>>> US After Hours Summary: JBL +9.3%, NKE +7.9%, AEHR +6.2%, IN

After Hours Summary: JBL +9.3%, NKE +7.9%, AEHR +6.2%, INAP -15.1%, PIR -7.4%, BBBY -0.9% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: JBL +9.3%, NKE +7.9%, AEHR +6.2%, CTAS +0.1%

Companies trading higher in after hours in reaction to news: BLPH +80.9% (positive data from an interim analysis of its Phase 2 long-term extension study of INOpulse for the treatment of Pulmonary Arterial Hypertension; receives SPA for its phase 3 PAH program), MRVL +5.3% (announced restructuring of its mobile platform business, expects the initiative to result in annualized operating expense savings in the range of $170-220 mln), WMIH +4.1% (received approval to list on Nasdaq effective September 28), ADRO +3.7% (to acquire BioNovion for EUR 29 mln), RAI +1.0% (Bloomberg reporting Japan Tobacco is in talks to acquire ~$5 bln of RAI's assets)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: INAP -15.1%, PIR -7.4%, BBBY -0.9%, BHLB -0.7%

Companies trading lower in after hours in reaction to news: PETX -8.0% (provided product update; co does not believe AT-004 or AT-005 in their current, first-generation forms will capture the desired lymphoma market opportunity), CTIC -3.9% (announced a 10 mln share registered direct offering at $1.57 per share), EMES -3.6% (withdrew its previously announced distribution guidance for 2015 due to 'difficult' market conditions in its Sand and Fuel segments), SLW -1.0% (received notices of reassessment from the Canada Revenue Agency relating to its 2005 to 2010 taxation years), DB -0.9% (ordered to face $190 mln U.S. government tax fraud lawsuit, according to Reuters report)

>>> US Close Dow-0.48% S&P-0.31% Nasdaq-0.38% Russell-0.26%

Closing Market Summary: Stocks Unable to Avoid Third Consecutive Decline

The stock market finished Thursday on a modestly lower note after erasing the bulk of its early loss. The S&P 500 settled lower by 0.3% while the Dow Jones Industrial Average (-0.5%) and Nasdaq Composite (-0.4%) underperformed.

The final standing represented a notable shift from the morning dynamic that saw equity indices gap down at the start amid selling in Europe. To that point, markets in France and Germany both lost near 2.0% apiece with automakers facing continued pressure. BMW was among the weakest performers in Germany, falling 5.2%, with company executives pushing back against insinuations that the company may have taken a page out of Volkswagen's playbook, saying they are ready to provide vehicles for testing on demand.

To be sure, the losses among automakers were not the culprit behind the slide in Europe, but they represented another source of pressure in market that has been wrestling with persistent growth concerns surrounding China. Those concerns were echoed by Caterpillar (CAT 65.80, -4.40) as the manufacturer of heavy machinery lowered its guidance and announced plans to reduce its workforce by 4,000 to 5,000 people by the end of next year. Shares of CAT settled lower by 6.3%, keeping the industrial sector (-0.7%) among the laggards throughout the day.

The industrial sector finished the day in negative territory, but the cyclical group put a notable dent in its opening decline, climbing off lows alongside the broader market. As for the S&P 500, the benchmark index hit its low just after 11:00 ET, which was followed by a steady march higher that accelerated during the late afternoon.

Similar to industrials, heavily-weighted financials (-0.7%) and health care (-1.1%) underperformed into the close, but their losses were outweighed by an intraday rally in energy (+0.4%), technology (unch), and consumer staples (+0.1%). In addition, the utilities sector (+0.8%) displayed relative strength throughout the day, building on its gain even as Treasuries slipped from their highs with the 10-yr yield narrowing its loss to two basis points at 2.13% after testing the 2.09% level in the morning.

Elsewhere, the energy sector turned positive with help from crude oil, which rallied 0.9% to $44.94/bbl after briefly dipping below $44.00/bbl in the morning. The energy sector narrowed this week's loss to 1.5% while WTI crude will enter the Friday session little changed for the week.

Also of note, the consumer discretionary sector (-0.3%) settled in-line with the broader market even though homebuilders displayed relative strength after KB Home (KBH 14.60, +0.15) reported a one-cent beat on better than expected revenue. KB Home settled higher by 1.1% while iShares Dow Jones US HomeConstruction ETF (ITB 27.21, +0.07) added 0.3%.

Today's participation was ahead of recent averages as more than a billion shares changed hands at the NYSE floor.

Economic data included Initial Claims, Durable Orders, and New Home Sales:

  • Weekly initial claims increased to 267,000 from an unrevised 264,000 while the consensus expected an increase to 271,000
    • Layoff trends remain extremely low as the four-week moving average dropped to 272,000 from 273,000, remaining at levels normally associated with full employment
  • Durable goods orders declined 2.0% in August after increasing a downwardly revised 1.9% (from 2.2%) in July while the consensus expected a decline of 2.0%
    • As expected, the transportation sector weighed down durable goods demand with total transportation orders declining 5.8%, paced be falling orders for motor vehicles (-1.6%) and aircraft (-3.5%)
    • Excluding transportation, durable goods orders were flat in August after increasing an unrevised 0.4% while the consensus expected an increase of 0.2%
  • New home sales increased 5.7% in August to 552,000 from an upwardly revised 522,000 (from 507,000) while the consensus expected a reading of 515,000
    • That was the most new homes sold since 593,000 homes were sold in February 2008; however, at that time, sales were trending down
    • Demand was strongest in the Northeast, where sales increased 24.1%. Sales in the South (7.4%) and West (5.4%) were also positive while sales in the Midwest declined 9.1%

Tomorrow, the third estimate of Q2 GDP will be released at 8:30 ET (consensus 3.7%) while the final reading of the Michigan Sentiment survey for September (consensus 87.0) will be reported at 10:00 ET.

  • Nasdaq Composite +0.1% YTD
  • Russell 2000 -5.4% YTD
  • S&P 500 -6.1% YTD
  • Dow Jones Industrial Average -9.0% YTD

>>> American seeks new business seat vendor after chronic delays(Zodiac)


American Airlines has started looking for a new vendor to supply Business Class seats for its Boeing 787-9 aircraft and the remainder of its Boeing 777-200 retrofit aircraft, after grappling with chronic delays from seat vendor Zodiac Aerospace.

“Zodiac has not been able to deliver new seats in a timely fashion according to the terms of its contract,” a spokeswoman with the airline confirmed to RGN, after frequent flyers flagged the change on FlyerTalk.

“Our Business Suite supplied by Zodiac is an excellent product with good reviews, but the seats are far behind schedule and continue to cause significant delays to our plans to improve the travel experience for our customers. We’re confident that selecting a new vendor now will provide enough time for our partners to install a new seat-type on the 787-9, which is scheduled for delivery in 2016,” she explained.

The 787-8 program will remain unchanged and deliver in its entirety with the Zodiac Business Suite. This will include the last three aircraft that deliver in 2017 after American takes a break for some 787-9 deliveries.

Approximately 13 777-200 aircraft are being retrofitted with the Zodiac Business Suite – these aircraft will have 260 seats. “As we work with Zodiac and a new vendor on seat deliveries, we’ll determine which 777-200 with the 289 seat configuration will have the new seat type,” says American.

AA
The customized, Zodiac-made seat on a refurbished AA 777-200
The airline sought a patent on the customized Business Suite. RGN previously flagged #PaxEx concerns about the same seat on American’s new 787-8 noting that while the seat’s direct aisle access is appealing and praiseworthy, the problem is that the wall at the end of the bed doesn’t allow taller passengers to tuck their feet past the edge of the cushion.

AA business --Jamie Fegley
The same seat on American’s new 787-8
Zodiac could not be immediately reached for comment.

>>> Lyon and Nice airports privatisation to launch mid-October, French Economy M

Lyon and Nice airports privatisation to launch mid-October, French Economy Minister says 

The privatisation of Nice and Lyon airports will be officially launched in mid-October, France's Minister of the Economy, Emmanuel Macron, told this news service.

The terms of the privatisation are being drawn up by the Agence des Participations de l’Etat (APE). These should be finalised by mid-October at which point advisors will be mandated to handle the process, Macron said.

The state controls 60% of Nice Cote d’Azur Airport alongside Chambre de Commerce et d'Industrie (CCI) Nice Cote d'Azur (25%) and local authorities (15%). Lyon-Saint-Exupéry Airport is 60% held by the state, 25% by Chambre de Commerce et d'Industrie (CCI) Lyon and 15% by local authorities.

According to recent local press reports, the government will sell its entire 60% stake in each of the Lyon and Nice airports, with the respective Chambers of Commerce and local authorities retaining their shareholding. The process is reportedly expected to conclude at the beginning of 2016.

As the municipalities of Lyon and Nice asked for their interests to be taken into account in the upcoming auction, it is understood they will be consulted before the terms of the privatisation are dispatched, a lawyer following the situation said.

Societe Generale advised the Government of France on the sale of Toulouse Blagnac airport at the end of 2014. In the same way as other banks, Societe Generale is waiting for the decision in regards to the advisors, a Societe Generale spokesperson said, declining to comment further.

Airports command multiples of around 15x EBITDA, so with EUR 100m in EBITDA, Nice airport should be valued at around EUR 1.5bn and will likely attract a larger number of investors than Lyon, this news service previously reported. Lyon airport’s EBITDA stands at EUR 50m, valuing the asset at around EUR 750m, and would more likely attract infrastructure funds, as its valuation might be too low for sovereign funds, this news service also reported.

Macron was in London to promote France as a foreign investment destination.

Previously reported potential bidders for Nice airport include listed German insurer Allianz [ETR:ALV], investment fund Ardian, sovereign funds Temasek from Singapore, Canada’s PSP and Caisse de Depot & Placement du Quebec. Earlier this year, it was also reported that Atlantia [BIT:ATL], an Italian infrastructure company, could partner with sovereign wealth funds Abu Dhabi Investment Authority (ADIA) or infrastructure fund Wren House, a subsidiary of the Kuwait Investment Authority, to bid for Nice airport.

Previously reported bidders for Lyon airport include funds Meridiam and Ardian, Canadian group SNC Lavalin [TSE:SNC], French concessions and construction company Vinci [EPA:DG], through its subsidiary Vinci Airports, French state-owned financial services group Caisse des Depots & Consignations, Australian fund AMP Capital, and Swiss state-owned airport operator Geneve Aeroport along with CUBE, the investment fund specialized in infrastructure. Earlier this week, Augustin de Romanet, head of listed Paris airports operator ADP [EPA:ADP], said that his group would not take part in the auction for Lyon airport.

Other firms reportedly interested in the Nice and Lyon airport privatizations include Italian holding company F2i Aeroporti, German airport operator Fraport [FRA:FRA], and private equity firm Global Infrastructure Partners.

>>> Renault - Good Timing Mr Macron...will cost 250mil to French State...

>>> Renault - Good Timing Mr Macron...will cost 250mil to French State...

French State bought 5% stake in Renault in April around the 90's levels....on the 30/7 he said to Le Monde, he was planing to sell this stake {NSN NSAYLO6JIJUX<Go>}, placement didn't come yet....stock is trading 25% lower...stock started to trade after this interview...better to sell first and talk after...

5% is worth 1bil...easy calculation....

>>> Delphi, Faurecia, Valeo Exposed to Diesel Car Market (BBG)

Following are analyst comments relating to automotive suppliers and their exposure to diesel car market.

Goldman Sachs
  • Est. Faurecia VW sales make up 25% of total; diesel products 8% of total
  • Continental VW sales 15% of total; diesel 3%
  • Valeo est. VW sales 20% of total; diesel 3%
  • More stringent testing engine emissions testing may be boost to Continental and Valeo (both buy rated)
BARCLAYS
  • Near-term supplier sector has been hit by VW fallout
  • Longer-term, powertrain suppliers including Continental, Valeo and Johnson Controls (all outperform rated) may benefit
  • A faster shift away from diesel would hit Faurecia, Tenneco (both equal weight)
  • Suppliers’ sales exposure to VW: Faurecia 25%; Borg Warner 17%, Magna 11%, Harman International 11%, Gentex 10%, Delphi 10%, Tenneco 8%, GKN 7%
HSBC
  • Expect stricter emissions testing in wake of VW case
  • Some suppliers may benefit as automakers will have to buy more emissions reduction tools
  • Tools such as selective catalytic reduction (SCR) may become mandatory
  • NOTE: Delphi and Robert Bosch are among suppliers of SCR