*SAUDI ARAMCO CEO SEES 2016 `SIGNIFICANT GROWTH' IN OIL OUTPUT
Dow-0.20% S&P+0.08% Nasdaq+0.30% Russell+0.32%
US MArket closed near the flat line as a rebound in the heavyweight health care (+1.1%) sector compensated for a downturn from the oil pit, WTI rallied 66.2% since its closing low of $26.14/bbl on February 11. gold (-2.1%; 1,226.80/ozt), iron ore (-6.3%; $54.65/mt), and copper (-2.3%; 2.10/lb). AGN+6% after losing 4.1% on friday, IBB+2.6%. consumer discretionary (+0.3%), consumer staples (+0.6%) and utilities (+0.5%). on the downside commodity-sensitive energy (-1.2%) and materials (-1.3%). Volume were in line with average at 941mil shares. US After Hours SCTY -20%, MNKD -15%, NVCR -15%, SSNI -13.6%, BLOX -13%, GPS -12.8%, INVN -10.4%, AAOI -10%, FRGI -9.5%, SEDG -8.4%, RAX -8%, JUNO -3% following earnings/guidance, LC+2.4% on SEC Review, NLS+2.3% on share buy back, NLNK-35% on Phase 3, ZTS-2.5% on Ackman Sale of 17m shares. Asian equity markets are finally seeing some risk-on flows come in after 4 straight losing sessions, with the latest China inflation figures bolstering the case for price recovery along with reports of govt support of the trade sector.Nikkei225 is the top performing index as USD/JPY rose 50pips from the lows above 108.80. In Japan, Econ Min Ishihara also stated that the govt is closely monitoring market moves, calling for a combination of monetary easing and fiscal stimulus to tackle slow progress on inflation.
Nikkei +2.03% Hang Seng -0.17% CSI 300 +0.17%
Eur$ 1.1379 CNH 6.5421 CNY 6.5177 JPY 108.79 GBP 1.4407 CHF 0.9720 RUB$66.5475 WTI$ 43.38 ( -0.14%)
S&P +0.24% EuroStoxx+0.62% Dax +0.46% SMI +0.37%
Macro :
- Fed’s Kashkari Tells Reuters June Rate Move Is ‘Possible’
- China April Retail Auto Sales Rise 6.4% on Year, PCA Says
- China April Consumer Prices +2.3% Y/y; Matching Estimate
- German Industrial Output Falls for Second Month as Demand Cools
Keep an eye on :
- ABG SM : Ditecsa Prepares Offer for Abengoa Unit, Expansion Reports
- ARL GY : Aareal Bank 1Q Net Interest Income Rise; Confirms 2016 Forecast
- ADEN VX : Adecco 1Q Revenue Beats Estimate; Says Continued Solid Growth , CEO Says Brexit Fears Only Hitting U.K. High Skilled Jobs
- AF FP : Air France KLM April Group Traffic Rises 2.5%, Unit Rev. Down
- AGFB BB : Agfa Says on Track for 2016 Adj. Ebitda Margin Target of 10%
- ALV GY : Allianz Life Hires Kropp From Genworth to Oversee $100 Billion
- NDA GY : Aurubis 2Q Revenue, Ebitda Fall; Confirms FY Forecast
- BPE IM : Pop. Emilia Weighs Bid for All 4 of Italy’s Rescued Banks: MF
- GBF GY : Bilfinger Plans Annual Savings of EU100 Mln on Admin Functions
- CO FP : Vietnam to Tax Casino for Central Group Deal: Tuoi Tre
- CSGNN VX : Credit Suisse 1Q Posts Net Loss, Pretax Loss
- CSGN VX : Credit Suisse Said to Delay Completion of Risk-Bond Sale
- DECB BB : Deceuninck 1Q Sales Up 6%; Sees Continued Growth Throughout 2016
- FGR FP : Eiffage 1Q Rev. Drops to EU2.99b; FY Rev. Seen Falling Slightly
- ENEL IM : Enel 1Q Adj. Net EU795m vs Est. EU776m; Rev. EU17.9b
- EUCAR FP : Europcar 1Q Net Loss Narrows to EU20m, in Line With FY Targets
- FAGR BB : Fagron CFO Jan Peeters Steps Down, Also Leaves Board: De Tijd
- FER SM : Ferrovial May Mull Quitting Joint Airport Bid Plan With ICA:Rtrs
- HNR1 GY : Hannover Re 1Q Operating Profit Beats; Keeps FY Forecast
- HDD GY : Heidelberger Druck Returns to Profit, Redeems High Yield Bond
- IDR SM : Indra 1Q Ebit Rises to EU29M from EU1M Loss Year Earlier
- ING NA : ING Group 1Q Net Income Drops 29%, Beats Estimate
- ITV LN : ITV Cut at Morgan Stanley Ahead of 1Q on Slowing U.K. Ad Trends
- JUN3 GY : Jungheinrich 1Q Sales Rise 8%, Misses Est.; Confirms Outlook
- SDF GY : K+S 1Q Ebit I In Line With Estimates; 2016 Outlook Confirmed
- KCR1V FH : Terex/Zoomlion merger could be announced in a week or two; Konecranes reiterates still in talks with Terex - Kauppalehti Online
- LHN VX : LafargeHolcim's India asset sale is back on track after Dalmia Cement withdraws appeal
- LSE LN : LSE/Deutsche Boerse not approached by CME - MergerMarket
- MUV2 GY : Munich Re Sees 2016 Profit of EU2.3b, Saw EU2.3b–EU2.8b
- KN FP : Natixis 1Q Net EU200m; Est. EU223.5m
- COX FP : Nicox 1Q Rev. Rises, 1Q Cash Burn Had Non-Recurring Expense
- NOK1V FH : Nokia 1Q Sales Miss Ests.; Sees FY Networks Sales Declining , Nokia 1Q Adj. Gross Margin Beats; Sees More Deal Synergies
- OERL SW : Oerlikon 1Q Sales, Ebitda Fall; Maintains 2016 Forecast
- P1Z GY : Patrizia 1Q Operating Result Rises, Confirms Outlook (Earlier)
- RNO FP : Mitsubishi Motors / Nissan to cover customer costs from scandal - http://s.nikkei.com/1OkGHbx
- SAZ GY : Stada investor AOC wants to abolish registered shares with restricted transferability - Frankfurter Allgemeine Zeitung
- SAN FP : Medivation Said to Explore Sale After Interest: Reuters - http://reut.rs/1NoypVd
- SYM GY : Symrise 1Q Revenue Below Estimates, Confirms Outlook
- TEG GY : TAG Immobilien 1Q NAV Rises, LTV Ratio Drops
- TKA GY : Thyssenkrupp Cuts FY Forecast on Steel Price; Beats 2Q Estimates, CFO Repeats Consolidation Needed in Steel Sector
- TIT IM : Telecom Italia Said to Submit Offer to Acquire Metroweb
- TRELB SS : Trelleborg New Buy at UBS; Stands Better Equipped Than Ever
- FP FP : Total to Sell Off German Chemicals Division Atotech: Le Figaro
- USG NA : Water Island Capital Reports 3.03% Stake in USG
>>> Up
*BMW RAISED TO BUY VS HOLD AT DZ BANK
*CONTINENTAL RAISED TO ADD VS REDUCE AT ALPHAVALUE
*FOXTONS RAISED TO NEUTRAL VS SELL AT CITI
*GEA GROUP RAISED TO NEUTRAL VS SELL AT UBS
*KOENIG & BAUER RAISED TO BUY VS HOLD AT BANKHAUS LAMPE
*LENZING RAISED TO BUY VS HOLD AT BERENBERG
*LVMH RAISED TO OUTPERFORM VS NEUTRAL AT EXANE
*WORLDLINE RAISED TO HOLD VS SELL AT BERENBERG
>>> Down
*AFRICAN RAINBOW MINERALS CUT TO HOLD VS BUY AT RENCAP
*ASSORE CUT TO SELL VS HOLD AT RENAISSANCE CAPITAL
*CAMPARI CUT TO HOLD VS BUY AT KEPLER CHEUVREUX
*DIASORIN CUT TO HOLD VS BUY AT FIDENTIIS
*DNO CUT OT NEUTRAL VS BUY AT UBS
*HOCHTIEF CUT TO HOLD AT SOCIETE GENERALE
*SALZGITTER CUT TO UNDERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*SOUTH32 CUT TO SELL VS HOLD AT RENAISSANCE CAPITAL
*STRATEC BIOMEDICAL CUT TO HOLD VS BUY AT HSBC
*TEMENOS CUT TO HOLD VS BUY AT BERENBERG
>>> PT Change
>>> Initiation
*KUKA RATED NEW NEUTRAL AT ODDO
*ROCKET INTERNET RATED NEW OVERWEIGHT AT BARCLAYS; PT EU27
*SCHAEFFLER RATED NEW NEUTRAL AT JPMORGAN, PT EU15.5
*TRELLEBORG RATED NEW BUY AT UBS, PT SKR165 {NSN O6Y5WW6K50Y2 <GO>}
*WORLDPAY RATED NEW BUY AT BERENBERG; PT 327P
>>> Call
>> Stock
*K+S ADDED TO BANKHAUS LAMPE ALPHA LIST
Stada investor AOC wants to abolish registered shares with restricted transferability
Stada [ETR: SAZ], the German pharmaceutical company, is facing shareholder pressure to abolish its registered shares with restricted transferability, Frankfurter Allgemeine reported.
Ahead of an upcoming shareholder meeting, the German investment firm Active Ownership Capital (AOC) is calling for changes in the supervisory board membership, the German-language daily noted.
The shareholder is also asking for the abolition of registered shares whose ownership change would need to be approved by the company itself, the report added.
Without identifying sources, the report said the latter shift would remove the most important barrier against takeovers.
AOC had accumulated a 5% stake in Stada by April, the article noted. It is asking for the new proposals to be added to the agenda of the 9 June shareholder meeting, according to the daily. The newspaper cited unidentified sources as saying that AOC wants to see the board contain fewer healthcare professionals and offer a stronger counterpoint to the management.
Among the five long-standing supervisory board members AOC wants removed is the chairman, Martin Abend, the report said. AOC co-founder Klaus Roehrig himself wants to be elected to a board seat, it added.
According to the article, AOC considers Stada to be lacking in efficiency and to have inadequately taken advantage of internationalization opportunities.
The article said there is no information on whether AOC envisages a sale, or wants to see generic and over-the-counter medications being separated from other business activities.
The daily learned from unidentified sources that AOC, contrary to some speculation, is not interested in talking with hedge funds that might function as its fellow-campaigners. Rather, according to the newspaper's information, AOC expects there to be enough dissatisfied shareholders that will support its goals.
Frankfurter Allgemeine Zeitung
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 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 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)
After Hours Summary: SCTY -20%, MNKD -15%, NVCR -15% following earnings/guidanceAfter 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)
(NYT) Dealbook: William Ackman Sets Out to Sell $800 Million in Shares of Zoetis
Closing Market Summary: Biotech Rallies and Oil Slides to Begin WeekThe 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