>>> US Gapping up

Gapping up
In reaction to strong earnings/guidance: BGI +10.4%, LEN +2%, BLK +1.3%, FAST +1.2%

M&A news: FISH +6.9% (FISH to acquire Legacy Gathering System for $162.5 mln From Azure Midstream Energy, and Marlin's General Partner to be acquired by Azure), EML +2.3% (The Eastern Company confirms approach from (SYNL) for possible acquisition of EML for $6.69 per share in cash and ~$12.43 in shares of Synalloy common stock; determines proposal is not is best interest of shareholders)

Select EU related names showing strength: OUBS +7.1%, LOGI +5.8%, SYT +4.8%, NVS +4.2%, ABB +3%, CS +2.6%, .

Select metals/mining stocks trading higher: HMY +7%, AG +6.6%, AU +5.6%, GOLD +4.9%, IAG +4.8%, AUY +4.8%, GDX +4.7%, AEM +4.5%, GG +4.4%, GFI +4.4%, SSRI +3.8%, SLW +3.6%

Other news: PPC +14.2% (announces special cash dividend of $5.77 per share), MUX +13.4% (reports record production in 2014;), PT +10.2% (still checking), NVEE +8.1% (selected by the City of Colorado Springs to provide professional engineering services ), FLML +5.2% (following nearly 40% drop yesterday), CDE +4.5% (nnounces fourth quarter production of 4.3 mln ounces of silver and 64,534 ounces of gold), WYY +3.4% ( has been awarded a contract by an existing federal agency customer for wireless Telecom Expense Management services), SWN +2.2% (prices upsized offerings of 26,086,957 shares of common stock and 30 mln Depositary Shares representing interests in Mandatory Convertible Preferred Stock), GPRO +1.7% (cont pre-mkt vol), ESLT+1.4% (awarded ~$117 mln in contracts to supply Command and Control, and Communications Systems to the Israeli Ministry of Defense), OKE +1.1% ((increased quarterly cash dividend by 3%, to $0.605/share from $0.59/share)), ADBE +0.9% (announces program to repurchase $2.0 billion of stock by end of fy2017)

Analyst comments: BHP +2.2% (upgraded to Buy from Neutral at Goldman -- Added to Conviction Buy List), MGI +2% (upgraded to Overweight from Neutral at JP Morgan), KRFT +1.7% (upgraded to Buy from Neutral at Goldman -- Added to Conviction Buy List), YELP +1.6% (upgraded to Hold form Sell at Evercore ISI), GLW +1.2% (upgraded to Overweight from Neutral at JP Morgan), CF +1.1% (upgraded to Buy from Neutral at Goldman), GPN +0.9% (upgraded to Overweight from Neutral at JP Morgan)

>>> US Gapping down

Gapping down
In reaction to disappointing earnings/guidance: EDUC -20.2%, BBY -9.3%, GEF -4.7%, REG -2.8%, (also plans to commence an underwritten public offering of up to 2,500,000 shares of its common stock in connection with the forward sale agreement), BAC -2.6%, CLC -2.4%, IKAN -1.5%, ARTX -1.2%

M&A news: BBRY -15.9% (following late spike on Reuters report suggesting SSNLF for BBRY M&A).


Other news: RSH -29.3% (WSJ discusses the potential for RadioShack (RSH) bankruptcy filing), FRO -6.8% (still checking), TERP -2.4% (announces public offering of $350 mln common stock), ADXS -1.6% (still checking), CEL -1.1% (to potentially issue new debentures in amount of up to ~NIS 430 million).

Analyst comments: GDOT -2% (downgraded to Neutral from Overweight at JP Morgan), BGC -1.7% (downgraded to Neutral from Buy at Longbow ), DDR -1.5% (downgraded to Neutral from Overweight at JP Morgan), CSC -1.5% (owngraded to Underweight from Neutral at JP Morgan), PM -1% (downgraded to Sell from Neutral at Goldman), JNJ -1% (downgraded to Sell from Neutral at Goldman).

>>> Citigroup misses by $0.04, misses on revs

Citigroup misses by $0.04, misses on revs

Reports Q4 (Dec) earnings of $0.06 per share, excluding non-recurring items, $0.04 worse than the Capital IQ Consensus Estimate of $0.10; revenues rose 0.2% year/year to $17.81 bln vs the $18.53 bln consensus.
  • Legal and related expenses and repositioning charges totaled $3.5 billion in the current quarter, compared to $1.0 billion in the prior year period.
Citigroup
  • Citigroup revenues of $17.8 billion in the fourth quarter 2014 were unchanged from the prior year period. Citigroup's net income declined to $350 million in the fourth quarter 2014 from $2.5 billion in the prior year period.
  • Citigroup's operating expenses were $14.4 billion in the fourth quarter 2014, 21% higher than the $11.9 billion in the prior year period..
  • Citigroup's loans were $645 billion as of quarter end, down 3% from the prior year period.
  • Citigroup's book value per share was $66.16 and its tangible book value per share was $56.83.
Citicorp
  • Citicorp revenues of $16.5 billion in the fourth quarter 2014 were unchanged from the prior year period.
  • Global Consumer Banking GCB revenues of $9.4 billion were unchanged from the prior year period, as growth in North America was offset by a decline in international revenues on a reported basis.
Institutional Clients Group
  • ICG revenues rose 2% from the prior year period to $7.2 billion. Banking revenues of $4.1 billion increased 1% from the prior year period (excluding gain / (loss) on loan hedges in each period), primarily reflecting growth in Private Bank and Corporate Lending revenues.
    • Investment Banking revenues decreased 7% versus the prior year period, driven by a 19% decrease in equity underwriting revenues to $252 million, a 4% decrease in debt underwriting revenues to $550 million and a 1% decrease in advisory revenues to $263 million. Corporate Lending revenues rose 9% versus the prior year period to $431 million (excluding gain / (loss) on loan hedges in each period) reflecting growth in average loans and lower funding costs.
    • Fixed Income Markets revenues of $2.0 billion in the fourth quarter 2014 (excluding $9 million of CVA/DVA, compared to negative $153 million in the prior year period) decreased 16% from the prior year period, driven by difficult trading conditions in spread products as well as a challenging macroeconomic environment that impacted the rates business. Equity Markets revenues of $471 million (excluding $7 million of CVA/DVA) were down 3% versus the prior year period, driven by lower trading revenues in cash equities in EMEA.
Citi Holdings
  • Citi Holdings revenues of $1.3 billion in the fourth quarter 2014 included CVA/DVA of negative $5 million, compared to $1 million in the prior year period. Excluding CVA/DVA, Citi Holdings revenues increased slightly from the prior year period driven by higher gains on asset sales and lower cost of funds. As of the end of the quarter, Citi Holdings assets were $98 billion, 16% below the prior year period, and represented approximately 5% of total Citigroup assets. Citi Holdings net income, excluding CVA/DVA, was $161 million, up from a loss of $432 million in the prior year period, reflecting lower operating expenses and lower net credit losses, partially offset by a lower net loan loss reserve release.

>>> Bank of America beats by $0.01, misses on revs

Bank of America beats by $0.01, misses on revs

Reports Q4 (Dec) earnings of $0.32 per share, excluding non-recurring items, $0.01 better than the Capital IQ Consensus Estimate of $0.31; revenues fell 12.7% year/year to $20.15 bln vs the $21.01 bln consensus.
  • Results for the most recent quarter exclude three adjustments that, in aggregate, reduced revenue in the fourth quarter of 2014 by $1.2 billion (pretax) and lowered earnings per share by $0.07. These adjustments were:
    • $578 million negative market-related net interest income (NII) adjustment, driven by the acceleration of bond premium amortization on the company's debt securities portfolio due to lower long-term interest rates;
    • One-time transitional charge of $497 million related to the adoption of funding valuation adjustments on uncollateralized derivatives i
    • $129 million in net DVA losses related to a tightening of the company's credit spreads.
  • Net interest income, on an FTE basis, was $9.9 billion in the fourth quarter of 2014, down $1.1 billion from the year-ago quarter. The decline was driven by a $788 million negative swing year-over-year in market-related adjustments as discussed above, and lower loan balances and yields.
  • Consumer and Business Banking reported net income of $1.8 billion, compared to $2.0 billion in the year-ago quarter. The decline was driven by higher provision for credit losses as a result of the slowing pace of improvements in credit quality.
  • The company originated $11.6 billion in first-lien residential mortgage loans and $3.4 billion in home equity lines during the fourth quarter of 2014, compared to $11.7 billion and $3.2 billion in the prior quarter.
  • Global Wealth and Investment Management reported net income of $706 million, compared to $778 million in the fourth quarter of 2013. Revenue increased 3 percent from the year-ago quarter to $4.6 billion, driven by higher noninterest income with record asset management fees, partially offset by lower transactional activity.
  • Global Banking reported net income of $1.4 billion in the fourth quarter of 2014, up $178 million, or 14 percent, from the year-ago quarter, driven by a reduction in the provision for credit losses and a decline in noninterest expense partly offset by lower revenue. Revenue of $4.1 billion declined 6 percent from the year-ago quarter, reflecting lower investment banking fees and net interest income.
    • Equities sales and trading revenue, excluding net DVA/FVA, was up modestly from the fourth quarter of 2013 to $911 million despite a challenging market environment.
Capital
  • The common equity tier 1 capital ratio under the Basel 3 was 12.3 percent at December 31, 2014 and 12.0 percent at September 30, 2014. The estimated common equity tier 1 capital ratio under the Basel 3 Advanced approaches was 9.6 percent at both December 31, 2014 and September 30, 2014.
  • The estimated supplementary leverage ratio (SLR) for the Bank Holding Company was approximately 5.9 percent.
  • Tangible book value per share of common stock was $14.43 at December 31, 2014, compared to $13.79 at December 31, 2013. Book value per share was $21.32 at December 31, 2014, compared to $20.71 at December 31, 2013.

>>> Best Buy reports adj. holiday comps +2.6%, raises comp guidance to in-line w

Best Buy reports adj. holiday comps +2.6%, raises comp guidance to in-line with estimates, raises operating margin guidance slightly; guides 1H16 comps, margins down

  • Co reports holiday (9 weeks) comps +2.6% ex-80 bps benefit from mobile phone installment billing -- co raises adj. comps to near 1% (~in-line with estimates) from near flat.
  • Co raises Q4 operating margin guidance to +75-90 bps YoY from +50 bps previously.
  • Co sees 1H16 comps flat to negative low-single digits vs. ests just under +1%; sees non-GAAP operating margin down 30-50 bps YoY
"A compelling merchandise assortment, strong multi-channel execution, and a more favorable year-over-year macroeconomic environment drove these better-than-expected results. We were also able to capitalize on the product cycles in large screen televisions and mobile phones. These two categories were the primary drivers of our year-over-year revenue growth, more than offsetting significant weakness in tablets. Domestic online revenue of $1.49 billion increased 13.4% on a comparable basis due to (1) substantially improved inventory availability made possible by the chain-wide rollout of our ship-from-store capability in January 2014; (2) higher conversion rates; and (3) increased traffic driven by greater investment in online digital marketing...

As such, we are increasing our fourth quarter financial outlook, excluding the Five Star business in China, as follows: (1) Enterprise comparable sales growth, excluding the impact of installment billing, near 1% versus our previous outlook of near flat; and (2) non-GAAP operating income rate expansion of 75 to 90 basis points versus our previous outlook of 50 basis points. This operating income rate expansion, similar to our previous outlook, will come from (1) gross profit rate expansion, despite the pressure of growth in our lower-margin online channel; and (2) fixed SG&A sales growth leverage assuming near flat year-over-year SG&A dollars"

1H16 warning: "we do expect the impact of the external pressures he laid out [(1) deflationary pricing; (2) weak industry demand in NPD-reported Consumer Electronics categories; (3) declining demand for extended warranties; as well as (4) exchange rate volatility in our International businesses] to continue throughout FY16 and the impact of the incremental investments to begin in the first quarter. Additionally, we believe that the positive Domestic sales trends that we saw in mobile phones and home theater during the holiday period, in addition to the share gains we saw across other NPD-reported Consumer Electronics categories, were partially driven by the excitement around high-profile products and will not likely continue at holiday levels. As such, while we are excited about these investments and confident in our ability to execute against them, we are also appropriately cautious about the pressures. Therefore, we are currently expecting enterprise comparable sales in the first half of FY16, excluding the estimated impact of installment billing, to be flat to negative low-single digits (ests are near +1%) and the non-GAAP operating income rate to be down ~30 to 50 basis points -- reflecting a more modest sales environment and the impact of our incremental investments and SG&A inflation.

(BofA-ML) With the Swiss temporarily abandonment their EUR/CHF, we try to draw s

With the Swiss temporarily abandonment their EUR/CHF, we try to draw some early guesses on IMPACT:
1. There will be significant losses in Swiss rates markets amongst banks & clients
2. There will be significant losses in $/CHF positions amongst speculative clients using $/CHF as a EUR/$ proxy
3. In EUR/CHF there will be losses amongst structured & private clients who sold downside optionality short
4. #1 and #2 are likely big enough to create a “risk off” tone as losses are felt and VAR limits shrink: IMPACT SOON
5. #3 could mean that other popular fully funded positions in retail space such as long Gold may be liquidated to fund losses: IMPACT SLOWER
6. This blatant mistake by the SNB (allowing their currency to move 30% at one point) will bring into question our trust of CB’s globally
Those are our first guesses and we very much welcome all other ideas of impact and consequences.