Tag: news

It was just 2 months ago when the one-off Boeing order-related idiocy distorted the entire time series and was thus extrapolated into escape velocity dreams by prognosticators everywhere. Excused by the cognoscenti as a “volatile time series,” Durable Goods new orders dropped 1.3% MoM, missing expectations by the most since Dec 2013 and negative for the 2nd month in a row. Lats month’s drop was revised lower also. Even more concerning is the 1.7% drop MoM in Core Capex, the biggest miss in over a year and biggest drop since January. Did it snow in September?

Durable Goods prints 2nd miss and 2nd drop in a row

 

And Core Capex – Capital goods new orders ex defense ex-aircraft – dropped most since January

 

Headlines:

• Durable goods new orders fell 18.3% in Aug., the Census Bureau said
• New orders ex-trans. fell 0.2% in Sept. after 0.7% rise
• New orders ex-defense fell 1.5% in Sept. after 19.1% fall
• Non-defense capital goods orders ex-aircraft fell 1.7% in Sept.
• Non-defense capital goods ex-air 3 mo. avg. annualized rose 10.4%
• Non-defense capital goods shipments ex-aircraft fell 0.2% in Sept. after 0.1% rise

 

Charts: Bloomberg

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

Who can forget China’s ghost city of Ordos: back in late 2009, when the hollow shell behind China’s torrid growth was first revealed to the world, the city near China’s Mongolia border was cooler talk for weeks. Fast forward five years later, and Ordos is all but forgotten, having been eclipsed by a veritable army of much bigger “ghosts” that make up the “ghost town network” – a list of cities created by the China Investment Network, a business newspaper in Beijing, to determine which cities were the most ghostly.

As Caixin reports, the newspaper devised its index using a government standard that says cities should have 10,000 people per square kilometer. The editors at China Investment Network determined that if a city’s ratio of people to area was 0.5 – that is, it was half full – then it is a ghost town. To take the example a step further, if a city had a ratio of .10, then it had one-tenth the population the government thought it deserved. Based on this approach, at least 50 Chinese cities fit the description of “ghost town.” The large city of Weihai, in the eastern province of Shandong, and the tourist destination of Sanya, in the south’s Hainan Province, were among China’s emptiest.

 

And here is how a Goldman analyst recount his “on the ground” visit around some of the more prominent Chinese ghost cities. From Goldman’s Kenneth Ho:

In August, the GS Asia Credit Strategy team spent four days in China, visiting a number of property development projects as well as a couple of well-publicized “ghost towns.” While this brief trip to a limited number of developments is unlikely to provide a full picture of the real estate market in China, it does offer a first-hand look at some of the most widely cited concerns about China’s housing build-up. Kenneth Ho offers his takeaways (and pictures) below.

Less ghostly than expected, but still spooky

The couple of “ghost towns” we visited, while less desolate than some press reports would suggest, were indeed very quiet. We did not prearrange the visits, and we went to the sales offices as well as seeing the properties. Both towns we saw have been in development for about a decade. Tianducheng, or Sky City, on the outskirts of Hangzhou has been reported by the press as deserted (e.g., by Reuters). Although the development was relatively quiet, there were a fair number of occupants in the residential buildings, and we got the sense that tenants were slowly moving in. The staff at the sales office told us that the occupancy rate is around 60% for the completed and sold units. There is further development in Tianducheng, and we did see more construction work taking place – but it was not the desolate town portrayed by the press.

A second well-publicized “ghost town” (e.g., by the South China Morning Post) we visited was Jingjin New Town, on the outskirts of Tianjin. This development is mostly comprised of villas and separated into ten phases. According to the staff at the sales office, phases 1 to 4 have been mostly sold, and phase 5 may be released later this year, though there were no plans at that moment to release phases 6 to 10. We believe that half of the development (phases 1 to 5) have already been built, with the other half (phases 6 to 10) yet to be constructed. Despite most of the completed villas having been sold, from what we saw, the occupancy level is very low, and some unsold villas are not in the best shape. The sales office told us that the project targeted retirees or second/holiday homebuyers working in Beijing and Tianjin (hence the low occupancy), and that it is busier during public holidays and weekends. We cannot verify this statement, and it is difficult to assess which factors are driving the low occupancy rate. Projects of this type have not been attracting much demand, and the town was very quiet overall. That said, we did not see a significant amount of uncompleted constructions. As in Sky City, however, it appeared that more development was coming through.

Construction still dominates the landscape

We visited other projects in Tianjin, Hangzhou, and Hohhot, as they are tier 2 and 3 cities with meaningful excess supply. In Tianjin and Hangzhou, we saw developments on the outskirts as well as some closer to the city center. Although it appeared that YTD sales had been satisfactory, we saw significant amount of construction activity; most projects were targeting improved sales in 2H14, with new launches to come. In Hohhot, a provincial capital reported as having some of the most significant overbuild, centrally located developments targeting the mass market appeared to be seeing demand, though less so for the higher-end projects. But we did see signs of overbuilding, which raises questions about whether newer properties, particularly on the outskirts, will find sufficient demand.

via Zero Hedge http://ift.tt/ZVW7Ad Tyler Durden

A summary of the key things on traders’ minds this morning, as reported by Peter Garnry, head of equity strategy at Saxo Bank

1. Record short selling in Japanese equities… with around 35% of daily trading volume being shorted. Normally the most shorted single stocks outperform the general market, so this might be a signal that the market is too pessimistic on Japanese equities and we could see a short-term, short-covering rally.
2. The market does not believe the European Central Bank… with all banking stocks yesterday erasing early gains following the better-than-expected stress-test results. The truth lies probably in between, with the ECB being a bit too optimistic and investors a bit too pessimistic. Overall, our view is that the stress test will improve valuations among certain banking stocks, such as Commerzbank and Deutsche Bank which are trading at half their book value.
3. Amgen delivered solid third-quarter earnings after US market close… with EPS at $2.30 vs. an expected $2.11. The company is raising its full-year guidance. We highlighted the stock on yesterday’s morning call and we remain very bullish on Amgen.
4. Twitter Q3 EPS was in line… but the valuation is grotesque given the lack of user growth. We are negative on the stock.
5. BP issues an implicit profit warning… but the market does not care, sending the stock up around 1% in early London trading as Q3 net income came in a tad better than expected (but Q3 profits were down 19% year-over-year). Gulf of Mexico oil spill costs are now $20 billion but could go as high as $50 billion. Management is issuing a small profit warning due to the sanctions against Russia. BP owns 20% of OAO Rosneft, Russia’s largest oil producer.
6. Lloyds Banking sees a 41% jump in profits… but investors are sending the stock down 1.5% despite announcements of jobs cut and positive trends in impairments. Our quant model is neutral on Lloyds Banking but very bullish on Royal Bank of Scotland, which is reporting its Q3 earnings on Friday. Given today’s results from Lloyds, we expect positive results from Royal Bank of Scotland.
7. Gilead Sciences reports Q3 earnings at 20:00 GMT… with the Street expecting $1.91. Our quant model is extremely bullish on Gilead Sciences and the stock is on our conviction buy list for North America equities.
8. Facebook reports Q3 earnings after US market close... with analysts expecting earnings to rise 61% y/y on margin expansion and increased monetisation of its international user base. Our quant model is very bullish on Facebook and we will elaborate on our view later today on Saxo TV.

via Zero Hedge http://ift.tt/1wHDY7l Tyler Durden

• CDC says returning Ebola medical workers should not be quarantined (Reuters)
• Sweden’s central bank cuts rates to zero (FT)
• Hacking Trail Leads to Russia, Experts Say (WSJ)
• Discount-Hunting Shoppers Threaten Stores’ Holiday Cheer (BBG)
• Apple CEO fires back as retailers block Pay (Reuters)
• Repeat after us: all China data is fake – China Fake Invoice Evidence Mounts as HK Figures Diverge (BBG)
• FX Traders’ Facebook Chats Said to Be Sought in EU Probe (BBG)
• Euro Outflows at Record Pace as ECB Promotes Exodus (BBG)
• Apple boosts R&D spending in new product hunt (FT)
• China’s Stocks Rise Most in Three Months on Trade-Zone Expansion (BBG)
• BoE demands climate answers from insurers (FT)
• Mercedes Drivers Stung by Shale Boom’s Quirks at the Pump (BBG)
• Russian Brain Drain Saps Talent as Sanctions Hit Financing (BBG)
• China’s ‘new normal’ for consumption (FT)
• Madison Square Garden Explores Plan to Split Into Two (BBG)
• Washington state school gunman texted victims to meet at cafeteria: official (Reuters)
• Wyly Widow Was Insolvent After Billionaire’s Death (BBG)
• Zombie Storms Cause Mayhem Long After They Drop off Maps (BBG)

 

Overnight Media Digest

WSJ

* The Centers for Disease Control recommended that people deemed to be at high risk of developing Ebola voluntarily isolate themselves from others for 21 days, but stopped short of recommending the mandatory quarantines that at least two states have ordered. (http://on.wsj.com/1wD924O)

* Computer-security experts say they found what they describe as a sophisticated cyberweapon on a network at a U.S. firm harboring military secrets, and that the spy tool was built during Moscow working hours. (http://on.wsj.com/1tC3c62)

* Alibaba Group Holding Ltd, which recently raised $25 billion in the world’s biggest initial public offering in the United States, is interested in cooperating with Apple Inc in financial payments, the Chinese company’s executive chairman said. (http://on.wsj.com/1sxoI5e)

* The FDA, Interpol and dozens of countries want the Internet’s central administrator to help shut down sites suspected of selling drugs without a prescription, but Icann’s powers are limited. (http://on.wsj.com/1tBbolL)

* The United States is imposing additional tariffs on Mexican sugar imports next week, but the new fees may be short-lived. (http://on.wsj.com/1pSTOV7)

* Europe’s yearlong banking stress tests were to provide the public with reliable, comprehensive data about the finances of the continent’s lenders. But some errors and inconsistencies nonetheless crept into the test results. (http://on.wsj.com/1tBbwSb)

* Madison Square Garden said it would explore separating its entertainment businesses from its media and sports operations, and that it was nominating Nelson Peltz and Scott Sperling to its board. (http://on.wsj.com/1yG5yzR)

* An internal disagreement within the Securities and Exchange Commission is threatening potentially lucrative revenue streams at Bank of America Corp, according to people close to the situation. (http://on.wsj.com/1wD94cK)

* General Motors Co – trying to stir some buzz around the next generation Chevrolet Volt plug-in – said Tuesday it would move production of the vehicle’s electric drive unit to its home state of Michigan from Mexico. (http://on.wsj.com/1xyuiZH)

 

FT

The Bank of England has written to about 30 insurance companies to evaluate the risks of climate change to their solvency and earnings, in a concern over the potential financial aftermath of global warming. In his address to the members of parliament, British Prime Minister David Cameron on Monday said Britain would not pay an additional 1.7 billion pounds ($2.74 billion) as part of its contribution to the European Union. The EU says a recent upward revision to Britain’s gross national income during 2002-2013 triggered the additional contributions. Scandals in the financial markets are not caused by just a “few bad apples”, and financial regulators are set to impose more regulation on the sector to reclaim public trust, Bank of England Deputy Governor of markets and banking, Nemat Shafik said.

Britain’s Co-operative Bank named Dennis Holt as its new chairman, as the bank aims to recover from a high-profile drugs scandal, senior management departures and its near collapse.

 

NYT

* Madison Square Garden Co said on Monday it was exploring a potential breakup of itself, a move that would separate the New York Knicks and Rangers professional sports teams from the company’s live entertainment business. (http://nyti.ms/1tBS74T)

* Adding to pressure on the guardrail manufacturer Trinity Industries Inc, Virginia said on Monday it planned to remove the company’s products after it failed to meet a state deadline to supply documentation for new crash testing. (http://nyti.ms/1tBRzf9)

* Regal Entertainment Group, which operates the country’s largest theater chain, said on Monday it was exploring “strategic alternatives” that may include a sale of the company. (http://nyti.ms/1zCxoB5)

* Sachem Head Capital Management, a $2 billion hedge fund, disclosed on Monday that it had acquired an economic interest in CDK Global Inc equivalent to a 9.8 percent stake. (http://nyti.ms/1DV09rv)

* Private equity firm Warburg Pincus LLC has raised $4 billion for a new fund, its first dedicated to investments in the energy sector. Warburg Pincus said on Monday that the final amount of capital raised for the fund was $1 billion higher than the initial goal, indicating robust demand among investors. (http://nyti.ms/1ze6PRH)

 

Canada

THE GLOBE AND MAIL

** On a day when the Conservative government tabled new legislation to expand the powers of Canadian Security Intelligence Service, sources say Ottawa is now weighing new tools to deal with citizens who openly support terrorist attacks on Canadians or back groups that urge this goal. (http://bit.ly/1teramw)

** The Canada government is beefing up its blacklist of Canadian employers with a plan to include not only businesses found to have broken temporary foreign worker program rules, but also provincial labour laws. (http://bit.ly/12ZjVVF)

** Toronto has rejected the tumultuous reign of the Ford brothers, choosing as their next mayor John Tory, a buttoned-up former provincial politician who won over voters with his promises of good governance and swift improvements to public transit. (http://bit.ly/1oT2rUT)

NATIONAL POST

** Nearly one year after John Chen took the helm of BlackBerry Ltd, the chief executive touted his turnaround plan on Monday. In a post on networking website LinkedIn, Chen said BlackBerry faced “tremendous challenges” when he was appointed last November and he moved to create a culture “that focuses on fixing things and finding solutions, not on the obstacles before you”. (http://bit.ly/10wwTt8)

** Canada’s ambassador in the United States Gary Doer says he has been busy since last week’s terror attack in Ottawa correcting “alarmist” media reports about the shooting. He has spent years pointing out there are nowhere near 500 Canadians fighting with ISIS, as one politician said. (http://bit.ly/1wDcbRZ)

** Royal Canadian Mounted Police Commissioner Bob Paulson says the video made by the gunman in last week’s attack on the National War Memorial contains evidence that the shooting was driven by political and ideological motives. Paulson hopes that it will eventually be released to the public. (http://bit.ly/1tDmN5A)

 

China

CHINA SECURITIES JOURNAL

– China should select a number of qualified cities to develop free trade zones following the progress made in Shanghai Pilot Free Trade Zone (FTZ), President Xi Jinping said during a meeting on Monday.

– China should be cautious about selling state assets too cheaply if it sells shares through private placement and should also develop supervision systems, State-owned Assets Supervision and Administration Commission of the State Council’s Director Chu Xuping said while discussing the main challenges for the ongoing mixed ownership reform.

SHANGHAI SECURITIES NEWS

– China’s Shanghai Pilot Free Trade Zone(FTZ) should increase foreign businesses’ access by updating the negative list and introduce taxation systems which are in line with international standards for foreign investment, accounting agency PricewaterhouseCoopers said in an assessment report.

– China Banking Regulatory Commission (CBRC) will encourage banks to establish branches in Tibet and will provide preferential credit policy to support its development, said CBRC’s President Shang Fulin during a meeting on Tibet’s financial development.

CHINA DAILY

– A memorandum of understanding (MoU) has been signed between U.S. pharmaceutical firm Johnson & Johnson and Shanghai Ruijin Hospital, to promote scientific research.

– Evergrande Real Estate Group Ltd plans to set up a dairy manufacturing operation in China, it said on Monday.

PEOPLE’S DAILY

– Meeting the cultural needs of people and promoting well-being are the Chinese Communist Party’s governance goals as these will also act as guarantees for the party’s sustainable political leadership, the party mouthpiece said in a commentary

Britain

The Times

PRICE OF OIL COULD TUMBLE TO $80 A BARREL AMID GLUT

Goldman Sachs Group Inc said Brent crude could drop to $80 a barrel next year as the slump that has seen oil prices fall 25 percent in the past five months continues. The investment bank said rising production would outstrip demand and slashed its forecasts by 15 percent. It said Brent crude could hit $85 a barrel in the first quarter of next year, falling to $80 a barrel in the second quarter. (http://thetim.es/1zdUugc)

STRUGGLING SALAMANDER ENERGY CONFIRMS TAKEOVER TALKS

The slump in oil prices is set to claim its first corporate casualty as Salamander Energy Plc confirms it is in talks with two companies about a potential takeover. Ophir Energy Plc, the FTSE 250 explorer, is closing in on a possible 275 million pound deal, but Salamander said it was seeking clarity on the terms of the deal. Another suitor, Cepsa, the Spanish group controlled by Ipic, the Abu Dhabi investment fund, is also circling. Salamander says it has not received details of any proposal from the consortium or any confirmation that it will receive a proper offer. (http://thetim.es/1w9mT4B)

The Guardian

DENNIS HOLT NAMED CHAIRMAN OF CO-OP BANK

A former top retail banker, Dennis Holt, has been named chairman of Co-operative Bank Plc after standing in on an interim basis for the past month. The appointment of Holt, who used to run the high street banking operation of Lloyds TSB, takes place immediately and makes him the third chairman of the troubled bank in the last 18 months. (http://bit.ly/1u0qC5T)

ALEX SALMOND WELCOMES FLYBE FLIGHTS BETWEEN LONDON CITY AND SCOTLAND

First Minister of Scotland Alex Salmond has welcomed Flybe Group Plc’s launch of new services from Scotland to London City airport, saying they would provide business travellers with an alternative to Heathrow and reduce British Airways overcharging. Flybe launched operations from London City on Monday with six routes connecting Britain and Ireland to the capital’s financial district. Scotland is a key beneficiary with multiple daily services to Edinburgh, Aberdeen and Inverness. (http://bit.ly/1wwgi39)

Sky News

CAMERON: UK WILL NOT MEET 1.7 BLN STG EU BILL DEMAND

British Prime Minister David Cameron insists there is “no pressing need” for Britain to pay 1.7 billion pounds ($2.74 billion) to the EU – despite a warning of a substantial fine. The surcharge was made public at an EU summit last week, but the Prime Minister said Britain would not meet the Dec. 1 deadline. (http://bit.ly/ZUr4Vl)

MAJOR BANKS TO TOP UP PPI BILL TO OVER 22 BLN STG

Britain’s five biggest banks are poised to take their aggregate bill for miss-selling payment protection insurance (PPI) past 22 billion pounds, underlining its status as the most costly scandal in the industry’s history. Barclays Plc, HSBC Holdings Plc, Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc will all use their quarterly results statements during the next week to top up PPI compensation provisions. (http://bit.ly/1rMhxXP)

 

 

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Durable goods orders for September at 8:30–consensus up 0.9%
S&P Case-Shiller 20-city home price index for August at 9:00–consensus up 0.2%
Consumer confidence for October at 10:00–consensus 86.8
Richmond Fed manufacturing index for October at 10:00–consensus 10

ANALYST RESEARCH

Upgrades

Buffalo Wild Wings (BWLD) upgraded to Outperform from Neutral at RW Baird
Core Laboratories (CLB) upgraded to Overweight from Equal Weight at Morgan Stanley
Dril-Quip (DRQ) upgraded to Equal Weight from Underweight at Morgan Stanley
DryShips (DRYS) upgraded to Outperform from Underperform at Imperial Capital
GOL Linhas (GOL) upgraded to Outperform from Market Perform at Raymond James
Madison Square Garden (MSG) upgraded to Buy from Hold at ISI Group
STMicroelectronics (STM) upgraded to Neutral from Sell at Citigroup
Trinity Industries (TRN) upgraded to Positive from Neutral at Susquehanna
Twitter (TWTR) upgraded to Hold from Sell at Pivotal Research
Wal-Mart de Mexico (WMMVY) upgraded to Overweight from Equal Weight at Barclays
Wright Medical (WMGI) upgraded to Outperform from Sector Perform at RBC Capital
XL Group (XL) upgraded to Hold from Sell at Deutsche Bank

Downgrades

Armstrong World (AWI) downgraded to Equal Weight from Overweight at Barclays
Basic Energy (BAS) downgraded to Market Perform from Outperform at Wells Fargo
Bunge (BG) downgraded to Neutral from Overweight at JPMorgan
C&J Energy (CJES) downgraded to Market Perform from Outperform at Wells Fargo
Cementos Pacasmayo (CPAC) downgraded to Equal Weight from Overweight at Barclays
Exact Sciences (EXAS) downgraded to Equal Weight from Overweight at Stephens
Forum Energy (FET) downgraded to Equal Weight from Overweight at Morgan Stanley
Helmerich & Payne (HP) downgraded to Market Perform from Outperform at Wells Fargo
Nabors Industries (NBR) downgraded to Market Perform from Outperform at Wells Fargo
Oceaneering (OII) downgraded to Equal Weight from Overweight at Morgan Stanley
PRGX Global (PRGX) downgraded to Neutral from Outperform at RW Baird
Patterson-UTI (PTEN) downgraded to Market Perform from Outperform at Wells Fargo
Pioneer Energy (PES) downgraded to Market Perform from Outperform at Wells Fargo
Plum Creek Timber (PCL) downgraded to Neutral from Buy at BofA/Merrill
Sarepta (SRPT) downgraded to Neutral from Outperform at RW Baird
Thoratec (THOR) downgraded to Equal Weight from Overweight at Barclays
Twitter (TWTR) downgraded to Neutral from Buy at BofA/Merrill
Twitter (TWTR) downgraded to Neutral from Buy at Nomura
Twitter (TWTR) downgraded to Sector Perform from Outperform at RBC Capital
Twitter (TWTR) downgraded to Sell from Hold at Stifel
Washington REIT (WRE) downgraded to Market Perform from Outperform at Wells Fargo
Wright Medical (WMGI) downgraded to Buy from Strong Buy at Needham

Initiations

Dermira (DERM) initiated with a Buy at Citigroup
FMSA Holdings (FMSA) initiated with a Buy at KeyBanc
FMSA Holdings (FMSA) initiated with a Neutral at Goldman
FMSA Holdings (FMSA) initiated with an Outperform at Cowen
GoPro (GPRO) initiated with an Outperform at Wedbush
HSN, Inc. (HSNI) initiated with a Buy at Brean Capital
Kite Pharma (KITE) initiated with a Buy at Canaccord
ValueVision (VVTV) initiated with a Buy at Brean Capital
Vivint Solar (VSLR) initiated with an Equal Weight at Barclays
Yodlee (YDLE) initiated with a Buy at BofA/Merrill
Yodlee (YDLE) initiated with a Buy at Goldman
Yodlee (YDLE) initiated with a Neutral at UBS
Yodlee (YDLE) initiated with an Outperform at Credit Suisse
Yodlee (YDLE) initiated with an Outperform at Pacific Crest

COMPANY NEWS

GM’s (GM) Warren Transmission Plant to build electric drive unit for Volt. CEO Mary Barra will announce capital investments of nearly $300M in Michigan between now and the end of the year
Madison Square Garden (MSG) board unanimously approved plan to explore spin-off
Barclays (BCS) said it plans to cut 9,000 jobs across the business by the end of 2017
Lloyds Banking (LYG) said it sees 9,000 job reductions by end of 2017
Gartner said worldwide shipments of 3D printers to reach over 217,000 in 2015 (DDD, XONE, ADSK, MTLS, VJET, SSYS)
Amazon.com (AMZN) to invest $75M and create 1,000 jobs in first Illinois facility
UBS (UBS) said no agreemment reached with DOJ over foreign exchange
Wright Medical (WMGI), Tornier (TRNX) agreed to merge in $3.3B transaction
Receptos (RCPT) said RPC1063 Phase 2 trial met primary and all secondary endpoints
Regal Entertainment (RGC) announced a $1.00 per share special dividend retained Morgan Stanley to explore strategic alternatives, including a potential sale

EARNINGS

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

LabCorp (LH), Capella Education (CPLA), Spirit Airlines (SAVE), CIT Group (CIT), Harris (HRS), Sensata (ST), Washington Federal (WAFD), Centene (CNC), Radware (RDWR), Aetna (AET), DuPont (DD), VASCO Data Security (VDSI), BP (BP), Novartis (NVS), HomeStreet (HMST), German American Bancorp (GABC), Kadant (KAI), First Interstate (FIBK), Arlington Asset Investment (AI), Seacor Holdings (CKH), Alliance Holdings (ahgp), Alliance Resource Partners (ARLP), Ferro (FOE), XL Group (XL), Cliffs Natural (CLF), NBT Bancorp (NBTB), HealthSouth (HLS), Seacoast Banking (SBCF), Mavenir Systems (MVNR), Reinsurance Group (RGA), Berkshire Hills Bancorp (BHLB), Compass Minerals (CMP), Advent Software (ADVS), Hartford Financial (HIG), Brixmor (BRX), MicroStrategy (MSTR), Bank of Hawaii (BOH), GigOptix (GIG), PMC-Sierra (PMCS), Intevac (IVAC), Sanmina (SANM), Luminex (LMNX), Cognex (CGNX), Integrated Device (IDTI), Plum Creek Timber (PCL), Denny’s (DENN), Allison Transmission (ALSN), Buffalo Wild Wings (BWLD), Amgen (AMGN), Heartland Financial (HTLF), Regal Entertainment (RGC)

Companies that missed consensus earnings expectations include:

CONSOL (CNX), Medidata (MDSO), Bio-Techne (TECH), Independent Bank (IBTX), Stock Building Supply (STCK), Whirlpool (WHR), Portland General Electric (POR), T-Mobile (TMUS), PRGX Global (PRGX), Owens & Minor (OMI), Manitowoc (MTW), Masco (MAS), Hudson Valley (HVB), Orchid Island Capital (ORC), Park National (PRK), Innophos Holdings (IPHS), Artisan Partners (APAM), PartnerRe (PRE), Symetra Financial (SYA), Blue Capital (BCRH), Ducommun (DCO), Amkor Technology (AMKR), Montpelier Re (MRH), Meru Networks (MERU), Knowles (KN)

Companies that matched consensus earnings expectations include:

1-800-Flowers.com (FLWS), First BanCorp (FBP), Universal Health (UHS), Flushing Financial (FFIC), Twitter (TWTR), Monolithic Power (MPWR), TriplePoint Venture (TPVG), ANADIGICS (ANAD)

NEWSPAPERS/WEBSITES

YouTube (GOOG) may charge for new services, Re/code reports
SEC undecided on Bank of America (BAC) business curbs, WSJ reports
More than 1M credit cards registered on Apple Pay (AAPL) in first 72 hours, Re/code reports
Apple CEO (AAPL) says Apple Pay in 220,000 locations already, Business Insider reports
NYC boy with Ebola-like symptoms tests negative for disease, WSJ says (PPHM, TKMR, SRPT, BCRX, CMRX, NLNK, LAKE, APT, SMED)

SYNDICATE

EnLink Midstream (ENLK) files to sell $350M shares of common units
Hannon Armstrong (HASI) 4M share Spot Secondary priced at $13.60
Inogen (INGN) files to sell 2.1M shares of common stock for holders
Pebblebrook Hotel (PEB) files to sell 3.2M common shares of beneficial interest
Regulus Therapeutics (RGLS) files to sell $80M of common stock

via Zero Hedge http://ift.tt/1u2CZyl Tyler Durden

If yesterday’s markets closed broadly unchanged following all the excitement from the latest “buy the rumor, sell the news” European stress test coupled with a quadruple whammy of macroeconomic misses across the globe, then today’s overnight trading session has been far more muted with no major reports, and if the highlight was Kuroda’s broken, and erroneous, record then the catalyst that pushed the Nikkei lower by 0.4% was a Bloomberg article this morning mentioning that lower oil prices could mean the BoJ is forced to “tone down or abandon its outlook for inflation.” This comes before the Bank of Japan meeting on Friday where the focus will likely be on whether Kuroda says he is fully committed to keeping current monetary policy open ended and whether or not he outlines a target for the BoJ’s asset balance by the end of 2015; some such as Morgan Stanely even believe the BOJ may announce an expansion of its QE program even if most don’t, considering the soaring import cost inflation that is ravaging the nation and is pushing Abe’s rating dangerously low.

Ironically it was the USDJPY levitation after the Japanese session, which launched just as Europe opened, moving the USDJPY from 107.80 to 108.10, that has managed to push equity futures up 0.5% on the usual: nothing.

And speaking of central bank meetings, the Fed’s own two-day October FOMC meeting begins today in the first ex-POMO day after many years of direct central bank intervention in the market, with the announcement due at the usual time tomorrow. Most commentators expect QE to end this month but for the Fed to keep the ‘considerable time’ language. Some mentioned that it would be interesting to see if the recent market volatility gets a mention. In short, nothing major is expected from the Fed although central banks still can surprise as Sweden’s Riksbanks showed today, when it sent the Krona tumbling to a four-year low against the dollar after the central bank entered the ZIRP club, cutting its main rate to 0.00%, below the 0.1%-0.25% expected.

Looking at markets, JGBs trade up 11 ticks at 146.55 underpinned by weakness in Japanese stocks, with some mild curve flattening observed, as 10s/20s fell to their flattest level since July 2013. Chinese bourses rescinded yesterday’s losses amid the H.K-Shanghai connect delay. The Hang Seng (+1.6%) and Shanghai Comp (+2.07%) were further supported by a jump in September Chinese Industrial Profits (+0.4% vs. Prev. -0.6%). Nikkei 225 traded down 0.4% weighed on by energy stocks, after yesterday where WTI crude futures briefly fell below USD 80/bbl to trade at the lowest level since June 2012. FIXED INCOME & EQUITIES Price action throughout the European session has largely been dictated by this morning’s plethora of large cap earnings reports, with a distinct lack of further macro European news to guide prices. More specifically, the DAX (+1.4%) leads the way for European equities after breaking above the 9,000 level with support provided by Deutsche Telekom (2.9%) following earnings from T-Mobile US and K+S (+2.2%) after a positive broker move at Goldman Sachs. Elsewhere in Europe gains for both the CAC (+0.4%) and FTSE 100 (+0.4%) have been capped by heavy losses for Sanofi (-7.9%) and Standard Chartered (-8.4%) respectively.

Today will see the release of the Conference Board Consumer Confidence for October, the Richmond Fed Manufacturing Survey for October, Case-Shiller Home Prices for August and more importantly Durable Goods Orders for September. It is a highly volatile series but could play a key part in influencing the advance Q3 real GDP report on Thursday. Closer to home, Italy’s economic sentiment and business confidence are perhaps the notable ones to watch. We also have 49 S&P 500 companies and 16 Stoxx600 firms reporting today. Pfizer, Facebook (after market), UBS and Lloyds Banking Group are just some of them.

Bulletin Headline Summary from Bloomberg and RanSquawk

• Large cap earnings take focus in Europe, with European equities green across the board amid a lack of other fundamental newsflow to guide prices.
• FX markets remain tentative ahead of tomorrow’s FOMC release, with the Fed expected to announce a completion of their asset purchase programme.
• Looking ahead, attention turns towards the US durable goods release as well as a host of tier 1 US earnings from the likes of Pfizer, Facebook and Gilead Sciences.
• Treasuries little changed before start of Fed’s two-day meeting, week’s supply begins with $29b 2Y notes; yield 0.42% in WI trading, lowest in five months.
• Investors eyeing recent global economic and political turmoil are expressing doubt about forecasts from Fed officials — and most Wall Street economists — that the Fed will begin to lift its benchmark rate in mid-2015
• Fed officials are seen debating merits of “considerable time” rate guidance; click here for roundup of views
• Sweden’s central bank ventured into uncharted territory as it cut its main interest rate to zero and delayed tightening plans into 2016 in a bid to jolt the largest Nordic economy out of a deflationary spiral
• The Bank of Japan will consider moderating its language on inflation in a report this week to take account of the impact of lower oil prices, according to people familiar with central bank’s discussions
• The Japanese economy isn’t strong enough to withstand another increase in the sales tax, the ruling Liberal Democratic Party’s finance panel chief said
• The gap between China’s reported exports to Hong Kong and the territory’s imports from the mainland widened in September to the most this year, suggesting fake export-invoicing is again skewing China’s trade data
• Support for U.K. Independence Party, which wants Britain to leave the EU, has risen to a record 19%; Conservatives tie Labour according to a ComRes poll
• A week before midterm elections, governors are upstaging the White House on dealing with Ebola, and Obama’s Ebola coordinator, Ron Klain, is staying out of public view
• Result is a national response to the risk of Ebola that has looked anything but coordinated
• Louisiana Senator Mary Landrieu used the absence of her top opponent in her re-election race at Monday’s debate to highlight her differences with Obama and her efforts to work across the aisle during her time in office
• Sovereign yields mostly lower. Asian stocks mixed, with Nikkei lower, Shanghai higher; European stocks, U.S. equity- index futures gain. Brent crude falls 0.2%; copper gains, gold little changed

US Economic Calendar

• 8:30am: Durable Goods Orders, Sept., est. 0.5% (prior -18.2%, revised -18.4%)
  • Durables Ex-Transportation, Sept., est. 0.5% (prior 0.7%, revised 0.4%)
  • Capital Goods Shipments Non-Defense Ex-Aircraft, Sept., est. 0.7% (prior 0.1%)
  • Capital Goods Orders Non-Defense Ex-Aircraft, Sept., est. 0.7% (prior 0.6%, revised 0.4%)
• 9:00am: S&P/Case-Shiller 20 City m/m, Aug., est. 0.18% (prior -0.5%)
  • S&P/CS 20 City y/y, Aug., est. 5.70% (prior 6.75%)
  • S&P/CS 20 City NSA, Aug., est. 173.89 (prior 173.34)
  • S&P/CS US HPI y/y, Aug. (prior 5.61%)
  • S&P/CS US HPI NSA, Aug. (prior 167.32)
• 10:00am: Consumer Confidence Index, Oct., est. 87 (prior 86)
• 10:00am: Richmond Fed Manufacturing Index, Oct., est. 11 (prior 14)
• 1:00pm: U.S. to sell $29b 2Y notes
• FOMC starts two-day meeting Supply

ASIA

JGBs trade up 11 ticks at 146.55 underpinned by weakness in Japanese stocks, with some mild curve flattening observed, as 10s/20s fell to their flattest level since July 2013. Chinese bourses rescinded yesterday’s losses amid the H.K-Shanghai connect delay. The Hang Seng (+1.6%) and Shanghai Comp (+2.07%) were further supported by a jump in September Chinese Industrial Profits (+0.4% vs. Prev. -0.6%). Nikkei 225 traded down 0.4% weighed on by energy stocks, after yesterday where WTI crude futures briefly fell below USD 80/bbl to trade at the lowest level since June 2012. FIXED INCOME & EQUITIES Price action throughout the European session has largely been dictated by this morning’s plethora of large cap earnings reports, with a distinct lack of further macro European news to guide prices. More specifically, the DAX (+1.4%) leads the way for European equities after breaking above the 9,000 level with support provided by Deutsche Telekom (2.9%) following earnings from T-Mobile US and K+S (+2.2%) after a positive broker move at Goldman Sachs. Elsewhere in Europe gains for both the CAC (+0.4%) and FTSE 100 (+0.4%) have been capped by heavy losses for Sanofi (-7.9%) and Standard Chartered (-8.4%) respectively.

Fixed income markets remain relatively subdued, although underperformance has been seen in the long-end of the UK curve after books closed on the syndication of UK 2068 Gilt with orders exceeding GBP 13bln and price guidance set at 2.5 bps over the 2060 Gilt. French and Belgium bonds are trading well in early trade with IFR noting demand into month-end and redemption flow supporting prices; a redemption payment of EUR 21bln of a maturing 10y OAT was paid yesterday.

FX

FX markets remain relatively tentative ahead of tomorrow’s widely anticipated FOMC releases, however, SEK has seen substantial weakness after the Riksbank cut their key repo rate by 25bps to 0.00% against expectations of a 15bps cut. This subsequently saw SEK weaken to a 4-month low vs. EUR and 4-year low vs. USD. Heading into the North American crossover, USD is regaining some ground as the USD index returns to positive territory and as such pushing USD/JPY back above 108.00, with offers touted above at 108.20-25 and 108.40-50 with stops above.

COMMODITIES

WTI and Brent crude futures have been provided some reprieve in a pull-back of yesterday’s heavy losses, although Barclays have added to the recent slew of tier 1 investment banks by cutting their 2015 Brent and WTI crude forecasts. More specifically, they cut their 2015 Brent crude forecast to USD 93/bbl from USD 96/bbl and 2015 WTI crude forecast to USD 85/bbl from USD 89/bbl. Elsewhere, gold trades with modest gains albeit off its best levels, as markets look ahead to tomorrow’s seminal FOMC meeting while spot gold (+0.1%) bounced back after triggering stops below last week’s low on strong Asian demand. Furthermore, Barclays remains bullish on the near-term fundamentals for gold, keeping its Q4 average forecast at USD 1,220/oz.

* * *

DB’s Jim Reid complete the overnight summary

It was a bit of a ‚buy the rumour, sell the fact? day for European financials after Sunday’s relatively benign stress test results. Although to be fair there hadn’t been an awful lot of buying beforehand. The Stoxx 600 bank index peaked at 8.03am (London time) having climbed +2.1% in a matter of minutes, only to close -2.3% lower with the wider Stoxx 600 -xxx%. The turn also coincided with a weak IFO number (more later) but financials traded poorly led by Italian and Greek banks. Banca Monte dei Paschi di Siena and National Bank of Greece were the main decliners having closed -21.5% and -7.8% on the day, respectively. Credit fared better with Crossover, Main and Fin Snr index closing around +3bp, +1bp and +1bp on the day although they were still around 18bp, 4bp and 4bp off their respective intraday tights.

I spoke to a few clients and internal people yesterday about the tests and there was a broad consensus that although banks are now probably safer entities with ample liquidity and a decent amount of capital, nothing has really changed vis-a-vis growth. There was some disagreement on whether the responsibility was now on banks to lend more or whether the test results actually hint that the banks aren’t holding back the recovery. The latter view tended to think that it was now for the authorities to provide a growth impetus. With politicians unable or unwilling to use fiscal policy then all the heavy lifting is down to a divided ECB. We think they’ll eventually expand their balance sheet considerably but there’s unlikely to be an imminent surge. So we’re perhaps in no man’s land for a while in Europe.

Yesterday marked the weekly ECB balance sheet numbers where we learnt they bought €1.704bn of Covered bonds in the first week of their new regime. The result was broadly in line with what was expected but it’s a long way to go to reach a Trillion Euros. We still think they’ll have to do Government QE to get there, a view shared by our Economists. They simply don’t think there’s enough private securities to be able to realistically buy enough bonds to meet their target. My team contributed to a section in this week’s Focus Europe where the conclusion is that buying corporate bonds is a decent possibility but that they will still eventually need to do full QE to get the desired volumes. The piece has plenty of stats around the potential size of ABS, Covered and Corporate bonds they could purchase.

Staying in Europe, the German IFO survey and sub components were all softer than expected. Business Climate (103.2 v 104.5 expected) fell for the sixth consecutive month which brings the series to a 22 month low. Current Assessment (108.4 v 110.0 expected) fell to the lowest since April 2013 whilst Expectations (98.3 v 99.2 expected) also fell to December 2012 lows. Money and credit aggregates data in Europe offered some encouraging news (M3 +2.5% yoy in September v +2.1% yoy August) but the market was very much fixated on conditions in Germany.

Over on the other side of the Atlantic, data was also on the softer side. Pending home sales (0.3% mom in September v 1.0% mom expected), Markit services PMI (57.3 v 57.8) and Dallas Fed Manufacturing (10.5 v 11.0) all fell short of market consensus. This offered little support to US equities (S&P 500 -0.15%) but in reality the market was perhaps due for a little breather after the biggest weekly gain (+4.1%) for the index since January 2013. All eyes now turn to the Fed’s decision tomorrow. Elsewhere in US credit the CDX IG and HY indices were little changed at around 65bp and $106.8 even though it was a fairly active day for the primary markets. The USD corporate bond market (including EM) absorbed US$5.4bn from five issuers across 9 different tranches with Financials being the main issuer of the day. The stability in Treasuries probably helped with the UST 10yr yield only a smidgen lower on the day at 2.26%. Away from core DM markets, price action in Brazil following the election results was largely as expected although they did recover from their intraday lows. After sharp fall in Brazilian stock ETF’s of as much as 7% in European trading, the Ibovespa closed down 2.8% after having fallen as much as 6.2% in early trading. The BRL fell by 1.9% to 2.521 against the USD. Our EM colleagues had expected the Real to trade closer to 2.60/USD and noted that the relatively tame reaction in the currency reduced the probability of another tightening cycle. They also expect the finance minister appointment to be crucial as to whether Rousseff will adjust current polices, however early indications from the Portuguese President Falcao is that this might not happen until 2015.

This morning we’ve already had the September Retail Sales print in Japan with the 2.7% mom reading well ahead of expectations of 0.9%. The data has failed to spark positive sentiment however with the Nikkei currently trading 0.8% lower following a Bloomberg article this morning mentioning that lower oil prices could mean the BoJ is forced to “tone down or abandon its outlook for inflation.” This comes before the Bank of Japan meeting on Friday where our Japanese colleagues mentioned yesterday that the focus will likely be on whether Kuroda says he is fully committed to keeping current monetary policy open ended and whether or not he outlines a target for the BoJ’s asset balance by the end of 2015. The rest of Asia is trading generally mixed with bourses in Hong Kong, China, Korea and Australia +0.6%, +1.1%, -0.3% and -0.2% respectively.

Before we wrap it up, there was some focus on Greece yesterday as the market absorbed the news that Syriza had edged further ahead in the latest weekend polls, extending their supposed lead to 8.5% from 6.5% in previous polls earlier in the month. As we’ve discussed before, although parliamentary elections are not due until June 2016, the presidential vote early next year could trigger snap elections sooner than expected if the current coalition government fails to secure the 180 votes needed to elect its presidential candidate. These polls will certainly be important to keep an eye on as we move through the remainder of the year. Greece’s key equity benchmark closed -3.3% yesterday although this is still about 10% off its recent lows.

Today will see the start of the two-day FOMC meeting although we won’t hear anything from the Fed until tomorrow’s post meeting statement. As a brief recap DB does expect QE to end this month but for the Fed to keep the ‘considerable time’ language for now. What’s would be interesting though is to see if the recent market volatility gets a mention. Fed aside, today will see the release of the Conference Board Consumer Confidence for October, the Richmond Fed Manufacturing Survey for October, Case-Shiller Home Prices for August and more importantly Durable Goods Orders for September. It is a highly volatile series but could play a key part in influencing the advance Q3 real GDP report on Thursday. Closer to home, Italy’s economic sentiment and business confidence are perhaps the notable ones to watch. We also have 49 S&P 500 companies and 16 Stoxx600 firms reporting today. Pfizer, Facebook (after market), UBS and Lloyds Banking Group are just some of them.

via Zero Hedge http://ift.tt/1wy0JIu Tyler Durden