Month: July 2014

European peripheral bond yields have compressed from “whatever it takes” highs to “whatever…” lows in the last two years as no amount of factual representation of the dismal reality of Europe’s non-recovery can affect the centrally-planned virtuous cycle of ECB carry-trade funded idiocy occurring in the bond markets. Theoretically, Draghi’s removal of the credit risk/convertibility premium has left these bonds to trade on growth/inflation expectations alone… and at record lows, they don’t seem too hopeful. While Spain 10Y dropped below 2.5% (and we could list 20 fundamental factors that flash red), we thought it ironic that as Italy’s 10Y drops below 2.7% for the first time in history it is delinquent on $100 billion in services rendered to its private businesses.

 

via Zero Hedge http://ift.tt/1uyJNnf Tyler Durden

With the start of the new weeks, and with the MH-17 tragedy increasingly more distant and blurred, with no definitive evidence on either presented so far, with a stripped black box revealing nothing, and with the Air Traffic control recordings still in Ukraine secret service hands, the “He said, She said” is about to escalate to a fever pitch.

The UN launched the first salvo when it announced earlier today that the downing of Malaysia Airlines jet MH17 in eastern Ukraine may constitute a “war crime”, according to UN human rights chief Navi Pillay says.

“This violation of international law, given the prevailing circumstances, may amount to a war crime,” Ms Pillay, the UN High Commissioner for Human Rights, said of the downing of MH17.

“Every effort will be made to ensure that anyone committing serious violations of international law including war crimes will be brought to justice, no matter who they are,” Ms Pillay said.

This is happening after a team of Australian and Dutch police and forensic experts was forced to abandon attempts to reach the site on Monday due to the security situation in the area. It was the second failed attempt in as many days. The reason: ongoing incursions by the Ukraine army in nearby towns. In a statement on Monday, the Ukrainian military said it had “entered” the towns of Shakhtarsk and Torez and was working to seize control of Pervomaysk and Snizhne – all close to the crash site of MH17. Irrelevant of the facts, this too will be blamed on Putin.

And speaking of Putin, based on all the evidence (all of it in the “hearsay”, “emotional appeal” and “YouTube clip” format ), the UN is already setting the stage to brand the Russian president a war criminal. And yet, somehow we doubt it will have any more success in bringing him to “justice” than the Iraqi people will have in getting Colin Powell to stand for trial over the US invasion over fabricated WMD “evidence.”

What certainly won’t help international tribunal matters is that overnight, the same Hague court where Putin will soon be tried in absentia, ruled on Monday that Russia must pay a group of shareholders in oil giant Yukos $51.6 billion for expropriating its assets, a big hit for a country teetering on the brink of recession.

The arbitration panel in the Netherlands said it had awarded shareholders in the GML group just under half of their $114 billion claim, going some way to covering the money they lost when the Kremlin seized Yukos, once controlled by Mikhail Khodorkovsky.

 

“The award is a slam dunk. It is for $50 billion, and that cannot be disputed,” said Tim Osborne, director of GML. “It’s now a question of enforcing it.”

Good luck with that, because last time we checked Putin is not exactly “compliant” with arbitrary western propaganda decisions, unless of course it involves the capture of even more Crimeas in the process.

And speaking of Russian responses, remember those DigitalGlobe pics the US State Department presented as “evidence” of Russia’s shelling of east Ukraine?

 

 

It didn’t take long for Russia to promptly reject all of them outright as nothing but fakes. According to RIA, the Russian Defense Ministry says not possible to establish authenticity of U.S. satellite photos alleging shelling from Russian into Ukrainian territory, citing spokesman Igor Konashenkov.

Photos already were shown by Kiev; fakes prepared by U.S. advisers; source of fakes lost in information “carousel,” said the Russian newswire.

So now what: clearly any evidence that one side presents will be promptly refuted as fake or propaganda by the other side and vice versa. The big question is who will arbitrate, especially if a real, impactful retaliation against Russia refuse to come (where are those Gazprom sanctions). With China so far clearly on the side of Russia the question remains very much unanswered.

via Zero Hedge http://ift.tt/1uyJN6K Tyler Durden

With the start of the new weeks, and with the MH-17 tragedy increasingly more distant and blurred, with no definitive evidence on either presented so far, with a stripped black box revealing nothing, and with the Air Traffic control recordings still in Ukraine secret service hands, the “He said, She said” is about to escalate to a fever pitch.

The UN launched the first salvo when it announced earlier today that the downing of Malaysia Airlines jet MH17 in eastern Ukraine may constitute a “war crime”, according to UN human rights chief Navi Pillay says.

“This violation of international law, given the prevailing circumstances, may amount to a war crime,” Ms Pillay, the UN High Commissioner for Human Rights, said of the downing of MH17.

“Every effort will be made to ensure that anyone committing serious violations of international law including war crimes will be brought to justice, no matter who they are,” Ms Pillay said.

This is happening after a team of Australian and Dutch police and forensic experts was forced to abandon attempts to reach the site on Monday due to the security situation in the area. It was the second failed attempt in as many days. The reason: ongoing incursions by the Ukraine army in nearby towns. In a statement on Monday, the Ukrainian military said it had “entered” the towns of Shakhtarsk and Torez and was working to seize control of Pervomaysk and Snizhne – all close to the crash site of MH17. Irrelevant of the facts, this too will be blamed on Putin.

And speaking of Putin, based on all the evidence (all of it in the “hearsay”, “emotional appeal” and “YouTube clip” format ), the UN is already setting the stage to brand the Russian president a war criminal. And yet, somehow we doubt it will have any more success in bringing him to “justice” than the Iraqi people will have in getting Colin Powell to stand for trial over the US invasion over fabricated WMD “evidence.”

What certainly won’t help international tribunal matters is that overnight, the same Hague court where Putin will soon be tried in absentia, ruled on Monday that Russia must pay a group of shareholders in oil giant Yukos $51.6 billion for expropriating its assets, a big hit for a country teetering on the brink of recession.

The arbitration panel in the Netherlands said it had awarded shareholders in the GML group just under half of their $114 billion claim, going some way to covering the money they lost when the Kremlin seized Yukos, once controlled by Mikhail Khodorkovsky.

 

“The award is a slam dunk. It is for $50 billion, and that cannot be disputed,” said Tim Osborne, director of GML. “It’s now a question of enforcing it.”

Good luck with that, because last time we checked Putin is not exactly “compliant” with arbitrary western propaganda decisions, unless of course it involves the capture of even more Crimeas in the process.

And speaking of Russian responses, remember those DigitalGlobe pics the US State Department presented as “evidence” of Russia’s shelling of east Ukraine?

 

 

It didn’t take long for Russia to promptly reject all of them outright as nothing but fakes. According to RIA, the Russian Defense Ministry says not possible to establish authenticity of U.S. satellite photos alleging shelling from Russian into Ukrainian territory, citing spokesman Igor Konashenkov.

Photos already were shown by Kiev; fakes prepared by U.S. advisers; source of fakes lost in information “carousel,” said the Russian newswire.

So now what: clearly any evidence that one side presents will be promptly refuted as fake or propaganda by the other side and vice versa. The big question is who will arbitrate, especially if a real, impactful retaliation against Russia refuse to come (where are those Gazprom sanctions). With China so far clearly on the side of Russia the question remains very much unanswered.

via Zero Hedge http://ift.tt/1uyJN6K Tyler Durden

• The market in one sentence: Buying on Dips Pays Most in Five Years as Stocks Rebound (BBG)
• Europe subdued, Russia shares tumble on new sanctions (Reuters)
• Chinese Data Don’t Add Up (WSJ)
• Argentine Default Drama Nears Critical Stage (WSJ)
• Global Pressure Mounts on Israel to End Gaza Fighting (BBG)
• Ukraine troops advance as experts renew attempt to reach crash site (Reuters)
• Prospects Brighten for Republicans to Reclaim a Senate Majority (WSJ)
• Europe’s banking union faces legal challenge in Germany (FT)
• Investors Bet on China’s Large Property Developers (WSJ)
• Hague court orders Russia to pay over $50 billion in Yukos case (Reuters)
• Luxembourg Covets Offshore Trade in China’s Yuan (WSJ)
• Time Machine Finds Bulls Run Amok at ’07 Stock-Market Top (BBG)
• Microsoft says government officials make sudden visits to China offices (Reuters)
• Equinox Fitness Is Buying Rest of Millennium’s Gyms (NYT)

 

Overnight Media Digest

WSJ

* With 100 days to go until the midterm election, unexpectedly strong bids by several Republican candidates and President Barack Obama’s continued sagging approval ratings are boosting GOP chances of capturing a Senate majority. (http://on.wsj.com/1l5WnRi)

* The chaos that followed the crash of Malaysian Airline System Bhd’s Flight 17 has added to the worry that families will never learn exactly what happened. (http://on.wsj.com/WJaO8L)

* Twenty-First Century Fox Inc is prepared to offer shareholders of Time Warner Inc board representation as part of its bid to acquire the media company, according to a person familiar with the matter. (http://on.wsj.com/1AnuQVn)

* Luxembourg is seeking to be at the heart of a new trend in global finance: the rising use of China’s currency outside its home market. (http://on.wsj.com/1kibHzD)

* Regulators have questioned JPMorgan Chase & Co executives in recent months about whether the firm steers private-banking clients to its own investment products, according to people familiar with the matter. (http://on.wsj.com/1ux42Si)

* The fight over Herbalife Ltd has taken on a more personal, distinctly 19th century flavor. Rather than a battle among faceless institutions, as is usually the case today, Herbalife features a handful of financiers – Bill Ackman, Carl Icahn and George Soros – in a high-stakes duel. (http://on.wsj.com/UwjPjT)

* Deutsche Bank co-CEO Anshu Jain has in the past two years made it a top priority to get the lender’s investment bank and wealth-management business to work to each other’s benefit. (http://on.wsj.com/1rW82qQ)

* Hospira Inc has emerged as a bidder for Danone’s medical-nutrition unit in a deal that could be worth about $5 billion and mark the latest in a flurry of so-called inversion deals. (http://on.wsj.com/1xmwTES)

* U.S.-based meat supplier OSI Group Inc said it would withdraw all products manufactured by its embattled Shanghai unit from the marketplace, a move to control damage that has hit fast-food companies across China, in Hong Kong and in Japan.(http://on.wsj.com/1nMmxP0)

* Tencent Holdings Ltd will use its alliance with online retailer JD.com Inc to sell in advance Microsoft Corp’s Xbox One consoles in China, as it ramps up efforts to compete with electronic-commerce giant Alibaba Group Holding Ltd <IPO-BABA.N>. (http://on.wsj.com/1rP0RBT)

* Volkswagen AG’s Audi on Saturday announced price cuts for spare parts of up to 38 percent in China, the company’s largest market, as the Chinese government steps up its scrutiny of foreign luxury-auto makers. (http://on.wsj.com/1pu1wUO)

* The Justice Department indicted FedEx Corp earlier this month, charging conspiracy to distribute controlled substances because of the shipper’s alleged role in transporting painkillers and other prescription drugs that had been sold illegally. FedEx is scheduled to be arraigned in the proceeding Tuesday morning in San Francisco. (http://on.wsj.com/1AnXRQO)

 

FT

French dairy group Danone has been in talks for several weeks to sell its medical nutrition business to U.S. rival Hospira in a deal that would let the buyer move its tax base to Europe.

UBS was in talks with French authorities over a 100 million euro ($134.29 million) settlement to resolve an investigation into how the Swiss wealth manager dealt with some of its rich clients, before discussions collapsed two weeks ago.

Underwriters are reviewing policies for aircraft involved in hostile acts such as the downing of Malaysia Airlines flight MH17 as the airline insurance industry faces its most expensive year since the 9/11 attacks in 2001

Diageo, the world’s largest spirits maker, will say when it reports full-year results on Thursday that it is writing down the value of its majority stake in its troubled premium Chinese baijiu brand.

 

NYT

* About 1,200 fast-food workers from McDonald’s, Burger King and other chains crowded over the weekend into an expo center in the suburb west of Chicago to pursue their ambitious goal of creating a $15-an-hour wage floor for the nation’s four million fast-food workers. (http://nyti.ms/1AnVLAm)

* The Federal Reserve’s policy-making committee, which meets Tuesday and Wednesday, is widely expected to announce another cut in its monthly bond purchases, to $25 billion, in keeping with its declared intention to end the purchases in October.(http://nyti.ms/UEqTuo)

* Reddit, a community-driven site, is trying to jump-start its advertising business and reinforce some smaller moneymaking efforts. Reddit’s focus is to figure out how to become a real business without changing the essential nature of the service and alienating its powerhouse constituency of 114 million intensely loyal monthly users. (http://nyti.ms/1nxfj03)

* The British government plans to make more land available for licensing for oil and natural gas exploration in the first such expansion since 2008. The government wants new sources of oil and gas to help replace Britain’s declining offshore production in the North Sea, to create jobs and to ease growing dependence on fuel imports, especially from Russia. (http://nyti.ms/X1vvwr)

* The multi-billion dollar dispute over Guidant between Johnson & Johnson and Boston Scientific Corp finally heads for a trial. After virtually no movement in the case for two years, a federal judge has denied a motion for summary judgment that would have put the matter to rest. (http://nyti.ms/1xmzIFV)

* Equinox Fitness said it will buy rest of Millennium’s Gyms for about $110 million. The purveyor of expensive workout centers and risqué advertising, Equinox is about to announce on Monday that it had acquired Sports Club/LA gyms in New York and four other cities, as well as the Reebok Sports Club/NY gym on the Upper West Side of Manhattan. All will soon bear the Equinox brand and feature the company’s classes and products. (http://nyti.ms/1rt3uqV)

* Hospira, a Midwestern medical device maker is in talks to pay about $5 billion for the medical nutrition business of the French consumer group Danone. The deal, if completed, would allow Hospira to re-incorporate overseas in a so-called inversion, lowering its tax rate and freeing its foreign cash. (http://nyti.ms/1mTmNFz)

* Alan Greenberg, who led Bear Stearns Co through its rise and fall, died on Friday at the age of 86. Greenberg as chief executive of Bear Stearns Co transformed a small bond shop into the fifth-largest U.S. securities firm before it collapsed in 2008 in one of the key events of the global credit crisis. (http://nyti.ms/1uxe31I)

 

Canada

THE GLOBE AND MAIL

* Canadian diplomatic staff in Tripoli have taken the precaution of working out of an undisclosed location, as Libya faces increasingly intense intermilitia violence that this weekend that cost dozens of civilian lives and prompted the U.S. to temporarily shutter its embassy. (http://bit.ly/1xnw66x)

* Parts of Ontario suffered some severe thunderstorms on Sunday night, including an unconfirmed report of a tornado near the shores of Lake Huron. Environment Canada forecaster Jason Burford says the storm activity stretched across southern Ontario from Windsor to Kingston. (http://bit.ly/1ozti5R)

Reports in the business section:

* Quebecor Inc’s management will face further questions about plans for a potential wireless expansion when the company reports second quarter results on Thursday. (http://bit.ly/1o5wktw)

NATIONAL POST

* The Canadian government is not responding to a report that Germany is set to reject Canada’s long sought after trade deal between Canada and the European Union. The leading German newspaper Sueddeutsche Zeitung cites diplomats in Brussels as saying Berlin won’t sign the deal in its current form. (http://bit.ly/1rKj8BI)

* Two people have been killed in a small plane crash near Nanaimo on Vancouver Island. Transportation Safety Board spokesman Bill Yearwood says the plane, an “amateur built” Avid amphibious aircraft, crashed on takeoff from the Nanaimo Airport in Cassidy. (http://bit.ly/1lLV1LE)

FINANCIAL POST

* PetroChina Co Ltd, the Chinese oil giant rocked by a corruption scandal that has spread to its Canadian unit, is trying to reduce a C$1.23 billion payment to Calgary-based Athabasca Oil Corp for oil sands properties it believes are of poorer than expected quality, a source close to PetroChina said Friday. (http://bit.ly/1uygCAI)

* Airline stocks have often found it hard to win over investors in recent times. But investors are now finding many reasons to love the airlines. Their stocks are soaring, making them one of the best-performing segments on the U.S. and Canadian markets in the past year. (http://bit.ly/1kgzvUt)

 

Hong Kong

SOUTH CHINA MORNING POST

— Genetically modified rice, which is illegal to sell or grow commercially on the mainland, has been found on sale in a large supermarket in Wuhan. State television CCTV said there was also evidence that genetically modified rice had been sold in Hunan, Anhui and Fujian. (http://bit.ly/1l5Mvad)

— McDonald’s issued another apology on Sunday for its part in the rotten meat scandal, saying a “lack of clarity” had confused people. McDonald’s managing director in Hong Kong, Randy Lai Wai-sze, said the company had “not communicated well” and promised it would never again source from the Shanghai Husi plant at the heart of the scandal. (http://bit.ly/1ptAeOh)

— Swire Pacific’s core property and aviation businesses face major structural shifts, chairman John Slosar said. He said residential property trading operations were at their cyclical peak while the performance at Cathay Pacific would be in line with an industry that had underperformed expectations worldwide. (http://bit.ly/1mT3TyM)

THE STANDARD

— A group of bloggers has set up a Facebook page for people’s commentaries on politics and other issues following the sudden closure of House News, a pro-democracy news site with strong ties to media mogul Jimmy Lai Chee-ying. Within 20 hours of it being set up on Saturday night, the House News Bloggers Group received more than 20,000 likes. (http://bit.ly/WJ7tq7)

— Hong Kong Airlines, a local budget carrier partly owned by Hainan Airlines, will submit its listing application by next month and is expected to open the retail book in October at the earliest. It plans to raise up to HK$3.9 billion in what could be Hong Kong’s first dual-currency float with investors able to subscribe to shares in either yuan or Hong Kong dollars. (http://bit.ly/1rOxKyr)

HONG KONG ECONOMIC JOURNAL

— Hong Kong Monetary Authority on Saturday injected HK$5.348 billion into the banking system, its fifteenth intervention so far this month, to meet commercial demand for the local currency.

— Property developer Cheung Kong has generated HK$17.6 billion ($2.27 billion) revenue from flat sales so far this year, representing 58.7 percent of its HK$30 billion annual sales target this year, according to its senior management. It generated HK$5 billion from flat sales last year.

— Bank of East Asia is expected to post an interim profit of up to HK$3.505 billion, with cross-border loan business leading the growth, while also facing challenges from increasing non-performaning loans, according to analysts.

APPLE DAILY

— Conglomerate Hutchison Whampoa is expected to post single-digit growth in first-half earnings due to lower contribution from subsidiaries following stake sales of some of its units, according to analysts. Morgan Stanley estimates Hutchison to post a 9 percent growth in earnings at HK$13 billion, the slowest since 2009.

 

Britain

The Times

RBS COULD CLAW BACK BONUSES FROM TURNAROUND DIVISION

Royal Bank of Scotland could claw back millions of pounds in bonuses from staff working for its controversial turnaround unit after it was revealed that the bank has set aside 17 million pounds ($28.86 million) in pay awards. (http://thetim.es/1rVCtgS)

RECKITT BENCKISER SET TO SPLIT OFF U.S. PHARMA DIVISION

Reckitt Benckiser, the maker of Nurofen and Cillit Bang, is likely to confirm it will spin off RBP, its American pharmaceuticals division, when it announces half-year results this morning. (http://thetim.es/1lKO39G)

The Guardian

U.S. INVESTOR SUES THREE BANKS OVER SILVER PRICE

HSBC, Deutsche Bank and the Bank of Nova Scotia have been accused of attempting to rig the price of silver in the latest price fixing scandal to rock the banking industry. (http://bit.ly/WZxEbY)

STRONG POUND TRIGGERS RISE IN PROFIT WARNINGS

Profit warnings from British companies have hit a three-year high despite the improving economy, with the strong pound a growing problem for businesses with overseas operations. (http://bit.ly/1rOuRxK)

The Telegraph

SMITH & NEPHEW BOSS: ‘I DON’T WANT A MEGA-MERGER’

The boss of perennial bid target Smith & Nephew has criticised “defensive” mega-mergers and tax-driven deals that have swept the healthcare sector in the last few months. Chief Executive Olivier Bohuon said he was not interested in striking a deal with another large med tech company. (http://bit.ly/1k2yn6u)

COLLINGWOOD MULLS SALE TO PRIVATE EQUITY FIRM

Learner-driver car insurance firm Collingwood Insurance Services is exploring selling the business to private equity. Sources said that a clutch of mid-market private equity firms had already been sounded out for the business which has earnings before interest, tax, depreciation and amortisation of about 6 million pounds. (http://bit.ly/1ptAEnM)

Sky News

FORMER CBI CHIEF TO AID OSBORNE MARKETS PROBE

Richard Lambert, who ran the Confederation of British Industry until 2011, will this week be appointed to scrutinise a Government-led probe into financial markets launched in the wake of a string of major trading scandals. (http://bit.ly/1prHEBD)

The Independent

VINCE CABLE GOES OFF MESSAGE ON SLOW GROWTH IN WAGES

British Business Secretary Vince Cable, in a series of articles for regional newspapers, warned that wage growth was sluggish and the economy remained stubbornly imbalanced. His comments came after Chief Secretary to the Treasury Danny Alexander and Finance Minister George Osborne trumpeted GDP figures showing growth was now at record levels. (http://ind.pn/1pr1Nrw)

 

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled include:
Markit U.S. services PMI for July at 9:45–consensus 59.8
Pending home sales index for June at 10:00–consensus up 0.3%

ANALYST RESEARCH

Upgrades

AbbVie (ABBV) upgraded to Buy from Neutral at UBS
Bancolombia (CIB) upgraded to Overweight from Neutral at JPMorgan
CIT Group (CIT) upgraded to Overweight from Equal Weight at Morgan Stanley
Calpine (CPN) upgraded to Conviction Buy from Buy at Goldman
DHT Holdings (DHT) upgraded to Buy from Hold at Jefferies
Dynegy (DYN) upgraded to Buy from Neutral at Goldman
Heritage Commerce (HTBK) upgraded to Outperform from Market Perform at Fig Partners
Lorillard (LO) upgraded to Neutral from Reduce at Nomura
NuStar Energy (NS) upgraded to Outperform from Neutral at Credit Suisse
NuStar GP Holdings (NSH) upgraded to Outperform from Neutral at Credit Suisse
Pitney Bowes (PBI) upgraded to Buy from Hold at Brean Capital
Prosensa (RNA) upgraded to Buy from Neutral at Roth Capital
QR Energy (QRE) upgraded to Buy from Hold at Wunderlich
Reynolds American (RAI) upgraded to Top Pick from Outperform at RBC Capital
Royal Bank of Scotland (RBS) upgraded to Neutral from Underweight at JPMorgan
Safeguard Scientifics (SFE) upgraded to Overweight from Equal Weight at First Analysis
Xerox (XRX) upgraded to Neutral from Underweight at JPMorgan
Zimmer (ZMH) upgraded to Outperform from Perform at Oppenheimer

Downgrades

AcelRx (ACRX) downgraded to Hold from Buy at Canaccord
Cisco (CSCO) downgraded to Sector Perform from Outperform at Pacific Crest
DSW (DSW) downgraded to Underperform from Neutral at Sterne Agee
DuPont Fabros (DFT) downgraded to Neutral from Buy at Citigroup
Enphase Energy (ENPH) downgraded to Hold from Buy at Deutsche Bank
Horizon Technology (HRZN) downgraded to Hold from Buy at Wunderlich
Monster Beverage (MNST) downgraded to Neutral from Buy at UBS
NRG Energy (NRG) downgraded to Buy from Conviction Buy at Goldman
PG&E (PCG) downgraded to Sell from Neutral at Goldman
Pfizer (PFE) downgraded to Market Perform from Outperform at BMO Capital
Post Properties (PPS) downgraded to Neutral from Buy at Citigroup

Initiations

Empire State Realty (ESRT) initiated with a Market Perform at Wells Fargo
FirstService (FSRV) initiated with an Outperform at RBC Capital
Interpublic Group (IPG) initiated with a Neutral at Citigroup
Minerva (NERV) initiated with a Buy at Jefferies
Minerva (NERV) initiated with an Outperform at JMP Securities
Minerva (NERV) initiated with an Outperform at RW Baird
NextEra Energy Partners (NEP) initiated with an Overweight at Barclays
Omnicom (OMC) initiated with a Sell at Citigroup
Seventy Seven Energy (SSE) initiated with a Neutral at Susquehanna
 
COMPANY NEWS
Dollar Tree (DLTR) to acquire Family Dollar (FDO) for $74.50 per share in cash, stock
Berkshire Hathaway Energy (BRK.A) received Canadian approval for AtlaLink acquisition
Tyson Foods (TSN) said Hillshire Brands (HSH) acquisition on track to close in Q4
Tyson Foods (TSN) to close three plants to improve prepared foods performance
Aspen Insurance (AHL) holders overwhelmingly rejected Endurance (ENH) authorization proposals
Federal Reserve did not object to Zions Bancorp (ZION) FY14 capital plan
Husi Shanghai said it would withdraw products from marketplace  (MCD, YUM, SBUX)

EARNINGS

Companies that beat consensus earnings expectations last night and today include:

Cal-Maine Foods (CALM), Changyou.com (CYOU), Sohu.com (SOHU), Lincoln Electric (LECO)

Companies that missed consensus earnings expectations include:

Tyson Foods (TSN), NTELOS (NTLS), TGC Industries (TGE), Blue Capital (BCRH), Hudson Valley (HVB)

NEWSPAPERS/WEBSITES

Goldman (GS) close to settling FHFA suit on faulty mortgage claims, Bloomberg reports
Hospira (HSP) in talks to acquire Danone’s (DANOY) medical nutrition business, FT reports
Fox (FOXA) may be willing to give board seats to Time Warner (TWX), Bloomberg reports
GlaxoSmithKline (GSK) could eventually spin off consumer healthcare business, FT reports
JPMorgan (JPM) questioned by regulators for conclicts of interest, WSJ says
J&J (JNJ) dispute with Boston Scientific (BSX) looks set to go to trial, NY Times reports
Apple (AAPL) nears deal to buy Swell radio app for $30M, Re/code reports
Apple (AAPL) acquires book analytic startup BookLamp, TechCrunch reports
Larger iPhone could squeeze iPad sales further, Barron’s says
CIT Group (CIT) still looks undervalued, Barron’s says
Wal-Mart (WMT) doesn’t look cheap, Barron’s says
Dow Chemical (DOW) could return 20%, Barron’s says
Theravance (THRX) looks overvalued, Barron’s says

SYNDICATE

Seabridge Gold (SA) files to sell C$100M of common shares
Teekay LNG (TGP) files to sell $500M of common units representing limited partners
Zions Bancorp (ZION) files to sell $525M in common stock

via Zero Hedge http://ift.tt/1pvpLBO Tyler Durden

There has been little in term of tier 1 data releases to drive the price action so far in the overnight session which means participants focused on the upcoming US related risk events including the Fed, Q2 GDP and July Payrolls. This, combined with WSJ article by Fed’s Fisher who opined that the FOMC should consider tapering the reinvestment of maturing securities and begin shrinking the Fed’s balance sheet (note that Fisher’s opinion piece is written based on a speech he gave on July 16th) meant that USTs came under pressure overnight in Asia and in Europe this morning. There has been little notable equity futures action (for now: the USDJPY algo team gave it a good ramp attempt just before Europe open, and will repeat just around the US open despite Standard Chartered major cut to its USDJPY forecast from 110 to 106 overnight), although we expect that to change since today is the day when Tuesday frontrunning takes place with full force. We expect equities to completely ignore the ongoing deterioration in Ukraine and the imminent release of EU’s own sanctions against Russia, as well as what is now shaping up as an Argentina default on July 30.

The only deal so far on Merger Monday is another Carl Ichan victory, after Dollar Tree agreed to buy Family Dollar for a 20% premium, or about $74.50 in a cash and stock combination. The implied EV is a 11.2x multiple of FDO’s LTM EBITDA. And no, this is not some aggressive growth company: this is a deteriorating retailer with margins lower than Amazon’s. Because there is a reason why we call it an M&A bubble…

European shares remain little changed, though off intraday lows, with the personal & household and travel & leisure sectors outperforming and autos, basic resources underperforming. The French and Italian markets are the best-performing larger bourses, Swiss the worst. Financials led the move lower in Europe this morning, with RBS (-2.20%) paring some of Friday’s gains after the bank reported a surprise rise in profit and Aberdeen Asset Management (-3.07%) shares also lower after reporting a fall in funds under administration. On the other hand, the cautious sentiment supported the more defensive sectors, with Danone (+1.49%) shares also gaining following reports that the company is in talks to sell its medical nutrition arms to US group Hospira in a deal valuing the business at around GBP 2.95bln. 10 out of 19 Stoxx Europe 600 sectors rise; personal & household, travel & leisure outperform, autos, basic resources underperform. 43.8% of Stoxx 600 members gain, 53% decline.  Eurostoxx 50 +0.2%, FTSE 100 +0.2%, CAC 40 +0.5%, DAX -0%, IBEX +0.1%, FTSEMIB +0.3%, SMI -0.4%

Chinese shares in Hong Kong enter a bull market, lifted by financials as reports of liquidity and cash support for local banks buoys sentiment for the sector. Meanwhile the rally in long-end treasuries has provided support to Asia Pac bonds this morning. Most 10yr Asian sovereign bonds are about 1-2bp firmer in yield terms. The US dollar index is consolidating its gains from Friday, up marginally today (+0.02%) ahead of the multitude of data and the FOMC this week. Chinese A-shares have had a strong start to the week (up 2.3%) as talk of stimulus continues to benefit China-linked growth assets. The HSCEI is now 21% above its March lows and Shanghai copper futures are not far behind at +15% since March.   MSCI Asia Pacific up 0.2% to 149.1. Nikkei 225 up 0.5%, Hang Seng up 0.9%, Kospi up 0.7%, Shanghai Composite up 2.4%, ASX down 0.1%, Sensex down 0.5%

The euro is little changed against the dollar. Portuguese 10yr bond yields fall; Greek yields decline. Commodities decline, with Brent crude, wheat underperforming and soybeans outperforming.

Elsewhere in the week ahead, Argentina has until Wednesday to settle a dispute with holdout creditors to avoid triggering a default on restructured debt. Current reports suggest that negotiations between the Argentine government and bondholders have made little progress. The highlights on the European data calendar include Spanish retail sales tomorrow, Spanish Q2 GDP on Wednesday and Final Euroarea PMIs on Friday. The July CPI reports are also due on Wednesday in Germany and Spain, ahead of the first Euroarea estimate on Thursday. In China the official manufacturing PMI will be released on Friday.

Today the US highlights are the Dallas Fed index, pending home sales, Markit U.S. composite PMI, Markit U.S. services PMI,  due later.

Market Wrap

• S&P 500 futures at 1971.6
• Stoxx 600 at 342.1
• US 10Yr yield up 2bps to 2.49%
• German 10Yr yield up 1bps to 1.16%
• MSCI Asia Pacific up 0.2% to 149.1
• Gold spot down 0.3% to $1303.7/oz

Bulletin headline summary from Bloomberg and RanSquawk

• Positive sentiment seen overnight in Asia failed to filter through to Europe (Eurostoxx 50, +0.03%), with stocks mixed as market participants position for various risk events due later, with Bunds and USTs also trading lower.
• Chinese equities outperformed (Shanghai Comp +2.4%), lifted by financials as reports of liquidity and cash support for local banks buoys sentiment for the sector.
• Focus going forward will be on PMI and pending home sales data from the US, as well as the 2y note auction by the US Treasury
• Treasuries decline to begin a week that brings three coupon auctions and a Fed meeting at which policy makers are expected to trim QE by another $10b.
• 2Y notes to be sold at today’s $29b auction yield 0.54% inWI trading vs 0.511% in June; stopout yield at that levelwould be highest in more than two years
• As part of its review of 128 lenders, the ECB is studying less-actively traded loans and securitized products that banks value with minimal external data; could require Deutsche Bank, BNP and others to restate value of their assets
• Chinese shares in Hong Kong entered a bull market, leading emerging market stocks higher as commodities advanced for a second day
• When the ECB unleashed a stimulus barrage in June, it cautioned that the economy would take some time to respond. Data due this week may test its patience. 
• International pressure mounted on Israel to end its three-week offensive in the Hamas-controlled Gaza Strip, with Obama and the United Nations Security Council demanding an immediate truce
• McDonald’s said it eliminated beef, pork and chicken items from its restaurants in China after supplier OSI Group LLC recalled all products made at its Shanghai unit yesterday
• Two U.S. citizens are being treated for Ebola in Liberia and the country shut some border crossings, as the worst outbreak of the disease on record spread to Nigeria
• Sovereign yields mixed, with Germany, U.S. and U.K. higher, EU peripherals falling. Euro Stoxx Banks -0.2%. Asian stocks mostly higher. European equities mixed, U.S. stock futures fall. WTI crude and gold lower, copper little changed

US Event Calendar

• 9:45am: Markit US Composite PMI, July preliminary (prior 61); Markit US Services PMI, July preliminary (prior 61)
• 10:00am: Pending Home Sales m/m, Jun, est. 0.2% (prior 6.1%); Pending Home Sales y/y, June, est. -5% (prior -6.9%)
• 10:30am: Dallas Fed Manufacturing Activity, July, est. 12 (prior 11.4)
• 11:00am:  POMO, Fed purchases $1b-$1.25b notes in 2036-2044 sector
• 1:00pm: U.S. to sell $29b 2Y notes

FIXED INCOME

There was little in term of tier 1 data releases to drive the price action which meant that market participants focused on the upcoming US related risk events which are expected to further reinforce the growing expectation of higher rates. This, combined with WSJ article by Fed’s Fisher who opined that the FOMC should consider tapering the reinvestment of maturing securities and begin shrinking the Fed’s balance sheet (note that Fisher’s opinion piece is written based on a speech he gave on July 16th) meant that USTs came under pressure overnight in Asia and in Europe this morning. Of note, Portuguese bonds outperformed in Europe this morning in reaction to Moody’s upgrading Portuguese sovereign debt rating to Ba1 from Ba2.

Barclays Prelim Pan Euro Agg Month-end Extension +0.11y (Prev. month 0.09y, 12m avg. 0.08y), Prelim Treasury Month-end Extension +0.08y (Prev. month 0.08y, 12m avg. 0.09y)

EQUITIES

Financials led the move lower in Europe this morning, with RBS (-2.20%) paring some of Friday’s gains after the bank reported a surprise rise in profit and Aberdeen Asset Management (-3.07%) shares also lower after reporting a fall in funds under administration. On the other hand, the cautious sentiment supported the more defensive sectors, with Danone (+1.49%) shares also gaining following reports that the company is in talks to sell its medical nutrition arms to US group Hospira in a deal valuing the business at around GBP 2.95bln. Of note, Goldman Sachs has downgraded global equities to neutral over 3 months and corporate credit to underweight over both 3 and 12 months.

FX

Currencies remain very quiet ahead of the key risk events later in the week (Fed rate decision, NFP, US GDP, further US earnings), with the USD-index still residing close to six-week highs. The RUB remains softer against most others, with traders eyeing the threat of further sanctions due tomorrow as well as Russia’s USD 50bln fine to shareholders of the now defunct Yukos Energy. EUR/USD sits close to touted option barriers at 1.3425 and 1.3400. Finally, GBP/USD trades close to 1.6975 option expiries for today’s 10am NY cut, as the pair consolidates last week’s modest losses

COMMODITIES

Brent crude futures continue to pull back from Friday’s high of USD 108.46 with a lack of further catalysts to keep the price escalated after EU’s Van Rompuy warned of further sanctions on Russia last Friday, leading the energy complex into negative territory. Gold trades lower as the USD-index holds close to a 6-month high, yet the yellow metals remains above the USD 1300 level on Russian/Ukraine tensions, with positioning ahead of the FOMC and NPF key risk events firmly in focus. Platinum and palladium are outperforming their peers on the back of aforementioned Russian sanctions, with further details expected to be announced on Tuesday.

* * *

DB’s Jim Reid as usual concludes the overnight recap

Bond market bears will be hoping that it’s a case of pop goes the Payrolls this week as August starts with a bang on Friday with the monthly employment report. DB expect a +250k gain on both headline and private nonfarm payrolls which should encourage a one-tenth decline in the unemployment rate to 6.0%. The street is expecting +231k, +228k and 6.1% respectively. Our economists highlight the average hourly earnings part of the report as one to watch for clues to when the Fed become more hawkish. Outside of this the other key releases of the week are US Q2 GDP on Wednesday and the conclusion of the FOMC later the same day. The latter should be a formality (another $10bn reduction in asset purchases) with little in the way of surprises especially with no press conference planned. The GDP report will be fascinating given the -2.9% print in Q1 and also due to the annual revisions that will be announced. DB expect +4.2% with the street at +3.0%. Other data in the US include pending home sales tomorrow, consumer confidence and ADP employment on Wednesday, Chicago PMI on Thursday and the ISM manufacturing on Friday. So a very extensive US data docket.

This US data blitz comes after a week where the curve has continued to flatten at the long-end with 30 year USTs hitting 13 month lows. All up, the 2s/30s curve ended the week around 6bp flatter. It seems that the low for longer view camp, which we’re already members, has gained more followers recently. There also seemed to be renewed interest in the theme that the US economy will face a lower terminal cash rate whether it be due to productivity constraints or otherwise. Going forward, our rates strategists also think that foreign official investors still have cash to put to work in Treasuries after a period of underinvestment, and they continue to think that real money investors are short duration in the longer end as a hedge to overweight positions in spread product. So perhaps we could still see more demand at the long end if these underweight positions were to normalise.

The rally in long-end treasuries has provided support to Asia Pac bonds this morning. Most 10yr Asian sovereign bonds are about 1-2bp firmer in yield terms. The US dollar index is consolidating its gains from Friday, up marginally today (+0.02%) ahead of the multitude of data and the FOMC this week. Chinese A-shares have had a strong start to the week (up 2.3%) as talk of stimulus continues to benefit China-linked growth assets. The HSCEI is now 21% above its March lows and Shanghai copper futures are not far behind at +15% since March.

This week is the last major week of the US reporting season with updates from Pfizer (Tue), ConocoPhillips, Exxon Mobil, Time Warner (Wed) and Berkshire Hathway (Fri) scattered throughout the next few days. There are also the earnings from the major European banks due this week including Bankia (today),. UBS (Tue), Barclays (Wed) and BNP (Thur). So far 228 S&P500 constituents have reported their Q2 results, accounting for just shy of 60% of the index market cap. The current tally is that 78% of companies have beat EPS estimates, with 66% exceeding consensus revenue forecasts. In Europe, 127 companies have reported earnings. The earnings performance of European corporates has been noticeably poorer than their US counterparts, with just 55% and 52% beating EPS and revenue estimates respectively. Our usual earnings tracker table is included in the PDF of today’s EMR.

On Friday and over the course of the weekend, more detail on the potential EU sanctions against Russian sectors began to emerge. A 10 page “options” paper was distributed to EU diplomats last week which would ban EU participation in the sales of new stocks and bonds of Russian state owned banks, together with restrictions on exports of technology to the energy sector. Late on Friday, the European Council president Van Rompuy sent a letter to EU prime ministers, which was said to have clarified that energy sanctions are limited to the Russian oil sector, and not the gas industry “in view of the need to preserve EU energy security”. The FT wrote on Sunday that Germany, who have previously been reluctant to take a harder line approach to the Kremlin, is set to back the sanctions on the condition that the burden is spread evenly across the EU. Germany’s foreign minister said in a German radio interview on Sunday that the EU had “created the conditions” to “increase the pressure on Russia” through the sanctions in finance, defence and energy equipment, but “if there are negative consequences, then they must be borne across Europe as a whole”. A meeting of EU ambassadors on Tuesday will debate those sectoral sanctions.

Elsewhere in the week ahead, Argentina has until Wednesday to settle a dispute with holdout creditors to avoid triggering a default on restructured debt. Current reports suggest that negotiations between the Argentine government and bondholders have made little progress. The highlights on the European data calendar include Spanish retail sales tomorrow, Spanish Q2 GDP on Wednesday and Final Euroarea PMIs on Friday. The July CPI reports are also due on Wednesday in Germany and Spain, ahead of the first Euroarea estimate on Thursday. In China the official manufacturing PMI will be released on Friday.

via Zero Hedge http://ift.tt/1th8cfk Tyler Durden