>>> Europe : Brokers Upgrades & Downgrades - 14th of April 2016

>>> Up
*ALSTOM RAISED TO BUY VS NEUTRAL AT UBS
*ATOS RAISED TO OVERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*IMAGINATION TECH RAISED TO EQUALWEIGHT VS UNDERWEIGHT: BARCLAYS
*JOHNSON MATTHEY RAISED TO OUTPERFORM AT CREDIT SUISSE
*SALZGITTER RAISED TO OUTPERFORM VS SECTOR PERFORM AT RBC
*TOD’S RAISED TO HOLD VS SELL AT SOCGEN

>>> Down
*PRADA CUT TO HOLD VS BUY AT HSBC
*SOFTWARE AG CUT TO UNDERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*TESCO CUT TO SELL VS HOLD AT SOCGEN

>>> PT Change


>>> Initiation
*ABN AMRO RATED NEW OUTPERFORM AT MACQUARIE; PT EU22
*GENMAB RATED NEW BUY AT CITI; PT DKK1,140
*METRO BANK RATED NEW OUTPERFORM AT RBC CAPITAL
*PREMIER FARNELL REINSTATED EQUALWEIGHT AT BARCLAYS, PT 125P

>>> Call
>> Stock
*UMICORE ADDED TO EUROPE FOCUS LIST AT CREDIT SUISSE

>>> Telecom Italia to choose between rival bids for Inwit stake in first week of

Telecom Italia to choose between rival bids for Inwit stake in first week of May 

Telecom Italia (TI) will hold a board of directors meeting in the first week of May to pick a winning bidder for a stake in Inwit, the listed Italian transmission tower group, the Italian language Carlo Festa blog reported. The report cited unspecified rumours saying that it will have to choose between a bid for a 45% stake in Inwit from a consortium made up of Cellnex and F2i an an offer from EI Towers for a stake just under 30%.

The report said that the Cellnex/F2i offer is priced at EUR 4.9 a share and the EI Towers offer at EUR 5 a share.
Inwit has a market cap of EUR 2.61bn.

Carlo Festa Blog

>>> Moleskine could attract private equity bidders - Il Sole 24 Ore

Moleskine could attract private equity bidders 

Moleskine, the listed high-end Italian stationary producer, could attract bids from private equity, Italian language daily Il Sole 24 Ore reported.

The unsourced report said that PE firms Permira, Blackstone and Triton could be among the bidders.

The report added that Rothschild, which has extensive knowledge of Moleskine, could become involved in the dossier.

The report said that the speculation has been sparked by the fact that PE firm Syntegra has held its 42.2% stake for 10 years and could be looking to exit. The item noted that Syntegra has ruled out an exit in the short term.

Moleskine has a market cap of EUR 415m.

Il Sole 24 Ore

>>> Gategroup to submit revised proposal regarding executive management compensa

Gategroup to submit revised proposal regarding executive management compensation to AGM

On 13 April listed Swiss airline catering group Gategroup issued the following press release:

Prior to tomorrow’s Annual General Meeting, the Board of Directors of gategroup Holding AG has held discussions with various key shareholders and proxy advisors on agenda item 9.2 (total amount of compensation of the Executive Management Board for the 2017 business year) and has come to the conclusion that this item needs to be reviewed.

The Board of Directors has therefore decided not to submit to the Annual General Meeting agenda item 9.2 for a vote. The Board of Directors intends to submit to the next General Meeting a revised proposal regarding compensation of the Executive Management Board.

>>> Qatar Holding increases stake in London Stock Exchange Group to 10.3%

Qatar Holding increases stake in London Stock Exchange Group to 10.3% - pdf attached

The sovereign wealth fund Qatar Holding has disclosed that it has increased its shareholding in London Stock Exchange Group [LON:LSE] to 10.321%. The stakebuilding was disclosed in a stock exchange announcement by Qatar Holding, which can be viewed here.

London Stock Exchange Group’s share price closed 18p up at 2808p in London on Wednesday, valuing the company at GBP 9.78bn (EUR 12.29bn).


see press release attached

>>> Asian Update

Asian Market Update: Austalia unemployment rate falls to 2013-lows, reducing outlook for more RBA cuts; Singapore central bank eases policy

***Economic Data***
- (AU) AUSTRALIA MAR EMPLOYMENT CHANGE: 26.1K (4-month high) V 17.0KE; UNEMPLOYMENT RATE: 5.7% (lowest since Sept 2013) V 5.9%E
- (AU) AUSTRALIA APR CONSUMER INFLATION EXPECTATION: 3.6% V 3.4% PRIOR
- (NZ) NEW ZEALAND FEB MANUFACTURING PMI: 54.7 V 55.9 PRIOR; 2nd straight month of sequential decline and 5-month low
- (SG) SINGAPORE Q1 ADVANCED GDP Q/Q: 0.0% V 0.0%E; Y/Y: 1.8% V 1.7%E
- (UK) MAR RICS HOUSE PRICE BALANCE: 42% V 50%E; 9-month low

***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 +3.1%, S&P/ASX +1.2%, Kospi +1.3%, Shanghai Composite +0.1%, Hang Seng +0.9%, Jun S&P500 -0.1% at 2,075

***Commodities/Fixed Income***
- Apr gold -1.1% at $1,234/oz, May crude oil -1.2% at $41.28/brl, May copper -0.3% at $2.16/lb
- SLV: iShares Silver Trust ETF daily holdings fall to 10,396 tonnes from 10,455 tonnes prior; first fall since Mar 23rd
- GLD: SPDR Gold Trust ETF daily holdings fall 5.0 tonnes to 810.1 tonnes; 3rd straight decline
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.4891 V 6.4591 PRIOR; weakest Yuan setting since Mar 29th; first weaker setting in 4 sessions
- (CN) PBOC to inject CNY40B in 7-day reverse repos
- JGB: (JP) Japan's MOF sells ¥730B in 0.8% 30-year bonds; Avg yield: 0.388% (record low) v 0.765% prior; Bid to cover: 3.39x v 4.21x prior; Tail: 0.67 (widest since April 2013) v 0.03 prior
- (JP) Japan investors sold net ¥1.2T in foreign bonds v sold ¥1.6T in prior week; Foreign investors bought net ¥147B in Japan stocks v bought ¥415B in Japan stocks in prior week

***Market Focal Points/FX***
- Asian equity markets are generally positive, though investors on the mainland are notably more cautious going into tomorrow's Q1 GDP and March economic data points. Nikkei225 is leading the charge higher amid continued weakness in JPY currency, as USD/JPY has now tested a 1-week high above 109.50. Australia's mining names are also benefiting from the prevalent risk-on sentiment this week, even though commodity prices - precious metals in particular - were lower in electronic trade. Aussie banks are seeing more modest gains amid speculation of bad debt exposure from some of the troubled mining names. In other FX majors, AUD/USD was volatile in a 40-pip range above 0.7620 as Aussie employment report was more mixed than implied in the headline. AUD was also weighed by cautious remarks from Moody's, as was NZD/USD which fell some 80pips below 0.6840.

- A surprise currency policy easing by Singapore central bank was a notable ripple that was also felt in significantly weaker Yuan fix by the PBoC. In its semiannual statement, MAS set the rate of appreciation of SGD nominal effective exchange rate (S$NEER) at 0% effective Apr 14th, thus removing its bias of slight SGD appreciation. Policymakers said this does not signify that MAS prefers SGD depreciation, but also noted that headline CPI would remain negative this year and economic growth would be more modest. This marked the 3rd policy easing by the MAS since 2015, sending USD/SGD pair up well over 100pips above S$1.36, while STI index rose about 1%.

- Australia March employment change above 26K was a 4-month high, and unemployment rate of 5.7% was the lowest since Sept 2013. Initially, the figures sent AUD/USD up over 30pips above 0.7660. However, inside those numbers were a negative full-time employment component (-8.8K v +13.9K prior) as part-time labor growth signified uneven transition in the economy. Participation rate also did not grow as expected, remaining at a 6-month low of 64.9%. Lastly, the aggregate hours worked marked their biggest sequential decline since mid-2012. Nonetheless, fixed income markets reduced the expectations of another RBA cut in May below 20%. Still, AUD promptly retreated from the initial spike on jobs numbers, remaining pressured by earlier comments from Moody's calling for higher taxes in addition to lower spending in order for Australia to retain its AAA rating.

- BOJ Gov Kuroda spoke extensively on the central bank policy, largely remaining optimistic about achieving inflation target with the current policy framework. As usual, Kuroda reiterated that the central bank is prepared to cut rates further, but generally sees underlying trend of inflation improving and economy recovering. He also defended the use of negative rates, stating the economy would have been worse without negative rates. Later in the day, BOJ's Amamiya was somewhat more practical, calling for close monitoring of the impact of negative rate policy on Japanese financial market. The distortions of BOJ's NIRP on JGBs was evidenced by a particularly soft demand in today's 30-year auction, where the average yield of 0.388% was much lower than the 0.8% coupon and the tail was the widest in 3 years.

***Equities***
US equities / ADRs:
- LUB: Reports Q2 -$0.03 v -$0.07 y/y, R$92.1M v $91.0M y/y; +5.4% afterhours
- WYNN: CEO Stephen Wynn buys 72.8K shares at $98.78 - filing; +2.3% afterhours
- PIR: Reports Q4 $0.39 (adj) v $0.21e, R$542M v $533Me; -5.2% afterhours
- STX: Reports prelim Q3 R$2.6B v $2.72Be, gross margin 23% (prior forecast R$2.7B, gross margin 25.6%); -6.2% afterhours

Notable movers by sector:
- Consumer discretionary: China Eastern Airlines 600115.CN +2.3% (guidance); Luk Fook Holdings 590.HK -0.9% (Q4 result); Aeon Mall Co. 8905.JP +4.5% (FY15/16 result); Lawson Inc 2651.JP -3.6% (FY15/16 result); Aeon Co 8267.JP +4.7% (FY15/16 result)
- Financials: COFCO Property Group Co 000031.CN +1.0% (Q1 guidance)
- Industrials: GUD Holdings GUD.AU +7.2% (sells interest in Sunbeam and Jarden business)
- Materials: Whitehaven Coal WHC.AU +12.7% (Q3 production); Sandfire Resources SFR.AU -2.8% (Q3 production)

>>> US After Hours Summary: EXXI -59% after reports it is preparing to


After Hours Summary: EXXI -59% after reports it is preparing to file bankruptcy; STX -6% after prelim Q3 revs below Consensus

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: PIR -6.7%, STX -6%

Companies trading lower in after hours in reaction to news: EXXI -58.6% (in preparations for filing bankruptcy, according to Bloomberg), SUNE -4.9% (misses a ~$2.6 mln payment on a bond, according to Bloomberg), SUM -1.9% (announces 10 mln common share offering by selling shareholders)

>>> US CLose Dow+1.06% S&P+1% Nasdaq+1.55% Russell+2.14%

Closing Market Summary: Financials Lead Indices and Large Caps Higher

The stock market ended the Wednesday affair on a higher note as better than feared earnings results from JPMorgan Chase (JPM 61.79, +2.51) and CSX (CSX 26.03, +1.04) boosted their respective sectors and the broader market. Additionally, today's trade saw a downturn in crude oil, below-consensus readings of economic data, and the outperformance of the heavily-weighted financial (+2.3%), industrial (+1.4%) consumer discretionary (+1.4%), and technology (+1.4%) spaces. The Nasdaq Composite (+1.6%) ended its day ahead of both the Dow Jones Industrial Average (+1.1%) and the S&P 500 (+1.0%).

Today's session started on a higher note as equity futures and international bourses responded to an above-consensus reading of exports out of China (+11.5% year-over-year; consensus +2.5%). Meanwhile, positive earnings reports at home outweighed some negative economic data and a downturn in crude oil. On that note, March PPI, Retail Sales for March, and Business Inventories for February all either came in below-consensus or contained negative revisions to prior reports.

The major averages slipped from their highs after the release of the Department of Energy's weekly stockpile data. Weekly inventories showed that crude oil stockpiles rose by 6.63 million barrels (consensus 1.85 million barrels). As a result, WTI crude ended its day lower by 1.0% at $41.70/bbl. To be fair though, the energy component has gained 8.9% in April, and the potential production cut meeting will be held on Sunday.

The downturn in crude oil did not cause the broader market to rollover as heavily-weighted sectors maintained momentum throughout the day. On that note, the beleaguered financial sector (+2.3%) ended its day in the front of the pack while industrials (+1.4%), consumer discretionary (+1.4%), and technology (+1.4%) followed.

The economically-sensitive financial sector (+2.3%) moved higher in sympathy with JPMorgan Chase. The company reported a top and bottom-line beat in the first quarter. However, the company's report didn't paint a rosy picture, as revenue declined 3.7% year-over-year and the company increased its loan loss provisions from $959 million to $1.80 billion. Elsewhere in the group, Citigroup (C 44.25, +2.35) outperformed after its "living will" was approved by regulators. The company has until July 1, 2017 to revise shortcomings in its plan.

In the industrial space (+1.4%), rail names and airlines displayed relative strength today. Among the rail names, CSX outperformed after reporting bottom-line results that fell in-line with analysts' expectations. Elsewhere, Delta Airlines (DAL 48.04, +1.41) gained 3.0% ahead of its earnings release tomorrow morning.

Media names and electronics retailers outperformed in the consumer discretionary space (+1.4%) as large cap Disney (DIS 99.48, +2.13) gained 2.2%. Meanwhile, Best Buy (BBY 32.16, +1.34) and GameStop (GME 31.47, +1.38) jumped a respective 4.4% and 4.6%.

Countercyclical telecom services (-1.0%), consumer staples (-0.8%), and utilities (-0.7%) finished beneath their flat lines while energy (+0.4%) and health care (+0.9%) finished with the slimmest gains.

On the central bank front, the Federal Reserve released its April Beige Book, which described overall economic activity across the twelve Fed Districts as expanding within a "modest" or a "moderate" range. Most districts reported job gains, which in turn looks to be leading to an uptick in wage growth. Elsewhere, manufacturing activity increased in most districts, although, expectations for continued expansion remained mixed. As for inflation, the Beige Book described continued optimism for slow and steady growth in 2016.

The U.S. Dollar Index (94.79, +0.83) ended beneath its session high as the dollar trimmed its gain against the euro and the yen. The euro/dollar pair slipped 0.9% against the dollar and finished at 1.1277. The dollar/yen pair ended its day at 109.29 (+0.6%).

The Treasury complex concluded its day on its highs as the yield on the 10-yr note sank two basis points to 1.76%.

Today's participation was above the recent average as more than 983 million shares changed hands on the NYSE floor.

Today's economic data included the weekly MBA Mortgage Index, March Core PPI, Retail Sales for March, February Business Inventories, and the Fed's Beige Book for April: 

  • The weekly MBA Mortgage Index showed a seasonally adjusted increase of 10.0% 
  • The Producer Price Index for final demand declined 0.1% (consensus +0.3%).Excluding food and energy, producer prices were also down 0.1% (consensus +0.2%) after being unchanged in February.
    • The March data underscore that inflation continued to run cool at the producer level, which should presumably help keep consumer prices in check.
    • A 0.2% decline in prices for final demand services acted as a drag on the final demand index, but was offset in part by a 0.2% increase in prices for final demand goods.
    • On an unadjusted basis, prices for final demand are down 0.1% year-over-year. Final demand prices less food and energy are up 1.0% year-over-year on an unadjusted basis.
  • The Retail Sales report for March was pretty lackluster, offering further evidence that consumer spending and economic activity overall was pretty weak in the first quarter.
    • Plagued by a 2.1% decline in auto sales, total retail sales declined 0.3% in March (consensus +0.1) after being unchanged in February.
    • Excluding autos, retail sales were up a weaker than expected 0.2%  (consensus +0.4%) after also being unchanged in February. A 1.4% gain in building material sales and a 0.9% jump in gasoline station sales helped offset a 0.9% drop in apparel sales and a 0.8% decline in sales at food services and drinking places.
    • Core retail sales, which exclude auto, gasoline station, and building material sales, were flat following a 0.4% increase in February. Core retail sales factor into the computation for the goods component of personal consumption expenditures in the GDP report. So, it's not very good news here.
  • Total business inventories declined 0.1% in February (consensus -0.1%). The negative surprise with this report was the downward revision to January business inventories, which were revised to show a decline of 0.1% versus a previously reported reading of being unchanged.
    • The decline in business inventories in February combined with the decline in January will factor negatively in the computation for first quarter GDP, which stood most recently at just 0.1% according to the Atlanta Fed's GDP Now model forecast.
    • Manufacturers' inventories (-0.4%) and merchant wholesaler inventories (-0.5%) were already known. Retailer inventories were the only unknown and they increased 0.6% on top of a 0.4% increase in January.
      The breakdown of retailer inventories showed increases in all major areas, with the exception of furniture, home furnishings, electronic and appliance stores (-0.1%). The biggest uptick in inventories was seen for motor vehicle and parts dealers (+1.3%).
    • The total business inventory-to-sales ratio stood at 1.41 in March, which was unchanged from the upwardly revised reading for February (from 1.40) and up from 1.37 in the same period a year ago.

Tomorrow's economic data will include Core CPI for March (consensus +0.2%) and weekly initial claims (consensus 268k), which will both cross the wires at 8:30 ET.