(BofA-ML) The Flow Show - Two buy signals & a flash crash

* Buy the “flash crash”: as in Oct’14 a Treasury “flash crash” has coincided in early- Jan with a “buy signal” for oversold risk markets and tactical inflection point for markets

* Two “buy signals”:
- BofAML Bull & Bear Index triggers contrarian “buy” signal (Chart 1 - excessive bearish investor sentiment driven by big EM & HY outflows & weak price action in junk bonds);
- BofAML Global Breadth Rule on brink of triggering “buy” signal (Chart 2 - at Wednesday close net 80% of global equity markets trading below 200dma & 50dma, with US, China, Turkey the holdouts)
- “Risk-on” into ECB: our signals tactically argue for “risk-on” exposure in equity & credit markets into the ECB QE event on Jan 22nd (assuming US payrolls are robust)
- Volatility the Q1 winner: we worry a large ECB QE package in Jan will mark “peak QE expectations” leaving Europe/global risk markets in Q1 solely dependent on growth & EPS. And global govt bond yields could rise: fixed income markets have heavily discounted ECB QE (stock of negatively yielding Euro debt now stands at a staggering €1.2 trillion); in 3-months following Fed QE announcements 30-year Treasury yield rose on average 50bps. Volatility the only true winner if low growth, lower liquidity expectations cause investors to discount “policy failure” in coming months.
- Weekly flows: in line with bearish consensus, weekly flows showed “risk-off” rotation from equity funds ($12.1bn outflows) to bond funds ($5.3bn inflows) and money-markets ($9.0bn inflows)

* Asset Class Flows
- Equities: $12.1bn outflows ($7.8bn outflows from ETF’s vs $4.3bn outflows from mutual funds)
- Bonds: $5.3bn inflows (largest in 8 weeks) (Table 1)
- Precious metals: $0.2bn outflows (6 straight weeks)
- Money-markets: $9.0bn inflows

* Equity Flows
- EM: 8 straight weeks of redemptions ($1.3bn) (Table 2)
- US: $12.8bn outflows (via both ETF’s and mutual funds)
- Japan: $0.5bn inflows
- Europe: modest $0.3bn outflows

* Fixed Income Flows
- 55 straight weeks of inflows to IG bond funds ($5.4bn)
- 6 straight weeks of outflows from HY bond funds ($1.9bn)
- 5 straight weeks of outflows from EM debt funds ($0.5bn)
- 26 straight weeks of outflows from bank loan funds ($0.5bn) (Chart 3)
- 16 straight weeks of inflows to muni funds ($1.2bn)
- 12 straight weeks of inflows to MBS funds ($0.7bn)
- $1.0bn inflows to govt/tsy funds

>>> Sky shares gain as talk of takeover bid from Vodafone resurfaces

Sky shares gain as talk of takeover bid from Vodafone resurfaces 

Sky’s share price gained 2% yesterday, 8 January, on renewed talk that the listed UK-based satellite television broadcaster will receive a takeover bid from the FTSE-100 telecoms group Vodafone, The Times reported. The newspaper’s market report section did not cite a source for the speculation.

A market report in the Financial Times also briefly mentioned the rehashed speculation of a Vodafone bid for Sky, but did not cite a source.

Sky shares closed 17.5p up at 887p in London, giving the company a market capitalisation of GBP 15.24bn (EUR 19.48bn). Vodafone’s share price closed 9.75p up at 225.75p, a gain of 4.51%.

The Times (London), Financial Times

>>> What to look at today - 9th of January 2015

Dow+1,84% S&P +1,79% Nasdaq +1,84% Russell +1,71% VIX @ 17.01 -11.91%
US Market spiked again today, S&P surged past its 50d & 100d MA. Fed insider Jon Hilsenrath of the Wall Street Journal wrote this morning that the Fed could indeed raise rates soon if it is believed that low yields at the long end of the curve reflect an influx of capital into dollar-denominated assets, which could spark a surge in prices. Mr. Hilsenrath added that this was the view espoused by NY Fed President and this year's voting member William Dudley, who argued a similar situation presented itself in 2000s, leading to the housing bubble, All ten sectors finished the day in positive territory with cyclical groups pacing the rally. The materials sector (+2.4%) ended atop the leaderboard, but more notably, the technology sector, which is roughly six times the size of materials, jumped 2.2%. (AAPL +3.8%)... energy sector (+2.2%) was able to finish among the leaders even though crude oil remained on slippery footing. The energy component crept above the $49.50/bbl level overnight, but was beaten back to its flat line. The commodity was down in excess of 1.0% intraday, but fought back to a slim gain of 0.2% at $48.80/bbl....Volume in line with average @ 830mil shares... US Rally has been carried over to Asia...China inflation data were mixed, as December CPI matched expectations of 1.5% and also marked the first y/y sequential increase in 7-months, having hit a 5-year low of 1.4% in November. For the year, 2014 CPI came in at 2.0%, unchanged from YTD level in Nov and also well below 3.5% official target, China will release its trade data over the weekend
Nikkei +0.18% Hang Seng +0.97% Shanghai +1.68%

RUB $59.97 RUB €71.31 WTI $49.19 Brent $51.17

Eur$ 1.1798 S&P -0.16% EuroStoxx -0.83% Dax -0.41% SMI -0.25%

Macro :
- China Dec. Consumer Prices Rise 1.5% Y/y; Est. 1.5% Gain
- ECB’s Coeure: France’s Reforms Are Step in Right Direction
- ECB’s Coeure Says Drop in Oil Prices Good News for Euro Economy
- SNB 2014 Expects CHF38b Profit on Foreign Exchange, Gold Gains
- German Nov. Industrial Production Falls 0.1% M/m; Est. +0.3% M/m


Keep an eye on :
- ABG/P SM : Abengoa to Cut Debt by 30% in 2015, CEO Says: Expansion
- ADXN SW : Addex Year-End Cash Drops to CHF1.8m, Sees Data in Coming Months
- ALPH SW : Alpiq Sees CHF1b Impairments After Tax on Low Wholesale Prices
- AREVA FP : Areva Names Philippe Varin Chairman of Board of Directors
- BBVA SM : BBVA Expressed Interest In Novo Banco, Jornal de Negocios Says
- BMW GY : Shanghai to Give Free License Plates to BMW i3 Car Owners
- DWNI GY : Deutsche Wohnen Extends Appointment of CEO Zahn Through 2020
- ERICB SS : Ericsson Claims TCL Comm Smartphones Infringe 5 Mobile Patents
- HFG LN : Hilton Food Says 2014 Results in Line With Board Forecasts
- JEN BB : Jensen Family Buys Additional EU922,484 of Jensen-Group Stock
- MRW LN : Morrison Said to Plan 4-Year Running Sponsorship Deal: Sky
- PTC PL : Portugal Telecom Didn’t Properly Apply Risk Policy: PWC
- PTC PL : Ongoing Says Altice PT Offer Is Best Known Alternative at Moment
- QIA GY : Qiagen Exceeds ’14 Goal to Achieve 1,250 QIAsymphony Placements
- ROG VX : Roche Says FDA Approves Screening Assay for Blood Donations
- SAN FP : Sanofi, Regeneron Say Alirocumab Monthly Dose Meets Trial Goal
- SAN SM : Santander to Sell Shrs at EU6.18/Shr in EU7.5b Capital Increase
- SAN SM : Santander Not Looking at Banca Monte Dei Paschi, CEO Says
- SW FP : Sodexo 1Q Organic Sales Growth 2.3%, Confirms FY Targets
- TUI1 GY : TUI Buys MS Europa 2 for EU278m From Otto Mihm, FAZ Reports

>>> Brokers Upgrades & Downgrades - 9th of January 2015

>>> Up
*BCP RAISED TO NEUTRAL VS REDUCE AT NOMURA
*FIAT CHRYSLER RAISED TO NEUTRAL VS UNDERPERFORM: CREDIT SUISSE
*HALFORDS RAISED TO OVERWEIGHT AT HSBC
*HENDERSON GROUP RAISED TO OVERWEIGHT VS NEUTRAL AT JPMORGAN
*MERCK KGAA RAISED TO OUTPERFORM VS NEUTRAL AT CREDIT SUISSE
*MORGAN SINDALL RAISED TO BUY VS HOLD AT JEFFERIES
*PEUGEOT RAISED TO NEUTRAL VS UNDERPERFORM AT CREDIT SUISSE
*RECKITT BENCKISER RAISED TO NEUTRAL VS SELL AT UBS
*VEOLIA RAISED TO NEUTRAL VS UNDERPERFORM AT CREDIT SUISSE

>>> Down
*ASHMORE GROUP CUT TO UNDERWEIGHT VS NEUTRAL AT JPMORGAN
*BARRATT DEVELOPMENTS CUT TO UNDERPERFORM VS BUY AT JEFFERIES
*BELLWAY CUT TO HOLD VS BUY AT JEFFERIES
*BERKELEY GROUP CUT TO UNDERPERFORM VS HOLD AT JEFFERIES
*BOVIS CUT TO HOLD VS BUY AT JEFFERIES
*COLT CUT TO UNDERWEIGHT VS NEUTRAL AT JPMORGAN
*COUNTRYWIDE CUT TO HOLD VS BUY AT JEFFERIES
*CREST NICHOLSON CUT TO HOLD VS BUY AT JEFFERIES
*DUERR CUT TO NEUTRAL AT HSBC
*LSL CUT TO HOLD VS BUY AT JEFFERIES
*MAUNA KEA TECHNOLOGIES CUT TO SELL VS HOLD AT SOCGEN
*MILLICOM CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
*PERSIMMON CUT TO UNDERPERFORM VS HOLD AT JEFFERIES
*REDROW CUT TO HOLD VS BUY AT JEFFERIES
*RIGHTMOVE CUT TO UNDERPERFORM VS HOLD AT JEFFERIES
*STAGECOACH CUT TO NEUTRAL VS OVERWEIGHT AT HSBC
*TAYLOR WIMPEY CUT TO HOLD VS BUY AT JEFFERIES
*TURK HAVA YOLLARI CUT TO NEUTRAL VS BUY AT UBS
*ZOOPLA CUT TO HOLD VS BUY AT JEFFERIES
*ZURICH INSURANCE CUT TO SELL VS HOLD AT SOCGEN

>>> PT Changes


>>> Initiation
*TSB RATED NEW EQUALWEIGHT AT BARCLAYS, PT 270P
*VIRGIN MONEY RATED NEW OVERWEIGHT AT BARCLAYS, PT 370P

>>> Call
>> Stock
*ATLANTIA ADDED TO GOLDMAN CONVICTION BUY LIST

(BFW) Santander to Sell Shrs at EU6.18/Shr in EU7.5b Capital Increase

Santander to Sell Shrs at EU6.18/Shr in EU7.5b Capital Increase
2015-01-08 22:11:23.600 GMT


By Robin Stringer
(Bloomberg) -- Bank to sell 1.21b shrs, it says in
regulatory filing.
* Bank was offering shrs in range EU6.18-EU6.50, person
familiar said earlier
* NOTE: Earlier, Santander Plans Capital Increase of Up to
EU7.5 Billion: Link

Link to Company News:SAN SM <Equity> CN <GO>

For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>

To contact the editor responsible for this story:
Robin Stringer at +1-212-617-2526 or
rstringer7@bloomberg.net

>>> Asian Update

Asian Mid-session Update: China ends 2014 with a sequential uptick in CPI; Investors await NFP after a 2-day rally


***Economic Data***
- (CN) CHINA DEC CPI Y/Y: 1.5% V 1.5%E (first sequential y/y rise in 7 months)
- (CN) CHINA DEC PPI Y/Y: -3.3% V -3.1%E (34th straight month of decline); Largest decline since Sept 2012
- (AU) AUSTRALIA NOV RETAIL SALES M/M: 0.1% V 0.2%E (6th consecutive month of increase)
- (AU) AUSTRALIA DEC AIG PERFORMANCE OF CONSTRUCTION INDEX: 44.4 V 45.4 PRIOR (2nd month of contraction)
- (NZ) NEW ZEALAND NOV BUILDING PERMITS M/M: 10.0% V 9.8% PRIOR (12-month high)
- (JP) JAPAN DEC OFFICIAL RESERVE ASSETS: $1.26T V $1.27T PRIOR

***Index Snapshot (as of 03:30 GMT)***
- Nikkei225 +0.6%, S&P/ASX +1.2%, Kospi +1.4%, Shanghai Composite +0.3%, Hang Seng +1.1%, Mar S&P500 -0.1% at 2,053

***Commodities/Fixed Income***
- Feb gold +0.2% at $1,211, Feb crude oil +0.9% at $49.25/brl, Mar Copper flat at $2.76/lb
- SLV: iShares Silver Trust ETF daily holdings rise to 10,260 tonnes from 10,216 tonnes priors; first rise since Dec 11
- (US) Weekly Fed Balance Sheet Total Assets for week ending Jan 7th: $4.50T v $4.50T prior; M1 y/y change: 9.5% v 9.4% w/w; M2 y/y change: 5.8% v 5.8% w/w
- (JP) BOJ to buy ¥400B in 1-3yr JGB, ¥400B in 3-5 yr JGB, ¥240B in 10-25yr JGB and ¥140B in JGB with maturity over 25-yr
- USD/CNY: (CN) PBoC sets yuan mid point at 6.1296 v 6.1302 prior setting (first firmer Yuan setting since Dec 31st)

***Market Focal Points/Key Themes/FX***
- The rally in US equities has once again carried over to Asia, where materials and tech driven Australia and Korea are leading the charge. Gains in Shanghai are slightly more subdued, as IPO expectations and a 70pip retreat in USD/JPY to 119.20 have capped the rebound. Markets are also on edge going into the non-farm payrolls report in the US, following better than expected ADP and weekly claims releases earlier this week.

- China inflation data were mixed, as December CPI matched expectations of 1.5% and also marked the first y/y sequential increase in 7-months, having hit a 5-year low of 1.4% in November. For the year, 2014 CPI came in at 2.0%, unchanged from YTD level in Nov and also well below 3.5% official target. Wholesale inflation - PPI - was in the red for the 34th consecutive month and also deteriorated to -1.9% for 2014 from -1.8% YTD in November. After posting a record surplus last month on the back of falling imports, China will release its trade data over the weekend.

- In Australia, the construction sector registered its 2nd month of contraction, which should help diminish RBA concerns over housing inflation and potentially reintroduce a dovish bias to its next policy statement. Retail sales were also underwhelming at just 0.1%, although that did mark the 6th consecutive month of sequential growth. AUD/USD is up for the 2nd day, rising about 40pips from the lows above $0.8140.

- After yesterday's remarks from Fed dove Evans calling any potential 2015 rate hike "catastrophic", Minnesota Fed Pres Kocherlakota also spoke about the importance of Fed credibility around the 2% inflation target. The dovish dissenter from 2014 added that unemployment remains elevated in calling for caution on tightening, pointing to low energy prices and disinflationary forces around the world. US equity futures briefly traded higher as Kocherlakota made his dovish remarks.

***Equities***
US markets:
- SD: Reports Q3 $0.07 v $0.02e, R$394.1M v $398Me; +12.3% afterhours
- PRTO: Journal of Cardiovascular Pharmacology Publishes Positive Nonclinical Results of PRT-201 in Peripheral Artery Disease; +3.6% afterhours
- HK: Makes additional cuts to 2015 Drilling & Completion Budget; +1.9% afterhours
- SF: Stifel and Urban Edge to be added to S&P400; +1.0% afterhours
- AAPL: Carl Icahn: Apple is still undervalued; Apple is my favorite stock - CNBC interview; +0.4% afterhours
- TWTR: Carl Icahn: Not involved in Twitter; Does not own any Twitter; Only looked peripherally into Twitter - CNBC interview; -0.1% afterhours
- CUDA: Reports Q3 $0.06 v $0.05e, R$70.4M v $70.1Me; -0.4% afterhours
- SBUX: COO Troy Alstead to take extended unpaid leave; effective March 1; transition plans to be detailed on Jan 22; -1.8% afterhours
- M: Reports Nov/Dec SSS +2.7%; affirms FY14 guidance; Announced a series of initiatives to evolve its business model and invest in continued growth opportunities as consumers change the way they shop; -3.2% afterhours
- BBBY: Reports Q3 $1.19 (ex benefits, incl litigation) v $1.19e, R$2.94B v $2.97Be; -3.5% afterhours
- RT: Reports Q2 -$0.15 v -$0.14e, R$262.7M v $268Me; -8.5% afterhours
- TCS: Reports Q3 $0.07 v $0.07e, R$190.9M v $200Me; Cuts FY14 guidance; -9.0% afterhours
- FIVE: Reports holiday SSS +3.2%; Affirms Q4 $0.59-0.60 v $0.62e, Narrows lower R$262-263M (prior $262-266M) v $266Me, SSS +3; -14.3% afterhours
- CNAT: Announces Top-Line Results From ACLF and Organ Impairment Clinical Trials of Emricasan; -36.1% afterhours

Notable movers by sector:
- Consumer Discretionary: Chow Tai Fook Jewellery Group 1929.HK -6.6% (Q3 SSS result); Fast Retailing 9983.JP +3.1% (Q1 results)
- Financials: Agile Property Holdings 3383.HK +1.2% (Dec sales result); KWG Property Holding 1813.HK +1.8% (Dec sales result)
- Materials: Queensland Bauxite QBL.AU +10.5% (issues update on approvals); Flinders Mines FMS.AU +5.3% (provides update on resource estimates)
- Industrials: Dalian Port 601880.CN +10.0%, Dalian Huarui Heavy Industry Group 002204.CN +3.4%, Dalian Friendship Group 000679.CN +3.0% (Dalian submits plan for free trade zone trial); Kawasaki Heavy Industries 7012.JP +2.8% (FY14/15 to beat forecast)
- Healthcare: Sosei Group Corp 4565.JP +4.6% (submits regulatory filings to FDA)

>>> US After Hours Summary: SD +7.7%, HELE +5.5%, SUNE +1.5%, EOPN -34

After Hours Summary: SD +7.7%, HELE +5.5%, SUNE +1.5%, EOPN -34.7%, FIVE -15.1%, BBBY -3.9%, M -2.7% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: SD +7.7%, HELE +5.5%, BAMM +1.8%, SUNE +1.5%

Companies trading higher in after hours in reaction to news: RVNC +11.9% (announced publication of positive results from RT002 Phase 1/2 study in which RT002 achieved median duration of 7 mos, met its efficacy and safety endpoints), PRTO +3.6% (announced publication of nonclinical data on PRT-201 in peripheral artery disease), GILD +1.7% (seeing reports that health insurer Anthem has selected Harvoni as hepatitis C drug of choice), SF +1.0% (to replace IRF in the S&P MidCap 400)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: EOPN -34.7%, FIVE -15.1%, RT -9.9%, TCS -8.5%, BBBY -3.9%, M -2.7%, VOXX -2.5%, CUDA -0.4%, GPS -0.3%, ANGO -0.2%, ABBV -0.2%

Companies trading lower in after hours in reaction to news: CNAT -35.1% (announced top-line results from acute-on-chronic liver failure and organ impairment clinical trials of emricasan; co has decided to discontinue the acute-on-chronic liver failure trial due to logistical challenges), SBLK -18.1% (co plans to make an underwritten public offering of its common stock; size not disclosed), ADMP -7.9% (co will offer shares of its common stock in an underwritten public offering; size not disclosed), KBIO -6.5% (CEO David W. Pritchard announced retirement), GMLP -5.0% (announced secondary offering of 7,170,000 common units by Golar LNG Limited (GLNG)), ADHD -2.8% (announced it intends to offer its ordinary shares in a public offering; terms not disclosed), SBUX -1.5% (announced COO Troy Alstead is taking an extended unpaid leave from the co, effective March 1, 2015), SAVE -1.0% (reported preliminary traffic results for December 2014; Traffic in December 2014 increased 17.7% versus December 2013 on a capacity increase of 20.1%) 

>>> Petroceltic activist Worldview Capital calls for EGM to remove CEO Brian O’C

Petroceltic activist Worldview Capital calls for EGM to remove CEO Brian O’Cathain, make additions to board

Petroceltic International [LON:PCI] activist shareholder Worldview Capital Management is calling for an extraordinary general meeting to remove CEO Brian O’Cathain, according to multiple reports.

Several news outlets cited a statement from Worldview Capital, which controls 28% of Petroceltic, which indicated that the investment fund is also seeking a board shakeup - including its own seat and the addition of Maurice Dijols as an independent director with industry experience.

As reported, Worldview initiated legal proceedings against Petroceltic in which it alleges that the company has failed to undertake a review of its business.

Reuters - Ex-Moore Capital manager Findley's hedge fund Bramshott to close-sour

Exclusive - Ex-Moore Capital manager Findley's hedge fund Bramshott to close-sources

LONDON (Reuters) - Hedge fund Bramshott Capital, led by former Moore Capital portfolio manager Paul Findley, is shutting down, four sources familiar with the matter told Reuters on Thursday.
One of the sources said the key reason for the closure was the fund's 1 percent return in 2014, compared with 15.5 percent in 2013, when it outperformed its peers' average 12 percent gain, as measured by industry data tracker Eurekahedge.
The Bramshott Europe Fund bets on rising and falling prices in regional equities. It was spun out of Moore Capital in May 2011 and managed about $425 million in October last year, a letter to investors obtained by Reuters showed.
The fund's 2014 returns compare with a 0.6 percent rise in the Eurekahedge Europe Long Short Equities Hedge Fund Index.
Bramshott Chief Operating Officer Rupert Mahon declined to comment when contacted by Reuters. Findley joined Moore in 2008 after working for a decade at Threadneedle Asset Management.
Hedge funds have been hit in recent months by poor returns and rising costs due to a growing regulatory burden.As many as 661 hedge funds shuttered globally through the end of September last year, data from industry tracker HFR showed. Money managers including Brevan Howard, BlueBay and OVS Capital Management all shut down hedge funds last year.
In Europe, investors pulled about $15 billion from hedge funds in the second half of the year after investing about $35 billion in the first half, data from Eurekahedge showed.
Net inflows for hedge funds in the region for 2013, when European long/short equities hedge fund returned more than 12 percent, stood at $64 billion, Eurekahedge data showed.