>>> Hays rumoured to be in line for GBP 2.1bn bid from Adecco - reports

Hays rumoured to be in line for GBP 2.1bn bid from Adecco

Hays, the UK-based listed recruitment company, is said to be in line for a potential GBP 2.1bn (USD 3.0bn) takeover offer from Switzerland-headquartered rival Adecco, The Daily Mail reported. The rumour mill suggests Adecco is preparing a cash offer pitched at 150p per share and private-equity firms are believed also to be circling, the report said.

The Times also noted gossip that Hays may be in line for a bid from Adecco but reported that the rumoured approach for the longstanding takeover target is worth approximately 200p per share. Hays declined to make any comment on the matter, the report said.

Although Adecco is considered by analysts to be more attracted to bolt-on deals, the company’s board has become interested in Hays since the British company’s share price has plummeted, the Mail item reported.

The Financial Times also mentioned speculation of a Hays bid from Adecco, adding that the Dutch recruitment firm Randstad is also a potential bidder, according to trader chatter. The report noted that Randstad has told investors it plans to focus on acquisitions this year, adding however that its current targets are worth less than EUR 500m each.

Daily Mail, The Times (London), Financial Times

>>> Italian Banks


* BAD BANK Reuters and other news sources continue to report the idea that the ECB has asked Italy to provide further information on its idea of the formation of Bad Banks to manage national lenders NPL’s and its ready to work with Italy to find a solution.

* BMPS Consob announced that it has extended the short selling ban until the end of the trading session on 21 Jan. Reuters reports comments that the BMPS banking foundation confirmed its trust in the bank's management, adding the share losses the lender suffered over the past two days were without any "objective justification"
Reuters reports comments from CEO Mr Vioala that the share price performance has nothing to do with fundamentals that have actually improved also in Q4 ’15 confirming the 9 mth ’15 trend. He added that the liquidity at the bank at year end ’15 was very positive and at levels not seen for 4 years.

* UBI / BMPS / POP MILANO / BCO POP Il Corriere reports that UBI could have a look at an alliance with BMPS if it merges with Pop Milano. Sugegsted that the UBI / PMI merger would create execess capital of Euro 1.2 bn and that this could be used to facilitate an integration with BMPS.
Also reported that some analysts think that that if PMI merges with Bca Popolare a rights issue of Euro 2 bn could be required.

>>> What to look at today - 20th of January 2016

Dow+0.17% S&P+0.05% Nasdaq-0.25% Russell-1.28%
MAjor Index closed near their flat line,but Small Cap still underpressure...Pressure on Oil continue to weight on market. Q4 GDP In china was a positive catakyst to the market but not enough...IMF revised its global growth projection to 3.4% for 2016 and 3.6% for 2017 versus prior estimates of 3.6% and 3.8%, respectively. commodity-sensitive energy (-2.1%) and materials (-1.2%) were followed by health care (-0.1%) and technology (-0.1%) while countercyclical utilities (+1.5%), consumer staples (+1.2%), and telecom services ( +1.2%) lead. WTI closed lower by 2.5% @ $29.62..trading down 3.20% this morning @ $27.55. Financials managed to close positive after MS(+1% & BAC (-1.5%), Volume were above average with more than 1bil shares traded. US After Hours NFLX +7.2%, CREE +4.6%, AMD -6.2%, IBM -3.5% following earnings/guidance, SYN +18.4% on phase 2, CLMT +12.1%. S&P500 futures are down over 1.5% at multi-month lows below 1,845, US 10-year note yield is down 5bps below 2%, crude oil is down another 3.1%. while gold is up over $5 above 1,092. Among regional indices, Nikkei and Kospi were down some 3%, Shanghai down by nearly 1.5%, and Hang Seng is down nearly 4% amid heavy selling in HKD. In Japan, Nikkei225 officially entered "bear market", falling 20% from the high mark set in June. Earlier press reports saw speculation that BOJ is considering to once again delay the timeframe to achieve the 2% inflation target beyond H2 of FY16, comments from business federation (Keidanren) about softer wage growth, and increasing uncertainty over the govt's goal of balancing budget by FY20. Yet again however, PM Abe reiterated that he sees Japan economic fundamentals as solid.

Nikkei -3.71% Hang Seng -3.50% Shanghai -0.87%

Eur$ 1.0961 CNH 6.5977 CNY 6.5792 JPY 116.60 GBP 1.4150 CHF 0.9997 RUB$ 79.27 WTI $27.61 (-3%)

S&P-1.62% EuroStoxx -2.76% Dax -2.7% SMI -1.79%

Macro :
- Saudi Banks Face Difficult Operating Conditions Next 2 Yrs: S&P
- UBS’s Axel Weber Sees No ‘Downward Spiral’ in Global Economy

Keep an eye on :
- ASML NA : ASML 1Q Outlook Below Ests.; Plans to Buy Back EU1b Shrs
- AZN LN : AstraZeneca to Conduct Phase 2a Asthma Trial Under Dynavax Pact
- BARN SW : Barry Callebaut 1Q Sales Beat Estimates
- EDF FP : EDF Plans to Build Hinkley Point Reactors in Six Years: Echos
- ENI IM : Eni Board Approves Bond Sale of Up to EU2b
- NOVN VX : Novartis’s Arzerra Wins Expanded Indication in CLL From FDA
- GLE FP : SocGen Traders Said to Pull Back From U.S. Mortgage Securities
- TIT IM : Il Sole reports comments from ViVendi CEO Mr de Puyfontaine that he has no plans / link with Niel and / or Orange. He also commented when questioned by a parliamentary committee that TI would push ahead with Metroweb and aims to become the undisputed number one concerning investment in Ultra broadband.
Il Sole reports that Oi has chosen Barclays and Santander as advisors to help with Oi’s merger proposals with Tim Brazil
- TKA GY : ThyssenKrupp’s Hiesinger Sees Good China Business: Sueddeutsche
- UCB BB : UCB’s New Epilepsy Drug Briviact Receives EU Approval
- DG FP : Vinci in Talks to Buy Abengoa Unit Abeinsa: Expansion
- VOW3 GY : VW Says Mueller’s Position Hasn’t Been in Question
- VOW3 GY : VW to Recall 78,083 Vehicles in China, AQSIQ Says
- VOW3 GY : Europe Industry Commissioner Demands Action From VW: Reuters
- ZURN VX : Zurich Sees 2015 Losses of ~$275m From U.K. Storms, 4Q Charges

>>> Europe : Brokers Upgrades & Downgrades - 20th of January 2016

>>> Up
*A2A RAISED TO NEUTRAL AT MACQUARIE
*AEGON RAISED TO BUY VS HOLD AT ING, PT EU6.40 VS EU6.80
*AHOLD RAISED TO BUY VS HOLD AT JEFFERIES
*ALDERMORE RAISED TO OUTPERFORM VS NEUTRAL AT CREDIT SUISSE
*ATLANTIA RAISED TO BUY AT DEUTSCHE BANK
*BNP ADDED TON CONVICTION BUY LIST AT GOLDMAN
*CREDIT AGRICOLE RAISED TO NEUTRAL VS SELL AT GOLDMAN
*ELECTROLUX B RAISED TO BUY VS SELL AT UBS
*FAURECIA RAISED TO BUY VS REDUCE AT NOMURA
*NATIXIS RAISED TO NEUTRAL VS SELL AT GOLDMAN (YESTERDAY)
*SDL RAISED TO BUY VS NEUTRAL AT CITI
*STELLUS CAPITAL RAISED TO OUTPERFORM VS NEUTRAL AT BAIRD

>>> Down
*A2A CUT TO NEUTRAL VS OUTPERFORM AT MEDIOBANCA
*EOS IMAGING CUT TO HOLD VS BUY AT KEPLER CHEUVREUX
*JLT GROUP CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*PARKER-HANNIFIN CUT TO HOLD VS BUY AT JEFFERIES
*QINETIQ CUT TO SELL VS HOLD AT BERENBERG
*TAG IMMOBILIEN CUT TO UNDERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*TIMKEN CUT TO HOLD VS BUY AT JEFFERIES

>>> PT Change
*VIVENDI PT REDUCED FROM 20.70 TO 20.40 AT NOMURA

>>> Initiation
*BMW RATED NEW SELL AT CITI; PT EU72.50
*CAIXABANK RESUMED NEUTRAL AT GOLDMAN, PT EU4 (YESTERDAY)
*DAIMLER RATED NEW BUY AT CITI; PT EU85
*EUSKALTEL RATED NEW BUY AT CITI; PT EU13
*FERRARI RATED NEW NEUTRAL AT CITI; PT EU37
*FCA RATED NEW NEUTRAL AT CITI; PT EU7
*ONESAVINGS BANK RATED NEW UNDERPERFORM AT CREDIT SUISSE
*RENAULT RATED NEW BUY AT CITI; PT EU92
*SCAPA RATED NEW BUY AT BERENBERG, PT 260P
*SHAWBROOK RATED NEW OUTPERFORM AT CREDIT SUISSE
*SYNTHOMER RATED NEW UNDERPERFORM AT CREDIT SUISSE, PT 260P
*VIRGIN MONEY RATED NEW NEUTRAL AT CREDIT SUISSE
*VOLKSWAGEN ORDS, PREFS RATED NEW BUY AT CITI

>>> Call
>> Sector
*EUROPEAN AUTOS & AUTO PARTS SECTOR CUT TO NEUTRAL AT NOMURA
*EUROPEAN GENERAL RETAIL SECTOR RAISED TO NEUTRAL AT BARCLAYS

>>> Asian Update

Asian Market Update: Market meltdown in higher gear amid uncertainty over PBoC intent to ease; Nikkei225 enters bear market


***Economic Data***
- (CN) CHINA DEC FOREIGN DIRECT INVESTMENT (FDI) Y/Y: -5.8% V +3.1%E
- (AU) AUSTRALIA JAN WESTPAC CONSUMER CONFIDENCE INDEX: 97.3 (4-month low) V 100.8 PRIOR, M/M: -3.5% (2nd consecutive decline) V -0.8% PRIOR
- (NZ) NEW ZEALAND Q4 CPI Q/Q: -0.5% (biggest decline in 7 years) V -0.2%E; Y/Y: 0.1% (15-year low) V 0.3%E
- (NZ) New Zealand REINZ Dec National median home price +3.3% v +0.8% prior

***Index Snapshot (as of 05:00 GMT)***
- Nikkei225 -2.9%, S&P/ASX -1.3%, Kospi -3.1%, Shanghai Composite -1.4%, Hang Seng -3.8%, Mar S&P500 -1.5% at 1,845

***Commodities/Fixed Income***
- Feb gold +0.3% at $1,092/oz, Mar crude oil -2.4% at $28.86/brl, Mar copper flat at $1.97/lb
- SLV: iShares Silver Trust ETF daily holdings fall to 9,754 tonnes from 9,795 tonnes (lowest level since Dec 2012)
- (CN) PBOC SETS YUAN MID POINT AT 6.5578 V 6.5596 PRIOR; strongest Yuan fix since Jan 6th; 9th straight firmer setting relative to Close
- (CN) China MoF sells 7-yr bonds; yield 2.83% v 2.98% prior
- (JP) BOJ offers to buy ¥400B in 1-3yr JGBs, ¥420B in 3-5yr JGBs, ¥450B in 5-10yr JGBs
- (AU) Australia sells A$4.6B in Nov 2027 bonds; yield 2.865%

***Market Focal Points/FX***
- Risk assets were under steady, heavy pressure in Asian hours as optimism over expectation of more PBoC easing in the wake of soft China GDP data overnight proved to be a sugar high. S&P500 futures are down over 1.5% at multi-month lows below 1,845, US 10-year note yield is down 5bps below 2%, crude oil is down another 2.4%, while gold is up over $5 above 1,092. Among regional indices, Nikkei and Kospi were down some 3%, Shanghai down by nearly 1.5%, and Hang Seng is down nearly 4% amid heavy selling in HKD. In FX majors, high-beta/commodity currencies AUD, NZD, CAD, and MXN are down sharply to the benefit of USD, JPY, and EUR. USD/JPY is off by 80pips from the highs below 117, AUD/USD down over 60pips at 0.6860, and NZD/USD down over 100pips below 0.6370, with added pressure on the kiwi coming from soft New Zealand CPI figures.

- Comments from PBoC economist Ma Jun, who said the MLF facility implemented yesterday could be a substitute for a RRR cut, seemed to confound investors looking for hints of more aggressive easing. Recall overnight gains were attributed to expectation of more response from the PBOC after yesterday's economic data, and the comments out of Ma produced a burst of risk selling. Separately, a China Securities Journal report called for the central bank to cut RRR due to market fluctuations and raise fiscal deficit target to 3% of GDP to allow for more fiscal stimulus. MOFCOM spokesperson Shen also remarked that China trade conditions remain challenging and January exports would likely come in rather weak, especially in the contect of December strength supported by year-end front loading. PBoC's Yuan fix was set as strongest since the mini-devaluation but produced little reaction.

- In Japan, Nikkei225 officially entered "bear market", falling 20% from the high mark set in June. Earlier press reports saw speculation that BOJ is considering to once again delay the timeframe to achieve the 2% inflation target beyond H2 of FY16, comments from business federation (Keidanren) about softer wage growth, and increasing uncertainty over the govt's goal of balancing budget by FY20. Yet again however, PM Abe reiterated that he sees Japan economic fundamentals as solid.

- BHP Q2 iron ore production report missed expectations at 57M tons v 59Me. H1 output of iron ore was up 4%, but copper and petroleum were down 6% and 5% respectively. BHP also cut its forecast for FY16 iron ore output to 237Mt from 247Mt due to Brazil Samarco disaster and also cut US production of petroleum. Copper and Metallurgical coal production forecasts were unchanged.

- In economic data, New Zealand quarterly CPI hit multi-year lows, prompting speculation of RBNZ resuming policy easing. Economist with TD Securities said it would be a surprise if the central bank did not show a "genuine easing bias" in its decision next week. Soft CPI added to the pressure on NZD currency earlier coming after a 2nd straight decline in dairy auction prices. Australia's Westpac consumer confidence index hit 4-month lows, falling for the 2nd straight month. Westpac economist noted the decline in commodity prices has impacted business sentiment.

***Equities***
US equities / ADRs:
- SYN: Reports Positive Topline Data from Second Phase 2 Clinical Trial of SYN-010 in Patients with Irritable Bowel Syndrome with Constipation (IBS-C); +34.9% afterhours
- NFLX: Reports Q4 $0.10 v $0.03e, R$1.82B v $1.83Be; +6.9% afterhours
- CREE: Reports Q2 $0.30 v $0.24e, R$435.8M v $434Me; +6.6% afterhours
- IBM: Reports Q4 $4.84 (adj) v $4.76e, R$22.1B v $22.2Be; Guides initial FY16 'at least $13.50' v $15.02e - earnings call; -3.8% afterhours
- IBKR: Reports Q4 $0.25 v $0.25e, R$289M v $313Me; -4.5% afterhours
- AMD: Reports Q4 -$0.10 v -$0.10e, R$958M v $955Me; -6.2% afterhours

Notable movers by sector:
- Consumer discretionary: Sydney Airports SYD.AU +2.1% (Dec result)
- Financials: Eclipx Group ECX.AU -0.3% (divestment); PAX Global Technology 327.HK +3.7% (profit alert); Everbright Securities Co 601788.CN +2.0% (guidance); Hopson Development Holdings 754.HK -2.3% (2015 result)
- Industrials: Harbin Electric Co 1133.HK -4.4% (profit warning); Nippon Express 9062.JP +0.6% (9-month result speculation)
- Materials: Mount Gibson Iron MGX.AU -2.7% (Q2 result); BHP BHP.AU -3.7% (Q2 result); Baoshan Iron & Steel Co 600019.CN -6.8% (FY15 result)
- Energy: CNOOC 883.HK -6.0% (2016 target)
- Telecom: ZTE Corp 000063.CN +1.3% (prelim FY15 result); China Mobile 941.HK -3.0% (Dec result)
- Utilities: Huadian Power International Corp 1071.HK -4.3% (2015 result)

>>> US After Hours Summary: NFLX +7.2%, CREE +4.6%, AMD -6.2%, IBM -3.


After Hours Summary: NFLX +7.2%, CREE +4.6%, AMD -6.2%, IBM -3.5% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance:  NFLX +7.2%, SAVE +5.4%, CREE +4.6%, NLS +1.5%

Companies trading higher in after hours in reaction to news:  SYN +18.4% (The second Phase 2 clinical trial of SYN-010 for the treatment of irritable bowel syndrome with constipation met its primary endpoint), CLMT +12.1% (declared $0.685 dividend, unchanged from prior dividend; reaffirmed objective of providing all unitholders a stable-to-growing quarterly cash distribution), SCS +2.0% (Board approved a $150 mln increase to its share repurchase program).

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance:  AMD -6.2%, IBM -3.5%, IBKR -1.5%.

US Close Dow+0.17% S&P+0.05% Nasdaq-0.25% Russell-1.28%


Closing Market Summary: Major Averages End Near Flat Lines

The major averages ended the first session of the abbreviated week above their flat lines, as pressure regarding global growth and lower oil prices weighed on the market's early rally. Today's session began sharply higher after a miss in China's Q4 GDP report invited speculation regarding potential stimulus from the People's Bank of China, but soon the realities of shrinking global growth and a persisting oil glut pressured the market lower. The Nasdaq (-0.3%) registered the largest decline while the Dow Jones Industrial Average (+0.2%) and the S&P 500 (+0.1%) outperformed.

Last night, China released its Q4 GDP report, which showed that quarter-over-quarter GDP growth came in at 1.6% while year-over-year GDP growth was reported at 6.8%. Additionally, China reported below-consensus Industrial Production (5.9% vs 6.0%) and Retail Sales (11.1% vs 11.3%) in December. This was the slowest GDP reading since 2009 and prompted heavy speculation that the People's Bank of China would institute new stimulus measures to combat the growth issues. To that point, a late afternoon report from China Securities Journal argued for a cut to the reserve requirement ratio. 

European indices, U.S. futures, and pre-market crude oil trading were able to benefit from this speculation. Shortly after the U.S. open though the focus shifted to the resulting implications to global growth. On that note, the International Monetary Fund revised its global growth projection to 3.4% for 2016 and 3.6% for 2017 versus prior estimates of 3.6% and 3.8%, respectively. Shortly after the opening bell the major averages met resistance near the upper end of their trading ranges, retreating into the afternoon.

Rounding out the leaderboard, commodity-sensitive energy (-2.1%) and materials (-1.2%) were followed by health care (-0.1%) and technology (-0.1%) while countercyclical utilities (+1.5%), consumer staples (+1.2%), and telecom services ( +1.2%) lead.

Looking at the energy sector, independent oil and gas companies like ConocoPhillips (COP 36.40, -2.96) lead the retreat in the group with a decline of 7.5%. Increased pressure in oil companies came after WTI crude surrendered the $30.00/bbl price level. Oil was able to recover slightly, ending its pit session lower by 2.5% at $29.62/bbl. Elsewhere in the energy space, Dow components Chevron (CVX 81.51, -2.16) and Exxon Mobil (76.40, -1.18) paced the sector's decline.

In the health care space, UnitedHealth Group (UNH 112.58, +3.31) outperformed after the company reported an earnings beat with EPS at $1.40 and reaffirmed its FY 2016 guidance. UnitedHealth Group ended its day 3.0% higher. Fellow large-cap component Eli Lilly (LLY 83.23, +1.99) climbed 2.5% after the company affirmed its earning guidance for 2016 with EPS of $3.45-3.55. Elsewhere in the space, biotechnology showed relative weakness, evidenced by the 2.2% decline in the iShares Nasdaq Biotechnology ETF (IBB 277.84, -6.34).

Switching to financials (UNCH), the group was one of the early leaders until a sharp reversal knocked the sector to the middle of the board. Morgan Stanley (MS 26.26, +0.29) managed to outperforms the space, following a beat on Q4 earnings with EPS of $0.43 and a beat on revenue at $7.74 billion. Elsewhere, Bank of America (BAC 14.24, -0.22) declined 1.5% despite beating earnings estimates on in-line revenue.

In other earnings of note, Dow Jones Transportation Average (-0.5%) component Delta Airlines (DAL 45.96, +1.46) posted the largest advance in the complex after narrowly missing on earnings this morning; however, the carrier raised its Q1 operating margin guidance to 18-20% from 16-17%. Elsewhere in the composite, United Continental (UAL 45.18, -0.49) and JetBlue (JBLU 20.26, -0.43) declined 1.1% and 2.1%, respectively. 

Treasuries fell to their lows during the morning rally but were able to move higher during the market pullback. Ultimately, the 10-yr note settled just below its flat line with its yield higher by a basis point at 2.05%. 

Today's session saw heavy volume with more than a billion shares changing hands at they NYSE floor. 

Today's economic data was limited to the NAHB Housing Market Index, which came in at 60, following a revised reading of 60 in December (from 61)  consensus 61.0).

Tomorrow's economic data includes the weekly MBA Mortgage Index, which will be released at 7:00 ET, while December CPI (consensus 0.0%), December Core CPI (consensus +0.2%), December Housing Starts (consensus 1197k), and Building Permits (consensus 1200k) will cross the wires at 8:30 ET. 

  • Russell 2000 -12.3 YTD
  • Nasdaq -10.6% YTD
  • Dow Jones -8.1% YTD
  • S&P 500 -8.0 YTD