>>> Asian Update

Asian Market Update: Fed Chair Yellen tempers recent "live meeting" Fed speak with dovish remarks; Japan industrial output plummets; ADB cuts Asia GDP targets

***Economic Data***
- (JP) JAPAN FEB PRELIMINARY INDUSTRIAL PRODUCTION M/M: -6.2% (biggest decline since Mar 2011) V -5.9%E; Y/Y: -1.5% V -1.7%E
- (JP) JAPAN FEB VEHICLE PRODUCTION Y/Y: -6.9% V -5.8% PRIOR; 3rd straight decline
- (CN) China Mar Westpac Consumer Confidence index: 118.1 v 111.3 prior
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 114.5 v 116.0 prior
- (NZ) NEW ZEALAND FEB BUILDING PERMITS M/M: +10.8% V -7.8% PRIOR; 7-month high
- (KR) South Korea Feb Department Store Sales y/y: -1.9% v 9.0% prior; Discount store sales y/y: -7.0% v 11.0% prior

***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 -0.3%, S&P/ASX +0.1%, Kospi +0.4%, Shanghai Composite +1.4%, Hang Seng +1.4%, Jun S&P500 +0.1% at 2,049

***Commodities/Fixed Income***
- Apr gold flat at $1,238/oz, May crude oil +0.8% at $38.57/brl, May copper -0.9% at $2.19/lb
- (US) Weekly API Oil Inventories: Crude: +2.6M v +8.8M prior; 6th straight week of build
- GLD: SPDR Gold Trust ETF daily holdings fall 1.2 tonnes to 820.5 tonnes; first decline since Mar 14th
- SLV: iShares Silver Trust ETF daily holdings rise to 10,276 tonnes from 10,257 tonnes; highest since Apr 2015
- (CN) PBOC to inject CNY60B in 7-day reverse repos
- (CN) PBOC SETS YUAN MID POINT AT 6.4841 V 6.5060 PRIOR; Strongest Yuan setting since Mar 18th
- (AU) Australia MoF (AOFM) sells A$900M in 2.75% 2017 Bonds; avg yield: 2.63%; bid-to-cover: 2.54x

***Market Focal Points/FX***
- Asian equity markets have responded positively to the latest set of dovish remarks from Fed chair Yellen, tracking the gains on Wall St, just as USD index plunged and precious metals rallied. Speaking in New York, Yellen challenged the more upbeat recent rhetoric from regional Fed presidents that rekindled uncertainty of April being a "live" meeting, noting ongoing risks to US economy from global developments while also expressing concern about low inflation expectations with projections of PCE core well below 2% in 2016. She concluded that cautiousness in policy adjustment is the most appropriate course of action, reiterating that the FOMC is not on a preset course for normalizing policy. USD/JPY fell about 100pips below 112.40 from the levels ahead of Yellen's remarks, AUD/USD was up about 90 pips above 0.7640, and NZD/USD up about 80pips to trade above 0.6880, with some added strength coming from hotter building permits data. China markets led the regional advance, while Nikkei lagged on JPY strength against the stumbling greenback.

- Risk aversion in Japan was exacerbated by particularly disappointing February industrial production which fell m/m by the biggest margin since the massive 2011 earthquake. Despite the bigger than anticipated plunge, METI still raised its March forecast to +3.9% m/m v +3.1% prior and also set its Apr forecast at +5.3%. Earlier, a Nikkei feature noted increasingly lower trading volumes on Tokyo Stock Exchange as indication of wilting investor confidence in even short-term trading profits. Later in the day, Japan vehicle output also fell for the 3rd straight month.

- Regionally, Asian Development Bank (ADB)'s "Outlook 2016" report cut developing Asia 2016 GDP target to 5.7% from 6.0% and cut Central Asia 2016 GDP growth to 2.1% from 3.7%. SE Asia forecasts were cut to 4.5% from 4.9% and 2017 set at 4.8%. ADB also cut its China target for this year to 6.5% from 6.7% prior and forecast 2017 at 6.3% - below the official 6.5-7.0% range for the next 5 years.

- In Australia, PM Turnbull confirmed press speculation that the govt will consider giving more flexibility to states to set their own rates of income tax, reducing nationwide levy by 2pts starting from 2020. On the corporate front, shares of Virgin Australia were sharply lower after key holder Air New Zealand announced it is considering selling part or all of its 26% stake in VAH.

***Equities***
US equities / ADRs:
- SONC: Reports Q2 $0.18 adj v $0.16e, R$133.2M v $129Me; +4.3% afterhours
- PLAY: Reports Q4 $0.53 v $0.43e, R$234M v $229Me; -0.6% afterhours
- RH: Reports Q4 $0.98 v $0.99 prelim, R$647M v $647M prelim; -4.5% afterhours
- VRNT: Reports Q4 $0.90 v $1.17e, R$282M v $319Me; Starts $150M share buyback program (6.8% of market cap); -11.9% afterhours

Notable movers by sector:
- Consumer discretionary: Belle International Holdings 1880.HK -7.5% (guidance); Dongfeng Motor 600006.CN +0.2% (FY15 result); FamilyMart Co. 8028.JP +0.8% (FY15/16 result speculation); Daphne International Holdings 210.HK -1.0% (FY15 result); Ajinomoto Co 2802.JP -5.1% (guidance)
- Consumer staples: WH Group 288.HK +7.5% (FY15 result)
- Financials: Evergrande Real Estate Group 3333.HK -1.3% (FY15 result); Bank of Communications 601328.CN +1.8% (FY15 result); China Everbright Bank Co 601818.CN +1.9% (FY15 result)
- Industrials: CRRC Corp 601766.CN +1.2% (FY15 result); Virgin Australian VAH.AU -4.8% (Air New Zealand looks to sell stake)
- Technology: Alibaba Pictures Group 1060.HK +4.1% (FY15 result); Ourgame International Holdings 6899.HK +1.9% (FY15 result); Samsung Electronics 005930.KR +1.4% (Q1 result speculation); Sharp Corp 6753.JP +6.2% (president to resign)
- Energy: Sinopec (China Petroleum & and Chemical Corp) 386.HK +6.1% (FY15 result); Xinjiang Goldwind Science & Technology Co 2208.HK +5.1% (FY15 result); Yanzhou Coal Mining Co. 1171.HK -0.5% (FY15 result); APA Group APA.AU +2.8% (AGL deal)
- Telecom: NTT (Nippon Telegraph & Telephone Corp) 9432.JP +0.5% (acquisition)

>>> US After Hours Summary: ACAD +22% in reaction to news; LNDC -13% &


After Hours Summary: ACAD +22% in reaction to news; LNDC -13% & VRNT -12% in reaction to earnings

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: SONC +3.7%

Companies trading higher in after hours in reaction to news: ACAD +22.2% (affirms favorable AdComm review for NUPLAZID for the treatment of psychosis associated with Parkinson's disease)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: LNDC -12.6%, VRNT -11.9%, WPRT -5.8%, VNCE -3.1%, RH -2.6%, PLAY -1.8%

Companies trading lower in after hours in reaction to news: SPKE -14.9% (announces 1.5 mln secondary offering of class A common stock by selling stockholders), CTRV -7.2% (to offer shares of its common stock and warrants to purchase shares of its common stock in a 'best efforts' underwritten public

>>> US CLose Dow+0.56% S&P+0.88% Nasdaq+1.67% Russell+2.67%

Closing Market Summary: Dovish Commentary Rallies Indices

The stock market ended its day on a sharply higher note as Fed Chair Janet Yellen boosted equities by striking a decidedly dovish tone. Meanwhile, the outperformance of the heavily-weighted technology (+1.6%) and health care (+1.2%) spaces added support to the move higher. Conversely, a downturn in crude oil and the underperformance of the financial sector (+0.2%) provided for some early weakness in the broader market. The Nasdaq Composite (+1.7%) ended ahead of the S&P 500 (+0.9%) and the Dow Jones Industrial Average (+0.6%).

Equity indices opened their day modestly lower as global bourses struck a risk-off posture ahead of remarks from Fed Chair Janet Yellen. At the same time, a continued tumble in crude oil took some steam out of the equity market. To that point, oil carved out fresh session lows in the morning as investors eyed this evening's weekly API data. However, an increase in risk appetite, courtesy of dovish commentary from Fed Chair Yellen, lifted the energy component off its low. Nevertheless, WTI ended its day lower by 2.7% at $38.32/bbl.

Chair Yellen channeled the dovish undertones from her March 16 press conference as she cited growing risks to the global economy to justify a gradual path in raising rates. Particularly, the Fed Chair mentioned uncertainty over China, low oil prices, and tightening in financial conditions. Furthermore, Fed Chair Yellen pointed to possible shortcomings in monetary policy if another disturbance were to manifest itself. Ms. Yellen noted the "asymmetric" response of monetary policy if economic conditions worsened, given the fed funds rate this close to zero.

All ten sectors ended the day in the green with heavily-weighted technology (+1.6%), utilities (+1.4%), and health care (+1.2%) leading the upside. Meanwhile, the economically-sensitive financial sector (+0.2%) and commodity-sensitive energy (+0.4%) and materials (+0.4%) showed the slimmest gains.

The influential technology sector (+1.6%) outperformed throughout the day, but enjoyed a strong bid following the conclusion of Fed Chair Yellen's speech. Apple (AAPL 107.70, +2.51) and Microsoft (MSFT 54.71, +1.17) outperformed as large names  saw an influx of buying interest. Meanwhile, Yahoo! (YHOO 36.32, +1.09) gained 3.1% after reports indicated that interested parties have until April 11 to submit offers for the web portal's core business and Asian assets.

Biotechnology outperformed in the health care group (+1.2%), as the iShares Nasdaq Biotechnology ETF (IBB 256.61, +4.53) gained 1.8%. To be fair though, the entire space experienced an uptick in buying interest as the beleaguered sector sought to rebound from its 5.7% year to date decline.

In the consumer discretionary space (+0.9%), homebuilders outperformed following above-consensus first quarter results from Lennar (LEN 48.18, +1.48). Meanwhile, Amazon (AMZN 593.86, +13.99) tacked on to its recent winning streak as the retail giant gained 2.4%.

Conversely, rate-sensitive money center banks and life insurance companies underperformed in the financial sector (+0.2%). The groups saw little reprieve from the dovish commentary as their earnings prospects are expected to suffer from lower rates. On that note, MetLife (MET 42.46, -0.54) tumbled 1.3% while Dow component JPMorgan Chase (JPM 59.03, -0.37) fell 0.6%.

On the commodities front, gold spiked following comments from Fed Chair Yellen, which helped diminish inflation expectations. Gold rallied 1.3% to $1,235.80/ozt.

The yield on the 10-yr note ended its day lower by nine basis points to 1.80%. 

The U.S. Dollar Index (95.15, -0.79) came under fire as traders again reconsidered the policy divergence trade. The euro gained 0.9% against the dollar to end at 1.1294. Meanwhile, the dollar lost 0.7% to the yen and kicked the pair to 112.70 after trading at 113.46.

Once again, today's participation was above last week's average as more than 945 million shares changed hands on the NYSE floor.

Today's data included the Case-Shiller 20-city Index for January and Consumer Confidence for March: 

  • The Case-Shiller 20-city Home Price Index for January rose 5.7%, which fell in-line with the consensus. This followed the previous month's unrevised increase of 5.7%.
  • The Conference Board's Consumer Confidence index increased to 96.2 in March from an upwardly revised 94.0 (from 92.2) in February. The March reading was ahead of the consensus estimate, which was pegged at 94.5.
    • The March reading leaves the series roughly in the middle of a 91-104 range that has been in effect since November 2014.
    • The improvement in March stemmed from an increase in the Expectations Index (from 79.9 to 84.7), which outweighed a decline in the Present Situation Index (from 115.0 to 113.5).
    • The report indicated that the strengthening in the Expectations Index was due in part to an improved outlook for the labor market.

Tomorrow's economic data will be limited to the weekly MBA Mortgage Index and the ADP Employment Change for March (consensus 214k), which will be released at 7:00 ET and 8:15 ET, respectively. 

  • Nasdaq Composite -3.2% YTD
  • Russell 2000 -2.5% YTD
  • S&P 500 +0.5% YTD
  • Dow Jones +1.2% YTD

>>> LVMH not interested in Burberry – report (translated)

LVMH not interested in Burberry 

LVMH [EPA:MC], the listed French fashion and luxury group, is not interested in competitor Burberry [LON:BRBY], the London, England-based manufacturer, wholesaler and retailer of luxury goods, French weekly Challenges reported. The unsourced report claimed that Bernard Arnaut, the owner and head of LVMH, has denied having any interest in the company. Burberry has a GBP 5.87bn market cap.

Challenges

>>> LafargeHolcim engages Citi and JPMorgan to sell Australian and New Zealand o

LafargeHolcim engages Citi and JPMorgan to sell Australian and New Zealand operations - The Australian

LafargeHolcim [VTX: LHN] is believed to have engaged Citi and JPMorgan to investigate the sale of its Australia and New Zealand business, The Australian’s Dataroom reported, without citing sources. The report said that neither Citi or JPMorgan would confirm the mandate.

LafargeHolcim has been considering the sale of its Australian and New Zealand operations as part of a larger global asset sell off, the paper noted.

The article stated that JPMorgan and Citi may have been preparing the Australian and New Zealand business for an ASX listing. However, the report said that listing plans have been put on hold due to volatile market conditions.

Plans to sell the company could still be in the works, the paper said. Adelaide Brighton [ASX: ABC] is considered a potential trade buyer.

The Australian