>>> US Close Dow-0.14% S&P-0.22% Nasdaq0.15% Russell-0.56%

Closing Market Summary: Energy Sector Leads Stocks Lower

The stock market began the abbreviated trading week on a lower note with the S&P 500 surrendering 0.2%; however, Monday's participation left a lot to be desired considering fewer than 600 million shares changed hands at the NYSE floor.

Equity indices stumbled out of the gate with the energy sector (-1.8%) leading the opening slide. The growth-sensitive sector responded to a nightlong retreat in crude oil, which settled lower by 3.3% at $36.86/bbl. The energy component saw additional selling pressure after China reported its sixth consecutive monthly decline in industrial profits (-1.4% in November).

The disappointing data from China cast a pall on the overall risk sentiment and a 2.6% decline in the Shanghai Composite certainly did not help matters. Interestingly, the index held its ground through the first half of the session, but plunged in afternoon trade.

The situation was a bit different in the U.S. as stocks stumbled out of the gate, spending the afternoon in a slow rally off late-morning lows. Two sectors—consumer discretionary (+0.3%) and utilities (+0.2%)—eked out slim gains while the remaining eight groups registered losses. Slow was the operative word as light trading volume made for a quiet trading day and thin trading conditions are expected to persist throughout the week.

The energy sector (-1.8%) spent the day behind its peers, which kept the market on the defensive despite flashes of relative strength in a few other areas. For instance, the consumer discretionary sector (+0.3%) settled just above its flat line with Amazon (AMZN 675.25, +12.46) and Disney (DIS 107.25, +1.39) underpinning the modest advance. Amazon rallied in reaction to upbeat holiday shopping data while Dow component Disney benefited from a strong weekend at the box office for the latest installment of the Star Wars series.

Elsewhere, the top-weighted technology sector (-0.1%) also finished ahead of the broader market, but Apple (AAPL 106.82, -1.21) surrendered 1.1%, returning into the neighborhood of its December low. High-beta chipmakers also struggled with the PHLX Semiconductor Index falling 0.4%.

Unlike stocks, Treasuries climbed in the morning and maintained slim gains into the close with the 10-yr yield falling one basis point to 2.23%.

Investors did not receive any economic data today, but tomorrow, the October Case-Shiller 20-city Index (consensus 5.4%) and December Consumer Confidence (consensus 93.5) will be reported at 9:00 ET and 10:00 ET, respectively.

  • Nasdaq Composite +6.4% YTD
  • S&P 500 -0.1% YTD
  • Dow Jones Industrial Average -1.7% YTD
  • Russell 2000 -4.7% YTD

FT : Saudis unveil radical austerity programme


Saudi Arabia on Monday unveiled spending cuts in its 2016 budget, subsidy reforms and a call for privatisations to rein in a yawning deficit caused by the prolonged period of low oil prices.
The Gulf kingdom has kept oil production at high levels in an attempt to force out higher-cost producers, such as shale, and retain its market share. But this year’s deficit ballooned to 367bn Saudi riyals ($97.9bn,) or 15 per cent of gross domestic product, as oil revenues fell 23 per cent to Sr444.5bn.

Seeking to ward off future fiscal crises, the ministry of finance confirmed wide-ranging economic reforms, including plans to “privatise a range of sectors and economic activities”.
Riyadh would revise energy, water and electricity prices “gradually over the next five years” to optimise efficiency while minimising “negative effects on low and mid-income citizens and the competitiveness of the business sector,” it added.
The first reforms will be effective from Tuesday, including an increase in gasoline prices, a rise in electricity tariffs for the wealthiest consumers, a modest increase in water costs for all, and changes to all energy prices for industrial users.
The government will also seek to implement a plan for the introduction of a sales tax across the six Arab Gulf states.
The success or failure of the reforms will help define the legacy of King Salman bin Abdulaziz al-Saud and his influential son, Deputy Crown Prince Mohammed bin Salman, who is overseeing the programme.

The kingdom’s austerity and reform programme, a reaction to the past decade of profligate spending, has raised alarm among parts of the country’s business community, who are already reeling from this year’s cuts that have triggered widespread delays in government payments.
Radical reforms to the social contract between Saudi citizens and the ruling al-Saud family also threaten discord at a time when Islamist extremist groups such as Isis have threatened the country.
Real gross domestic product this year is expected to rise by 3.35 per cent, with the private sector growing at 3.74 per cent.
“We see real GDP growth decelerating sharply in 2016, albeit remaining positive,” said Monica Malik, chief economist with Abu Dhabi Commercial Bank. “Non-oil GDP is forecast to moderate with the lower government spending feeding into the wider economy.”
The government’s austerity measures have been accompanied by extra spending items, such as the Saudi-led war in Yemen and Sr88bn in bonus payments for civil servants when King Salman ascended to the throne in January.
The 2016 budget envisions spending Sr840bn in 2016, compared to the Sr975bn that is forecast to have been spent this year and Sr1.14tn in 2014. Actual spending has outstripped projections by as much as a quarter for the past decade, but the government is trying to instil greater fiscal discipline.
Revenues in 2016 are forecast at Sr514bn, down from Sr608bn this year. The budget projects a deficit of Sr326bn in 2016.

>>> CMRX -79% - brincidofovir misses primary endpoint of preventing CMV infectio

{CMRX US Equity DES<Go>}
Chimerix down 79% at all time low premarket after brincidofovir misses primary endpoint of preventing CMV infection after HCT

  • Phase 3 SUPPRESS trial of brincidofovir in patients undergoing hematopoietic cell transplantation (HCT) did not achieve its primary endpoint for the prevention of clinically significant cytomegalovirus (CMV) infection through Week 24 after transplant.
  • Mgmt does not yet understand the difference between Phase 2 and SUPPRESS data.
  • Chimerix plans to continue the programs testing brincidofovir in serious adenovirus infections and in smallpox.
  • Pending the availability of complete data from SUPPRESS, including secondary endpoints in other dsDNA viral infections (full data will be presented Feb 18-22), Chimerix has elected to pause further enrollment in the Phase 3 SUSTAIN and SURPASS trials in kidney transplant recipients -- out of caution.
  • CMRX is down 78% at an all-time low as brincidofovir is CMRX's lead product candidate.

(TechCrunch) How GoPro Is Building Its Future Drone Platform Foundations

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GoPro started working on drones a few months ago in order to stake a claim in this multibillion-dollar market. This is a natural for them, as they will be able to offer the best flying immersive camera on the market — completely autonomous, no pilot required. We explain here why they could be the next big player in the emerging drone market.

Even though we’ve seen GoPro non-event videos appearing on the web, it’s probably when there is no communication that the best technological innovation will emerge.

A few months ago, GoPro announced buying Kolor, a 360-degree video software vendor company in France. Kolor is developing a platform for stitching together 360-degree videos coming from, for example, different GoPro units attached to a specific mast. The company has become a dedicated business unit for 360-degree spherical applications.

Kolor’s founder is now Senior Director of Immersive Media Solutions at GoPro. With this acquisition, GoPro is entering the market for 360-degree drone images/videos applications. Even though there are some 360-degree camera players on the market (like Bublcam, Panono and Giroptic), none will be able to natively integrate the camera on the drone for perfect image quality and stabilization.

Immersive video and images applications are the next big thing coming on the market. Anyone who has ever tried to set up a drone gimbal to catch perfect quality and stabilized video on three axes knows it’s a nightmare.

Immersive video without any camera/drone movement allows you to benefit immediately from a panoramic and 360-degree spherical view to offer interactive exploration directly inside the image, to see the real world in your VR gear. This is what Kolor is doing in this field with Chrome for 360-degree view.

One of GoPro’s latest acquisitions is in Zürich, Switzerland. GoPro is now entering GPS-denied navigation space. In fact, they have taken the opportunity to establish their Swiss subsidiary after buying Skybotix in September (a small company of five engineers coming from ETH, the Swiss Federal Institute of Technology in Zürich).

Skybotix has five years of experience in autonomous drone technology. ETH also is well-known for having spun-off several companies. For example, senseFly became a Parrot company (the worldwide leader in professional drone mapping systems).

The Skybotix team was able to send a drone inside a building, with no pilot, by reconstructing real-time 3D space and constraints. Their technology is providing a visual navigation application that replaces GPS with much more accurate, camera-based positioning. Their multi-camera sensors used industrial-grade visual odometry and real-time 3D reconstruction in unstructured indoor and outdoor environments.

This is not only a strategic acquisition for GoPro, but they also take root at the same time with this new team: Autonomous Systems Lab (ASL) and Institute of Robotics and Intelligent Systems (IRIS) Technology, the two departments belonging to ETH, one of the most advanced labs in the world. Here is an example of what they have achieved so far with their drone:

Now the team is directly integrated as a GoPro product division. With this acquisition, GoPro is taking a strategic advantage for advanced SLAM applications (simultaneous localization and mapping), where 3D representation of the environment is used for automatic collision avoidance, improved user interaction and helping operators in terms of orientation and flight planning. Remember, sense-and-avoid is one of the key issues for the FAA to allow drone systems to evolve autonomously without pilot line of sight.

But behind the scenes, a strategic battle for software and hardware is also playing out. Hardware is a core component in the size/consumption of drones, as is building more and more intelligent applications with data power calculation coming from integrated multiple sensors, like the former Skybotix.

Qualcomm will certainly be a major player for drone hardware platforms in the next few years. They have vast field robotics experience and now run a robotic accelerator with a promising drone startup.

Qualcomm recently announced a partnership with Yuneec, the second Chinese ready-to-fly platform (their Snapdragon advanced processing power and real-time flight control has a leading global navigation satellite system [GNSS] optimized to support highly accurate location positioning). The Computer Vision and Geometry Group from ETH has also been involved in the advanced development of their onboard computer.

Intel intends to play a major role, as well, with their Edison chipset embedded on open-source hardware computers. They are partnering with 3DRobotics and Ascending Technologies in Europe to build next-generation autopilots for on-board image processing and sense-and-avoid technology. Intel also funded Yuneec, with $60 million.

Then, there’s the software. The intelligence of drones lies in the DOS (Drone Operating System); in other words, the autopilot: the command-and-control central nervous system.

In this space, we have players aiming to become the platform leaders. One is Airware, which is licensing an end-to-end open aerial platform to simplify the development and integration of drone applications, sensors, remote control systems and cloud data analysis. Airware has raised $40 million so far, and has closed another round to reinvest in building the emerging drone ecosystem.

On the other side are the open-source autopilot platform projects, such as the Linux Foundation Dronecode project. It is supported by many companies (Parrot, Intel, Yuneec) and led by 3DRobotics with the PX4 Project of the Computer Vision and Geometry Lab of ETH Zürich again.

Today, the 3D robotics ecosystem has hundreds of contributors in the world, as well as international distributors.

In addition to the U.S. players, we have DJI coming from China. DJI is a ready-to-fly drone products manufacturer. Its core model was, until now, a proprietary technology (which has provided success since 2009).

DJI now understands they must open their platform (their SDK is still limited to education and simple development) if they want to continue to lead the market. To develop a DJI ecosystem like Airware, they have closed a $75 million round with Accel.

Among those big players, GoPro certainly has the assets to make the best flying camera on the market for B2C applications, and maybe take part in the construction of new professional applications for the B2B market. And it would not be a surprise if they joined the Linux Foundation Dronecode project in the next few months.