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Winter storm warnings and advisories stretched from Utah to Pennsylvania this morning. As Bloomberg reports, hundreds of flights across the US are being canceled as the threat of snow, ice, and sleet (and up to 8 inches of snow in New York City) “impact the morning commute.” The storm will move across the central U.S., bringing showers and thunderstorms to the Central Gulf Coast tomorrow morning and expanding northward into the Tennessee Valley by Tuesday evening, the weather service said. In other words, we have our first good excuse for a crimped consumer not spending once again in February – the weather.

 

Ironically, this fresh winter storm – Nika – is named for the Greek Goddess of Victory.

 

Via Bloomberg,

Hundreds of flights across the U.S. are being canceled as a winter storm threatens to drop snow, ice and sleet from Utah to Pennsylvania, including as much as 8 inches (20 centimeters) in New York City.

 

Light snow began falling in New York before 5 a.m. local time. The storm will have its greatest impact through mid-day, almost certainly tying up flights and making it hard for people to reach work, Bill Goodman, a National Weather Service meteorologist in Upton, New York said yesterday.

 

…

 

Winter storm warnings and advisories stretched from Utah to Pennsylvania this morning. The storm was also expected to drop as much as 8 inches on Ohio. As much as two inches an hour of snow may fall in New Jersey after 8 a.m., the Weather Service said.

 

Washington may get as much as 8 inches after 4 p.m., and Boston less than 0.5 inch as the storm focuses more on the corridor from Philadelphia to New York.

 

…

 

The storm will move across the central U.S., bringing showers and thunderstorms to the Central Gulf Coast tomorrow morning and expanding northward into the Tennessee Valley by Tuesday evening, the weather service said.

 

Stock bulls can only hope this negative (or USDJPY 102) does not impact what is perhaps the best day of the year for equities. The last time we had a decline of more than 0.1% on this day was back in 2002.

via Zero Hedge http://ift.tt/1dY5VsG Tyler Durden

Winter storm warnings and advisories stretched from Utah to Pennsylvania this morning. As Bloomberg reports, hundreds of flights across the US are being canceled as the threat of snow, ice, and sleet (and up to 8 inches of snow in New York City) “impact the morning commute.” The storm will move across the central U.S., bringing showers and thunderstorms to the Central Gulf Coast tomorrow morning and expanding northward into the Tennessee Valley by Tuesday evening, the weather service said. In other words, we have our first good excuse for a crimped consumer not spending once again in February – the weather.

 

Ironically, this fresh winter storm – Nika – is named for the Greek Goddess of Victory.

 

Via Bloomberg,

Hundreds of flights across the U.S. are being canceled as a winter storm threatens to drop snow, ice and sleet from Utah to Pennsylvania, including as much as 8 inches (20 centimeters) in New York City.

 

Light snow began falling in New York before 5 a.m. local time. The storm will have its greatest impact through mid-day, almost certainly tying up flights and making it hard for people to reach work, Bill Goodman, a National Weather Service meteorologist in Upton, New York said yesterday.

 

…

 

Winter storm warnings and advisories stretched from Utah to Pennsylvania this morning. The storm was also expected to drop as much as 8 inches on Ohio. As much as two inches an hour of snow may fall in New Jersey after 8 a.m., the Weather Service said.

 

Washington may get as much as 8 inches after 4 p.m., and Boston less than 0.5 inch as the storm focuses more on the corridor from Philadelphia to New York.

 

…

 

The storm will move across the central U.S., bringing showers and thunderstorms to the Central Gulf Coast tomorrow morning and expanding northward into the Tennessee Valley by Tuesday evening, the weather service said.

 

Stock bulls can only hope this negative (or USDJPY 102) does not impact what is perhaps the best day of the year for equities. The last time we had a decline of more than 0.1% on this day was back in 2002.

via Zero Hedge http://ift.tt/1dY5VsG Tyler Durden

The first in 2013 – namely the Nikkei, because oddly enough everyone ignores that hyperinflation “success story” that is the Caracas stock market, was last in January. And vice versa: the best performing asset last month was the barbarous relic which every Keynesian “expert” once again left for dead in the last year, roundly ignoring that it has been the best performing asset class since the Lehman collapse.

Some additional commentary from Deutsche Bank:

It’s been a turbulent start to the year as EM developments as well as arguably softer global economic data have seen risk sentiment turn negative. The clear outperformers have been DM fixed income and European peripheral equities, whilst it has been a very tough month for other DM equities as well as most EM assets. The performance of commodities has been somewhat mixed.

 

A difficult 2013 for EM has continued into the start of 2014. Key equity indices have seen notable falls with the MSCI EM index down -6.6%. Bonds have also come under pressure with overall government bond returns of -3.5% led largely by performance of EMEA bonds (-6.3%). The most notable negatives in EM have come in FX. In Figure 1 we show the performance of a number of key EM currencies in January. They have all declined vs. the Dollar with the Argentinean Peso the obvious underperformer falling nearly 19%. There has also been significant weakness in RUB, HUF, TRL and ZAR, which have all fallen by more than 5% against the Dollar.

 

It has also been a tough month for DM equities. Despite a decent start to the month in Europe, where the DJ Stoxx 600 had returned as much as +2.5% to the 22nd Jan, the negative EM developments saw a notable swing in sentiment and the index eventually ended the month down -1.6%. In the US the S&P 500 has only briefly touched its end of year high and has returned -3.5% on the month. Asian indices have probably seen the worst of the performance with the Nikkei and Hang Seng returning -8.4% and -5.5% respectively. The only real bright spot for DM equities has come from the periphery of Europe where returns have still generally been positive with Ireland (+2.5%), Portugal (+2.5%) and Italy (+2.4%) seeing the best of the performance.

 

In contrast to the performance of DM equities, DM fixed income has had a solid start to the year as core government bond yields have generally fallen. Despite the fact that the Fed has started to taper QE, the 10 year Treasury yield has fallen 38bps, which has helped the Treasury index return +1.6% in January. Similarly the 10 year Bund and Gilt yields have fallen 27bps and 32bps respectively with the indices returning +2.2% and +2.1% respectively. Spanish government bonds (+2.8%) have seen the best of the performance. The move in government bonds has also helped corporate credit to produce positive returns despite indices generally widening in spread terms. IG has outperformed HY in the sell-off but credit has held in reasonably well considering the issues elsewhere. In USD credit IG non-financials (+1.9%) have seen the best of the performance while in GBP it has been financials (senior +2.3% and sub +1.9%).

Subordinated financials (+1.7%) have seen the best of the performance in EUR credit after a strong start. Interestingly none of the sub credit components in our performance review have seen negative total returns.

 

Finally commodities, which have had a mixed month. Overall the CRB index rose +1.1% helped by gains in gold (+3.2%) and corn (+2.8%) while other key commodities were generally down on the month including wheat (-8.2%), copper (-5.9%) and sugar (-5.2%). All the returns above are in local currency. We chart the returns in both local currency and Dollar terms in the pdf.

via Zero Hedge http://ift.tt/1k3q2hl Tyler Durden

The key events this week are have non-farm payrolls (consensus 181K) and unemployment rate (consensus 6.7%). There is also going to be a number of speeches given by Fed policymakers.  Production surveys from the US (ISM) and other parts of the world are due Monday. We also get trade balance updates from the English-speaking economies – US, UK, Australia and Canada. Finally, keep track on inflation data from Italy and Turkey: the latter is important to track given current high correlation among ‘fragile’ EM currencies.

Monday, 3 February

• Australia MPC: Consensus has policy rate unchanged at 2.50%
• US ISM Survey (Jan): Consensus 56.0, previous 56.5
• US Construction Spending (Dec): Consensus flat, previous +1.0%
• Euro Area Manufacturing PMIs (Jan, final): Consensus 53.9, previous 53.9 (flash)
• UK Manufacturing PMI (Jan): consensus 57.1, previous 57.3
• Sweden Manufacturing PMI (Jan): Previous 52.2
• Switzerland Manufacturing PMI (Jan): consensus 55.0, previous 53.9
• Turkey CPI (Jan): Consensus +7.4%yoy, previous +7.4%yoy
• Brazil Trade Balance (Dec): previous USD+2.65bn
• Also interesting: US Motor Vehicles Sales (Jan), UK HBOS House Prices (Jan), Indonesia Trade Balance (Dec)

Tuesday, 4 February

• US Fed speakers: Lacker (FOMC non-voter), Evans (FOMC non-voter)
• Romania MPC: Consensus expect a cut of 25bps in policy rate to 3.50% and, along with it, the rate on the NBR’s standing deposit facility to 0.50% (the deposit rate is currently the binding policy rate, given excess banking sector liquidity)
• US Factory Orders (Dec): consensus -1.6%, previous +1.8%
• UK Construction PMI (Jan): consensus 61.5, previous 62.1
• Italy Harmonized CPI (Jan): consensus +0.8%yoy, previous +0.7%yoy

Wednesday, 5 February

• US Fed speakers: Plosser (FOMC voter), Lockhart (FOMC non-voter)
• Poland MPC: Consensus has policy rate unchanged at 2.50%. We also expect MPC to offer the same, neutral rate guidance, that is repeat that rates will remain on hold at least until the end of 2014H1
• Hungary MPC minutes
• US Non-manufacturing ISM Survey (Jan): Consensus 53.7, previous 53.0
• US ADP Employment Change (Jan): consensus 190K, previous 238K
• Euro Area Services PMIs (Jan, final): Consensus 51.9, previous 51.9 (flash)
• Euro Area Composite PMIs (Jan): previous 53.2 (flash)
• Euro Area Retail Sales (Dec): consensus +1.6%yoy, previous +1.6%yoy
• Japan Nominal Cash Wage (Dec): Est +1.6%yoy
• UK Services PMI (Jan): consensus 59.1, previous 58.8
• UK Composite PMI (Jan): Previous 59.2

Thursday, 6 February

• US Fed speakers: Rosengren (FOMC non-voter)
• Euro Area MPC: Consensus sees the main policy tools – depo, MRO and MLR – unchanged at 0.00%, 0.25% and 0.75% respectively
• UK MPC: Consensus has main policy tools – policy rate and asset purchases – unchanged at 0.50% and GBP375bn respectively. GS expects revisions to the guidance framework to be announced by its alumnus alongside the publication of the February Inflation Report. Of the various options discussed, the most likely is that the MPC will replace the existing framework with one based on a broader range of variables, perhaps with a greater emphasis on wage developments. Adopting a more flexible forward guidance framework need not blunt the message that the MPC wishes to send about the future direction of policy, and we expect the committee to signal that, despite the sharp fall in unemployment, official rates are likely to remain on hold for some time.
• Czech Republic MPC: Consensus has policy rate unchanged at 0.05%. In addition, we think the CNB Board will repeat its commitment to the peg and the need for a weaker Koruna
• Philippines MPC: consensus has policy rate unchanged at 3.50%
• US Unit Labour Costs (Q4, prelim.): Consensus -0.5%, previous -1.4%
• US Initial Jobless Claims: consensus 335K, previous 338K
• US Trade Balance (Dec): Consensus USD-36.0bn, previous USD-34.3bn
• Germany Factory Orders (Dec): consensus +6.2%yoy, previous +6.8%yoy
• Also interesting: US Nonfarm Productivity (Q4, final), Canada International Merchandise Trade (Dec), Australia Trade Balance (Dec), Switzerland Trade Balance (Dec), Czech Republic Trade Balance (Dec)

Friday, 7 February

• US Non-farm Payrolls (Jan): Consensus 181K, previous 74K
• US Unemployment Rate (Jan): Consensus 6.7%, previous 6.7%
• US Average Earnings (Jan): consensus +0.2%, previous +0.1%
• Australia Statement of Monetary Policy
• Germany IP (Dec): consensus +3.1%yoy, previous +3.5%yoy
• UK IP (Dec): Vonsensus +2.4%yoy, previous +2.5%yoy
• UK Trade Balance (Dec): consensus USD-3.0bn, previous USD-3.2bn
• Brazil Inflation IPCA (Jan): Consensus +5.67%yoy, previous +5.91%yoy
• Also interesting: US Consumer Credit (Dec), Canada Unemployment Rate (Jan), Spain IP (Dec), Sweden IP (Dec), Russia FX Reserves (Jan), Mexico INPC Inflation (Jan), Hungary Trade Balance (Dec, prelim.), Malaysia Trade Balance (Dec)

In conclusion, here is SocGen with its summary of top issues for the week ahead:

MORE POSITIVE SIGNALS FROM EUROPE

A broader batch of country PMIs this week are expected to confirm improving economic conditions in the euro area, consistent with solid GDP growth in Q1. However, both France and Spain are expected to remain just below the 50 mark, suggesting that the recovery is still uneven and fragile. Later in the week, we expect German factory orders and industrial production to confirm the positive sentiment in Germany. MARKET ISSUES: The recent string of positive data in Europe may well lead to higher growth forecasts in the coming months. However, we would caution against excessive optimism, as only Germany has the conditions for a full cyclical recovery.

CENTRAL BANKS ON HOLD

This week, we expect the central banks of Australia (Tuesday), Poland (Wednesday), the Bank of England (Thursday) and the ECB (Thursday) to all remain on hold. The ECB will be the closest call, while the BoE should signal an update to its Forward Guidance policy. In Australia, the easing bias may be on the way out.

MARKET ISSUES: We should have got used to early action by the ECB by now, but headline inflation may not be the ECBs main concern this time, rather money market tensions and inflation expectations. Expect lots of questions on deflation, and ECBs possibilities to act. In the UK, the BoE will again struggle to find the right level on its unemployment threshold to anchor short-term rate expectations.

US DATA

In the US, the ISM manufacturing gauge is expected to climb to 56.8 In January, thus confirming that the pace of the US recovery is quickening. Non-farm payrolls will be the highlight ending the week. Again, we expect an above-consensus rise of 270 thousand, with the unemployment rate dropping to the FOMC’s 6.5% threshold. This puts high expectations on the March meeting on what to do with forward guidance (see Aneta’s note).

MARKET ISSUES: With markets wary of any acceleration of tapering in the US, the market impact of the US labour market data is likely to be high, affecting emerging markets more than the US and Europe.

Source: Goldman, BofA, SocGen

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

• Emerging-Market Rout Seen Enduring on Low Real Rates (BBG)
• After rocky January, markets eye data and central banks (Reuters)
• Europe will feel the pain of emerging markets  (FT)
• Lloyds delays dividend prospect after mis-selling charge (Reuters)
• Snow Set to Snarl New York Commute as U.S. Flights Halted (BBG)
• Rate Decision to Drive Yellen’s Early Agenda  (Hilsenrath)
• Thai protesters move to downtown Bangkok in bid to topple PM (Reuters)
• China says Japan’s ‘hype’ on air defence zone spreads tension (Reuters)
• Hedge funds seek 1.8 billion euros damages from members of Porsche’s owning family (Reuters)
• Euro dogged by ECB talk, emerging markets sell-off grinds on (Reuters)
• N.J. Governor Christie aides face subpoena deadline in bridge scandal probe (Reuters)
• Buoyant Germany boosts eurozone manufacturing (FT)
• Kissinger Says Asia Is Like 19th-Century Europe on Use of Force (BBG)
• US banks under pressure to step up new mortgage business (FT)

 

Overnight Media Digest

WSJ

* The Justice Department joined a widening investigation of banks, private-equity firms and hedge funds that may have violated anti-bribery laws in dealings with Libya’s government-run investment fund.

* Actor Philip Seymour Hoffman was found dead of an apparent drug overdose late Sunday morning in his New York City apartment, police said.

* The Seattle Seahawks beat the Denver Broncos 43-8 in Sunday night’s Super Bowl XLVIII in a shocking blowout that saw the greatest quarterback of his generation, Peyton Manning, look helpless against an immovable Seahawks defense.

* After a choppy start to 2014, many portfolio managers are shifting away from the kinds of investments that did exceptionally well in 2013 but are vulnerable to large swings.

* Buoyed by strong credit ratings and rising deposits, Asian banks have become bigger global players as they chase higher yields and look to diversify their business.

* Wal-Mart Stores Inc told the National Labor Relations Board that it was within its rights when it disciplined workers for taking part in short strikes, setting up a legal test of a phenomenon that is reshaping relations between companies and labor.

* Jos. A. Bank Clothiers Inc took the offensive in its effort to fend off a proposed takeover by Men’s Wearhouse Inc, entering talks of its own to buy fellow apparel retailer Eddie Bauer LLC and issuing a sharply worded rebuke to its rival’s latest bid to negotiate a deal.

* KKR is set to open its first office in Spain on Monday, as the buyout specialist seeks to build on its billion-euro stake in a country that is attracting a growing volume of investment from abroad.

* AstraZeneca’s anti-clotting drug Brilinta was approved based on a study showing the pill saved lives and reduced heart attacks. But a drama is unfolding over whether the drug should have been approved.

 

FT

Seven hedge funds have filed a 1.8 billion euro ($2.43 billion) lawsuit against Porsche’s chairman and another board member, accusing them of misleading the market before Porsche disclosed in late 2008 that it was eyeing control of larger rival Volkswagen.

Alitalia and Etihad Airways are in the final phase of a due diligence for the completion of an investment by the Abu Dhabi-based airline in the Italian carrier, the companies said on Sunday.

Royal Bank of Scotland’s new Chief Executive Ross McEwan is planning an overhaul of the bank’s top management team, hoping to strengthen its focus on retail and small business customers, according to people familiar with the matter.

Societe Generale, France’s No. 2 listed bank, plans to add up to 150 staff to its bond trading business in a bid to get a stronger global foothold as most of its European banking rivals are cutting back.

Intesa Sanpaolo, Italy’s biggest retail bank, is seeking to become the country’s first lender to set up an internal “bad bank” since the financial crisis by setting aside a chunk of its 55 billion euros of gross non-performing loans before banking stress tests by the European regulator.

 

NYT

* Not only could competitors in China cut into its potential market share there, but Imax Corp has charged in several courts that the Chinese system relies on technology that was blatantly stolen from its offices in Canada.

* Growth in China’s service sector slowed to a five-year low in January, an official survey showed Monday, another sign of stuttering momentum that could deepen investors’ concerns about emerging markets around the world.

* After disclosures about credit and debit card breaches at several major retailers, some shoppers are making the effort to use cash in lieu of cards.

* Steven Cohen’s 22-year-old hedge fund, SAC Capital Advisors, is completing plans to change its name and its corporate structure by mid-March, according to people briefed on the matter.

* After reviewing Alitalia’s books for more than a month, Etihad Airways of Abu Dhabi said on Sunday that it was in serious negotiations over a possible investment in the troubled Italian airline, and it set a 30-day deadline to wrap up a deal.

* The financial downturn in Spain’s newspaper industry has claimed its most prominent journalist to date, Pedro J. Ramírez, who was ousted as editor of El Mundo, the conservative newspaper he founded 25 years ago.

* As Jos. A. Bank continues to rebuff a hostile takeover bid by Men’s Wearhouse, the clothier is exploring at least one alternative deal that would keep it independent. The company is in talks to buy Eddie Bauer, the outdoor clothing retailer, according to people briefed on the matter.

* Kohlberg Kravis Roberts & Co, a private equity giant with its hands in a range of businesses, from natural gas to maritime finance, has bought into a new sector: German soccer.

 

Canada

THE GLOBE AND MAIL

* The Canadian government plans to start buying land in Detroit for the U.S. portion of a new bridge linking the two countries, a Canadian official said in a report published Sunday, a move that bypasses opponents of the project and comes as the U.S. government hasn’t yet allocated money. (http://ift.tt/1dlNoGx)

* Producers of a vaccine developed to help thwart a fast-spreading swine virus that recently surfaced in Canada says the new drug is showing promise, reducing hog deaths in several American states. (http://ift.tt/1aj68vp)

Reports in the business section:

* Canada’s largest companies are leaping ahead of their peers in the United States and Britain in adding more women to their boards of directors. Women now account for 20 percent of directors on the boards of 100 of Canada’s largest companies, while comparable-sized U.S. companies have 17 percent women and British boards have reached 18 per cent. (http://ift.tt/1dlNoGy)

NATIONAL POST

* The New Democratic Party (NDP) is stepping up its battle against bank machine fees, urging the government to make good on its pledge to do something about the charges that vex some Canadian consumers. (http://ift.tt/1aj68vq)

FINANCIAL POST

* More than 20,000 small business customers of telecommunications giant Bell Canada were the victims of what the company is calling an “illegal hacking” incident that left their user names and passwords publicly exposed on the Internet during the weekend. (http://ift.tt/1dlNqyp)

* Retailers are now gathering customers’ location data from the pings and signals smartphones are giving off. And, chances are, if your smartphone hasn’t already been tracked by these services, it will be very soon. (http://ift.tt/1aj68vr)

 

Britain

The Telegraph

GSK SEEKS TO MOVE ON FROM CHINA WITH PIPELINE UPDATE

GlaxoSmithKline plans to launch late-stage clinical trials on ten new drugs over the next two years and is expected to report that sales from China are under less pressure.

FIRMS FACE EU BLACKLIST IN BRIBERY LAW CHANGE

Companies and banks that fail to prevent financial crime by their staff could face vast fines and be blacklisted from European contracts under a change to the Bribery Act being considered by the British Government.

BWIN.PARTY CALLS EGM TO CLEAR PAY DEAL

Online gambling group bwin.party has outlined plans to award top executives up to 550 percent of their annual salary as some existing bonus plans have become worthless.

The Guardian

DISCOUNT RETAILER B&M PREPARES FOR A STOCK MARKET FLOTATION

B&M, a discount retailer set up in Blackpool with just 750 pounds in 1978, is preparing for a stock market flotation that could value it at 2 billion pounds ($3.29 billion).

ECONOMIC FORECASTERS CALL FOR MEASURES TO COOL DOWN LONDON’S PROPERTY MARKET

In a special report published on Monday into the impact of rising house prices, the EY Item Club said the influx of super wealthy buyers has created bubble-like conditions in London.

The Times

LLOYDS VOWS TO RESTORE FEEL-GOOD FACTOR

Lloyds Banking Group has pledged to lend more than 1 billion pounds to small businesses and support more than 80,000 first-time buyers this year as part of an attempt to rebuild its reputation.

BAE STEPS UP CYBER CRIME FIGHT

Britain’s biggest defence group is cranking up recruitment in digital security to take on the growing threat from cyber criminals. About two fifths of BAE Systems’ British graduate intake this year is joining the company’s cyber security unit.

 

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Markit final PMI for January will be reported near 9:00–consensus 53.9
ISM manufacturing index for January will be reported at 10:00–consensus 56.0
Construction spending for December will be reported at 10:00–consensus flat

ANALYST RESEARCH

Upgrades

Airgas (ARG) upgraded to Overweight from Equal Weight at First Analysis
Cabot Oil & Gas (COG) upgraded to Overweight from Equal Weight at Barclays
Columbia Banking (COLB) upgraded to Outperform from Market Perform at Raymond James
LifePoint Hospitals (LPNT) upgraded to Buy from Fair Value at CRT Capital
NVIDIA (NVDA) upgraded to Neutral from Negative at Susquehanna
NetApp (NTAP) upgraded to Overweight from Neutral at Piper Jaffray
Norfolk Southern (NSC) upgraded to Outperform from Market Perform at Wells Fargo
Northrop Grumman (NOC) upgraded to Buy from Hold at Drexel Hamilton
O’Reilly Automotive (ORLY) upgraded to Buy from Neutral at ISI Group
On Assignment (ASGN) upgraded to Buy from Hold at Deutsche Bank
PPL Corp. (PPL) upgraded to Buy from Hold at Jefferies
Palo Alto (PANW) upgraded to Outperform from Market Perform at Wells Fargo
Penn Virginia (PVA) upgraded to Equal Weight from Underweight at Barclays
Progenics (PGNX) upgraded to Buy from Hold at Needham
PulteGroup (PHM) upgraded to Positive from Neutral at Susquehanna
Rowan Companies (RDC) upgraded to Outperform from Market Perform at Raymond James
Yadkin Financial (YDKN) upgraded to Strong Buy from Outperform at Raymond James

Downgrades

Apollo Commercial (ARI) downgraded to Market Perform from Outperform at Wells Fargo
Applied Materials (AMAT) downgraded to Sector Perform from Outperform at RBC Capital
Banco Bilbao (BBVA) downgraded to Hold from Buy at Societe Generale
Bill Barrett (BBG) downgraded to Equal Weight from Overweight at Barclays
Cameco (CCJ) downgraded to Sell from Hold at Canaccord
DFC Global (DLLR) downgraded to Market Perform from Outperform at Wells Fargo
EXCO Resources (XCO) downgraded to Underweight from Equal Weight at Barclays
Eaton Vance (EV) downgraded to Sell from Neutral at Goldman
KLA-Tencor (KLAC) downgraded to Sector Perform from Outperform at RBC Capital
Lam Research (LRCX) downgraded to Sector Perform from Outperform at RBC Capital
MasterCard (MA) downgraded to Market Perform from Outperform at FBR Capital
Mattel (MAT) downgraded to Neutral from Buy at B. Riley
Mattel (MAT) downgraded to Neutral from Buy at SunTrust
Medivation (MDVN) downgraded to Hold from Buy at Needham
NVR (NVR) downgraded to Neutral from Buy at Sterne Agee
Nanometrics (NANO) downgraded to Sector Perform from Outperform at RBC Capital
Royal Dutch Shell (RDS.A) downgraded to Neutral from Overweight at HSBC
Spectranetics (SPNC) downgraded to Underperform from Market Perform at Northland
StanCorp (SFG) downgraded to Sell from Neutral at Goldman
Stone Energy (SGY) downgraded to Equal Weight from Overweight at Barclays
Swift Energy (SFY) downgraded to Underweight from Equal Weight at Barclays
WESCO (WCC) downgraded to Neutral from Buy at MKM Partners

Initiations

Forest Oil (FST) reinstated with an Underweight at Barclays
ONE Gas (OGS) initiated with a Hold at Jefferies
Seadrill Partners (SDLP) initiated with an Outperform at RBC Capital
Sungy Mobile (GOMO) initiated with an Outperform at Oppenheimer

HOT STOCKS

Smith & Nephew (SNN) to acquire ArthroCare (ARTC) for about $1.7B
Post Holdings (POST) agreed to acquire PowerBar, Musashi brands from Nestle (NSRGY)
TransCanada (TRP) said U.S. State Department report supports Keystone XL approval
JoS. A. Bank (JOSB) sent letter to Men’s Wearhouse (MW) saying offer inadequate
Chevron (CVX), General Electric (GE) formed technology alliance
NextEra Energy (NEE) recommended rejection of mini-tender offer from TRC Capital
Forest Labs (FRX) filed patent suit against several companies, including Teva (TEVA)
Sony (SNE): Report on possible PC alliance with Lenovo (LNVGY) ‘inaccurate’
eBay (EBAY) received second Civil Investigative Demand on January 13 related to Bill Me Later

EARNINGS

Companies that missed consensus earnings expectations include:
Cape Bancorp (CBNJ)

NEWSPAPERS/WEBSITES

Mining (RIO, BHP, AAUKY) may see a M&A revival, Bloomberg reports
Obama not ready to decide on Keystone XL pipeline (TRP), Reuters reports
Lenovo Group (LNVGY) hired security experts to help with U.S. deals (GOOG, IBM), Bloomberg reports
Yahoo (YHOO) aims to bring back search tech via new initiatives, Re/code reports
JoS. A. Bank (JOSB) in talks to acquire sportswear retailer Eddie Bauer, WSJ reports
DOJ joins investigation into finance firms (GS, CS, JPM, SCGLY, BX, OZM), Libyan dealings, WSJ reports
Sprint (S) chairman Son to meet with FCC head, WSJ reports
LinkedIn (LNKD) may have better chance of growth in China than others, FT reports
GM’s (GM) Opel reaches labor agreements in German factories, Reuters reports
States want Apple (AAPL) to pay $840M over e-books, Bloomberg reports

BARRON’S

Akamai (AKAM) could rise over 25%
Stanley Black & Decker (SWK) could gain over 20% in a year or two
General Motors (GM) shares could gain over 30% this year
Ford (F) could rise 20% over the next year
Imperial Oil’s (IMO, XOM) production growth could drive shares higher
Weight Watchers (WTW) shares could double over next two years
Bed Bath & Beyond (BBBY) shares are at a cheap entry point
DuPont (DD) shares could rise 15% this year
Avoid Lenovo Group (LNVGY) for now (GOOG, IBM)
Ericsson (ERIC) could add 25% in value this year (SSNLF)

SYNDICATE

Catalyst Pharmaceutical (CPRX) files to sell $100M of common stock
FireEye (FEYE) files to sell $700M in common stock
Herbalife (HLF) announces offering of $1B of convertible notes
Inovio (INO) files $125M mixed securities shelf
Martin Midstream Partners (MMLP) files to sell $300M in common units
Real Goods Solar (RSOL) files automatic mixed securities shelf

via Zero Hedge http://ift.tt/1nI2aA5 Tyler Durden

Alarms are going off in assorted plunge protecting offices, now that the USDJPY has breached the 102.000 “fundamental” support level, below which the Yen can comfortably soar to sub 100.000 in perfectly even 100 pip increments. The first trading day of February has brought another weaker session across Asia though some equity indices such as the KOSPI (-1.1%) are in catch-up mode given they were shut towards the back-end of last week. Over the weekend, the Chinese government published its latest official manufacturing PMI which showed a 0.5pt drop to 50.5, a six-month low, and consistent with consensus estimates. DB’s Jun Ma believes there was some element of seasonality affecting this month’s result including the fact that Chinese New Year started at the end of January (vs February last year), anti-pollution measures in the lead up to CNY and efforts to control government consumption around the holiday period. The official service PMI was released overnight (53.4) which printed at the lowest level since at least 2011. The uninspiring Chinese data has not helped market sentiment this morning, with the Nikkei plunging -2% and ASX200 once again under pressure. S&P500 futures have fluctuated around the unchanged line this morning although if support below the USDJPY fail solidly, then watch out below. Markets in Mainland China and Hong Kong remain closed for Lunar New Year.

Aside from the ECB, which is meeting this week, other highlights in the week ahead include a big US data docket. Indeed the three most important data releases this week are today’s January manufacturing ISM, Wednesday’s ADP employment and of course, Friday’s January non-farm payrolls. Also on Friday, the US treasury will once again officially hit its debt ceiling limit.

Market Re-Cap

European equities are treading water in negative territory amid cautious sentiment ahead of this week’s plethora of key risk events. Consequently financials are seeing underperformance with health care stocks outperforming in a defensive move, which is acting as support for the SMI and FTSE 100. In stock specific news, Lloyd’s shares are seen down 3% following their pre-market update which revealed the Co. sees GBP 1.8bln provision for PPI in Q4. Elsewhere, Ryanair are seen up over 5% after the Co. reiterated FY profit forecast of EUR 500-520mln and says pricing “soft” but not declining.

Following a host of impressive Eurozone Manufacturing PMI releases, EUR has trended higher, a move that has been exacerbated by the residual touted month-end related flows in EUR/GBP. GBP has seen weakness following this and a disappointing PMI Manufacturing release, a figure that is very much against the grain of recent UK data. Elsewhere, USTs and Bunds have recovered earlier losses and move back to unchanged, alongside the move lower in equities.

US Event Calendar:

• 8:58am: Markit U.S. PMI Final, Jan., est. 53.9
• 10:00am: ISM Manufacturing, Jan., est. 56.1 (prior 57,  revised 56.5); ISM Prices Paid, Jan., est. 53.8 (prior 53.5)
• 10:00am: Construction Spending, m/m, Dec., est. 0.2% (prior 1%)
• Total Vehicle Sales, Jan., est. 15.6m (prior 15.3m); Domestic Vehicle Sales, Jan., est. 12m (prior 11.65m)
• Yellen’s first POMO – Fed purchases $1-1.25b in 2036-2043 sector at 11 am

Overnight headline bulletin from Bloomberg and RanSquawk:

• European equities are seen lower ahead of this week’s host of key global risk events.
• GBP/USD has trended lower following a disappointing UK Manufacturing PMI and residual touted monthend related flows in EUR/GBP.
• Looking ahead for the session, there is a lack of tier 1 data. However, 1500GMT/0900CST sees the release of US ISM Manufacturing (Jan) M/M Exp. 56.2 vs. Prev. 57.0.
• Treasury 10Y yields holding near lowest since early November as China’s official purchasing managers’ index falls to six-month low in Jan., Nikkei enters correction.
• U.K. manufacturing expanded at slower pace in January, with PMI falling to 56.7 from revised 57.2, as domestic demand and rising export orders underpinned growth for a 10th month
• Investors are betting Bank of England’s Carney will lead the charge out of record-low interest rates as central banks pivot from fighting stagnation to managing expansions
• The U.K. markets regulator notified a bank manager and a rate submitter that they face penalties over their involvement in manipulating Libor in the first civil cases against individuals in the global probe
• Obama said neither he nor members of his administration anticipated the magnitude of the flaws that hobbled the startup of the federal website for people to choose health-care plans under his new law
• Ukraine’s opposition got a boost in its struggle to wrest power from President Viktor Yanukovych as  a report said the European Union and U.S. are working on an aid package to rival assistance from Russia
• Hundreds of flights across the U.S. are being canceled as a winter storm threatens to drop snow, ice and sleet from Utah to Pennsylvania, including as much as 8 inches (20 centimeters) in New York City
• Sovereign yields mixed. EU peripheral spreads tighten. Asian and European stocks, U.S. stock-index futures fall. WTI crude and copper lower; gold higher

Asian Headlines

China Manufacturing PMI (Jan) M/M 50.5 vs. Exp. 50.5 (Prev. 51.0); 6-month low.

China Non-Manufacturing PMI (Jan) M/M 53.4 (Prev. 54.6)

The Nikkei 225 closed 10% below its Dec. 30 high to enter a correction phase (down 2.0% on the day), as risk appetite across the region remained dampened following the release of uninspiring Chinese data. (RANsquawk) Mainland China, Hong Kong and Taiwan remained closed following the Lunar New Year celebrations.

EU & UK Headlines

German Manufacturing PMI (Jan F) M/M 56.5 vs. Exp. 56.3 (Prev. 56.3) – Highest since May 2011

Eurozone Manufacturing PMI (Jan F) M/M 54.0 vs Exp. 53.9 (Prev. 53.9)

French PMI Manufacturing (Jan F) M/M 49.3 vs Exp. 48.8 (Prev. 48.8)

Spanish PMI Manufacturing (Jan) M/M 52.2 vs Exp. 51.1 (Prev. 50.8)
– Spanish Job Manufacturing PMI Employment Index (Jan) M/M 50.8 vs Prev. 48.4 – showing the first jobs growth since Oct 2010.

UK PMI Manufacturing (Jan) M/M 56.7 vs Exp. 57.3 (Prev. 57.3)

Germany has denied reports of possible Greece debt cut, according to the German government spokesman Semmelmann.  (RTRS) This follows earlier reports that German Finance Minister Schaeuble is planning EUR 10-20bln in Greek aid. (Spiegel)

BoE Governor Carney said sees no immediate rate change needed. Carney said the bank will take stock of drop in unemployment and forward guidance will evolve. (Scotland on Sunday)

US Headlines

Fed watcher Hilsenrath points out that Yellen’s most critical decisions is when to start lifting interest rates and that if she and her colleagues wait too long, they could fuel high inflation or financial bubbles; if they move too soon, they could dampen a recovery that is just gaining steam. (WSJ)

US auto sales are due out Monday; Ford (F) exp. down 2.3%, Fiat’s Chrysler (F IM) exp. up 5.4% and General Motors (GM) exp. down 2.5%. (RANsquawk)

Equities

With participants looking ahead to key risk events this week in the form of ECB and BoE monetary policy decisions, as well as the monthly US jobs report, European stocks have trended lower. Consequently, financials have been put under pressure, whilst healthcare stocks have benefited from the defensive positioning by participants, which has provided the FTSE 100 and SMI with support. Lloyds shares have suffered this morning (-3%) as their pre-market update has revealed the Co. sees GBP 1.8bln in provisions for PPI in Q4. Julius Baer shares are seen lower by over 5% following the Co.’s 2013 net profit CHF 480mln vs Exp. CHF 495mln. Ryanair are the sessions outperformer and seen seen up over 5% after the Co. reiterated FY profit forecast of EUR 500-520mln.

FX

EUR has been guided by an amalgamation of positive Eurozone PMI readings and residual touted month-end related flows in EUR/GBP. A move which has put downward pressure on GBP and later exacerbated by a disappointing PMI Manufacturing release from the UK. In Asia-Pacific trade, the Nikkei 225 closed 10% below its Dec. 30 high to enter a correction phase, alongside a less than impressive PMI release from China, which has consequently led USD/JPY lower. SNB’s Danthine said the SNB would only consider scrapping the minimum exchange rate of 1.2000 in EUR/CHF if inflation were much higher and there was less upward pressure on the currency. (Blick)

Commodities

South African government mediators have put forward a proposal designed to end a strike that hit around 40% of global platinum supply. It has not been made immediately clear what the proposal entails. (RTRS)

Morgan Stanley has lowered their 2014 gold forecast to USD 1,160/oz. (BBG)

Iraq’s crude exports have declined to an average of 2.228mbpd but should rise next month, according to the Iraqi Oil Minister. (RTRS).

Goldman Sachs has raised their 2014 NYMEX natural gas price forecast to USD 4.5mmbtu from USD 4.25mmbtu. (RTRS)

In conclusion, here is Jim Reid with the overnight and weekend recap:

Right on my way back from three weeks away, the last couple spent travelling through Asia and Australia in seemingly non-stop meetings. I first travelled to Australia in 1998 when most of the tourists I saw were British, European or Americans. It’s a measure of how the world has changed in such a relatively short space of time that in my down time exploring, most of the tourists were from Asia with many from China. I suppose this reflects the changing world order from the last time EM had a global crisis. So we think whatever happens in EM this year will have consequences for the global economy, global markets and global central banks. It’ll be difficult to de-couple. Indeed, emerging markets are expected to account for 85% of all global GDP growth seen in 2013, up from an average of just 37% in the years leading up to the 1997-1998 emerging market crises according to IMF data.

From all the stories that broke while I was away the most fascinating surely revolves around the Chinese Trust product that in the end wasn’t allowed to be at the mercy of market forces. For me it’s a microcosm of the fragility still present in global financial markets that a $9.0 trillion dollar economy – that will be the biggest in the world within the time frame of most of our careers – struggles to allow a $500 million investment product to default without there being market fears of it igniting panic in financial markets. This has now been a theme for the best part of 10-15 years in global financial markets particularly in the developed world but more recently the EM world since the GFC. We’ve created a global debt monster that’s now so big and so crucial to the workings of the financial system and economy that defaults have been increasingly minimised by uber aggressive policy responses. It’s arguably too late to change course now without huge consequences. This cycle perhaps started with very easy policy after the 97/98 EM crises thus kick starting the exponential rise in leverage across the globe. Since then we saw big corporates saved in the early 00s, financials towards the end of the decade and most recently Sovereigns bailed out. It’s been many, many years since free markets decided the fate of debt markets and bail-outs have generally had to get bigger and bigger.

This sounds negative but the reality is that for us it means that central banks have little option but to keep high levels of support for markets for as far as the eye can see and defaults will stay artificially low. As such we remain bullish for 2014. However it’s largely because we think the authorities are trapped for now rather than because the global financial system is healing rapidly. So as well as EM being very important for 2014, we continue to think the Fed taper pace is also very important. If the US economy was the only one in the world then maybe they could slowly taper without major consequences. However the world is fixated with US monetary policy and huge flows have traded off the back of QE and ZIRP so it does matter. We have suspicions that the Fed may have to be appreciative of the global beast they’ve helped create as the year progresses. We stand by our call from the 2014 Outlook (The Taper-Bubble Tightrope) that credit will end up having a good year but that H1 will be volatile but that H2 will be more positive as central bankers around the world look to be keeping their foot on the gas for longer.

On this the ECB will be interesting this week in light of Friday’s soft inflation print (0.7% year-on-year vs consensus of 0.9%), which returned headline inflation to the October 2013 lows. Core inflation was 0.8% year-on-year which was little changed on last month. DB’s Wall and Moec think that last week’s inflation data was a negative surprise for the ECB, making it highly likely that forward inflation projections will be revised down. Despite the better PMI, weaker than expected German inflation data in January, pressures in EM that could entail disinflationary forces for Europe and an ECB keen to be ahead of the curve on inflation all add to the justification for the ECB to ease the policy stance again in February (if not in February, certainly in March). Wall & Moec expect the ECB to cut all policy rates by 5 or 10 basis points this week, implying a small negative deposit rate. The direct impact of a negative deposit rate may be less today than might have been the case 6 months ago when excess reserves were much higher. But there could be an important signal benefit from even a small negative deposit rate – either way a negative deposit rate would be another significant milestone in the theme of financial repression.

The first trading day of February has brought another weaker session across Asia though some equity indices such as the KOSPI (-1.1%) are in catch-up mode given they were shut towards the back-end of last week. Over the weekend, the Chinese government published its latest official manufacturing PMI which showed a 0.5pt drop to 50.5, a six-month low, and consistent with consensus estimates. DB’s Jun Ma believes there was some element of seasonality affecting this month’s result including the fact that Chinese New Year started at the end of January (vs February last year), anti-pollution measures in the lead up to CNY and efforts to control government consumption around the holiday period. The official service PMI was released overnight (53.4) which printed at the lowest level since at least 2011. The uninspiring Chinese data has not helped market sentiment this morning, with the Nikkei (-1.6%) and ASX200 (-0.1%) once again under pressure. S&P500 futures are slightly higher this morning (+0.15%) while 10yr USTs are unchanged near three month lows of 2.66%. Markets in Mainland China and Hong Kong remain closed for Lunar New Year.

Aside from the ECB, the other highlights in the week ahead include a big US data docket. Indeed the three most important data releases this week are today’s January manufacturing ISM, Wednesday’s ADP employment and of course, Friday’s January non-farm payrolls. DB is forecasting a +200k gain on both headline and private nonfarm payrolls. In addition, our economists expect the unemployment rate to fall two-tenths to 6.5% due to the expiration of extended unemployment benefits. Outside of the macro data, it’s another big week for earnings with close to one-fifth of S&P500 constituents reporting. Janet Yellen will be officially sworn in as Fed chair today so we enter a new era. The US treasury officially hits its debt ceiling limit on Friday, but the treasury secretary will resort to extraordinary measures to push the funding deadline until sometime late in February while Congress debates when and how to increase the debt limit. The US Congressional Budget Office releases its annual economic outlook on Tuesday. In Europe all eyes will be on Thursday’s ECB and BoE meetings. The service sector PMI readings will be published on Wednesday, German factory orders on Thursday and German and UK IP reports will be released on Friday. Australia’s RBA meets on Tuesday. In EM, there will be some focus on the inflation readings from Indonesia, Thailand and the Philippines. The fallout from Thailand’s weekend elections should be clearer towards the latter part of this week. Now onto the review of January – a fascinating month.

via Zero Hedge http://ift.tt/1dlIrO5 Tyler Durden