(MS) Secular Growth Themes at Play: Analysts’ Views — Europe - full note att.

* ARM Holdings Plc (Francois Meunier) – ARM Holdings has one of the strongest IP portfolios in the industry leveraging on further growth in mobile devices such as smartphones, tablets, and wearables. It has a monopoly position in application processor design for the smartphone market and is currently raising prices – one of a few in the industry. We forecast a 19% EPS CAGR over F2014-F2017e. 

* ASML Holding NV (Francois Meunier) – ASML is a prerequisite for the continuation of Moore’s Law and the path towards smaller transistor structures. ASML should benefit from the development of EUV technology that we believe will start to ramp in 2017-2018 which will lead to a monopoly position in lithography. We forecast 20% EPS CAGR over F2014-F2017e. 

* Big Yellow Group (Bianca Riemer) – Big Yellow is a dominant player in the London self-storage market, which has structural demand growth from a tight housing market, rising disposable incomes and rising product awareness, falling self-storage capacity, and high barriers to entry. Big Yellow’s occupancy rate is in the mid-70s, and we expect it to hit 80% within the next 18 months, from where we expect to see a significant acceleration in rental growth. 

* B&M European Value Retail SA (Audrey Borius) – In our view, B&M’s relatively limited geographic coverage of the UK leaves the retailer significant room to grow its store network supporting a double-digit topline growth over the next 5 years. We also expect B&M to be one of the main beneficiaries of the expansion of the UK value channel thanks to its multi-price-point strategy and its large assortment providing a significant competitive advantage. 

* Dassault Systemes (Adam Wood) – Given the breadth of the company’s product offering, we believe Dassault is well-positioned as a market leader to take advantage of the expanding TAM for PLM design software, which is expected to reach $32Bn by 2019. We believe this supports the company’s 2019 EPS target and should drive a ~15% CAGR over the 2014-19 period. 

* EDP Renovaveis (Carolina Dores) – EDPR is the 4th largest wind developer globally. The group has a strong track record on delivering high availability ratios and load factors and outperforming peers in regions it operates. EDPR's business model has been successful in delivering growth (through new capacity and scale gains) and crystallizing valuation by recycling capital. We believe the continuing execution of EDPR business plan (the group has given full visibility on new projects up to 2017) will result in further growth (18% EBIT CAGR 2014-2017). Considering its large project pipeline (of c16GW) and strong balance sheet to leverage asset rotation, we believe EDPR is well-positioned for this further growth scenario. 

* Flow Traders NV (Bruce Hamilton) – We see Flow Traders (electronic market maker active in ETP globally) as a geared play on growth in the ETF/ETP asset class, one end of our oft argued asset management barbell and where AuM CAGR over the coming years should average ~20%. We also see revenue margins supported by increased volatility, which typically leads to wider spreads on business. Additional opportunities for growth exist via increasing market share in the US/Asian markets. Overall this drives ~30% CAGR in earnings 2014-17e.

* Just Eat (Andrea Ferraz) – A strong leader in the UK, Denmark, and Australia positioning itself as the clear winner in Canada and France. It has delivered order growth of c.50% in the last 6 quarters. We forecast 46% revenue growth in 2015, 40% in 2016, and 24% in 2017. It operates in an attractive winner-takes-most industry, with EBITDA margins at maturity exceeding 40% with no capital required. We estimate Just Eat could generate £870m revenues, £390m EBITDA, and 43p EPS at maturity, and could benefit from industry consolidation. We forecast a year-end net cash balance of £165m.

* KUKA (Lucie Carrier) – A global leader in both Robotics and designs and installations of robotics-based automation Systems. The robotics industry is expected to grow c. 12% (industrial robots units) between 2014 and 2017e as penetration increases in a broad range of industries, supported by strong macro drivers such as ageing population, wage inflation, and an increasing focus on products quality and workers safety. As a top 3 player in this industry with meaningful R&D capabilities, we think Kuka is well-positioned to benefit from the secular growth in that market and maintain leadership. We forecast 26.5% EPS CAGR 14-17e (high teens percentage on an organic basis).

* London Stock Exchange (Anil Sharma) – Attractive structural topline growth via index and post-trade businesses, combined with intriguing optionality around asset disposals (recently announced Russell Investment Management) and potential for further acquisitions or capital returns. Although we view 2015/16 as a period of re-investment in the business to leverage the post-trade assets (across areas such as clearing, trade compression, collateral management), we see topline pick-up and further cost efficiency driving appealing acceleration in earnings 2017 with CAGR ~17% 14-17e.

* Luxottica (Elena Mariani) – A vertically integrated industry captain with unrivalled leadership within the structurally-growing premium eyewear sector (7x sales of the #2 player). The eyewear sub-sector is less cyclical than the brands and consumer industries and is supported by solid long-term structural growth drivers (both in emerging and developed economies) thanks to favourable demographics, lifestyle evolution, and premiumisation.

* Merlin Entertainments (Jamie Rollo) – In a growing, fragmented industry, with high barriers to entry, Merlin has strong brands and a strong track record. Targets are 6-7 Midways and 200 hotel rooms each year, a LEGOLAND Park every 2-3 years, and mid-single-digit like-for-like profit growth, which should drive annual growth of 8-9% in EBITDA and 14-15% in EPS.

* Ocado Group (Francois Halconruy) – We believe Ocado is a disruptive long-term winner in online grocery, which comes with a unique customer proposition and the lowest cost-to-serve business model. Ocado’s ability to leverage its UK proprietary technology and platform (via ‘plug-and-play’ agreements with multiple partners worldwide) should make Ocado an attractive play on this structural (and global) shift towards online.

* Rightmove Plc (Andrea Ferraz) – Rightmove is the leading online classifieds portal in the UK. It benefits from a strong network effect and structural growth as advertising moves online (45% still print). Cash flow generation is exceptional with 75% EBITDA margins and 1% capex / sales. Unique combination of 11% 15-18 revenue CAGR and 4% FCF yield with all cash returned to shareholders through dividends / buybacks.

* Sophos Group (Adam Wood) – As a global provider of security software, Sophos is in one of the fastest-growing areas of IT spend. We believe the group’s mid-market focus and play on converging technologies position it well to take share. We forecast revenues to grow 12% CAGR ex FX from F2015 to F2018 and expect adjusted EBITDA to grow above this (14% ex FX), given the operating leverage.

* St. James’s Place (Jon Hocking) – The changing pension regulatory landscape and ever-increasing complexity of the personal tax system in the UK are likely to generate more demand for advice, where SJP’s strength lies. The challenges of establishing and maintaining a productive advisory team create a relatively high entry barrier for its peer and enable SJP to maintain margins. The company has a clear strategy to expand its capacity of tapping higher-end market into the fast-growing EMs which should support its growth in the longer term.

* Stroer SE (Eliska Mallickova) – Stroer is the leading outdoor advertising player in Germany complemented by a fast-growing digital business. Through cross-selling opportunities between outdoor and digital, share of outdoor rising in the German media mix, and significant margin upside, we look for c.30% eps CAGR 2014-18 (following the t-online and OMS acquisitions). The strong FCF profile also provides potential for enhanced cash returns.

* Symrise (Erik Sjogren) – Symrise should sustain an attractive growth profile in line with management’s targets to 2020 of 5-7% gradual margin progression. Sales growth is driven by growth in the underlying F&F market, Symrise’s exposure to local and regional FMCG companies which are taking share, and gradual market share gains with global FMCG companies. Margins should come up on continued improved mix and efficiency gains. Finally, we think that Symrise will continue to employ its cash flow for acquisitions in line with the Diana and Pinova deals in 2014-15.

* Telit Communications (Francois Meunier) – Telit is positioned to benefit from the adoption of the Internet of Things and the ramp of connected devices such as automotive, telematics, fleet management, and connected industrial applications. Telit is one of the few companies we cover with 100% exposure to the Internet of Things. We forecast 26% EPS CAGR and 19% revenue CAGR over F2014-F2017e.

* United Internet (Laura Ashforth) – United Internet’s Access business should continue to benefit from a growing mobile and fixed market share in Germany as a result of its strong brand and value-for-money tariffs. In the Applications business, UTDI is exposed to a high-growth web presence market and already has a strong market position in Europe.

* Whitbread (Jamie Rollo) – Rapid expansion to 2020 targets of 85,000 hotel rooms (+45% on 2015) and £2.5bn Costa Coffee system sales (+80% on 2015) should drive mid-teens EPS growth even assuming only modest like-for-like sales growth.

* Zalando (Anisha Singhal) – With a strong brand portfolio and more than 100m visits a month to its sites, we believe Zalando has built a credible proposition which will allow it to continue to take share of the Europe apparel and footwear market.

>>> What to look at today - 4th of November 2015

Dow +0.50% S&P +0.27% Nasdaq +0.35% Russell +0.46% VIX 14.54 ( +2.76%)
US MArket closed higher for a second day. Energy had another good day, trading up 2.5%. Crude +3.8% @ $47.90/bbl. Tech also had a good day. health care (-0.3%), telecom services (-0.4%), and consumer staples (-0.5%) lagged throughout the session. The health care sector struggled despite a modest uptick among biotech names, evidenced by a 0.3% gain in iShares Nasdaq Biotechnology ETF. consumer staples sector (-0.5%), which finished behind the remaining nine groups with Archer-Daniels Midland (ADM 43.15, -3.13) falling 6.8% in reaction to disappointing results. Volume were ahead of average @ 900mil shares. US After Hours FIVN +18.3%, DPLO +11.9%, TSLA +9.2%, GRPN -26.1%, ENPH -20.7%, FARO -16.3% X -12% following earnings/guidance...Asian Mkt started to rally on noise of PBoC Zhou saying the HK-Shenzhen stock connect will launch this year, but it looks like it was old comments so mkt came back.Also headlines on meeting between Taiwain & Chinese Officials, 1st time since 1949. Takata (7312 JP) -14% signs consent order & Penalty...Japan Post (6178 JP) .25.7%+ & Japan Post insurance (7181 JP) +55.9% on first day of Trading.

Nikkei +1.30% Hang Seng +2.42% Shanghai +4.12%

Eur$1.0952 CNY 6.3356 JPY 121.05 GBP 1.5425 EurCHF 1.0860 RUB$62.39 WTI $47.90

S&P +0.02% EuroStoxx+0.41% Dax+0.29% SMI+0.38%


Macro :
- France to Push Self-Employment Brought By Digital Economy: Valls
- Draghi: ECB Willing to Act to Maintain Monetary Accommodation
- Greek Bank Recap Must Be Done by Year End, Nouy Tells Ta Nea
- Nikkei India Oct. Composite PMI 52.6 vs 51.5 in Sept.
- Nikkei Japan Oct. Composite PMI 52.3 vs 51.2 in Sept.

Keep an eye on :
- ABI BB : AB InBev Said to Agree Bud Light NFL Sponsorship Extension: WSJ
- AIR FP : Russia Jet’s Black Box Said to Show No Talk of a Problem: WSJ
- ALPHA GA : Alpha Bank to Seek Nov.14 Holder Approval for Capital Increase
- ATC NA : Cablevision 3Q Rev. Misses Lowest Est.; HSD Net Adds +3k -->
- ATO FP : Atos 3Q Revenue Matches Estimates; Maintains 2015 Outlook
- SPR GY : Axel Springer 3Q Rev. in Line W/Est.; Raises FY Revenue Forecast
- BARN SW : Barry Callebaut Sees 4%-6% Avg. Vol. Growth Through FY18
- BSL GY : Basler 9m Pretax Profit Declines; Margin Drops to 13% vs 16%
- BMW GY : BMW Group U.S. Brand Oct. ’15 Sales Fell 3.8%
- BMSA GY : Braas Monier 3Q Sales Rise 3%, Sees 2015 Rev. Growth of 3%-4%
- BRBY LN : Burberry to Build New 50 Million-Pound Weaving Facility in U.K.
- DBK GY : DB Said to Plan for Thomas Patrick to Head Stock Trading: WSJ
- DRI GY : Drillisch Has Substantial Increase in Profit, Confirms Forecasts
- DSM MA : DSM Sets Ebitda, ROCE Growth Goals Through 2018, Plans Cost Cuts
- EVK GY : Evonik 3Q Adj. Ebitda Beats, Sales Miss; 2015 Outlook Confirmed
- FNC IM : Finmeccanica 3Q Rev Matches Est; Confirms FY Forecast
- GEN DC : Genmab Raises 2015 Rev., Oper. Income Views
- GBB FP : Bourbon Says Market Conditions Difficult as Clients Cut Spending
- HPG GY : Hapag-Lloyd Sets Price for IPO at EU20/Shr
- INGA NA : ING Group 3Q Net Income Beats Estimate; Group CET1 Ratio 12.3%
- LUN DC : Lundbeck 3Q Rev., Net Loss Meets Estimates; Keeps Rev. Forecast
- LUPE SS : Lundin Petroleum 3Q Ebitda Beats Estimate
- MC FP : Bulgari to Keep Focus on Luxury Watches and Jewelry, CEO Says
- MOR GY : MorphoSys 9-Month Revenues, Ebit Rises; Confirms Guidance
- MMT FP : M6 3Q Mixed; Beat Ests on Ad Growth, Weak Elsewhere, Nomura Says
- MPI FP : Ledbury Seeks to Block MPI-Maurel Merger Unless Bid Is Improved
- NOEJ GR : Norma Group 3Q Adj. Ebita Rises, Confirms 2015 Forecast
- ORP FP : Orpea 3Q Rev. Beats Estimates; FY Revenue Target Reiterated
- TPEIR GA : Piraeus Bank Targets as Much as EU4.9b From Share Cap Increase
- PAH3 GY : Porsche Says VW Shareholding in Co. Could Impact Earnings
- REC NO : Rec Silicon 3Q EBITDA Loss $14.1m on Higher Costs, Lower Prices
- SAB LN : SABMiller/AB InBev Said to Need Another Week Extension: FT
- SGL GY : SGL Carbon Outlook on 2016 ‘Significantly’ Impacted by Pricing
- SOP FP : Sopra Steria 3Q Organic Growth Up 3.2%; Confirms 2015 Forecast
- TEF SM : Telefonica to Announce Spain Revenue Increase: Confidencial
- THULE SS : Thule 3Q Adj. Operating Profit Beats Estimates
- VOS GY : Vossloh Sells Rail Vehicles Unit to Stadler Rail for Cash, Debt
- VOW3 GY : Volkswagen Sees Economic Risk at ~EU2b on CO2 Irregularities

>>> Europe : Brokers Upgrades & Downgrades - 4th of November 201

>>> Up
*PROXIMUS RAISED TO HOLD VS REDUCE AT KEPLER CHEUVREUX
*RENAULT RAISED TO OUTPERFORM AT BERNSTEIN
*REPSOL RAISED TO NEUTRAL VS SELL AT GOLDMAN
*TECHNIP RAISED TO OUTPERFORM AT MACQUARIE
*TELEFONICA RAISED TO BUY AT UBS
*TOD’S RAISED TO BUY VS HOLD AT HSBC
*WEIR RAISED TO SECTOR PERFORM VS UNDERPERFORM AT RBC
*ZODIAC RAISED TO NEUTRAL VS UNDERWEIGHT AT JPMORGAN

>>> Down
*BANKIA CUT TO SELL VS HOLD AT BERENBERG
*INTU PROPERTIES CUT TO UNDERWEIGHT AT MORGAN STANLEY
*LOGISTA CUT TO HOLD VS BUY AT SOCGEN
*M6-METROPOLE CUT TO HOLD VS BUY AT HSBC
*SAIPEM CUT TO UNDERPERFORM AT MACQUARIE
*SAIPEM CUT TO UNDERWEIGHT VS EQUALWEIGHT AT BARCLAYS
*SODEXO CUT TO SELL VS NEUTRAL AT GOLDMAN
*SSAB CUT TO SECTOR PERFORM AT RBC CAPITAL
*WHITBREAD CUT TO HOLD VS BUY AT SOCGEN


>>> PT Change


>>> Initiation
*AKER SOLUTIONS RATED NEW UNDERPERFORM AT MACQUARIE; PT NOK28.3
*ELRINGKLINGER RATED NEW BUY AT HSBC, PT EU25
*SMITH & NEPHEW RATED NEW NEUTRAL AT STERNE AGEE CRT, PT
*SUBSEA 7 RATED NEW NEUTRAL AT MACQUARIE; PT NOK69

>>> Call
>> Stock
*DASSAULT SYSTEMES REMOVED FROM CONVICTION LIST AT GOLDMAN
*ROYAL DUTCH SHELL EXITS EUROPE CONVICTION LIST AT RAYMOND JAMES

>>> Asian Update

Asian Mid-session Update: China Services and Hong Kong PMIs rebound; Australia trade deficit narrows


***Economic Data***
- (CN) CHINA OCT CAIXIN PMI SERVICES: 52.0 V 50.5 PRIOR; 3-month high
- (HK) HONG KONG OCT PMI: 46.6 v 45.7 PRIOR; 8th month of contraction
- (AU) AUSTRALIA SEPT TRADE BALANCE (A$): -2.32B V -2.90BE; smallest deficit in 6 months
- (AU) AUSTRALIA SEPT RETAIL SALES M/M: 0.4% V 0.4%E
- (AU) AUSTRALIA OCT AIG PERF OF SERVICES INDEX: 48.9 V 52.3 PRIOR; 1st contraction in 5 months
- (NZ) NEW ZEALAND Q3 EMPLOYMENT CHANGE Q/Q: -0.4% (first decline since Q2 of 2013) V +0.4%E; Y/Y: 1.5% V 2.5%E; Participation rate 68.6% v 69.3%e (2-year low)
- (NZ) NEW ZEALAND Q3 UNEMPLOYMENT RATE: 6.0% V 6.0%E; Avg hourly earnings 0.9% v 1.1%e
- (JP) JAPAN OCT NIKKEI SERVICES PMI: 52.2 V 51.4 PRIOR; COMPOSITE PMI: 52.3 V 51.2 PRIOR
- (JP) JAPAN OCT MONETARY BASE Y/Y: 32.5% v 35.1% PRIOR; MONETARY BASE END OF PERIOD: ¥344.4T v ¥338.4T PRIOR
- (JP) JAPAN OCT CONSUMER CONFIDENCE: 41.5 V 40.8E
- (IN) INDIA OCT PMI SERVICES: 53.2 V 51.3 PRIOR (4th straight month of expansion and highest since Feb)
- (UK) SEPT BRC SHOP PRICE INDEX Y/Y: -1.8% V -1.9% PRIOR; 30th month of decline

***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 +2.2%, S&P/ASX +0.1%, Kospi +0.1%, Shanghai Composite +2.6%, Hang Seng +3.1%, Dec S&P500 +0.2% at 2,106

***Commodities/Fixed Income***
- Dec gold +0.6% at $1,120/oz, Dec crude oil -0.3% at $47.74/brl, Dec copper +0.2% at $2.33/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 3.0 tonnes to 686.3 tonnes; lowest since Sept 29th
- (US) API Petroleum Inventories: Crude: +2.8M v +2.5Me; 4th straight build
- (JP) BOJ offers to buy ¥400B in 1-3yr JGBs, ¥400B in 3-5yr JGBs, ¥240B in 10-25yr JGBs and ¥140B in JGBs with maturity over 25-yr
- (CN) China MOF sells 10-yr bonds, avg yield 3.092%
- (AU) Australia MoF (AOFM) sells A$900M in 2.75% 2024 Bonds; avg yield: 2.6348%; bid-to-cover: 2.89x

***Market Focal Points/FX***
- Asian markets are broadly higher, tracking another session of strong gains on Wall St, with Shanghai Composite and the Hang Seng leading the way. China Services PMI registered a notable bounce higher, in contrast with continued weakness in the manufacturing space. Caixin economists said the data show that previous stimulus policies have begun to take effect, while the economic structure steadily improved. Hong Kong PMI was in contraction for 8th month but also rose for the 2nd straight month. Resident economist did not that economy will likely contract, as "sharper reduction in selling prices was not sufficient enough to attract new clients." Relative strength in the Hang Seng index was also attributed to reports of PBoC Gov Zhou announcing plans to complete Shenzhen-Hong Kong stock link before the end of the year. However, reports late in the day indicated those remarks were made over 5 months ago, and the Hang Seng came off its highs in afternoon trade.

- Australia trade and retail data for September were surprisingly benign. Retail spending was in line with estimates, while trade deficit was the smallest in 6 months as Exports and Imports component growth saw 3-month highs. Exports to China were especially notable, rising to A$7.49B v A$6.95B prior, a 16-month high. AUD/USD rose some 40pips above $0.7220 in the wake of the data. In contrast, NZD/USD fell some 60pips below $0.6640 after disappointing quarterly employment data, adding to the losses earlier following another decline in GDT auction dairy prices. Economist with ASB said the latest New Zealand employment data reinforces the view that RBNZ should cut rates again in December.

***Equities***
US equities / ADRs:
- DPLO: Reports Q3 $0.26 v $0.16e, R$947M v $931Me; +11.9% afterhours
- TSLA: Reports Q3 -$0.58 v -$0.53e, R$1.24B v $1.21Be; +9.0% afterhours
- PBPB: Reports Q3 $0.05 v $0.09e, R$96M v $95.8Me; +5.8% afterhours
- TMH: Reports Q3 $0.68 v $0.71e, R$899.2M v $892Me; +3.2% afterhours
- CBS: Reports Q3 $0.88 v $0.81e, R$3.26B v $3.27Be; +3.1% afterhours
- HLF: Reports Q3 $1.28 v $1.07e, R$1.10B v $1.15Be; -2.7% afterhours
- PAA: Reports Q3 $0.28 v $0.27e, R$5.55B v $5.98Be; -4.5% afterhours
- ETSY: Reports Q3 -$0.06 v -$0.03e, R$65.7M v $68.5Me; -6.9% afterhours
- MTZ: Reports Q3 $0.26 v $0.33e, R$1.11B v $1.14Be; -7.1% afterhours
- CERN: Reports Q3 $0.54 v $0.55e, R$1.13B v $1.17Be; -9.7% afterhours
- DSW: Announces CEO Transition; guides lower; raises buyback by $200M (10% of market cap); -11.5% afterhours
- QUAD: Reports Q3 $0.14 adj v $0.51 y/y, R$1.16B v $1.24B y/y; -13.0% afterhours
- ENPH: Reports Q3 $0.01 v $0.01e, R$102.9M v $104Me; -19.9% afterhours
- X: Reports Q3 -$0.70 adj v -$0.28e, R$2.83B v $2.95Be; -11.9% afterhours
- GRPN: Reports Q3 $0.05 v $0.01e, R$713M v $730Me; names Rich Williams as new CEO, effective immediately; -25.6% afterhours

Notable movers by sector:
- Consumer discretionary: SJM Holdings 880.HK -0.9% (Q3 result)
- Financials: China Vanke 000002.CN +2.0% (Oct result); Guotai Junan 601211.CN +6.5%, Citic Securities 6030.HK +9.0%, Haitong Securities 600837.CN +4.8% (attribution to PBoC Gov's comment on stock connect); Scentre Group SCG.AU +1.5% (Q3 result)
- Industrials: Geely Automobile Holdings 175.HK +3.1% (Oct sales); Ssangyong Motor Co 003620.KR +0.5% (Q3 result); Hyundai Motor Co 005380.KR +2.8% (Oct US sales); CSR Ltd CSR.AU +5.3% (H1 result); Takata Corp 7312.JP -14.1% (signs consent order and penalty payment)
- Technology: NCsoft Corp 036570.KR +9.8% (Q3 result); Pegatron Corp 4938.TW +0.5% (frozen hiring in Shanghai)
- Materials: Yodogawa Steel Works 5451.JP +7.8% (H1 result)
- Energy: Santos STO.AU -2.9% (rights placement); JX Holdings 5020.JP +3.7% (H1 result); CNOOC 883.HK +6.4%, PetroChina 601857.CN +1.5% (NDRC raises fuel prices)
- Healthcare: NIB Holdings NHF.AU +3.9% (guidance)
- Telecom: SK Telecom 017670.KR +0.7% (speculation to split up company); KDDI Corp 9433.JP +2.7% (H1 result speculation)

>>> US After Hours Summary: FIVN +18.3%, DPLO +11.9%, TSLA +9.2%

After Hours Summary: FIVN +18.3%, DPLO +11.9%, TSLA +9.2%, GRPN -26.1%, ENPH -20.7%, FARO -16.3% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: FIVN +18.3%, DPLO +11.9%, TSLA +9.2%, ZEN +8.7%, MXL +7.4%, CHUY +6.6%, PBPB +5.8%, OKE +5.7%, CPIX +5.3%, PGH +4.6%, PAYC +4.1%, FLTX +3.9%, TMH +3.2%, DVN +2.8%, LDL +2.6%, TRUP +2.4%, CBS +2.2%, PAGP +2.1%, OCLR +1.6%, OESX +1.5%, AMSG +1.4%, TSLX +1.3%, BW +1%, XXIA +0.9%, SLW +0.9%, OAS +0.8%, DVA +0.6%, AFG +0.5%, ZNGA +0.4%, ACHC +0.3%,

Companies trading higher in after hours in reaction to news: TSLA +9.2% (named Jason Wheeler, formerly VP of Finance at Google, as CFO; Jon McNeill named President of Global Sales and Service; co also reported earnings), FLTX +3.95 (acquired SAAS fleet mgmt solutions firm Visirun S.p.A.; terms not disclosed), XOMA +2.7% (regained compliance with Nasdaq's minimum bid price requirement; Jim Neal named Chief Operating Officer), SLW +0.9% (acquired silver stream from Glencore's Antamina mine; co also reported earnings), 

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: GRPN -26.1%, ENPH -20.7%, FARO -16.3%, QUAD -14.1%, DSW -12.2%, X -11.5%, CERN -9.2%, ZG -8%, PZZA -7.3%, ETSY -6.8%, UNTD -4.4%, KRNT -4.3%, RTRX -3.3%, HLF -3.1%, VNOM -2.5%, KFRC -2.4%, HCI -1.7%, FOLD -1.7%, IAG -1.1%, XOXO -1.1%, AIV -0.6%, FOGO -0.5%, FANG -0.3%, ZAGG -0.3%, CIM -0.3%, CVC -0.2%, USNA -0.1%

Companies trading lower in after hours in reaction to news: HCHC -7.9% (announced a proposed offering of $50 mln in common stock), CKP -7.55 (co discovered financial statement errors attributable to the accounting for its quarterly income tax provision, says various previous financial statement should no longer be relied upon), BIOD -4.5% (entered into a restructuring plan), UNTD -4.4% (President and CEO Francis Lobo to resign effective November 18), BAH -1.6% (announced secondary offering of 13 mln shares of Class A common stock by an affiliate of The Carlyle Group)

>>> Under Armour discloses CEO/Chairman Kevin Plank entered into a pre-arranged

Under Armour discloses CEO/Chairman Kevin Plank entered into a pre-arranged stock trading plan to sell shares of the Company’s Common Stock 

* The trading plan provides for the sale of shares of a combination of the Class B Common Stock and, if and when issued, the Class C Common Stock. The trading plan provides for the sale prior to the end of 2015 of up to 1,125,000 shares of the Company's Class B Common Stock held by Mr. Plank personally and up to 125,000 shares of the Company's Class B Common Stock held by his charitable foundation.
* The trading plan further provides for the sale of up to 1,350,000 shares of the Company's Class C Common Stock held by him personally and up to 150,000 shares of the Company's Class C Common Stock held by his charitable foundation. Any sales of Class C Common Stock under the trading plan will begin only following the initial distribution of one share the Class C Common Stock for each outstanding share of Class A and Class B Common Stock (the "Initial Class C Issuance") and the listing of the Class C Common Stock on the New York Stock Exchange. Sales of the Class C Common Stock may extend through August 2016. The sales under the trading plan sales are being done for asset diversification, tax and estate planning and charitable giving purposes.

WSJ : ECB’s Draghi Defends Its Readiness to Fight Low Inflation

ECB’s Draghi Defends Its Readiness to Fight Low Inflation

Central bank head underscores its willingness to do more

FRANKFURT—European Central Bank President Mario Draghi defended the central bank’s readiness to take more accommodative action to fight the risks of low inflation in the currency bloc.

Speaking in an ornate room in Frankfurt’s grand Alte Oper concert hall on Tuesday, the ECB head took specific aim at German critics, rejecting criticism that the ECB’s policies punish savers and create unwarranted risks.

“History shows that deflation can be just as damaging to the prosperity and stability of our economies as high inflation,” Mr. Draghi said.

The ECB head said its asset-purchase program was proceeding smoothly, but underscored the central bank’s willingness to do more.

“The Governing Council is willing and able to act by using all the instruments available within its mandate if warranted in order to maintain an appropriate degree of monetary accommodation,” he said.

The comments come as inflation in the eurozone is flat and isn’t expected to approach the central bank’s medium-term target of just below 2% for quite some time. Mr. Draghi signaled at his news conference last month that the central bank may expand its large-scale bond-purchase program and could also lower the rate on overnight deposits further into negative territory, meaning that banks would have to pay more to store surplus funds with the central bank.

In March, the ECB launched a €60 billion ($66.1 million) a month bond-buying program that it intends to run until at least September of next year. The ECB’s deposit rate is currently -0.2%.

Mr. Draghi said, however, in a weekend interview in the Italian newspaper, Il Sole 24 Ore, that it remained an “open question” whether more stimulus would be needed at its next meeting in December. This comment and others from hawkish members of the Governing Council have led some analysts to suggest that the outcome for December isn’t quite as clear as was once assumed.

Though still expecting some action from the ECB in December, J.P. Morgan’s Greg Fuzesi said in a recent note that “it does feel as if the outcome in December could turn out closer than seemed likely a couple of weeks ago.”

(Barron's) How Low Can Gold Go?

How Low Can Gold Go?

Higher U.S. rates, weak Chinese demand and India’s moves to curb gold imports has some analysts forecasting further downside.

Diwali, or the festival of lights, usually brings a gold rush to India as households splurge on jewelry and artifacts crafted from the precious metal. But, this year, gold hasn’t sparkled ahead of next week’s five-day holiday. The SPDR Gold Shares ETF (ticker: GLD ) is down more than 4% over the past five trading days.

The yellow metal has been hurt by shifting expectations for the first hike in U.S. interest rates in a decade. The more hawkish than expected tone following last week’s meeting of the Federal Open Market Committee suggested a December tightening of monetary policy may be on the cards. Higher interest rates loom as bad news for the non-yielding metal as they make cash and fixed income investments look more appealing than gold. The gold price also tends to move in the opposite direction as the U.S. dollar, which would strength on higher interest rates.

The sharp downturn in the gold price, coupled with a stronger Australian dollar, has snapped a rally in Australian gold miners Northern Star Resources ( NST.AU ) and Evolution Mining ( EVN.AU ). Northern Star has tumbled 18% since the beginning of last week, while Evolution is down 14%. And there could be more pain ahead for the gold miners if analyst forecasts for the precious metal prove true.

Nomura analyst Yen Voo expects the gold price to weaken from current levels around $1,140 an ounce to $1,115 an ounce in the first half of 2016 before recovering to above $1,200 an ounce in the second half. Besides the pressures of the looming Fed interest rate hike, Voo struggles to see fundamental support for the yellow metal. “Chinese gold demand and inflation are absent for a more sustained gold rally,” notes the analyst.

A return to $1,115 an ounce may be bad news for Northern Star and Evolution. When gold was fetching that price in mid-September, Northern Star shares had been trading at around 21% below its current level of AUD2.56 a share, while Evolution had been at 14% below its current AUD1.39 a share. The 80% rally in Northern Star shares since the start of the year to the end of September enticed BlackRock to lighten its position in early October, with the U.S. fund manager cutting its stake to 10.8% from 12.4%. However, both miners continue to record strong production growth, underpinned by a string of acquisitions, and are enjoying healthy margins as the Australian dollar and oil prices remain weak.

But there’s the possibility that gold could get beaten down to lower levels, and at a faster pace. Nomura’s Voo is skeptical the Fed will hike rates in December and sees a raise in March as more likely. That’s a view shared by ReOrient strategist Uwe Parpart, who argues that “the FOMC suggested at its October meeting that it will tighten in December, only to be smacked with a new round of data indicating that the Fed’s belief in an improving US economy is (once again) delusional.” However, the market now sees a 50% chance of a December hike, up from 35% a week ago. And in the event that the U.S. central bank does hike in December then the negative sentiment likely to envelop financial markets, on top of gold’s not-so-good fundamentals, could drag the yellow metal to below $1,100 an ounce, notes Voo.

The demand side of the gold equation does not look bright. India, the world’s largest gold consumer, is set to launch two schemes to reduce the country’s reliance on gold imports: a sovereign bond scheme will allow Indians to invest their gold into bonds yielding between 2% and 3%, while a gold monetization scheme will allow gold owners to convert their holdings into credit in a bank account. Meanwhile, rural income growth has been hurt by weak monsoon rains this year, which could weigh on gold spending and makes a repeat of the surge in demand during last year’s Diwali festival less likely.


Source: FactSet
India’s northern neighbor China, the world’s second largest gold consumer, is suffering from an economic slowdown that’s expected to weaken demand for the yellow metal. Beijing last week lowered its GDP growth target for the 13th Five Year Plan to 6.5%, down from the current 7%. Nomura is forecasting even slower growth of 5.8% in 2016. Besides the economic drag, jewelers in China have increased retail mark-ups on gold products, which may weigh on sales volumes and hurt gold producers. A weaker Chinese yuan also suppresses consumer appetite for gold by making it more expensive in local currency terms. Nomura’s Voo estimates that a 5% fall in the value of the yuan against the greenback would reduce China’s gold demand by 4% in 2016.

The supply side of the gold equation looks a little more promising. The volume of mined gold is expected to decrease at a 3% year-on-year pace as the quality of global reserves falls. Weak gold prices have also crimped gold recycling activity. However, inventory volumes remain excessive in Asia, as indicated by the discount to spot gold prices in the region, and the problem looks especially pronounced in India, which appears to have front-loaded gold imports in August. Also hurting prices is the risk that Venezuela sells 25%, or around 80 tonnes, of its gold reserves to cover maturing debt, warns Nomura’s Voo.

Gold could regain some of its luster over the longer term, with prices expected to eventually return to $1,300 an ounce at the end of 2017. There’s support from the shrinking of newly mined supply and the decline in reserve grades. Greater clarity about the trajectory of U.S. rate hikes could also help, while demand from China is expected to improve on rising investments in gold as wealth shifts from yuan deposits to the precious metal as a store of value against declining interest rates and a weaker currency.

>>> Notable after hours earnings movers: DPLO +12.8%, ZEN +9.2%, PBPB +7.5%, ENP

Notable after hours earnings movers: DPLO +12.8%, ZEN +9.2%, PBPB +7.5%, ENPH -24.7%, QUAD -16%, DSW -12.1%

* Companies trading higher after hours following earnings/guidance:
DPLO +12.8%, ZEN +9.2%, PBPB +7.5%, TSLA +7.3%, CHUY +6.6%, SSNI +5.6%, CPIX +5.3%, GMED +4.9%, MXL +4.7%, FLTX +3.8%, ZG +3.6%

* Companies trading lower after hours following earnings/guidance:
ENPH -24.7%, QUAD -16%, DSW -12.1%, CERN -9.5%, ETSY -8%, VNOM -2.5%, CBS -2.2%, HLF -1.5%, KFRC -0.8%, HF -0.7%, AIV -0.6%