>>> Fed Chair Yellen: reiterates Fed to proceed cautiously in raising rates - se

Fed Chair Yellen: reiterates Fed to proceed cautiously in raising rates - semi-annual Senate testimony 
- expects inflation to rise to 2% over medium term as transitory influences holding it down fade
- data points to a step-up in Q2 GDP growth
- reiterates there are tentative signs wage growth may be picking up; reiterates pace of labor market improvements appear to have slowed
- anticipates economic conditions will improve further
- cannot rule out possibility slow productivity growth will continue
- considerable uncertainty about economic outlook remains
- path of Fed funds rate will depend on economic and financial developments
- corporate bond program continues to function smoothly

La TRibune : Les "arrangements troubles" de Lafarge avec l'Etat islamique

Les "arrangements troubles" de Lafarge avec l'Etat islamique

Le groupe français a négocié avec l'Etat islamique en vue d'obtenir des autorisations pour laisser passer aux checkpoints les employés de son usine syrienne, selon Le Monde.

Le cimentier Lafarge a tenté en 2013 et 2014 de faire fonctionner "coûte que coûte" son usine en Syrie "au prix d'arrangements troubles et inavouables avec les groupes armés environnants, dont l'organisation Etat islamique (EI)", affirme mardi Le Monde.

En cause : la cimenterie de Jalabiya, située à 150 kilomètres au nord-est d'Alep, rachetée par Lafarge en 2007 et mise en route en 2011. "Jusqu'en 2013, la production se maintient malgré l'instabilité croissante dans la région due à la guerre civile qui a débuté en 2011", relève le quotidien. Mais "à partir du printemps 2013", l'EI "prend progressivement le contrôle des villes et des routes environnant l'usine de Lafarge".

"Des courriels envoyés par la direction de Lafarge en Syrie, publiés en partie par le site syrien proche de l'opposition Zaman Al-Wasl et que Le Monde a pu consulter, révèlent les arrangements de Lafarge avec le groupe djihadiste pour pouvoir poursuivre la production jusqu'au 19 septembre 2014, date à laquelle l'EI s'empare du site et Lafarge annonce l'arrêt de toute activité", explique Le Monde.

Des négociants qui commercialisent le pétrole raffiné par l'EI
Lafarge, qui cherche à garantir l'accès à l'usine de ses ouvriers et des marchandises, missionne notamment un certain Ahmad Jaloudi "pour obtenir des autorisations de l'EI pour laisser passer les employés aux checkpoints". Des échanges de courriels "permettent de conclure que la direction de Lafarge à Paris était au courant de ces efforts".

Autre preuve du quotidien : "Un laissez-passer estampillé du tampon de l'EI et visé par le directeur des finances de la wilaya (région) d'Alep, daté du 11 septembre 2014, atteste des accords passés avec l'EI pour permettre la libre circulation des matériaux".

Pour pouvoir fabriquer le ciment, Lafarge est aussi passé par "des intermédiaires et des négociants qui commercialisaient le pétrole raffiné par l'EI, contre le paiement d'une licence et le versement de taxes", assure le journal. Lafarge, qui a depuis fusionné en 2015 avec le Suisse Holcim pour devenir un géant des matériaux de construction, n'était pas joignable dans l'immédiat à Paris.

>>> US Gapping Up

Gapping up
In reaction to strong earnings/guidance
: LEN +3.7%

M&A news: ASEI +12.6% (to be acquired by OSI Systems (OSIS) for $37.00/share in cash, or ~$269 mln), NSR +4.1% (announces intention to separate into two independent and publicly traded companies)

Select EU financial related names showing strength: SAN +2.5%, BCS+2.4%, PUK +2.2%, DB +2%, ING +2%, RBS +1.9%, LYG +1.5%, CS+1.4%

Other news: CDXC +9.2% (responds to recent report of short sellers; co exploring options in response to 'attack' ), OPK +7.8% (confirms FDA approval for RAYALDEE; U.S. launch planned for H2 of 2016),IMPV +7.7% (Elliott Associates disclosed a 9.8% active stake, confirming reports it has acquired a position. Elliott said it has initiated dialogue with management and the Board on ways to increase shareholder value), RDHL +6.8% (positive final results with primary and secondary endpoints met in phase 1 study with Yeliva in advanced solid tumors), CYRN +6.1% (Thomson Reuters (TRI) announced a strategic partnership with CYREN (CYRN).g), GWPH+3.5% (selects infantile spasms as the fourth target indication for its Epidiolex orphan pediatric epilepsy development program), MITK+3.3% (issued patent by the USPTO for its unique system for processing and extracting content from the image of a driver license captured using a mobile device), UAL +3.1% (Outlines value-driving initiatives), KBH +2.8% (in sympathy with LEN), GBT +2% (prices upsized offering of 6.4 mln shares of its common stock at $18.75/share), GEVO +1.8% (Intracoastal Capital discloses 3.1% passive stake)

Analyst comments: RUN +1.8% (initiated with an Outperform at Oppenheimer), ERIC +1.7% (upgraded to Neutral from Sell at Goldman), MRO +1% (upgraded to Overweight from Equal-Weight at Morgan Stanley)

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance
: WERN -11.4%, KMX-3.5%, CP -2.4%


Select metals/mining stocks trading lower: HMY -5.8%, SBGL -3.4%,GFI -3.3%, AG -3.1%, PAAS -3.1%, KGC -2.5%, ABX -2.4%, SLW -2.3%,NEM -2.1%, GDX -1.9%, AUY -1.9%, GOLD -1.9%, GLD -1.2%

Other news: OIBR -76.7% (requests judicial reorganization after debt agreement talks with creditors breaks down), SCYX -12.8% (announces launch of public offering of common stock and warrants), SWFT -6.6% (in sympathy with WERN), CSAL -4.7% (announces the pricing of a secondary offering of ~14.7 mln shares of common stock by selling shareholders on behalf of Windstream (WIN) at $26.01/share), PLNT-4.7% (announces a 10 mln share class A common stock offering by selling stockholders), PRTK -3.8% (commences underwritten public offering of 3.75 mln shares of its common stock), HTLD -2.5% (in sympathy with WERN)

Analyst comments: USAC -5.1% (downgraded to Sell from Neutral at Goldman), STO -0.8% (downgraded to Sell from Hold at Deutsche Bank)

FT : Leonardo-Finmeccanica set to go on acquisition trail

Leonardo-Finmeccanica set to go on acquisition trail

Chief executive Mauro Moretti wants to secure control of ATR, the regional aircraft manufacturer

Mauro Moretti is in expansion mode. Barely two years after arriving to shake up and streamline the top 10 global defence company, Finmeccanica, the chief executive of the newly-rebranded Leonardo-Finmeccanica is talking about acquisitions.
“We are ready to buy or exchange businesses,” he says in an interview with the Financial Times. “We want to grow in our core areas, particularly in helicopters and defence electronics.”
Mr Moretti indicated that Leonardo could even be willing to swap part of the Italian industrial champion’s 25 per cent stake in European missile maker MBDA.
Airbus should take note. Europe’s leading aerospace and defence group has long coveted control of the missile company in which it and BAE Systems each have a 37.5 per cent stake.

Mr Moretti’s eye, meanwhile, is on winning control of ATR, the regional aircraft maker jointly owned by it and Airbus.
DRS Technologies, the US electronics business put up for sale by Leonardo last year and then withdrawn after a stronger than expected turnround, could also be a swap candidate, although the Italian company intends to retain control, says Mr Moretti.
The former trade union official — who was handpicked by Italy’s prime minister to revive the partially state-owned company — is feeling so flush after reporting a sharp rise in net profits, from €20m in 2014 to €527m in 2015, that he is even considering restarting dividend payments next year. Leonardo has not paid a dividend since 2010.
But not everything is quite as rosy as Mr Moretti would wish. A British vote this week to quit the European Union would pose a real threat, not just to Leonardo, which has significant interests in the UK, but to the country’s entire defence industry, he says.

“Europe is moving towards . . . common defence projects,” he says. “Obviously if [Britain] exits from Europe it is quite difficult to have the same opportunities in future.”
He adds that on its own, Britain or any other European country would not be able to fund development of the cutting edge technologies that are necessary to compete against richer defence budgets in China or the US.
Leonardo’s UK businesses — AgustaWestland, the helicopter maker, and Selex, a leading maker of radars and sensors — would be handicapped by a leave vote, says Mr Moretti. Eventually, he adds, Leonardo could be forced to review its investments in Britain.
A vote to leave would make life more difficult for Mr Moretti, he says, just as the outlook for Leonardo begins to improve. The company, once a ragbag of industrial interests struck by serial allegations of corruption, has in the past year shed its rail and bus businesses to focus on aerospace, defence electronics and security.
But rebuilding Leonardo’s reputation after high-profile corruption scandals will take time. This month a former chief executive, Giuseppe Orsi, saw his acquittal reversed by an appeals court for his role in alleged kickbacks in an Indian helicopter contract.
Reports have resurfaced in the Indian media that the Indian government has blacklisted Leonardo as a result, although Mr Moretti says the company has not been informed of any such move.

He admits there has been an issue with corporate culture at Leonardo but says this is changing. He challenged Indian authorities to come in and scrutinise the company’s practices.
Mr Moretti has sought to clean up Leonardo’s image, along with the chairman, Giovanni de Gennario, a former chief of police who led investigations into the mafia. Mr Moretti says he has replaced all executives who were tainted by corruption allegations.
His efforts at changing perceptions appeared to be paying off last year, with Leonardo’s shares reaching a seven-year high in November.
However, the stock has fallen by a third since the beginning of this year and the company still retains its junk credit rating.
Leonardo’s recovery still needs to prove itself, say analysts, even if good progress has been made. Uncertainty clouds the outlook for the company’s helicopter division — badly hit by the sharp downturn in its key market of oil and gas exploration.

These questions will be answered, promises Mr Moretti. As far as the oil and gas sector is concerned, this will be the trough year, he believes. The oil price has passed $50 a barrel, strengthening his conviction that the helicopter sector is on the brink of recovery. “By the end of 2016 we will have a positive trend,” he says.
Leonardo has come a long way in the nearly two years since Mr Moretti arrived, but there is still some way to go.
Just over a year ago he said he would be in a new job within two years. Now, his timeline has stretched a bit. Mr Mr Moretti says he will not be looking for a new challenge before 2020. “I would like to complete this mission,” he adds.

>>> US Early premarket gappers

Early premarket gappers

Gapping up: IMPV +9.5%, OPK +8.3%, CYRN +4.5%, RBS +3.2%, BCS +3.1%, PUK +2.9%, AV +2.9%, GWPH+2.6%, SAN +2.5%, LEN +2.4%, DB +2.2%, LYG +2.2%, ING +2.1%, UN +2%, SHPG +1.9%, GEVO +1.8%, CS+1.8%, ASML +1.7%, DEO +1.6%, KBH +1.4%, MT +1.3%, ERIC +1.3%, TOT +1.2%, ARMH +1.2%, NGG +1.2%,BP +1.1%

Gapping down: WERN -10.9%, LBTYA -10.3%, SCYX -7.9%, HMY -7.5%, CSAL -7%, PRTK -3.8%, ABX -3.1%, SBGL-2.7%, KGC -2.7%, GDX -2.7%, AUY -2.5%, NEM -2.3%, SLW -2.2%, GOLD -1.8%, AG -1.5%, GLD -1.4%, RIG-1.2%, WLL -1.2%