Gapping down
In reaction to disappointing earnings/guidance: ADEP -9.7%, DLTR -5.6%, QIWI -4.8%, DANG -3.7%
Select fan favorites showing weakness: MBLY -5.9%, NFLX -4.3%, FIT -4%, TSLA -3.2%, FEYE -3.1%, FB -2.5%, SBUX -2.4%, AMZN -2.3%, TWTR -2.1%, AAPL -2%
Select China related names after release of PMI data lower: BHP -5.9%, SFUN -4.9%, QIHU -4.4%, EJ -4.4%, RIO -4.4%, CSIQ -3.8%, WUBA -3.2%, NQ -2.9%, JD -2.8%, JMEI -1.5%
In reaction to disappointing earnings/guidance: ADEP -9.7%, DLTR -5.6%, QIWI -4.8%, DANG -3.7%
Select fan favorites showing weakness: MBLY -5.9%, NFLX -4.3%, FIT -4%, TSLA -3.2%, FEYE -3.1%, FB -2.5%, SBUX -2.4%, AMZN -2.3%, TWTR -2.1%, AAPL -2%
Select China related names after release of PMI data lower: BHP -5.9%, SFUN -4.9%, QIHU -4.4%, EJ -4.4%, RIO -4.4%, CSIQ -3.8%, WUBA -3.2%, NQ -2.9%, JD -2.8%, JMEI -1.5%
Select energy names showing weakness: SDRL -6.2%, MRO -4.6%, PBR -4.4%, RIG -3.7%, STO -3%, RDS.A -2.8%
Other news: AVGO -4.7% (presented at investor conf yesterday), MGM -4% (Macau gaming revs down 35.5% YoY), WYNN -2.5% (Macau gaming revs down 35.5% YoY), LVS -2.4% (Macau gaming peer), MPEL -2.1% (Macau gaming peer)
Analyst comments: FCX -4.7% (downgraded to Neutral from Buy at Citigroup)
Expected flow after results of regular annual review of Stoxx Blue-Chip Indices.
- Fresenius, Safran to join Euro Stoxx 50 Index (SX5E); Repsol, RWE to be deleted
- Intesa Sanpaolo, Imperial Tobacco to join Stoxx Europe 50 (SX5P); Glencore, BHP Billiton to be deleted
- Changes will be effective with open of European markets on Sep. 21
- Expected flows
- Fresenius: exp wgt chg (%, indicates weight change in SX5E Index) 1.21%; 16.26m shs to trade; 10.34x ADV
- Safran; exp wgt chg 1.12%; 13.67m shs to trade; 11.71x ADV
- Repsol; exp wgt chg -0.62%; -40.36m shs to trade; -3.31x ADV
- RWE; exp wgt chg -0.31%; -19.31m shs to trade; -3.78x ADV
- Intesa; exp wgt chg (%, indicates weight change in SX5P Index) 1.34%; 35.90m shs to trade; 0.32x ADV
- Imperial Tobacco; exp wgt chg 1.18%; 2.39m shs to trade; 1.02x ADV
- Glencore; exp wgt chg -0.63%; -27.41m shs to trade; -0.33x ADV
- BHP Billiton; exp wgt chg -0.92%; -5.28m shs to trade; -0.47x ADV
Gapping up
In reaction to strong earnings/guidance: MTRX +2.3%, BV +2.1%
Other news: TRVN +35% (announced positive results from its Phase 2b study of TRV130 in acute postoperative pain, showing that the novel mu-opioid receptor modulator achieved its primary endpoint), DRD +19.7% (still checking), MNOV +1.7% (still checking), WTI +1.4% (to sell all of its interest in its Yellow Rose field in the Permian Basin to Ajax Resources for ~$376 mln),SUNE +0.5% (Point72 Asset Management discloses 5.1% passive stake)
Analyst comments: ALKS +3.2% (upgraded toupgraded to Overweight at Morgan Stanley)
Other news: TRVN +35% (announced positive results from its Phase 2b study of TRV130 in acute postoperative pain, showing that the novel mu-opioid receptor modulator achieved its primary endpoint), DRD +19.7% (still checking), MNOV +1.7% (still checking), WTI +1.4% (to sell all of its interest in its Yellow Rose field in the Permian Basin to Ajax Resources for ~$376 mln),SUNE +0.5% (Point72 Asset Management discloses 5.1% passive stake)
Analyst comments: ALKS +3.2% (upgraded toupgraded to Overweight at Morgan Stanley)
Tullow Oil Cut to Underperform at BofAML; Soco Raised to Buy
2015-09-01 11:50:07.867 GMT
By Angelina Rascouet
(Bloomberg) -- Tullow’s “balance sheet riskiest in lower
for longer,” scenario, BofAML says in note; cuts PT 31% to
235p.
* Tullow’s balance sheet left further stretched as net debt
rises
* Sees mkt focusing more on core value, which includes
producing assets and net cash rather than development
value w/ unsanctioned projects
* Covenant issue to remain ongoing background narrative to
equity story
* Maturity schedule doesn’t raise any imminent threat with
first scheduled repayment 20 mos. away
* Pressing concern is cut in borrowing base, reserve based
lending (RBL) facilities
* Says Tullow has most significant RBL facility of all
European E&Ps under BofAML coverage at ~140% of mkt cap
* Notes that next key review process in October
* Soco raised to buy with PT 185p; says of valuation “we like
Soco here”; co. has net cash position, unlike peers Tullow,
Premier Oil
* Sees $5m-$10m per month payments from 2005 disposal of
Mongolia interest
* Sees Lidongo X Marine-5 well as “asset that could
interest Eni”
* Tullow rising as much as 2.8% today in fifth day of gains
after falling to 10-year low in late Aug.; Soco up as much
as 9.7% in third day of gains
* Tullow leads YTD declines on FTSE 350 Oil & Gas
Producers Index at -46% in 2015, followed bt Premier
(-37%), Ophir (-31.5%); Soco -44% YTD
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
--With assistance from Joshua Fineman in New York.
To contact the reporter on this story:
Angelina Rascouet in London at +44-20-3525-0424 or
arascouet1@bloomberg.net
To contact the editor responsible for this story:
James Herron at +44-20-3525-8705 or
jherron9@bloomberg.net
2015-09-01 11:50:07.867 GMT
By Angelina Rascouet
(Bloomberg) -- Tullow’s “balance sheet riskiest in lower
for longer,” scenario, BofAML says in note; cuts PT 31% to
235p.
* Tullow’s balance sheet left further stretched as net debt
rises
* Sees mkt focusing more on core value, which includes
producing assets and net cash rather than development
value w/ unsanctioned projects
* Covenant issue to remain ongoing background narrative to
equity story
* Maturity schedule doesn’t raise any imminent threat with
first scheduled repayment 20 mos. away
* Pressing concern is cut in borrowing base, reserve based
lending (RBL) facilities
* Says Tullow has most significant RBL facility of all
European E&Ps under BofAML coverage at ~140% of mkt cap
* Notes that next key review process in October
* Soco raised to buy with PT 185p; says of valuation “we like
Soco here”; co. has net cash position, unlike peers Tullow,
Premier Oil
* Sees $5m-$10m per month payments from 2005 disposal of
Mongolia interest
* Sees Lidongo X Marine-5 well as “asset that could
interest Eni”
* Tullow rising as much as 2.8% today in fifth day of gains
after falling to 10-year low in late Aug.; Soco up as much
as 9.7% in third day of gains
* Tullow leads YTD declines on FTSE 350 Oil & Gas
Producers Index at -46% in 2015, followed bt Premier
(-37%), Ophir (-31.5%); Soco -44% YTD
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
--With assistance from Joshua Fineman in New York.
To contact the reporter on this story:
Angelina Rascouet in London at +44-20-3525-0424 or
arascouet1@bloomberg.net
To contact the editor responsible for this story:
James Herron at +44-20-3525-8705 or
jherron9@bloomberg.net
>>> Expect EM ROE to Trough Below 2008/09 Crisis Low - Buy Back Japan First
We reduce our 12 month forward Target Prices for MSCI EM, APxJ and HSI /HSCEI/MSCI China substantially. Our Topix Target Price is unchanged at 1740. We now expect EM ROE to trough at around 10%, below the trough in 2008/09. (Note attached)
>>> European Economics - Waiting for Capex to Kick in Despite EM Concerns (note attached)
>>> European Equities - European shares – Double-digit upside despite another year of 0% EPS growth
We remain positive on EU equities despite material cuts to our EPS forecasts. Post the correction we expect a modest PE rebound & our MTIs give a Full-House Buy Signal. We stay OW EMU exposure & periphery vs UK. We like Banks vs UW defensives. We remain UW EM exposure, but watch for opportunities. (Note attached)
>>> MS GLobal Macro - Growth Gets Stuck in Middle Gear
With growth still sluggish and new risks emerging, the global economy seems to be stuck in middle gear. As policy-makers are approaching key decisions, the macro debate has zoomed in on China, EM more broadly and the Fed. The growth trajectory shifts down, but still points up. Inflation is pulled lower by commodities. While 1Q15 likely marked the trough for growth and inflation, we are cutting our estimates and see the risks skewed to the downside. (note attached)
Deutsche Bank Raises European Banking Sector To Overweight
- citing improving earnings and capital, and recent pullback in bank share prices
- Firm's top picks includes buy rated Lloyds, Danske Bank and Commerzbank (all plays on improving profitability and strengthening capital) and Bankia and Banco Popolare (M&A candidates)
--> Full note attached
Iran Nuclear Deal Gains Momentum With Endorsements of Four House Democrats
2015-09-01 02:03:53.350 GMT
Iran Nuclear Deal Gains Momentum With Endorsements of Four House
Democrats
By ALEXANDER BURNS
(New York Times) -- Three House Democrats from New York and
a House Democrat from Florida who is running for a Senate seat
endorsed President Obama’s nuclear deal with Iran on Monday,
lending fresh momentum to the pact from political quarters that
once appeared most leery of it.
In rapid succession, Representatives Nydia M. Velázquez,
Gregory W. Meeks and Yvette Clarke of New York backed the deal,
as did Representative Patrick Murphy, the Democratic
establishment’s choice to compete for the Senate seat being
vacated by the Republican presidential candidate Marco Rubio. Mr.
Murphy’s decision was the most surprising: Democratic leaders
supporting the deal had written him off as he battles
Representative Alan Grayson, a liberal who is leaning against the
accord, for his party’s Senate nomination.
“There is ‘no other available alternative,’ ” Mr. Murphy
wrote, quoting Florida’s Democratic senator, Bill Nelson, who
also supports the deal. “On balance, I cannot let possibilities a
decade or more in the future, however troubling, outweigh the
immediate benefits of this agreement.”
Mr. Meeks said that rejecting the deal would leave the
United States only with alternatives that “do far less, if
anything at all, to change Iranian nuclear and weaponization
pursuits.”
The decisions by all four House members speak to the
shifting politics of the Iran deal. For Democrats, especially
those with potential primary competition, opposing the accord now
appears to be a greater political risk than supporting it.
Mr. Meeks, Ms. Velázquez and Ms. Clarke were among the last
New York City lawmakers to announce their views on the nuclear
deal, which would lift punitive sanctions on Iran in exchange for
the country’s dismantling of parts of its nuclear program and its
allowing international inspections of certain facilities.
The New York congressional delegation has been a source of
forceful opposition to the pact, including among Democrats.
Senator Chuck Schumer broke with the rest of the party’s Senate
leadership to denounce the deal, and was joined by several senior
Jewish lawmakers in the House delegation. Of the 16 Democrats in
Congress publicly opposed to the deal, 10 are from New York or
New Jersey.
But the balance of opinion is shifting. After Mr. Schumer
and Representative Eliot Engel of New York, the ranking member of
the Foreign Affairs Committee, came out in opposition, Democratic
leaders feared a flood of “no” votes from the New York area. The
opposite appears to be happening.
Supporters of the nuclear deal have had greater success in
swaying New York’s more liberal members of Congress, especially
those representing heavily black and Hispanic districts. In
addition to Mr. Meeks and Ms. Velázquez, Representative José E.
Serrano of the Bronx endorsed the deal last week.
And in mid-August, Representative Jerrold Nadler of
Manhattan gave a crucial endorsement, becoming the lone Jewish
member of Congress from New York to support the agreement. Only a
few New York City holdouts remain, including Representatives
Charles B. Rangel, Joseph Crowley and Hakeem Jeffries.
Congress will vote in September on a resolution to
disapprove the deal. It is unclear whether opponents of the
agreement will be able to break an expected Democratic filibuster
in the Senate. Even if they succeed, it appears very unlikely
that they can muster the votes to override Mr. Obama’s expected
veto.
Copyright 2015 The New York Times Company
-0- Sep/01/2015 02:34 GMT
2015-09-01 02:03:53.350 GMT
Iran Nuclear Deal Gains Momentum With Endorsements of Four House
Democrats
By ALEXANDER BURNS
(New York Times) -- Three House Democrats from New York and
a House Democrat from Florida who is running for a Senate seat
endorsed President Obama’s nuclear deal with Iran on Monday,
lending fresh momentum to the pact from political quarters that
once appeared most leery of it.
In rapid succession, Representatives Nydia M. Velázquez,
Gregory W. Meeks and Yvette Clarke of New York backed the deal,
as did Representative Patrick Murphy, the Democratic
establishment’s choice to compete for the Senate seat being
vacated by the Republican presidential candidate Marco Rubio. Mr.
Murphy’s decision was the most surprising: Democratic leaders
supporting the deal had written him off as he battles
Representative Alan Grayson, a liberal who is leaning against the
accord, for his party’s Senate nomination.
“There is ‘no other available alternative,’ ” Mr. Murphy
wrote, quoting Florida’s Democratic senator, Bill Nelson, who
also supports the deal. “On balance, I cannot let possibilities a
decade or more in the future, however troubling, outweigh the
immediate benefits of this agreement.”
Mr. Meeks said that rejecting the deal would leave the
United States only with alternatives that “do far less, if
anything at all, to change Iranian nuclear and weaponization
pursuits.”
The decisions by all four House members speak to the
shifting politics of the Iran deal. For Democrats, especially
those with potential primary competition, opposing the accord now
appears to be a greater political risk than supporting it.
Mr. Meeks, Ms. Velázquez and Ms. Clarke were among the last
New York City lawmakers to announce their views on the nuclear
deal, which would lift punitive sanctions on Iran in exchange for
the country’s dismantling of parts of its nuclear program and its
allowing international inspections of certain facilities.
The New York congressional delegation has been a source of
forceful opposition to the pact, including among Democrats.
Senator Chuck Schumer broke with the rest of the party’s Senate
leadership to denounce the deal, and was joined by several senior
Jewish lawmakers in the House delegation. Of the 16 Democrats in
Congress publicly opposed to the deal, 10 are from New York or
New Jersey.
But the balance of opinion is shifting. After Mr. Schumer
and Representative Eliot Engel of New York, the ranking member of
the Foreign Affairs Committee, came out in opposition, Democratic
leaders feared a flood of “no” votes from the New York area. The
opposite appears to be happening.
Supporters of the nuclear deal have had greater success in
swaying New York’s more liberal members of Congress, especially
those representing heavily black and Hispanic districts. In
addition to Mr. Meeks and Ms. Velázquez, Representative José E.
Serrano of the Bronx endorsed the deal last week.
And in mid-August, Representative Jerrold Nadler of
Manhattan gave a crucial endorsement, becoming the lone Jewish
member of Congress from New York to support the agreement. Only a
few New York City holdouts remain, including Representatives
Charles B. Rangel, Joseph Crowley and Hakeem Jeffries.
Congress will vote in September on a resolution to
disapprove the deal. It is unclear whether opponents of the
agreement will be able to break an expected Democratic filibuster
in the Senate. Even if they succeed, it appears very unlikely
that they can muster the votes to override Mr. Obama’s expected
veto.
Copyright 2015 The New York Times Company
-0- Sep/01/2015 02:34 GMT
--> Our models indicate that
* Market Neutral funds’ market exposure decreased to 3% net short from 2% net long;
* Equity Long/Short market exposure decreased to 28% net long from 35% net long.
* Macro hedge funds increased their long exposure to S&P 500, NASDAQ 100, USD, and 10-year treasury, maintained their shorts in commodities, while adding to their shorts in EAFE and EM.
Equities
Large specs reduced their short positioning in the S&P 500 and Russell 2000, and sold their long position in NASDAQ 100 to almost flat. Large specs sold 62,449 NASDAQ 100 E-mini contracts last week, the largest reduction in consolidated net positioning since March 2007
FX
Large specs reduced their net short positioning in EURO and JPY, increased their shorts in AUD and MXN, and bought GBP to a net long for the 1st time since Sept. 2014.
Energy
Large specs reduced their long positioning in Crude Oil and Gasoline, sold Heating Oil to a net short, and reduced their shorts in Natural Gas. Money Managers bought Crude Oil futures last week though.
Interest Rates
Large specs sold 30-yr Treasuries to a net short, reduced their long positioning in 10-yr, but increased their net log in 2-yr.
HF outperformed MTD, led by M/N and Merger Arb
The investable Hedge Fund Composite index was down 2.92% MTD (as of Aug. 26), better than the S&P 500 price return of down 6.69% for the same period. Market Neutral and Merger Arbitrage strategies were the best performers, up 0.25% and 0.17%, respectively. For details, refer to the performance data below