>>> US Early premarket gappers

Early premarket gappers

Gapping up: HRTX +39.8%, OPXA +13.1%, STML +10.5%, BIOD +6.4%, ALTR +6.2%, GME +5.7%, GALE +5.5%, BOOT +5.5%, APRI +3%, ULTA +3%, KGC +2.6%, ONTY +1.8%, BLOX +1.3%, SUNE +1%, DGLY +0.5%

Gapping down: PSUN -12.2%, GEF -10.2%, VEEV -8.6%, QADA -5.2%, NBG -3%, SYT -2.2%, MEET -2%, FRO -2%, PLUS -1.8%, SPLK -1.8%, SD -1.7%, RCL -1.6%, DEO -1.4%, MX -1.4%, AZN -1.1%, DB -0.9%, ING -0.7%, ATI -0.6%

(JPM) Initiating Coverage on Oil, Services, Equipment & Drilling(HAL,SLB,WFT,CAM

--> Top Picks : HAL, SLB, WFT and CAM

* We are initiating coverage of the Oil Services, Equipment and Drilling Group
with a cautious outlook that reflects our view the stocks have largely exhausted
the upside near term with only 10% upside on average to our Dec-2015 price targets
based on “normalized” 2017 estimates. We believe the market has priced in a U.S. rig
count recovery akin to the v-shaped one that followed the 2009 downturn.
However, we anticipate a more gradual recovery characterized by fits and starts as
E&Ps oscillate between rig adds and drops in sympathy with commodity swings.

* Looking through the cycle, difficult to find much upside in the group on a
“normalized” basis: With E&P capex budgets estimated down 38% in North America
and 17% internationally, the sector is currently plagued by underutilization, declining
pricing and challenged margins. In a trough, valuation on near-term results doesn’t
offer much perspective. Rather, we prefer to look towards the next cycle to see what
we think the group can earn on a “normalized” basis. With our expectation of a
recovery in activity beginning in 2016, we think 2017 can serve as a reasonable proxy
for mid-cycle earnings, though on this basis, valuations already look fairly full.

* We prefer scale, flexibility and differentiation: We favor the large cap diversifieds
and select NAM-levered stocks. We like onshore over offshore, and recommend
increasing leverage towards U.S. land when we think expectations reset to a more
attainable level. Our top picks are HAL, SLB, WFT and CAM among large caps, while
our best ideas for smid caps include MRC, NBR, SPN and CJES. Each has or is
undergoing idiosyncratic changes we believe can drive relative outperformance
irrespective of the recovery’s trajectory. Offshore drillers face structural challenges that
will likely take years to play out, and thus we have not found a credible contrarian
thesis to recommend. Our lone OW offshore is RDC, which we view as the most derisked
from a fleet and cash flow perspective, and attractive on valuation.

>>> JPMorgan Initiates Offshore Drillers with a Negative Outlook

JPMorgan Initiates Offshore Drillers with a Negative Outlook 
- firm initiates RDC with Overweight rating, price target $26- firm initiates DO with Neutral rating, price target $29- firm initiates ESV with Underweight rating, price target $21
- firm initiates NE with Underweight rating, price target $15
- firm initiates RIG with Underweight rating, price target $16- Firm anticipates the structural challenges facing the industry to persist for at least the next 24 months
- Firm expects day rates and utilization to continue to trend downward for both floaters and jackups as demand for IOCs and NOCs remains tepid and supply growth from newbuild deliveries outstrips fleet attrition
- Firm thinks the notion that newbuild jackups will displace the pre-1985 cycle jackups and usher in a homogeneous high-spec jackup market is a misconception. 
- Firm expects incumbent premium jackups to fare better than the market is expecting, and for 4th/5th gen moored semis and commodity jackups to provide cheap optionality in a more protracted downturn. 
- As the market paints the industry with a broad brush, firm believes there are opportunities to identify niche exposures that can provide pricing power, captive utilization, and time optionality advantages to certain contractors.
- As contract coverage rolls off and we enter a more uncertain environment in 2016-2017, these incremental factors will drive outperformance, in firm's view.

(BofA-ML) The Flow Show : China in a Bull Shop : Massive Inflows

>>> Asset Class Flows
* Equities: $4.6bn inflows (note divergence between $6.3bn ETF inflows and $1.7bn mutual fund outflows)
* Bonds: modest $0.4bn outflows (only the second week of outflows in 2015 YTD)
* Precious Metals: small $0.1bn inflows (first inflows in 3 weeks)

>>> Equity Flows
* EM: $4.1bn inflows (largest since Jul’14); note China equity funds see big $4.5bn inflows, largest since Apr’08 (A-shares ETF’s such as China SSE 50 & Huatai-Pinebridge CSI 300 record outsized inflows)
* Japan: first outflows in 14 weeks (albeit tiny $22mn)
* Europe: $1.6bn inflows (2 straight weeks)
* US: $3.9bn outflows (outflows in 9 out of past 10 weeks)
--> By sector: largest inflows to financials funds ($1.2bn) since Dec’14

>>> Fixed Income Flows
* 75 straight weeks of inflows to IG bond funds ($0.9bn)…but weakest inflows since Jan’14 = waning interest
* First outflows from EM debt funds in 10 weeks ($0.2bn)
* First outflows from TIPS funds in 11 weeks ($0.2bn)
* $0.4bn inflows to HY bond funds
* 5 straight weeks of outflows from govt/tsy funds ($1.4bn)


--> Talking Points
* Stocks>Bonds: this week equity inflows ($4.6bn) and bond outflows
($0.4bn)...flows belatedly responding to growing outperformance of global stocks
(+6% YTD) versus global fixed income (-3% YTD).
* Dollar Driver: renewed dollar strength (DXY +8% YTD) sees inflows to Europe
equity funds, outflows from US equity funds (and more surprisingly a weekly pause
in inflows to Japan).
* China in a Bull Shop: massive $4.5bn inflows to China funds, largest weekly inflow
since Apr’08 (Chart 1); big inflows via A-shares ETF’s (China SSE 50 & Huatai-
Pinebridge CSI 300) in run-up to 6.5% SHCOMP overnight correction. Ex. China
effectively no inflows to EM, i.e. no evidence investors see China equity “bubble” as
precursor to strong China growth.
* Here Come the Banks: coinciding with firming Fed hike expectations, biggest
weekly inflow since Dec’14 ($1.2bn) to financial sector equity funds (Chart 2).
* Credit Cracking: smallest weekly inflows to IG bond funds since Jan’14 ($0.9bn –
Chart 3)...waning interest coincides with US IG return index (C0A0 Index) dipping
below 200dma for first ti