*SYNGENTA'S DEMARE SEES US MERGER RULING BY LATE SUMMER: BILANZ
Dow-0.62% S&P-0.02% Nasdaq+0.35% Russell-0.04%
US market losed mixed with Dow Lower & Tech slightly higher. Financials were an early gainer but gived back most of all gains during the afternoon. Oil tried to rally but give back also all gains and closed down 1.6% to $27.54/bbl. energy was down 0.5%. Fed Chair Yellen's testimony was largely a middle-of-the-road presentation as she made it sound as if the Fed is open to holding off on another rate hike at its March meeting; however, she didn't make it sound as if the Fed is willing to concede anything past that meeting. One notable thing she said in the Q&A portion of her testimony was that she doesn't think it will be necessary to cut rates soon, yet she did add the Fed will do what is necessary to achieve its goals. Healthcare (+0.9%) and technology (+0.4%) were the only sectors that were able to end the day with a gain. Volume : 1.05bil shares traded. US After Hours MOSY +15.5%, HUBS +13.3%, EXPE +11.3%, TSLA +8.8%, SKX +8%, CSCO +7.5%, FLO -14%, PPC -9.7% following earnings/guidance. Tokyo is closed for holiday but Japanese Yen remains extremely volatile. Hong Kong returned after 3 days of holidays with a 4% drop below 18,500 in the Hang Seng - the lowest level since 2012.
Nikkei Closed Hang Seng -4.18% Shanghai Closed
Eur$1.1286 CNH 6.5330 CNY 6.5743 GBP 1.45.36 JPY 112.62 CHF 0.9723 RUB$78.84 WTI$27.03(-1.57%)
S&P -0.56% EuroStoxx -1.61% DAx -1.58% SMI -1.48%
Macro :
- Yellen Suggests Fed May Delay Rate Increases, Not Abandon Them
- Bass Says China Bank Losses May Top 400% of Subprime Crisis (1)
Keep an eye on :
- ABG SM : Abengoa Creditors Seek Greater Shareholder Dilution: Cinco Dias
- ADS GY : Adidas Raises 2016 Outlook; 2015 Adj. Sales Rise 16%
- ALU FP : Alcatel-Lucent 4Q Sales, Adj. Op. Income Beat Ests.
- APAM NA : Aperam 4Q Ebitda $105m vs Est. $103m; Net Income Also Beats
- GBF GY : Bilfinger 2015 Orders Rise 24%, Net Loss Widens
- BOL SS : Boliden 4Q Adjusted Profit Misses Estimates; Dividend Raised
- CSGN VX : Credit Suisse CEO: ’I Don’t See a Disaster’ in Macro Terms
- AM FP : Dassault Rafale Production to Rise to 3 a Month From 1: DGA
- EDEN FP : Edenred FY Net, Ebit Miss Ests; Says FX Negative Over Period
- ENEA SS : Enea Says 2016 Objective Is to Achieve Revenue Growth
- EO FP : Faurecia Sees 1%-3% Sales Growth in 2016
- GXI GY : Gerresheimer FY Adj. Ebitda Slightly Below Ests., Rev. In Line --> Indicated 4% lower
- GLEN LN : Glencore 4Q Copper Output Falls; Announces Franco Streaming Deal
- HUHT NA : Huhtamaki 4Q Adj. Operating Profit, Sales Miss Estimates
- KRA1V FH : Kemira 4Q Operative Ebitda, Sales Miss Estimates
- KGX GY : Kion Group FY Rev., Ebit Up 9%, New Truck Orders Up 7%
- KORI FP : Korian 2015 Rev. EU2.58b, Est. EU2.59b; Cuts Ebitda Margin View
- MMB FP : Lagardere FY Rev. EU7.19B; FY Recurring EBIT Growth to Beat Goal
- LR FP : Legrand FY Net, Rev. In Line, Sets 2016 Targets
- MEDAA SS : Mylan Set to Reveal Takeover of Meda, FT Reports, 165/share +91.8% vs yest close, Mylan CEO Doesn’t Expect Rival Bids for Meda: Dagens Industri
- MEDAA SS : Meda 4Q Adj. Ebitda, Sales Slightly Below Estimates
- MB IM : Mediobanca 2Q Net EU76.8m; EU57.3m Charge for Resolution Fund
- MEO GY : Metro 1Q Ebit Ex-Items Misses Est.; Debt Cut, Outlook Reiterated
- MERY FP : Mercialys Sees 2016 Rents Organic Growth of 2% Over Indexation
- KN FP : Natixis FY Net EU1.34b; Est. EU1.36b ,Natixis CEO Sees No Signifint Rise in Oil-Related Provisions
- NOKIA FP :Nokia 4Q Sales Miss, Adj. EPS Beats Ests. Nokia Gross Margin Beats Ests., Sees 1Q Challenging
- RI FP : Pernod 1H Profit Recurring Ops. 2% Below Analysts’ Estimates
- PUB FP : Publicis 2015 Revenue Beats; Modest Organic Growth Seen in 2016
- RBS LN : RBS Said Working With Lazard on Sale of Shipping Loan Book: Sky
- RXL FP : Rexel Says 2015 Performance in Line With Targets
- RYA LN : Ryanair to Cut Prices by 6% on Oil Price Drop, El Mundo Says
- SBMO NA : SBM Offshore 2015 IFRS Directional Ebit $348m; Reinstates Div.
- GLE FP : SocGen 4Q Net EU656m; FL CET1 10.9%, Proposes Cash DPS EU2
- GLE FP : SocGen’s Investment-Banking Bonus Pool to Decline: Cabannes, Cabannes Says ‘No Fear’ on SocGen’s CoCos Or Hybrid Debt
- SOW GY : Software AG Off to Good 2016 Start, May Raise Dividend, CFO Says
- FP FP : Total 2015 Adj. Net $10.5b vs Est. $9.9b; 4Q Div. EU0.61/Share
- VEI NO : Veidekke 4Q Revenue Rises to NOK7.37b; EBIT Declines to NOK389m
- ZURN VX : Zurich Says Unlikely to Reach 12%-14% ROE Target in 2016
>>> Up
*AKZO NOBEL RAISED TO NEUTRAL VS UNDERPERFORM AT BOFAML
*GAS NATURAL RAISED TO BUY VS HOLD AT BERENBERG
*IAG RAISED TO HOLD VS SELL AT CANTOR
*POSTE ITALIANE RAISED TO BUY VS NEUTRAL AT GOLDMAN
>>> Down
*ARM HOLDINGS CUT TO UNDERPERFORM VS MARKET PERFORM AT BERNSTEIN
*EDF CUT TO SELL VS HOLD AT BERENBERG
*EDP RENOVAVEIS CUT TO HOLD VS BUY AT BERENBERG
*ENDESA CUT TO HOLD VS BUY AT BERENBERG
*EON CUT TO SELL VS HOLD AT BERENBERG
*FORTUM CUT TO SELL VS HOLD AT BERENBERG
*OPERA SOFTWARE CUT TO HOLD VS BUY AT PARETO
*PAION CUT TO NEUTRAL AT ODDO SEYDLER
*RWE CUT TO SELL VS HOLD AT BERENBERG
*SMITH & NEPHEW CUT TO NEUTRAL VS BUY AT UBS
*TELENOR CUT TO SECTOR PERFORM VS OUTPERFORM AT RBC
>>> PT Change
>>> Initiation
*OHL RESUMED AT NEUTRAL AT BOFAML; PT EU5
>>> Call
Asian Market Update: Yen hits new 15-month highs below 113 amid increased speculation about possibility of intervention; Korea, Hong Kong plunge after return from holiday break
***Economic Data***
- (AU) AUSTRALIA FEB CONSUMER INFLATION EXPECTATION: 3.6% V 3.6% PRIOR
- (NZ) New Zealand Jan Manufacturing PMI: 57.9 v 57.0 prior
- (NZ) New Zealand REINZ Jan median home price +5.2% y/y v +3.3% prior; Home sales 5,048, +4.3% y/y
- (UK) JAN RICS HOUSE PRICE BALANCE: 49% V 52%E
***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 closed, S&P/ASX +0.8%, Kospi -2.9%, Shanghai Composite closed, Hang Seng -4.0%, Mar S&P500 -0.5% at 1,837
***Commodities/Fixed Income***
- Apr gold +1.0% at $1,208/oz, Mar crude oil -1.2% at $26.96/brl, Mar copper -0.2% at $2.01/lb
- GLD: Apr Gold rises over 1% above $1,210/oz; 9-month high
- World Gold Council: 2015 gold demand was flat
- SLV: iShares Silver Trust ETF daily holdings fall to 9,591 tonnes from 9,610 tonnes; multi-year low
***Market Focal Points/FX***
- Tokyo is closed for holiday but Japanese Yen remains extremely volatile, with the "elevator" thrust lower reminiscent of October 2008 - the last month that matched the magnitude of February's decline so far. Investors continue to digest semi-annual address from Fed Chair Yellen in Congress, with a round of dollar selling coming after she noted that the FOMC is not on a predetermined course. After falling 2 big figures toward 113 in the US hours, USD/JPY extended its declines below 112.60 in early Asia session, as macro traders pile into the long-Yen / short-Nikkei trade. High-beta AUD and NZD were also up over 0.7% on the dollar in early Asia trade as high as 0.7150 and 0.6730 respectively, but subsequently reversed those gains on risk-aversion. S&P500 futures also sank deeper to as low as 1,832, extending the final hours selloff in the US session.
- Hong Kong returned after 3 days of holidays with a 4% drop below 18,500 in the Hang Seng - the lowest level since 2012. Hong Kong Financial Services Sec KC Chan remarked that while the market remains volatile, there was little concern over the risk of outflows because HK has ample liquidity. Separately, HKEX chief Li noted 2016 will be challenging for the city.
- Korea's Kospi was also sharply lower with a 3% slide. Local finance ministry also said the financial system is stable amid external challenges, with currency levels remaining stable. Local press report citing a survey noted analysts are unanimous in expectation for BOK to leave rates on hold this month. Meanwhile, the escalation of tensions with the North has resulted in the closure of the joint Gaeseong plant on the border, with the South suspending supply of water and power and the North workers not reporting for duty.
- Down under, Australian Prudential Regulation Authority (APRA) noted that the rise in credit spreads is "manageable" and the financial system is fundamentally sound. A Moody's economist said New Zealand has fiscal and monetary policy room to move if needed, expressing comfort with AAA rating and stable outlook.
***Equities***
US equities / ADRs:
- HUBS: Reports Q4 -$0.12 adj v -$0.18e, R$53.1M v $50.3Me; +13.6% afterhours
- CSRA: Reports Q3 $0.48 v $0.39e, R$1.27B v $1.31Be; +11.9% afterhours
- EXPE: Reports Q4 $0.77 v $1.01e, R$1.70B v $1.72Be; Guides initial FY16 EBITDA +35-40% y/y - earnings call; +11.6% afterhours
- TSLA: Reports Q4 -$0.87* v +$0.07e, R$1.75B v $1.78Be; +9.6% afterhours
- SKX: SKX: Reports Q4 $0.19 v $0.20e, R$722.7M v $684Me; +9.3% afterhours
- HDP: Reports Q4 -$0.72 v -$0.80e, R$37.4M v $36.0Me; +8.6% afterhours
- CSCO: Reports Q2 $0.57 v $0.54e, R$11.9B v $11.8Be; increases dividend 24% to $0.26 (4.6% yield), approves $15B share buyback (13% of market cap); +7.9% afterhours
- CTL: Reports Q4 $0.62 (adj) v $0.65e, R$4.48B v $4.43Be; +6.3% afterhours
- ORLY: Reports Q4 $2.19 v $2.07e, R$1.95B v $1.91Be; to increase share repurchase program by $750M (3% of market cap); +5.2% afterhours
- WFM: Reports Q1 $0.46 v $0.40e, R$4.83B v $4.81Be; +3.1% afterhours
- AMZN: Approves $5B buyback program (2.1% of market cap) - filing; +0.9% afterhours
- PRU: Reports Q4 $1.94 v $2.27e, R$13.2B v $11.6Be; -0.9% afterhours
- PXD: Reports Q4 -$0.18 v -$0.38e, R$1.1B v $851Me; Announces reduction in drilling in 2016; -2.5% afterhours
- TWTR: Reports Q4 $0.16 v $0.12e, R$710.5M v $718Me; -3.0% afterhours
- IRBT: Reports Q4 $0.65 v $0.55e, R$206M v $203Me; -6.6% afterhours
- LOCK: Reports Q4 $0.30 v $0.30e, R$156.2M v $129.7M y/y; -8.4% afterhours
- MYL: Reports Q4 $1.22 adj v $1.25e, R$2.49B v $2.66Be; -9.1% afterhours
- ZNGA: Reports Q4 $0.00 (adj) v $0.00e, R$186M v $177Me; -10.8% afterhours
Notable movers by sector:
- Consumer discretionary: Cochlear COH.AU +12.3% (H1 result); Goodman Group GMG.AU +5.8% (H1 result)
- Financials: China Jinmao Holdings Group 817.HK -6.7% (Chairman under probe); Mirvac Group MGR.AU +2.2% (H1 result); Australian Stock Exchange ASX.AU +1.7% (H1 result)
- Industrials: Hyundai Merchant 011200.KR -18.8% (Gaeseong pulling out plan); Tianjin Port Development Holdings 3382.HK -3.8% (Chairperson to be dismissed); RUSAL PLC 486.HK -8.3% (Q4 result); Virgin Australia VAH.AU -6.1% (H1 result)
- Utilities: Transurban TCL.AU +1.2% (H1 result)
After Hours Summary: MOSY +15.5%, HUBS +13.3%, EXPE +11.3%, TSLA +8.8%, SKX +8%, CSCO +7.5%, FLO -14%, PPC -9.7% following earnings/guidance
After Hours Gainers:
Companies trading higher in after hours in reaction to earnings/guidance: MOSY +15.5%, HUBS +13.3%, EXPE +11.3%, TSLA +8.8%, HDP +8.6%, SKX +8%, CSCO +7.5%, RPD +7.2%, QTWO +6.8%, CTL +6.3%, ORLY +5.3%, OHI +4%, KGC +3.9%, WFM +2.9%
Companies trading higher in after hours in reaction to news: CUI +12% (Co's wholly-owned subsidiary Orbital Gas Systems announced award of first purchase order for delivery of its gasPT technology).
After Hours Losers:
Companies trading lower in after hours in reaction to earnings/guidance: FLO -14%, PPC -9.7%, MYL -9% (also to acquire Meda for SEK 165/share), ZNGA -8.5%, IRBT -7.1%, RAVE -6.5%, LOCK -4.9%, TWTR -3.9%, CSOD -3.6%, CDE -3.2%, CXW -2.6%
Companies trading lower in after hours in reaction to news: AMPE -5.2% (entered into a Controlled Equity Offering Sales Agreement with Cantor Fitzgerald to implement an 'at-the-market' equity offering program to offer and sell up to $25 mln in shares of its common stock), FNV -4.9% (Co to acquire precious metals stream from Glencore (GLNCY) for $550 mln - expected to be immediately EPS accretive; will host a conference call today to discuss the transaction; also announced $550 mln bought deal financing), MHGC -3.5% (provided corporate update; believes that it has sufficient liquidity to meet its current working capital needs), CLR -2.4% (announced YE 2015 proved reserves of 1.23 bln Boe, -9% YoY).
Closing Market Summary: Indices End Day Under Heavy Selling PressureThe major averages ended Wednesday's affair under heavy selling pressure, which left the Dow Jones Industrial Average and S&P 500 in negative territory when the closing bell rang. The Nasdaq managed a modest gain, yet still gave back a huge chunk of an earlier 101-point gain. Once again, trade centered on troubles inthe oil patch, concerns over global and domestic growth, currency swings, and the future path of the fed funds rate. Today saw limited articulation of that final point as Fed Chair Yellen gave her semiannual monetary policy report before the House Financial Services Committee.
The major averages hit session highs within the first hour of trading but were unable to hold those levels as participants once again showed a propensity to sell into strength. The financial sector, for instance, was an early leader -- and an influential one at that -- as it followed in the footsteps of European banks, which attracted a bargain-hunting bid on Wednesday. Deutsche Bank (DB 16.21, +0.83), which has been under heavy selling presure of late on investor concerns about its financial condition, helped lead that effort. Financials (-0.5%) here, though, were unable to hold their gains and helped precipitate the late-day selling interest.
Oil prices attempted an early rally, climbing above $29.00/bbl after the weekly inventory report from the EIA report showed a draw of 0.754 million barrels. That rally was short-lived though and the commodity soon rolled over. The disappointing price action there after an ostensibly bullish catalyst took some wind out of the stock market's sails. WTI crude settled the day down 1.6% at $27.54/bbl. The S&P 500 energy sector declined 0.5%.
Fed Chair Yellen's testimony was largely a middle-of-the-road presentation as she made it sound as if the Fed is open to holding off on another rate hike at its March meeting; however, she didn't make it sound as if the Fed is willing to concede anything past that meeting. One notable thing she said in the Q&A portion of her testimony was that she doesn't think it will be necessary to cut rates soon, yet she did add the Fed will do what is necessary to achieve its goals.
By and large, the response to Ms. Yellen's presentation was mixed and was reflected in the S&P closing the day relatively flat.
Healthcare (+0.9%) and technology (+0.4%) were the only sectors that were able to end the day with a gain, yet both groups ended the session well off their highs (+2.4% and +1.8%, respectively). The technology group saw leadership from large-cap components like Facebook (FB 101.00, +1.46) and Microsoft (MSFT 49.71, +0.43) while health care could attribute its relative strength to the biotechnology stocks.
The commodity-sensitive materials sector (-1.0%) ended the day with the worst performance.
At their highs of the day, the Dow Jones Industrial Average, Nasdaq Composite, and S&P 500 were up 1.2%, 2.4%, and 1.3%, respectively.
There were 1.05 billion shares traded at the NYSE, which was a bit light of the recent average.
Treasuries traded in a narrow range for most of the session, but came on strong in the afternoon and rolled to their best levels of the session as stocks sold off in the final hour of trading. The yield on the 10-yr note dropped four basis points to 1.69%.
Strikingly, the late selling in the equity market took place alongside a strengthening in the Japanese yen. The stronger yen has been problematic for Japanese exporters and has been a catalyst for heavy selling in Japan's stock market this month.
Today's economic data included the weekly MBA Mortgage Index and the Treasury Budget for January:
- Mortgage applications were up 9.3% in the latest week driven by a 16.0% surge in refinancing applications.
- The January Treasury Budget showed a surplus of $55.2 billion versus a deficit of $17.5 billion for the same period a year ago. This Treasury data is not seasonally adjusted, so the January surplus cannot be compared to the December deficit of $14.4 billion.
- Total receipts in January were $313.6 billion while total outlays were $258.4 billion. Receipts were $6.8 billion more than January 2015 receipts while total outlays were $65.9 billion less than January 2015. The 12-month deficit decreased by $72.7 billion to $405.3 billion.
Tomorrow's economic data is limited to the weekly Initial Claims (consensus 280k). Tomorrow will also conclude Fed Chair Yellen's semiannual monetary policy report before the House Financial Services Committee