>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: SEED +12.5%, SKY +2.4%, EDUC +2.2%, FAST +2%

M&A news: CDRB +16.1% (enters into a non-binding Letter of Intent to engage in a merger with Aegis Identity Software ),SYT +2.4% (Bloomberg reports that Syngenta's (SYT) Board would support a potential deal with ChemChina)

Select metals/mining stocks trading higher: HMY +9.4%, AU +4.7%, MTL +3.5%, MTL +3.5%, ABX +2.4%, GDX+2%, NEM +1.6%, GLD +1.1%

Other news: BSI +24% (receives additional offer to purchase its holdings in Blue Square Real Estate), DGLY +8.8% (The U.S. patent office has confirmed the validity of Co's '292 patent on body camera auto-activiation technology; Co also files lawsuit against TASER (TASR)), LVS +2.8% (in symp with WYNN), AE +2.1% (subsidiary acquired a 30% member interest in Ben Cap for $2.2 mln), BTG +1.4% (reported Q4 gold production +18% y/y to of 131,469 ounces and issues 2016 production outlook for gold production of 510-550K ounces), MGM +1.4% (in symp with WYNN), LEI +0.9% ( schedules conference call to discuss planned Mid-Continent acquisition and strategic objectives on January 21 at 11am ET)

Analyst comments: ESL +5.4% (upgraded to Outperform from Neutral at Credit Suisse), EA +1.2% (upgraded to Buy from Neutral at BofA/Merrill), SHPG +0.8% (upgraded to Buy from Neutral at BofA/Merrill)

>>> Wells Fargo reports EPS in-line, revs in-line --> WFC -2.21%

Wells Fargo reports EPS in-line, revs in-line
  • Reports Q4 (Dec) earnings of $1.03 per share, in-line with the Capital IQ Consensus of $1.03; revenues rose 0.7% year/year to $21.59 bln vs the $21.75 bln Capital IQ Consensus.
  • Total loans were $916.6 bln at Dec 31, 2015, up $13.3 bln from Sept 30, 2015. Q4 loan growth was broad-based across all portfolios (other than real estate 1-4 family junior lien mortgages) and did not include any loan portfolio acquisitions. Core loan growth was $15.4 bln, or 2%, as non-strategic/liquidating portfolios declined $2.1 bln in the quarter. Total average loans of $912.3 bln, up $62.9 bln, or 7%
  • During Q4, residential mortgage loan originations were $47 bln, down $8 bln linked quarter on seasonality. The production margin on residential held-for-sale mortgage loan originations5 was 1.83%, compared with 1.88% in third quarter. Net mortgage servicing rights (MSRs) results were $417 mln, compared with $253 mln in third quarter 2015.
  • Net interest income in Q4 increased $131 mln from Q3 to $11.6 bln, largely driven by growth in earning assets. Net interest margin was 2.92%, down 4 bps QoQ.
  • Credit quality: "The quarterly loss rate (annualized) remained low at 0.36% and nonperforming assets declined by $497 mln, or 15% (annualized), from the prior quarter. The allowance for credit losses in the fourth quarter was stable (no reserve build or release) as continued credit quality improvements in the residential real estate portfolio were offset by higher commercial reserves reflecting continued deterioration within the energy sector. Future allowance levels may increase or decrease based on a variety of factors, including loan growth, portfolio performance and general economic conditions." Book value +0.4% QoQ to $33.81/share.

>>> Citigroup reports EPS in-line, beats on revs --> C US -1.98% pre open

Citigroup reports EPS in-line, beats on revs
  • Reports Q4 (Dec) earnings of $1.06 per share, in-line with the Capital IQ Consensus of $1.06; revenues rose 3.1% year/year to $18.46 bln vs the $17.93 bln Capital IQ Consensus.
  • Citigroup revenues of $18.6 billion in the fourth quarter 2015 increased 4%, driven by a 61% increase in Citi Holdings, partially offset by a 2% decrease in Citicorp revenues.
  • Citigroup's net income increased to $3.4 billion in the fourth quarter 2015, primarily driven by the higher revenues and lower operating expenses, partially offset by a higher cost of credit. Citigroup's operating expenses decreased 23% to $11.1 billion in the fourth quarter 2015.
    • Operating expenses in the fourth quarter 2015 included legal and related expenses of $411 million, compared to $2.9 billion in the prior year period, and $313 million of repositioning charges, compared to $655 million in the prior year period.
    • Citigroup's cost of credit in the fourth quarter 2015 was $2.5 billion, a 25% increase, with a net loan loss reserve build of $588 million, primarily in Institutional Clients Group (ICG), compared to a net loan loss reserve release of $441 million in the prior year period, and partially offset by a 22% decrease in net credit losses.
    • ICG cost of credit was primarily driven by a net loan loss reserve build of $549 million, including approximately $250 million related to the energy portfolio, with the remainder reflecting volume growth and macroeconomic conditions.
  • Citigroup's allowance for loan losses was $12.6 billion at quarter end, or 2.06% of total loans, compared to $16.0 billion, or 2.50% of total loans, at the end of the prior year period.
  • Citigroup's loans were $618 billion as of quarter end, down 4% from the prior year period, and down 1% in constant dollars.
  • Citigroup's book value per share was $69.46 and tangible book value per share was $60.61, each as of quarter end, representing 5% and 7% increases, respectively.
  • Institutional Clients Group
  • ICG revenues of $7.4 billion increased 4%, driven by a 9% increase in Markets and Securities Services revenues. Banking revenues of $4.2 billion increased 3% .
  • Investment Banking revenues of $1.1 billion increased 6%.
    • Advisory revenues increased 15% to $303 million, debt underwriting revenues increased 12% to $616 million, and equity underwriting fell 18% to $206 million, reflecting lower industry-wide underwriting activity during the current quarter.
    • Markets and Securities Services revenues of $3.2 billion increased 9%.
    • Fixed Income Markets revenues of $2.2 billion in the fourth quarter 2015 increased 7%, reflecting improved trading conditions in spread products as well as continued strength in rates and currencies.
    • Equity Markets revenues of $606 million increased 29%, driven by growth across products and improved performance in EMEA.

(Science Daily) Genes may contribute to making some nations happier than others

Link to Article : http://bit.ly/233VUHI

Genes may contribute to making some nations happier than others

First study to show link between genetic make-up and perceived national happiness

The citizens of nations which rate themselves happiest display a specific genetic feature: their DNA is more likely to contain a specific allele involved in sensory pleasure and pain reduction, say Michael Minkov of the Varna University of Management (formerly International University College) in Bulgaria, and Michael Bond of the Hong Kong Polytechnic University. They weighed up genetic and various external factors to might contribute to national differences in happiness. The findings are published in Springer's Journal of Happiness Studies.

Minkov and Bond used data from three waves of the nationally representative World Values Survey (2000 -- 2014). They calculated the average national percentages of respondents who unambiguously reported being "very happy." Their calculations also included population genetic data from an allele frequency database maintained by population geneticist Kenneth K. Kidd of Yale University as well as climatic information about the harshness of summers and winters, the historic prevalence of pathogens and World Bank economic data, since national differences in subjective well-being are thought to depend on socioeconomic and climatic factors in addition to genetic factors. The authors found a strong correlation between a nation's happiness and the presence of the A allele in the fatty acid amide hydrolase (FAAH) gene variant rs324420 in its citizens' genetic make-up. This allele helps prevent the chemical degradation of anandamide, a substance that enhances sensory pleasure and helps to reduce pain.

Nations with the highest prevalence of the A allele are quite clearly also those who perceive themselves happiest. These include Ghana and Nigeria in West Africa, and northern Latin American nations, such as Mexico and Colombia, whose citizens are of Amerindian or mixed Euro-American descent. The Arab nations of Iraq and Jordan, and the East Asian nations of Hong Kong, China, Thailand and Taiwan, which had the lowest prevalence of this allele, were also found to be the least likely to rate themselves as "very happy." Genetics also suggests explanations for differences in happiness between European nations. Northern Europeans such as Swedes were found to have a much higher prevalence of the A allele -- and more often rate themselves as being very happy -- than their cousins from Central or Southern Europe.

The authors recognise that genetics is not the only determinant happiness. They argue that the economic and political difficulties continuously experienced by East European nations contribute to the very low happiness scores of Russians and Estonians. This is despite the fairly high prevalence of the A allele in the genes of these Northeast European nations.

Economic wealth, the type of law governing a nation or disease patterns did not significantly influence national differences in happiness. However, politics and economics did cause fluctuations in happiness levels in certain countries during the time this study was conducted. The authors suggest that, for instance, the percentage of very happy people in Rwanda rose dramatically recently because the effect of the 1994 genocide is wearing off. Inversely, it fell among Egyptians, most likely because of the political and economic turmoil in this North African country.

Climatic differences were also found to be significantly associated with national differences in happiness.

"We cannot fail to notice the high occurrence of the A allele in equatorial and tropical environments in the Americas and Africa and the lower occurrence of that allele around the Mediterranean Sea than in Northern Europe," says Minkov. "It seems that some equatorial and tropical environments select for a higher occurrence of the A allele as a counterbalance to environmental stressors."

The results may sound somewhat disturbing for nations that are not endowed with beneficial genes and climatic factors. The researchers reiterate that they studied only national differences in relation to one another and not absolute measures. "In other words, we have not shown that a nation's genetic and climatic heritage doom a particular country to a specific happiness score, but that it can still rise and fall because of situational factors," explains Bond.

FT : ECB policymakers pushed for more stimulus ahead of December vote

ECB policymakers pushed for more stimulus ahead of December vote

Financial markets were not alone in having their hopes dashed by the European Central Bank’s response to the latest setback for the eurozone economic recovery last month. Some of the region’s monetary policymakers had backed more forceful monetary stimulus at their controversial December vote before additional modest measures were announced.
An account of last year’s final policy meeting, published on Thursday, shows that “some” policymakers wanted the bank to act more aggressively — and more in line with investor expectations — by cutting a benchmark interest rate by more than the 10 basis points it delivered.
Some of the 25 members of the governing council had pushed for a 20 basis point cut to its deposit rate, according to the minutes — a move that would have been more in line with market expectations of a bigger stimulus from the ECB in response to a slowdown in emerging markets.
In the event, most of the council backed ECB chief economist Peter Praet’s call for a 10 basis point cut, which left the deposit rate charged on banks’ reserves parked at the central bank in the region at 0.3 per cent.
The account revealed the possibility was also raised of expanding the monthly volume of asset purchases under the ECB’s landmark quantitative easing programme from the current level of €60bn, or of front-loading asset purchases. The option of extending QE beyond the date Mr Praet tabled — March 2017 — was also considered. While no one backed taking these measures as soon as December, the ECB raised the prospect of more action in 2016 by saying “a reassessment could be made in the future”.
The account also confirmed that the ECB could cut the deposit rate again, saying those in favour of a 10 basis point cut viewed such a move as having “the advantage of leaving some room for further downward adjustments”.

Investors were left disappointed by what was eventually agreed upon, sparking a sharp sell-off in European bonds and equities. Since the meeting, ECB president Mario Draghi has downplayed concerns that his central bank is out of ammunition or is reluctant to act.
Few expect policymakers to unveil fresh measures in seven days’ time, when their next meeting takes place.
“On the one hand, there was a desire by some to ease more than they did, but on the other, there was quite a lot of opposition to doing more sovereign QE unless it’s a last resort. The implication is ‘let’s wait and see’,” said Justin Knight, a rates strategist at UBS. “Under current conditions, we don’t think there will be further major policy announcements from the ECB.”
But the news that minus 0.3 per cent is not the lower limit for interest rates and that the central bank could increase the volume of monthly purchases under QE are likely to buoy hopes that the ECB will act again, should growth and inflation continue to disappoint. The earliest date for more action looks likely to be March, when the ECB’s staff will present a fresh round of projections for inflation and growth in the 19-member region.
In contrast to those advocating extra monetary stimulus, some ECB members had wanted to do less than what was announced. Five members of the governing council wanted the central bank to stick with QE in the form decided last January, according to people familiar with the matter.
Some of those voting against Mr Praet’s proposal were only prepared to lower the deposit rate, though in certain cases by more than the 10 basis points put forward by the ECB’s chief economist. Other dissenters said the existing measures by the ECB “were working in the right direction and more time should be given for them to unfold their full effect”.