>>> Wal-Mart beats by $0.01, reports revs in-line; guides Q4 EPS in-line with mi

Wal-Mart beats by $0.01, reports revs in-line; guides Q4 EPS in-line with midpoint above; reaffirms FY16 revs guidance
  • Reports Q3 (Oct) earnings of $0.99 per share, ex-$0.04 lease benefit, $0.01 better than the Capital IQ Consensus of $0.98; net sales fell 1.3% year/year to $116.6 bln vs the $117.37 bln Capital IQ Consensus.
    • US Walmart Q3 comparable store sales +1.5% vs 1-2% guidance (+0.5% Q3 last year), positive for the fifth consecutive quarter; traffic increased 1.7%; Sam's Club Q3 comparable store sales of +0.4% vs 0-2% guidance (excluding fuel).
    • E-commerce sales and GMV globally increased ~10% on a constant currency basis. Growth was pressured by challenges in key international markets.
    • Investments in people and technology continued. Consolidated operating income declined 8.8%.
  • Co issues in-line guidance for Q4, sees EPS of $1.40-1.55 vs. $1.42 Capital IQ Consensus; sees Walmart US comps +1%, Sam's Club comp ex-fuel +0-1%.
  • Co issues guidance for FY16, narrows EPS to $4.50-4.65 from $4.40-4.70 vs. $4.51 Capital IQ Consensus; reaffirms FY16 revs flat at ~$482.2 bln vs. $481.98 bln Capital IQ Consensus Estimate. Note co warned at Investor Day last month.

(BofA-ML) Global & European Fund Manager

Global Fund Manager :

The Big November FMS takeaway is...
...most vulnerable trade heading into the Dec Fed hike is "long dollar", and associated
positions: long discretionary, Eurozone, banks, Japan, short EM, resources, commodities
(Exhibit 1). We are sellers of risk SPX 2050-2100, DXY>100. Terror/geopolitics can keep
ZIRP for longer, but bullish FMS indicates big EPS needed for sustained new risk highs.
81% expect the Fed to hike in December...
...up from 47% last month as growth expectations bounce (in China to 15-month highs)
and perceptions of market liquidity rise from 3-year lows. Fed hike acceptance causes
largest MoM drop in utilities allocation in 5 years. But Nov bounce in profit expectations
notably flaccid and margin expectations weakest in 3 years.
4.9% cash levels, down from 5.1%...
...but higher than post "taper tantrum" avg of 4.7%...BofAML Risk Index jumps to 7-
month high.
The big FMS positioning extremes...
...biggest long DM versus EM ever; 2nd highest Eurozone OW ever; 3rd biggest EM UW
ever; 2nd largest tech OW ever; 3rd largest banks OW ever; long of industrials at 3-year
low; US$ is 2nd most "overvalued" in 6.5 years; largest ever US equity "overvaluation"
versus RoW (EM/Europe/Japan).
Brand new question on Investment Style
Net 61% expect high-quality stocks to outperform low-quality; net 34% expect "highdividend
yield" to outperform; net 33% expect large-cap to beat small-cap; net 21%
expect high-yield bonds to outperform high-grade bonds.
Nov FMS contrarian trades
Long EM-short Eurozone; long staples-short discretionary; long industrials-short banks;
l ong commodities-short REITs.

European Fund Manager :

European investors’ sentiment towards Eurozone growth on a 12-month horizon
improves sharply: net 54% expect strengthening, up from net 25% last month. Profit
expectations on a 12-month view also improved this month, while the proportion
expecting stronger inflation is constant at net 46%. Despite the incremental
improvement in macro expectations, European fund managers are hugging the
benchmark on sector positioning - the lack of extreme OWs/UWs means there are no
contrarian sector trades this month (<-40% or >30% net OW). The sense of caution is
also seen in investment style preferences: net 39% expect high Quality to outperform
low Quality over the next 12 months, up from net 14% last month.

(Exane) Strategy Outlook 2016



* The directional call…liquidity and growth
In the US, financial conditions are tightening. The corporate’s sector’s utilisation of debt
is soaring as the financing gap deteriorates. And the corporate debt maturity calendar
looks onerous in 2016. The risk is spreads move materially higher again. Given the
reliance on debt funded buybacks this has direct, and negative, equity market
implications.
In EM, the debate over whether there is a mini-cycle forming may continue near term.
But the structural issues are not improving. Corporate debt lies at the root of the
problem. The NPL cycle is only just beginning. And in China we have real concern on
the Banks’ capital resilience. Impaired financial intermediation points to sustained
pressures on domestic liquidity and, by extension, growth. Equity negative.
For once, Europe offers a stronger story. A central bank that stands ready to escalate
monetary policy support, and a domestic economy that is showing some momentum.
For us, it is the one major region where macro conditions look supportive of equity
markets. This should favour domestic stocks and underpin a relative trade. But we
suspect that global influences are likely to weigh on the aggregate indices.


* Valuation and earnings…behind the headline
Valuations are clearly elevated. Considering the capital structure, rather than just the
equity, and European ratings have only been higher through the TMT bubble. The
European CAPE is often mis-used – remove the structurally changed sectors and the
rating is again at the top of the range. But perhaps the greatest mis-perception relates
to dividends. Yields may look attractive against credit, but capex is extremely
depressed and payout ratios close to historic highs. Even in a benign world, as these
factors normalise, future dividend growth will materially lag earnings. Buying equities
requires investors to stomach rather than embrace valuation.

>>> What to look at today - 17th of November 2015

Dow+1.38% S&P+1.39% Nasdaq+1.15% Russell+0.83% VIX 18.16 (-9.56%)
US market start the week on +ve note. Overnight, it was reported that the Japanese economy has re-entered recession for the second time in as many years as Q3 GDP contracted 0.2% quarter-over-quarter (expected -0.1%; last -0.3%),but this news boost hope for more monetary support from BOJ. Energy leaded the move(+3.3%), aided by a 2.5% spike in crude oil, which put a sizable dent into last week's 8.2% decline. For its part, the energy sector was able to erase almost half of its 5.5% drop from last week. Volume were in line with average @ 830mil shares. US After Hours HOTR +11.5%, NUAN +7%, TGLS +4.1%, URBN -11.5%, SPHS -9%, A -1.4% following earnings/guidance, OCRX +26.6% on Positive phase 1, HERO+2% on Soros 7% Passive stake. Traders have attributed the rebound to clear signs of willingness to step up offensive against the militants and also the rising possibility of more easing by the ECB along with a potential delay to liftoff at the Fed. Hang Seng and Shanghai are among the strongest markets, with the PBoC reportedly announcing an additional targeted RRR cut of additional 50 bps for the Bank of Beijing to 14% so as to help lending to rural sector of the economy. In Jap., Econ Min Amari did acknowledge that an extra budget may now be called but added fiscal consolidation remains critical. Going into the BOJ meeting this week, reports of fiscal stimulus in the pipeline will likely temper already slim expectations of an announcement of expansion of QE by Japan's central bank.

Nikkei +1.22% Hang Seng +1.49% Shanghai +0.26%

Eur$ 1.0671 JPY 123.39 CNY 6.3763 GBP 1.5177 CHF 1.0113 RUB $65.5219 WTI $ 41.69 (-0.02%)

S&P +0.10% EuroStoxx +1.43% Dax +1.29% SMI +1.29%

Macro :
- China Investors Go Missing From Hong Kong Stock-Trading Link
- Treasury Volatility Falls to 2015 Low as Consensus on Fed Grows
- Global Economic Cost of Terrorism at Highest Since Sept. 11
- French Defense Ministry: IS Command, Training Centers Destroyed

Keep an eye on :
- ABI BB : AB InBev CEO Brito Sells EU22.6m Stock After Exercising Options
- BALN VX : Baloise 9m Solvency 1 Ratio 341%; Sticks to Outlook
- CLLS US / ALCLS FP : Cellectis 3Q Total Rev. & Other Income EU9.98m
- CWC LN : Liberty Global Says Deal Values CWC at Equity Value $5.3b
- AM FP : Liberty Global Says Deal Values CWC at Equity Value $5.3b
- GEN DC : Genmab/J&J Cancer Drug Approved by FDA More Than 3 Months Early
- IBE SM : Iberdrola to Get $34m From Bolivia on 2012 Nationalizations:Rtrs
- ITP FP : Interparfums Sees 2016 Sales of EU340m, Up Almost 8%
- SBMO NA : SBM Receives Formal Invitation to Tender for Sepia, Libra FPSOs
- SHP LN : Shire Entry Point Seen Attractive After Sector Pullback: Leerink
- HOT US : Hyatt Said to Have Made Last-Minute Bid for Starwood, DJ Says
- UBSN VX : UBS Agrees to Buy Santander Private Banking Italia Unit
- UTDI GY : United Internet 3Q Ebit Beats Ests.; Keeps Outlook Unchanged
- VIV FP : Vivendi Had No Contact With Niel Or Other Parties Re Tel Italia
- VOW3 GY : *VW’S OCTOBER EUROPEAN MARKET SHARE FALLS TO 25.2% FROM 26.1%

>>> Europe : Brokers Upgrades & Downgrades - 17th of November 2015

>>> Up
*ACOMO RAISED TO ACCUMULATE AT SNS SECURITIES
*AUTONEUM RAISED TO OUTPERFORM VS NEUTRAL AT CREDIT SUISSE
*CENTAMIN RAISED TO BUY VS HOLD AT INVESTEC
*CENTRAL ASIA METALS CUT TO SELL VS HOLD AT INVESTEC
*DEUTSCHE EUROSHOP RAISED TO ACCUMULATE VS NEUTRAL AT EQUINET
*HANNOVER RAISED TO OVERWEIGHT VS UNDERWEIGHT AT JPMORGAN
*OPHIR ENERGY RAISED TO NEUTRAL VS UNDERPERFORM AT CREDIT SUISSE
*PREMIER OIL RAISED TO HOLD VS SELL AT CANACCORD
*SHIRE ADS RAISED TO OUTPERFORM AT LEERINK, PT $239
*TECNICAS REUNIDAS RAISED TO NEUTRAL VS SELL AT CITI
*TESCO RAISED TO BUY VS NEUTRAL AT CITI

>>> Down
*ADIDAS CUT TO SECTOR PERFORM AT RBC CAPITAL
*ALLIANZ CUT TO HOLD VS BUY AT BANKHAUS LAMPE
*DRAX CUT TO NEUTRAL VS OUTPERFORM AT MACQUARIE
*E.ON CUT TO HOLD VS BUY AT SOCGEN
*LAFARGEHOLCIM CUT TO UNDERPERFORM FROM NEUTRAL AT DAVY
*MORRISON CUT TO SELL VS BUY AT CITI
*NOVAE CUT TO ADD VS BUY AT PEEL HUNT
*PEAB CUT TO HOLD VS BUY AT PARETO
*RWE CUT TO HOLD VS BUY AT SOCGEN
*SAINSBURY CUT TO NEUTRAL VS BUY AT CITI
*SIG PLC CUT TO NEUTRAL VS BUY AT CITI
*TALKTALK CUT TO SELL VS HOLD AT SOCGEN
*TRELLEBORG CUT TO HOLD VS BUY AT KEPLER CHEUVREUX

>>> PT Change


>>> Initiation
*TUI AG REINSTATED NEUTRAL AT GOLDMAN
*UBISOFT ENTERTAINMENT RATED NEW BUY AT JEFFERIES

>>> Call
>> Sector
*GLOBAL BANKS SECTOR CUT TO UNDERWEIGHT AT HSBC
*SEMICONDUCTORS SECTOR RAISED TO NEUTRAL AT HSBC