Tag: finance

Now that we have entered the Post Taper world, at least until the data gets so horrendous that the Fed is forced to admit defeat and resumes Untapering, here is a cliff notes version of the “reality” narrative as spun by the media and pundits: if the data is “good” it is because of the recovery; if the data is “bad” it is due to the weather.

Which is why when retail sales are reported in a few minutes, we expect nothing less than more weather scapegoating. In fact, courtesy of Guggenheim’s Scott Minerd we can almost predict with surgical accuracy just how bad the retail sales miss will be based on the series’ correlation to average January temperatures. Because, you see, when it is snowing outside people just don’t use their computer to go to amazon.com and order negative margin loss leaders for Jeff Bezos…

Minerd’s take

The effects of December’s frigid temperatures have already been seen in recent U.S. economic data releases. With January temperatures more than three degrees colder than average, it is likely that economic activity will continue to be depressed in the first month of the year. Retail sales show a particularly strong correlation with temperatures in January, suggesting that data for January will likely show restrained growth.

Of course, on the off chance that retail sales should pull a Services ISM and surge, beating expectations, the narrative will quickly be flip-flopped to where the recovery is so strong and the $17 trillion US economy so resilient, it even managed to overcome the effect of snow in the winter.

via Zero Hedge http://ift.tt/1lIDSE7 Tyler Durden

Something funny happened on the Grecovery: the Grecession…. Actually, make that the Gepression. In a nutshell – according to Elstat, Greek unemployment in November rose to a record high on both a seasonally adjusted and unadjusted basis with 28% of the labor force without a job, the number of people unemployed rose to a record high 1.382 million, even as the number of labor inactive people keeps rising, hitting 3.377 million and on its way to catch up with the rapidly declining 3.55 million people employed, which incidentally in November also posted a new record low. And tying it all together was the Greek youth unemployment rate which posted a record high for November at 61.4%, and after a few months of declines which gave some hope that things are indeed improving is back to its old, soaring ways.

Greek employment table:

Record low number employed:

 

Record high number unemployed:

 

Record high unemployment:

 

Gerek youth unemployment: the latest trend is no longer your friend.

via Zero Hedge http://ift.tt/1hfrf57 Tyler Durden

• Comcast Agrees to Buy Time Warner Cable for $45.2 Billion (BBG)
• Italian leadership squabble weighs as shares halt hot run (Reuters)
• Russia says Syria aid draft could open door to military action (Reuters)
• China trust assets rise 46% in 2013  (WSJ), China Trust Assets Surge to $1.8 Trillion Amid Default Risks  (BBG)
• Australian Unemployment Jumps to 10-Year High (BBG)
• Seven banks face new forex market-rigging claims in lawsuit (FT)
• Tea Party Scorns Republicans as House Lifts Debt Ceiling (BBG)
• Peso plunge forces Argentine soya hoarding (FT)
• BNP Paribas Net Falls After $1.1 Billion U.S. Legal Charge (BBG)
• Hacking Joins Curriculum as Businesses Seek Cyber Skills (BBG)
• Android’s ‘Open’ System Has Limits (WSJ)
• Blackstone-Fueled Single-Family Home Boom Lifts Chicago (BBG)
• Turkey Dec. Current Account Gap More Than Doubles (BBG)
• Yes, There’s a Pilot Shortage: Salaries Start at $21,000 (BBG)
• Krawcheck Says Women on Wall Street Have ‘Gone Backwards’ (BBG)
• MIT Mistakenly Tells Some Applicants They’ve Been Admitted (BBG)

 

Overnight Media Digest

WSJ

* Comcast Corp has agreed to buy Time Warner Cable for $45 billion in stock, in a deal that would combine the nation’s two biggest cable operators. With the proposed deal, Comcast almost certainly ends an eight-month takeover battle for TWC waged by Charter Communications Inc and its biggest shareholder, Liberty Media Corp.

* Apple Inc said it has verified that its suppliers do not use tantalum, a key metal used in electronic components, secured from sources that use the mineral’s sale to provide funds for violent armed groups in war-torn parts of Africa.

* Dropbox Inc, the fast-growing online storage company, plans to name Google Inc executive Dennis Woodside as its first chief operating officer. Woodside, a Google veteran of more than 10 years most recently ran the Motorola Mobility handset unit.

* Newly discovered documents had revealed that Google Inc has imposed strict restrictions on device makers that want access to its search engine, YouTube or the more than one million apps in its Play Store. In return, the device makers must feature other Google apps and set Google search as the default for users, according to the agreements.

* Verizon Wireless is easing into the cellphone market’s price war, cutting rates on some of its data plans by as much as 12.5 percent. Customers now paying $80 a month for a smartphone plan with 500 megabytes of data can get that same service for $10 less a month, among other offers.

* BNP Paribas SA Thursday announced an unexpected slump in fourth-quarter profit after it set aside a $1.1 billion provision against possible penalties for allegedly violating U.S. laws that restrict financial transactions with countries under economic sanctions.

* On Thursday, cable companies Comcast Corp, Time Warner Cable Inc and Charter Communications Inc along with tech giants Google Inc and Microsoft Corp , are expected to announce a new coalition to bolster efforts to expand access to WiFi.

* Lenovo Group Ltd warned its earnings in the short-term could be hurt by its acquisition of Google Inc’s Motorola Mobility handset business, even as the Chinese personal-computer maker reported a 30 percent jump in fiscal third-quarter net profit.

* Merck & Co Inc’s effort to sell its portfolio of well-known consumer brands including Coppertone sunscreen and Claritin allergy pills is kicking into high gear, with big consumer and healthcare industry players expected to put in bids that could top $10 billion.

* Avon Products Inc is in advanced talks with federal authorities to settle a long-running bribery probe that has dogged the beauty products company for years and could cost tens of millions of dollars to resolve.

* A giant solar-power project officially opening this week in the California desert is the first of its kind, and may be among the last, in part because of growing evidence that the technology it uses is killing birds. The $2.2 billion solar farm with nearly 350,000 mirrors, each the size of a garage door, that reflect sunlight onto boilers atop towers, creating steam that drives power generators.

* Firefox, the open-source browser that sparred with advertisers over tracking Web users, will soon display advertising. The non-profit Mozilla Foundation, which owns Firefox, said Wednesday it would sell a small number of ads, which will appear on new browser tabs for new users.

* Apple Inc appears to be scaling back its lofty TV industry plans. The company is talking to media companies and pay TV distributors including Time Warner Cable Inc about launching a revamped Apple-branded TV set-top box in coming months, according to people familiar with the matter.

* Deere & Co, the world’s largest seller of farm machinery, said Wednesday it expects U.S. tax breaks that helped propel sales of farm equipment in recent years to be reinstated later this year.

* Chinese cosmetics retailer Jumei.com has tapped banks for an initial public offering in the United States, said people familiar with the company’s plans. The IPO might raise about $600 million, at a valuation above $3 billion, and is expected to come later this year.

* Total SA was hit by the same mix of declining refining margins and high exploration costs that have slammed its European rivals in the fourth quarter, causing its earnings to slide.

* Cisco Systems Inc continues to face sagging demand for some important products, a problem exacerbated in its fiscal second quarter by some faulty memory chips. The company on Wednesday reported a 55 percent drop in income for the quarter, blaming a $655 million charge to cover the costs of addressing the memory-chip problem.

* Samsung Electronics Co is revamping its push into the U.S. enterprise and government sector, adding further pressure to the new leadership at the company that once dominated that space – BlackBerry Ltd. Samsung recently won an order for roughly 7,000 smartphones from the U.S. Army and is close to securing an order for several thousand devices from the U.S. National Security Agency, according to a person familiar with the matter.

* Fiat Chrysler Automobiles is pressing Canada for subsidies to keep production at a minivan factory in Windsor, Ontario, a move that underscores the clout global auto makers wield when bargaining with governments eager for manufacturing jobs.

* The chief executive of SoftBank Corp said its Sprint Corp wireless subsidiary needs to make another acquisition in the United States if it is to achieve its ambition of shaking up the country’s mobile-phone market.

* The Obama administration released voluntary cybersecurity guidelines for utilities, banks and other crucial industries Wednesday, framing them as a basic step companies can take to secure their networks against hackers and other online threats.

 

FT

The Bank of England indicated on Wednesday that interest rates were unlikely to rise before next year’s election, as it unveiled bullish economic forecasts that support Finance Minister George Osborne’s claim that the economic recovery is on track.

Billionaire Warren Buffett’s Berkshire Hathaway is in talks with Graham Holdings, formerly The Washington Post Co, to swap a 28 percent stake in the media company for control of one of its yet-to-be-formed units.

Two of the leading Bitcoin exchanges halted withdrawals after being hit by attacks from unknown computer hackers, further damaging the prospects of the virtual currency winning mainstream acceptance.

Cisco Systems posted an 8 percent slide in quarterly revenue as it struggled to cope with a slump in demand from emerging markets and a product transition that hit sales of its core router business.

Cadbury chocolate and Oreo cookie seller Mondelez International posted lower-than-expected fourth-quarter earnings and sales as it struggled to grow amid tough economic conditions for food companies.

 

NYT

* Comcast Corp will announce a deal to acquire Time Warner Cable in an all-stock deal that will unite the biggest and second largest cable television operators in the country, according to people briefed on the matter.

* Senate Republican leaders rescued a measure to raise the nation’s borrowing limit, overcoming a threatened filibuster to clear the way for final approval.

* More than 1.1 million people signed up for health insurance through federal and state marketplaces in January, according to the government, and the number of young people enrolling increased faster than that of any other group.

* Toyota Motor Corp is recalling all of the 1.9 million newest-generation Prius vehicles it has sold worldwide because of a programming error that could cause their gas-electric hybrid systems to shut down, the automaker said Wednesday.

* The owner of WQHT-FM, the hip-hop station better known as Hot 97, is buying WBLS-FM and one other station for $131 million in cash, in a deal that will align some of New York’s most popular radio stations specializing in black music.

* The American Bankers Association announced on Wednesday that it was dropping its lawsuit to block parts of the Volcker Rule from going into effect after regulators modified what the group found most objectionable.

* Kroger Co, the biggest supermarket operator in the United States, faces a lawsuit claiming it deceived consumers by marketing a store brand as products from humanely raised chickens when the animals were raised under standard commercial farming.

* George Canellos, the former co-chief of enforcement at the Securities and Exchange Commission, announced on Wednesday that he would be joining Milbank, Tweed, Hadley & McCloy as a partner and global head of the firm’s litigation department.

* The Walt Disney Co said on Wednesday that it plans to partner with the technology accelerator TechStars to advise and encourage 10 startups. Each company will receive $120,000 and work with Disney leaders like Chief Executive Robert Iger for three months starting June 30.

* A total of 131 CEOs in the United States, mostly at public companies, departed their posts in January, the highest monthly total since February 2010 and 15.9 percent higher than the same period last year, according to findings from Challenger, Gray & Christmas, an outplacement firm.

* Standard Chartered Plc, the British bank that earns most of its profit in Asia, is prepping its Swiss private bank for a sale as it prunes its non-core operations, a spokeswoman confirmed Wednesday.

* Grupo Bimbo, a large Mexican baking company, agreed on Wednesday to buy Canada Bread, a baking company based in Toronto that is 90 percent owned by Maple Leaf Foods, for $1.67 billion.

* The French specialty materials maker Imerys SA said Wednesday that it had signed an agreement to acquire Amcol International Corp for $1.6 billion in cash and the assumption of debt.

* Société Générale said on Wednesday that it had swung to a profit in the fourth quarter, as it booked fewer one-time items than it did a year earlier. The French bank also said it would raise its dividend.

* Lenovo Group Ltd, the world’s biggest maker of personal computers, reported Thursday it had made progress in its plan to expand beyond PCs, even before a planned acquisition of Motorola Mobility.

 

Canada

THE GLOBE AND MAIL

* A crackdown on fake transit passes has resulted in dozens of arrests and almost 200 criminal charges. Most of those arrested were charged with knowingly using fake Metropasses, but seven are accused of selling them.

* There was some light rumbling under Lake Ontario late Wednesday caused by a minor earthquake. The U.S. Geological Survey says the 2.9 magnitude quake happened just before midnight, 40 kilometres southwest of Cobourg, Ontario.

Reports in the business section:

* Chrysler Group LLC is proposing a major $3.6-billion retooling of not one but two Canadian auto plants as it enters high-stakes negotiations with the federal and Ontario governments for financial assistance.

* Husky Energy Inc said it sold one million barrels of Canadian oil to Indian Oil Corp, a state-owned refinery, in late 2013, a move that boosts the company’s ability to capture world pricing and helps open the door for more Canadian producers to ship crude to Asia.

NATIONAL POST

* Two teenage boys were charged in Quebec Wednesday with first-degree murder and conspiracy in the deaths of two young sisters, aged 17 and 22, and the teenage boyfriend of the younger sister.

* Finance minister Jim Flaherty made a deliberate decision to unfairly shortchange Ontario to the tune of $641 million in the federal budget, Premier Kathleen Wynne charged Wednesday.

FINANCIAL POST

* The U.S. federal budget has closed a loophole offering a shortcut to wealthy foreign investors, which may impact Canada’s luxury housing markets in Vancouver and Toronto, already impacted by changes in immigration policy.

* Kinross Gold Corp surprised investors on Wednesday by slashing its gold reserves by a staggering 33 percent as it focuses on mining high-grade ounces in a low-price environment.

 

China

CHINA SECURITIES JOURNAL

– Part of the southern Chinese Guangzhou Baiyun Airport will be included in the Guangdong-Hong Kong-Macau Free Trade Zone (FTZ), a source told the official paper. This would increase the zone’s size to over 930 square kilometres, around 30 times larger than the Shanghai FTZ.

SECURITIES TIMES

– China’s securities regulator has raised the asset requirement threshold for bank-broker partnerships to 50 billion yuan ($8.25 billion). The new regulation will come into effect from Feb. 17.

SHANGHAI DAILY

– Shanghai will draw on international practices to develop an attractive tax policy for its pilot Free Trade Zone (FTZ), the city’s tax authorities said on Wednesday.

PEOPLE’S DAILY

– China’s Prime Minister Li Keqiang emphasised the fight against air pollution and regulation of medical equipment at a State Council executive meeting on Wednesday.

 

Britain

The Telegraph

RBS WARNED OF CREDIT RATING ‘DOWNGRADE’

Royal Bank of Scotland has been warned by one of the world’s main ratings agencies that its credit is at risk of being downgraded following the surprise revelation last month of weaker than expected capital levels.

Moody’s said it had put RBS’s debt “on review for downgrade” pointing to the taxpayer-backed lender’s “weaker than previously anticipated regulatory capital position”.

The Guardian

BANK OF ENGLAND TO KEEP INTEREST RATES AT 0.5 PCT FOR AT LEAST ANOTHER YEAR

The Bank of England has signalled it will keep interest rates on hold at the historic low of 0.5 percent for at least another year, despite forecasting strong growth of 3.4 percent in 2014.

SCOTTISH INDEPENDENCE: RBS BOSS PLAYS DOWN REPORTS OF LONDON MOVE

The chief executive of Royal Bank of Scotland, Ross McEwan, has made it clear the bank will adapt its business for an independent Scotland.

TWO HELD IN ROLLS-ROYCE BRIBERY INQUIRY

Britain’s Serious Fraud Office has arrested two people and raided five homes as part of its investigation into alleged bribery and corruption at the engineering group Rolls-Royce .

VODAFONE’S $2 BLN INDIAN TAX BILL ROW: PEACE TALKS ABOUT TO BREAK DOWN

India plans to pull out of talks with Vodafone over a $2 billion tax dispute, in a move that will prolong a row that is already more than six-years old and increase uncertainty among investors in Asia’s third-largest economy.

STRUGGLING MORRISONS LINKED TO PRIVATE EQUITY BUYOUT

The pressure on Morrisons Chief Executive Dalton Philips and Chairman Ian Gibson intensified on Wednesday amid rumours that the Bradford-based supermarket could be subject to a bid.

The Times

RECKITT SEEKS A CURE FOR HEALTH TROUBLES AS PERFECT RECORD ENDS

A faultless 15-year record of profit growth at Reckitt Benckiser was shattered yesterday when the household products empire revealed that it had been hit by weak emerging markets and a slump in American sales of drug addiction treatments.

MAURITANIA COMES UP DRY AS TULLOW DISAPPOINTS YET AGAIN

Long-suffering investors in Tullow Oil were urged to “be realistic” yesterday after the explorer revealed that another of its wells had come up dry.

DX REPEATS CHALLENGE TO ROYAL MAIL

One of a clutch of delivery companies to have made bold claims that it would profit from the decline in Royal Mail is set to be floated on the stock market – for the second time in ten years.

DX Group is expected to say today that it plans to raise £170 million on AIM in an initial public offering that would value the company at up to 180 million pounds ($298.53 million).

The Independent

H&M TO OPEN FIRST STORE IN INDIA IN A BID CATCH UP WITH RIVAL INDITEX

H&M will open its first store in India this year as the world’s second-biggest fashion retailer becomes the latest to take advantage of the opening of its economy to foreign operators.

 

Fly On The Wall 7:00 AM Market Snapshot

FUTURES:

Just before 7 a.m. ET:
S&P: -9.00 vs. fair value
Dow: -74.00 vs. fair value
Nasdaq: -19.00 vs. fair value

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Retail sales for January at 8:30–consensus -0.1%; ex-autos & gas consensus +0.2%
Jobless claims for week of Feb. 8 at 8:30–consensus 330K
Business inventories for December at 10:00–consensus +0.5%

ANALYST RESEARCH

Upgrades

Approach Resources (AREX) upgraded to Outperform from Sector Perform at Iberia
athenahealth (ATHN) upgraded to Market Perform from Underperform at Cowen
Children’s Place (PLCE) upgraded to Overweight from Neutral at Piper Jaffray
Ctrip.com (CTRP) upgraded to Overweight from Equal Weight at Morgan Stanley
Helix Energy (HLX) upgraded to Outperform from Market Perform at Raymond James
NVIDIA (NVDA) upgraded to Buy from Neutral at B. Riley
Nanosphere (NSPH) upgraded to Buy from Neutral at Roth Capital

Downgrades

Angie’s List (ANGI) downgraded to Hold from Buy at Stifel
Angie’s List (ANGI) downgraded to Market Perform from Strong Buy at Raymond James
Avago (AVGO) downgraded to Market Perform from Outperform at JMP Securities
Depomed (DEPO) downgraded to Neutral from Buy at Roth Capital
EastGroup Properties (EGP) downgraded to Reduce from Neutral at SunTrust
Itron (ITRI) downgraded to Hold from Buy at Canaccord
Itron (ITRI) downgraded to Sell from Hold at Brean Capital
Itron (ITRI) downgraded to Underweight from Neutral at JPMorgan
Lorillard (LO) downgraded to Hold from Buy at Jefferies
Sempra Energy (SRE) downgraded to Neutral from Buy at Citigroup
The Medicines Co. (MDCO) downgraded to Hold from Buy at Jefferies
Titan Machinery (TITN) downgraded to Underperform from Neutral at Longbow

Initiations

Acxiom (ACXM) initiated with a Market Perform at Wells Fargo
Chimerix (CMRX) initiated with a Buy at Canaccord
CoStar Group (CSGP) initiated with an Outperform at Wells Fargo
Coach (COH) initiated with a Buy at Nomura
Columbia Sportswear (COLM) initiated with a Buy at Nomura
CoreLogic (CLGX) initiated with an Outperform at Wells Fargo
Costco (COST) initiated with a Buy at Nomura
Craft Brew (BREW) assumed with a Neutral at Citigroup
Deckers Outdoor (DECK) initiated with a Neutral at Nomura
Dun & Bradstreet (DNB) initiated with a Market Perform at Wells Fargo
Equifax (EFX) initiated with a Market Perform at Wells Fargo
FactSet (FDS) initiated with a Market Perform at Wells Fargo
Fair Isaac (FICO) initiated with a Market Perform at Wells Fargo
Gartner (IT) initiated with an Outperform at Wells Fargo
Hanesbrands (HBI) initiated with a Neutral at Nomura
IHS Inc. (IHS) initiated with an Outperform at Wells Fargo
Iconix Brand (ICON) initiated with a Buy at Nomura
J.C. Penney (JCP) initiated with a Reduce at Nomura
Kohl’s (KSS) initiated with a Buy at Nomura
lululemon (LULU) initiated with a Buy at Nomura
MSCI (MSCI) initiated with an Outperform at Wells Fargo
Macy’s (M) initiated with a Buy at Nomura
McGraw Hill Financial (MHFI) initiated with a Market Perform at Wells Fargo
Moody’s (MCO) initiated with a Market Perform at Wells Fargo
Nielsen (NLSN) initiated with an Outperform at Wells Fargo
Nike (NKE) initiated with a Buy at Nomura
Nordstrom (JWN) initiated with a Neutral at Nomura
PVH Corp. (PVH) initiated with a Buy at Nomura
Ralph Lauren (RL) initiated with a Neutral at Nomura
Ross Stores (ROST) initiated with a Buy at Nomura
Sempra Energy (SRE) initiated with an Outperform at Wells Fargo
Solera (SLH) initiated with a Market Perform at Wells Fargo
Stage Stores (SSI) initiated with a Neutral at Nomura
Stein Mart (SMRT) initiated with a Buy at Canaccord
TJX (TJX) initiated with a Buy at Nomura
Target (TGT) initiated with a Neutral at Nomura
Tiffany (TIF) initiated with a Buy at Nomura
VF Corp. (VFC) initiated with a Buy at Nomura
Verisk Analytics (VRSK) initiated with an Outperform at Wells Fargo
Wal-Mart (WMT) initiated with a Buy at Nomura

COMPANY NEWS

Time Warner Cable (TWC) to merge with Comcast (CMCSA) in $45.2B deal
AMEC to offer $16 per share, 0.8998 shares to acquire Foster Wheeler (FWLT)
ACCC took action against Pfizer Australia (PFE) for alleged anti-competitive conduct
Whole Foods (WFM) fell 7% after reporting earnings,revenue that missed estimates while cutting its fiscal 2014 profit outlook and lowering high end of sales growth expectations
Berkshire Hathaway (BRK.A) may acquire unformed Graham Holdings’ (GHC) subsidiary
Apache (APA) sold Argentina operations to YPF Sociedad (YPF) for $852M
Colfax (CFX) to acquire Victor Technologies from Irving Place Capital for $947.3M
Teleflex (TFX) announced worldwide recall of ISIS HVT Tracheal Tube
CBS (CBS) announced $1.5B accelerated share repurchase
Cheesecake Factory (CAKE) sees return of about all free cash flow to holders in FY14

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Orbital Sciences (ORB), Encana (ECA), Higher One (ONE), Quintiles (Q), NetEase.com (NTES),  CenturyLink (CTL), NVIDIA (NVDA), Cohu (COHU), MetLife (MET), SunPower (SPWR), Ruckus Wireless (RKUS), Famous Dave’s (DAVE), Skechers (SKX), Cisco (CSCO), Applied Materials (AMAT), NetApp (NTAP), Forrester (FORR), CBS (CBS)

Companies that missed consensus earnings expectations include:
Calpine (CPN), Walker & Dunlop (WD), Kinross Gold (KGC), General Cable (BGC), Morningstar (MORN), LeapFrog (LF), Enbridge Energy (EEP), Zillow (Z), iPass (IPAS), Manning & Napier (MN), Intrepid Potash (IPI), Mondelez (MDLZ), Whole Foods (WFM), B&G Foods (BGS)

Companies that matched consensus earnings expectations include:
Nielsen (NLSN), Student Transportation (STB), Digital Cinema (DCIN), LivePerson (LPSN), Tangoe (TNGO), Blackbaud (BLKB), American Equity (AEL)

NEWSPAPERS/WEBSITES

Comcast (CMCSA) looking to step into Netflix (NFLX) streaming territory, WSJ reports
Google’s (GOOG) Android comes with restrictions for device makers, WSJ reports
Nielsen (NLSN) faces intense competition measuring online viewers, WSJ reports
Avon Products (AVP) in talks to settle bribery probe, WSJ reports
Winter weather forces automakers (F, GM,TM, HMC) to increase discounting, Reuters reports
Verizon (VZ) Wireless prepares price cuts, aims to close call centers, Re/code reports
Dropbox hires Google (GOOG) executive as COO, WSJ reports
KKR (KKR), Apax said to be mulling bid for Telesat, Bloomberg reports
Merck (MRK) consumer-brand portfolio could fetch $10B, WSJ reports

SYNDICATE

Amedica (AMDA) 3.5M share IPO priced at $5.75
AtriCure (ATRC) files to sell common stock for holders
Booz Allen (BAH) files to sell 7.35M common shares for Carlyle affiliates
Colfax (CFX) files to sell 6.5M shares of common stock
Enzymotec (ENZY) files to sell 4M shares of common stock for holders
GenVec (GNVC) files to sell $10M shares of common stock
Installed Building Products (IBP) 7.45M share IPO priced at $11.00
MacroGenics (MGNX) 3M share Secondary priced at $36.50
PTC Therapeutics (PTCT) 4.49M share Secondary priced at $24.50

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

With so much of the recent bad news roundly ignored or simply “priced in” and blamed on the snow, it is unknown just what it is that catalyzed the overnight round of risk-offness, but whatever the ultimate factor, it first dragged the Nikkei lower by 1.8%, as we noted previously, then sent the SHCOMP down by 0.55%, then ultimately dragged the USDJPY below the key 102 support area which in turn pulled US equity futures to set the scene for a red open (with no POMO and no Yellen testimony today which also was canceled due to snow), and, putting it all together, suddenly Europe too is back on the scene, with a blow out in Italian yields driven by the realization that the Letta government is on the edge of collapse, in a deja vu moment to those hot summers of 2011 and 2012.

Granted, the yield on the Italian 10 Year has about 3-4% higher to go before the full sense of imminent European doom returns, but it all starts with minor momentum inversions, and considering that the OMT is no longer a credible backstop as Deutsche explained yesterday following its official exposure as an emperor without clothes by the GCC, all the world needs now is for the European crisis to return full bore, just as Japan is scrambling to justify the failure of Abenomics, the EMs are on the edge of another risk off implosion, China is tapering (at least on the surface), and shadow bank blows up are just around the corner to make it all really exciting, and finally geopolitical is just around the corner.

Headline bulletin from RanSquawk and Bloomberg

• Disappointing financial earnings and post-rally profit-taking sees European equities lower.
• ECB forecasters sees growth risks tilted to the downside and have lowered their inflation forecasts.
• EUR sees notable outperformance after breaking through 1.3650, the 50 DMA at 1.3655 and talk of Asian offers at 1.3640.
• Looking ahead for the session, participants will get the chance to digest the release of US Retail Sales, Weekly Jobless data, US 30yr TIPS announcement and USD 16bln 30y bond auction.

Market Re-Cap

Less than impressive financial earnings and profit-taking from the recent rally has seen European equities trade lower across the board throughout the session. Notable underperformers are BNP Paribas (-3.83%) and Lloyds Banking Group (-4.74%) who are leading the way lower for the financial sector. With the FTSE 100 under heavy selling pressure following Rolls-Royce (-14%) and Tate & Lyle (-16%) less than impressive earnings reports.

The ECB monthly report revealed that forecasters see growth risks tilted to the downside. This initially prompted some weakness in EUR. However, EUR/USD soared approximately 20 minutes later by just under 50 pips after breaking through resistance at 1.3650 and the 50DMA at 1.3655 as well as being subject to Asian offers at 1.3640.

In fixed income markets, bunds are seen better bid following the move lower in equities, political instability in Italy and the ECB forecasts which revealed the bank sees 2014 HICP inflation at 1.1% from prev. forecast of 1.5%. Elsewhere, the Short-Sterling curve is seen flatter this morning as participants take profits from yesterday’s
aggressive QIR inspired steepening.

Asian Headlines

China are said to target a slower pace of exports this year, with 7.5% export growth in 2014. (BBG) This is despite exports rising 10.6% Y/Y in January, indicating the Chinese authorities expect a slowdown in international trade.

EU & UK Headlines

ECB forecasters sees growth risks tilted to the downside, bulletin echoes Feb. 6 policy statement by Draghi

– Sees inflation risks broadly balanced for 2014, 2015, somewhat to downside for 2016.
– Sees Eurozone 2016 GDP growth 1.7%, longer-term 1.8% (1.7% in Q4).
– Eurozone 2014 GDP growth 1.0% (1.0% in Q4), 2015 GDP growth 1.5% (1.5% in Q4).
– Eurozone 2016 HICP inflation seen at 1.7%, longer-term inflation seen at 1.9% (1.9% in Q4).
– Eurozone 2015 HICP inflation 1.4% (1.6% in Q4).
– Eurozone 2014 HICP inflation 1.1% (1.5% in Q4 forecast).

ECB’s Coene said a drop in CPI is not sufficient to force ECB action and that they need more information to see whether to cut rate. (DJN)

Italian government coalition partner Alfano says he will continue to support PM Letta if he has backing of his party and if centre-left withdraws backing from Letta it must explain its reasons openly. Alfano went on to say will evaluate whether to continue in government with centre-left leader Renzi if PM Letta loses support of his party. (RTRS)

BoE’s Dale said does not know what will happen in rates, but economic profile looks good in 2015 and that market pricing for 2015 rate rise looks reasonable. (BBG/BBC) Following yesterday’s inflation report, SocGen now expect the BoE to raise the key rate in Q1 2015 from previously forecast Q3 2015. (BBG)

Equities

Financials underperformed since the get-go in Europe, following less than impressive earnings by BNP Paribas and Lloyds. Also, Austrian listed Raiffeisen Bank came under heavy selling pressure amid renewed concerns over Hungary, with EUR/HUF bid as market participants continued to fret over potential rise in loan losses after an adviser to the EU’s top court said that Hungary’s courts can force banks to replace unfair contract terms for customers holding approx. USD 15bln of foreign-currency loans. In terms of other notable movers, Rolls-Royce shares fell over 10% after the company said that in 2014 it expects a pause in revenue and profit growth, reflecting offsetting trends.

FX

USD/JPY and EUR/CHF traded lower this morning, amid general risk averse sentiment, with option related flow linked to tomorrow’s large expiries in USD/JPY at 101.50/102.50 also said to have contributed to the downward bias. Looking elsewhere, EUR/HUF surged this morning after Hungarian Central Bank monetary policy director Palotai said council is to evaluate HUF exchange rate at next rate meeting. Of note, analysts at Barclays noted yesterday that the weak HUF is likely to lead the National Bank of Hungary (MNB) to suspend its easing cycle after a small final interest rate cut this month.

Commodities

Goldman Sachs see downside for gold prices in 2014 due to US growth rebounding, forecasting a USD 1,050/oz price by the end of 2014. (BBG)

IEA raises 2014 global oil demand forecasts on developed nations, with demand to rise 1.4% to 92.6mln bpd in 2014. (BBG)

According to an NOC spokesman protesters have shut Libya’s pipeline from the El Sharara oilfield to the Zawiya port, with the impact on production still unclear. (RTRS)

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S&P 500 futures remain up 15 points on the week but have retraced 16 points from today’s highs; Dow futures are down 150 points from today’s highs; and Nikkei 225 futures are down almost 500 points from their Yellen-Tuesday peak (and down 200 on the week) as USDJPY fades back towards the critical 102.00 level. Emerging Market FX is fading rapidly also.

NKY -450 from Yellen highs on Tuesday as USDJPY slides…

 

S&P -16 from today’s highs…

 

Dow -150 from today’s highs…

 

Charts: Bloomberg

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S&P 500 futures remain up 15 points on the week but have retraced 16 points from today’s highs; Dow futures are down 150 points from today’s highs; and Nikkei 225 futures are down almost 500 points from their Yellen-Tuesday peak (and down 200 on the week) as USDJPY fades back towards the critical 102.00 level. Emerging Market FX is fading rapidly also.

NKY -450 from Yellen highs on Tuesday as USDJPY slides…

 

S&P -16 from today’s highs…

 

Dow -150 from today’s highs…

 

Charts: Bloomberg

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

About an hour ago, it was announced that Time Warner was going to be acquired by Comcast for ~$159 / share. That’s roughly an 18% premium from today’s close. Speaking of today’s close, some ‘smart’ analyst must’ve really nailed this call, getting in just after 3:42pm… hope they #timestamped

via Zero Hedge http://ift.tt/1dJHXl4 CrownThomas

Submitted by Michael Snyder of The Economic Collapse blog,

On Tuesday, new Federal Reserve Chairman Janet Yellen went before Congress and confidently declared that "the economic recovery gained greater traction in the second half of last year" and that "substantial progress has been made in restoring the economy to health".  This resulted in glowing headlines throughout the mainstream media such as this one from USA Today: "Yellen: Economy is improving at moderate pace".  Sadly, tens of millions of Americans are going to believe what the mainstream media is telling them.  But it isn't the truth.  As you will see below, there are all sorts of signs that the economy is taking a turn for the worse.  And when the next great economic crisis does strike, most Americans will be completely and totally unprepared because they trusted our "leaders" when they told us that everything would be just fine.

It is amazing how deceived people can be.  Just consider the case of 56-year-old Brian Perry.  He is a former law clerk that has applied for nearly 1,500 jobs since 2008 without any success.  But he says that he is "optimistic" that he will get another job soon because he believes that the economy is recovering…

By his own count, Brian Perry has applied for nearly 1,500 jobs since being let go as a law clerk in 2008. The 56-year old Perry lives in Rhode Island, where the 9.1 percent unemployment rate is 2.5 percentage points above the national average.

 

Perry remains optimistic that a job is forthcoming. He thinks a more robust economy would create better opportunities for the long-term unemployed like him.

Let us certainly hope that Perry does find a new job soon.  But if he does, it won't be because we are experiencing an "economic recovery".  Just consider the following facts…

-In January, we were told that the U.S. economy "created" 113,000 new jobs.  But that figure was arrived at only after adding a massive seasonal adjustment.  In reality, the U.S. economy actually lost 2.87 million jobs in January.  During the past decade, the only time the U.S. economy has lost more jobs in January was during 2009.  At that time, the U.S. economy was suffering through the peak of the worst economic downturn since the Great Depression.

-Prominent retailers are closing hundreds of stores all over the United States.  Things have gotten so bad that some are calling this a "retail apocalypse"…

• JC Penney, which lost $586 million in three months in 2013, is planning to close 33 stores in 19 states and lay off 2,000 people. JC Penney’s stock has lost 84 percent of its value since February 2012.
• Sears has decided to shut down its flagship store in Downtown Chicago, and it has closed 300 stores in the United States since 2010. Stock analyst Brian Sozzi noted that Sear’s inventory levels have fallen by 23.7 percent since 2006. He also noted that Sears had $4.4 billion in cash and equivalents in 2005 but $609 million in cash and equivalents in 2012. Sozzi, who calls himself a guerrilla analyst, has a blog full of disturbing pictures of empty Sears stores.
• Macy’s, one of the few retail success stories, is planning to close five stores and eliminate 2,500 jobs.
• Radio Shack is preparing to close 500 stores, according to The Wall Street Journal.
• Best Buy recently closed 50 stores and eliminated 950 jobs at stores in Canada.
• Target announced plans to eliminate 475 jobs and not fill 700 empty positions to reduce costs.
• Aeropostale is planning to close 175 stores.
• Blockbuster has closed down all of its stores.

-McDonald's is reporting that sales at established U.S. locations were down 3.3 percent in January.

-In January, real disposable income in the U.S. experienced the largest year over year decline that we have seen since 1974.

-As I wrote about the other day, the number of "planned job cuts" in January was 12 percent higher than 12 months earlier, and it was actually 47 percent higher than in December.

-Only 35 percent of all Americans say that they are better off financially than they were a year ago.

-What is happening to the U.S. stock market right now very closely resembles what happened to the U.S. stock market just before the horrific stock market crash of 1929.  Just check out the chart in this article.

For dozens more statistics that show that the U.S. economy is not improving, please see this article and this article.

Meanwhile, things continue to unravel all around the rest of the globe as well.

In previous articles, I have detailed how the reckless money printing by the Federal Reserve has inflated massive financial bubbles in emerging markets all over the planet.  Now that the Fed is "tapering", those bubbles are starting to burst and we are witnessing a tremendous amount of economic chaos.  Here are three more examples…

#1 Ghana:

Ghanaian Economist Dr. Theo Richardson says Ghana’s economy will crash by June this year if the Bank of Ghana continues with its kneejerk measures to rescue the cedi.

“The government is facing liquidity problems and if we don’t get the appropriate remedies to address the issues at hand the situation may worsen and by June the economy may crash,” Dr. Richardson said.

#2 Kazakhstan:

With only $24.5 billion left in FX reserves after valiantly defending major capital outflows since the Fed's Taper announcement, the Kazakhstan central bank has devalued the currency (Tenge) by 19% – its largest adjustment since 2009. At 185 KZT to the USD, this is the weakest the currency has ever been as the central bank cites weakness in the Russian Ruble and "speculation" against its currency as drivers of the outflows (which will be "exhausted" by this devaluation according to the bank). The new level will improve the country's competitiveness (they are potassium heavy) but one wonders whether, unless Yellen folds whether it will help the outflows at all.

#3 India:

In the wake of a global stock market sell-off driven by worries over slower growth in emerging markets, the head of India's central bank, Raghuram Rajan, criticized the U.S. Federal Reserve as it pressed on with plans to dial back its monthly bond purchases: "International monetary co-operation has broken down," said Rajan, who added that "the U.S. should worry about the effects of its polices on the rest of the world."

We have reached a "turning point" for the global financial system.  Things are beginning to fall apart both in the United States and all around the world.

But at least the dogs at the White House are eating well.  Just consider the following photo that was recently tweeted by Michelle Obama…

via Zero Hedge http://ift.tt/1dJHX4z Tyler Durden

Submitted by Michael Snyder of The Economic Collapse blog,

On Tuesday, new Federal Reserve Chairman Janet Yellen went before Congress and confidently declared that "the economic recovery gained greater traction in the second half of last year" and that "substantial progress has been made in restoring the economy to health".  This resulted in glowing headlines throughout the mainstream media such as this one from USA Today: "Yellen: Economy is improving at moderate pace".  Sadly, tens of millions of Americans are going to believe what the mainstream media is telling them.  But it isn't the truth.  As you will see below, there are all sorts of signs that the economy is taking a turn for the worse.  And when the next great economic crisis does strike, most Americans will be completely and totally unprepared because they trusted our "leaders" when they told us that everything would be just fine.

It is amazing how deceived people can be.  Just consider the case of 56-year-old Brian Perry.  He is a former law clerk that has applied for nearly 1,500 jobs since 2008 without any success.  But he says that he is "optimistic" that he will get another job soon because he believes that the economy is recovering…

By his own count, Brian Perry has applied for nearly 1,500 jobs since being let go as a law clerk in 2008. The 56-year old Perry lives in Rhode Island, where the 9.1 percent unemployment rate is 2.5 percentage points above the national average.

 

Perry remains optimistic that a job is forthcoming. He thinks a more robust economy would create better opportunities for the long-term unemployed like him.

Let us certainly hope that Perry does find a new job soon.  But if he does, it won't be because we are experiencing an "economic recovery".  Just consider the following facts…

-In January, we were told that the U.S. economy "created" 113,000 new jobs.  But that figure was arrived at only after adding a massive seasonal adjustment.  In reality, the U.S. economy actually lost 2.87 million jobs in January.  During the past decade, the only time the U.S. economy has lost more jobs in January was during 2009.  At that time, the U.S. economy was suffering through the peak of the worst economic downturn since the Great Depression.

-Prominent retailers are closing hundreds of stores all over the United States.  Things have gotten so bad that some are calling this a "retail apocalypse"…

• JC Penney, which lost $586 million in three months in 2013, is planning to close 33 stores in 19 states and lay off 2,000 people. JC Penney’s stock has lost 84 percent of its value since February 2012.
• Sears has decided to shut down its flagship store in Downtown Chicago, and it has closed 300 stores in the United States since 2010. Stock analyst Brian Sozzi noted that Sear’s inventory levels have fallen by 23.7 percent since 2006. He also noted that Sears had $4.4 billion in cash and equivalents in 2005 but $609 million in cash and equivalents in 2012. Sozzi, who calls himself a guerrilla analyst, has a blog full of disturbing pictures of empty Sears stores.
• Macy’s, one of the few retail success stories, is planning to close five stores and eliminate 2,500 jobs.
• Radio Shack is preparing to close 500 stores, according to The Wall Street Journal.
• Best Buy recently closed 50 stores and eliminated 950 jobs at stores in Canada.
• Target announced plans to eliminate 475 jobs and not fill 700 empty positions to reduce costs.
• Aeropostale is planning to close 175 stores.
• Blockbuster has closed down all of its stores.

-McDonald's is reporting that sales at established U.S. locations were down 3.3 percent in January.

-In January, real disposable income in the U.S. experienced the largest year over year decline that we have seen since 1974.

-As I wrote about the other day, the number of "planned job cuts" in January was 12 percent higher than 12 months earlier, and it was actually 47 percent higher than in December.

-Only 35 percent of all Americans say that they are better off financially than they were a year ago.

-What is happening to the U.S. stock market right now very closely resembles what happened to the U.S. stock market just before the horrific stock market crash of 1929.  Just check out the chart in this article.

For dozens more statistics that show that the U.S. economy is not improving, please see this article and this article.

Meanwhile, things continue to unravel all around the rest of the globe as well.

In previous articles, I have detailed how the reckless money printing by the Federal Reserve has inflated massive financial bubbles in emerging markets all over the planet.  Now that the Fed is "tapering", those bubbles are starting to burst and we are witnessing a tremendous amount of economic chaos.  Here are three more examples…

#1 Ghana:

Ghanaian Economist Dr. Theo Richardson says Ghana’s economy will crash by June this year if the Bank of Ghana continues with its kneejerk measures to rescue the cedi.

“The government is facing liquidity problems and if we don’t get the appropriate remedies to address the issues at hand the situation may worsen and by June the economy may crash,” Dr. Richardson said.

#2 Kazakhstan:

With only $24.5 billion left in FX reserves after valiantly defending major capital outflows since the Fed's Taper announcement, the Kazakhstan central bank has devalued the currency (Tenge) by 19% – its largest adjustment since 2009. At 185 KZT to the USD, this is the weakest the currency has ever been as the central bank cites weakness in the Russian Ruble an
d "speculation" against its currency as drivers of the outflows (which will be "exhausted" by this devaluation according to the bank). The new level will improve the country's competitiveness (they are potassium heavy) but one wonders whether, unless Yellen folds whether it will help the outflows at all.

#3 India:

In the wake of a global stock market sell-off driven by worries over slower growth in emerging markets, the head of India's central bank, Raghuram Rajan, criticized the U.S. Federal Reserve as it pressed on with plans to dial back its monthly bond purchases: "International monetary co-operation has broken down," said Rajan, who added that "the U.S. should worry about the effects of its polices on the rest of the world."

We have reached a "turning point" for the global financial system.  Things are beginning to fall apart both in the United States and all around the world.

But at least the dogs at the White House are eating well.  Just consider the following photo that was recently tweeted by Michelle Obama…

via Zero Hedge http://ift.tt/1dJHX4z Tyler Durden

While the eyes of the world were focused on the now infamous "Credit Equals Gold #1" Chinese wealth management product – it's imminent default and last-minute bailout by 'investors' unknown – the coal industry in China continued to collapse (as we noted here). We noted at the time how bailing out current high-yield product investors would merely amplify the problems down the line and it seems that Chinese authorities have heard that message. As Reuters reports, a high-yield investment product backed by a loan to a debt-ridden coal company failed to repay investors when it matured last Friday, state media reported on Wednesday.

Via Reuters,

A high-yield investment product backed by a loan to a debt-ridden coal company failed to repay investors when it matured last Friday, state media reported on Wednesday, in the latest sign of financial stress in China's shadow bank sector.

 

…

 

"It matured on Feb. 7, but CCB passed on an announcement from Jilin Trust saying 'We currently can't be certain when (Liansheng) funds will be returned,'" the official Shanghai Securities News quoted an unnamed investor in the trust product as saying.

 

Though the maturity date has already passed, producing a technical default, Jilin Trust appears to be working to recover investor funds.

 

"Restructuring isn't bankruptcy. As far as we know, there is no problem with the firm's assets. The firm is in negotiations with investors," the paper quoted an unnamed Jilin Trust official as saying.

Backed by China's 2nd largest lender China Construction Bank (note we discussed the largest shadow-bank here), the product is as follows:

The fourth tranche of Jilin Trust's product is name "Songhua River #77 Shanxi Opulent Blessing Project" raised 289 million yuan from investors in February 2012, promising a 9.8% yield – we will see if this technical default results in actual losses for investors.

backed by a coal-industry loan to Shanxi Liansheng Energy Co Ltd…

Shares of China’s biggest listed coal producers have dropped to their lowest valuations on record as falling fuel prices make it harder to repay debt.

 

China’s coal industry is “dead,” said Laban Yu, a Jefferies Group LLC analyst in Hong Kong with an underperform rating on all three stocks. “There are 10,000 producers in China. A lot of them are taking on debt. It gets harder and harder to service debts when coal prices keep falling.

and the risk of more defaults is not going away – in fact will onkly get worse in the next 3 months!!

 

 

For those who have forgotten, below is a quick schematic of what a WMP looks like:

As Michael Pettis, Jim Chanos, Zero Hedge (numerous times), and now George Soros have explained. Simply put –

"There is an unresolved self-contradiction in China’s current policies: restarting the furnaces also reignites exponential debt growth, which cannot be sustained for much longer than a couple of years."

The "eerie resemblances" – as Soros previously noted – to the US in 2008 have profound consequences for China and the world – nowhere is that more dangerously exposed (just as in the US) than in the Chinese shadow banking sector as explained above.

 

The bottom-line is that China seems to be testing the reaction of markets to small 'technical' defaults (such as this one)…

Technical defaults caused by repayment delays have occurred before, but market watchers say that China's shadow bank sector is still waiting for a precedent-setting default in which investors are forced to absorb substantial losses.

 

Such an event could shatter the widespread assumption that even high-yielding investments carry an implicit guarantee from state banks. But Jilin Trust is apparently still looking for ways to recover investors' funds.  

The question is – doe s the PBOC really think that desparate borrowers will stop borrowing – and contract the size of the shadow-banking system reining in the out of control credit creation (and its subprime-like consequences)…

As we previously noted,

…borrowers are facing rising pressures for loan repayments in an environment of overcapacity and unprofitable investments. Unable to generate cash to service their loans, they have to turn to the shadow-banking sector for credit and avoid default. The result is an explosive growth of the size of the shadow-banking sector (now conservatively estimated to account for 20-30 percent of GDP).

 

Understandably, the PBOC does not look upon the shadow banking sector favorably. Since shadow-banking sector gets its short-term liquidity mainly through interbanking loans, the PBOC thought that it could put a painful squeeze on this sector through reducing liquidity. Apparently, the PBOC underestimated the effects of its measure. Largely because Chinese borrowers tend to cross-guarantee each other’s debt, squeezing even a relatively small number of borrowers could produce a cascade of default. The reaction in the credit market was thus almost instant and frightening. Borrowers facing imminent default are willing to borrow at any rate while banks with money are unwilling to loan it out no matter how attractive the terms are.

 

Should this situation continue, China’s real economy would suffer a nasty shock. Chain default would produce a paralyzing effect on economic activities even though there is no run on the banks. Clearly, this is not a prospect the CCP’s top leadership relishes.

So the PBOC's efforts are merely exacerbating the situation for the worst companies…

However, this just hit the wire…

• *CHINA BANS BOND TRADE BETWEEN PROPRIETARY, WMP ACCOUNTS

Which sounds ominously like the PBOC won;t allow banks to bail their own WMP investors out and take the risky crap back on their off-balance-sheet books… i.e. The PBOC wants real defaults… not 'technical' defaults

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