(BofA-ML) European Equity Strategy - Q1 : Earning Season Review

(Full note attached)

Strength in numbers
By all accounts it was a strong Q1 results season for European stocks. Our
European Quantitative Strategy team’s weekly summaries show that of the 80% of
firms that have reported to date, 58% have beaten earnings expectations – the
strongest number since Q3 ’10 – and the sales beats ratio stands at 64% – its
highest point in more than five years.

Not just the FX and flow show
We show that company fundamentals often outweighed flow from an earnings
perspective (Banks, Oil & Gas) and the leading sales beats were in sectors with the
greatest exposure to the FX tailwinds (Autos, Travel & Leisure). A number of one-off
market-specific events also had a greater than expected impact on the season
(Utilities and Insurance), while the relative strength of the macro environment in end
markets was another defining theme (Retail).

(BofA-ML) European Autos - Exit the Dragon #2 (full note attached)

Taking an in depth look at how EU Autos earn in China
Given recent slower growth in German OEMs in China, we carry out an in-depth
China earnings analysis for the EU OEMs and EU Suppliers and quantify exposure
by company. We reiterate our cautious view on Chinese Mass and Premium
markets (growth, pricing & margins) and companies with high China exposure.


We see German brands continuing to lose share in 2015
China market growth is trending roughly in line with our 7% est for the year, but so
far 2015 has been a great year for local Chinese brands, as they have substantially
outperformed Global JV brands (+29.1% vs +1.1%). We think this can continue as
the consumer looks for lower prices in a tough macro environment and local quality
improves. We forecast only +2% for VW Pass Car in 2015 and +3% for Audi / BMW.

FT : Fed minutes show doubts about strength of US recovery

Fed minutes show doubts about strength of US recovery

Doubts about the strength of the US recovery appeared to grow among Federal Reserve policy makers in their latest rate-setting meeting as soggy economic data further diminished the prospect of a rate rise in the summer.
Minutes from the meeting on April 28-29 reveal a Federal Open Market Committee that was divided over when the central bank’s target range for the federal funds rate should be lifted from today’s near-zero levels. A “range of views” were expressed on the right time for a move.

Whereas a few rate-setters thought June could still be the right time for the first increase, they were outnumbered by those who thought conditions were unlikely to be right by then, following the release of weak economic data early in the year.
Bonds yields crept lower following release of the minutes. The yield on the ten-year Treasury note was down 3 basis points at 2.26 per cent.
The dollar, which has rallied for much of the last year on the prospect of the Fed lifting rates, gave up some of its gains against the euro to trade at $1.11. The S&P 500 closed little changed at 2125.85.
The Fed this year dropped its pledge to be “patient” before raising rates, shifting to a new footing where it can tighten policy as soon as it decides the economic outlook is strong enough to merit a rise.
Earlier in 2015 a move as soon as June seemed a possibility, but the disappointing economic data in the first three months of the year undercut those expectations, with official growth figures revealing an annualised expansion of just 0.2 per cent.
The key question now confronting the central bank is how much of that slowdown reflects anomalous factors such as a port strike and bad weather, and whether a sharp rebound is in the offing.
The minutes to the April policy meeting suggest there were mixed views about this on the FOMC. While a number of reasons were advanced for the slowdown to be temporary, some rate setters backed the concern that the weakness might persist: in particular, the impact of the high level of the dollar and the decline in oil-related investment could last longer than expected.
“Participants judged that recent domestic economic developments had increased uncertainty regarding the economic outlook,” the minutes said.
The FOMC drew attention to the high value of the dollar as a continuing restraint. The strength of the jobs market is central to the Fed’s judgment about the outlook, and many of the policy makers also told the meeting that they thought the pace of improvement in the labour market had slowed. Balancing that, however, were other more positive signs on labour market conditions, including an increase in job openings.
Participants judged that recent domestic economic developments had increased uncertainty regarding the economic outlook
- Fed minutes
With energy prices no longer declining, most participants in the meeting thought inflation would move back towards the committee’s 2 per cent objective.
Discussing the prospects of higher interest rates, the minutes said: “Many participants . . . thought it unlikely that the data available in June would provide sufficient confirmation that the conditions for raising the target range for the federal funds rate had been satisfied, although they generally did not rule out this possibility.”
A few members went further, and questioned whether the committee was providing enough monetary accommodation at the present time, as they cautioned against tightening policy in the near term.
A handful of policy makers said there may even be an argument for a discussion over whether to boost the FOMC’s inflation objective — something that has been advocated by Eric Rosengren, the head of the Boston Fed.

(BN) *JOYOU REVIEWING IFREQUIRED TO FILE APPLICATION FOR INSOLVENCY

--> stock -80% pre market

{JY8 GY DES<Go>}
BN 05/20 19:38 *JOYOU REVIEWING IFREQUIRED TO FILE APPLICATION FOR INSOLVENCY
BN 05/20 19:37 *JOYOU TO POSTPONE PUBLICATION 1Q FINL REPORT
BN 05/20 19:36 *JOYOU NOTICE OF LOSS OF MORE THAN HALF REGISTERED SHR CAPITAL
BN 05/20 19:36 *JOYOU NOTICE OF LOSS
DGAP-Adhoc: Joyou AG: Notice of loss pursuant to Section 92(1) of the German Stock Corporation Act / Postponement of
2015-05-20 19:35:56.977 GMT

DGAP-Adhoc: Joyou AG: Notice of loss pursuant to Section 92(1) of the German
Stock Corporation Act / Postponement of publication of the financial report Q1
2015 / Examination of obligation to file for insolvency

Joyou AG / Key word(s): Quarter Results/Miscellaneous

20.05.2015 21:35

Dissemination of an Ad hoc announcement according to § 15 WpHG, transmitted
by DGAP - a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

>>> What to look at today - 21st of May 2015

Dow-0.15% S&P-0.09% Nasdaq+0.03% Russell+0.17%
US Market closed for a 3rd day in a row on flat note. FOMC Minutes pushed mkt higher but came back to the flat line.the minutes revealed that some participants believed that the weakness observed in the first quarter could extend into Q2 with many officials characterizing a rate hike in June as "unlikely." However, the minutes did not rule out a near-term rate hike in its entirety. US 10y settled @ 2.25%. Airlines paced the slide with Delta Air Lines (DAL 43.62, -2.59), Southwest Airlines (LUV 37.19, -3.72), and United Continental (UAL 54.54, -6.27) losing between 5.6% and 10.3% after Southwest lowered its guidance. In addition, investors showed concern over potential pricing pressures that could result from the entry of three subsidized Arabian Gulf carriers into the U.S. market. Volume were in line with the last few days @ 700mil shares...US After Hours CRM +6.4%, WSM +4%, COVS +3.5%, XNET -14.9%, KZ -13.8%, NTAP -8.3% following earnings/guidance...CTP +42.0% (agreed to exclusive negotiations to be acquired by DHR International; pricing and other terms not disclosed, OCR +4.9% Bloomber reporting that co is in late stage talks to be acquired by CVS Health...Asia stocks are mixed, tracking the ripple created by the release of the latest Fed meeting minutes in late US trading hours...China PMI missed consensus and remained in contraction for the 5th straight month, HSBC economist noted the figures "pointed to a further deterioration in operating conditions in April, with production declining for the first time in 2015" and suggest softer demand domestically and overseas, the data is "leaving plenty of scope for the authorities to implement further stimulus measures. Ahead of tomorrow's BOJ policy statement, Nikkei report speculated policymakers may consider their first upward revision in overall economic assessment in nearly two years.

Nikkei +0.13% Hang Seng -0.43% Shanghai +0.80%

Eur$ 1.1105 GBP 1.5535 EURCHF 1.0391 JPY 121.07 RUB $49.9051 WTI $59.24 (+0.44%)

S&P -0.13% EuroStoxx -0.22% Dax -0.23% SMI -0.12%


Macro :
- HSBC China May Flash Manufacturing PMI 49.1; Est. 49.3
- Fed Minutes: Many Saw June Mtg as Likely Too Soon for Rate Move
- ECB Said to Leave Haircut on Greek Collateral Unchanged
- Moscovici Says Greece Progress Made in Last 3 Weeks: L’Opinion
- ECB Scraps Embargoed Media Speeches After Fund Storm: Reuters http://reut.rs/1Py2gLg
- Germany’s Schaeuble Doesn’t Rule Out Greek Bankruptcy: Echos

Keep an eye on :
- AIR FP : Airbus Faces Hefty Penalties for A440M Delay: Handelsblatt
- BP/ LN : Halliburton Reaches Pact With BP Resolving Deepwater Claims
- EDF FP : EDF Offers 10,000-Euro Bonuses to Change Work Contracts: Echos
- HETA GR : Heta Annual Report Delayed Until End of June
- NHH SM : Santander Selling 8.56% of NH Hotel Group in Bookbuilding ,Shrs Priced at EU5.10 (Fiidentis selling)
- RBI AV : Raiffeisen 1Q Net Income Halves to EU83m; Est. EU58m
- RF FP : Eurazeo’s Europcar Files IPO Documents With French Regulator
- SAN FP : Sanofi, Regeneron Say Phase 3 Sarilumab Studies Met Goals in RA
- SYNN VX : Monsanto Declines to Say Where Combined Co. to Be Domiciled
- TIT IM : Telecom Italia ‘Highly Interested’ in Enel Collaboration: CEO
- TIT IM : Telecom Italia Says Will Go Ahead With Tower IPO
- ZURN VX : Zurich Says on Track to Meet 2016 Strategic Objectives

>>> Europe : Brokers Upgrades & Downgrades - 21st of May 2015

>>> Up
*AZIMUT RAISED TO BUY VS NEUTRAL AT CITI
*FLUGHAFEN WIEN RAISED TO BUY VS REDUCE AT HSBC
*MARKS & SPENCER RAISED TO EQUALWEIGHT VS UNDERWEIGHT: BARCLAYS
*NOKIAN RENKAAT RAISED TO NEUTRAL VS UNDERWEIGHT AT JPMORGAN
*SOLSTAD OFFSHORE RAISED TO HOLD AT NORDEA
*VIENNA INSURANCE RAISED TO BUY VS NEUTRAL AT BOFA
*VODAFONE RAISED TO NEUTRAL VS REDUCE AT NOMURA

>>> Down
*AVEVA CUT TO NEUTRAL VS BUY AT CITI
*ICAP CUT TO SELL VS HOLD AT LIBERUM
*NORILSK NICKEL CUT TO NEUTRAL VS BUY AT UBS
*ORIFLAME CUT TO NEUTRAL VS BUY AT GOLDMAN

>>> PT change


>>> Initiation
*ALKERMES RATED NEW OVERWEIGHT AT BARCLAYS
*ASSA ABLOY RATED NEW UNDERPERFORM AT RBC, PT SEK470
*ELECTROLUX RATED NEW OUTPERFORM AT RBC, PT SEK320
*EIFFAGE RATED NEW UNDERWEIGHT AT BARCLAYS (NOTE ATTACHED)
*GEBERIT RATED NEW OUTPERFORM AT RBC, PT CHF370
*GROUPE EUROTUNNEL RATED NEW OVERWEIGHT AT BARCLAYS
*JOHNSON MATTHEY RATED NEW BUY AT JEFFERIES
*KONE OYJ RATED NEW SECTOR PERFORM AT RBC, PT EU41
*LEGRAND SA RATED NEW SECTOR PERFORM AT RBC, PT EU54

*PETS AT HOME RATED NEW BUY AT HSBC, PT 320P
*PUBLICIS REINSTATED NEUTRAL AT CITI, WAS SELL
*SCHINDLER HOLDING RATED NEW UNDERPERFORM AT RBC, PT CHF150
*VINCI RATED NEW EQUALWEIGHT AT BARCLAYS (NOTE ATTACHED)


>>> Call
>> Stock
* NOMURA Adds Atlantia, TUI AG, Hexagon, Legrand, Adecco, ING to European Recommended Portfolio
* NOMURA Removes Syngenta, Siemens, ABB, Alcatel-Lucent, Deutsche Post to European Recommended Portfolio

(Reuters) ECB scraps embargoed media speeches in wake of hedge fund storm


ECB scraps embargoed media speeches in wake of hedge fund storm

May 20 (Reuters) - The European Central Bank (ECB) said on Wednesday it would stop providing journalists embargoed copies of its speeches, as a storm grew over one of its top policymakers giving hedge funds a head start on market-sensitive information.

On Monday, ECB Executive Board member Benoit Coeure gave a speech to an invitation-only dinner of fund managers, bankers and academics in London, saying the bank would accelerate its bond buying programme to offset an expected summer lull.

When the speech was made public on Tuesday, the comments moved the euro as well as stock and bond markets. The euro had also dropped around the time the speech was originally delivered, and the ECB came under fire about giving a possible trading advantage for those at the dinner, which included top hedge funds like Brevan Howard and banks such as Goldman Sachs and Citi.
The event was not open to media. Some 13 hours after the speech was given, news outlets received a pre-release copy, which was embargoed for release an hour later, when it was also published on the ECB's website as European markets opened on Tuesday.
The ECB's decision to clamp down on giving the text of speeches to the media in advance, a practice used at most of the world's big central banks, therefore came as a surprise.

An ECB spokesman said that the decision was a "tightening up of procedures" after what had happened on Monday although it had been under consideration beforehand.
The ban will not apply to the data the central bank publishes and will not affect its interest rate decisions which are delivered over teleconference, although that is also under review and expected to eventually switch to an automated system.

Although it is getting increasingly difficult to verify the credentials of news outlets in the age of social media, central banks provide journalists with the speeches before they are delivered so that they can be reported simultaneously, lowering the chances of people trading on privileged information.

>>> US After Hours


After Hours Summary: CRM +6.4%, WSM +4%, COVS +3.5%, XNET -14.9%, KZ -13.8%, NTAP -8.3% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: CRM +6.4%, WSM +4%, COVS +3.5%, ACXM +2.9%, YOKU +1%

Companies trading higher in after hours in reaction to news: CTP +42.0% (agreed to exclusive negotiations to be acquired by DHR International; pricing and other terms not disclosed, but indicated preliminary price below the $7 per share DHR previously proposed), OCR +4.9% Bloomber reporting that co is in late stage talks to be acquired by CVS Health (CVS)), ACXM -2.9% (entered into an agreement to sell its IT Infrastructure Management business to Charlesbank Capital Partners and M/C Partners for total cash consideration of up to $190 mln; co also reported preliminary Q4 results), GMCR +0.4% (Director disclosed purchase of 15K shares, worth total of $1.347 mln), 

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: XNET -14.9%, KZ -13.8%, NTAP -8.3%, OTEX -7.7%, RXN -7.1%, BRS -5.9%, SCVL -4.9%, SNPS -3%, LB -0.9%

Companies trading lower in after hours in reaction to news: WAVX -8.5% (to make a public offering of shares of its Class A common stock and warrants; size not disclosed), NTAP -8.2% (disclosed that on May 19, 2015, it committed to a realignment designed to drive efficiency, eliminate cost and redirect resources; expects to reduce headcount by ~500 employees; co also reported earnings), AETI -5.2% (filed for $25 mln offering of common stock, warrants, and units), AGEN -5.2% (announced that it intends to offer shares of its common stock in an underwritten public offering, size not disclosed), OXGN -5.1% (filed for $75 mln mixed securities shelf offering), BRKR -4.9% (announced that CFO Charles Wagner has submitted his resignation, effective June 12, 2015, in order to pursue other interests), OCUL -2.0% (filed for $125 mln common stock offering by selling shareholders), ARCI -1.7% (announced the return of Edward Cameron as President and CEO) 

>>> Asian Update

Asian Mid-session Update: China HSBC flash PMI remains in contraction; New Zealand budget does not alter credit profile with rating agencies


***Economic Data***
- (CN) CHINA MAY FLASH HSBC MANUFACTURING PMI: 49.1 V 49.3E (5th consecutive contraction)
- (JP) JAPAN MAY PRELIMINARY MARKIT/JMMA MANUFACTURING PMI: 50.9 V 50.3E; 3-month high
- (AU) AUSTRALIA APR CONSUMER INFLATION EXPECTATION: 3.6% V 3.4% PRIOR
- (NZ) New Zealand Apr Net Migration: 4.7K v 5.0K prior

***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 +0.5%, S&P/ASX +0.8%, Kospi -0.7%, Shanghai Composite +0.8%, Hang Seng -0.2%, Jun S&P500 -0.2% at 2,117

***Commodities/Fixed Income***
- Jun gold +0.2% at $1,211.5/oz, Jul crude oil +0.2% at $59.09/brl, Jul copper +0.5% at $2.84/lb
- GLD: SPDR Gold Trust ETF daily holdings fall 2.9 tonnes to 715.3 tonnes; lowest since Jan 14th
- (JP) Japan investors bought net ¥1.1T in foreign bonds v bought ¥394.7B in prior week; Foreign investors bought net ¥187.3B in Japan stocks v bought ¥71.4B in prior week

***Market Focal Points/FX***
- Asia stocks are mixed, tracking the ripple created by the release of the latest Fed meeting minutes in late US trading hours. Members also considered introducing a more explicit signal foreshadowing a rate liftoff but decided to maintain the open-ended "to be determined on a meeting-by-meeting basis". US indices initially rallied but then sold off on the announcement that June rate hike, though unlikely, is not entirely off the table. S&P futures are down a modest 0.2% in electronic session, with the focus turning to Thursday's Philly Fed and Existing Home sales data.

- Investors were also having a tough time establishing a trend after the release of China flash manufacturing PMI figure, which missed consensus and remained in contraction for the 5th straight month. New Orders and Employment trends were still on the decline but at a slower rate, while New Export Orders component turned to a "decrease" from "increase." HSBC economist noted the figures "pointed to a further deterioration in operating conditions in April, with production declining for the first time in 2015" and suggest softer demand domestically and overseas. On the bright side, HSBC said, the data is "leaving plenty of scope for the authorities to implement further stimulus measures," which helps explain Shanghai Composite quickly reversing initial plunge to rally over 1% for the morning session. Also of note in China, Premier Li stated the country does have the ability to meet 2015 GDP target of about 7%.

- Ahead of tomorrow's BOJ policy statement, Nikkei report speculated policymakers may consider their first upward revision in overall economic assessment in nearly two years. Report pointed to yesterday's better than expected GDP figures and also trend of improving consumption. Today's May prelim manufacturing PMI was also notable, hitting a 3-month high and returning to expansion. USD/JPY has recently broken out to 2-month highs above ¥121.40, but consolidated some of those gains with a 30pip slide toward ¥121 figure.

- In other USD majors, trading in NZD/USD was also slightly more volatile as the pair finally moved back above 0.73 following 5 straight down days after the release of New Zealand annual budget. The govt lowered its expected surplus forecast to NZ$0.18B v NZ$0.56B at its half-year outlook, cut 2015 GDP to 3.3% from 4.0%, and raised unemployment expectations to 5.6% from 5.4%. However, 2016 and 2017 targets were largely left unchanged, and the Finance Ministry also deemed economy to be in good shape despite the headwinds of low dairy prices. Both Moody's and S&P affirmed their outlook and ratings after the budget - the former said it "shows a continuing positive trend in the government's finances", while the latter noted "the country's general government net debt to remain low."

***Equities***
US equities / ADRs:
- CRM: Reports Q1 $0.16 v $0.14e, R$1.51B v $1.50Be; Raises FY16 guidance; +6.6% afterhours
- OCR: CVS said to be in advanced talks to acquire Omnicare; May pay over $12B - financial press; +5.7% afterhours
- WSM: Reports Q1 $0.48 v $0.44e, R$1.03B v $1.01Be; +4.0% afterhours
- ACXM: Guides Q4 $0.24 v $0.23e, R$257M v $262Me, To Sell IT Infrastructure Management Business for $190M; increases buyback by $50M (3.7% of market cap); +2.9% afterhours
- YOKU: Reports Q1 -$0.40 v -$0.14 y/y, R$170M v $113M y/y; +2.0% afterhours
- LB: Reports Q1 $0.61 v $0.60e, R$2.51B v $2.52Be; -1.4% afterhours
- SNPS: Reports Q2 $0.68 v $0.63e, R$557.2M v $547Me; -3.5% afterhours
- OTEX: Guides Q4 $0.64-0.72 v $0.91e, R$440-455M v $482Me, CEO resumes full involvement in operations, initiates restructuring; -7.7% afterhours
- NTAP: Reports Q4 $0.65 v $0.73e, R$1.54B v $1.59Be; Raises dividend 9% to $0.18/shr; -8.1% afterhours

Notable movers by sector:
- Consumer discretionary: Domino's Pizza Enterprises DMP.AU +3.4% (to cut jobs); Genting Singapore 678.HK +2.1% (to sell shares in NCLH); Huayi Brothers Media 300027.CN +1.9% (real estate project); Panasonic Corporation 6752.JP +3.9% (to increase investment in auto business)
- Consumer staples: Warrnambool Cheese & Butter WCB.AU -0.8% (9-month results)
- Industrials: Worley Parsons WOR.AU +1.9% (Q3 results); James Hardie Industries JHX.AU +10.3% (FY4/15 results); China Cosco Holdings Co Ltd. 601919.CN +10.0%, China Shipping Development Co. 600026.CN +10.0% (set up jv to sign contract with Vale); Ningbo Port Co Ltd 601018.CN +10.0% (Ningbo port development)
- Energy: GCL-Poly Energy Holdings 3800.HK -2.8% (Q1 result)
- Materials: Metcash MTS.AU +2.3% (approached for bid)
- Utilities: Tellhow Sci-Tech 600590.CN +5.8% (approval to issue shares); Tokyo Electric Power Co 9501.JP +11.3% (to increase investment)
- Telecom: Chengdu Dr Peng Telecom & Media Group Co Ltd 600804.CN +1.1% (China broadband construction plan)

CVS Said in Advanced Talks to Buy Omnicare in Pharmacy Expansion


CVS Said in Advanced Talks to Buy Omnicare in Pharmacy Expansion
2015-05-20 21:59:20.969 GMT


By Ed Hammond, Jeffrey McCracken and Manuel Baigorri
(Bloomberg) -- CVS Health Corp., the biggest U.S. retailer
of prescription drugs, is in advanced talks to acquire nursing-
home pharmacy Omnicare Inc., people with knowledge of the matter
said.
A deal could be reached as soon as this week, the people
said, asking not to be identified discussing private
information. Omnicare, with a market value of about $9.2
billion, hired advisers to explore a sale earlier this year.
The companies are still finalizing the terms of the deal,
and no agreement is certain, the people said. Representatives
for Omnicare and CVS didn’t immediately reply to e-mail and
phone calls seeking comment.
Omnicare delivers drugs and helps senior-living facilities
manage residents’ medications. CVS is the nation’s second-
largest pharmacy benefits manager, handling drug plans for
health insurers and employers. In its most recent quarter growth
in sales from that business far outpaced the company’s retail
division.
Both CVS and Omnicare are big in Medicare Part D, a federal
program that subsidizes medicine for retirees, Charles Rhyee, a
New York-based analyst for Cowen Group Inc., said in an
interview last month. Omnicare also drew interest from industry
leader Express Scripts Holding Co., people with knowledge of the
matter said last month.

Rising Demand

Demand for pharmacy services is rising as patients,
insurers and companies look for ways to manage costs with drug
prices increasing. Pharmacy-services providers are combining to
gain a bigger piece of the growing market.
UnitedHealth Group Inc. said in March that it would buy
Catamaran Corp. in a $12.8 billion deal to create a large third-
place competitor. That deal came on the heels of Rite Aid
Corp.’s agreement to buy pharmacy benefits manager EnvisionRx
for about $2 billion.
Express Scripts became the biggest pharmacy-benefits
management company after purchasing Medco Health Solutions Inc.
three years ago for $34 billion including net debt.

For Related News and Information:
Omnicare Said to Draw Interest From CVS and Express Scripts
Omnicare at Almost $10 Billion Still Worth It for CVS: Real M&A
Top Stories:TOP<GO>

--With assistance from Tara Lachapelle in New York.

To contact the reporters on this story:
Ed Hammond in New York at +1-212-617-1963 or
ehammond12@bloomberg.net;
Jeffrey McCracken in New York at +1-212-617-8517 or
jmccracken3@bloomberg.net;
Manuel Baigorri in London at +44-20-3525-4457 or
mbaigorri@bloomberg.net
To contact the editors responsible for this story:
Mohammed Hadi at +1-212-617-2914 or
mhadi1@bloomberg.net
Elizabeth Wollman