80/ozt), iron ore (-6.3%; $54.65/mt), and copper (-2.3%; 2.10/lb) also ended the day lower as they each felt pressure from an uptick in the greenback and below-consensus data out of China. Over the weekend, April import (-10.9% year-over-year; expected -5.0%) and export (-1.8%; consensus -0.1%) data from China came in below consensus while commentary from a high-ranking official called into question further stimulus measures from the government.

Equity indices ticked off their session lows in the early afternoon as the heavily-weighted health care (+1.1%) and consumer discretionary (+0.3%) spaces extended their gains. The two finished near the top of the leaderboard along with countercyclical consumer staples (+0.6%) and utilities (+0.5%). Conversely, commodity-sensitive energy (-1.2%) and materials (-1.3%) rounded out the board.

In the health care sector (+1.1%), generic drug names outperformed as they rebounded from losses registered in the wake of disappointing guidance from Endo International (ENDP 15.27, -0.90). On that note, Allergan (AGN 213.71, +12.06) gained 6.0% today after declining 4.1% last Friday. The company is scheduled to deliver its quarterly report tomorrow morning. Elsewhere, biotechnology outperformed, evidenced by the 2.6% gain in the iShares Nasdaq Biotechnology ETF (IBB 261.90, +6.62).

The SPDR S&P Retail ETF (XRT 43.73, +0.70) outperformed in the consumer discretionary space (+0.3%) as retail names rebounded from a selloff following last week's disappointing same-store sales readings. Elsewhere, Chipotle Mexican Grill (CMG 453.17, +19.36) gained 4.5%, closing above last week's high ($447.46). On the flipside, JD.com (JD 23.41 ,-1.78) fell 7.1% after sales volume declined alongside growth concerns in China.

In the energy space (-1.2%) oil and gas service names underperformed with Halliburton (HAL 38.69, -0.75) and Schlumberger (SLB 72.77, -2.35) declining 1.9% and 3.1%, respectively. The broader energy sector extended its May decline to 4.2%, compared to a loss of 0.3% in the benchmark index.

The U.S. Dollar Index (94.14, +0.25) ended higher as the greenback gained against the yen and euro. The dollar/yen pair finished higher by 1.2% (108.38) after commentary from Japanese Finance Minister Taro Aso alluded to intervention in the foreign exchange market if the yen poses a continuing risk to trade or the country's broader economy. Separately, the euro lost 0.2% against the dollar (1.1383).

The Treasury complex ended its day higher with the yield on the 10-yr note slipping three basis points to 1.75%.

Today's trading volume was above the recent average as more than 941 million shares changed hands on the NYSE floor.

Investors did not receive any noteworthy economic data today.

Tomorrow's economic data will include the March Job Openings and Labor Turnover Survey and Wholesale Inventories for March (consensus +0.2%), which will both cross the wires at 10:00 ET. 

  • Nasdaq Composite -5.1% YTD
  • Russell 2000 -1.5% YTD
  • S&P 500 +0.7% YTD
  • Dow Jones +1.6% YTD

WSJ : Eurozone Asked to Consider More Concessions on Greece’s Debt

Eurozone Asked to Consider More Concessions on Greece’s Debt

Finance ministers to discuss extending maturities, limiting repayments and capping interest rates

BRUSSELS—Eurozone countries should extend maturities, limit annual repayments and cap interest rates on Greece’s second bailout, along with other measures, according to a document being discussed by Athens’s creditors Monday.

The document was prepared by the eurozone’s bailout fund, European Stability Mechanism, and reviewed by The Wall Street Journal. It says implementing all the proposed debt relief measures would bring Greece’s debt to 74% of gross domestic product by 2060, provided Athens fully implements its bailout program and if economic growth and government funding costs develop as expected.

Without these debt relief measures, Greece’s debt would be at 105% of GDP under such a scenario, according to the document.

The measures proposed in the document mostly focus on loans given to Greece under its second bailout from the now-defunct European Financial Stability Facility. Greece still owes the facility €130.9 billion.

Average maturities on these EFSF loans should be extended by an average five years to 37 1/2 years, the document says.

Annual payments on the principal of the European Financial Stability Facility loans should be fixed at 1% of GDP until 2050, while interest rates should be capped to 2% of the loans until then, the document says. Any outstanding debt and interest payments would then be split into equal installments to be repaid after 2050.

The document suggests two other measures. National central banks in the eurozone as well as the European Central Bank should give any profits they have made on Greek bonds back to Athens. Those payments would amount to around €8 billion, the document says.

On top of that, Greece should be allowed to use any leftover money from its third bailout of €86 billion to repay early loans from the International Monetary Fund. IMF loans carry higher interest than money borrowed from the eurozone bailout fund.

The document says that eurozone countries could choose to just implement some of the proposed measures. However, Greece’s debt will remain higher if not all measures are implemented.

Greece’s debt may rise to as much as 258% of gross domestic product by 2060 or fall to as low as 63% of GDP, according to an official analysis of the country’s debt trajectory that heralds tough talks ahead on potential measures to ease Athens’ payment burden.

The so-called debt sustainability analysis was drawn up by Greece’s European creditors. The wide divergences in the debt predictions are due to different forecasts on how much Greece’s economy will grow in the coming decades and how much money it can put aside to pay down debt.

Under all but the most optimistic scenarios, the document points to serious concerns over Greece’s ability to repay its debt, which stood at 176.9% of GDP at the end of last year. The results of “this analysis point to serious concerns regarding the sustainability of Greece’s public debt in the long term,” the document says.

The document was distributed to officials from eurozone finance ministries Monday morning for discussion later in the day.

To reach a deal, the ministers will also have to bring on board the IMF, one of Greece’s biggest creditors. The IMF has consistently had more pessimistic forecasts for Greece’s debt ratio and demanded far-reaching measures to cut the country’s payment burden. Here it has clashed with Germany, which has opposed further debt relief.

“Today we will only have a first discussion on what, when, if and how the debt sustainability or debt relief measures could take place,” said Jeroen Dijsselbloem, the Dutch finance minister who presides over the group of ministers, on his way into Monday’s meeting.

The debt sustainability analysis looks at four different scenarios for Greece’s economy and assesses how the country’s debt-to-GDP ratio will fare in each case for the decades up to 2060.

>>> Lattice Semi misses by $0.16, misses on revs; guides Q2 revs below consensus

Lattice Semi misses by $0.16, misses on revs; guides Q2 revs below consensus
* Reports Q1 (Mar) loss of $0.17 per share, $0.16 worse than the Capital IQ Consensus of ($0.01); revenues rose 8.9% year/year to $96.5 mln vs the $98 mln Capital IQ Consensus.
Non-GAAP Gross Margin 60.0%.
* Co issues downside guidance for Q2, sees Q2 revs of $97-103 mln vs. $107.43 mln Capital IQ Consensus Estimate.
Sees Non-GAAP EPS in the range of 55-59%.

>>> Mitsubishi Motors / Nissan to cover customer costs from scandal

Mitsubishi Motors to cover customer costs from scandal - http://s.nikkei.com/1OkGHbx
TOKYO -- Mitsubishi Motors and Nissan Motor firmed up plans Monday to compensate customers for expenses stemming from the lower-than-reported fuel efficiency of some cars, including fuel costs and higher taxes on vehicles that no longer qualify for breaks.

Letters signed by both automakers' presidents will be mailed to customers via dealers soon, apologizing for the mileage data scandal and laying out a compensation policy.

The amount paid will depend on the results of fuel efficiency testing by Japan's transport ministry, which began May 2 but will likely not finish until June.

Mitsubishi Motors will foot Nissan's portion of the bill.