>>> Europe : Brokers Upgrades & Downgrades - 10th of December 20

>>> Up
*AHOLD RAISED TO OUTPERFORM AT BERNSTEIN
*ALLIANZ RAISED TO OUTPERFORM AT RBC CAPITAL
*BAYER RAISED TO BUY AT HSBC
*BLUE SOLUTIONS RAISED TO HOLD AT HSBC
*HANNOVER RUECK SE RAISED TO SECTOR PERFORM AT RBC CAPITAL
*KONE RAISED TO OVERWEIGHT VS EQUAL-WEIGHT AT MORGAN STANLEY
*LEGRAND RAISED TO EQUALWEIGHT VS UNDERWEIGHT: MORGAN STANLEY
*PROSEGUR RAISED TO BUY VS HOLD AT KEPLER CHEVUREUX
*REPSOL RAISED TO OUTPERFORM AT BMO CAPITAL MARKETS
*STAGECOACH RAISED TO BUY FROM NEUTRAL AT CITI

>>> Down
*ACACIA MINING CUT TO UNDERWEIGHT VS EQUALWEIGHT: MORGAN STANLEY
*AEGON CUT TO SECTOR PERFORM AT RBC CAPITAL
*BAT CUT TO SELL VS NEUTRAL AT GOLDMAN
*GAM HOLDING CUT TO NEUTRAL VS BUY AT GOLDMAN
*GEA GROUP CUT TO UNDERWEIGHT VS EQUAL-WEIGHT AT MORGAN STANLEY
*GENERALI CUT TO SECTOR PERFORM AT RBC CAPITAL
*IMI CUT TO EQUALWEIGHT VS OVERWEIGHT AT MORGAN STANLEY
*INTERTEK CUT TO SELL AT CITI
*RED ELECTRICA CUT TO SELL AT CITI
*SCHIBSTED CUT TO HOLD AT NORDEA
*SGS CUT TO SELL AT CITI
*SMITHS GROUP CUT TO UNDERWEIGHT VS EQUALWEIGHT: MORGAN STANLEY
*ST JAMES’S PLACE CUT TO SECTOR PERFORM AT RBC CAPITAL
*SWISSCOM CUT TO SELL AT GOLDMAN

>>> PT Change


>>> Initiation
*CTS EVENTIM RATED NEW BUY AT ODDO
*ENGIE RESUMED AT BUY AT CITI, PT EU18.5
*SUNRISE COMMUNICATIONS RATED NEW NEUTRAL AT GOLDMAN, PT CHF70

>>> Call
>> Stock
*DEUTSCHE BOERSE ADDED TO GOLDMAN CONVICTION BUY LIST
*IMPERIAL TOBACCO EXITS GOLDMAN CONVICTION BUY LIST, STAYS BUY

>>> Asian Update

Asian Mid-session Update: Australia posts another month of stellar job growth; RBNZ cuts with a neutral outlook


***Economic Data***
- (AU) AUSTRALIA NOV EMPLOYMENT CHANGE: +71.4K (highest since Aug 2000) V -10.0KE; UNEMPLOYMENT RATE: 5.8% (lowest since Apr 2014) V 6.0%E
- (NZ) NEW ZEALAND CENTRAL BANK (RBNZ) CUTS OFFICIAL CASH RATE BY 25BPS TO 2.50%; AS EXPECTED
- (KR) BANK OF KOREA (BOK) LEAVES 7-DAY REPO RATE UNCHANGED AT 1.50%; AS EXPECTED
- (JP) JAPAN Q4 BUSINESS SURVEY INDEX (BSI) LARGE ALL INDUSTRY Q/Q: +4.6 V +9.6 PRIOR; BSI LARGE MANUFACTURING Q/Q: +3.8 V +11.0 PRIOR
- (JP) JAPAN NOV PPI M/M: -0.1% V -0.3%E; Y/Y: -3.6% (3-month high) V -3.8%E
- (JP) Japan Nov Tokyo Avg Office Vacancies 4.2% v 4.5% prior
- (NZ) NEW ZEALAND NOV RETAIL CREDIT CARD SPENDING M/M: 0.3% V 0.4%E; TOTAL M/M: 0.2% V 0.0% PRIOR

***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 -1.1%, S&P/ASX -1.2%, Kospi -0.2%, Shanghai Composite +0.2%, Hang Seng -0.1%, Dec S&P500 +0.3% at 2,049

***Commodities/Fixed Income***
- Feb gold -0.2% at $1,074/oz, Jan crude oil +0.8% at $37.44/brl, Mar copper +0.1% at $2.07/lb
- (CN) PBoC to inject CNY20B in 7-day reverse repos (46th consecutive injection); Drains net CNY50B this week v injected CNY50B prior (biggest weekly drain in 2 months)
- USD/CNY: (CN) PBoC sets yuan mid point at 6.4236 v 6.4140 prior; Lowest Yuan setting since 6.4335 in Aug 2011
- (CN) China aluminum smelters said to meet for discussion of cutting production - financial press
- (AU) Yield on Australia 3-year bond rises 8bps to 2.22% after jobs data; 7-month high
- (JP) Japan investors buy net ¥73.1B in foreign bonds v sell net ¥156.6B in prior week; Foreign investors buy net ¥104.6B in Japan stocks v selling ¥54.6B in Japan stocks in prior week

***Market Focal Points/FX***
- Asian equity markets are trading mixed again in the wake of 3rd consecutive losing session on Wall St. Nikkei225 and S&P/ASX are underperforming - the former weighed down by stronger JPY amid some extreme USD selling following earlier hawkish comments from ECB's Nowotny while the latter is reacting to strong Aussie jobs numbers further deflating expectations of RBA rate cuts.

- Australia employment growth hit its highest monthly increase in 15 years while unemployment rate sank to match the lowest since Apr 2014. Participation rate of 65.3% - well above 65.0% expected - was also the highest in over 3 years, though the aggregate hours worked saw the biggest decline in 16 months. The contradictions in the data did not go unnoticed by analysts, and some of the bigger sceptics also pointed to the "matched sample" of survey respondents - those who were in both data sets of the past two months - being underrepresented. UBS estimated that accounting for those factors, the growth of the past two months would be 6K and 24K vs 71K and 56K reported. More hawkish economists with BoA/ML said RBA should consider a rate hike if growth and employment continue to recover. AUD/USD spiked up some 90pips on the jobs release above 0.7330, while the yield on Australia's 3-yr bond rose 8bps to 2.22%, a 7-month high.

- As expected, RBNZ cut rates by 25bps to match record lows of 2.50%, but also signaled that level should be sufficient to achieve the central bank's inflation objective. The implied pause in the easing cycle against some analysts' calls of further cuts sent NZD/USD up about 100pips above 0.6750. RBNZ forecast recovery in growth as a result from improved export prices, the recent lift in confidence, and increasing domestic demand from the rising population, though it also pushed for further depreciation in NZD as "appropriate in order to support sustainable growth." In the subsequent press conference, Gov Wheeler clarified that RBNZ will cut rates further if needed, but warned that aggressive rate cuts would increase housing risks, even as the latest data suggests slowing in the overheated Auckland property market. Despite the neutral outlook, economists with ASB and Westpac still expect RBNZ to ease further but at a later date in 2016 than previously anticipated.

- Bank of Korea left rates at record low levels of 1.5% in a unanimous decision, offering mixed commentary. BOK said inflation would remain low for the time being and economy would continue its recovery, but also warned over elevated household borrowing along with risks associated with Fed rate hike and China slowdown. BOK Gov Lee said the FOMC tightening would likely have limited impact, but low oil prices would likely keep 2016 inflation subdued. ANZ economists said the more mixed economic assessment by the BOK relative to last month implied another rate cut is likely in Q1 of 2016.

***Equities***
US equities / ADRs:
- AMSC: Guides Q3 higher -$0.54, R$22-24M (-$0.62, R$19-22M prior guidance); +14.3% afterhours
- OLLI: Reports Q3 $0.11 v $0.08e, R$174.6M v $169Me; +6.0% afterhours
- FTI: TEC.FR reportedly exploring potential merger options, held discussions with FMC Technologies - press; +5.0% afterhours
- ATHN: Guides initial FY16 $1.65-1.85 v $1.58e, R$1.085-1.115B v $1.13Be (ahead of investor day tomorrow); +0.6% afterhours
- CVX: Announces $26.6B Capital and Exploratory Budget for 2016, down 24% from 2015; +0.1% afterhours
- ITCI: Presents additional efficacy and safety data from the positive Phase 3 Clinical Trial of ITI-007 for the Treatment of Schizophrenia and From the Positron Emission Tomography Study; -3.6% afterhours
- PE: Announces Midland Basin acquisition for $148.5M in cash; -3.8% afterhours
- FSLR: Guides initial FY16 $4.00-4.50 (including gain from expected sale of equity method investment and the share of 8point3 earnings) v $4.08e; R$3.9-4.1B v $4.0Be; -9.4% afterhours
- MW: Reports Q3 $0.50 v $0.50e, R$865M v $869Me; -19.1% afterhours

Notable movers by sector:
- Financials: Collection House CLH.AU -2.1% (affirms guidance); CITIC Securities 6030.HK +0.5%, Haitong Securities 600837.CN +2.0% (China to launch IPO registration next year)
- Industrials: Austal Ltd ASB.AU -24.8% (guidance)
- Technology: United Microlectronics Corp UMC -1.3% (Nov result); InnoLux Corp 3481.TW -5.9% (Nov result); Yahoo! Japan Corp 4689.JP -1.7% (launches taxi hailing app); Toshiba Corporation 6502.JP +1.9% (speculation to cease TV manufacture); Canon Electronics Inc 7739.JP -3.7% (cuts guidance)
- Materials: Yunnan Copper Co 000878.CN +3.6% (cancels debt sale); Whitehaven Coal P:WHC.AU -9.2% (guidance); Independence Group IGO.AU +4.1% (affirms capex); Aluminum Corporation of China 601601.CN +1.2% (speculation to discuss cutbacks)
- Energy: China Oilfield Services 2883.HK -2.7% (guidance)

>>> After Hours Summary: AMSC +16.9%, OLLI +7.5%, MW -15.2%, FLSR -


After Hours Summary: AMSC +16.9%, OLLI +7.5%, MW -15.2%, FLSR -9.8% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings:  AMSC +16.9%, OLLI +7.5%, NSR +6.4% (also completed MarketShare Partners acquisition)

Companies trading higher in after hours in reaction to news:  QTNT +5.8% (entered into a construction contract with MW High Tech Projects), FTI +5.1% (following report that company may merge with Technip (TKPPY), XOMA +4.8% (entered into a settlement and amended license agreement with Pfizer (PFE), MNOV +3.9% (announced positive findings from a clinical trial of mn-166 in alcohol use disorder; Ibudilast, but not placebo, significantly decreased basal, daily alcohol craving over the course of the study), NVGN +2.8% (named James Garner as CEO effective February 1).

After Hours Losers:

Companies trading lower in after hours in reaction to earnings:  MW -15.2%, FLSR -9.8%

Companies trading lower in after hours in reaction to news:  PE -3.8% (announced an acquisition of undeveloped acreage and producing oil and gas properties in the Midland Basin, for $148.5 mln in cash), ITCI -3.6% (announced additional efficacy/safety data from first Phase 3 clinical trial of ITI-007; to host a conference call December 10 at 8:30 am ET to discuss data), WES -3.4% (extended its commodity price swap agreements with Anadarko (APC) for the DJ Basin complex and Hugoton system from January 1 through December 31, 2016), CSTM -3.2% (subsidiary Wise Alloys reported that it will explore alternatives to refinance its existing Asset Based Lending facility).

Chevron ​announces a $26.6 bln capital and exploratory investment program

Chevron ​announces a $26.6 bln capital and exploratory investment program for FY16

Co announces a $26.6 bln capital and exploratory investment program for 2016. Included in the 2016 program are $4.5 bln of planned expenditures by affiliates. The 2016 budget is 24% lower than total expected investments for 2015.
For Upstream, ~$9 bln of planned capital spending is for existing base producing assets, which includes shale and tight resource investments.

Exclusive: Technip explores sale, has held talks with FMC Technologies - sources

Exclusive: Technip explores sale, has held talks with FMC Technologies - sources


French oilfield services company Technip (TECF.PA) is exploring a sale and has held talks with U.S. peer FMC Technologies Inc (FTI.N) about a potential combination, according to people familiar with the matter.

A deal would illustrate how lower energy prices are driving consolidation in the oil services sector, as companies seek savings and synergies to boost profits amid a supply glut that is weighing on exploration and production.

Technip and FMC Technologies, which have market capitalizations of 5.3 billion euros ($8 billion) and $6.8 billion respectively, have not yet agreed on terms and there is no certainty they will do so, the people said on Wednesday.

Technip has also held talks with other potential buyers, one of the people added.

The sources asked not to be identified because the negotiations are confidential. FMC Technologies and Technip did not immediately respond to requests for comment.

Exclusive: Technip explores sale, has held talks with FMC Technologies - sources

Exclusive: Technip explores sale, has held talks with FMC Technologies - sources


French oilfield services company Technip (TECF.PA) is exploring a sale and has held talks with U.S. peer FMC Technologies Inc (FTI.N) about a potential combination, according to people familiar with the matter.

A deal would illustrate how lower energy prices are driving consolidation in the oil services sector, as companies seek savings and synergies to boost profits amid a supply glut that is weighing on exploration and production.

Technip and FMC Technologies, which have market capitalizations of 5.3 billion euros ($8 billion) and $6.8 billion respectively, have not yet agreed on terms and there is no certainty they will do so, the people said on Wednesday.

Technip has also held talks with other potential buyers, one of the people added.

The sources asked not to be identified because the negotiations are confidential. FMC Technologies and Technip did not immediately respond to requests for comment.

>>> US Close Dow-0.43% S&P-0.77% Nasdaq-1.48% Russell-1.17%

Closing Market Summary: Stocks Register Third Consecutive Decline After Surrendering Early Gains

The stock market ended the midweek affair on a broadly lower note with the S&P 500 surrendering 0.8% after being up 0.8% in the early going. The benchmark index returned below its 200-day moving average (2,064) while the Nasdaq (-1.5%) underperformed throughout the day.

The early portion of today's session appeared to have the makings of a rebound, but the opening strength was entirely due to significant gains in two commodity-related sectors. The materials space (+3.1%) ended comfortably in the lead after it was reported that Dow Chemical (DOW 56.97, +6.07) and DuPont (DD 74.49, +7.89) are in advanced merger talks. Both names surged 11.9% with DuPont's strength keeping the Dow ahead of the broader market.

Similar to materials, the energy sector (+1.3%) ended well ahead of the broader market, but it is worth noting that today's gain occurred after the growth-sensitive group gave up 4.8% over the past two days. Crude oil, however, could not remain in the green, ending the day lower by 0.9% at $37.18/bbl even though the latest storage report from the Energy Information Administration showed the biggest inventory draw in four months.

That storage report briefly propelled crude into the $39.00/bbl area, but the ensuing reversal in oil coincided with the turn in the equity market that left just three sectors in the green when the closing bell rang.

The late morning slide from highs was paced by the technology sector (-1.5%), which struggled from the start. The top-weighted group kept the Nasdaq behind the S&P 500 while biotechnology also weighed on the tech-heavy index. The iShares Nasdaq Biotechnology ETF (IBB 325.20, -5.39) settled lower by 1.6% while the health care sector lost 1.0%.

Similar to technology, heavily-weighted financials (-1.2%) and consumer discretionary (-1.2%) contributed to the intraday selloff. Lululemon (LULU 45.31, -6.84) was among the notable laggards in the discretionary space, falling 13.1%, after below-consensus earnings and revenue guidance overshadowed a bottom-line beat.

Staying on the retail theme, Costco (COST 159.72, -9.15) fell 5.4% after missing earnings and revenue estimates while the broader consumer staples sector (-0.9%) settled just behind the broader market.

The cautious posture exhibited in the market was not unique to stocks as currency traders also displayed some unease, evidenced by a rally in the yen that caused the dollar/yen pair to slide 1.3% to 121.35. Similarly, the euro rallied 1.2% against the dollar to 1.1020, suggesting some carry trades were unwound intraday.

Treasuries retreated during the morning advance in stocks, but they climbed to highs in the afternoon, sending the 10-yr yield lower by a basis point to 2.21%.

Today's participation was better than average with more than 975 million shares changing hands at the NYSE floor.

Economic data was limited to Wholesale Inventories and MBA Mortgage Index:

  • October Wholesale Inventories fell 0.1% while the consensus expected an increase of 0.2%
    • The September reading was revised down to 0.2% from 0.5%
    • The inventories/sales ratio was 1.31 in October, up from 1.22 in October 2014
  • The weekly MBA Mortgage Index rose 1.2% to follow last week's 0.2% downtick

Tomorrow, weekly Initial Claims (consensus 269K) and November Import/Export Prices will be reported at 8:30 ET while the November Treasury Budget will be released at 14:00 ET.

  • Nasdaq Composite +6.1% YTD
  • S&P 500 -0.6% YTD
  • Dow Jones Industrial Average -1.9% YTD
  • Russell 2000 -4.6%