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

>>> Up
*JUNIPER NETWORKS RAISED TO OUTPERFORM AT BERNSTEIN
*LINDE RAISED TO OUTPERFORM VS NEUTRAL AT CREDIT SUISSE
*LONMIN RAISED TO BUY VS HOLD AT HSBC
*MITCHELLS & BUTLERS RAISED TO OVERWEIGHT VS NEUTRAL AT JPMORGAN
*NEXTERA ENERGY RAISED TO OUTPERFORM AT BAIRD
*TELE2 RAISED TO SECTOR PERFORM AT RBC CAPITAL

>>> Down
*BUREAU VERITAS CUT TO HOLD VS BUY AT BERENBERG
*FIRSTGROUP CUT TO UNDERPERFORM VS SECTOR PERFORM AT RBC
*SOCIETE GENERALE CUT TO ADD VS BUY AT ALPHAVALUE
*SONOVA CUT TO REDUCE AT HSBC
*STOLT-NIELSEN CUT TO HOLD AT NORDEA
*UNICREDIT CUT TO HOLD VS BUY AT BERENBERG
*WILLIAM DEMANT CUT TO REDUCE AT HSBC

>>> PT Change


>>> Initiation
*INWIT RATED NEW OVERWEIGHT AT BARCLAYS, PT EU6
*WIZZ AIR RATED NEW NEUTRAL AT GOLDMAN, PT 1,932P

>>> Call

>>> Asian Update

Asian Market Update: BOJ adds Negative Interest Rates to policy stimulus measures; PBoC adds incremental liquidity in OMO ahead of holiday cash crunch

***Economic Data***
- (JP) JAPAN JAN TOKYO CPI Y/Y: -0.3% V 0.0%E; CPI EX-FRESH FOOD Y/Y: -0.1% V 0.1%E
- (JP) JAPAN DEC NATIONAL CPI Y/Y: 0.2% V 0.2%E; CPI EX-FRESH FOOD (CORE) Y/Y: 0.1% V 0.1%E
- (JP) JAPAN DEC JOBLESS RATE: 3.3% V 3.3%E
- (JP) JAPAN DEC PRELIMINARY INDUSTRIAL PRODUCTION M/M: -1.4% V -0.3%E; Y/Y:-1.6% V -0.6%E
- (JP) JAPAN DEC OVERALL HOUSEHOLD SPENDING Y/Y: -4.4% V -2.5%E
- (JP) JAPAN DEC VEHICLE PRODUCTION Y/Y: -2.3% V +6.1% PRIOR
- (AU) AUSTRALIA Q4 PPI Q/Q: 0.3% V 0.9% PRIOR; Y/Y: 1.9% V 1.7% PRIOR
- (AU) AUSTRALIA DEC PRIVATE SECTOR CREDIT M/M: 0.5% V 0.6%E; Y/Y: 6.6% V 6.7%E
- (NZ) New Zealand Dec Building Permits M/M: 2.3% v 2.4% prior
- (TW) TAIWAN Q4 PRELIMINARY GDP Y/Y: -0.3% V -0.6%E (enters technical recession with 2nd straight quarter of contraction)
- (KR) SOUTH KOREA DEC INDUSTRIAL PRODUCTION M/M: +1.3% V -0.3%E; Y/Y: -1.9% V -3.3%E
- (KR) SOUTH KOREA FEB BUSINESS MANUFACTURING SURVEY: 66 V 68 PRIOR; NON-MANUFACTURING SURVEY: 68 V 69 PRIOR

***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 -0.2%, S&P/ASX -0.1%, Kospi -0.5%, Shanghai Composite +2.0%, Hang Seng +1.8%, Mar S&P500 +0.1% at 1,883

***Commodities/Fixed Income***
- Apr gold flat at $1,116/oz, Mar crude oil +1.0% at $33.55/brl, Mar copper -0.1% at $2.05/lb
- SLV: iShares Silver Trust ETF daily holdings fall to 9,626 tonnes from 9,662 tonnes; multi-year low
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.5516 V 6.5528 PRIOR; strongest Yuan setting since Jan 6th, 15th straight firmer setting relative to Close
- (CN) PBOC to inject CNY20B in 7-day reverse repos and CNY80B in 28-day reverse repos
- (AU) Australia MoF (AOFM) sells A$900M in 2025 Bonds; avg yield: 2.6128%; bid-to-cover: 2.39x

***Market Focal Points/FX***
- After the recent easing rhetoric from ECB's Draghi and carefully phrased backing away from steady tightening commitment by the Fed, the Bank of Japan was on deck today and seemingly lived up to its "arch-dove among peers" credentials. Expectations by cabinet advisors and analysts have been piling up for the BOJ to respond to recent spate of softer metrics. Today's slowing CPI prints - particularly in the forward looking Tokyo region - along with bigger than expected declines in household spending and industrial output may have convinced policymakers to take bolder action. After last month's innocuous increase in JGB buying, the BOJ scaled up its stimulative activity, announcing negative interest rates on current accounts that financial institutions hold with BOJ and added it was prepared to adjust negative rates even deeper. USD/JPY spiked up some 300pips from session lows to as high as 121.50, Nikkei225 rallied strongly, and the S&P500 futures traded up by nearly 1% in electronic trade.

- BOJ's negative -0.1% interest rate was voted on by a narrow 5-4 margin. Accompanying the decision, the BOJ also cuts its FY16/17 CPI projection to 0.8% v 1.4% prior forecast and maintained FY17/18 at 1.8%, adding the assumptions were based on oil price rising to over $40/brl over projected period. Tokyo's penchant for trifurcated policy approach - comparable to Abenomics' "three arrows" - is now being deployed in monetary policy. 1st dimension - "interest rate policy" - is the -0.1% interest rate, 2nd dimension - "quantitative" - is the maintained annual monetary base expansion target of ¥80T, and the 3rd dimension - "qualitative" - is the makeup of that asset buying scheme which remains primarily JGB purchases with annual maturity of 7-12 yrs. Going forward, BOJ is assumed to be willing to alter any or all of these to achieve 2% inflation target, expected date for which has also been pushed back by another 6 months to H1 of FY17/18.

- Outside of Japan policy decision, PBoC injected additional CNY100B in repos to supply more liquidity going into the Lunar New Year holidays in China next month. A researcher with PBoC warned the central bank is in for a "tough battle" against speculators in CNY, but was confident that Chinese currency can be kept stable. Another PBoC academic said RRR cut can still happen but its impact is limited by factors such as Fed tightening. In Australia, Treasury Sec Fraser warned PM Turnbull that AAA credit rating is in jeopardy unless the gvot cuts spending.

***Equities***
US equities / ADRs:
- FTNT: Reports Q4 $0.18 v $0.18e, R$297M v $296Me; +8.1% afterhours
- MSFT: Reports Q2 $0.78 v $0.69e, R$25.7B v $25.1Be; +4.2% afterhours
- FLEX: Reports Q3 $0.35 v $0.30e, R$6.76B v $6.49Be; +3.5% afterhours
- WRK: Reports Q1 $0.59 v $0.58e, R$3.68B v $3.71Be; +2.7% afterhours
- WDC: Reports Q2 $1.60 v $1.53e, R$3.33B v $3.35Be; +0.9% afterhours
- AMGN: Reports Q4 $2.37 v $2.27e, R$5.54B v $5.53Be; -0.3% afterhours
- V: Reports Q1 $0.69 v $0.68e, R$3.57B v $3.56Be; -0.3% afterhours
- SYNA: Reports Q2 $1.60 v $1.56e, R$470.5M v $476Me -3.5% afterhours
- EA: Reports Q3 $1.83 v $1.81e, R$1.80B v $1.80Be; -7.9% afterhours
- AMZN: Reports Q4 $1.00 v $1.61e (unclear if comp), R$35.7B v $35.9Be; -13.4% afterhours
- AZPN: Reports Q2 $0.47 v $0.39e, R$119.2M v $112Me; -18.2% afterhours

Notable movers by sector:
- Financials: CITIC Securities 6030.HK +4.8% (FY15 result); Haitong Securities 6837.HK +4.2% (prelim FY15 result)
- Industrials: China First Heavy Industries 601106.CN +2.9% (prelim FY15 result); Guangshen Railway Co 601333.CN' +3.7% (profit alert); Great Wall Motor 2333.HK -13.9% (prelim FY15 result); Nippon Express 9062.JP -1.5% (9-month result); Mitsui Osk Lines 9104.JP -1.3% (9-month result)
- Technology: Alibaba Health Information Technology 241.HK +7.2% (clarification); AU Optronics Corp 2409.TW -2.5% (Q4 result); NEC Corp 6701.JP -10.3% (9-month result)
- Materials: Aluminum Corporation of China 2600.HK +3.6% (guidance); Posco 005490.KR +0.9% (FY15 result)
- Energy: AWE AWE.AU +1.0% (Q2 result); Origin Energy ORG.AU +5.4% (Q2 result); Tohoku Electric 9506.JP +3.8% (9-month result); Osaka Gas Co. 9532.JP +1.1% (9-month result)
- Healthcare: Astellas Pharma Inc 4503.JP -1.2 % (9-month reuslt)

>>>US After Hours Summary: GIMO +15.3%, MTW +14.1%, QLGC +10.9%, FT


After Hours Summary: GIMO +15.3%, MTW +14.1%, QLGC +10.9%, FTNT +9.2%, AMZN -13.6%, AZPN -13.3%, QSII -9.0%, EA -8.0% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance:  GIMO +15.3%, MTW +14.1%, QLGC +10.9%, FTNT +9.2%, SHOR +5.7%, ALGN +5.0%, USAT +4.7%, FLEX +4.6%, SWKS +3.6%, PFPT +3.1%, MSFT 2.7%, WRK +2.7%, ARAY +1.7%.

Companies trading higher in after hours in reaction to news:  STRP +4.6% (Blackrock filed a passive 5.3% stake), VALE +3.0% (announced that, in compliance with its dividend policy and due to price volatility in mineral commodities, the Executive Board has approved and will submit to the Board a proposal for a minimum dividend equal to zero for 2016), OSTK +2.0% (accepted $20 mln to settle market manipulation case).

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance:  AMZN -13.6%, AZPN -13.3%, QSII -9.0%, EA -8.0%, QTM -7.3%, EMN -6.6%, SYNA -4.1%, V -1.2%

Companies trading lower in after hours in reaction to news:  HK -1.7% (announced suspension of dividend on Series A Cumulative Perpetual Convertible Preferred Stock).

>>> US Close Dow+0.79% S&P+0.55% Nasdaq+0.86% Russell+0.05%

Closing Market Summary: Energy and Technology End Day in the Lead

The major averages ended the Thursday affair modestly higher as speculation regarding oil output cuts, and positive earnings results helped keep the stock market in positive territory. However, the major indices lost their footing near their opening highs as weaker than expected economic data, and conflicting reports between OPEC and non-OPEC states limited the upside of today's trade. The tech-heavy Nasdaq (+0.9%) outpaced the Dow Jones Industrial Average  (+0.8%) and the S&P 500 (+0.6%).

Today's session began on a positive note with earning results from Facebook (FB 109.11, +14.66) and Under Armour (UA 84.07, +15.49) each coming in ahead of analysts' estimates. Meanwhile, industrial giant Caterpillar (CAT 61.08, +2.76) issued above consensus EPS guidance for 2016 in its earnings report.

On the commodities front, WTI crude was able to extend its recent win streak due to increased speculation regarding oil production cuts between OPEC and non-OPEC states. This culminated when the Russian Energy Minister, Alexander Novak, released a statement saying that Saudi Arabia proposed a 5.0% cut to oil production by member states. This was followed by a denial from OPEC delegates, but despite the denial, oil was able to hold its ground above the $33.00/bbl level. WTI crude ended its session higher by 2.8% at $33.22/bbl.

In response to the upswing in oil, energy (+3.2%) settled on top of the leaderboard while utilities (+1.6%) and technology (+1.5%) followed. On the flipside, health care (-2.3%) was unable to make it out of negative territory while telecom services (+0.1%) and financials (+0.1%) also underperformed.

In the commodity-sensitive energy space, pipeline company Kinder Morgan (KMI 15.29, +1.19) and oilfield service company Schlumberger (SLB 69.51, +3.96) were able to capitalize on the positive price movement in crude to top the sector. Meanwhile, Dow components Chevron (CVX 85.92, +2.63) and Exxon Mobil (XOM 76.99, +1.70) were able to end their day near the top of that composite.

Switching gears, Facebook (FB 109.11, +14.66) dominated in the heavily-weighted technology space as it climbed 16.6% in response to a fourth quarter earnings beat. Fellow large cap Alphabet (GOOGL 748.30, +30.72) also outperformed, climbing 4.2%. To be fair, there was some relative weakness in the tech space as Cisco Systems (CSCO 23.10, -0.32) slid 1.4% in sympathy with Juniper Networks (JNPR 22.46, -4.08). Juniper plummeted 15.4% after issuing downside EPS guidance for Q1. Similarly, Qualcomm (QCOM 43.59, -3.94) lost 8.3% after below consensus guidance overshadowed better than expected earnings. 

In health care, biotechnology showed persistent weakness, evidenced by the 3.7% tumble in the iShares Nasdaq Biotechnology ETF (IBB 263.40, -10.00). The sub-group responded to weakness in Celgene (CELG 97.21, -5.10), which missed bottom line estimates and issued below-consensus guidance.

Elsewhere, the financial sector continued to be anchored by American Express (AXP 52.88, -1.64), which has slid more than 16.0% since it reported earnings last week. Meanwhile, large-cap constituents Citigroup (C 40.39, -0.10) and Morgan Stanley (MS 25.17, -0.20) also showed relative weakness.

Once again, today's volume was relatively heavy as more than a billion shares changed hands at the NYSE floor.

Treasuries retreated from their lows for the bulk of the session, pressuring the 10-yr yield one basis point to 1.99%.

Today's economic data included weekly Initial Claims, Durable Orders for December, and Pending Home Sales for December.

  • Weekly initial claims were a bit better than expected, dropping to 278,000 (consensus 285,000) for the week ending January 23.
    • Initial claims remain bounded between 250,000 and 300,000, which is where they have been since July 2014, yet they have been showing signs of weakening in more recent reports.
  • Continuing rose to 2.268 million from the prior week's revised count of 2.219 from 2.208 million (consensus 2.230 million).
    • The four-week moving average for continuing claims sits at 2.246 million, up nearly 16,000 from the prior week's revised average.
  • Durable Goods Orders declined 5.1% (consensus -0.5%) on top of a downwardly revised 0.5% decrease (from 0.0%) for November.
    • Total durable goods orders are down 3.5% year-over-year while orders, excluding transportation, are down 2.6%.
  • Excluding transportation, orders fell 1.2% (consensus -0.1%) on the heels of a downwardly revised 0.5% decline (from 0.0%) for November.
  • Pending home sales for December ticked higher 0.1% (consensus +0.8%). The November reading was revised to -1.1% from -0.9%.

Tomorrow's economic data includes the advance reading of Q4 GDP (consensus 0.9%) will be released at 8:30 ET. Meanwhile, Chicago PMI for January (consensus 45.0) and the final reading of the January Michigan Sentiment Index (consensus 93.2) will cross the wires at 9:45 ET and 10:00 ET, respectively.

  • Russell 2000 -11.7% YTD
  • Nasdaq -10.0 YTD
  • Dow Jones -7.8% YTD
  • S&P 500 -7.4% YTD 

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: NOW -19.1%, OSIS -15%, SGI -13.5%, EBAY -12.8%, URI -12%, INVN -10.1%, JNPR -9.6%,OAS -8.8%, KEX -7.6%, ACAT -7.3%, CLB -7.1%, CLB -7.1%, DFS -6%, HOLX -4.7%, POT -4.2%, ABT -3.6%, CRR -3.3%, BX -2.7%, MO -2.7%,QCOM -2.6%, DB -2.4%, AN -2.4%, CELG -2.3%, VAR -1.9%, EXTR -1.8%, VRTX -1.4%, SWK -1.2%, CGI -0.9%, SHW -0.9%, DEO -0.8%, NG-0.7%, NOC -0.7%

Other news: INCY -11.2% ( stops phase 2 sub-study early after interim analysis of the high CRP subgroup demonstrated that ruxolitinib plus regorafenib did not show a sufficient level of efficacy ), SGI -9.1% (announces universal shelf registration of up to $75 mln), FCX -3.7% (Moody's downgrades FCX's ratings, assigns B1 CFR; outlook negative), NVS -1.7% (in symp with peer Roche, which reported this morning in Europe), MOS -1.6% (in symp with POT),CS -1.5% (in symp with DB), BXLT -0.5% (prices offering of 37,573,040 shares of its common stock by Baxter (BAX) at $39.50 per share)

Analyst comments: X -1.3% (downgraded to Hold at Argus)

>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: OHGI +16.3%, WGBS +13.9%, FB +13.3%, UA +12.3%, TER+8.8%, MSTR +8.5%, MLNX +7.9%, HOG +6.7%, PYPL +6%, PYPL +6%, CAVM +5.9%, CRUS +5.9%,EURN +5.9%, DLB +5.7%, PHM +5.7%, CTXS +5.5%, CAT +4.9%, MJN +4.5%, DCOM +4.4%, GHL+3.9%, AMP +3.6%, CMRE +3.4%, BABA +3%, JBLU +2.7%, TXN +2.6%, BMY +2.5%, EPD +2.4%, CMO+2.3%, CCI +2.2%, FTK +2.2%, MCK +2.1%, HAR +1.9%, CY +1.9%, CHKP +1.8%, ZBH +1.8%, SNDK+1.7%, MEMP +1.5%, MEOH +1.5%, VLO +1.4%, LVS +1.3%, CAFD +1.2%, LLY +1.1%, DST +1.1%, F+1.1%, MYCC +1%, MKC +0.9%, MUR +0.8%, BLL +0.6%, .

M&A news: HTWR +7.2% (HeartWare and privately held Valtech Cardio terminate proposed acquisition, co to make $30 mln loan to Valtech), BIDU +1.3% (rumored to spin-off and IPO nine of its subsidiaries, according to Marbridge)

Select metals/mining stocks trading higher: MT +7.6%, BBL +2.4%, RIO +2.1%, BHP +1.6%

Other news: NEOS +59.2% (receives FDA approval for Adzenys XR-ODT), ETE +4.5% (maintained same dividend as Q3; Extends management fee to ETP through 2016; ETP maintains dividend, provided cap-ex update), INO +4.3% (beginning recruitment for its collaborative vaccine study for MERS), AMZN +3.7% (modestly rebounding from yday), SUNE +3.6% (cont strength), EXEL +3.5% (FDA deems NDA sufficiently complete and grants priority review for Cabozantinib), WLL +3.5% (still checking), MTL +3.3% (to create a Special Committee of the Board as part of efforts aimed at restructuring its debt portfolio), ETP +3% (maintained same dividend as Q3; Extends management fee to ETP through 2016; ETP maintains dividend, provided cap-ex update), NFLX+2.5% (modestly rebounding from yday), NKE +2.3% (in symp with UA), CNHI +2.1% (in symp with CAT), GPRO +2% (still checking), JD +1.7% (in symp with BABA), RDUS +1.2% (entered into a clinical collaboration with Novartis Pharmaceuticals (NVS) to evaluate the safety and efficacy of combining investigational agent RAD1901 with investigational agent LEE011), AZN +0.9% (granted Breakthrough Therapy Designation by FDA for Lynparza for the