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via Zero Hedge http://ift.tt/1r4xf0h williambanzai7

Via Goldman Sachs’ Yu Song,

The PBOC cut the benchmark lending and deposit rates by 40 bp and 25 bp, respectively. Meanwhile, the deposit rate ceiling was increased to 1.2 times the benchmark deposit rate (from 1.1 previously), effective from Nov 22. The one-year benchmark lending rate will stand at 5.6% (vs 6% previously) and one-year benchmark deposit rate at 2.75% (vs 3% previously).

The change is in response to the weakness in economic growth and falling inflation. High-frequency data available to select government officials may have shown significant weakening, which was likely impacted by (1) the APEC related shutdowns, (2) weakening of underlying export growth amid mixed global activity growth and the recent appreciation of the CNY exchange rate and (3) tighter domestic liquidity conditions. Although nominal interest rates have been relatively stable, real rates have been on the rise in recent months amid lower inflation, which is effectively monetary tightening.

The effects of the cut in the benchmark lending rate are likely to be small since lending rates are not currently subject to either upper or lower limits. It may however be slightly useful to borrowers in negotiations with lenders, in our view.

The deposit rate is effectively unchanged (one-year deposit rate will range from 2.75% to 3.3% vs previously from 3% to 3.3%) because the cut in the benchmark rate is fully offset by the rise in the deposit rate ceiling (assuming commercial banks utilize nearly 100% of the upside from the benchmark rate to the ceiling. We believe they will be likely to do so given the competition for deposits). We believe the reluctance to cut the deposit rate could be because the government wishes to avoid any negative impact on household income growth.

Thus the move itself is unlikely to have a big direct impact on the economy. But the indirect effects could be meaningful because today’s move sends a very clear signal to the market on policy intention. When the government intends to loosen its macro policy stance, it typically uses a range of policy tools instead of relying on just one or two. Full RRR cuts face a higher hurdle as they have more substitutes such as targeted RRR cuts, relending and its equivalents (PSL, MLF etc.). We expect the government to step up fiscal expenditure allocation and add more pressure on local government to act to support the economy, especially via speeding up infrastructure construction. These measures were the key in the growth rebound in 2Q of this year and will likely to be supportive of growth again in the rest of the year.

This is nevertheless a positive step in interest rate liberalization, in our view.

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

A week ago, we penned “The Real Reason Why Germany Halted Its Gold Repatriation From The NY Fed“, in which we got, for the first time ever, an admission by an official source, namely the bank that knows everything that takes place in Germany – Deutsche Bank – what the real reason was for Germany’s gold repatriation halt after obtaining a meager 5 tons from the NY Fed:

… the gold community paid great attention to the decision of the German Bundesbank to “bring German gold home”. At the beginning of 2013, the Bundesbank announced it would repatriate 300 tonnes of gold stored in the US by 2020. It is well behind schedule, citing logistical difficulties. Yet diplomatic difficulties are more likely to be the chief cause of the delay, especially seeing as the Bundesbank has proven its capacity to organise large-scale gold transports. In the early 2000s, the Bundesbank incrementally repatriated 930 tonnes of German gold held by the Bank of England.

Some took offense with this, pointing out, accurately, that the gold held at the NY Fed in deposit form for foreign institutions had continued to decline into 2014 despite the alleged German halt. Well, today we know the answer: it wasn’t Germany who was secretly withdrawing gold from the NYFed contrary to what it had publicly disclosed.  

It was the Netherlands.

This is the stunning statement made by the Dutch Central Bank earlier today, and which, all compliments to China’s rate cut, is truly the biggest news of the day, as it shows that one doesn’t need a referendum to repatriate their gold, nor does one run into logistic or diplomatic problems if one is truly set on procuring their physical.

As to why the DNB decided it was time to cut its gold held at the NY Fed by 122 tons? “”It is no longer wise to keep half of our gold in one part of the world,” a DNB spokesman told Telegraaf. “Maybe it was desirable during the Cold War, but not now.”

From the source:

De Nederlandsche Bank (DNB) has adjusted its gold stock location policy and has shipped gold from the United States to the Netherlands to spread its gold stock in a more balanced way.

 

Under the previous policy, 11% of the gold stock was located in the Netherlands, 51% in the United States, with the remainder held in Canada (20%) and the United Kingdom (18%). Under the new policy, the breakdown by location is as follows: 31% in Amsterdam, 31% in New York, with the relative holdings in Ottawa and London remaining unchanged at 20% and 18%, respectively. Following this adjustment, DNB is in line with other central banks holding a greater part of their gold stock in their own countries. Beyond realising a more balanced distribution of the gold stock across the different locations, this may also have a positive effect on public confidence.

 

Changing the distribution of the gold holdings across the different locations is not without precedent. From the end of the Second World War until the early 1970s, for example, DNB increased its gold reserves following the Bretton Woods Accord, mainly in New York. Since then, there have been other movements in DNB’s gold stock. The main reasons for this being the gold sales in the past few decades and the closure of the vaults of the Reserve Bank of Australia, as a result of which DNB shipped gold from Australia to the United Kingdom in 2000.

Sure enough, AP confirmed:

The Dutch Central Bank says it has recently shipped 122.5 tons of gold worth around 4 billion euros ($5 billion) from safekeeping in New York back to its headquarters in Amsterdam.

 

In a statement Friday morning the bank said that its 612.5-ton national gold reserve is now divided 31 percent in Amsterdam, 31 percent in New York, 20 percent in Ottawa, Canada and 18 percent in London.

 

“With this adjustment the Dutch Central Bank joins other banks that are keeping a larger share of their gold supply in their own country,” the bank said in a statement. “In addition to a more balanced division of the gold reserves...this may also contribute to a positive confidence effect with the public.”

This is how the Old and New gold allocation of the Dutch Central Bank look currently:

Note: the reallocation has already taken place, and is not – like Germany – subject to a 5 year period during which the NY Fed is expected to recoup the gold. So it can be done!?

As to when it was done, here is the NY Fed’s monthly reports of gold deposits by foreign entities: here we can see that while the 5 tons outflow in 2013 was most likely Germany, the recent surge in gold repatriation from Liberty 33 was the Netherlands. That said, only 57.5 tons of NY deposits gold has been officially repatriated through September, which means the October update, when it comes out, will be a doozy.

 

Some more details from the Dutch Telegraaf, google-translated:

In the vaults at the Amsterdam Frederiksplein was until recently 11% percent of the total of 612 tons of government gold. That is screwed up to 31%.

For years there were major concerns of the gold was still there. This months of almost military organized gold shipments from Manhattan DNB wants a ‘balanced’ distribution of the national gold buffer.

 

In addition, DNB expects Dutch citizens more confident that enough of our gold is in their own ‘home’ to guide the country if necessary following major crises.

 

At that effect also highlights the German Bundesbank, which are gold also partially recovered. De Nederlandsche Bank has great silence in recent months retrieved 130 tons of gold bars.

 

Last week drove armored trucks back and forth towards the Amsterdam Frederiksplein. “It is no longer wise to keep half of our gold in one part of the world,” the DNB spokesman on the massive operation with gold bars to Amsterdam says. “Maybe that was during the Cold War still desirable, not now. ”

 

In Amsterdam is recently 31% of the gold. In the vaults of New York is 31%. It remains. De Nederlandsche Bank carries no gold bars back from the protected storage in Ottawa, Canada, where 20% of the gold remains. In London, the Netherlands keeps 18% of all Dutch ‘sandwiches’ gold as nest egg.

 

Netherlands moved his gold in the past frequently. In the period after the Second World War until the early seventies the Dutch central bank bought gold to replenish its reserves. That was mainly focused on the vaults in New York, which are built to earthquakes and bomb attacks endured. Since then bought and sold DNB gold and earned it every robustly.

Another curiosity: the gold was repatriated by ship. From Dutch News:

In total, 120 tonnes of gold valued at €4bn has been brought back to the Netherlands by ship, Nos television said. The high security reparations for the move took months.

Luckily, that particular vessel did not suffer any “boating incidents.”

And now that the Dutch have shown just how “easy” it is to repatriate one’s gold when not entangled in shifting alliances, diplomatic feuds, or suffering from “logistical problems” preventing one from collecting their gold, we wonder just how much more eager Germany or Switzerland will be to collect their own gold, or whether the Swiss November 30 referendum will decide to let countries like the Netherlands have a right of first refusal of whatever gold may still be held at the vault located 90 feet below street level at the New York Federal Reserve Bank (which as we reported a year ago, is connected by an underground tunnel to the JPMorgan precious metal which was located just across the street).

via Zero Hedge http://ift.tt/1z2FWN0 Tyler Durden

First Mario Draghi made some strong statements speaking in Asia that "it is essential to bring back inflation to target and without delay," which sent EURUSD tumbling BUT did not spark moves in the S&P 500 (though Gold slipped). It was not until the PBOC cut rates (and sent AUD surging) that the US equity market perked up and started ripping… along with gold and as the morning progressed, gold has kept going as it is clear the Central Banks of the world have only one policy left… (no wonder the Dutch want their gold back)

 

 

It appears that while Draghi's comments impacted European stocks (DAX surged)…

 

it had negligible impact on US stocks… they were driven by AUDJPY after the PBOC cut

 

Charts:Bloomberg

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

Once again, Zero Hedge was just a bit ahead of its time. From September 22:

Moat? RT @fiatcurrency: Snipers, Guards, Fences Not Enough: Secret Service Mulls Security Checkpoints Outside WH http://t.co/Vou49LA68M

— zerohedge (@zerohedge) September 22, 2014

And now, fast forward to today, and this submission by Mike Krieger via Liberty Blitzkrieg blog,

What has been occurring over the past several years is not a recovery, rather, it’s a painful transition of the U.S. into a neo-feudal society. Earlier this week in the post, Welcome to the Recovery – U.S. Child Homelessness Hits Record as Poverty in Mass. is Highest Since 1960, I wrote:

While the general population is aware something is seriously wrong, people remain extremely confused about the root of the problem. This is because what’s happening all around us isn’t socialism and it isn’t free market capitalism. It is actually a return to something much more ancient and much more oppressive. It is a return to serfdom, neo-feudalism and oligarchy.

Well now we have definitive proof. It can’t get any more in your face than this.

From MarketWatch:

WASHINGTON (MarketWatch)—Faced with an increasing number of White House intrusions that led to the resignation of a Secret Service director, a congressman on Wednesday suggested that maybe a moat should be erected around the president’s home.

 

The suggestion was made by Rep. Steve Cohen, a Tennessee Democrat, at a House Judiciary Committee hearing.

 

With hand gestures, Cohen suggested a moat roughly six-feet wide may be “attractive” and “effective.”

 

Joseph Clancy, the acting director of the Secret Service, didn’t dismiss the suggestion out of hand.

 

“Sir, it may be,” he said. Clancy said the Secret Service and the National Park Service were discussing ways to ensure security along with access to the White House for the American people.

In case you aren’t familiar with Steve Cohen, I covered his fascist tendencies in the past. Recall the post: Rep. Steve Cohen Calls Tea Party Republicans “Domestic Enemies” on MSNBC.

Here’s the moat clip:

We wonder where he got that idea from?

Moat? RT @fiatcurrency: Snipers, Guards, Fences Not Enough: Secret Service Mulls Security Checkpoints Outside WH http://t.co/Vou49LA68M

— zerohedge (@zerohedge) September 22, 2014

Enjoy your serfdom!!

 

via Zero Hedge http://ift.tt/1uW6Mat Tyler Durden

Recent polls show pro-default parties growing popular in peripheral euro-area countries such as Greece, Italy and Spain. As Bloomberg Brief's Maxime Sbaihi notes, in a depressed economic environment, their promises to restructure public debt might soon bring them to power and tempt traditional parties to adopt their ideas. This return of political risk in the euro area doesn’t appear to be priced in by market participants. As Italy's Beppe Grillo recently exclaimed, "we will leave the Euro and bring down this system of bankers, of scum."

 

 

One of these countries could trigger a new euro-area political crisis and affect the others through contagion. Market participants are focused on the European Central Bank and may be overlooking that prospect.

*  *  *

As Martin Armstrong asks rather pointedly…

Since the introduction of the euro, all economic parameters have deteriorated, the founder of the five-star movement in Italy is absolutely correct. The design or the Euro was a disaster. There is no fixing this any more. We have crossed the line of no return. Beppe is now calling for referendum on leaving euro. Will he be assassinated by Brussels? It is unlikely that the EU Commission will allow such a vote.

*  *  *

Source: Bloomberg Briefs

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

• They go all in: China’s PBOC Cuts Interest Rates for First Time Since 2012 (BBG)
• And all in-er: ECB’s Draghi throws door to quantitative easing wide open as recovery wanes (Reuters)
• Global Markets Rally: ECB Head Says Central Bank Is Ready to Expand Stimulus Program After China Cuts Rates (WSJ)
• Obama unveils U.S. immigration reform, setting up fight with Republicans (Reuters)
• U.S. increasing non-lethal military aid to Ukraine (Reuters)
• Russia warns U.S. against arms to Ukraine as Biden due in Kiev (Reuters)
• Ukraine slashed gold holdings in October, Russia added more – IMF (Reuters)
• Abe Dissolves Japan’s Lower House of Parliament (WSJ)
• In blow to Cameron, Britain’s UKIP wins second parliamentary seat (Reuters)
• Distressed Debt in China? Ain’t Seen Nothing, DAC Says (BBG)
• Citigroup Said to Be Ousted From ECB FX Group for Rigging (BBG)
• Sotheby’s CEO to Step Down (WSJ)
• More arrests as protesters await Ferguson grand jury decision (Reuters)
• Finally, a New Clue to Solve the CIA’s Mysterious Kryptos Sculpture (Wired)

 

Overnight Media Digest

WSJ

* U.S. President Barack Obama announced Thursday that millions of illegal immigrants will gain protection from deportation, under a plan that bypasses Congress and which could unleash unpredictable political and economic forces. (http://on.wsj.com/1BSgbVA)

* The Federal Reserve launched a sweeping review of how it supervises big banks. The Fed said the review is focused on whether senior staff are given enough information when making decisions affecting the largest financial firms, including “whether channels exist for decision makers to be aware of divergent views”. (http://on.wsj.com/1uGbYOe)

* Chief Executive William Ruprecht is leaving Sotheby’s , months after hedge-fund activist Dan Loeb and several others joined the auction house’s board. The company said the departure was by mutual agreement with the board, which took a hard look at the company’s senior management in August. (http://on.wsj.com/1Aqf5Pg)

* Takata Corp, the air-bag supplier at the center of a massive recall involving millions of vehicles, knew one of its air bags exploded as early as May 2005 but didn’t investigate it further or warn auto makers of a potential defect until two years later. (http://on.wsj.com/1vukToN)

* Alibaba Group Holding Ltd, the Chinese e-commerce company, has emerged as this year’s biggest source of fees for banks working on capital-markets deals. After its initial public offering in September, the largest in history, the company on Thursday sold $8 billion in bonds, one of the largest corporate-bond deals of the year. (http://on.wsj.com/1qDgY8d)

* Federal authorities are investigating whether casino operator Wynn Resorts Ltd violated money-laundering laws, according to people familiar with the matter. Wynn will be the third major Las Vegas casino company in recent years known to be investigated for possible violations of money-laundering laws. (http://on.wsj.com/11AkML5)

* Valeant Pharmaceuticals Inc is launching a new $2 billion securities repurchase program, just days after losing its bid to buy Botox maker Allergan Inc to Actavis Plc . Under the program, which begins Friday, Valeant can buy back its senior notes, common shares and other securities. (http://on.wsj.com/1xvIEfR)

 

FT

UK Independence party leader Nigel Farage said his party was going to win the seat in the Rochester and Strood by-election on Thursday night as the Tories braced themselves for a possible upheaval in the wake of the election of Ukip’s second member of parliament.

Britain’s Finance Minister George Osborne on Thursday night withdrew his bid to overturn the EU banker bonus cap, saying he would focus on reforming global rules on pay rather than wasting more money on a hopeless lawsuit.

Boris Johnson, the Conservative mayor of London, admitted to being pursued by the US authorities for an unpaid tax demand.

Swiss chemicals group Ineos has entered the race to develop UK reserves of shale gas, announcing its plans on Thursday to spend $1 billion on exploration in coming years.

 

NYT

* Goldman Sachs Group Inc executives spent Thursday locked in a testy public face-off with members of Congress, fighting suggestions that the bank had taken too large a role in the commodities market. (http://nyti.ms/1x8jNuG)

* British regulators fined the Royal Bank of Scotland for about $88 million, on Thursday over a technology failure that left millions of customers unable to access their accounts for several weeks in 2012. (http://nyti.ms/1t9ihad)

* Airbus Group NV scored a big victory over Boeing Co on Thursday when Delta Air Lines Inc said it would buy 50 new planes from Airbus, including its newest long-range A350 aircraft. (http://nyti.ms/1uGFTpr)

* NRG Energy Inc, which built a leading electricity business from coal and other conventional power plants, is aiming to reduce its carbon emissions 50 percent by 2030 and 90 percent by 2050, the company said on Thursday. (http://nyti.ms/11xFA5Y)

* Technip of France said on Thursday that it had approached CGG SA, an oil services company, about a potential takeover and offered to acquire the smaller company for about $1.8 billion. (http://nyti.ms/1v0bnIG)

 

China

CHINA SECURITIES JOURNAL

– China is aiming to overhaul its rural land transfer systems within the next five years, the newspaper reported, citing a joint statement from China’s Central Committee and the State Council, China’s cabinet.

SECURITIES TIMES

– The State Council has rolled out a series of measures to help smaller companies amid a slowing economy, including extra financial support, lower taxation and establishing information sharing platforms.

SHANGHAI SECURITIES NEWS

– China’s securities regulator is probing PKU HealthCare Corp Ltd, a healthcare group linked to the prestigious Peking University, for violating securities regulations, according to a filing from the company.

CHINA DAILY

– China will unveil new standards for air purifiers on Friday to better regulate a market which is booming as consumers grow increasingly concerned about hazardous levels of air pollution, the Standardization Administration said on Thursday.

– A court in the autonomous region of Inner Mongolia plans to reopen a two decades-old trial of a teenager who was executed in 1996 for rape and murder. The case was fast tracked at the time despite doubts over the evidence.

SHANGHAI DAILY

– Shanghai has increased protection for consumers buying products online, the Shanghai People’s Congress ruled on Thursday. China’s e-commerce market boom is forcing regulators to adapt rules to keep up.

PEOPLE’S DAILY

– Solving land issues affecting China’s farmers is critical to the country’s wider reform, the paper which acts as a mouthpiece for the ruling Communist Party, said in a commentary.

Britain

The Times

Police struggle to trap tech-savvy terrorists

The ability of Britain’s intelligence chiefs to monitor the terrorist threat is at its lowest level for a decade, according to the country’s most senior anti-terrorism policeman.

(http://thetim.es/1tmXu28)

IT staff pay price for computer fiasco that locked RBS customers’ accounts

The staff responsible for an IT glitch that left millions of RBS, NatWest and Ulster Bank customers unable to access their accounts have shouldered about one-tenth of a 56 million-pound ($87.9 million) fine slapped on Royal Bank of Scotland yesterday.

(http://thetim.es/1ugmJTI)

The Guardian Chancellor George Osborne backs down over EU cap on bankers’ bonuses

Chancellor George Osborne has conceded defeat in his attempt to overturn the EU cap on bonuses after a senior legal advisor at the European Court of Justice rejected his arguments.

(http://bit.ly/1x76A55)

Former JJB Sports boss convicted of taking 1 mln stg in backhanders

Chris Ronnie, the former boss of JJB Sports Plc, faces up to five years in jail, after being found guilty of accepting more than 1 million pounds ($1.57 million) in payments from suppliers.

(http://bit.ly/1xv9u7P)

The Telegraph RBS hit with 56 mln stg fine for IT breakdown

Royal Bank of Scotland has pledged that a repeat of the IT disaster that left millions of customers unable to make payments is extremely unlikely after the bank was hit with a 56 million-pound fine.

(http://bit.ly/1r28d1O)

Wonga chief executive departs after six months in the job

Tim Weller, the interim chief executive officer of loan company Wonga, has left the consumer loans business six months after he took over from former chief executive Niall Wass, who himself lasted just six months in the role.

(http://bit.ly/1Amx3SJ)

Sky News Shop Prices Fall at Fastest Pace Since 2002

Shoppers are on course to bag some bargains in the run up to Christmas, with prices falling at their quickest pace since 2002 in October.

(http://bit.ly/1yvLr78)

British Gas Predicts Lower Bills This Year

British Gas is predicting its average dual fuel bills to be 100 pounds lower per household this year, largely because of warmer weather.

(http://bit.ly/1xWPjQ4)

The Independent Ineos announces $1 bln investment in UK fracking exploration

Chemicals giant Ineos has set out plans to invest up to $1 billion (640 million pounds) into shale gas production in the UK – putting it at the centre of the country’s nascent fracking plans.

(http://ind.pn/1r2dSoJ)

UK retail sales jumped in October as shoppers go bargain hunting

Retailers got an early boost in the run-up to Christmas as shoppers threw caution to the wind in October, official figures showed.

(http://ind.pn/11I6mJR)

 

Fly On The Wall Pre-market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Kansas City Fed manufacturing index for November at 11:00–consensus 6

ANALYST RESEARCH

Upgrades

Best Buy (BBY) upgraded to Outperform from Market Perform at Telsey Advisory
BlackRock (BLK) upgraded to Outperform from Market Perform at Bernstein
Cerner (CERN) upgraded to Outperform from Market Perform at Cowen
Community Health (CYH) upgraded to Outperform from Market Perform at Raymond James
Lockheed Martin (LMT) upgraded to Neutral from Sell at UBS
Manchester United (MANU) upgraded to Overweight from Neutral at JPMorgan
Teekay Offshore Partners (TOO) upgraded to Buy from Neutral at Citigroup
Trinity Industries (TRN) upgraded to Buy from Neutral at Longbow
Zebra Technologies (ZBRA) upgraded to Overweight from Neutral at JPMorgan

Downgrades

Aerohive (HIVE) downgraded to Neutral from Outperform at Macquarie
Alliant Energy (LNT) downgraded to Hold from Buy at Wunderlich
AmerisourceBergen (ABC) downgraded to Market Perform from Outperform at FBR Capital
Dillard’s (DDS) downgraded to Neutral from Buy at BofA/Merrill
eBay (EBAY) downgraded to Sell from Hold at Evercore ISI
Fiserv (FISV) downgraded to Equal Weight from Overweight at Barclays
Franklin Resources (BEN) downgraded to Market Perform from Outperform at Bernstein
GameStop (GME) downgraded to Market Perform from Outperform at Telsey Advisory
Macerich (MAC) downgraded to Equal Weight from Overweight at Morgan Stanley
Macerich (MAC) downgraded to Hold from Buy at KeyBanc
Wesco Aircraft (WAIR) downgraded to Equal Weight from Overweight at Barclays
WuXi PharmaTech (WX) downgraded to Hold from Buy at Jefferies

Initiations

ADP (ADP) initiated with a Sell at Topeka
Adobe (ADBE) initiated with a Buy at Jefferies
Amazon.com (AMZN) initiated with a Buy at Nomura
Arlington Asset Investment (AI) initiated with an Outperform at FBR Capital
Benefitfocus (BNFT) initiated with a Buy at Jefferies
CA Technologies (CA) initiated with a Buy at Jefferies
Caterpillar (CAT) initiated with a Buy at Stifel
Check Point (CHKP) initiated with a Buy at Jefferies
Ctrip.com (CTRP) initiated with an Overweight at HSBC
FMC Technologies (FTI) initiated with a Buy at Citigroup
Intuit (INTU) initiated with a Buy at Jefferies
Jefferies says new Microsoft (MSFT) looks like old, starts with Underperform
Microsoft (MSFT) initiated with an Underperform at Jefferies
MoneyGram (MGI) initiated with a Neutral at Compass Point
National Oilwell (NOV) initiated with a Neutral at Citigroup
Oracle (ORCL) initiated with a Hold at Jefferies
Paychex (PAYX) initiated with a Sell at Topeka
Paycom (PAYC) Software initiated with a Buy at Jefferies
Qlik Technologies (QLIK) initiated with a Buy at Jefferies
Qunar (QUNR) initiated with a Neutral at HSBC
Red Hat (RHT) initiated with a Hold at Jefferies
RingCentral (RNG) initiated with a Buy at Jefferies
SAP (SAP) initiated with a Hold at Jefferies
SS&C Technologies (SSNC) initiated with a Buy at Jefferies
Salesforce.com (CRM) initiated with an Underperform at Jefferies
SolarWinds (SWI) initiated with a Buy at Jefferies
Splunk (SPLK) initiated with a Buy at Jefferies
Symantec (SYMC) initiated with an Underperform at Jefferies
Tableau (DATA) initiated with a Hold at Jefferies
VMware (VMW) initiated with a Buy at Jefferies
Varonis (VRNS) assumed with a Buy at Jefferies
Western Union (WU) initiated with a Neutral at Compass Point
Xoom (XOOM) initiated with a Sell at Compass Point
ZAIS Financial (ZFC) initiated with an Outperform at JMP Securities

COMPANY NEWS

Sotheby’s (BID) CEO William F. Ruprecht to step down by mutual agreement with the board. Ruprecht, who has served as CEO since 2000, will continue
as Chairman, President and CEO until his successor is in place
Hertz (HTZ) named John P. Tague as President, CEO
Yum! Brands (YUM) authorized up to $1B in share repurchases 
PS Fund 1 sold 2.24M Allergan (AGN) shares allocated to Valeant USA (VRX)
Rolls-Royce (RYCEY) wins $5B Trent order for 50 aircraft from Delta Air Lines (DAL) (EADSY)
Starwood (HOT) declared special dividend of 65c per share

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Sirona Dental (SIRO), Hibbett Sports (HIBB), Aruba Networks (ARUN), Zoe’s Kitchen (ZOES), Mentor Graphics (MENT), Splunk (SPLK), Autodesk (ADSK), Haynes (HAYN), Ross Stores (ROST), Intuit (INTU)

Companies that missed consensus earnings expectations include:
Geospace (GEOS), Amtech Systems (ASYS), Wesco Aircraft (WAIR), The Fresh Market (TFM), GameStop (GME)

Companies that matched consensus earnings expectations include:
Marvell (MRVL)

NEWSPAPERS/WEBSITES

CBS (CBS) consents to short term extension on DISH (DISH) negotiations, Bloomberg reports
Intel (INTC) may not reach goal of shipping 70M tablet chips next year, Re/code reports
Amazon (AMZN) lease hints at same-day shipping, brick-and-mortar ambitions, WSJ says
Goldman Sachs (GS) denies manipulating commodities, Reuters reports
Boeing (BA) has no plans for long-range 737 MAX, Reuters reports
Amazon (AMZN) could launch travel service, Skift reports

SYNDICATE

Ashford Hospitality Prime (AHP) files to sell 8.8M units for limited partners
BGC Partners (BGCP) files to sell 20M shares of Class A Common Stock
Castle Brands (ROX) files to sell $10M in common stock
Celsus Therapeutics (cltx) files to sell $46M in common stock
Lexicon (LXRX) 49.751M share Spot Secondary priced at $1.005
New York Mortgage (NYMT) files to sell 15M shares of common stock
On Track Innovations (OTIV) 6.25M share Spot Secondary priced at $1.60
On Track Innovations (OTIV) files to sell common stock
Perrigo (PRGO) 5.92M share Secondary priced at $152.00
TCP Capital (TCPC) files to sell 5.9M shares of common stock

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

While the biggest news of the day will certainly be China’s rate cut (and the Dutch secret gold repatriation but more on the shortly), here is a list of all the other central-banking events which have moved markets overnight, because in the new normal it no longer is about any news or fundamentals, it is all about the destruction of the value of money and the matched increase in nominal asset values.

As RanSquawk recounts, European equities opened in the green in a continuation of the Wall Street close and positive performance overnight in Asia-Pacific equities with little else in the way of macro newsflow to dictate the price action. However, this subdued start to the session was short-lived as ECB’s Draghi took the stage in Frankfurt and presented an increasingly dovish tone. More specifically, the ECB head said the inflation situation in the euro area has become increasingly challenging and will seek to raise inflation as fast as possible, with participants taking these as comments as one of the clearest indications yet that an ECB QE programme is increasingly likely. This subsequently saw European stocks surge higher with gains in excess of 1% amid hopes of further liquidity while Bunds staged a fast-money move higher to print session highs and the Euribor strip was also seen bid following the dovish rhetoric. On a stock specific basis in Europe this morning, newsflow remains relatively light. However, energy and basic material names lead the way higher alongside the recent modest recovery seen in commodity prices.

Overnight Buletin Headlines form Ransquawk and Bloomberg

• European price action has been largely controlled by particularly dovish rhetoric from ECB’s Draghi.
• As such EUR/USD prints a weekly low, while European equities enter the North American crossover firmly in the green.
• Looking ahead, today’s session sees a lack of tier 1 US data, with Canadian CPI the main event.
• Treasuries headed for second consecutive weekly loss amid gains for stocks, surge in corporate issuance including Alibaba’s $8b, largest USD- denominated sale by an Asian issuer.
• China cut interest rates for the first time since July 2012,    lowering the 1-year deposit rate to 2.75% from 3.00% and the    one-year lending rate by 0.4ppt to 5.6%
• Draghi said the ECB must drive inflation higher “as fast as possible,” and will broaden its asset-purchase program if needed to achieve that
• Japan’s finance chief said the yen has been weakening too fast over the past week, the strongest statement yet by one of the nation’s top policy makers as the central bank’s expanded stimulus drives down the exchange rate
• Obama lifted the immediate threat of deportation and opened the way to better jobs for about 5m undocumented immigrants, thrusting a long-simmering fight to the forefront as he takes on a Republican-controlled Congress
• The U.S. health secretary, Sylvia Mathews Burwell, said her agency made a mistake when it added dental-plan customers to recent figures on Obamacare enrollment.
• Russia is seeking to build a high-speed rail link to further bolster ties with China after agreeing on the biggest natural gas supply deal in history
• The U.K. Independence Party dealt a new blow to Prime Minister David Cameron as it won a second seat in Parliament from his Conservatives in six weeks
• U.S. prosecutors are seeking to settle criminal currency- rigging cases with multiple banks at the same time, allowing lenders to avoid being singled out for industrywide conduct, according to people familiar with the matter
• Sovereign yields lower. Asian stocks gained. European stocks, U.S. equity-index futures higher. Brent crude, gold gain; copper falls

US Event Calendar

• 11:00am: Kansas City Fed Manufacturing Activity, Nov., est. 6 (prior 4)
• 10:00am: Senate subcommittee hearing on New York Fed

FX

In terms of FX moves, until the PBOC shocker just before 6 am eastern time, the comments from Draghi have dictated a bulk of the price action, with EUR/USD breaking back below 1.2500. This subsequently provided USD with a strong bid which lifted USD/CHF and subsequently saw EUR/CHF reach its highest level in 9 days, with some also citing SNB intervention alongside the move in the cross. Elsewhere, overnight, USD/JPY was dragged lower following the pair failing to break above 119.00 yesterday, with the move to the downside exacerbated by comments by Japanese Fin. Min. Aso who said the speed of JPY weakening has been too fast, with this move also resulting in heavy selling in EUR/JPY and GBP/JPY. Once the PBOC hit the tape, the AUD soared against all pairs, and as a result lifted all AUDJPY carry driven trades, which as we showed yesterday, was the key correlation pair for E-Mini algos, thus sending the S&P to new all time highs.

COMMODITIES

Elsewhere, the commodity complex has been particularly subdued. Early in the European session spot gold failed to break above USD 1,200 before being dragged further away from the handle following the broad-based USD strength. WTI and Brent crude futures enter the North American crossover in modest negative territory with participants looking ahead to the OPEC meeting, ahead of which analysts at Commerzbank said OPEC are unlikely to cut 30mln bpd target next week, while SocGen sees Saudi Arabia leading 1mln b/d to 1.5mln bbd OPEC cut.

* * *

DB’s Jim Reid concludes the overnight news recap

Yesterday was certainly a day for the data-watchers with a host of prints across Europe and the US. The result was, perhaps unsurprisingly, a mixed bag and continues the theme we’ve seen recently with less than encouraging PMI prints out of Europe in the morning being met with a generally solid set of releases in the US in the afternoon. Starting in the US, CPI came in modestly ahead of consensus as the flat mom October CPI headline print was a tad above the -0.1%mom expected, whilst the core reading showed further acceleration to +0.2%mom (+0.1%mom expected) from +0.1% previously. Our US economists interestingly pointed out that the continually deflating goods prices recently have been offset by ongoing gains in services prices – this in turn has raised the core inflation print by a tenth to 1.8% in year-over-year ended terms.

Looking further ahead, our colleagues expect that it’ll be difficult for core inflation to move lower given that core services prices accounts for a chunky 75% of overall core CPI inflation. With core goods prices moving lower as a result of a significant deceleration in non-petroleum import prices, we’ve seen core goods decline year-over-year since April 2013. On the other hand core services prices have consistently grown well above +2.0% for the last three years (with the current run rate at +2.5%). This is largely as a result of shelter costs that we mentioned yesterday which have once again risen in October to a +3.1% yoy growth rate, now a recession high. Given the expected further decline in the rental vacancy rate, we should see shelter costs continue to rise in the near term which should offset any downwards goods sector pressure and hold inflation above 2%. All-in-all the divergence in the two factors of CPI highlights the current inflationary conditions in the US and is worth keeping a keen eye on as we move through 2015.

Away from the CPI readings, there were further positive prints in the housing market with existing home sales increasing 1.5%mom, ahead of expectations of a small decline. As well as this, the Philadelphia Fed survey was Strong with the solid 40.8 reading up from 20.7 in October. Claims were largely mixed although the flash manufacturing PMI was the slight blip in an otherwise encouraging day for the region with a 1.2pt fall to 54.7 weaker than expected. Finally October’s leading index showed a +0.9%mom rise, ahead of consensus.

Looking at how the market reacted, the +0.20% close in the S&P yesterday somewhat hides the +0.6% bounce off the lows, closing just shy of Wednesday’s record highs. Treasuries weakened modestly with the curve some 2-3bps wider whilst the Dollar closed down slightly weaker (DXY -0.06%).

Before all this yesterday, there was little for the market to get encouraged about in Europe following disappointing PMI’s. The Eurozone November flash print of 51.4 was materially down on expectations of 52.4 and last month’s 52.1 reading. However, this is largely explained by a drop in the German composite to 52.1 (54 expected) from 53.9 previously and comes after what had been an encouraging recent ZEW survey. Just on the German reading, the most disappointing reading was perhaps a fall in the services index to 52.1 from 54.4, marking the lowest level since July 2013. The weakness in these numbers backs up our German economists’ view that GDP is set to stagnate through the next two quarters with the potential for a risk of a negative quarter. Away from Germany, France didn’t fare much better with the composite coming in below expectations at 48.4 (vs. 48.7), although the services print improved from Octobers reading. Looking forward, our European economists see the overall PMI outcome consistent with their GDP growth call in 2015 of +0.8% as well as providing further strength around the argument that that the ECB will have to include government bonds in its QE programme to meet its inflation target. Over the last few weeks of touring round Europe its been noticeable how sentiment has changed towards QE. Two months ago at the start of my recent travels, most people were still skeptical that the ECB could ever sanction Government bond QE. Fast forward to the present day and the vast majority think it’s an inevitability.

In terms of market reaction in Europe yesterday, 10yr Bunds closed some 5bps wider whilst the Stoxx 600 (-0.26%) and DAX (+0.12%) initially weakened some -0.9% post PMI’s only to rally into the close following the better sentiment out of the US. Credit markets largely reflected the equity moves, Xover closing some 4.5bps wider on the day.

Whilst on the subject of credit markets, the latest weekly fund flows are in. A look at the HY mutual fund flow numbers shows that the past week saw further outflows in Europe (-$143mn or -0.3% of NAV). We have now seen just one week of inflows in the past eight with 15 of the past 19 weeks seeing outflows. Net outflows over the 19 weeks have totaled $4.1bn (around 10% of NAV). US HY funds also saw outflows over the past week (-$809mn or -0.3% of NAV) breaking a streak of four consecutive weeks of inflows. Overall it does seem that flows have stabilised but we probably need inflows to encourage fund managers to exploit the wider and quite attractive levels – especially those in Europe. Maybe the US small set back is not being helped by the continued Energy sector concerns.

Just wrapping up the data prints yesterday, industrial orders out of Italy came in weaker than expected (-1.5% mom vs. -1.0% mom expected) although October retail sales in the UK surprised to the upside. The headline print including auto’s came in at +0.8% mom (vs. +0.3% mom expected and -0.3% previously) whilst the core reading (excluding auto’s) was above market at +0.8% mom. Finally, DB’s George Buckley noted that the picture painted by the UK’s CBI survey painted something of a mixed picture, with two key forward-looking activity measures in expected output and total orders – moving in opposite directions.

Elsewhere, Bloomberg has reported that the ECB has put together the necessary requirements to start purchasing ABS from as soon as today. This follows on from earlier comments from ECB member Mersch who commented that the central bank may start purchasing the securities this week. Rounding out central bank news, SNB board member Zurbruegg has defended the national banks cap of 1.20 to the Euro whilst commenting that the bank won’t hesitate to enact supplementary measures.

Before we look at the day ahead, markets in Asia this morning are generally firmer. In particular Japan appears to be trading well ahead of the anticipated dissolving of the lower house today. The Nikkei is currently +0.36% higher whilst the JPY has strengthened +0.21% versus the Dollar to 117.96 buoyed somewhat by comments from the Finance Minister that the currency’s decline had been too fast. Elsewhere bourses in China, Korea and Hong Kong are +0.76%, +0.35% and +0.19% better respectively as we go to print.

In terms of the day ahead, after yesterday’s raft of data releases the market could get something of a breather today with just the Kansas City Fed manufacturing index in the US to look forward to after we get public finances data in the UK and hourly wages out of Italy. Perhaps of more interest however, we will hear from both the ECB’s Draghi (commenting on ‘Reshaping Europe’) and Nouy (commenting on Banking and Regaultion) this morning as well as the Fed’s Williams later so we will keep an eye out for anything interesting.

via Zero Hedge http://ift.tt/1AsgbK4 Tyler Durden