>>> US Gapping down


Gapping down
Briefing note: With US Futures down ~1.5% in pre-mkt, most stocks are trading lower. The following represents stocks lower on more specific items.

In reaction to disappointing earnings/guidance: IBM -6%, AMD -4.6%, EAT -4.6%, IBKR -4.4%, RDS.A -3.7%, PACB -2.7%, GS -1.6%

Select financial related names showing weakness: HSBC -3.8%, CS -3.8%, DB -3.3%, BAC -3.3%, BCS -3.2%, C -2.9%, ING -2.7%, LYB -2.7%, JPM -2.3%

Select oil/gas related names showing early weakness: WLL -9.7%, LEI -8.1%, DVN -5.8%, CHK -5.2%, PBR -4.7%, STO -4.2%, TOT -3.2%, APC -2.9%, SLB -2.9%

Other news: THS -7.8% (to offer up to $750 mln in common stock to fund part of its acquisition of ConAgra's (CAG) Private Brands business), SUNE -6.5% (still checking), BHP -6% (reported FY15 op metrics), DOC -5.7% (upsizes and prices 18.5 mln shares of common stock at $15.75), AMD -5.6% (following IBM results), MU -4.3% (following IBM results), SSS -3.5% ( commences a public offering of 2.3 mln shares of common stock), BABA -3.3% (weakness in Chinese mkts overnight), BIDU -2.7% (weakness in Chinese mkts overnight)

Analyst comments: SDRL -10.8% (downgraded to Underperform at BofA/Merrill), FTNT -6.7% (downgraded to Neutral from Overweight at Piper Jaffray), VALE -6% (downgraded to Hold from Buy at HSBC Securities), RACE -2.2% (initiated with a Neutral at Citigroup; tgt $37), TIF -2% (downgraded to Neutral from Buy at Goldman), PRU -1.9% (downgraded to Neutral from Buy at BofA/Merrill)

>>> US Gapping up



Gapping up
In reaction to strong earnings/guidance: GNC +14.6%, CLMT +5%, AMTD +2%, CREE +1.7%, ASML +1.7%, LLTC +1.6%, NLS +1.5%, ADTN +1.5%, TEL +0.8%, APH +0.7%

Select gold mining stocks trading higher: HMY +9.3%, IAG +5.2%, HL +3.3%, ABX +3%, GG +2.8%, GFI +2.5%, NEM +2.4%, AEM +2%, GLD +1.2%

Other news: ZFGN +37% ( positive efficacy results from the bestPWS ZAF-311 Phase 3 trial), SYN +21.7% (The second Phase 2 clinical trial of SYN-010 for the treatment of irritable bowel syndrome with constipation met its primary endpoint), CBAY +17.3% (Announces Successful Completion of End-of-Phase 2 Discussions With FDA for Arhalofenate), SFUN +5.5% (made significant progress on acquisition of controlling stake in Chongqing Wanli New Energy), PESI +5.1% (part of winning team led by CH2M Hill selected by US Navy for a $240 mln, 5-year Comprehensive Long-Term Environmental Action Navy (CLEAN) contract), CLMT +5% (declared $0.685 dividend, unchanged from prior dividend; reaffirmed objective of providing all unitholders a stable-to-growing quarterly cash distribution), SCS +2.1% (Board approved a $150 mln increase to its share repurchase program)

Analyst comments: BSFT +2% (upgraded to Outperform from Market Perform at Wells Fargo)

UK 'will not participate' in new refugee-sharing arrangements agreed by the EU

UK 'will not participate' in new refugee-sharing arrangements agreed by the EU
So the great thing about Davos is that more-or-less everyone is here (swank) so nailing down a tale is easier than normal.

What I've learned is that the UK is not going to participate in any new refugee-sharing arrangement agreed by the rest of the EU - and may even frustrate it (OK maybe that's not a big surprise - but it matters).

The point is that the prime minister is intent on preserving the Dublin Regulations, at least for the UK - because, according to a government source, it really matters to us that we can send asylum seekers who illegally enter the UK back to the place they first entered the EU (such as Greece).

And, according to my source, there is no chance of the UK taking any refugees on top of the 20,000 Syrians David Cameron already said he would in effect recruit by 2020 directly from camps in the Middle East.

This will certainly complicate EU negotiations - in that countries like France and Spain, which refugees are largely avoiding right now, are highly unlikely to want to absorb many tens of thousands of migrants if the UK is exempt.
For what it's worth, a European political leader said to me this morning that it would be enormously helpful if David Cameron could find a way of joining a new EU migrant deal.
And this leader seemed to think this would happen.
Apparently not - which, I fear, may make other EU leaders grumpier with the UK Government than they already are (if that is possible)

>>> Goldman Sachs reports Q4 (Dec) results, beats on revs

--> -2.35% pre open 25k traded

Goldman Sachs reports Q4 (Dec) results, beats on revs
  • Reports Q4 (Dec) earnings of $4.68 per share, may not be comparable to the Capital IQ Consensus of $3.62; revenues fell 5.5% year/year to $7.27 bln vs the $7.04 bln Capital IQ Consensus.
    • Diluted earnings per common share were $1.27 compared with $4.38 for the fourth quarter of 2014 and $2.90 for the third quarter of 2015. During the fourth quarter of 2015, the firm recorded provisions for the settlement with the RMBS Working Group (1) of $1.80 billion ($1.54 billion after-tax), which reduced diluted earnings per common share by $3.41 and annualized ROE by 8.1 percentage points.The $4.68 figure does include CVA/DVA
  • Annualized ROE as 3.0% for the fourth quarter of 2015.
  • Investment Banking
    • Net revenues in Investment Banking were $1.55 billion for Q4, 7% higher y/y.
    • Net revenues in Financial Advisory were $879 million, 27% higher y/y.
    • Net revenues in Underwriting were $668 million, 11% lower y/y.
  • Institutional Client Services
    • Net revenues in Institutional Client Services were $2.88 billion for the fourth quarter of 2015, 9% lower y/y.
    • Net revenues in Fixed Income, Currency and Commodities Client Execution were $1.12 billion for the fourth quarter of 2015, 8% lower y/y.
    • Net revenues in Equities were $1.76 billion for the fourth quarter of 2015, 9% lower y/y.
    • The fair value net loss attributable to the impact of changes in the firm's credit spreads on borrowings was $68 million.
  • Investing & Lending
    • Net revenues in Investing & Lendingwere $1.30 billion for the fourth quarter of 2015, 15% lower y/y.
  • Investment Management
    • Net revenues in Investment Management were $1.55 billion for the fourth quarter of 2015, essentially unchanged compared with the fourth quarter of 2014 and 9% higher than the third quarter of 2015.
  • Noncomp Expenses
    • Non-compensation expenses were $4.14 billion for the fourth quarter of 2015, 64% higher y/y. The increase compared with the fourth quarter of 2014 was due to significantly higher net provisions for mortgage-related litigation and regulatory matters, which are included in other expenses.
    • Net provisions for litigation and regulatory proceedings for the fourth quarter of 2015 were $1.95 billion compared with $161 million for the fourth quarter of 2014 (both primarily comprised of net provisions for mortgage-related matters).
  • Book value per common share was $171.03 and tangible book value per common share was $161.64, both 5% higher compared with the end of 2014 and essentially unchanged compared with the end of the third quarter of 2015.

>>> US Early premarket gappers

Early premarket gappers
Gapping up: ZFGN +71.7%, SYN +44.7%, GNC +10.4%, CLMT +7.6%, CLMT+7.6%, HMY +7.3%, IAG +6.1%, LLTC +3.6%, ABX +3%, GG +2.3%, SCS+2.1%, AEM +1.8%, NEM +1.7%, CREE +1.6%, NLS +1.5%

Gapping down: SDRL -11.8%, CHK -9.1%, VALE -8.6%, DDD -7.1%, BBL-6.8%, SUNE -6.5%, DVN -6.3%, BHP -6.2%, DOC -5.7%, FTNT -5.5%, SYMC-5.3%, MT -5.1%, AMD -5.1%, PBR -5%, DB -4.6%, HSBC -4.6%, IBM -4.6%,FCX -4.5%, MU -4.4%, IBKR -4.4%, RDS.A -4.4%, APC -4.3%, STO -4.2%, CS-3.9%, JOY -3.7%, BAC -3.7%, SLB -3.5%, TWTR -3.5%, C -3.4%, TOT -3.4%,AEG -3.4%, SSS -3%, BIDU -2.9%, BABA -2.9%, BCS -2.9%, JPM -2.7%, ING-2.7%, LYB -2.7%, RACE -2.6%

>>> Some Monte Paschi customers withdraw savings as bank's stock sinks - RTRS

Some Monte Paschi customers withdraw savings as bank's stock sinks - RTRS


20-JAN-2016 13:25:02

Bank's shares and junior bonds both fall on Wednesday
Monte Paschi's market value has halved this year
Lender faces crisis over its pile of bad loans
Some savers withdraw cash, CEO says outflow limited
(Adds Monte Paschi bonds)

By Francesca Landini and Stefano Bernabei

MILAN, Jan 20 (Reuters) - Some Monte dei Paschi BMPS.MI customers have been pulling savings out of the Italian bank, its chief executive said on Wednesday, as it faces a crisis over a mountain of bad loans that has halved its market value this year.

CEO Fabrizio Viola did not say how much money savers had withdrawn, or when the outflow began, though he said the fall in deposits was "limited" and that the bank could cope with it as he sought to reassure customers and investors.

Italian bank shares .FTIT8300 have lost 20 percent so far this year as investors, already rattled about global economic growth, have sold out of a sector with low profitability and about 200 billion euros ($218 billion) of loans that are unlikely to be repaid.

Monte Paschi - Italy's third-biggest bank - has lost the most ground as it is perceived to be the most vulnerable; it has the highest level of bad loans as a proportion of assets and was the worst performer in a 2014 health check of euro zone lenders.

The Tuscan-based bank's stock, which had sunk 15 percent on Monday and 14.4 percent on Tuesday, was suspended from trading several times after falling 18.2 percent on Wednesday. The plunge helped dragged down all other Italian banking stocks, with Carige CRGI.MI shedding 12.7 percent and Banco Popolare BAPO.MI falling more than 6 percent. (Full Story)

"Of course clients turning to our local branches are worried about what they read," Viola said in a statement.

"At present the size of the funding lost due to clients who decided to move part of their savings elsewhere is limited and anyway below levels seen during the previous crisis the bank faced in February 2013 which was overcome brilliantly."

The 2013 crisis he was referring to was when the world's oldest bank, already badly weakened by the euro zone debt crisis, was hit by a scandal about loss-making derivatives trades.

Monte Paschi's bonds also suffered on Wednesday, with a September 2020 subordinated paper yielding 24 percent, up from 19 percent at Tuesday's close and just above 10 percent on Friday. (Full Story)

A Milan bond trader said both retail and some institutional investors were trying to sell the bank's debt. "Everyone is trying to get out. Retail for sure but I saw also a couple of fund managers today," the trader said.


FRAGILE

Italian lenders' huge pile of soured loans is tying up capital and holding back fresh credit that could support a fragile economic recovery in the country.

A boost to bank stocks from merger speculation following an overhaul of cooperative lenders last year has fizzled out as a deal has yet to materialise.

Monte Paschi was told by the European Central Bank to seek a buyer after the 2014 health check. It appointed UBS and Citi as advisers more than a year ago but has so far failed to find one.


A rescue of four small lenders at the end of last year carried out under new EU rules which imposed losses on shareholders and junior bondholders has meanwhile caused concerns among Italians, traditionally large holders of bank debt.

Since then, there have been concerns that customers could move money out of lenders perceived as weaker, to those banks considered stronger, say industry players.

"Over the past few days many have been wondering about the pace at which people closed their accounts and sold bank bonds," said Giuseppe Sersale, a fund manager at Anthilia Capital Partners. "I wouldn't call it a bank run but there are definitely outflows," he added.

Viola said the plunge in Monte Paschi shares was not a reflection of the bank's fundamentals, which he said had improved in the last quarter of 2015.

He said revenues rose both compared with the third quarter and from a year earlier while costs were cut, adding that liquidity levels at the end of 2015 were at their highest in four years and the bank's capital base was adequate. The bank reports its annual results on Feb.5.

Viola said he was confident the bank would weather the current crisis and that the recent fall in the stock did not appear to be linked to sales of big stakes.