>>> What to look at today - 30th of December 2015

Reminder : 
Last day of Trading for Belgium, France Holland, Portugal (Euronext), Italy, Denmark, Finland Sweeden, Norway, Switzerland Austria, Japan...No EuroStoxx Future tomorrow.
Half Day Tomorrow for Ireland, UK, Spain & Germany, Greece, Hong Kong
Full day tomorrow for the U S

Dow+1.10% S&P+1.06% Nasdaq+1.33% Russell+1.07% VIX 16.15 (-4.49%)
US Market closed higher but once again in light volume. Equity indices spiked out of the gate following a jump in oil prices heading into the opening hour. This led to a large initial uptick in commodity-sensitive sectors like energy (+0.7%) and materials (+0.9%). Their rally was short-lived, however, as the struggling sectors couldn't hold the lead. On a related note, WTI crude was able to end its day near its high, climbing 2.8% to $37.86/bbl. technology (+1.3%), health care (+1.2%), consumer discretionary (+1.1%), and financials (+1.1%) lead the pack, while utilities (+0.5%), energy (+0.7%), and telecommunications (+0.7%) rounded out the leaderboard. Tech was also higher with large cap outperforming. IBB +1.8%. US After Hours, no earning reports, FCS +4.0% (confirmed receipt of a revised, unsolicited $21.70/share proposal to acquire the company), PBY-2.3% on Bridgetsone saying won't counter last Icahn offer. Asia indices are mixed despite the broad gains on Wall St, with Australia and Japan rising while China trades near its flat line. Rebound in oil prices was attributed to US rebound, though those gains were cut in half after the API inventories showed the biggest build in 7 weeks. In China, Fin Min Lou extoled the virtues of austerity as the best way to deal with slower govt revenues, just as local press speculated that China budget deficit would rise to 3% of GDP or more in 2016 vs 2.3% 2015 target. Separately, one survey forecast China FX reserves to fall another $305B next year after record outflows in 2015. PBoC chief economist also noted that RRR changes should be wary of short-term interest rate stability. Noble Corp trading house was back in the spotlight after hiring advisors regarding strategic alternatives just a few months ago. Shares were down 7% after Moody's cut company rating to junk, citing concerns over the company's liquidity amid prolonged commodity downcycle. In response, management said the rating agency failed to differentiate between challenging market for upstream firms and opportunities for commodity traders. (Glencore +1.8% in HK)

Nikkei +0.27% Hang Seng -0.47% Shanghai -0.06%

Eur$ 1.0929 JPY 120.41 CNY 6.4903 GBP 1.4837 CHF 0.9922 RUB$ 72.5527 WTI$37.19 (-1.8%)

S&P-0.02% EuroStoxx +0.12% Dax +0.17% SMI+0.03%


Macro :
- Putin Sees Assad Chance to Stay as U.S. Pursues Syria Settlement
- U.S. Gas Erases 25% December Loss on Outlook for Wintry Weather
- API Said to Report Crude Inventories Rose 2.9M Bbl Last Wk --> WTI -1.8% @ $37.19
- Swiss Company Insolvencies Rose in 2015: Neue Luzerner Zeitung
- Europe New Car Demand on Track for 2015 Gain as November Revs

Keep an eye on :
- ANA SM : Acciona Teams Up With Highfield for Potassium Mine: Expansion
- AF FP : Air France, Lufthansa Yields Fall on Paris Terrorism, Strikes
- BZU IM : Buzzi Says Sacci Received More Favorable Competing Offer
- ECHO US : Echo Global to Buy Back Up to $50m in Stock, Convertible Notes
- HSBA LN : Elliott Said to Subpoena HSBC on Involvement in Argentina Loans
- OCI NA : N. Sawiris Buys 34,615 OCI Shares, AFM Regulatory Filing Shows
- ORA FP : France’s Orange Studying 10% Stake in TF1, Canard Says
- PALANTIR IPO : Palantir Investors Differ Over How to Sell Shares, WSJ Reports
- PBY US : Bridgestone Won’t Counter Most Recent Icahn Offer for Pep Boys
- RB/ LN : Reckitt Benckiser said to be working with Robey Warshaw on major deal http://bit.ly/1YQAOaK
- SU FP : Schneider Shareholders Seem Sanguine Over Aveva Deal Collapse
- SUBC NO : *SUBSEA 7 GETS 'SIZEABLE' CONTRACT OFFSHORE EGYPT
- TFI FP : France’s Orange Studying 10% Stake in TF1, Canard Says
- FP FP : Total Says Committed to Yemen After End of Block 10 Contract
- VIV FP : Spotify Sued by Musician in Copyright Dispute, AFP Says
- VOW3 GY : VW’s Mueller Won’t Meet Officials During U.S. Trip: Handelsblatt

(Les Echos) Orange intéressé par une participation de 10% dans TF1-presse

PARIS, 29 décembre (Reuters) - Orange étudie la prise d'une participation de 10% dans TF1 dans le cadre d'un rapprochement entre l'opérateur télécoms historique et Bouygues Telecom, filiale, comme TF1, de Bouygues, croit savoir Le Canard Enchaîné.
L'Etat français, qui détient 23% d'Orange, cherche ainsi à entrer indirectement dans le capital dans le groupe de télévision, écrit l'hebdomadaire satirique dans son édition à paraître mercredi.
Ni Orange, ni Bouygues, ni l'entourage de François Hollande ni Bercy n'ont souhaité faire de commentaire. L'Agence des participations de l'Etat (APE) n'était immédiatement disponible.
Selon une source proche du dossier, toutefois, l'information du Canard Enchaîné est "fantaisiste".
L'agence Bloomberg avait rapporté début décembre qu'Orange était en discussions préliminaires avec Bouygues au sujet d'un rachat de ses activités dans les télécoms et les médias.
Selon l'une des parties prenantes citées par Le Canard Enchaîné, Orange et Bouygues Telecom n'ont jamais été aussi proches d'un accord mais il faudra "plusieurs semaines" pour aboutir. La question de la participation de Bouygues dans Orange, qui pourrait atteindre 10% à 12% au terme du processus, est l'un de sujets à régler, ajoute l'hebdomadaire satirique.
Le gouvernement n'est pas opposé par principe à une réduction du nombre d'opérateurs télécoms en France, avait déclaré le 10 décembre le ministre de l'Economie Emmanuel Macron à la suite de la reprise des échanges sur un rapprochement entre Orange et Bouygues Telecom.
Le Conseil supérieur de l'audiovisuel (CSA) a donné son feu vert l7 décembre au passage en gratuit de LCI, après l'avoir rejeté en juillet 2014, redonnant des perspectives à la chaîne d'information en continu du groupe TF1, passée tout près de la fermeture.

>>> Asian Update

Asian Mid-session Update: Korean industrial output decline worsens; Noble Group plunges on Moody's cut to junk


***Economic Data***
- (CN) China Nov Services Trade Deficit: $15.6B v $14.1B prior; YTD $187.9B - SAFE
- (CN) China SAFE (FX Regulator): Revises Q3 current account surplus to $60.3B from $63.4B prelim; Q3 Capital and financial account surplus of $11.4B
- (KR) SOUTH KOREA NOV INDUSTRIAL PRODUCTION M/M: -2.1% (biggest decline in 10-months) V -0.7%E; Y/Y: -0.3% V 1.6%E
- (KR) SOUTH KOREA JAN MANUFACTURING BUSINESS OUTLOOK INDEX SEASONALLY ADJ: 68 V 69 PRIOR; NON-MANUFACTURING 69 V 71 PRIOR

***Index Snapshot (as of 04:30 GMT)***
- Nikkei225 +0.3%, S&P/ASX +1.1%, Kospi -0.3%; Shanghai Composite -0.1%, Hang Seng -0.2%, Feb S&P500 flat at 2,072

***Commodities/Fixed Income***
- Feb gold +0.2% at $1,070/oz, Feb crude oil -1.8% at $37.20/brl, Mar copper -0.2% at $2.13/lb
- (CN) China reportedly to not approve any new coal mines over next 3 years - Chinese press
- (US) API Petroleum Inventories: Crude: +2.9M v -3.6M prior; largest build in 7 weeks
- USD/CNY: (CN) PBoC sets yuan mid point at 6.4895 v 6.4864 prior; weakest Yuan setting since June 2011
- (JP) BOJ offers to buy ¥350B in 1-3yr JGBs, ¥350B in 3-5yr JGBs, ¥400B in 5-10yr JGBs

***Market Focal Points/FX***
- Asia indices are mixed despite the broad gains on Wall St, with Australia and Japan rising while China trades lower. Rebound in oil prices was attributed to US rebound, though those gains were cut in half after the API inventories showed the biggest build in 7 weeks. FX majors remain contained to narrow ranges on dearth of economic releases and low holiday week trading volumes. USD/JPY advanced above 120.50 but then retreated to 120.35, EUR/USD traded in 1.0915-35 range, AUD/USD traded down about 20pips from the highs to 0.7270, and NZD/USD consolidated overnight gains with a 30pip move lower below 0.6850. PBoC's Yuan fix saw fresh 4 1/2 year lows approaching 6.50, while offshore Yuan is eyeing 6.60 lows.

- In China, Fin Min Lou extoled the virtues of austerity as the best way to deal with slower govt revenues, just as local press speculated that China budget deficit would rise to 3% of GDP or more in 2016 vs 2.3% 2015 target. Separately, one survey forecast China FX reserves to fall another $305B next year after record outflows in 2015. PBoC chief economist also noted that RRR changes should be wary of short-term interest rate stability. Regulators also reportedly suspended FX business of certain overseas banks until March amid continued CNY decline.

- Australia Treasurer Morrison remarked that it was now pointless to forecast when Australia budget returns to surplus as long as the govt is making efforts to get there. Morrison was optimistic about next year, but also cautious in terms of higher spending to compensation for slow growth. Recall the latest MYEFO pushed back expectations for Australia to return to surplus by 1 year to FY20/21.

- In Korea, Fin Min Choi reiterated that the key risks to economy are the Fed rate hike and China slowdown. Remarks were intended to bolster sentiment after the biggest decline in Korea's industrial output in 10 months boosted speculation of more BOK easing early next year. Separately, Financial Supervisory Service (FSS) reported that creditors requested that as many as 19 large companies restructure their debt in 2016. Regulators continue to curb crossholdings, with request for Hyundai Motors to cut their holding of Hyundai Steel, whose shares then fell nearly 5%.

- Singapore-listed Noble Corp trading house was back in the spotlight after hiring advisors regarding strategic alternatives just a few months ago. Shares were down 8% after Moody's cut company rating to junk, citing concerns over the company's liquidity amid prolonged commodity downcycle. In response, management said the rating agency failed to differentiate between challenging market for upstream firms and opportunities for commodity traders.

***Equities***
US equities / ADRs:
- BLDP: Subsidiary Protonex secures follow-on power manager product order for $2.8M from U.S. Army; +13.3% afterhours
- NERV: Updates MIN-101 clinical development program; European Phase IIb trial enrollment completed and FDA accepts Investigational New Drug (IND) application; +4.0% afterhours
- PBY: Bridgestone will not counter latest bid for Pep Boys; -3.3% afterhours

Asia by sector:
- Technology: LG Electronics 066570.KR +2.1% (positive broker commentary)
- Materials: China Sandi Holdings Ltd 910.HK +8% (update on acquisition); Hyundai Steel Co 004020.KR -4.6% (Hyundai Motor ordered to sell stake)
- Financials: Noble Grop NOBL.SG -8.0% (Moody's cuts rating to junk)
- Technology: Otsuka Corp 4768.JP -1.3% (FY results speculation); Toshiba 6502.JP +5.5% (may sell medical devices unit)
- Industrials: Nippon Paper 3863.JP +1.8% (9-mo results speculation); Nidec 6594.JP +1.3% (CEO sees more acquisition opportunities)

>>> US After Hours Summary:


After Hours Summary:

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings:  Nothing of Interest

Companies trading higher in after hours in reaction to news:  BLDP +13.3% (subsidiary secured follow-on power manager product order of $2.8 mln from U.S. Army), NERV +4.4% (announced that the FDA has accepted an IND application for MIN-101 for the treatment of schizophrenia), FCS +4.0% (confirmed receipt of a revised, unsolicited $21.70/share proposal to acquire the company)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings:  Nothing of Interest

Companies trading lower in after hours in reaction to news:  PBY -2.3% (Bridgestone will not counter latest Carl Icahn bid of $18.50/share for PBY), DSCO -2.2% (disclosed it received a second letter from Nasdaq indicating that the co had not regained compliance with the minimum bid price requirement), CLIR -1.6% (filed $30 mln mixed securities shelf offering)

>>> US Close Dow+1.10% S&P+1.06% Nasdaq+1.33% Russell+1.07%

Closing Market Summary: Technology Leads Today's Rally 

The stock market enjoyed a broad-based rally on Tuesday, which lifted the S&P 500 (+1.1%) back into positive territory for the year (+1.0%). The benchmark index was outperformed by the Nasdaq (+1.3%) for the bulk of the day, as technology would lead the advance. Once again it was a very quiet day with fewer than 573 million shares changing hands at the NYSE floor. 

Equity indices spiked out of the gate following a jump in oil prices heading into the opening hour. This led to a large initial uptick in commodity-sensitive sectors like energy (+0.7%) and materials (+0.9%). Their rally was short-lived, however, as the struggling sectors couldn't hold the lead. On a related note, WTI crude was able to end its day near its high, climbing 2.8% to $37.86/bbl. 

In sectors, technology (+1.3%), health care (+1.2%), consumer discretionary (+1.1%), and financials (+1.1%) lead the pack, while utilities (+0.5%), energy (+0.7%), and telecommunications (+0.7%) rounded out the leaderboard.

The highly-weighted technology sector advanced thanks in large part to a strong showing from large-cap components Apple (AAPL 108.74, +1.92), Alphabet (GOOGL 793.96, +11.72), and Facebook (FB 107.26, 1.33) as the three rallied from 1.3-1.8%. The other major contributor to technology's position atop the leaderboard was the high-beta chipmaker group, which outperformed the broader market with the PHLX Semiconductor Index ending the day higher by 1.2%.

In the health care space, biotechnology was one of the sector's best performers with iShares Nasdaq Biotechnology ETF (IBB 343.11, +5.89) advancing 1.8% on the day. Elsewhere, sector large-caps AbbVie (ABBV 59.45, +0.70) and Pfizer (PFE 32.83, +0.41) kept pace with the sector.

It was a relatively quiet day with economic data being limited to Consumer Confidence and Case-Shiller 20-City Index:

  • The Consumer Confidence report for December rose to 96.5 from 90.4 while the consensus expected a reading of 93.5
    • The December survey marked the first increase in consumer confidence since September thanks to an improvement in the Present Situation Index (115.3 from 110.9) and the Expectations Index (83.9 from 80.4)
  • The Case-Shiller 20-city Index rose 5.5% in October to follow the previous month's 5.5% increase while the consensus expected an increase of 5.4%

Tomorrow's economic data will be limited to last week's MBA Mortgage Index at 7:00 ET and the 10:00 ET release of the Pending Home Sales report for November (consensus +0.5%).

  • Nasdaq Composite +7.9% YTD
  • S&P 500 +1.0% YTD
  • Dow Jones Industrial Average -0.6% YTD
  • Russell 2000 -3.7% YTD

FT : Outlook for oil hit by Saudi Arabia budget cuts

Outlook for oil hit by Saudi Arabia budget cuts

The outlook for the oil price next year is under renewed pressure following strong signals from Saudi Arabia that the world’s largest crude exporter is preparing for a long period of low returns and amid expectations that Iran will further flood the global market when sanctions are lifted.
Analysts said plans announced by Saudi Arabia late on Monday to reduce a budget deficit of nearly $98bn through spending cuts, reforms to energy subsidies and a privatisation drive were a sign that Riyadh intends to stick with its policy of not cutting output.

It also shows that Opec’s de facto leader is prepared to accept cheap prices for its crude as it seeks to put pressure on higher cost rivals such as US shale producers and waits for the market to rebalance.
“They are responding to the low-price regime, the duration of which has surprised,” said Ole Hansen at Saxo Bank. “Having gone this far with their pump and dump strategy they sense that victory in the shape of non-Opec production cuts is just around the corner. Offsetting this in the near term will be the extra supply from Iran once sanctions are lifted.”
Another signal that Saudi Arabia is prepared to sustain its strategy of keeping the pumps open came from the chairman of Saudi Aramco, the state-controlled oil company, after the budget was announced on Monday. “We see the market balancing sometime in 2016, we see demand ultimately exceeding supply and soaking up a lot of the excess inventory and prices in due course will respond regardless of when and by how much,” said Khalid al-Falih.
“Saudi Arabia more than anyone else has the capacity to wait out the market until this balancing takes place,” he added.
However, oil prices moved higher on Tuesday supported by forecasts for colder temperatures in the US and as hedge funds and other speculators moved to close bearish bets before the end of the year. Brent, the international oil marker, rose 2.5 per cent to $37.53 a barrel, while West Texas Intermediate, the US benchmark, added 2.4 per cent to $37.68.
But a relentless rise in global oil production and ballooning inventories has resulted in the price of Brent crude falling 35 per cent this year to as low as $35 a barrel — the lowest level in more than a decade.
The market is expected to remain oversupplied in 2016 as Riyadh resists calls for production restraint and Iran, once Opec’s second-largest producer, prepares to increase output once sanctions linked to its nuclear programme are lifted.
Reports that the Iran nuclear deal was on track after Tehran dispatched a shipment of more than 11 tonnes of low-enriched uranium to Russia has renewed focus on the supply glut.
“Iran is gearing up to flood the market with 500,000 barrels a day within weeks of sanctions being lifted while the ceasefire in Libya may also add extra barrels,” Mr Hansen said.
Data showing weaker demand for oil products such petrol and diesel in Europe during October has also affected sentiment. “This is the first year on year decline this year after 10 months of consecutive gains,” noted analysts at consultancy JBC Energy.
“This might be the first indication that further demand gains induced by additional driving on the back of low prices is likely to be limited in 2016,” said JBC.
In the US, falling revenues and rising debt in the oil and gas sector have meant that lay-offs continued despite production declines. Since peaking in October 2014, US oil and gas employment has fallen 14.5 per cent, or by 70,000 jobs, year over year, according to the Federal Reserve Bank of Dallas.
“Job losses and falling energy prices portend continued distress for the oil and gas sector in 2016,” the Dallas Fed said in its latest energy update last month.
Meanwhile oil and gas sector bankruptcies have reached quarterly levels last seen in the Great Recession, with at least nine US oil and gas companies, accounting for more than $2bn in debt, filing for bankruptcy in the fourth quarter of 2015 said the Dallas Fed.

(BetaVille) Reckitt Benckiser said to be working with Robey Warshaw on major dea

Reckitt Benckiser said to be working with Robey Warshaw on major deal http://bit.ly/1YQAOaK

Rakesh Kapoor, chief executive of FTSE 100-listed Reckitt Benkiser, has been talking up the prospects of doing some major M&A in 2016.

Indeed, a few weeks ago Morgan Stanley analysts quoted Mr Kapoor as saying:

"If any of the interesting consumer-health assets were to come up for today, I believe Reckitt Benkiser has the capacity to do it. Any of them."

That's pretty punchy stuff from Kapoor.

And now it would appear the household goods giant is on the cusp of doing a major deal as City sources recently told me that Reckitt Benckiser has been working with uber investment bankers Robey Warshaw on a sizeable corporate transaction.

As regular readers know, Robey Warshaw - founded by Simon Robey and Simon Warshaw - have picked up two of the largest defence mandates of 2015, advising BG Group on its £40 billion sale to Royal Dutch Shell and SAB Miller on its £75 billion sale to Anheuser-Busch Inbev.

To be clear, I don't have any visibility on which deal Reckitt Benckiser, whose regular advisers are Morgan Stanley and Deutsche Bank, is working on. However, according to my sources, it sounded like the transaction Robey Warshaw has been advising on is more likely to be an acquisition/merger rather than a defence of the business.

Back in September analysts at Exane BNP Paribas theorised that that if Pfizer pursued a merger with another drugmaker (which it subsequently has), then the US drugs giant would sell its consumer health unit, possibly to Reckitt Benckiser. Here is a link to Bryce Elder's stock market report which first reported Exane BNP Paribas's speculation:


Or, perhaps Reckitt Benckiser is working with Robey Warshaw on a completely different deal. I'm sure the market will find out in 2016...

A spokesperson for Reckitt Benkiser declined to comment.