>>> US Close Dow+0.64% S&P+0.54% Nasdaq+0.51% Russell+0.63%

Closing Market Summary: S&P 500 Settles Above 100-Day Moving Average

The stock market ended the Tuesday session on an upbeat note with the S&P 500 adding 0.6%. In addition to posting a solid gain, the benchmark index reclaimed its 100-day moving average (2,089) after settling below that mark on Monday.

Equity indices began the day near their flat lines and rallied throughout the day, unperturbed by the lack of progress between Greece and its creditors. Furthermore, the rhetoric in Athens intensified with Greek Prime Minister Alexis Tsipras saying the International Monetary Fund bears "criminal" responsibility for the current state of the Greek economy. Mr. Tsipras' remarks were made in front of the Greek parliament with the premier adding that another round of elections is not in the cards.

Similar to U.S. equities, European stocks were able to rally despite the lack of positive developments. Meanwhile, Germany's 10-yr bund climbed, sending its yield lower by three basis points to 0.80% while the U.S. 10-yr note also rallied with its yield slipping four basis points to 2.32%.

All ten sectors posted gains with consumer staples (+1.1%) leading the advance. The sector rebounded from yesterday's underperformance amid broad strength while other countercyclical groups ended mixed with respect to the broader market. Similar to consumer staples, the telecom services sector (+0.8%) outperformed while health care (+0.5%) and utilities (+0.4%) settled behind the broader market.

The health care sector ended a bit behind the S&P 500 with biotechnology contributing to the underperformance. Still, the iShares Nasdaq Biotechnology ETF (IBB 364.38, +0.70) added 0.2%.

Moving to the cyclical side, the top-weighted technology sector (+0.6%) outperformed throughout the session while three of the remaining five growth-sensitive groups also displayed relative strength. The energy sector (+0.8%) rallied alongside crude oil, which rose 0.8% to $60.00/bbl.

Also of note, the industrial sector (+0.1%) turned positive during the late afternoon, but still ended behind the remaining nine sectors as transport stocks weighed. The Dow Jones Transportation Average lost 0.3%, extending this week's decline to 0.8%. United Continental (UAL 51.23, -1.02) was the weakest performer, falling 2.0%, while Con-way (CNW 40.30, -0.96) lost 1.6% after peer Oshkosh (OSK 46.71, -3.59) lowered its guidance.

Once again, today's participation was below average with roughly 640 million shares changing hands at the NYSE floor.

Economic data was limited to Housing Starts and Building Permits:
  • Housing starts declined 11.1% in May to 1.036 million from an upwardly revised 1.165 million (from 1.135 million) in April while the consensus expected a decline to 1.100 million 
    • In April, housing starts rose 22.1%, which was a historic, multi-decade high. It was only natural for housing starts to pull back following such a large increase 
    • Even after the decline, May starts were above Q1 averages (978,000) and in-line with trends from Q4 2014 (1.055 million) 
    • Building permits rose to a seasonally adjusted annualized rate of 1.275 million in May from a revised 1.140 million for April (from 1.143 million) while the consensus expected a decline to 1.100 million 
Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while the latest FOMC policy statement will be released at 14:00 ET.
  • Nasdaq Composite +6.8% YTD 
  • Russell 2000 +5.4% YTD 
  • S&P 500 +1.8% YTD 
  • Dow Jones Industrial Average +0.5% YTD

>>> Closing Commodities: Natural Gas Ends Flat Following Big Run Yesterday; Oil

Closing Commodities: Natural Gas Ends Flat Following Big Run Yesterday; Oil Rises, Helped By Storm

* Following a +5% run higher yesterday, natural gas futures ended the day on a dull note
* July nat gas futures closed floor trading flat at $2.89/MMBtu
* Overall, in the energy space, the tropical storm in the Gulf of Mexico is providing some uncertainty
* This helped oil futures today, which rose modestly
* July crude oil gained $0.45 at $60.00/barrel
* Metals fell today as the dollar index remained higher
* Aug gold lost $4.50 to $1181.10/oz, while July silver fell $0.11 at $15.97/oz
* July copper declined $0.04 today to $2.61/lb

>>> FB - JPMorgan making positive comments; Reiterates Overweight rating, p

FB - JPMorgan making positive comments; Reiterates Overweight rating, price target $100 - Firm maintains FB as 2015 top pick as they believe it is still early in monetizing Facebooks base of 1.44B users & the company is building other strong franchises in Instagram, Messenger, & WhatsApp. comScore data suggests continued strong engagement as Facebooks share of mobile Internet time excluding Instagram & WhatsApp in May was 23%, and its share of total U.S. Internet time including desktop was 19%.

FT : Airbus hoping to resume A400M aircraft deliveries next week

Airbus hoping to resume A400M aircraft deliveries next week

Airbus is hoping to resume deliveries of its A400M military transport carrier to customers next week as British and Turkish air forces lift flying restrictions that have kept the aircraft grounded since a fatal crash in Spain last month.
“If everything goes well we will deliver the next aircraft to France next week and another shortly to the UK,” said Bernhard Gerwert, head of Airbus’s defence and space division, in an interview at the Paris air show on Tuesday.

The first crash of an A400M, which killed four crew members and left two others badly injured, has cast a shadow over Europe’s largest single defence contract.
Airbus is waiting for Spanish authorities to grant permission to the aerospace group to resume deliveries of A400M aircraft to government customers. Regulators have said this authority could come within days.
Meanwhile, the UK’s Royal Air Force lifted a suspension on flights of its A400M aircraft following certain checks and extra procedures, while the Turkish defence ministry has notified Airbus that it would do the same from tomorrow.
“Having undertaken and completed a series of thorough checks on the UK’s A400M aircraft and how it is operated, the RAF is now satisfied that the additional processes and procedures introduced means it is now safe for the RAF to resume flying,” the UK defence ministry said.
Mr Gerwert said Airbus was still waiting for the final results of the investigation into the causes of the A400M crash.
Speculation has focused on the aircraft’s software which controls the engines, and was the subject of problems in 2009.
Airbus issued a patch to the software system last month to operators of the aircraft that has resolved the latest problems, according to government officials.
Some Airbus executives have in recent weeks suggested problems were apparent at the company’s Spanish factory that assembles the A400M.
This site was the focus of a management reshuffle earlier this year, due to protracted delays in production which have angered the aircraft’s eight launch customers.
Following these latest delays, Airbus is renegotiating the delivery timetable with customers, and Mr Gewert said it was possible that dates would be stretched out as a result.
The discussions are expected to continue for several months, he added. Airbus is likely to have to pay penalties for the delays and rescheduling.
The A400M programme has already been renegotiated once, in 2010, when the partner states agreed a €3.5bn bailout.

(BFW) Receptos Jumps; May Get Close to $350/Shr in Buyout: Wedbush

Receptos Jumps; May Get Close to $350/Shr in Buyout: Wedbush
2015-06-16 18:39:25.192 GMT


By Cristin Flanagan and Joshua Fineman
(Bloomberg) -- Receptos could get $348/shr or $10.9b in
acquisition after reports of bidding war, Wedbush analyst Liana
Moussatos writes in note.

* Acquisition value raised to $348 vs $211 “on increased
industry interest”
* Estimates ozanimod peak rev. >$15b in RMS, IBD
* NOTE: June 9, Receptos Said to Rebuff $200 Bid:
Proactiveinvestors; April 1, Receptos Said to Get M&A
Interest Amid Partnership Talks
* RCPT climbs as much as 7.5%

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cflanagan1@bloomberg.net;
Joshua Fineman in New York at +1-212-617-8953 or
jfineman@bloomberg.net
To contact the editors responsible for this story:
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Cristin Flanagan

(BFW) Nokia CEO Says Strategic Analysis Ongoing for Co.’s Here Unit

BN 06/16 17:44 *NOKIA CEO RAJEEV SURI SPEAKS TO FRENCH NATIONAL ASSEMBLY
BN 06/16 17:43 *NOKIA CEO: NO DECISION YET ON ALCATEL IN CHINA
BN 06/16 17:43 *NOKIA CEO SAYS IN TALKS WITH ALCATEL'S CHINA PARTNERS
BN 06/16 17:43 *NOKIA MAY DECIDE NOT TO SELL HERE, NO DECISION YET: CEO
BN 06/16 17:43 *NOKIA CEO: STRATEGIC ANALYSIS ONGOING FOR HERE UNIT
Nokia CEO Says Strategic Analysis Ongoing for Co.’s Here Unit
2015-06-16 17:55:35.50 GMT


By Marie Mawad
(Bloomberg) -- Nokia may decide not to sell Here, hasn’t
made a decision yet, CEO Rajeev Suri tells France’s National
Assembly.

* Nokia in talks with Alcatel-Lucent’s Chinese partners,
hasn’t made a decision on Alcatel in China

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FT : AB InBev: one more deal for the road?

AB InBev: one more deal for the road?

A pint of beer contains a lot of water — but even more money. The latter observation set Jorge Paulo Lemann on a path to become one of the world’s richest men with a $25bn fortune, according to Forbes.
“I was looking at Latin America and who was the richest guy in Venezuela? A brewer. The richest guy in Colombia? A brewer. The richest in Argentina? A brewer,” the Rio de Janeiro-born financier said in 1989. This was when he and his Brazilian partners — Marcel Telles and Carlos Alberto Sicupira — bought control of Brahma, a Brazilian brewer, despite knowing little about the sector.

A couple of decades on, Mr Lemann had indeed become Brazil’s “richest guy” thanks to his 12.5 per cent stake in AB InBev, the world leader that Brahma became. The Brazilian trio drove Brahma’s transformation into a company with a 21 per cent global market share through a series of ever-bolder deals, culminating in a $52bn takeover of Anheuser-Busch, owner of Budweiser.
They got there by following, with discipline and tenacity, their own mantra to “dream big”, accompanied by a driven and demanding management style, described in the first part of this series of articles. But where do you go once “dream big” turns into a reality and you have become the biggest?
That is precisely the challenge facing AB InBev today. With a market value of €170bn, it is larger than each of HSBC, Bank of America and Walt Disney. Only a mega-merger would make a difference to its scale. The most frequently speculated targets would cost $90bn or more (see box below). But the bigger the deal, the bigger the execution risk.
The alternative is to grow organically, in spite of the fact that consumers are not drinking more beer in the mature US market, AB InBev’s biggest for beer. Budweiser, the brew that Carlos Brito, AB InBev chief executive, calls “America in a bottle”, is at the heart of that task.
Crafty competition

The Anheuser-Busch brewery is a red-brick fortress in St Louis, Missouri, close to the Mississippi river. Built in 1852, it is the biggest AB InBev brewery in the US. More than 500,000 tourists a year come to see how Budweiser is made and visit a slice of American heritage that includes white-socked Clydesdale horses — a reminder of bygone days.
Over a hamburger and the recently launched Budweiser Signature Draught — it has a creamy, rather than foamy, head — Jorn Socquet, AB InBev’s vice-president for marketing in North America, explains the challenges of getting the brand back into growth.

The self-titled “king of beers” is growing internationally but in the US plays second fiddle to Bud Light, a spin-off brand launched in 1982. Sales of Budweiser have been in decline in the US for decades but what really rankles is that it is now outsold by Miller Lite, brewed by MillerCoors — a joint venture between the UK’s SABMiller and Molson Coors of the US.
“We were perfectly OK being the victim of the success of Bud Light because its growth more than offset the decline of Budweiser. But as soon as that stops, you are getting into trouble, which is why it’s so important for us — even if it’s small single-digit growth — to return to growth for Budweiser,” the 41-year old Belgian says.
Younger consumers have flocked to little-known craft beers, bourbons and cocktails, leaving mainstream beer in decline, a trend that causes Mr Socquet to lose sleep. “What keeps me up at night is, how do we genuinely reconnect with the new generation of people that is agnostic to brands?” he says.
Having already bought craft beers such as Goose Island and Shock Top in response to the trend, AB InBev is also making its biggest brand investment to date in Budweiser this year. This includes rolling out Signature Draught across the country; it gives bars a “significant” sales boost, says Mr Socquet .
The marketing message is changing too. The latest Super Bowl adverts emphasised heritage and consistency — “brewed the hard way” — to take on craft beers, which now account for 11 per cent of the market, up from 5 per cent in 2010, according to the Brewers Association.
Mr Socquet has high hopes for the recent launch of bold packaging emblazoned with the Statue of Liberty. Another change is to move some of the marketing team from St Louis to New York to be closer to urban trendsetters.
Park Avenue parsimony

AB InBev’s New York offices are on Park Avenue, a swish address for a supposedly frugal company. But the rental agreement was struck during the financial crisis in 2008 and the open plan office is confined to one relatively small floor.

The off-white desks have seen better days. They have little on them and are strikingly tidy — “we are encouraged to clear up at the end of the day,” says one employee — but there are no signs of little stickers marking the ideal placement of telephone and penholder recounted by one former employee. The door of the stationery cupboard is also open in an apparent contradiction of tales that the ferociousness of the cost-cutting culture means staff have to buy their own pens and paper.
Luiz Fernando Edmond, AB InBev’s head of sales, gets up from the central desk he shares with Mr Brito and other senior executives to walk into one of the small meeting rooms behind a bar and kitchenette.
Here, he admits in an interview that “we don’t have a magic formula” to get Budweiser back into growth in the US but adds that its decline has been stemmed. “It would be very easy for us just to say the trends will continue, that it’s not our fault; it’s whatever happened in the past. But we said, no, we don’t accept that. We said we need to fix Budweiser in the US.”
The need to increase sales organically is not just an issue for Budweiser. Across its brand portfolio, AB InBev is constructing “growth development platforms”: strategies to boost sales based on identifying beer-drinking occasions. These range from social media marketing campaigns to Belgian chefs appearing at food festivals to talk about menus suited to Stella Artois beer. “We are now spending a lot more time in trying to understand how we can grow the top line globally,” says Mr Edmond.
‘The supreme acquirer’

Yet M&A would be a far quicker route to growth judging by past spectacular results. In 1992, Brahma had a market value of $830m; today AB InBev’s market capitalisation is about 230 times bigger, according to FactSet. Coca-Cola’s tripled over the same period. AB InBev is “the supreme acquirer”, according to Goldman Sachs, which forecasts a $145bn transaction by the end of next year.

Its strategy of making acquisitions and cutting costs led to $3.5bn in synergies in its last three mergers — more than the combined total of synergies from all other brewing transactions in the last decade. The result is an efficiently profitable business. AB InBev’s operating margins are the highest in the industry at 32.5 per cent, up from 23.3 per cent in 2008, when AB was bought.
These achievements have secured a ringing endorsement from Warren Buffett, the world’s most respected investor, for the men he calls “the Brazilians.” Mr Buffett has put his money where his mouth is by investing through his Berkshire Hathaway investment group with 3G Capital, the private equity group co-founded by Mr Lemann, Mr Telles and Mr Sicupira 11 years ago.
Mr Buffett and New York-based 3G appear set on replicating in US food what AB InBev has done in beer, by buying Burger King in 2010, Heinz in 2013 and Kraft Foods this year. “3G does a magnificent job of running businesses,” Mr Buffett has said.
Having Mr Buffett as an ally potentially widens the scope of targets. So far, though, the Brazilian trio have kept their (privately-held) 3G investments legally separate from AB InBev, in which the three men hold a 22.7 per cent stake. They are the second-largest shareholders after the Belgian former Interbrew investors that hold 28.6 per cent of the shares.
‘Way more action in China’

On average, AB InBev has merged every four years over the past 16 years. The last sizeable takeover was three years ago and debt is being repaid fast to a level at which the company will either start returning cash to shareholders or gearing up for a big deal.
Mr Brito, the Rio-born 55 year-old at the helm of the company, insists that deals are not essential to the company’s growth but it is questionable whether organic growth alone will satisfy the company’s ambitious managers.

In an interview in New York, Mr Brito says the company will look at M&A so long as the target, deal structure and price make sense but does not feel any pressure to do deals. “We’re not building a dream that has to have M&A, we’re building a dream about company growth,” the CEO declares.
Asked whether AB InBev would look at targets outside the beer sector — perhaps soft drinks (PepsiCo, Coca-Cola) or spirits (Diageo) — Mr Brito, who dislikes unwieldy conglomerates, repeats his preference for “near beer.”
The group is virtually absent from Africa — the world’s fastest-growing beer market and a stronghold for SABMiller — but Mr Brito says he prefers China, where AB InBev has an 18 per cent market share.
“Asia offers an amazing opportunity for growth just like Latin America. There is way more action and dynamic in China than in Africa,” he says. “We believe a lot in focus so if we open too many fronts, it’s just hard to do it right.”
Such remarks are ambiguous enough for the speculation surrounding the group’s M&A ambitions to continue.
One certainty, however, is that AB InBev will keep moving. “The way we’ve built our company has always been with this constant dissatisfaction about our results and our achievements . . . so we’re never happy with where we are,” says Mr Brito. “We always think we can do more.”

(BFW) *ALCATEL CEO: SEEING NOKIA DEAL THROUGH IS ‘MY ONLY PRIORITY’

BN 06/16 17:15 *ALCATEL-LUCENT CEO COMBES SPEAKS TO FRANCE'S NATIONAL ASSEMBLY
BN 06/16 17:14 *ALCATEL CEO SAYS STILL UNDECIDED WHEN EXACTLY HE'LL LEAVE CO.
BN 06/16 17:14 *ALCATEL CEO SAYS WON'T LEAVE CO. UNTIL NOKIA DEAL SUCCESS SURE
BFW 06/16 17:14 *ALCATEL CEO: SEEING NOKIA DEAL THROUGH IS ‘MY ONLY PRIORITY’
BN 06/16 17:13 *ALCATEL CEO: SEEING NOKIA DEAL THROUGH IS `MY ONLY PRIORITY'
Alcatel CEO: Seeing Nokia Deal Through Is ‘My Only Priority’
2015-06-16 17:19:46.108 GMT


By Carolina Millan
(Bloomberg) -- Alcatel CEO says he won’t leave co. until
Nokia deal success certain, speaking at France’s National
Assembly.

* Still undecided on when exactly he’ll leave co.


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