>>> What to look at today - 20th of N0vember 2015

Dow-0.02% S&P-0.07% Nasdaq-0.03% Russell-0.42% VIX 16.99 (+0.83%)
US Market closed slightly lower. Health care (-1.6%) and energy (-1.3%) struggled from the start with the health care space responding to a 5.7% dive in the shares of UnitedHealth (UNH) after the insurer lowered its guidance, IBB -1.6%. crude oil loss 0.5%, ending the pit session at $40.54/bbl. (INTC), surged 3.4% after guiding in-line and boosting its annual dividend by eight cents to $1.04. SUNE -12% after Blackstone denied having interest in backstopping SUNE. consumer staples (+0.3%), telecom services (+0.5%), & utilities (+1.0%). Volume were below average with 800mil shares. US After Hours ANW +12.7%, ROST +8.2%, INTU +7.9%, MBL -36.6%, MENT -24.1%, WDAY -6% following earnings/guidance, VIPS +4.8% on Tiger 9.96% passive stake. Asian Markets trading slightly higher with low voaltility, JPY @ 122.80 justify NKY Underperformance. In local press, there was speculation that Japan government would consider to raise wages to help boost consumption so as to achieve the govt's growth targets. Japan cabinet officials also spoke - Amari urged caution on proceeding with the 2nd stage of consumption tax increase, while Fin Min Aso said there were no decisions yet on the direction of extra budget. China markets were unimpressed by the PBoC decision late Thursday to cut the 7-day Standing Lending Facility Rate (SLFR). PBoC cut 1-day (overnight) Standing Lending Facility Rate from 4.50% to 2.75% and 7-day Standing Lending Facility Rate from 5.50% to 3.25%. The move to lower borrowing costs is in line with central bank's agenda to cushion economic slowdown, stimulating lending activity that was particularly disappointing in October. PBoC said the SLF rate cut would help to form the ceiling of an interest rate corridor.Intel

Nikkei +0.10% Hang Seng +0.14% Shanghai +0.48%

Eur$ 1.0721 JPY 122.82 CNY 6.3819 GBP 1.5286 CHF 1.0130 RUB$ 64.6849 WTI $40.54

S&P +0.02% EuroStoxx-0.2% Dax-0.20% SMI +0.11

Macro :
- EU May Help European Airlines Against Gulf Rivals: Handelsblatt
- Lew Says Treasury Can Only Slow Pace of Corporate Tax Inversions


Keep an eye on :
- A2A IM : A2A offer for 51% of Linea to consist of cash and shares (127mil) - Milano Finanza
- AIR FP : Airbus CEO Expects to Put New Engines on A380 After 2022
- AF FP : Air France Plans EU1B of Investments in 2016, Le Figaro Says
- ABE SM : Merrill Selling 6.34% of Abertis to Institutional Investors
- BLT LN : BHP Billiton Credit Rating Downgrade ‘Looks Likely’: Macquarie
- CEFB BB : CFE 9-Month Revenue Falls 4.9%, Order Backlog EU4.3 Bln End-Sept
- DEXB BB : Dexia 3Q Net EU127m; CET1 Ratio Rises Slightly to 15.1%
- EDEN FP : Edenred Names Patrick Bataillard Chief Financial Officer
- ERICB SS : Ericsson did not see IP technology company acquisition economically viable - Talouselama
- GLPG NA : Galapagos Starts P1 Study W/ GLPG1972, Gets EU3.5m Milestone
- GALP PL : Eni to Sell Remaining ~4% Stake in Galp Energia
- IDR SM : Indra in Talks to Sell Venezuela Units: El Confidencial
- INW IM : F2i May Team Up With Cellnex for Inwit Stake Sale: CEO to Sole
- IFX GY : Infineon Said to Express Interest in Investing in Renesas: WSJ --> Renesas (6723 JP) +11%
- MSK IM : Moleskine Shares Offered at EU1.70 to Market Each: Terms
- NOVOB DC : Novo CEO Says Innovation Must be Factored Into Prices of Drugs
- RR/ LN : Rolls-Royce says activist shareholder ValueAct has requested board seat: no decision taken
- VOW3 GY : U.S. Prosecutors Said to Probe Bosch Over Role in VW: Reuters
- VOW3 GY : VW Might Have to Buy Back Some Diesel Cars in U.S.: Handelsblatt

>>> Europe : Brokers Upgrades & Downgrades - 20th of November 20

>>> Up
*DIAGEO RAISED TO OVERWEIGHT AT JPMORGAN
*ICAP RAISED TO BUY VS NEUTRAL AT CITI
*IMI RAISED TO BUY VS REDUCE AT NOMURA
*MR PRICE RAISED TO BUY VS HOLD AT HSBC
*NN GROUP RAISED TO NEUTRAL VS UNDERPERFORM AT BOFA
*SODEXO RAISED TO NEUTRAL VS SELL AT GOLDMAN (Note attached)

>>> Down
*ALSTOM CUT TO NEUTRAL VS BUY AT UBS
*CGG CUT TO HOLD VS BUY AT SOCGEN
*COUNTRYWIDE CUT TO NEUTRAL VS BUY AT CITI
*GRIFOLS B SHARES CUT TO HOLD VS BUY AT BERENBERG
*JIMMY CHOO CUT TO NEUTRAL VS BUY AT BOFA
*K+S CUT TO UNDERPERFORM VS NEUTRAL AT CREDIT SUISSE
*KORIAN CUT TO HOLD VS BUY AT HSBC
*MLP CUT TO HOLD FROM BUY AT BANKHAUS LAMPE; PT CUT 20% TO EU4
*SOUTH32 CUT TO NEUTRAL VS BUY AT UBS
*UNICREDIT CUT TO UNDERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*VEDANTA CUT TO NEUTRAL VS BUY AT UBS
*ZODIAC AEROSPACE CUT TO SELL VS HOLD AT SOCGEN

>>> PT change
*AIR FRANCE PT RAISED FROM €7.35 to €8.30 AT GOLDMAN (Note aattached)
*IAG PT RAISED FROM 755p TO 775p AT GOLDMAN
*LUFTHANSA PT RAISED FROM €10.5 TO €14.60 AT GOLDMAN
*SWATCH GROUP PT CUT FROM CHF480 TO CHF450 AT CREDIT SUISSE (Note attached)

>>> Initiation
*PETROLEUM GEO-SERVICES RATED NEW BUY AT SOCGEN; PT NOK50

>>> Call

(CS) ABI Imbev / SAB Miller - Financial implications of proposed ABI offer

Financial implications of proposed ABI offer to acquire SABMiller

■ Estimate changes: We lower our ABI FY16-17 EPS by 3-5% as we factor
in a worse near term outlook in Brazil and remove our previous share
buyback assumption. For SABMiller, we raise our EPS estimates by 1-4%,
as slightly weaker FX is more than offset by higher cost savings
(announced on the 9th October as part of its initial defence) – ABI has
indicated that these savings are not incorporated in its $1.4bn cost synergy
target.
■ Financial implications of the proposed transaction: ABI's share price
move following the proposed offer announced on the 11th November now
implies that the partial share alternative offer is now at parity to the cash
offer versus a 5% discount. The headline EV/EBITDA multiple of the
proposed transaction is c18x (or 15x post synergies) after factoring in the
agreed disposal of SAB's 58% share in the MillerCoors JV and the global
Miller brand to Molson Coors. The cost synergy target of 'at least' $1.4bn
represents c850bps of SABMiller's consolidated net revenues.
■ The proposed transaction is c16% EPS accretive by year 4 based on ABI's
cost synergy target, cost of funding and announced asset disposals. In
euro terms, ABI's share price is up 25% since the 14th Sept (last day prior
to news reports of a potential offer for SAB), a 5% outperformance against
its European consumer staples peer group.
■ Balance sheet considerations: ABI's pro-forma net debt/EBITDA rises to
3.9x in FY17E (the first full year after closing), and de-levers by 0.4-0.5x
per annum, without factoring in any cashflow synergies, which
management has alluded to but not quantified.
■ Regulatory and contractual hurdles: Following the MillerCoors disposal,
ABI's management has said it will shift its focus to resolving any potential
regulatory hurdles and contractual agreements with SABMiller's associates
& JVs and other strategic partners – These include China Resource
Enterprises, Anadolu Efes, Castel and The Coca-Cola company, which we
estimate represent c26% of SAB's EBITDA (including share of associates
& JVs, excluding MillerCoors).

>>> Ericsson did not see IP technology company acquisition economically viable

Ericsson did not see IP technology company acquisition economically viable  - Talouselama
Ericsson [STO: ERIC-B], the Swedish telephone network giant, could have acquired an IP technology company but did not see it economically viable, according to Talouselama.

The Finnish language paper cited the company’s CEO Hans Vestberg, who said that Ericsson could have acquired a company that has specialization in IP technology. However, it was not economically sensible, he added.

Vestberg said that an acquisition would have not fitted into the company’s strategy since it is increasingly moving towards software and services, the report said.

His comments come as it was speculated Ericsson was interested in acquiring the California-based tech company Juniper Networks [NYSE: JNPR].

Talouselama

>>> Rolls-Royce says activist shareholder ValueAct has requested board seat: no

Rolls-Royce says activist shareholder ValueAct has requested board seat: no decision taken

Rolls-Royce said the activist investment firm ValueAct has requested a seat on the FTSE-100 engineering group’s board, the Financial Times reported. The newspaper quoted Rolls-Royce, which said it has yet to make a decision on the request and needs to understand who ValueAct’s nominee is and whether giving a board seat to the investment firm would be acceptable to other investors.

ValueAct disclosed yesterday, 19 November that it had increased its shareholding in Rolls-Royce to 10%, as previously reported.

Roll-Royce has issued fie profit warnings since February 2014, the item noted, adding that the engineering group’s share price has fallen by close to 50% since the initial profit warning.

Some of Rolls-Royce’s 20 largest investors said they want the board to act with more urgency, the item said.

One of the shareholders said they support ValueAct and said the time has come to consider a turnaround strategy for Rolls-Royce.

ValueAct wants Rolls-Royce to dispose of its non-aerospace businesses, the article said. The investment fund has been sounding out leading shareholders in Rolls-Royce to put forward its strategy, the item added.

The report went on to quote one of Rolls-Royce's ten largest shareholders, who voiced the opinion that ValueAct’s comments were “sensible.” However, the shareholder added that he had yet to decide whether Rolls-Royce should concentrate its efforts on aerospace. The shareholder went on to say that ValueAct’s investment approach is in line with his firm and that he would welcome a board representative of the investment fund at Rolls-Royce.

Several other large shareholders also voiced their discontent with the Rolls-Royce board, the item said.

However, many of the investors cited by the report said Rolls-Royce are not under any immediate pressure to replace chief executive Warren East or chairman Ian Davis.

East is due to inform shareholders on Tuesday, 24 November of the progress of the review that he begun shortly after taking up the CEO job in July, according to the report.

East has until now argued against divesting Rolls-Royce’s marine engine business on the grounds that diversification is a necessary counterweight to cyclical nature of the aerospace industry, the item added.

Rolls-Royce’s share price closed 2p up at 541p in London yesterday, giving the company a market capitalisation of GBP 9.94bn (EUR 14.18bn).

Shareholders urge Rolls-Royce to give board seat to investor

Top shareholders are calling on Rolls-Royce to bring US activist investor ValueAct on to the board, to help in efforts to revive Britain’s premier engineering company.
The San Francisco-based hedge fund revealed on Thursday that it had doubled its stake in Rolls-Royce to 10 per cent, in a move that is expected to heighten the pressure on new chief executive Warren East for a change of strategy.

The leading manufacturer of passenger jet engines has lurched from profit warning to profit warning over the past two years, with the fifth only last week. The group’s shares have fallen almost 50 per cent since the first warning in February last year.
Rolls-Royce said it had received an official request for a board seat from ValueAct but no decision had yet been taken.
“We are leaving the option open,” said a company spokesman. “We need to understand who their nominee is, where they fit in and whether other shareholders would be happy with it.”
Several top 20 shareholders told the Financial Times that they were keen to see a greater sense of urgency at board level.
“We support ValueAct,” said one investor. “They have similar values to ourselves. They are medium to long-term investors that want to create more value at Rolls. With five profit warnings, it is time to think seriously about how the company can be turned round.”
The US fund, which is pushing for a divestment of the group’s businesses outside of aerospace, has been contacting Rolls-Royce’s top shareholders in recent months to explain its investment strategy and approach.
“We thought the things they were saying were sensible,” said a top 10 shareholder, though he stressed he had not yet come to a view on whether Rolls-Royce should focus solely on its core aerospace engine business.

“I would say that ValueAct is aligned with us in terms of their investment approach,” said another investor. “I would be happy to see them on the board. The group has a good track record and wants the same as other shareholders, which is better performance from Rolls.”
These views were echoed by several big shareholders who expressed frustration with a board which has lacked industrial expertise and failed to engage successfully with investors. “The need for help is self-evident,” said one big shareholder.
However, many said there was no immediate pressure for a change of chairman or chief executive. “This is a relatively new management team,” said the investor. “We would expect Warren East and the finance director to give leadership and tell us what steps they are taking and where they are going. This will take time.”

Much of this detail is expected at Tuesday’s investor briefing, when Mr East will give an update on the business review he has been conducting since arriving in July.
Mr East has so far resisted calls to divest the group’s marine engine unit, arguing that the group’s diversification is crucial to offset its exposure to the cyclical aerospace market. He has vowed to accelerate cost cutting in an attempt to boost profitability and cash generation
ValueAct became Rolls-Royce’s largest shareholder in July and has made a string of investments in some of the UK’s other engineering groups, including Smiths Group. It typically commits to holding its largest positions for several years, and pushes for substantial restructurings.
ValueAct, which began researching Rolls-Royce more than a year ago, believes the market is undervaluing future maintenance contracts for a new generation of aerospace engines. Rolls-Royce generates substantial profit from such service contracts.

>>> Asian Update

Asian Mid-session Update: PBoC SLF rate cut fails to jolt equities; Japan cabinet on the fence about consumption tax, extra budget

***Economic Data***
- (CN) China Oct Conference Board Leading Economic Index: 0.6% v 1.6% prior
- (NZ) NEW ZEALAND OCT RETAIL CREDIT CARD SPENDING M/M: +1.5% v -1.9% PRIOR; Y/Y: 7.8% v 7.3% PRIOR
- (MY) Malaysia Oct CPI Y/Y: 2.5% v 2.5%e
- (US) NORTH AMERICA OCT SEMI BOOK/BILL RATIO: 0.98 V 1.07 PRIOR; Below parity for the first time in 4 months
- (DE) German Finance Ministry November report: German moderate upswing likely to continue

***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 -0.5%, S&P/ASX +0.4%, Kospi +0.1%, Shanghai Composite +0.1%, Hang Seng -0.1%, Dec S&P500 -0.1% at 2,077

***Commodities/Fixed Income***
- Dec gold +0.5% at $1,083/oz, Jan crude oil +0.6% at $41.95/brl, Dec copper -0.3% at $2.07/lb
- (AU) Australia MoF (AOFM) sells A$600M in 4.5% 2020 Bonds; avg yield: 2.2367%; bid-to-cover: 4.42x
- (CN) China MOF sells 50-yr bonds, avg yield 3.89% v 3.87%e
- USD/CNY: (CN) PBoC sets yuan mid point at 6.3780 v 6.3791 prior; 2nd straight firmer setting
- USD/KRW: Onshore opens at KRW1,156 v KRW1,162 prior close

***Market Focal Points/FX***
- Asian markets trading in tight ranges, with low volatility across the region. There was very limited economic data out today to give the market momentum heading into the weekend. Japan's Nikkei underperformed in part due to stronger Yen overnight. USD/JPY is now down over 100pips from this week's high in spite of the buildup of expectations for December rate liftoff, falling to 122.60 level in US session and trading in a 20 pip range during Asian hours. In local press, there was speculation that Japan government would consider to raise wages to help boost consumption so as to achieve the govt's growth targets. Japan cabinet officials also spoke - Amari urged caution on proceeding with the 2nd stage of consumption tax increase, while Fin Min Aso said there were no decisions yet on the direction of extra budget (fiscal stimulus).

- China markets were unimpressed by the PBoC decision late Thursday to cut the 7-day Standing Lending Facility Rate (SLFR). PBoC cut 1-day (overnight) Standing Lending Facility Rate from 4.50% to 2.75% and 7-day Standing Lending Facility Rate from 5.50% to 3.25%. The move to lower borrowing costs is in line with central bank's agenda to cushion economic slowdown, stimulating lending activity that was particularly disappointing in October. PBoC said the SLF rate cut would help to form the ceiling of an interest rate corridor.

- Australia's S&P/ ASX spent most of the session flat, with a slight upside bias. Weakness in the resource sector was offset by a stronger demand for financial names. The ASX had its best week in over a month ending up over 3.5%. RBA's Heath comments had little impact on the market. She noted that the Australia economy is not as strong as she would like it to be, but saw labor market having made some progress over the past year.

- After the US close, Fed vice Chair Fischer added to anticipation of next month's likely hike, stating that interest rates will rise gradually in relatively near future, even though no final decision was made yet. Fischer added the FOMC has done everything possible to avoid surprising markets, though he also warned that slower growth in emerging Asia will have profound implications for global economy.

***Equities***
US equities / ADRs:
- ROST: Reports Q3 $0.53 v $0.50e, R$2.78B v $2.76Be; +8.3% afterhours
- INTU: Reports Q1 +$0.09 (adj) v -$0.03e, R$713M v $670Me; +8.2% afterhours
- CAB: Said to be evaluating possible bids and options for the company though no formal process is underway - financial press; +5.4% afterhours
- NKE: APPROVES $12B BUYBACK PROGRAM (14% OF MARKET CAP); INCREASES DIVIDEND 14%, APPROVES 2-1 STOCK SPLIT; +3.6% afterhours
- SPLK: Reports Q3 $0.05 v $0.02e, R$174.4M v $160Me +1.5% afterhours
- ADSK: Reports Q3 $0.14 v $0.08e, R$599.8M v $592Me; -0.6% afterhours
- GPS: Reports Q3 $0.63 (adj) v $0.63e, R$3.86B v $3.88Be; -1.6% afterhours
- WSM: Reports Q3 $0.77 v $0.71e, R$1.23B v $1.21Be; -3.7% afterhours
- ZOES: Reports Q3 $0.05 v $0.03e, R$56.4M v $55.5Me; -4.3% afterhours
- MENT: Reports Q3 $0.28 v $0.27e, R$291M v $290Me; Cuts FY16 guidance; -26.6% afterhours
- NMBL: Reports Q3 -$0.14 v -$0.06e, R$80.7M v $86.8Me; -37.7% afterhours

Notable movers by sector:
- Consumer discretionary: Slater & Gordon SGH.AU -10.2% (affirms guidance); Myer Holdings MYR.AU +4.8% (Q1 result); Sydney Airport SYD.AU +2.2% (Oct result); Dali Foods Group Company 3799.HK -4.4% (IPO debut); Slater & Gordon SGH.AU -9.5% (affirms guidance); Lawson 2651.JP +1.0% (entry into banking business speculation)
- Industrials: CIMIC Group CIM.AU +0.7% (new contract); Nissan Motor Co 7201.JP -1.6% , Toyota Motor Corp 7203.JP -1.0% (target sales in China)
- Energy: AWE AWE.AU +0.3% (guidance)
- Technology: Renesas Electronics 6723.JP +12.1% (fund's interest)
- Healthcare: Primary Healthcare PRY.AU -10.1% (guidance)
- Telecom: China Unicom 762.HK +0.8% (Oct result)

>>> US After Hours Summary: ANW +12.7%, ROST +8.2%, INTU +7.9%,


After Hours Summary: ANW +12.7%, ROST +8.2%, INTU +7.9%, MBL -36.6%, MENT -24.1%, WDAY -6% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: ANW +12.7%, ROST +8.2%, INTU +7.9%, CNC +2.4%, SPLK +2.3%, NGVC +1.8%, CISG +0.5%,

Companies trading higher in after hours in reaction to news: CAB +8.1% (Bloomberg reported potential sale to Bass Pro Shops), VIPS +4.8% (Tiger Global Management reported 9.96% passive stake in 13G filing), UVE +3.7% (authorized a new $10 mln share repurchase program), NKE +3.6% (NIKE announced new $12 bln share repurchase program, 14% increase in quarterly dividend and two-for-one stock split), SPLK +2.0% (President and CEO Godfrey Sullivan retires; Co appoints Doug Merritt President and CEO, effective immediately), CLVS +1.6% (PointState Capital disclosed 7.7% stake in 13G filing).

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: MBL -36.6%, MENT -24.1%, WDAY -6%, WAIR -4.9%, WSM -4.5%, ZOES -4.3%, MOMO -3.3%, TFM -1.7%, ADSK -1.4%, GPS -1.2%

Companies trading lower in after hours in reaction to news: NBG -5.6% (completed the book-building process to institutional and other investors by way of a private placement of its new ordinary registered shares), AVH -3.5% (following October traffic data), BLDR -2.3% (announced the commencement of a public offering of 7 mln shares of its common stock to be sold by Warburg Pincus).

>>> WSJ Deals: Allergan could be the buyer in any deal with Pfizer on.wsj..



Allergan Could Be the Buyer in Pfizer Deal
Having Allergan as buyer could make it easier to sidestep crackdown on inversion deals

Allergan PLC and Pfizer Inc. are considering structuring a merger of the drug companies so that it is an acquisition of Pfizer by Allergan, according to people familiar with the matter.
However the deal is technically structured, the much larger Pfizer will effectively be buying Allergan and assuming a lower offshore tax jurisdiction. Allergan shareholders would receive a premium and end up with 40% to 45% of the combined company, some of the people said. The deal is expected to be mainly in stock, but it could contain a small cash component, they said.
Related
While the timing could get sped up, the two sides are likely to strike a deal in seven to 10 days—assuming the talks don’t fall apart, the people said.
It is unclear why Allergan would be the acquiring entity, but the move could make it easier for the companies to sidestep a government crackdown on so-called inversion deals, in which a U.S. company buys a smaller foreign rival and moves its tax headquarters abroad. The U.S. Treasury has indicated that it could soon tighten rules aimed at discouraging such deals.
The tie-up is expected to value each Allergan share at just over 11 Pfizer shares. While that means the price will move around, as of Thursday’s close it values Allergan at about $355 a share.
Pfizer shares fell 3.1% to $32.29, hurt by fears of the impending Treasury crackdown. Allergan stock fell 2.8% to $302.05. Before The Wall Street Journal first reported on the merger talks late last month, Allergan stock traded at $287.04.
Allergan’s market value currently stands at $122 billion, while Pfizer’s is $206 billion.

>>> US Close Dow-0.02% S&P-0.07% Nasdaq-0.03% Russell-0.42%

Closing Market Summary: Stocks End Flat Amid Weakness in Energy and Health Care

The stock market ended the Thursday session on a flat note after spinning its wheels throughout the day. The S&P 500 shed 0.1% after spending the day in an eight-point range while the Nasdaq Composite (unch) outperformed slightly. Despite today's sluggish performance, the S&P 500 is set to enter Friday with a solid week-to-date gain of 2.9%.

Equities began the trading day just below their flat lines due to daylong weakness in two relatively large sectors. To that point, health care (-1.6%) and energy (-1.3%) struggled from the start with the health care space responding to a 5.7% dive in the shares of UnitedHealth (UNH 110.57, -6.68) after the insurer lowered its guidance, citing exposure to public exchanges. To be fair, UNH was not the only soft spot as biotech names also lagged with iShares Nasdaq Biotechnology ETF (IBB 333.42, -5.32) ending lower by 1.6%.

For its part, the energy sector struggled throughout the day, ending well behind the broader market despite an afternoon rebound in crude oil, which narrowed its loss to 0.5%, ending the pit session at $40.54/bbl.

Elsewhere among cyclical sectors, the discretionary space ended just above its flat line, which masked a 2.1% slide in the shares of Best Buy (BBY 30.66, -0.67) after the electronics retailer issued cautious guidance. Speaking of guidance, chipmaker heavyweight, Intel (INTC 34.30, +1.14), surged 3.4% after guiding in-line and boosting its annual dividend by eight cents to $1.04. Intel's outperformance contributed to a 0.4% gain in the top-weighted technology sector while the PHLX Semiconductor Index added 0.2%. The chipmaker index was held back from registering a larger gain due to a 12.0% plunge in SunEdison (SUNE 2.86, -0.39) after Blackstone denied having interest in backstopping SUNE.

Similar to technology, the industrial sector (+0.4%) ended well ahead of the broader market. Transport stocks contributed to the relative strength, evidenced by a 1.0% gain in the Dow Jones Transportation Average.

Moving back to the countercyclical side, consumer staples (+0.3%), telecom services (+0.5%), and utilities (+1.0%) held gains throughout the day, ending near their highs.

Unlike stocks, Treasuries climbed into the afternoon before surrendering about a third of their gains. That being said, the 10-yr note settled comfortably in the green with its yield slipping three basis points to 2.24%.

Today's participation was below recent averages as fewer than 800 million shares changed hands at the NYSE floor.

Economic data reported today included Initial Claims, Philadelphia Fed Survey, and Leading Indicators:

  • The latest initial claims report didn't provide any real surprises as initial claims for the week ending November 14 fell by 5,000 to 271,000 (consensus 272,000) without any special factors driving the slight improvement
    • Continuing claims for the week ending November 7, meanwhile, dipped by 2,000 to 2.175 million (consensus 2.164 million)
    • The four-week moving average for initial claims bumped up to 271,000 from 268,000
  • Manufacturing conditions in the Philadelphia Fed region improved in November, evidenced by the General Business Activity Index rising to 1.9 from -4.5 in October while the consensus estimate called for a reading of -1.0
    • This was the first positive reading in three months
    • The dividing line between expansion and contraction for this particular survey is 0.0, so it can be said manufacturing activity in the Philadelphia Fed region is back in expansion territory, albeit only slightly
  • The Leading Indicators report for October was up 0.6%, which is what the consensus expected

Investors will not receive any economic data tomorrow.

  • Nasdaq Composite +7.1% YTD
  • S&P 500 +1.1% YTD
  • Dow Jones Industrial Average -0.5% YTD
  • Russell 2000 -3.0% YTD