>>> US After Hours Summary: ARTX +10.8%, BDE +7.5%, JMEI +6.3%, MCP -1


After Hours Summary: ARTX +10.8%, BDE +7.5%, JMEI +6.3%, MCP -18.9%, BOOM -12%, CALL -9.4% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings: ARTX +10.8%, BDE +7.5%, JMEI +6.3%, KVHI +6%, NES +5.8%, QUNR +3.1%, LJPC +3.1%, CUI +1.6%

Companies trading higher in after hours in reaction to news: IMNP +9.0% (to develop a novel topical nanoparticle formulation of AmiKet), BDE +7.5% (announced that it has engaged the financial advisory firms Rothschild Inc. and Robert W. Baird & Co. to lead the exploration of a full range of strategic alternatives for each of its brands; co also reported earnings), FISI +7.3% (filed for $100 mln mixed securities shelf offering), KIN +4.1% (announced positive results of pilot field study of KIND-012 for the control of fever in horses; Randomized, blinded, placebo-controlled Phase 2 study meets its primary endpoint), AAL +3.6% (to replace AGN in the S&P 500), AMRN +3.2% (announced the presentation of findings from a new in vitro study showing that pretreatment with eicosapentaenoic acid reduced oxidation of small dense LDL and resulted in improved endothelial function), NUS +2.3% (received approval from China's Ministry of Commerce for the company to commence direct selling activities in Shaoxing City in Zhejiang Province) NXTD +1.6% (announced it has shipped Wocket smart wallets today)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: MCP -18.9%, BOOM -12%, CALL -9.4%, XONE -9.2%, EGY -7.4%, STEM -6.5%, WYY -4.8%, NOAH -4.7%, OMER -3.7%, FXEN -3.3%, BDSI -2.3%, ANW -0.7%, WGBS -0.4%, SGYP -0.3%

Companies trading lower in after hours in reaction to news: CRZO -4.8% (announced public offering of 4.5 mln shares of common stock), ABIO -3.7% (provided GENETIC-AF clinical trial update; Protocol amended to broaden trial population and increase enrollment rate, Phase 2B of GENETIC-AF anticipated to complete enrollment by year-end 2016), JMBA -3.3% (filed to delay Form 10-K), MYE -2.5% (filed to delay Form 10-K; co has recently uncovered what appear to be errors in the accounting for inventory and possibly fraudulent activities at its Brazilian operations), WD -2.0% (announced the commencement of a public secondary offering of 8,246,534 shares of common stock held by funds managed by affiliates of Fortress Investment Group LLC (FIG); In addition, co will repurchase from the Underwriter 3 mln of those shares), KCAP -1.9% (filed to delay Form 10-K), RTRX -1.6% (co offering to sell 5.1 mln shares of its common stock in an underwritten public offering) 

>>> Asian Update

Asian Mid-session Update: BOJ maintains policy settings, scales back inflation outlook


***Economic Data***
- (CN) China Feb FDI Y/Y: 0.9% v 29.4% prior
- (SG) SINGAPORE FEB ELECTRONIC EXPORTS Y/Y: -12.5% V -7.7%E; NON-OIL DOMESTIC EXPORTS M/M: -9.4% V -1.6%E; Y/Y: -9.7% V -0.9%E
- (AU) Australia ANZ Roy Morgan Weekly Consumer Confidence Index: 110.8 v 110.3 prior

***Index Snapshot (as of 02:30 GMT)***
- Nikkei225 +0.9%, S&P/ASX +1.0%, Kospi +1.5%, Shanghai Composite +0.8%, Hang Seng +0.1%, Jun S&P500 flat at 2,066

***Commodities/Fixed Income***
- Apr gold +0.1% at $1,155, Apr crude oil -0.2% at $43.74/brl
- USD/CNY: PBoC sets yuan mid point at 6.1585 v 6.1615 prior setting (strongest Yuan setting since Mar 10th)
- (CN) PBoC to inject CNY20B in 7-day reverse repos (6th consecutive injection)

***Market Focal Points/FX***
- Volatility in FX space remains minimal ahead of Wednesday's FOMC with EUR/USD in a 30pip range above 1.0550, USD/JPY in a 20pip range below 121.50, and AUD/USD supported above 0.76. BOJ policy statement and RBA meeting minutes were the key risk events, and the initial declines in thee USD/JPY and AUD/USD pairs were quickly pared. In equities, Shanghai Composite extended overnight gains to rise above 3,480 - the highest level since mid-2008 - while Tokyo, Sydney, and Seoul markets were also firm, tracking a strong session of gains in the US hours.

- BOJ policy statement was largely a reiteration of the prior month, maintaining annual rate of monetary base increase at ¥80T, and reiterating economic assessment of economy continuing moderate recovery trend. Board member Kiuchi remained the lone dissenter in favor of a more protracted timeframe for inflation target. The only change in the statement related to inflation, where the BOJ scaled back its current CPI view to 0.0-0.5% from around 0.5% and the outlook for inflation to also be around 0% vs prior "slow for time being". USD/JPY fell about 20pips below 121.30 on the release with little indication that further policy easing may be in the works for April. Separately, Fin Min Aso spoke of risks to Japan economy from the slowdown in China, and also acknowledged that it will take longer to exit deflationary mindset than 1-2 years after some 20 years of negative price trends.

- RBA board minutes paved the way to potential additional easing after this month's surprise rate hold against the expected 2nd consecutive rate cut. Minutes said a new cut may become appropriate, the economy is operating with spare capacity, and non-mining investment is subdued for longer than expected, while also noting the risks of a property market bubble, preferring to allow the markets to digest the February rate cut before moving again. On exchange rate, RBA reiterated AUD is still above most estimates of fundamental value. AUD/USD fell about 30pips to 0.7610 on the release.

- In China, PBoC injected another CNY20B via 7-day reverse repos in the system but also lowered its offering yield by another 10bps to 3.65%. This follows a similar 10bps reduction in the offering yield made one week ago. Also of note on the mainland, China February FDI slowed dramatically, and Commerce Ministry spokesperson attributed the strong rise in February exports to seasonality of the holidays and US recovery. In a sign of Beijing's increasing discomfort with FX volatility, MOFCOM's Shen said weaker EUR increases pressure on exports along with creating opportunities for Europe acquisitions.

***Equities***
US markets:
- AAL: To replace Allergan in S&P 500 after the close of trading on March 20; +4.2% afterhours
- NUS: Receives Direct Selling Authorization For Additional City In Mainland China; +2.3% afterhours
- FL: Announces Updated Strategic Growth Initiatives And Elevated Long-Term Financial Objectives; -0.2% afterhours
- ANW: Reports Q4 $0.22 (adj) v $0.22e, R$1.44B v $1.59Be; -0.7% afterhours
- CALL: Reports Q4 $0.15 (adj) v $0.14e (1 est), R$25.7M v $38.2M y/y; -10.7% afterhours
- BOOM: Reports Q4 $0.06 v $0.17e; R$52.0M v $51.6Me; -12.0% afterhours

- AAPL: Said to be in talks to launch a bundled online TV service by this fall; Would be availabe on devices such as Apple TV - financial press

Notable movers by sector:
- Consumer Discretionary: Dulux Group DLX.AU +1.9% (announces supply chain investments); Panasonic Corporation 6752.JP +1.7% (announces acquisition)
- Financials: Poly Real Estate 600048.CN +1.7% (FY14 results)
- Materials: Iluka Resources ILU.AU +1.2% (signs for copper-gold project); BHP Billiton Ltd BHP.AU +1.2% (to demerge South32)
- Energy: Tokyo Gas 9531.JP +2.2% (may announce repurchase)
- Industrials: Hitachi Ltd 6501.JP +3.9%, Mitsubishi Heavy 6501.JP +2.4% (Hitachi, Mitsubishi Heavy aim to raise ROE to above 10%)

>>> US Close

Closing Market Summary: S&P 500 Reclaims 50-Day Average

The stock market rebounded from last week's decline with a Monday rally that sent the S&P 500 (+1.3%) back above its 50-day moving average (2,060). The benchmark index narrowed its March loss to 1.1% while the Nasdaq (+1.2%) and Russell 2000 (+0.6%) underperformed, but still logged solid gains to start the week.

Unperturbed by disappointing economic data, equity indices rallied out of the gate and registered the bulk of their gains during the first hour of action. Countercyclical health care (+2.2%) and utilities (+1.7%) held the lead throughout the session, but most other sectors also posted solid gains.

The only group that couldn't make it out of the red was the materials sector (-0.1%) as Dow component DuPont (DD 77.07, -3.43) weighed after Bank of America/Merrill Lynch downgraded the stock to ‘Underperform' from ‘Buy.' DuPont lost 4.3% while steelmakers also pressured the sector with Market Vectors Steel ETF (SLX 30.91, -0.06) sliding 0.2%.

Meanwhile, another commodity-linked sector—energy—began the day in negative territory, but rebounded to end higher by 1.4% even as crude oil dropped to a new low for the year. The energy component settled lower by 2.1% at $43.94/bbl after testing the $43.00/bbl level this morning.

Crude oil spent the day in the red after OPEC's monthly oil market report indicated that global demand growth is unlikely to increase from the previous month's 1.17 million barrels/day. Furthermore, a pullback in the Dollar Index (99.71, -0.63) failed to provide support. The Dollar Index lost 0.6% with the greenback giving up 0.7% to the euro, which tested the 1.0600 level.

Today's relative weakness in the dollar combined with the lack of a negative response to disappointing economic data suggests that participants were not all that concerned with the possibility that the Fed will strike a hawkish tone in Wednesday's policy statement. There was no strong demand for volatility protection today with the CBOE Volatility Index (VIX 15.61, -0.39) falling 2.4%.

As mentioned earlier, the health care sector ended in the lead. Biotechnology supported the advance step-for-step with the iShares Nasdaq Biotechnology ETF (IBB 353.97, +8.64) climbing 2.5% to a new record high.

In turn, the relative strength within the biotech group was not enough to keep the Nasdaq in-line with the broader market. The tech-heavy index underperformed slightly as Facebook (FB 78.07, +0.02) and Intel (INTC 30.83, -0.10) spent the day in negative territory. Intel shed 0.3%, but that had little impact on its peers as the broader PHLX Semiconductor Index gained 1.5%.

Elsewhere among cyclical groups, the industrial sector (+1.6%) outperformed with help from transport stocks. The Dow Jones Transportation Average jumped 1.7% with 19 of its 20 components posting gains while Matson (MATX 40.73, -0.42) lost 1.0%.

Treasuries registered modest gains with the 10-yr yield slipping three basis points to 2.09%.

Today's participation was in-line with recent averages as 740 million shares changed hands at the NYSE floor.

Economic data included Empire Manufacturing Index, Industrial Production, and NAHB Housing Market Index:
  • The Empire Manufacturing Survey for March registered a reading of 6.9, which was below the prior month's reading of 7.8 and below the consensus estimate, which was pegged at 8.8 
  • Industrial production increased 0.1% in February after declining a negatively revised 0.3% (from +0.2%) while the consensus expected an increase of 0.3% 
    • Manufacturing production declined 0.2% in February after declining 0.3% in January, representing the third consecutive monthly contraction 
    • Capacity utilization declined to 78.9% from 79.1% (consensus 79.5%) 
  • The NAHB Housing Market Index for March fell to 53 from 55 while the consensus expected an increase to 56 
Tomorrow's economic data will be limited to the 8:30 ET release of February Housing Starts consensus 1.041 million) and Building Permits (consensus 1.07 million).
  • Nasdaq Composite +4.1% YTD 
  • Russell 2000 +2.9% YTD 
  • S&P 500 +1.1% YTD 
  • Dow Jones Industrial Average +0.9% YTD

FT : Emirates urges Airbus to take decision on A380 relaunch


Airbus’s most important customer for the A380 superjumbo is demanding the manufacturer decide this month on the case for relaunching the passenger jet, which has already cost billions of euros in a fraught, decade-long journey from drawing board to runway.
Sir Tim Clark, president of fast-growing Emirates Airline, which is the biggest A380 operator, said he had given Airbus a deadline to respond to his demand for a new, more fuel-efficient engine on the world’s largest jet seating more than 500

“We met in January in Toulouse. I said I want a decision by the middle of March,” he told the Financial Times in an interview. “They agreed that they would probably have some kind of business plan in March, and that they would take this to their supervisory board.”
Rainer Ohler, spokesman for Airbus, said the Toulouse-based aerospace company would not comment on promises made to Sir Tim. “However, any decision at Airbus group will only be taken when the time is right and all questions answered,” he added. “We are in touch on this subject with all interested parties.”
The future of the A380 is central to Sir Tim’s plans to expand the Gulf carrier, which since its launch in 1985 has grown to become the world’s largest international airline by seating capacity.
With the A380 as the flagship aircraft in its fleet, Emirates has been able to increase market share by ferrying large numbers of passengers and cargo through its Dubai hub to 148 destinations around the world.
Yet the engine designed in the late 1990s for the A380 has been overtaken by a new generation and Sir Tim wants the big fuel savings the latest technology can deliver for the 81 superjumbos he has yet to receive out of a total 140 ordered.
“If you do the right thing with it you can probably bring down your cost by as much as 10 to 13 per cent,” he said.
Yet Airbus management is reluctant to pour more money into an aircraft that has struggled to find new customers, having only this year begun to cover current production costs. In December Harald Wilhelm, the group’s finance director, reflected a view that is believed to be held by some members of the board when he suggested that the A380 programme could be scrapped without new orders.

That would not only be a huge embarrassment for Airbus but could severely constrain Sir Tim’s expansion plans which rely on having a fleet of supersized jets each capable of carrying more than 500 passengers to destinations where airport capacity is often squeezed.
But the Emirates president has other ways to meet his goal of carrying 70m passengers to 180 destinations by 2020, up from 44.5m last year.
After years of insisting Emirates could grow on its own, Sir Tim is now open to the possibilities of commercial alliances.
“Part of the organic growth is to establish commercial relationships on a bilateral basis with other carriers or even entities,” he said.
He added any new relationships are unlikely to be as significant as the 10-year partnership set up with Qantas, the Australian flag carrier, in 2013, in which the two carriers market each other’s flights and long-haul jets are routed through Dubai.
He rejected suggestions that some airlines might be reluctant to forge alliances amid suggestions that he had used the Qantas partnership to squeeze the struggling Australian carrier out of Europe.
“They only had three [destinations] in Europe,” Sir Tim said. “They were going to drop Frankfurt anyway.”
Meanwhile, he is moving to the next stage of expansion with more than 100 cities identified by Emirates as possible new destinations over the next five years or more. South America in particular is a focus.
“There hasn’t been a state in South America that hasn’t been knocking on our door saying, ‘Please fly’,” Sir Tim said.
He is in Washington this week to rebut allegations by US carriers that state-controlled Emirates has benefited from billions of dollars worth of state subsidies, saying the row has taken up time that should have been focused on the airline’s expansion plans.
But Emirates also remains limited by the pace at which he can acquire new aircraft. With the carrier’s first A380 due to be retired in 2020, it will soon need new aircraft not just for expansion, but for existing routes.
Sir Tim is coy on whether he will decide to renew an order for 70 Airbus A350 long-haul jets that he cancelled last year, or instead opt for Boeing’s Dreamliner.
Yet the uncertainty is a useful lever to exert pressure on Airbus for a re-engined A380. Has he used this as a bargaining chip in the battle over the A380’s future by suggesting he might go to Boeing? Sir Tim smiled. “I don’t have to say that to them, they know it.”

>>> Alibaba: Some Color on BABA's Upcoming Lock-up Expiration

Alibaba: Some Color on BABA's Upcoming Lock-up Expiration
On Wednesday, March 18, one of BABA's lock-up restrictions will expire, freeing up 437 million common shares to be traded on the public market. In a press release issued by BABA on March 10, the company stated that of these ordinary shares now coming available, approximately 100 million shares will remain subject to BABA's employee trading restrictions until after the announcement in May 2015 of its earnings results for the quarter and fiscal year ending March 31, 2015.

  • This expiration will unlock a large amount of stock, accounting for nearly 40% of the current total float. The shares will be available for trading the next morning, on March 19.

  • BABA already had one lock-up expiration, 90 days after its IPO (12/18/2014), but that was only for 8.1 million shares.

  • As foreboding as this week's lock-up expiration seems, there is actually a much larger one coming up in mid- September in which 1.4 billion shares will be free to hit the market.

  • With Wednesday's lock-up expiration and the one looming in September, there will be a massive amount of supply for the market to try and soak up in the coming months. Between this situation, and the recent non-flattering reports coming out about counterfeit goods and fake user accounts, it has been a rough few months for shares of BABA, down nearly 20% year-to-date.

  • Today, however, shares are displaying some impressive relative strength, up 3-4%, even in the face of Wednesday's lock up expiration. It is not too uncommon to see a "buy the news" reaction (at least temporarily) once the expiration date actually hits, as investors look forward to that overhang moving to the rear-view mirror. In the case of BABA, though, investors will have to face yet another huge lock-up expiration in 2015.