>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: TIF -3.9%, (reports holiday comps; guidance WIT -0.5%

M&A news: SU -1.9% (Suncor Energy and Canadian Oil Sands (COSWF) amend acquisition offer), SAND -0.9% (Sandstorm Gold (SAND) has agreed to acquire 56 royalties from co for $22 mln)

Other news: EBIO -52.3% (Phase 3 data on Isunakinra which missed primary endpoint of ocular itching), EC -4.9% (Moody's downgraded Ecopetrol to Baa3-triggered by persisting stressed oil prices; placed ratings on review for further downgrade), HDP -3.2% (files $100 mln common stock offering; also raises Q4 guidance (in line with estimates)), FTK-3% (announces retention of MHA Petroleum Consultants by CnF Special Technical Committee; Announces select, preliminary Q4 results; appointment of Independent Board Committee and SEC inquiry), SYT -2% (cont pre-mkt vol surrounding M&A spec), PBR -1.5% (reports its oil and natural gas production for 2015; period average of 2.128 mln barrels per day was 4.6% higher than the previous year ), HMY -1.2% (still checking), BLCM -0.5% (files $150 mln mixed securities shelf offering)

Analyst comments: SRPT -2.7% (downgraded to Sector Perform at RBC Capital Mkt)

>>> Early premarket gappers

Early premarket gappers

Gapping up: BITI +77.1%, BSI +11.9%, JKS +10.3%, MT +9.1%, CRDC +8.1%, ATV +7.8%, QUNR +6.5%, FCX +5.7%, CSIQ +5.4%, OAS +5.4%, STM+5.3%, ARMH +5.2%, PUK +5.1%, AU +5%, SUNE +4.7%, ERIC +4.5%, SNY +4.4%, TTM +4.3%, UN +4.3%, BBL +4.2%, MOMO +3.9%, RIO +3.8%, SHPG+3.8%, GPRO +3.8%, MBLY +3.7%, JMEI +3.6%, TOT +3.5%, BHP +3.4%, JASO +3.4%, BBRY +3.4%, MS +3.4%, JD +3.3%, ASML +3.3%, YHOO +3%, BP+2.9%, BABA +2.9%, AA +2.6%, VALE +2.1%, SN +1.1%, CMA +1.1%, FHN +0.8%, BAC +0.8%, UNH +0.5%

Gapping down: CTIC -4.1%, TIF -1.9%, PBR -2.0%, SYT -1.9%, EC -1.4%, HMY -1.2%, ALLT -0.8%, DAL -0.5%, DB -0.4%

>>> Tiffany & Co holiday comps -5% ex-FX; lowers FY15 EPS, sees minimal growth

--> -1.97% pre open...traded down -3.92% earlier..

Tiffany & Co holiday comps -5% ex-FX; lowers FY15 EPS, sees minimal growth in sales and earnings next year, below consensus 

  • Worldwide net sales declined 3%, comps declined 5% yoy, all numbers ex/fx
  • Worldwide net sales of $961 mln were 6% lower yoy,
Geographic Breakdown
Total sales of $505 mln, declined 7% in the Americas yoy
  • Total sales and comparable store sales declined 6% and 9%, total sales of $187 mln were 11% below the prior year in Asia-Pacific
  • Total sales increased 12% and comparable store sales rose 10%, total sales rose 9% to $123 mln in Japan
  • Total sales rose 4% and comps declined 2% in Europe
  • Other sales on a constant-exchange-rate basis declined 16% in total and comparable store sales on that same basis decreased 12%, reported in USD, sales of $19 mln were 20% below prior year
Company Outlook for 2015-2016
Management expects net earnings ending Jan 31, 2016 to decline ~ 10% (compared with its previously-reported forecast of 5%-10% decline) from last year's $4.20 per diluted share, excluding loan impairment charge in the Q215 and debt extinguishment charge in 2014, down to $3.78 vs consensus $3.88
"Management currently believes that the strong dollar and global macro challenges will likely result in minimal growth in net sales and net earnings [consensus EPS +14.8% to $4.34, rev +% to $4.2 bln] as reported in dollars and excluding charges in 2015, for the year, all assumptions and expectations are approximate and may or may not prove valid. Co maintains its forecast to generate at least $500 mln of free cash flow FY16

(BofA-ML) Fund Manager Survey (Global / Europe / Asia)


Global Fund Manager Survey
Investors not yet Max Bearish...

...just 12% believe a global recession will occur in the next 12-months, investors remain OW equities & UW bonds, and stubbornly long tech, Eurozone & Japanese stocks (assets now most vulnerable to a redemption/recession shakedown).

But cash levels surging higher...

...investors raise cash (to 5.4% = 3rd highest since 2009), cut growth & profit expectations (EPS expectations turn negative for 1st time since Oct’12), and rotate defensively (selling stocks, resources, industrials, banks & EM, and rotating to healthcare, staples, cash & bonds).

And long US dollar starts to unwind...

...US$ strength induces record UW in materials, 1st industrials UW in 40 months, and China recession/EM debt crisis remain biggest "tail risks"...but number of US dollar bullsdrops to 3-year lows as Fed rate hike expectations start to fade (2 hikes forecast in 2016, down from 3).

Investors no longer in "denial" about recession/bear market risks...

...but yet to accept macro/markets already well into a normal, cyclical recession/bear market. True capitulation would involve a bout of US$ weakness and outperformance of FMS "shorts" (e.g. BRIC) as redemptions induce forced-selling of "longs" (e.g. FANG). Sell bounces until the 4Cs (China, Commodities, Consumer, Credit) improve.


European Fund Manager Survey :
No conviction? Hide in Europe
Global expectations drop but investors still bullish on Europe