*NOKIA MAY KEEP HERE MAP UNIT, WAS 'RIGHT TIME' FOR ASSESSEMENT
Gapping up
In reaction to strong earnings/guidance: ATEN +17.8%, IM +16.3%, NLS +16.2%, ABMD +15.1%, ELNK +12.4%, CHUY +11.7%, ECOM +9.8%, (also Names David Spitz Chief Executive Officer and Scot Wingo Executive Chairman), AMRI +7.4%, UBS +7.1%, EFOI +7.1%, NLNK +7%, SSE +6.7%, CRTO +5.8%, TXRH +5.3%, MERU +4.5%, EL +4.5%, MNK +4.4%, DENN +4.1%, ININ +4.1%, NUVA +3.8%, TCPI +3.7%, LMNX +3.6%, CYNO +3.5%, CKEC +3.2%, CTT +3.1%, MATX +3%, SALE +2.9%, THC +2.1%, IDTI +2.1%, CGNX +1.9%, AEGR +1.8%, HCP +1.8%, BLMN +1.7%, OZM +1.5%, ZTS +1.4%, DISCA +1.4%, DISCA +1.4%, LPX +1.2%, GTN +1.1%, H +1.1%, VMC +1%, CDE +0.9%, ALLT +0.9%, APC +0.8%, PLOW +0.8%, PCOM +0.8%, NTI +0.8%, HW +0.8%, AFSI +0.8%
Select oil/gas related names showing strength with WTI up ~2% pre-mkt: EXXI +5.7%, OAS +2.2%, SDRL +1.9%, RIG +1.7%, XOM +0.8%, CVX +0.8%
Other news: PTBI +45.1% (Soros Fund Management disclosed 5.17% passive stake in 13G filing), GLNG +17.1% (Ophir Energy plc appoints Golar as midstream partner for Fortuna FLNG project in Equatorial Guinea), ECOM +9.8% (named David Spitz CEO and Scot Wingo Executive Chairman effective today; co also reported earnings), JAH +4.4% (following yesterday's positive mention by Pershing Square's Ackman), ISIS +3.4% (favorably commentary on Monday's Mad Money), ZIOP +2.4% (announces the initiation of a Phase 1 study of Ad-RTS-hIL-12 plus veledimex), BCO +2.1% ( Starboard Value discloses 8.2% active stake in 13D filing), ARWR +2% (announced that it completed dosing volunteers and will begin dosing patients in its on-going Phase 1 study of ARC-AAT), BNFT +1.8% (announced the signing of a reseller agreement with SAP), ISSI +1.6% (Starboard Value increased active stake to 11.5% from 9.9% in amended 13D filing)
Analyst comments: CONN +8% (upgraded to Outperform from Perform at Oppenheimer), TSLA +3.5% (initiated with a Buy at Jefferies; tgt $350), NFLX +2.2% (upgraded to Buy at BofA/Merrill), ALU +2.1% (upgraded to Buy from Neutral at Citigroup), ASEI +2.1% (upgraded to Buy at The Benchmark Company), SAFM +1.9% (upgraded to Overweight from Equal Weight at a boutique firm), ARRS +1.8% (upgraded to Buy from Neutral at Goldman), CYNI +1.7% (upgraded to Neutral from Underweight at JP Morgan), JBLU +1.4% (upgraded to Overweight from Neutral at JP Morgan), ETN +1.2% (upgraded to Overweight from Neutral at JP Morgan)
Gapping down
In reaction to disappointing earnings/guidance: PRIM -47.5%, QLYS -23.9%, ACRX -23.8%, (provides Zalviso regulatory update; notes its request for a Type B meeting with the FDA was denied), CVLT -13.2%, ONDK -9.6%, EOX -7.7%, SGY -7.6%, EIGI -7.5%, URG -5.4%, XNCR -5.2%, RGR -4.4%, PTCT -4.3%, KLIC -4.3%, EMR -4.2%, INVN -3.9%, SNHY -3.7%, PQ -3.4%, KMT -3.2%, OTTR -2.7%, MCEP -2.6%, MDU -2.6%, BALT -2.1%, ANIP -2.1%, LSCC -1.8%, HSBC -1.8%, EIGI -1.3%
M&A news: AVP -0.8% (having trouble finding a buyer, according to NY Post)
Other news: ACRX -23.8% (co's request for a meeting with the FDA was denied; FDA reiterated that an additional clinical study will be required for Zalviso), HELI -3.5% (announced appointment of Lee Eckert as successor CFO, effective July 16, 2015), ACHC -2.7% (announces a proposed offering of 4.5 mln shares of common stock ), MYCC -1.8% (announces secondary offering of 11 mln shares of common stock by a selling shareholder ), VRSK -1.5% (announces a proposed $675 mln offering of common stock ), EGLE -1.2% (disclosed departure of COO Alexis P. Zoullas)
Analyst comments: LUX -4.1% (downgraded to Mkt Perform from Outperform at Raymond James), GNW -2.8% (downgraded to Underweight from Equal-Weight at Morgan Stanley), AOL -2.7% (downgraded to Sell from Neutral at Goldman), STM -1.7% (downgraded to Neutral from Buy at BofA/Merrill), BIDU -1.6% (downgraded to Neutral from Overweight at JP Morgan), VECO -1.3% (downgraded to Outperform from Buy at Credit Agricole), MFRM -1.1% (downgraded to Neutral from Overweight at Piper Jaffray), MSI -0.7% (downgraded to Sell from Neutral at Goldman)
Click here to read the full comment.
Portfolio Ticker Matches: SCANX
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ZTS beat EPS by $0.045 but missed on Revs (0.75%), then announce $300M cost savings initiative through 2017, and last announce $400M-$500M write-off of Venezuela business.
A bit disappointing, cold justify the weakness of the stock,Revs were essentially flat YoY (1Q) for 2 straight years and now the emphasis is on cost cutting for the next two years...
It will be difficult to hold these levels if no M&a.
NEW note pdf
Heineken spread to parity?
Lock-up expires
PDF attached
This is an update to a prior note and deals with the HEIO (Holding) / HEIA spread not a directional trade on Heineken. I believe the spread which currently trades at 0.875 is more likely to gravitate towards parity than to long term mean.
Femsa owns Heineken NV and Heineken Holding for an economic equivalent of 20%. Femsa owns both lines.
As of today, Femsa is at liberty to sell the stake in full or in part.
Several reasons exist to believe the stake will be sold off. Firstly, the stake is not strategic, but simply a result of accepting the best price on offer for the disposal of the Femsa beer business in 2010. The Heineken stake brings no evident synergies other than perhaps some procurement advantages for Oxxo selling Heineken beer. The Heineken stake may provide Femsa’s board with high-level visibility into the beer market but Femsa is no longer involved with that market and has expressed no desire to return to it.
In fact, the Heineken stake is an impediment to advancing Femsa’s commercial business. Femsa’s Oxxo has been trying to get a licence to sell alcohol in Texas (only 2 hrs away driving distance from their base in Monterrey) but the US State will not give them a licence ruling its corporate parent’s indirect and partial ownership of Heineken NV brewers violates cross-ownership rules.
Further, the recent Femsa Q12015 results show how volatile Heineken income is to Femsa’s numbers. Heineken’s income for the quarter came at MXN1.4bn or 80pct higher than a year ago. Such income was c25pct of Femsa’s total net income before tax whereas last year the Heineken income was 13pct of total before tax. This reflects poorly on Femsa’s earnings quality.
Femsa said in the Q1 call that “ in the short term we will keep our stake in Heineken” and Femsa also said in the call that the lock –up expiry means “we can increase our level of activity (corporate activity)” meaning that they can actively pursue a way to exit the stake.
What Femsa needs is to find the right asset, the right target to justify trading the Heineken income for the new opportunity.
We expect, analysts will continue to ask the question and write-up corporate scenarios for such divestment.
Below, we argue one such scenario is that Femsa can keep HEIO and sell HEIA.
This brings sufficient financial resources for Femsa to continue to expand and also allows influential Femsa shareholders to continue to receive Euro income and keep a board seat in the non-operational Heineken Holding.
The expectation of such divestment may tilt the balance of probability in favour of the spread moving towards parity.
Early premarket gappers
Gapping up: PTBI +32.9%, ATEN +17.8%, IM +16.3%, NLS +16.2%, ELNK +12.4%, CHUY +10.2%, ECOM +9.8%, ECOM +9.8%, GLNG +8.9%, TXRH +6.3%, MERU +4.5%, ININ +4.1%, TSLA +4%, NUVA +3.8%, TCPI +3.7%, LMNX +3.6%, MNK +3.3%, CKEC +3.2%, CTT +3.1%, MATX +3%, BCO +2.9%, SALE +2.8%, ALU +2.6%, IDTI +2.6%, NFLX +2.5%, THC +2.1%, BNFT +1.8%, AEGR +1.8%, ISSI +1.6%, JBLU +1.5%, RIG +1.4%, VMC +1%, CDE +0.9%
Gapping down: ACRX -28.6%, QLYS -25.1%, ONDK -9.6%, EOX -7.7%, SGY -7.6%, URG -5.4%, XNCR -5.2%, INVN -5%, RGR -4.4%, PTCT -4.3%, SNHY -3.7%, KLIC -3.7%, HELI -3.5%, PQ -3.4%, ACHC -2.7%, OTTR -2.7%, MDU -2.6%, HSBC -2.3%, BALT -2.1%, MYCC -1.8%, LSCC -1.8%, BIDU -1.6%, VRSK -1.5%, BCS -1.3%, EIGI -1.3%, EGLE -1.2%, MCEP -1.2%, PBR -0.8%, EOG -0.8%, ADEP -0.7%, DVA -0.5%
BFW 05/05 10:44 *SCHAEUBLE SAYS ‘SKEPTICAL’ ON GREECE DEAL BY MAY 11 EUROGROUP
BFW 05/05 10:44 *IMF DIDN’T SAY GREEK DEBT CUT NEEDED FOR MORE AID: SCHAEUBLE
BFW 05/05 10:44 *SCHAEUBLE SAYS GREECE TALKS WITH CREDITORS MORE ‘CONSTRUCTIVE’
BFW 05/05 10:43 *SCHAEUBLE SAYS `SKEPTICAL' ON GREECE DEAL BY MAY 11 EUROGROUP
BN 05/05 10:43 *LIMITS TO WHAT GERMANY WILL DO KEEP GREECE, SCHAEUBLE SAYS
BN 05/05 10:43 *IMF DIDN'T SAY GREEK DEBT CUT NEEDED FOR MORE AID: SCHAEUBLE
BN 05/05 10:43 *SCHAEUBLE SAYS GREECE TALKS WITH CREDITORS MORE `CONSTRUCTIVE'
BN 05/05 10:43 *GERMANY DOESN'T WANT GREECE OUT OF THE EURO, SCHAEUBLE SAYS
BN 05/05 10:43 *SCHAEUBLE COMMENTS ON FT REPORT ON IMF'S GREECE POSITION
BN 05/05 10:43 *SCHAEUBLE, DIJSSELBLOEM TO MEET IN BERLIN WEDNESDAY: SCHAEUBLE
BN 05/05 10:43 *SCHAEUBLE SAYS DEBT SUSTAINABILITY IS BASIS FOR ANY AID PROGRAM
BFW 05/05 10:44 *IMF DIDN’T SAY GREEK DEBT CUT NEEDED FOR MORE AID: SCHAEUBLE
BFW 05/05 10:44 *SCHAEUBLE SAYS GREECE TALKS WITH CREDITORS MORE ‘CONSTRUCTIVE’
BFW 05/05 10:43 *SCHAEUBLE SAYS `SKEPTICAL' ON GREECE DEAL BY MAY 11 EUROGROUP
BN 05/05 10:43 *LIMITS TO WHAT GERMANY WILL DO KEEP GREECE, SCHAEUBLE SAYS
BN 05/05 10:43 *IMF DIDN'T SAY GREEK DEBT CUT NEEDED FOR MORE AID: SCHAEUBLE
BN 05/05 10:43 *SCHAEUBLE SAYS GREECE TALKS WITH CREDITORS MORE `CONSTRUCTIVE'
BN 05/05 10:43 *GERMANY DOESN'T WANT GREECE OUT OF THE EURO, SCHAEUBLE SAYS
BN 05/05 10:43 *SCHAEUBLE COMMENTS ON FT REPORT ON IMF'S GREECE POSITION
BN 05/05 10:43 *SCHAEUBLE, DIJSSELBLOEM TO MEET IN BERLIN WEDNESDAY: SCHAEUBLE
BN 05/05 10:43 *SCHAEUBLE SAYS DEBT SUSTAINABILITY IS BASIS FOR ANY AID PROGRAM
Schaeuble Says ‘Skeptical’ on Greece Deal by May 11 Eurogroup
2015-05-05 10:46:24.101 GMT
By Brian Parkin and Rainer Buergin
(Bloomberg) -- German Finance Minister Wolfgang Schaeuble
says Greek govt’s talks with creditors more “constructive,”
though he’s “skeptical” about euro-area deal by May 11.
* On Greek exit from euro: “We don’t want that. But that
doesn’t mean we’re ready to do anything and everything”
* On Greek default risk: “We will within the range of our
possibilities do everything to avoid this and to help
Greece. But just within the framework of what we have
agreed. We have no other mandate”
* Schaeuble comments at news conference with foreign reporters
in Berlin
* Says he, Dijsselbloem to discuss Greece in Berlin on
Wednesday
* Can’t explain “why so much time has been wasted” in Greece
talks. “Now things seem to be better”
* Three creditor institutions will have to examine Greek debt
sustainability
* IMF “did not say” Greek debt cut needed for more aid, only
told euro-area officials that now more difficult for Greece
to meet debt sustainability targets: Schaeuble
* Nobody forcing Greece to accept third aid program, task now
is “fulfillment of the second program”
* Says war reparations for Greece unrelated to humanitarian
issues
* German debt reduction will help sustainable growth:
Schaeuble
* NOTE: Greek Outlook Cut by EU as Officials Press Case on
Bailout Deal Link
Link to Company News:{2539Z GR <Equity> CN <GO>}
For Related News and Information:
First Word scrolling panel: {FIRST<GO>}
First Word newswire: {NH BFW<GO>}
To contact the reporter on this story:
Brian Parkin in Berlin at +49-30-70010-6229 or
bparkin@bloomberg.net
To contact the editor responsible for this story:
Tony Czuczka at +49-30-70010-6227 or
aczuczka@bloomberg.net
2015-05-05 10:46:24.101 GMT
By Brian Parkin and Rainer Buergin
(Bloomberg) -- German Finance Minister Wolfgang Schaeuble
says Greek govt’s talks with creditors more “constructive,”
though he’s “skeptical” about euro-area deal by May 11.
* On Greek exit from euro: “We don’t want that. But that
doesn’t mean we’re ready to do anything and everything”
* On Greek default risk: “We will within the range of our
possibilities do everything to avoid this and to help
Greece. But just within the framework of what we have
agreed. We have no other mandate”
* Schaeuble comments at news conference with foreign reporters
in Berlin
* Says he, Dijsselbloem to discuss Greece in Berlin on
Wednesday
* Can’t explain “why so much time has been wasted” in Greece
talks. “Now things seem to be better”
* Three creditor institutions will have to examine Greek debt
sustainability
* IMF “did not say” Greek debt cut needed for more aid, only
told euro-area officials that now more difficult for Greece
to meet debt sustainability targets: Schaeuble
* Nobody forcing Greece to accept third aid program, task now
is “fulfillment of the second program”
* Says war reparations for Greece unrelated to humanitarian
issues
* German debt reduction will help sustainable growth:
Schaeuble
* NOTE: Greek Outlook Cut by EU as Officials Press Case on
Bailout Deal Link
Link to Company News:{2539Z GR <Equity> CN <GO>}
For Related News and Information:
First Word scrolling panel: {FIRST<GO>}
First Word newswire: {NH BFW<GO>}
To contact the reporter on this story:
Brian Parkin in Berlin at +49-30-70010-6229 or
bparkin@bloomberg.net
To contact the editor responsible for this story:
Tony Czuczka at +49-30-70010-6227 or
aczuczka@bloomberg.net
Euro Stoxx 50 Index - bearish below 3,655-3,783, risks a move lower towards 3,436
* The Index is trying to stabilize above the 23.6% Fibonacci retracement level of the entire bull cycle which started on October2014 at 2,789. The 23.6% retracement stands at 3,589.
* A sustain move below 3,589 would argue for a deeper retracement towards the 38.2% retracement which stands at 3,436.
* In order to negate the immediate downside threat the index will have to take out the April 27th high at 3,783
* The Index is also trading below the 55dma which stands at 3,655 and seems to be a good indicator in historical terms
* On the weekly chart (not attached below) a weekly bearish continuation candle was posted last week increasing the like hood of a move lower
Strategy: risk/reward (less than 1:2) doesn't justify taking a position. Step aside for now.
Daily chart
[cid:image001.png@01D08720.187246B0]
Dax30 Index - Bearish below 11,730 targeting 10,830-10,850
* The Index is trading in a corrective path. In
* Elliot wave theory, it still remains unclear if this corrective path is a corrective wave 4 or a correction from the entire bull cycle which began at the 8,354 low in Oct2014.
* On a short term scale, there is a bearish H&S pattern which targets a move to 10,830. The Neckline of this pattern stands at 11,730 and while below this level on a daily closing basis the pattern and target remain valid.
* Looking at the entire bull cycle which started in October 2014 the 38.2% Fibonacci retracement stands at 10,850. This level is pretty close to the bearish H&S target
* On the weekly chart (not attached below) a weekly bearish continuation candle was posted last week increasing the like hood of a move lower
Strategy: risk/reward (less than 1:2) doesn't justify taking a position. Step aside for now.
Daily chart
[cid:image002.png@01D0871F.9705CCA0]
Cac40 Index - Clearly Bullish above 4,930 But weekly bearish reversal last week threatens this path
* The Index is the strongest index for now as unlike others it maintains the path of higher highs and higher lows established on the chart since Oct2014
* The recent higher low is 4,930 which is also the 23.6% Fibonacci Retracement level and while above it trend remains clearly to the upside
* The Index (unlike others) is still supported by its 55dma which stands at 5,083 and if we get a move below this level (daily closing basis) downside pressure should accelerate
* On a weekly scale, the Index posted a bearish outside week against the highs. A move below last week low at 4,987 should accelerate downside pressure and argue for a minimum test of 4,930
Strategy: Step aside for now.
Daily chart
[cid:image003.png@01D08722.0CB5E730]
Russell 2000 Index - Bearish Wedge breakdown targets the 200dma
* The Index broke down from a bearish Wedge pattern - the breakdown level is 1,245-1,250 and the target of this pattern is near the 200dma which stands at 1,180
* On a weekly scale, the index posted a bearish weekly reversal last week. This bearish signal increase the odds we move lower. In order to confirm this bearish reversal will need to see a move below last week low whish stands at 1,216
Strategy: Short from 1,242, target 1,185 with a stop at 1,263.
Daily chart
[cid:image004.png@01D08723.095BF150]
S&P 500 Index - Still in a range putting upside pressure on the 2,119-2,125 resistance area. Support at 2,072
* The Index continues to hold the path of higher highs and higher lows and continues to put upside pressure on the 2,119-2,125 resistance level
* One can see that the index continues to hold the path of higher highs and higher lows with the recent higher low standing at 2,072.
* Under the assumption that in an uptrend buyers come in at a higher level on every dip one should keep in mind that while above 2,072 (recent higher low) the trend remains clearly to the upside.
* That being said, lack of momentum, low volume, divergence on all time frames and large gap between moving averages and the price (especially on the weekly chart) make the risk/reward in chasing this uptrend pretty risky.
* INTERESTING, On the monthly scale if one measures the time it took for the index to make a high at 2000 and then at 2007 and then measures the time scale since the 2007 high was established THEY ARE SIMILAR. This from a cycle perspective when added up to the weakening technical picture increases the odds we are in process of making some kind of top.
Daily chart
[cid:image005.png@01D08724.4619C210]
Monthly chart
[cid:image007.jpg@01D08724.974C0B20]
2015 TECHNICAL TRADE IDEAS
[cid:image006.png@01D08725.4E985450]
* The Index is trying to stabilize above the 23.6% Fibonacci retracement level of the entire bull cycle which started on October2014 at 2,789. The 23.6% retracement stands at 3,589.
* A sustain move below 3,589 would argue for a deeper retracement towards the 38.2% retracement which stands at 3,436.
* In order to negate the immediate downside threat the index will have to take out the April 27th high at 3,783
* The Index is also trading below the 55dma which stands at 3,655 and seems to be a good indicator in historical terms
* On the weekly chart (not attached below) a weekly bearish continuation candle was posted last week increasing the like hood of a move lower
Strategy: risk/reward (less than 1:2) doesn't justify taking a position. Step aside for now.
Daily chart
[cid:image001.png@01D08720.187246B0]
Dax30 Index - Bearish below 11,730 targeting 10,830-10,850
* The Index is trading in a corrective path. In
* Elliot wave theory, it still remains unclear if this corrective path is a corrective wave 4 or a correction from the entire bull cycle which began at the 8,354 low in Oct2014.
* On a short term scale, there is a bearish H&S pattern which targets a move to 10,830. The Neckline of this pattern stands at 11,730 and while below this level on a daily closing basis the pattern and target remain valid.
* Looking at the entire bull cycle which started in October 2014 the 38.2% Fibonacci retracement stands at 10,850. This level is pretty close to the bearish H&S target
* On the weekly chart (not attached below) a weekly bearish continuation candle was posted last week increasing the like hood of a move lower
Strategy: risk/reward (less than 1:2) doesn't justify taking a position. Step aside for now.
Daily chart
[cid:image002.png@01D0871F.9705CCA0]
Cac40 Index - Clearly Bullish above 4,930 But weekly bearish reversal last week threatens this path
* The Index is the strongest index for now as unlike others it maintains the path of higher highs and higher lows established on the chart since Oct2014
* The recent higher low is 4,930 which is also the 23.6% Fibonacci Retracement level and while above it trend remains clearly to the upside
* The Index (unlike others) is still supported by its 55dma which stands at 5,083 and if we get a move below this level (daily closing basis) downside pressure should accelerate
* On a weekly scale, the Index posted a bearish outside week against the highs. A move below last week low at 4,987 should accelerate downside pressure and argue for a minimum test of 4,930
Strategy: Step aside for now.
Daily chart
[cid:image003.png@01D08722.0CB5E730]
Russell 2000 Index - Bearish Wedge breakdown targets the 200dma
* The Index broke down from a bearish Wedge pattern - the breakdown level is 1,245-1,250 and the target of this pattern is near the 200dma which stands at 1,180
* On a weekly scale, the index posted a bearish weekly reversal last week. This bearish signal increase the odds we move lower. In order to confirm this bearish reversal will need to see a move below last week low whish stands at 1,216
Strategy: Short from 1,242, target 1,185 with a stop at 1,263.
Daily chart
[cid:image004.png@01D08723.095BF150]
S&P 500 Index - Still in a range putting upside pressure on the 2,119-2,125 resistance area. Support at 2,072
* The Index continues to hold the path of higher highs and higher lows and continues to put upside pressure on the 2,119-2,125 resistance level
* One can see that the index continues to hold the path of higher highs and higher lows with the recent higher low standing at 2,072.
* Under the assumption that in an uptrend buyers come in at a higher level on every dip one should keep in mind that while above 2,072 (recent higher low) the trend remains clearly to the upside.
* That being said, lack of momentum, low volume, divergence on all time frames and large gap between moving averages and the price (especially on the weekly chart) make the risk/reward in chasing this uptrend pretty risky.
* INTERESTING, On the monthly scale if one measures the time it took for the index to make a high at 2000 and then at 2007 and then measures the time scale since the 2007 high was established THEY ARE SIMILAR. This from a cycle perspective when added up to the weakening technical picture increases the odds we are in process of making some kind of top.
Daily chart
[cid:image005.png@01D08724.4619C210]
Monthly chart
[cid:image007.jpg@01D08724.974C0B20]
2015 TECHNICAL TRADE IDEAS
[cid:image006.png@01D08725.4E985450]
