>>> Europe : Brokers Upgrades & Downgrades - 29th of March 2016

>>> Up
*ASHFORD HOSPITALITY PRIME UPGRADED TO NEUTRAL AT ROBERT BAIRD
*CEGEDIM RAISED TO BUY VS HOLD AT KEPLER CHEUVREUX
*CIELO RAISED TO NEUTRAL VS SELL AT GOLDMAN
*KUKA RAISED TO HOLD AT KEPLER CHEUVREUX
*STRATEC BIOMEDICAL RAISED TO BUY VS HOLD AT HSBC
*VEOLIA ENVIRONNEMENT RAISED TO OUTPERFORM AT RBC CAPITAL

>>> Down
*GRUPO AVAL CUT TO NEUTRAL VS BUY AT GOLDMAN
*HALYK BANK CUT TO NEUTRAL VS BUY AT CITI
*MAISONS FRANCE CONFORT CUT TO HOLD VS BUY AT SOCGEN
*NOVARTIS CUT TO NEUTRAL VS BUY AT CITI
*PERNOD CUT TO NEUTRAL VS BUY AT UBS, REMOVED FROM UBS KEY CALLS LIST
*SAFT CUT TO HOLD VS BUY AT HSBC
*SYNTHOMER CUT TO HOLD VS BUY AT BERENBERG

>>> PT Change


>>> Initiation


>>> Call
>> Stock
*NN GROUP ADDED TO HSBC EUROPE SUPER 10 PORTFOLIO
*PERNOD REMOVED FROM UBS KEY CALLS LIST
*PRUDENTIAL EXITS HSBC EUROPE SUPER 10 PORTFOLIO

(Les Echos) Bouygues se prononce cette semaine sur la vente de sa filiale téléco

Bouygues se prononce cette semaine sur la vente de sa filiale télécoms

Il ne reste plus que trois jours à Orange pour annoncer le rachat de Bouygues Telecom, ou l’échec de l’opération.Selon nos informations, Bouygues a convoqué un conseil d’administration mercredi.
«J» – 3. Le compte à rebours a commencé pour Orange qui a prévu d’annoncer le rachat de Bouygues Telecom - ou pas - avant la fin du mois de mars. Face à cette échéance, il n’y a pas eu de trêve pascale : les négociations ont continué pendant tout le week-end, qui avait la bonne idée de durer trois jours... Les états-major des quatre opérateurs, accompagnés de bataillons de juristes, étaient réunis chez un grand cabinet d’avocats parisien. « On est tous enfermé depuis mercredi. Certains ne rentrent même pas chez eux le soir », raconte un dirigeant, qui assure comme beaucoup d’autres que « rien n’est encore joué ». Les discussions semblent néanmoins avancer dans le bon sens. Selon nos informations, Bouygues a même convoqué un conseil d’administration mercredi, ce qui signifie que les travaux sont en phase d’atterrissage et qu’un accord serait imminent. Lors de ce conseil, Bouygues devra dire si oui ou non, il est d’accord pour vendre sa filiale télécoms à Orange.
Plusieurs points restent à régler d’ici là. Les discussions sur les prises de participation respectives de l’Etat et Bouygues au capital d’Orange ne sont pas finalisées. L’Etat, qui a 23%, veut rester au-dessus de 20%, et Martin Bouygues a dit qu’il voulait entre 10% et 15% du capital. D’après BFM Business, il obtiendrait 12%. Une partie de la transaction est en effet réglée en actions Orange, ce qui permet à Bouygues d’entrer au capital de l’opérateur. Reste à se mettre d’accord sur la valeur des actions. « La question, c’est quel prix donner à l’action Orange ? Celui du cours de bourse actuel, la valeur moyenne des derniers mois ou au-dessus ?, s’interroge un banquier. Plus l’Etat vendra l’action chère, moins il sera dilué. Le débat est là et en fin de semaine dernière les écarts de prix étaient réels.»
Patrick Drahi signerait un chèque de près de 4 milliards
Une fois qu’il aura racheté Bouygues Telecom, Orange va être obligé de vendre des actifs à Free et SFR. D’abord parce qu’il n’en a pas besoin. Ensuite et surtout, parce que c’est nécessaire pour obtenir le feu vert de l’Autorité de la concurrence, laquelle ne veut pas voir Orange se renforcer. Free reprendrait une bonne part du réseau, des fréquences et aussi des boutiques. De son côté, SFR récupérerait des clients mobiles, fixes et entreprises et, aussi, selon nos informations, bien plus de fréquences que ce qui était prévu au départ. L’opérateur de Patrick Drahi signerait un chèque avoisinant les 4 milliards . Orange, Free et SFR se partageraient les clients fixes.
Ces trois derniers jours, les discussions ont surtout tourné autour de la répartition des salariés de Bouygues Telecom. Il serait prévu que SFR en récupère entre 1.000 et 1.500. Et Free un peu plus de 2.000, qui proviendraient essentiellement des boutiques, et pas du réseau. A eux deux, ils s’offriraient donc la moitié des employés de Bouygues Telecom, l’autre moitié serait conservée par Orange. Cependant, Free n’en voudrait pas tant et négocierait à la baisse. Ces chiffres peuvent donc encore bouger.
L’Autorité de la concurrence au centre de tous les regards
L’ironie de l’histoire, c’est que c’est Orange qui va prendre la plus petite part du gâteau (c’est-à-dire des clients fixes et des salariés), alors que c’est lui qui rachète Bouygues Telecom. Et SFR qui aura la plus grosse, alors qu’ il avait échoué à racheter Bouygues Telecom en direct, en juin dernier !
Les risques liés à l’opération seraient partagés entre les quatre acteurs, chacun prenant sa part. La vraie inconnue, si l ’opération se fait, reste la décision de l’Autorité de la concurrence. Chacun sait que son président Bruno Lasserre ne laissera pas passer l’affaire comme une lettre à la Poste. Mais les protagonistes veulent croire qu’il ne touchera pas aux fondamentaux de l’accord. Faute de quoi, cela pourrait provoquer des désaccords entre opérateurs et mettre en péril l’opération.

>>> Asian Update

Asian Market Update: Japan household spending recovers; Traders look ahead to Yellen speech in the wake of softer US GDP outlook


***Economic Data***
- (JP) JAPAN FEB RETAIL SALES M/M: -2.3% V -0.9%E; RETAIL TRADE Y/Y: 0.5% (First rise in 4 month) V 1.6%E
- (JP) JAPAN FEB OVERALL HOUSEHOLD SPENDING Y/Y: +1.2% V -1.9%E (1st increase in 6-months)
- (JP) JAPAN FEB JOBLESS RATE: 3.3% V 3.2%E
- (KR) SOUTH KOREA MAR CONSUMER CONFIDENCE: 100 V 98 PRIOR

***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 -0.2%, S&P/ASX -1.3%, Kospi +0.2%, Shanghai Composite -1.1%, Hang Seng -0.4%, Jun S&P500 +0.1% at 2,030

***Commodities/Fixed Income***
- Apr gold -0.2% at $1,220/oz, May crude oil -0.6% at $39.17/brl, May copper -0.5% at $2.23/lb
- SLV: iShares Silver Trust ETF daily holdings rise to 10,257 tonnes from 10,230 tonnes
- (CN) China Feb fuel consumption 21.0Mt, +1.1% y/y
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.5060 V 6.5232 PRIOR; first stronger setting in 4 sessions
- (CN) PBOC to inject CNY60B in 7-day reverse repos
- (NZ) New Zealand sells 6-month bills at 2.05%; Sells 1-year bills at 2.10%

***Market Focal Points/FX***
- Asian equity markets are mixed, tracking the uncertainty on display in US hours, as investors pause the latest wave of buying to process the recent GDP report and also tune in to Fed Chair Yellen's speech at the Economic Club of New York luncheon on Tuesday. Recall US put out its final Q4 GDP data when the markets were closed on Friday, and even though the data were revised higher, a closer look at the numbers revealed declining profitability of companies along with more leverage in consumption. Monday's US release of personal spending figures were also lukewarm, prompting Atlanta Fed GDPNow model to cut expectations for US Q1 growth to 0.6% from 1.4%. High-profile fixed income manager Gundlach later remarked that after this revision, it would be "inconceivable" for the Fed to hike rates next month. In Asian trading, Australia and Shanghai are leading the key indices to the downside with lower commodity prices and tighter mortgage polices respectively weighing on those markets. FX majors were also in tight ranges ahead of Yellen's speech - USD/JPY traded some 20pips around 113.50, AUD/USD was in a 30pip range above 0.7540, and NZD/USD rose about 40pips to 0.6760.

- Economic data - primarily out of Japan - was similarly mixed. Retail sales underperformed vs expectations while overall household spending grew y/y for the first time in 6 months, though Japan officials attributed the gains to extra day of Leap Year. There was also more speculation about the 2nd round of consumption tax hikes - Econ Min Ishihara noted economic conditions will drive the decision while PM Abe reportedly suggested he would only cancel plans for the increase in the event of a Lehman type crisis scale shock.

- Korea consumer confidence rebounded slightly, just as Fin Min Yoo remarked that internal estimates suggest factory output is recovering and March trade figures will show improvement. Bank of Korea is also likely to remain accommodative - a local press report speculated that the next policy board coming with the May decision will be more accommodative than the current and possibly revise down growth estimates.

- In China, the new head of Stats Bureau, Ning Jizhe, called for the govt to encourage the flow of private capital into more sectors along with greater infrastructure investment to help boost consumption. Earlier, a researcher with CASS estimated Q1 GDP around 6.7% and Q2 at 6.8% - within the 6.5-7.0% target range forecast by Premier Li earlier this month.

***Equities***
US equities / ADRs:
- CNL: Louisiana Public Service Commission votes to grant a new hearing on proposed Macquarie merger (3-2 vote); +12.8% afterhours
- FL: To enter S&P500 index, replacing CAM; DCT to enter S&P Midcap 400 index; +1.8% afterhours
- MDVN: Group of congressmen ask NIH and HHS to examine pricing on Xtandi drug; -6.1% afterhours
- SNX: Reports Q1 $1.37 v $1.36e, R$3.13B v $3.28Be; -8.0% afterhours

Notable movers by sector:
- Consumer discretionary: Tsingtao Brewery Co 600600.CN -2.4% (FY15 result)
- Financials: Greentown China 3900.HK -4.8% (FY15 result); China Pacific Insurance Group Co 2601.HK +0.2% (FY15 result); Sunac China Holdings 1918.HK -2.4% (FY15 result); ANZ Bank ANZ.AU -3.2% (tightens mortgage lending criteria)
- Industrials: BYD Company 1211.HK +3.6% (FY15 result); BAIC Motor Corp 1958.HK -1.5% (FY15 result)
- Technology: Sharp Corp 6753.JP -3.1% (expects to sign bailout pact with Hon Hai)
- Materials: China National Building Material Co 3323.HK -5.6% (FY15 result); China Nonferrous Metals 1258.HK -0.8% (FY15 result)
- Energy: APA Group APA.AU +0.2% (raises guidance)
- Utilities: China Datang Renewable Power Co 1798.HK -1.1% (FY15 result); Tokyo Electric Power Co Inc 9501.JP +1.2% (to cut costs)

>>> US After Hours Sumamry:



After Hours Sumamry:

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: ALXA -49.7% (believes sufficient capital resources until the end of April 2016), SNX -7.9%, ICON -3.9%

Companies trading higher in after hours in reaction to news: FL +2.1% (To join S&P 500)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: None

Companies trading lower in after hours in reaction to news: GEVO -21.8% (announces proposed public offering of common stock and warrants), BPMX -18.4% (intends to offer and sell common stock and warrants in an underwritten public offering), PRKR -17.2% (Supreme Court has declined its pettition requesting a review of the decision of the United States Court of Appeals b/t the co and Qualcomm (QCOM)), PBYI -10.7% (plans to submit NDA for approval of neratinib for the treatment of extended adjuvant breast cancer in mid-2016 after meetings with FDA), MDVN -5% (NIH and HHS are asked by members of Congress to examine Xtandi pricing), QTS -3.3% (commences public offering of 5 mln shares of common stock)

>>> MDVN

Medivation: Senate and House members send letter to the Department of Health and Human Services and the NIH to step in to lower the cost of a prostate cancer drug Xtandi

WSJ : Theranos Results Could Throw Off Medical Decisions, Study Finds

Theranos Results Could Throw Off Medical Decisions, Study Finds

Researchers find that lab-testing company’s results on cholesterol tests were lower by an average of 9.3% than Quest and LabCorp

A study by researchers at the Icahn School of Medicine at Mount Sinai showed that results for cholesterol tests done by Theranos Inc. differed enough from the two largest laboratory companies in the U.S. that they could throw off doctors’ medical decisions.

The Mount Sinai study was published online Monday in the peer-reviewed Journal of Clinical Investigation. The authors recruited 60 healthy adults in the Phoenix area and sent them for 22 commonly prescribed blood tests over a five-day period in July 2015.

The tests were performed by Theranos, which operates blood-drawing sites in Walgreens drugstores, Quest Diagnostics Inc. and Laboratory Corp. of America Holdings, according to the study. The researchers at Mount Sinai in New York said they did the blood-testing comparison without the companies’ knowledge or participation.

The study concluded that Theranos’s results for total cholesterol were lower by an average of 9.3% than those produced by Quest and LabCorp. Doctors often use cholesterol-test results to determine whether to prescribe statins, a class of drugs that can help ward off heart disease.

The Mount Sinai researchers wrote that the average gap on the cholesterol test between Theranos and the other labs was large enough that it could lead doctors to “either inappropriately initiate or fail to appropriately initiate statin therapy” in some patients.

A Theranos spokeswoman didn’t respond to requests for comment.

LabCorp said the study shows that its tests “are well within established guidelines and meet performance expectations,” according to a spokeswoman for the Burlington, N.C., company.

A spokesman for Quest, of Madison, N.J., said the Mount Sinai researchers found “a concerning lack of agreement between the reference labs and the ‘low-volume-specimen’ lab, especially for heart health.”

Eric Schadt, chairman of the department of genetics and genomics at Mount Sinai and one of the study’s lead authors, said in an interview that executives at Theranos, based in Palo Alto, Calif., didn’t responded to his attempts last fall to discuss the findings.

The Mount Sinai study is the first peer-reviewed comparison of Theranos test results with those of other labs.

Some scientists have called on Theranos to publish data in a peer-reviewed medical journal to support the accuracy of its fingerprick blood-testing technology. Theranos founder and Chief Executive Elizabeth Holmes said in October that the company would publish peer-reviewed data but it hasn’t done so yet.

One key question that wasn’t addressed in the Mount Sinai study is whether Theranos used its proprietary devices to run those tests.

Test reports provided to patients show that the tests were run at the company’s lab in Newark, Calif. That lab has Theranos’s proprietary Edison devices and traditional lab machines bought from diagnostic-equipment makers such as Siemens AG, according to former Theranos employees.

One former Theranos employee said the company wasn’t performing the 22 tests in question on Edison devices as recently as June 2015, or the month before the Mount Sinai tests.

Instead, Theranos was diluting small blood samples collected from fingers to increase the volume of those samples and then running them through traditional lab machines, according to the former employee.

Dr. Schadt said the Theranos tests assessed in the study were run on small blood samples drawn from patients’ fingers. Quest and LabCorp ran their tests on larger blood samples drawn with needles from patients’ arms.

If Theranos diluted blood samples from patients in the Mount Sinai study, that might help explain the average difference in cholesterol-test results, because dilution introduces more potential for error, said Stephen Master, associate professor of pathology at Weill Cornell Medical College in New York.

Timothy Hamill, professor emeritus at the University of California, San Francisco’s department of laboratory medicine, said Theranos’s results also might have been affected “by the differences between capillary and venous samples.” He said capillary blood pricked from a fingertip often mixes with fluids from tissue and cells, making it less pure than blood drawn from an arm vein.

Drs. Hamill and Master weren’t involved in the Mount Sinai study.

Ms. Holmes denied in October that Theranos diluted blood samples before running them on traditional machines. Since then, the company has declined to comment on the matter. Theranos has stood by the accuracy of tests run from finger-pricked blood.

The Mount Sinai study also concluded that Theranos was more likely than Quest and LabCorp to reject samples as inadequate for testing.

In addition, the researchers found that Theranos flagged test results as being outside the normal range 60% more often than the two other lab companies.

“This increase in abnormal test results can have negative consequences for medicine in the form of extra testing, additional patient visits to clinics/hospitals, and added doctor services, all of which result in additional costs and burdens to patients or to the healthcare system and are potentially harmful, if the abnormal tests were misdiagnoses,” the Mount Sinai researchers wrote.

A federal inspection of the same Theranos lab in Newark, Calif., last fall found “deficient practices” in five categories. The lab is at risk of losing its federal certification if the problems aren’t resolved.

Theranos has said the inspection report “does not reflect the current state of the lab.” Theranos has said it has fixed many of the problems and has submitted a correction plan to regulators to remedy the remaining problems.

>>> US Close Dow+0.11% S&P+0.05% Nasdaq-0.14% Russell+0.06%

Closing Market Summary: Mixed Results as Energy Tumbles and Consumer Discretionary Leads

The stock market began the week on a flat note as the S&P 500 added 0.1% while the Nasdaq Composite (-0.1%) underperformed. Today's action featured a slide in crude oil, a noteworthy revision to economic data from January, and relative strength from the consumer discretionary space (+0.5%).

Overall, the Monday affair was very quiet as post-holiday trade failed to garner much interest ahead of a data-heavy week. To that point, fewer than 688 million shares changed hands at the NYSE floor, versus last week's average of 833.8 million shares.

A cautious tone was set this morning as a tumble in oil helped drag the major averages to opening lows. Meanwhile, some mixed data readings clouded sentiment as investors weighed a cooler-than-expected reading of Core PCE Prices for February (0.1%; consensus +0.2%) and an above-consensus reading of February Personal Income (+0.2%; consensus +0.1%). The former is the Fed's preferred measure of inflation, and investors will be on the lookout for any implications this may hold for future fed funds rate hikes.

The major indices hit their highs around 14:00 ET as WTI crude ended its rally off its low. The energy component would end its pit session near those levels, ticking down 0.3% to $39.38/bbl.

Four sectors ended beneath their flat lines with energy (-0.5%), utilities (-0.4%), technology (-0.3%), and health care (-0.3%) leading to the downside. Meanwhile, consumer discretionary (+0.5%), consumer staples (+0.5%), materials (+0.4%), and financials (+0.3%) outperformed.

Lodging names outperformed in the consumer discretionary space following reports that Starwood Hotels (HOT 83.75, +1.62) received a revised non-binding offer from the Chinese consortium headed by Anbang Insurance Group. Elsewhere, Time Warner (TWX 72.54, +2.53) rallied 3.6% following the release of ‘Batman v Superman: Dawn of Justice', which resulted in the third largest global opening for a March release in IMAX (IMAX 30.38, +0.20) theaters.

The top-weighted technology space (-0.3%) spent most of its day behind the benchmark index as Microsoft (MSFT 53.54, -0.67) weighed on the sector. The tech giant underperformed following headlines that it may be interested in acquiring Yahoo! (YHOO 35.23, +0.37). Meanwhile, Oracle (ORCL 40.62, -0.35) underperformed among software names while Qualcomm (QCOM 50.19, -0.67) displayed relative weakness in the PHLX Semiconductor Index (-0.1%).

The industrial sector (UNCH) finished above its flat line, as a rally in large cap General Electric (GE 31.49, +0.38) outweighed the underperformance of rail names in the Dow Jones Transportation Average (-0.9%). Elsewhere in the Transportation Average, JetBlue (JBLU 20.79, +0.55) spiked after reports indicated that the company put in a bid for Virgin American (VA 37.70, +3.53).

Biotechnology endured a choppy session as the iShare Nasdaq Biotechnology ETF (IBB 252.08) swung from a 1.5% loss to a 0.9% gain. The ETF ended its day down 1.3% despite strength from constituent Gilead Science (GILD 92.46, +1.14). The biotech name ended higher by 1.6% after a ruling in a patent dispute case was deemed better than feared.

The U.S. Dollar Index (95.97, -0.20) finished lower as the greenback lost ground to the euro. The euro/dollar pair ended higher by 0.3% at 1.1200. For its part, the dollar gained 0.2% against the yen to end at 113.38.

Treasuries ended in the green, but off their best levels. The yield on the 10-yr note settled lower by three basis points at 1.88% (-1 bps) after dipping into the 1.86% area.

Today's economic data included PCE Prices for February, Personal Income for February, Personal Spending for February, and Pending Home Sales for February:

  • The Personal Income and Spending report for February was released to little fanfare as the report came in right around expectations. Income increased 0.2% month-over-month (consensus +0.1%), spending increased 0.1% (consensus +0.1%), and the core PCE Price Index, which excludes food and energy, increased 0.1%  (consensus +0.2%).
    • Overall, this set of figures is not expected to do much in terms of strengthening or weakening a rate-hike argument, but it is worth noting that a 0.5% increase in January Personal Spending was revised down to an increase of just 0.1% in today's report.
    • The Federal Reserve is looking for 2.0% year-over-year inflation as expressed by the core PCE Index. Following today's report, the index remains unchanged at 1.7% year-over-year.
    • The personal savings rate edged up to 5.4% from 5.3%.
  • Pending home sales for February climbed 3.5% while the consensus expected an increase of 1.1%. Meanwhile, the January reading was revised to -3.0% from -2.5%.

Tomorrow's economic data will include the Case-Shiller 20-city Index for March (consensus +5.7%) and Consumer Confidence for March (consensus 94.5), which will be released at 9:00 ET and 10:00 ET, respectively. 

Separately, Fed Chair Janet Yellen will speak at the Economic Club of New York at 12:20 ET.