Monday, December 9, 2013
10:56 PMRexford Industrial Realty Inc declares $0.09 dividend| Comment!
9:41 PMGeron presents imetelstat data at ASH, shares rise
- Shares of Geron (GERN) rose 9% in AH trading.
- In a closely watched presentation at ASH, the company reviewed results from a study of imetelstat in myelofibrosis. For reference, see previous coverage of the study here and here.
- Results of GERN independent review of the Mayo study: Remissions (CR+PR) in 5/22 patients; CI in another 4 patients; OR rate of 40.9%.
- Notable: GERN says "no patients with CR, PR, or CI have lost their response to date."
- This is an important study. For more, see the full presentation.
6:58 PMAvan Projects acquires controlling interest in Papa John's Indian franchisee| Comment!
6:57 PMMicrosoft reportedly looking to bring back Windows Start menu
- Paul Thurrott reports Microsoft (MSFT) is looking to bring back Windows' traditional Start menu with its 2015 Threshold OS updates (previous). The company is also said to be interested in allowing users to run (touch-friendly) Metro-style apps in desktop mode.
- Microsoft brought back the Start button with Windows 8.1, but not the full-blown Start menu; a power menu can be accessed by right-clicking the button.
- Meanwhile, Mary Jo Foley reports Threshold could feature the release of three Windows variants (SKUs): A "modern" consumer SKU focused on Windows RT apps and touch devices; a "traditional" consumer SKU meant to placate keyboard/mouse users; and an enterprise SKU featuring "all the usual business bells and whistles."
- The reports come at a time when Windows 8/8.1's adoption rate continues to significantly trail that delivered by Windows 7 following its launch, thanks to minimal enterprise uptake and ongoing complaints about its dual UIs and lack of a traditional Start menu.
6:30 PMU.S. seen becoming net chemical exporter, thanks to shale boom
- The U.S. is poised to become a net exporter of chemicals thanks to the shale oil boom, FT reports; the American Chemistry Council forecasts net U.S. chemical exports of ~$2.7B this year and expects exports to rise 45% over the next five years to nearly $30B by 2018.
- U.S. companies such as Exxon Mobil (XOM), Dow Chemical (DOW), Chevron (CVX) and Phillips 66 (PSX) are among the leaders in investing in new capacity, but even producers from Asia and the Middle East are looking at projects in the U.S.
- Dow's Andrew Liveris speaks for big companies that want curbs on U.S. exports of liquefied natural gas to ensure their energy cost advantage; with five LNG projects now approved for export sales by the Obama administration, "where they are right now seems to be fine," he says.
6:23 PMSenior Salesforce exec leaves for startup
- Hilarie Koplow-McAdams, Salesforce's (CRM) president of global sales, is leaving to become the sales chief of performance monitoring software startup New Relic.
- Koplow-McAdams was in charge of Salesforce's international sales teams. AllThingsD reported two months ago she was looking to leave the company, rather than work for new sales chief/vice chairman Keith Block.
6:12 PMTriangle Petroleum EPS $0.18, beats on revenue| 1 Comment
6:11 PMDeutsche starts coverage on 3D Systems and Stratasys, shares up AH
- 3D Systems (DDD) +0.8% AH and Stratasys (SSYS) +0.9% after Deutsche starts coverage with Buy ratings. Fellow 3D printer maker ExOne has been started at Hold.
- The day has already seen Pac Crest start coverage on 3D Systems with an Outperform and Stratasys/ExOne with Sector Performs, and Nomura argue current industry hype is excessive. Also: Piper's Troy Jensen has issued another bullish industry report after returning from last week's EuroMold trade show.
- Jensen states 3D Systems, which introduced new high-end printers, materials, and software, was by far "the most active at EuroMold with respect to new product introductions." He's especially a fan of a new metal printer from 3D's recently-acquired Phenix Systems unit.
- Jensen also liked Stratasys' launch of a nylon printing material (resellers are upbeat), and says a visit to the HQ of Swedish printer maker Arcam (AMAVF) indicates the company is focused on rapidly expanding (it currently has only 65 employees).
6:00 PMOn the hour
- S&P +0.01%.
- 10-yr +0.02%.
- Euro -0.02% vs. dollar.
- Crude +0.04% to $97.28.
- Gold -0.09% to $1239.3.
5:57 PMWSJ: Shippers Eagle, Genco seeking debt help
- Dry-bulk shippers Eagle Bulk Shipping (EGLE) and Genco (GNK) reportedly have enlisted restructuring advisers after key creditors sold large blocks of debt to distressed investors amid balance sheet concerns.
- EGLE -8.4% AH after falling 7.5% in regular trading, while GNK +6.8% AH after shedding 4.6% during the day.
5:56 PMIcahn Enterprises -7.1% AH, sells 2M depository units| 10 Comments
5:50 PMPep Boys -12.4% AH on weaker-than-expected FQ3
- Pep Boys (PBY) shares plunge 12.4% in AH trading after the company missed expectations in FQ3.
- Revenue fell 0.5% Y/Y to $507M on the back of a 2.8% comparable sales decline (made up of a 0.5% service revenue increase and 3.6% merchandise decrease).
- CEO Mike Odell observed, "As the weather has turned colder, tire sales have started to improve, with mid-level price points and branded tires leading the way. Competitive pressures, however, continue to challenge sales of lower price point tires." The performance of 18 recently-acquired Service & Tire Centers in California "has been ahead of original projections," he added.
- Conference call at 8:30am ET tomorrow, PR
5:42 PMAlon USA jumped 7% today after Deutsche Bank upgrade
- Deutsche Bank upgraded refiners Alon USA Energy (ALJ +7.4%), Valero (VLO), Phillips 66 (PSX) and Delek US (DK) to Buy from Hold, citing a bullish outlook given the over-supply of light sweet crude and the limitation of the crude export ban.
- Cabot Oil & Gas (COG) also is upgraded as shares have lagged due to a combination of regional pricing and growth fears; DB believes both are overplayed and sees the stock as relatively attractive vs. Marcellus peers.
- The firm downgraded Noble Energy (NBL) and Continental Resources (CLR) to Hold from Buy primarily on valuation; NBL remains a best-in-class company but its high quality multi-year program is increasingly understood and de-risked by the Street.
5:36 PMNXP's P-E backers commence 25M-share offering; shares -1.7% AH
- NXP (NXPI) shareholders, including the P-E firms that took the chipmaker public - KKR, AlpInvest, Apax Partners, Bain Capital, and Silver Lake - are selling another 25M shares (9.7% of outstanding shares) through a secondary offering. (PR) (prospectus)
- The P-E firms previously announced 25M-share offerings in September and March, and a 30M-share offering in February. After the latest sale, the firms and affiliates will collectively be left with a 14.8% stake in NXP.
5:27 PMAehr Test Systems receives $1M FOX-15 and WaferPak follow-on order| Comment!
5:26 PMFinisar selling $200M worth of convertible debt, shares -1.8% AH
- Finisar (FNSR) is selling $200M worth of convertible senior notes due 2033. Underwriters will have a $30M overallotment option. (PR)
- Finisar says it expects to use the proceeds for "general corporate purposes," but adds it may also use some of the funds to "acquire complementary businesses, products or technologies." The optical component industry has seen a decent amount of M&A in recent years.
- It's worth noting Finisar doesn't have any pressing need for cash: As of Oct. 27, the company had $316.5M in cash/equivalents on its balance sheet, and only $4.7M in debt.
5:18 PMAccelrys acquires Irish cloud compliance software maker QUMAS for $50M| Comment!
5:13 PMOil begins flowing through Keystone XL's southern leg
- TransCanada (TRP) says it has begun moving oil into the Keystone XL pipeline’s southern leg, which runs from Oklahoma to the Texas coast, and is on schedule to begin deliveries by the end of the year.
- TRP will need to fill the new pipeline system before it can begin delivering oil to refineries along the Gulf coast, and it plans to do so with ~3M barrels of oil in the coming weeks.
- The line will be capable of bringing up to 700K bbl/day of oil to the coast, providing more supplies of crude to refineries.
5:12 PMDiodes +4.7% AH after FQ4 gross margin guidance is hiked by 60 bps| Comment!
5:08 PMValueClick selling website unit to IAC
- ValueClick (VCLK) is selling its Owned & Operated Websites business, which includes properties such as Investopedia and U.K. price-comparison site PriceRunner, to InterActiveCorp (IACI) for an undisclosed sum. The deal is expected to close in January. (PR)
- ValueClick announced last month (in tandem with disappointing Q3 results) it plans to sell its O&O unit, and focus on its online ad network/tech ops. O&O had Q3 revenue of $28.9M, and operating income of $4.5M.
- IAC plans to add the business to its Search & Applications unit, which includes Ask.com, About.com, and Dictionary.com. The acquisition stands to provide Barry Diller's Web empire with a little more advertising scale.
- With its numbers boosted by the About.com purchase, Search & Applications had Q3 revenue of $407.3M (54% of IAC's total revenue), and op. income of $87.8M (72% of the company total).
5:00 PMOn the hour
- S&P 0%.
- 10-yr +0.03%.
- Euro +0.25% vs. dollar.
- Crude -0.12% to $97.13.
- Gold -0.06% to $1239.7.
4:57 PMIron Mountain +2.7% AH, approves REIT Protection Rights Agreement
- Iron Mountain (IRM) shares jump 2.7% AH after the company discloses its board has approved a REIT Status Protection Rights Agreement providing for a dividend of one preferred stock purchase right for each share of common stock (Dec. 20 record date). Each right entitles the holder to purchase one-thousandth of a Series A Junior Preferred share for $114. (8-K)
- The company intends to convert to the REIT structure no earlier than the taxable year beginning Jan. but "has not yet received from the [IRS] the private letter rulings it believes it requires ... Nevertheless, the Company ... will begin to operate its business in a manner consistent with being a REIT effective January 1."
- The company entered the rights agreement to protect its potential conversion to a REIT by preventing "concentrated ownership" of common equity. IRM will seek shareholder approval to impose ownership limitations into its charter upon successful conversion to a REIT.
4:47 PMComtech +5.7% AH on FQ1 beat, FY2014 guidance, dividend hike, buyback
- Comtech Telecommunications (CMTL) shares jump 5.7% AH after the company beat expectations in FQ1, updated guidance, and announced a dividend hike and share repurchase expansion.
- EBITDA dropped 22.7% Y/Y to $14.3M. Total bookings grew 8.7% Y/Y to $76.5M, but backlog fell 2.7% Q/Q to $182.8M.
- The board raises the target annual dividend to $1.20 from $1.10 (with a quarterly dividend of $0.30/share declared implying a forward yield of 3.6%) and authorizes an increase to the share repurchase program to $100M from $50M. (PR)
- Management updates FY2014 guidance, seeing revenue of $325M-$345M (vs. analyst consensus of $328M), EPS of $1.12-$1.25 (vs. $1.14), and EBITDA of $55M-$59M.
- Conference call at 8:30am ET tomorrow, PR
4:47 PMTexas Instruments narrows Q4 guidance, shares -0.2% AH
- Texas Instruments (TXN) uses its mid-quarter update to narrow its Q4 guidance ranges. The chipmaker now expects Q4 revenue of $2.92B-$3.04B vs. prior guidance of $2.86B-$3.1B (consensus is at $2.99B), and EPS of $0.44-$0.48 vs. prior guidance of $0.42-$0.50 (consensus is at $0.46). (PR)
- TI did something similar in its Q2 and Q3 mid-quarter updates.
- CC at 5PM ET.
4:34 PMMarvell names new interim CFO
- Marvell (MRVL) has named Michael Rashkin, the president of the chipmaker's charitable fund (according to his LinkedIn profile), its new interim CFO. Rashkin, a 14-year company vet, has also worked as Marvell's VP of tax, and as interim CFO in the 2007-2008 timeframe. (PR)
- The appointment comes a week after Brad Feller, Marvell's interim CFO for 14 months, resigned to "pursue other opportunities."
4:33 PMDarling offers 40M shares, $500M in senior notes, -4.2% AH
- Darling International (DAR) -4.2% AH after announcing a public offering of 40M common shares and an offering of $500M of its unsecured senior notes.
- DAR plans to use the net proceeds to partially finance its acquisition of the Vion Ingredients division of Vion Holding and for general corporate purposes.
4:28 PMPVH -2.7% AH following Q3 beat, light FQ4 guidance
- PVH shares are down 2.7% AH following a FQ3 beat but ligher-than-expected FQ4 guidance.
- Revenue expanded 38% Y/Y to $2.26B, principally on the back of a $503M in revenue from the acquisition of Warnaco. The Tommy Hilfiger unit generated revenue growth of 10%, or $87M and pre-acquisition Calvin Klein businesses 19%, or $55M, partially offset by a 6% decrease, or $29M, in Heritage Brands.
- Calvin Klein comps jumped 3% Y/Y in North America but fell 1% internationally in FQ3. Tommy Hilfiger comps rose 3% in N.A. and 4% in Europe. Heritage Brands comps declined 3%.
- Management guides for Q4 EPS of $1.40-$1.60 (vs. analyst consensus of $1.54) and revenue of $2.08B (vs. $2.14B).
- Conference call at 9am ET tomorrow, PR
4:27 PMTreasury confirms GM exit, shares +1% AH
- The Treasury department confirms it has sold its remaining 31.1M GM shares. The department says it recouped $39B from its original investment.
- The sale will put an end to restrictions on executive pay, and could pave the way for dividend/buyback announcements.
- Previous: GM gains as Treasury exit could be imminent
4:26 PMTrinity Industries, Element Financial Corp. in $2B railcar deal
- A new subsidiary of Trinity Industries (TRN) enters into a strategic alliance with Element Financial Corp. which is set to acquire a new portfolio of railcars.
- Element will initially purchase some $500M of leased railcars from Trinity Industries Leasing Company ($100M of which will be bought by the end of the year).
- After the initial $500M purchase, Element will buy another $500M worth of railcars, this time from TrinityRail.
- Finally, Element is expected to make another $1B worth of purchases in 2015. This lot will include both newly manufactured cars and existing leased cars.
- For more on the deal, see here.
4:23 PMAres Capital -3% AH on secondary| 1 Comment
4:20 PMTwitter closes sharply higher in absence of major news
- Though no major news or sell-side calls arrived today to give shares a boost, Twitter (TWTR +9.5%) managed to soar nearly to its post-IPO high of $50.09 (achieved on its first day of trading). 16.7M shares changed hands.
- Twitter did announce a deal with Swiss software firm Myriad that will allow its services to reach mobile users lacking Internet connections, courtesy of a text transmission technology known as USSD. Users won't need to log into Twitter, or even have an account.
- With Myriad having partnerships with ~45 carriers worldwide (the company is looking to add 40 more), the deal could strengthen Twitter's international reach. CEO Dick Costolo recently stated he wants Twitter, which ended Q3 with 231.7M MAUs and is dealing with concerns its service is too specialized to have a Facebook-sized base, to eventually have 1B MAUs, and to become easier for new users to figure out.
- Also: Social media analytics firm Gigya estimates Twitter had a 30% share of social media referral traffic in Q3, up from 24% in Q2. Facebook still leads with a 41% share.
4:15 PMS&P closes at new high, stocks cling to gains as taper talk rises
- Stocks struggled to hold on to slim gains as taper talk momentum picked up, with Fed bank presidents Fisher, Bullard and Lacker all essentially calling for the end of the Fed's asset purchase program on the heels of recent improvement in the U.S. job market.
- While the S&P inched up to a new all-time high, influential large-cap names such as Apple, Google, Exxon, Citigroup and Caterpillar carried the weight of the market; decliners outnumbered advancers on the broader market, and the Russell 2000 index of small-cap stocks fell 0.3%.
- The yield on 10-year Treasurys slipped to 2.855% after reaching to nearly a three-month high on Thursday, crude oil fell to $97.34 in snapping a six-day winning streak, and gold gained 0.4% to $1,235.30.
4:03 PMFDA gives Bristol-Myers' lipodystrophy drug cautious review
- Briefing documents are out for Wednesday's metreleptin Ad Com.
- Although FDA staff acknowledge that Bristol-Myers' (BMY) lipodystrophy drug appears to benefit "a subgroup of patients," there's some concern regarding the absence of a control group.
- Here's FierceBiotech's John Carroll: "Without a control group in the pivotal study, run by the NIH, it's hard to tell whether the drug was assisting patients or whether that was something that was spurred by a change of diet or compliance with other meds."
- Also troubling are three cases of T-cell lymphoma. "It is unknown if metreleptin could promote the progression of lymphoma or other malignancies in a patient population that is predisposed to these diseases," the FDA documents say, although staffers also note that T-cell lymphoma has "been reported in the literature in patients with lipodystrophy not treated with metreleptin.
- Full documents
4:01 PMAt the close
- Dow +0.05% to 16027. S&P +0.19% to 1808. Nasdaq +0.15% to 4068.
- Treasurys: 30-year +0.19%. 10-yr +0.04%. 5-yr +0.01%.
- Commodities: Crude -0.29% to $97.37. Gold +0.9% to $1240.1.
- Currencies: Euro +0.25% vs. dollar. Yen +0.43%. Pound -0.5%.
3:56 PMTax-loss selling in bond funds
- Making a tough 2013 even worse for bond funds is tax-loss selling. "There's not a whole lot of other losses out there," explains Tim Courtney, taking note of the approximate 25% gain the broad stock market.
- "Every year we see investors running from bad performance when they set their new asset allocations," says S&P CapitalIQ's Todd Rosenbluth. "Investors want their money to work for them, and bond funds certainly haven't been delivering like they used to."
- Previous: Investors are cutting fixed income allocations and upping equity at what may be exactly the wrong time.
- Broad fixed-income ETFs: AGG, BOND, BND, BSV, BIV, BLV, SCHZ, LAG, SAGG, ILTB, ISTB, GBF, GVI, FWDB, MINC, GIY
3:56 PMPlatinum Group Metals files for 148.5M-share offering, shares halted
- Platinum Group Metals (PLG -0.8%) is halted as a syndicate of underwriters agrees to buy on a bought deal basis 148.5M common shares at a price of C$1.18/share for gross proceeds of ~C$175M.
- PLG says proceeds from the offering will be used to partially fund Phase 2 development at the WBJV Project 1 platinum mine; to fund its portion of ongoing exploration, engineering and extension work on the Waterberg joint venture project; and for general working capital purposes.
3:50 PMChimera up big on heavy volume
- The mortgage REIT sector (REM +1.5%) takes a breather from heading south today, but it's a low volume effort, with one exception. Chimera Investment's (CIM +3.3%) volume of 22.7M so far this session compares to an average of 6.8M. One trader observes it's the 3rd consecutive session of heavy activity for the stock.
- Investors still await audited results for 2012 from the company.
- Related ETFs: MORT, MORL
3:45 PMBob Evans fires back at Sandell
- Management with Bob Evans Farms (BOBE +1.2%) contends the company undertook a detailed analysis of the suggested moves put forth by Sandell Asset Management before concluding they weren't in the best interest of shareholders.
- A plan to sell and then lease back properties would limit the restaurant chain's ability to be financially flexible.
- The company also reiterates that recent investments should pay off in the near future with margin expansion.
3:44 PMLaredo Petroleum unveils $1B capex budget for 2014
- Laredo Petroleum (LPI -0.2%) announces a $1B capital budget for 2014, with 84% focused on drilling and completion activities, in a program LPI expects will drive a ~30% annual growth in production volumes from its Permian Basin properties.
- LPI forecasts total 2014 production of 12.2M-12.7M boe (58% oil), or 33.4K-34.8K boe/day, highlighted by the beginning of ramping up development drilling activities at its Permian-Garden City asset.
3:28 PMCell Therapeutics outlines integrated Phase 2 pacritinib data at ASH
- Cell Therapeutics (CTIC -5.9%) is out with results from an integrated analysis of two Phase 2 pacritinib trials.
- The company says "there were no significant differences observed in efficacy or safety parameters among patients with low platelet counts when compared to patients with higher platelet counts."
- Patients with low platelets saw clinically meaningful "spleen size and patient-reported symptom score reductions."
- The company says the data support "the planned second Phase 3 trial expected to start this month, known as PERSIST-2, which will evaluate pacritinib in patients with MF with low platelet counts compared to best available therapy." (PR)
3:23 PMAlpha Natural +14% after asset sale, but Citi says big problems remain
- Alpha Natural Resources (ANR +14%) powers higher after agreeing to sell its 50% interest in its Marcellus shale joint venture for $300M in cash and stock.
- Sterne Agee believes the deal valued the assets significantly above its estimates and previous Marcellus transaction comps, and notes that ANR has another 10K acres of Marcellus gas assets in its portfolio with more opportunities to create substantial value.
- Citigroup maintains its Sell recommendation, however, saying strong earnings headwinds remain in 2014 vs. 2013 since ANR will not benefit from higher priced met coal contracts as it did at the end of 2012.
3:15 PMSodaStream spikes on no readily apparent news, reverses slide
- SodaStream shares slid earlier in the day as much as -3.0% with Green Mountain Coffee Roasters CEO Brian Kelley scheduled to speak at Beverage Digest's "Future Smarts" industry conference in the afternoon. BofAML speculated that he would unveil a competitive offering aimed at SodaStream.
- Shares (SODA +3.3%) have now spiked, beginning on the hour, on no apparent news, and have closed losses and then some. Rumors are floating that positive industry data has been released.
3:13 PMShaving trends nick Procter & Gamble and peers
- Growth rates for shaving products are down as the fashionable trend by men of keeping some stubble around wreaks havoc on what's supposed to be an easy industry to forecast demand.
- Energizer (ENR +1.2%), Unilever (UL +0.3%), and Procter & Gamble (PG +0.3%) have cut back on R&D spending in response to the consumer shift and are competing harder at the premium razor price points.
3:02 PMThis year's best performing single-country ETFs
- Previously beaten down values and tech describe this year's list of best-performing single country ETFs. Numbers 5&6 are the iShares MSCI Finland Capped ETF (EFNL) and the iShares MSCI Denmark Capped ETF (EDEN), each up about 35%.
- Keeping with the beaten down theme are numbers 4&2 - both Japan funds hedged against shifts in the value of the yen, WisdomTree's DXJ and Deutsche's DBJP, up 38% and 44% respectively. Number 3 comes from another left-for-dead market, the iShares MSCI Ireland Capped ETF (EIRL).
- Leading the list is PowerShares' Golden Dragon China ETF (PGJ), which holds China N-Shares - U.S.-listed Chinese firms, i.e, tech, i.e., Internet. It's up 58% YTD.
3:00 PMOn the hour
- Dow +0.1%.
- 10-yr -0.02%.
- Euro +0.26% vs. dollar.
- Crude -0.12% to $97.54.
- Gold +0.8% to $1238.8.
2:59 PMThompson Creek may close mines if moly price falls more
- Thompson Creek (TC -0.4%) may suspend production at its two molybdenum mines if the price of the ingredient used to strengthen steel falls further, CEO Jacques Perron tells Bloomberg.
- Molybdenum prices have dropped 18% YTD to ~$9.57/lb., and "it's going to be very difficult for us" if prices fall to $9, the CEO says.
- Perron dismisses recent concerns about TC's solvency, saying the company still would be able to pay off or refinance its debt even if copper sinks as low as $2.75/lb. and gold to $1,100/oz.
2:50 PMSolar stocks lower again; investors worried about Chinese draft proposal
- The Chinese government, which has a 12GW 2014 solar installation target, wants to see 8GW of installations involve distributed solar systems (such as those installed on residential and commercial buildings), and just 4GW of higher-margin utility-scale deployments.
- Credit Suisse notes investors are concerned the 12GW target won't be attainable if utility-scale installations are capped at 4GW. It thinks Yingli (YGE -5.9%), Trina (TSL -7%), and JinkoSolar (JKS -5.3%) have the most to lose if such a cap is implemented.
- Nomura is less concerned, noting most companies it has talked to believe 4GW "will be more of a guideline rather than a firm cap." The firm adds China's solar policy discussion is "fluid," and that the government remains committed to supporting solar adoption.
- Notable solar decliners (in addition to the aforementioned companies): HSOL -12.1%. SPWR -5.6%. CSUN -5.5%. JASO -3.4%. DQ -2%.
- Last Friday: Solar stocks fall in spite of market rally
2:44 PMJPMorgan starts coverage on healthcare information services names
- JPMorgan initiates athenahealth (ATHN +0.1%), Allscripts (MDRX), and MedAssets (MDAS -1.7%) at Overweight, Overweight, and Neutral, respectively.
- On ATHN: The company "offers highly rated products differentiated from competitors' because of SaaS-based functionality and supportive back-office operations." Price target is $155.
- On MDRX: "We believe the growing share of recurring revenues, in part due to the company's large installed physician base, combined with recent bookings trends, sets the company up well for improving trends in 2014." Price target is $18.
- On MDAS: "While we like the company's positioning in both the revenue cycle and group purchasing markets, we are concerned about the impact from utilization trends on the SCM business and the volatility experienced in the RCM business." Price target is $23.
2:43 PMFire triggers shutdown of Entergy nuclear reactor in Arkansas
- A nuclear reactor at Entergy's (ETR -1%) Arkansas One power plant shut itself off this morning after a fire broke out at a nearby electrical switchyard; the Nuclear Regulatory Commission says the plant's protective shutdown system operated as designed and no radiation was released.
- The fire is the second incident at the plant this year that has forced a sudden shutdown of the Unit 2 reactor; the same unit also automatically shut down in March when a crane collapsed as it was moving a heavy piece of equipment out of a building adjacent to Unit 2's nuclear island.
2:31 PMRetail sector picks: Luxury sellers, dollar store group, and Nike
- LVMH (LVMHF), Neiman Marcus, Macy's (M +0.7%), Tiffany (TIF +0.5%), and other luxury names will do well this holiday season, predicts retail analyst Kristin Bentz.
- She also likes the dollar store group (DLTR, FDO, DG, FIVE) to hold up well as consumers make the extra effort to bargain shop.
- The giant chasm in the middle is where the retail pain will be felt.
- An outlier: Wearable technology will be an on-trend holiday season item, forecasts Bentz. Early adopter Nike (NKE) could have a big Q4.
2:30 PMNeedham likes Hologic's CEO choice
- "We think MacMillan was well-regarded during his time as CEO at Stryker given a track record of execution and managing expectations and note that he has experience in each of the major markets in which [the company] operates," Needham's Mike Matson says, maintaining a Buy rating on shares of Hologic (HOLX -1%) amid an executive and board shakeup.
- Although Matson still sees a lot of "heavy lifting" in the company's future, his price target is $26, representing upside of ~18% from current levels.
- See also: HOLX names new CEO, appoints Icahn reps to board
2:23 PMArray BioPharma falls as company presents at ASH
- Shares of Array BioPharma (ARRY -10.4%) are trading notably lower on the day.
- The company says data presented today at ASH shows filanesib is active "in heavily pre-treated MM patients, with a consistent safety profile."
- Results for heavily pre-treated patients (all of which were refractory to Velcade and 80% were refractory to Revlimid) receiving a filanesib/ Kyprolis combo treatment: 37% ORR and 63% CBR.
- The Phase 1b dose escalation study also showed "filanesib and Kyprolis can be combined at the maximum planned dose for each agent."
- Results for Phase 1b dose escalation study of a filanesib/Velcade combo in relapsed or refractory MM: 42% ORR for patients dosed at greater than or equal to 1.25 mg/m squared.
- Results for Phase 2 study of single agent filanesib with dexamethasone in heavily pretreated MM: 16% ORR in "patients with a median of six prior therapies, previously treated with both Velcade and Revlimid." (PR)
2:23 PMAmazon estimated to have 16.7M Prime subs; Janney a fan of Kiva's robots
- Research firm CIRP estimates Amazon (AMZN -0.8%) now has 16.7M Prime subs, up 72% from a year-ago level of 9.7M. The firm also reports 93% of Prime subs responding to a survey said they're happy with the service, and plan to renew.
- The estimate meshes with a recent report from Dan Rayburn, who was told by an Amazon insider the e-commerce giant ended Q3 with 15M+ Prime subs.
- Amazon's October decision to hike its minimum free shipping order size to $35 from $25 could be fueling a pickup in Prime subscriptions (free two-day shipping for $79/year, no order minimum). More recently, Amazon struck a deal with the USPS to enable Sunday delivery for Prime subs in major metro areas.
- If CIRP's estimate is reasonably accurate, it means close to 17M Amazon accounts now have access to Prime Instant Video (whether they're using it is a whole other question). Rival Netflix (NFLX -0.2%) ended Q3 with 31.1M U.S. streaming subs.
- Separately, Janney estimates Kiva Systems' robots could lower Amazon's per-order fulfillment costs by 20%-40% from a current $3.50-$3.75. That, in turn, spells estimated cost savings of $458M-$916M/year.
- Amazon mentioned in its Q3 report it deployed 1,382 Kiva robots during the quarter in three fulfillment centers.
2:21 PMHudson Technologies climbs on EPA R-22 proposed rule, Craig-Hallum initiation
- Hudson Technologies (HDSN +28.4%) shares climb after the EPA proposes a rule pertaining to virgin R-22 production. The agency's preferred method would be to phase out production by 2020 by allowing 30M pounds of production 2015, and scaling down annually through the target date.
- The phase-out will create "a significant long term opportunity for Hudson as one of the largest reclaimers in the marketplace ... the aftermarket demand for R-22 will exceed the total allowances and ... reclaimed R-22 will bridge the supply and demand gap," CEO Kevin Zugibe states.
- Also helping shares: Craig-Hallum has initiated HDSN at Buy with a PT of $5.
2:14 PMCabot Oil & Gas +3.8% on Marcellus shale success
- Cabot Oil & Gas (COG +3.8%) is powering higher after providing an update on its Marcellus shale properties, where it recently turned-in-line its first 10-well pad with a combined peak production rate of 201M cf/day and a combined average 30-day production rate of 168M cf/day.
- Topeka Capital calls the Marcellus results "phenomenal" and says the news means lower well costs and additional NAV upside; the firm says COG remains its top pick, one of the best domestic resource plays with superior economics in the dry gas Marcellus shale, top tier production growth, clean balance sheet and strong potential free cash flow generation
- COG also says it sold some legacy assets for $123M and had bought back 4.8M shares during Q4.
2:13 PMRepublic Airways reports November traffic tallies| 1 Comment
2:00 PMOn the hour
- Dow +0.13%.
- 10-yr +0.04%.
- Euro +0.26% vs. dollar.
- Crude -0.08% to $97.57.
- Gold +0.47% to $1234.8.
1:51 PMHeard during AMC Networks' presentation at a media conference
- AMC Networks (AMCX -1%) sees getting a continued lift from VOD and streaming if it can continue to deliver strong content. Execs note the company's strong track record - it now has 4 of the top 10 critically acclaimed shows by one industry publication - which it sees continuing.
- Can the push to original programming continue as consumer reach the point of over-saturation? AMC execs think technology will continue to serve the company's business model as shows like Breaking Bad can get a late lift even if early rating suffer.
- The company says it has a conservative approach to backing new shows, but notes SVOD and international gives it a safety net to recapture investments if it misfires.
- On licensing vs. development, the bias is toward quality not one track or the other.
- Movies will be a less significant part of AMC's business in the future.
- UBS Global Media and Communications Conference webcast
1:44 PMCanadian Solar obtains $40M loan for Japanese projects
- Canadian Solar (CSIQ -0.4%) has obtained a $40M loan from Harvest North Star Capital (provides structured financing for Chinese companies) to develop Japanese solar projects featuring 145.1MW worth of capacity. Construction on projects set to provide 40MW-50MW of capacity is expected to start in 1H14. (PR)
- Canadian and many other Chinese solar firms have moved aggressively to tap the fast-growing Japanese market. A trade group just estimated Japanese solar cell/module imports rose 30% Q/Q and 540% Y/Y in Q3 to 1.2GW.
- Also: Canadian announces it's supplying 8.7MW of modules for a Mexican solar project. The installation is said to represent the first phase of a "mega-project" from Mexican solar firm EOSOL that's expected to produce over 200MW of capacity over the next two years.
1:42 PMHeard during Viacom's presentation at a media conference
- The cost of programming was a key point during Viacom's (VIAB) presentation at a media conference today.
- Execs says the company will try to stick to an increase in programming costs in the mid- to high-single digit range.
- The risk of an unbundled Pay-TV sector is dismissed rather easily.
- Of note, CEO Philippe Dauman says he sees a strong chance that a virtual multichannel provided will launch next year. It wasn't clear if the exec had an inside line on what Google, Sony, or Intel might be up to in that area.
- UBS Global Media and Communications Conference webcast
1:26 PMAkamai CEO buys more shares; sell-side debates Verizon/EdgeCast
- Akamai (AKAM -2%) CEO Tom Leighton discloses he bought 25K shares on Friday at a price of $45.28. The purchase comes on top of ones made in February and March.
- Altogether, Leighton has bought 105K shares since becoming CEO at the beginning of 2013.
- Shares continue to trade lower in response to the Verizon/EdgeCast deal. Raymond James (Market Perform) thinks the deal will "exacerbate pricing concerns" for Akamai's lower-margin media delivery sales (48% of revenue, but gradually declining).
- Akamai mentioned on its Q3 CC (transcript) it's in the midst of price negotiations with a major media client. RJ thinks the client is Apple.
- Wells Fargo (Outperform) is less worried about Verizon's move. The firm notes telco acquisitions of Web hosting/cloud infrastructure companies (including Verizon's acquisition of Terremark) failed to hurt independent players.
1:21 PMCarney bullish on U.K. and global growth
- "For the first time in a long time it seems reasonable to expect the hopes and dreams of the holiday season to be fulfilled," says Bank of England Governor Mark Carney in a NY speech. "The Ghost of Christmas Present is a cheerful spirit. As uncertainty diminishes, credit conditions improve and balance sheet repair progresses, monetary policy is gaining traction."
- Not buying the "secular stagnation" thesis of many, Carney says there's little reason to believe developed economies can't recover to past growth rates.
- The pound continues to head higher, now up a whopping 16 handles since Carney took the BOE reins in July and has been unexpectedly hawkish since.
- Cable is buying $1.6406 at the moment. Above $1.70 would take it back to summer-2008 levels.
- U.K. and pound ETFs: FXB, EWU, GBB, EWUS, FKU, DXPS, DBUK
1:17 PMEngaged to Abercrombie & Fitch: We're not going away
- Abercrombie & Fitch (ANF -2.7%) decided to ignore the unsolicited advice of Engaged Capital to fire CEO Mike Jeffries when it gave the exec a new contract, but the leash this time around looks shorter.
- Jeffries is on a performance-based compensation plan and the retailer has three new brand presidents who will be groomed for succession.
- Still, Engaged isn't taking the news lightly. The firm expressed displeasure with the move and says it will consider "all options" when taking on the ANF board.
1:12 PMBullard: Taper would "recognize" labor improvement
- The chances of the taper have increased thanks to the recent labor market data, says St. Louis Fed chief Jim Bullard, but below-target inflation remains an issue. "There is no widely accepted reason why inflation is running as low as it is in the face of extraordinarily accommodative policy from the Fed,” he says. “A small taper might recognize labor market improvement while still providing the Committee the opportunity to carefully monitor inflation during the first half of 2014 ... Should inflation not return toward target, the Committee could pause tapering at subsequent meetings."
- Like John Williams last week, Bullard suggests a change in forward guidance may be in order to convince markets the taper and a rate hike are two separate issues.
- Treasurys remain little-changed on the session, the 10-year yield off a basis point to 2.85%.
- Treasury ETFs: TBT, TLT, TMV, SHY, IEF, TBF, PST, EDV, TTT, TMF, TLH, ZROZ, SBND, IEI, DLBS, TYO, DTYS, VGLT, UST, BIL, SHV, UBT, TBX, TLO, VGSH, VGIT, LBND, GSY, DTYL, SCHR, SCHO, TYD, ITE, TYBS, TENZ, DTUL, TUZ, SST, DTUS, FIVZ, TBZ, DFVL, DLBL, DFVS, TYNS
1:08 PMTesla Motors roundup: Shares range-bound, supercharger network, Oxen vs. Musk
- Shares of Tesla Motors (TSLA +1.7%) stay close to the $140 level as sentiment stays positive on the company, but not enough to break through the tight range of the last week.
- The EV automaker's map of Supercharger networks has grown to 39 in the U.S. to link more major cities. By most accounts, progress on the Superchargers is on pace with the company's projections.
- On the bear front, Oxen Group maintains its stance that Tesla is at most a $100 stock. The investment firm says even if Tesla hits Porsche-like margins and grows sales to 90K per yer by 2017 that the current valuation is too high as demand hits a ceiling. The outlook runs counter to Elon Musk's comments that Tesla is supply-constrained and not demand-constrained, although he hasn't been clear at what production level the equation flips.
1:05 PMJGW unit cuts interest expense by 200 basis points
- JGWPT Holdings (JGW +0.4%) subsidiary Orchard Acquisition cuts the margin on its term loans by 150 basis points and reduces the interest rate floors on the loans by 50 basis points. The company also modified the prepayment penalty agreement, allowing the repayment of $123M with proceeds from last month's IPO.
- The lower rate and paydown should reduce annual interest payments by about $20M.
- Previous: Sell-side coverage launches last week with five buys from the underwriters.
- Press release
1:00 PMOn the hour
- Dow +0.13%.
- 10-yr +0.09%.
- Euro +0.13% vs. dollar.
- Crude +0.01% to $97.66.
- Gold +0.37% to $1233.6.
12:59 PMTransGlobe Energy -6.2% on 2014 guidance
- Shares of TransGlobe Energy (TGA -6.2%) are weak after the Egypt and Yemen focused oil and gas company provided 2014 funds flow guidance of $146M, an 8% Y/Y increase.
- Production guidance for 2014 is seen at 20K-21K bbl/day of oil, an 11% increase; production averaged 12K bbl/day in October and 11.9K in November.
12:54 PMStatoil makes Arctic oil find in boost for Johan Castberg project
- Statoil (STO +0.9%) discovers as much as 50M barrels of oil at its Skavl prospect in the Barents Sea, in a boost to its delayed Johan Castberg project.
- Skavl, the third well in a drilling campaign of at least five wells, is the first crude discovery in a campaign of exploration to strengthen the Castberg project, which was delayed after costs and taxes rose and because of uncertainty over resource estimates.
12:51 PMEdwards Lifesciences falls on 2014 outlook
- Shares of Edwards Lifesciences (EW -5.6%) are weaker on the session as the company outlines its strategy and discusses its outlook at its annual investor conference.
- EW says that although "patient demand for [the] SAPIEN transcatheter valve therapy remains strong ... [the company] will face new competition in the U.S. and Europe early in 2014."
- Due to the "uncertain timing of these competitive entries," EW says it is "providing a wide range of forecasted THV sales."
- FY14 THV sales guidance: $700-820M.
- FY14 guidance: "A wide range around" EPS of $3 on sales of $2.05-2.25B. (PR)
- Shares of Edwards Lifesciences (EW -5.6%) are weaker on the session as the company outlines its strategy and discusses its outlook at its annual investor conference.
12:50 PMYahoo reportedly eying image-hosting platform Imgur
- BI reports Yahoo (YHOO -0.3%) "began serious talks" to acquire popular image-hosting/sharing platform Imgur this fall. Given current startup valuations and reports of strong VC/acquisition interest in Imgur, a deal likely wouldn't come cheap, though its price tag would probably be less than the $1.1B Yahoo paid for Tumblr.
- Imgur had 100M+ unique users as of September, up from just 30M at the beginning of 2012. Unlike Yahoo's Flickr (or for that matter, Facebook/Instagram), a large portion of its content doesn't consist of photos taken by users, but 3rd-party images (often animated and/or featuring text) created with public sharing in mind.
- Initially created as a image-hosting solution for article-sharing site Reddit, Imgur's reach now exceeds Reddit. Facebook and Twitter account for much of its referral traffic.
- Much like Tumblr, it's quite popular with the younger users Yahoo wants to reach out to. Also like Tumblr, some of its edgy and offbeat material may rub advertisers the wrong way.
12:49 PMJefferies, Deutsche Bank initiate Eros International at Buy
- Jefferies and Deutsche Bank are bullish on Eros International (EROS +0.6%), initiating shares at Buy with $14 and $20 PTs respectively.
- Jefferies analyst Randal Konik: "Eros is a pioneer in Indian filmed entertainment that is well positioned to capitalize on multiple growth opportunities within India and globally. This is a company that provides exposure to a growing industry in an expanding economy at what we view as a favorable valuation."
12:41 PMGulf Keystone soars on Excalibur decision not to appeal Kurdistan ruling
- Shares of Gulf Keystone Petroleum (GUKYF, GFKSY) are higher after Excalibur Ventures says it will not appeal a court judgment which dismissed all claims asserted against the company's Kurdistan operations.
- Excalibur's decision not to appeal ends a long period of uncertainty for Gulf Keystone, during which its 30% interest in the Shaikan oil field was in jeopardy.
- Gulf Keystone also is plotting a boardroom shakeup that could jeopardize a fragile truce between the company and leading investors, Sky News reports.
12:40 PMAdvanced Semiconductor Engineering revenue grew 12.4% Y/Y in Nov.| Comment!
12:32 PMAdvaxis rallies on licensing deal for ADXS-HPV
- Advaxis (ADXS +11.1%) rises after saying it has entered into a licensing agreement with Global BioPharma for the development and commercialization of ADXS-HPV.
- Global BioPharma was formed "solely to focus on the development and commercialization of ADXS-HPV," ADXS says.
- ADXS will receive "event-based financial milestones, an annual development fee, and annual net sales royalty payments in the high single to double digits."
- Additionally, Global will make an upfront investment in ADXS common stock.
- For more on the deal, see here.
12:28 PMGM gains as Treasury exit could be imminent
- General Motors (GM +2.3%) is an outlier to the upside in the auto sector today - hitting a new 52-week high amid a WSJ report, the Treasury could exit the rest of its stake (31.1M shares) as soon as this week. North America boss Mark Reuss expects a boost in sales thanks to the return of some customers who shunned "Government Motors" in wake of the bailout.
- The government exit will allow GM to immediately adjust executive pay, which should boost the recruitment and retention of key talent.
- Separately, the company says it is moving some call center ops back to the U.S. to hopefully improve interaction with customers. About 300 workers and 35 managers will be employed at a new "customer engagement center" in Warren, MI. The jobs are coming from the closing of a call center in Argentina.
- Earlier: GM to cut South Korean output; end Australian production.
12:23 PMNewfield Exploration -4% after issuing production, capex outlook
- Newfield Exploration (NFX -4%) slides after updating its production and capital investment outlook for 2014-16, including plans to spend ~$1.6B in 2014.
- Production is expected at 44M-48M boe, or 10%-20% higher than 2013 estimated production of ~40M boe; 2014 domestic liquids production is seen increasing 30% Y/Y.
- NFX plans 2014 capex of ~$700M in the Anadarko Basin, its largest investment region; it plans to run eight operated drilling rigs in its SCOOP and STACK plays.
12:22 PMMicron rallies amid positive DRAM pricing, sales reports; SanDisk also up
- Digitimes reports DRAM spot prices continue to jump, with recent quotes "soaring more than 5% on a single day." Tight supplies (caused in part by the SK Hynix fire), PC OEM inventory replenishment, and order pull-in from Chinese tablet vendors are said to be contributing factors.
- Naturally, spot price strength is expected to bolster contract pricing, whose growth has been tempered somewhat by attempts from SK Hynix and peers to adjust capacity in the wake of the fire.
- The report backs up recent comments Morgan Stanley's Joseph Moore, who has reported seeing a pickup in orders from the PC supply chain.
- Also: Both Taiwanese DRAM vendor Nanya and Micron/Nanya's Inotera JV have reported strong November sales. Nanya's sales rose 34% Y/Y to NT$3.85B ($130M), and Inotera's sales rose 117% to NT$6.46B ($218M).
- Aided by a favorable supply/demand balance and healthy mobile DRAM growth, the DRAM industry is expected to perform well again in 2014, though growth is expected to slow from 2013's levels. DRAMeXchange forecasts sales will rise 14% to $40B, after growing 32% in 2013.
- Micron (MU +3.9%) is making new 52-week highs, and SanDisk (SNDK +1.6%) is also up. Though not a DRAM vendor itself, SanDisk benefits from DRAM strength to the extent NAND capacity gets reallocated for DRAM production. Samsung (SSNLF, SSNGY) rose 1.8% overnight in Seoul, and SK Hynix (HXSCL) rose 2.4%.
12:22 PMRoche reports "unprecedented" results in CLL study
- Roche (RHHBY -0.8%) says Phase 3 data from a study of GA101 in CLL show patients "experienced nearly a year of extra remission time when treated with GA101 in combination with chlorambucil, compared with MabThera and chlorambucil."
- Median PFS: 26.7 months versus 15.2 months; HR=0.39.
- CR rate: 21% for GA101/chlorambucil versus 7% for MabThera/chlorambucil.
- The company calls the results "unprecedented": "For the first time in a first-line Phase 3 CLL study, we have seen a therapy that shows superior efficacy over MabThera," Roche says. (PR)
12:09 PMCuris falls on above average volume
- Curis (CRIS -15.2%) plunges on heavy volume.
- The company is out with preliminary data from an ongoing Phase 1 study of the dual HDAC and PI3K inhibitor CUDC-907 in relapsed/refractory lymphoma or multiple myeloma.
- "Intermittent oral dosing ... appears to be better tolerated than continuous daily dosing," the company notes.
- There was one observed PR and seven of 11 patients have SD.
- DLTs of Grade 3 diarrhea and Grade 4 hyperglycemia reported in 1 60mg dosed patient and AEs of Grade 3 epistaxis and Grade 3 diarrhea and Grade 4 hyperglycemia were also observed in the daily schedule, the company says. (PR)
12:02 PMOSI Systems plunges 34%, TSA wants to debar Rapiscan from contracts
- OSI Systems' (OSIS -33.6%) shares plummet after news breaks that the company may face a ban on contracts with the DHS after its Rapiscan Systems subsidiary lost a contract from the TSA for carry-on baggage screeners.
- The fiasco began on Friday, with OSI using a Chinese part without receiving consent from the TSA, which led to the department pulling the rug out from a $60M contract OSI won weeks ago.
- The company is no stranger to government contract trouble, with Rapiscan averting debarment by the DHS last year over accusations that it had misled the TSA about testing of its body-scanning machines.
- There is market chatter that Benchmark is out defending the company, calling the meltdown an overreaction.
12:00 PMSmall cap January effect is in December
- December is the new January as far as small caps are concerned, with Arthur Hill pointing out it's actually the year's last month when small caps are most likely to outperform the market - they do it 74% of the time vs. 50% in January (and a range of 40-60% for the rest of the year).
- The Russell 2000 (IWM -0.2%) is off today as the S&P 500 (SPY +0.3%) rises, and thus far this month the S&P 500 - is ahead of the Russell by 140 basis points.
- Small cap ETFs: IJS, IWM, TZA, TNA, UWM, VB, IJR, SLY, EES, RWJ, VBR, VBK, URTY, TWM, IWN, SCHA, IWO, IJT, RWM, SRTY, SAA, JKL, DWAS, VTWO, SLYG, RZV, SLYV, SBB, SDD, JKJ, RSCO, RZG, TILT, UKK, XSLV, FYX, VTWG, VIOO, JKK, SKK, FYT, VIOG, EWRS, UVT, VIOV, PXSV, TWOK, VTWV, SMLV, SJH, FNDA, FYC, IESM, VLU, PXSG, PXSC
12:00 PMOn the hour
- Dow +0.15%.
- 10-yr +0.13%.
- Euro +0.15% vs. dollar.
- Crude +0.04% to $97.69.
- Gold +0.38% to $1233.7.
11:59 AMMemorial Production Partners earns a Buy from UBS
- Memorial Production Partners (MEMP -0.5%) is initiated with a Buy rating and $25 price target at UBS, which feels investors could continue to undervalue the young MLP pending more performance history.
- The firm believes MEMP provides one of the more attractive yields (~11%) in the upstream space with what the firm feels is a limited risk profile vs. peers, it boasts a reserve base transitioning from gas-focused to a more balanced oil/gas mix, it's diversifying geographically, and distributions have been well supported and grown significantly with acquisitions.
11:58 AMHemispherx Biopharma goes parabolic on study expansion news
- Hemispherx Biopharma (HEB +80.3%) is up sharply on the session.
- The company says its Phase 1/2 study of a Ampligen/ intranasal seasonal influenza vaccine combo for "enhanced protection against certain potentially pandemic influenza strains" will be expanded based on safety results observed by the FDA and the DMC. (PR)
- Hemispherx Biopharma (HEB +80.3%) is up sharply on the session.
11:56 AMRuby Tuesday +7.7% on report it's exploring strategic options| Comment!
11:48 AMReuters: Gulf firms consider bid for Occidental's Middle East stake
- Three state-owned Gulf firms are considering a joint bid for a minority stake in Occidental Petroleum's (OXY +0.6%) Middle East and North Africa unit, a deal that could be worth $8B-$10B, three banking sources tell Reuters.
- Abu Dhabi's Mubadala Development, Qatar Petroleum and Oman Oil reportedly have formed a consortium and have picked Citigroup to advise them.
- OXY said in October it planned to sell a minority stake in its MENA operations as part of a restructuring meant to lift its valuation.
11:47 AMBox office roundup: Frozen takes over for Catching Fire, Gravity a hit in China
- Frozen topped the U.S. box office rankings with a $31.6M haul, but perhaps more importantly the Disney (DIS) film did very well in Europe and still has Russia and Italy to debut in this week. More than any other studio Disney gets a lot of bang for its bucks if it delivers a hit with children due to its merchandise and theme park tie-ins.
- Hunger Games: Catching Fire (LGF) fell back to earth with a $27M hold, but is still on pace to eclipse the $400M mark.
- China continues to be a strong market for Gravity (TWX) as the movie has now earned over $64M in the market. The sci-fi thriller has been one of the biggest surprises of the year with a global box office take of over $630M and counting. The movie has also backed up the idea of the must-see IMAX format for particular features.
11:40 AMOmnicell acquires SurgiChem from Bupa Care Homes for £12M
- Omnicell (OMCL -1.4%) acquires U.K. medication adherence packaging systems provider SurgiChem from Bupa Care Homes for £12M.
- SurgiChem grew revenue at a 13.9% clip in 2012 to £6.6M, generating £695K in profit.
- Omnicell intends to combine SurgiChem's ops with its MTS Medication Technologies subsidiary in the U.K.
11:38 AMIngersoll-Rand downgraded at MKM
- Ingersoll-Rand (IR) catches a downgrade to Neutral from Buy at MKM Partners.
- "With expectations that recovery is upon us and the Allegion spin complete, valuation appears fair versus other premium multi-industrials and the IR-specific major catalysts are behind us," analyst Joshua Pokrzywinski says, adding that he isn't "convinced that 2014 will be a strong recovery year for institutional markets where IR's larger HVAC offering is more prominent."
- Price target is $58.
- Ingersoll-Rand (IR) catches a downgrade to Neutral from Buy at MKM Partners.
11:37 AMMore on Hilton moving IPO up a day| Comment!
11:34 AMEni reopens flow stations on key Nigeria pipeline
- Eni (E +0.3%) is reopening flow stations on a key Tebidaba-Brass oil pipeline in Nigeria that was sabotaged over the weekend; the pipeline normally carries 75K bbl/day of high-quality Brass grade for export.
- The Nigerian army said locals had blown up parts of the pipeline in a dispute with the company, so Eni shut the flow stations serving the pipe.
- Oil theft occurs frequently on the line, which was shut down for months earlier this year.
11:31 AMSprint issuing more debt, possibly to finance 4G buildout
- Sprint (S +1.3%) plans to sell debt due in 2024 through a private offering. No offering size has yet been given. The #3 U.S. carrier says it will use the proceeds for "general corporate purposes, which may include, among other things, retirement or service requirements of outstanding debt and network expansion and modernization." (PR)
- Sprint already had $37.3B in debt at the end of Q3, to go with $10.7B in cash/investments. In July, 78% owner SoftBank promised Sprint would spend $16B in capex over the next two years, as it races to neutralize Verizon/AT&T's 4G coverage edge.
11:27 AMResults from study of Portola's factor Xa inhibitor antidote presented at ASH
- Portola Pharmaceuticals (PTLA +0.1%) says additional results from a Phase 2 study show andexanet alfa immediately reverses the anticoagulation activity of Xarelto.
- No SAEs were observed.
- Here's PTLA commenting: "Andexanet alfa has the potential to be a first-in-class universal antidote designed to reverse the anticoagulant activity of Factor Xa inhibitors in patients who experience an uncontrolled bleeding episode or who require emergency surgery."
- The company estimates as many as 500K patients in the U.S., Japan, and the EU could benefit from such an antidote by 2020. (PR)
11:24 AMA lot to like about Sysco-US Foods combination
- The outsized rally in Sysco (SYY +13.1%) following its purchase of US Foods is tied to a deal price which analysts see as coming in on the low end.
- Though shares have fallen back from their lofty +$43 perch, sentiment is still decidedly bullish on volume already 10X normal trading activity due to the enormous synergy opportunities presented by the combination.
- Unlike many merger partners, Sysco and US Foods are fairly complimentary on a geographic basis.
11:22 AMGuyana Goldfields approves $238M capex for Aurora Gold project
- Guyana Goldfields (GUYFF) says its board has approved $238M of spending for the Aurora Gold project to reach commercial production, subject to successful completion of project financing and other approvals expected to be finalized by Q2 2014.
- Construction is expected to last 18 months, with commissioning of the mill beginning in Q1 2015 and commercial gold production achieved by mid-2015.
11:19 AMTelecom New Zealand divests AAPT for AU$450M to TPG
- Telecom New Zealand (NZTCY +1.3%) will sell business telecommunications and cloud services provider AAPT for AU$450M ($409M) to TPG. Closing is expected in Feb., with Australian regulators having cleared the deal.
- After having sold the consumer division of AAPT in 2010 for AU$60M, the price the telco is getting is a far cry from the AU$2.2B it paid for AAPT at the peak of the dot com bubble in 1999.
- The ops' revenue has consistently declined, as has operational performance, with AAPT generating EBITDA of $57M this year, down $10M from the previous year.
- To TPG, the 11K km of fibre the unit owns across six states and territories "will provide ... a much larger backhaul network across Australia, as the company begins to embark on a fibre-to-the-basement rollout for 500,000 CBD businesses and apartments covered by TPG's existing network," ZDNet writes.
11:18 AMFormer WaMu soars after KKR investment| Comment!
11:18 AMIndian government holding off on Vodafone decision
- Citing a lack of interior ministry security approvals, India's foreign investment regulator says it's deferring a ruling on Vodafone's (VOD +1.2%) request to assume full ownership of its local subsidiary.
- Vodafone directly or indirectly owns 84.5% of its Indian unit, which is the country's #2 mobile carrier. It's offering $1.6B to buy out minority holders, and has promised to invest $2B in the business.
11:12 AMAmerican Airlines Group starts off with some tailwinds
- Shares of American Airlines Group (AAL) rise close to 7% to $24.35 in early trading as holders of US Airways and American Airline size up their positions following the distribution of AAL shares.
- Traders expect some selling pressure in the near-term as creditors of American convert their holdings to cash, but airline analysts like the long-term profit potential for American coming out of bankruptcy leaner.
- American Airlines CEO Doug Parker tells CNBC that the carrier's new fleet, which will be coming on board in the next couple of years, will give it an edge over Delta Airlines and United Continental. (video)
11:07 AMSpeculative gold longs lowest since 2007; time to look elsewhere?
- Net speculative longs in gold (GLD +0.6%) last week fell 16% to 26,774 contracts, according to the CFTC, the lowest amount since June 2007. Shorts rose 6.2% to 79,631, about matching a high set in July. The exit continues in gold ETPs, with assets now off 31% YTD to the lowest level since February 2010.
- "There's probably another wave of panic selling ahead," says Sage Capital's Bob Smith, one of those who's exited gold, putting the money in stocks instead. "In the absence of calamity, there's not much to go on."
- The last 12 years (prior to 2013) were an aberration, says Morningstar's Samuel Lee. True believers should instead look to deep-value assets linked to gold, namely the miners (GDX +1.3%) - they over-expanded and failed to hedge against falling prices, but a play now is a bet executives have learned their lessons.
- An even better idea, says Lee? Admit the worst-case scenarios about global crises and currency debasement never panned out and move onto another asset - nonagency MBS. The cheap, illiquid sector creates opportunities for a good fund manager, he says. Lee's pick is the Pimco Dynamic Income Fund (PDI +0.7%) - an "implicit bet on housing prices."
- Gold ETFs: GLD, IAU, PHYS, SGOL, UGL, DGP, GLL, DZZ, UGLD, DGL, DGZ, AGOL, GLDI, DGLD, TBAR, UBG
- Gold miner ETFs: GDX, GDXJ, NUGT, DUST, GLDX, GGGG, RING, PSAU, JNUG, JDST
11:05 AMDeutsche steadfastly bullish on Mead Johnson
- "Despite a number of unexpected challenges the last two years, largely from China, we have been steadfast in our positive view," Deutsche Bank says, reiterating a Buy rating on Mead Johnson Nutrition (MJN -0.1%).
- Analyst Greg Poole still likes the story based on the potential for growth in China and EM as well as "an eventual U.S. recovery."
- Price target is now $94.
11:00 AMOn the hour
- Dow +0.09%.
- 10-yr +0.11%.
- Euro +0.12% vs. dollar.
- Crude -0.06% to $97.59.
- Gold +0.55% to $1235.8.
10:58 AMTalisman, Ecopetrol say Colombian oil field is commercially viable
- Ecopetrol (EC +0.2%) and Talisman Energy (TLM -0.6%) declare the commercial viability of the Akacias oil field they have been exploring together, which they say will add at least 35M barrels of reserves for both the companies and Colombia's dwindling supply.
- EC expects production at Akacias to reach 25K bbl/day by late 2015 from the current 5.5K bbl/day, and says the field "clearly shows the heavy crude potential in the area of Llanos, which is the focus of the exploratory campaign to reach Ecopetrol's target of producing 1M of clean barrels in 2015 and 1.3M barrels in 2020."
- Last week, EC announced the commercial viability of another oil area, Eastern Cano Sur, in the same region.
10:58 AMPrana soars as treatment phase completed in Alzheimer's trial| Comment!
10:55 AMQLogic hires EMC engineering SVP exec to be its CEO
- QLogic (QLGC +0.2%) has hired Prasad Rampalli, until now EMC's cross-business-unit engineering chief, to be its new CEO, effective Feb. 3. (PR)
- Rampalli has been with EMC for three years. Before that, he spent 27 years at Intel in various positions.
- News of Rampalli's hiring comes seven months after the resignation of Simon Biddiscombe, QLogic's last full-time CEO. CFO Jean Hu has been serving as interim CEO since then.
10:51 AMStifel sees "dramatic growth" in Tandem's future
- "Tandem (TNDM -3.5%) appears poised for dramatic growth with what we view as a compelling differentiated platform technology, and a highly visible pipeline in the large, growing, and arguably under-penetrated insulin pump market," Stifel's Rick Wise says, initiating coverage at Buy.
- "The company's impressive, deep product pipeline [should] drive well above-average growth for the foreseeable future," Wise adds.
- Price target is $30, representing upside of ~21% from Friday's close.
10:49 AMAnalysis: Wait for better entry point on Lululemon| Comment!
10:47 AMValero, HollyFrontier, Marathon upgraded by J.P. Morgan on wider oil spreads
- J.P. Morgan is the latest investment banker to turn bullish on refiners, upgrading HollyFrontier (HFC +2%), Valero Energy (VLO +1.8%) and Marathon Petroleum (MPC +0.9%) on its expectation for a larger difference between Brent and West Texas oil prices.
- The firm revises its view on oil prices, forecasting Brent prices averaging $105.50/bbl for 2014 and $100.30 for 2015 vs. WTI prices of $91.50/bbl for 2014 and $85.30 for 2015, suggesting a $14-$15 differential, which should increase U.S. refining margins.
- In particular, the firm believes HFC's inland refining system is "well positioned to benefit from growth in production of disadvantaged inland North American crudes, and expect(s) HFC to capture Brent-WTI price differentials as higher gross margins across the majority of its throughput."
- HFC is upgraded to Overweight from Underweight, VLO and MPC are raised to Neutral from Underweight, and Phillips 66 (PSX +1.5%) and Tesoro (TSO +1.2%) are maintained at Overweight.
10:45 AMHeard during Time Warner Cable's media conference presentation
- Time Warner Cable (TWC -0.6%) CEO Rob Marcus says the regional L.A. Dodgers channel will launch in February with all its distribution deals not yet in place. The exec exudes confidence, but the cable operator clearly needs to get deals done to improve subscriber counts for the sports package.
- The company expects to see stable margins despite increasing programming and capital-intensive initiatives. Service revenue could help boost margins and some tightening on SG&A spending.
- Marcus seems to dismiss the Bloomberg story from last week indicating the company was a lock to take a buyout offer in the $150-$160 range. He does note the significant positive impact consolidation in the media industry could bring as programming costs are shared.
- UBS Global Media and Communications Conference Webcast
10:43 AMThai shares firm amid political turmoil| Comment!
10:42 AMNokia reportedly makes Indian tax offer; EU issues patent warning
- Reuters reports Nokia (NOK +3%) has offered to pay the Indian government €270M ($369M) to unfreeze assets (including a Chennai plant) caught up in a tax dispute.
- Nokia threatened to pull out of India earlier this year due to frustration over its tax squabble. The government made a settlement offer in July.
- Meanwhile, EU antitrust chief Joaquin Almunia is warning Nokia not to misuse its giant patent portfolio in the wake of the Microsoft deal. A number of analysts and investors have argued the deal opens the door for Nokia to become more aggressive in monetizing its IP.
- Almunia: "If Nokia were to take illegal advantage of its patents in the future, we will open an antitrust case - but I sincerely hope we will not have to." The EU has already taken a harsh view of the use of standards-essential mobile patents (some, though not all, of Nokia's patents fall under this label) in legal disputes.
10:40 AMPositive Street initiation not enough to prevent Chegg slide
- Ebullient underwriter initiation day coverage is not enough to staunch a slide by Chegg (CHGG -5.5%). Jefferies (PT of $14) and BofAML ($11.50) initiated the learning platform maker at Buy, J.P. Morgan ($13), Piper Jaffray ($11), and Raymond James ($12) at Outperform, and BMO Capital ($11) at Perform.
- Jefferies noted, "With a focus on saving students time money and helping them to get smarter, we believe Chegg is one of the best positioned in the rapidly evolving education products & services space and that there is meaningful upside from current levels."
- BofAML is bullish Chegg's textbook market, cloud-based Student Hub, and "early leadership in digital books." The firm also thinks "the high capital requirements of book distribution serve as significant competitive moats, and we see few retailers that can effectively compete with Chegg."
10:32 AMPiper still bearish on Seattle Genetics| 2 Comments
10:29 AMLayne Christensen swings to loss, shares -11%
- Layne Christensen (LAYN -11%) shares plunge after the drilling services company swung to a bigger than expected Q3 loss, including a 48% drop in mineral services revenue, which made up 18% of the quarter's revenue.
- The segment's results were hurt by charges from a Foreign Corrupt Practices Act investigation after the SEC had found LAYN received $4.8M in benefits from making improper payments, and made an accrual at the time.
- LAYN says the outlook for mineral services remains challenged due to continuing declines in global mineral exploration activity, which will results for at least the balance of FY 2014.
- Geoconstruction revenue fell 55% on weaker demand in the U.S. and South America, although the division gained three new contracts in the quarter.
10:25 AMBarclays names names in restaurant sector
- Barclays slices up the restaurant sector on its view that the franchised model will under-perform in 2014, but select chains with a higher mix of company-owned outlets will shine.
- The investment firm is positive on Bloomin' Brands (BLMN -0.3%), Buffalo Wild Wings (BWLD), Wendy's (WEN +0.1%), and Brinker International (EAT +0.8%) - but sees problems at Sonic (SONC +0.9%).
- Related: Weak performance by McDonald's in the U.S. an eye-opener for the industry.
10:23 AMHologic names new CEO, appoints Icahn reps to board
- Hologic (HOLX -1.1%) appoints former Stryker chief Steve MacMillan CEO. MacMillan will succeed Jack Cumming. (PR)
- "During his tenure, Steve led Stryker to strong operating performance, including nearly tripling revenue, and delivered stock price appreciation that significantly outperformed the S&P 500," HOLX notes.
- Meanwhile, the company is also appointing Jonathan Christodoro and Samuel Merksamer to the board — they are both managing directors at Icahn Capital. (PR)
10:20 AMJapan knows deflation, and it's buying Treasurys
- “There’s tremendous deflationary pressure in the U.S.,” says Mizuho Asset Management fund manager Yusuke Ito. “For bonds, the longer the maturity, the better." As U.S. investors exit duration in the domestic bond market, Japanese investors - to whom the U.S. 10-year yield of 2.84% looks positively towering - are snapping the paper up. The country's holdings of U.S. debt rose $98.2B in Q3, the 2nd largest increase since the data started becoming public 13 years ago.
- “The Japanese have experience with 15 years of disinflation,” says Hideo Shimomura, chief fund investor at Mitsubishi UFJ. “Now it is spreading to the U.S. It’s worthwhile to take long-end risk in portfolios.”
- Treasury ETFs: TBT, TLT, TMV, IEF, TBF, PST, EDV, TTT, TMF, TLH, ZROZ, SBND, IEI, DLBS, TYO, DTYS, VGLT, UST, UBT, TBX, TLO, VGIT, GSY, DTYL, LBND, SCHR, TYD, ITE, TYBS, TENZ, FIVZ, TBZ, DFVL, DLBL, DFVS, TYNS
10:17 AMThe mysterious Campbell Soup rally extends
- Share of Campbell Soup (CPB +1.2%) shoot higher again in early action and are now up over 10% over the last 5 trading sessions in the midst of a tough patch for the sector.
- The company is in the spotlight due to some unusual call option buying last week.
- Trader talk: A huge merger in the foodservice industry has just increased the chatter that Campbell Soup might be flirting with a peer.
10:16 AMMosaic to buy $2B in shares from Cargill trusts
- Mosaic (MOS -1.1%) agrees to repurchase 43.3M class A shares held by charitable trusts associated with the Cargill family with a market value of ~$2B.
- The buyback helps resolve the ownership of 128.8M MOS shares Cargill Inc. transferred to charitable trusts and Cargill family members in 2011 when it sold its 64% stake in MOS.
- "This is a major step toward our goal of a more efficient balance sheet by mid-2014,” according to MOS CEO Jim Prokopanko, but investors may be disappointed by the structure of the agreement and the size of the repurchase.
10:08 AMCasino stocks stay on hot streak
- Casino stocks start the week off in fine fashion as the sector remains hot.
- A bullish note from Wells Fargo on explosive growth of the mass-market segment in Macau is boosting sentiment. Positive forecasts on the prospects for gaming revenue in Singapore and Japan are also helping to tip sentiment.
- A solid start to online gambling in New Jersey has seen analysts lift long-term profit forecasts for some of the U.S. regional casino players as analysts weigh how the online story will play out.
- The Market Vector Gaming ETF (BJK) has trailed some of the larger U.S.-based casino stocks over the last 3 months due to its weighting toward global firms.
- Gainers: Melco Crown (MPEL) +2.3%, Caesars Entertainment (CZR) +2.3%, Boyd Gaming (BYD) +2.3%, Las Vegas Sands (LVS) +2.0%, Wynn Resorts (WYNN) +2.0%.
10:06 AMFortinet announces $200M buyback, shares rally
- Fortinet (FTNT +1.7%) is launching a $200M buyback program. At current levels, the program is good for repurchasing 6.8% of outstanding shares. (PR)
- The buyback could partly be an attempt to reassure investors following the departure of CFO/COO Ahmad Rubaie only eight months after his hiring.
- Previous: BofA/Merrill upgrades Fortinet, says Rubaie's departure not a concern
10:06 AMJefferies hikes target on Auxilium citing PD potential
- "Despite a black box warning for rare rupture events, we see the label as positive overall," Jefferies' Thomas Wei says, regarding approval for Auxilium Pharmaceuticals' (AUXL +1.8%) Xiaflex in Peyronie’s disease.
- "We see long-term upside to valuation from Peyronie's sales, which we think could be a larger opportunity than Dupuytren’s contracture," Wei adds, raising his price target on AUXL to $30 from $28.
10:00 AMOn the hour
- Dow +0.18%.
- 10-yr +0.15%.
- Euro +0.13% vs. dollar.
- Crude -0.23% to $97.43.
- Gold +0.57% to $1236.
9:59 AMOSI Systems issues public announcement on TSA order withdrawal
- OSI Systems (OSIS +0.8%) releases a public announcement on the TSA's $60M order cancellation: it believes the termination "results from Rapidscan's use of an upgraded component in the AT-2 detection systems. ... it did not meet the contractual approval requirement of obtaining TSA's approval in advance ... When Rapsican leadership discovered the error, they proactively informed the TSA of the configuration change."
- The X-ray generators are produced by Shanghai Advanced Non-Destructive Testing, which "According to the TSA's own preliminary test results ... shows comparable detection capability and false alarm rates."
- Shares tumbled 9.4% last Friday when the disclosure of the contract cancellation first hit. The TSA intends to issue a revised solicitation for the contract.
9:55 AMCheniere, Bechtel agree to $9.5B in contracts for Corpus Christi project
- Cheniere Energy (LNG +2.6%) agrees to two contracts worth a combined $9.5B with Bechtel to the engineering, procurement and construction of liquefied natural gas trains and facilities in Corpus Christi, Tex.
- Starting next year, Bechtel will build three LNG trains, three LNG storage tanks, and two berths to accommodate vessels with a capacity of up to 267K cubic meters.
- Besides the Corpus Christi project, Cheniere also is developing six LNG trains for the Sabine Pass Liquefaction project in Louisiana; Bechtel is a contractor on that project.
9:53 AMBarnes & Noble rallies as investors take another look
- Shares of Barnes & Noble (BKS +6.7%) take off as a couple of analysts back the company to come out the other side of a SEC probe over accounting in decent shape.
- The somewhat twisted logic is that the company's retail bookstore business may be in even better shape than realized if it's been bearing more Nook-related costs than it should have been.
9:52 AMSL Green in three retail transactions
- SL Green (SLG -0.7%) completes the "retail repositioning" of 747 Madison Avenue and brings it to 100% occupancy after signing a lease with a major European fashion house.
- SL Green is also conveying its 33.3% stake in the retail co-op at 747 Madison, valuing the asset at $160M, and conveying its 50% stake in the retail stores at 21-29 West 34th Street, valuing the entire property at $195M.
- SL Green is also making a $100M structured investment in conjunction with Jeff Sutton's JV at 530-536 Broadway.
- Press release
9:49 AMA roundup of tech ratings changes
- 3D Systems (DDD +1.8%) has been started at Outperform by Pac Crest.
- Mellanox (MLNX +4.2%) has been upgraded to Buy by Maxim. Jefferies started shares at Hold on Friday.
- Chegg (CHGG -3%) has received five bullish ratings, and one neutral rating, on underwriter coverage day.
- Ceragon (CRNT +8.3%) has been started at Strong Buy by Needham.
9:46 AMAudi gets aggressive| Comment!
9:42 AMAlpha Natural to sell its Marcellus JV for $300M, shares +5.9%
- Alpha Natural Resources (ANR +5.9%) jumps higher at the open after agreeing to sell its 50% interest in its shale joint venture to Rice Energy for $300M; ANR and Rice formed the venture in 2010 to develop a portion of ANR’s Marcellus natural gas holdings in Pennsylvania.
- Rice Energy plans an IPO that could value the company at up to $2.5B; of the $300M received by ANR in the Marcellus deal, $200M will be in the form of Rice common stock at the company's IPO price.
- More sales could be ahead, as ANR says it will continue to evaluate all possibilities for creating value from the balance of our Marcellus position" of ~10K acres.
9:38 AMBlackRock preps new bond ETFs
- BlackRock's (BLK) iShares looks to broadly expand its fixed-income offerings, filing to launch six new bond funds,. Two are target-date funds - the iSharesBond 2019 Corporate ex-Financials Term ETF and the iSharesBond 2019 Corporate Term ETF.
- The other four look to capitalize on the idea of rising interest rates. One is a floating-rate Treasury ETF, and the other three are hedged strategies - with two of those set to be actively-managed.
9:36 AMChina Mobile indicates iPhone pre-orders to start; 5S supplies improve
- An ad on China Mobile's (CHL +0.5%) site suggests the world' biggest carrier will begin taking pre-orders for the iPhone 5S (AAPL +0.7%) on Thursday, as well as for 4G phones from Samsung and Sony. A company rep confirms 4G pre-orders will start on Thursday, and that services will launch on Dec. 18 (the day of CHL's 4G partner event).
- CHL had previously said it was still negotiating with Apple regarding iPhone sales. Analysts have estimated a deal could boost Apple's 2014 EPS by $2-$4 (or perhaps ~5-10%), as they balance CHL's enormous customer base and sales reach with its relatively low ARPUs and surging Chinese demand for cheaper/larger smartphones.
- Separately, Gene Munster reports U.S. iPhone 5S supply has finally caught up with demand: Checks at 60 U.S. Apple Stores found all of them were carrying each model of the device. Munster's late November survey had found 90% of SKUs in stock.
9:36 AMBob Evans higher after Sandell get noisy| Comment!
9:32 AMAt the open
- Dow +0.04% to 16026. S&P +0.16% to 1807. Nasdaq +0.25% to 4072.
- Treasurys: 30-year +0.05%. 10-yr +0.06%. 5-yr +0.02%.
- Commodities: Crude +0.22% to $97.86. Gold +0.34% to $1233.2.
- Currencies: Euro +0.12% vs. dollar. Yen +0.27%. Pound -0.16%.
9:32 AMJefferies lifts target on Ariad as Iclusig debate continues
- Jefferies hikes its price target on Ariad Pharmaceuticals (ARIA) to $4 from $2.50. Hold rating reiterated.
- "Although timing of FDA's decision to return Iclusig to market remains uncertain, physicians expect a new label to be broader than just T315iM pts," analyst Eun Yang says.
- See also: Poster presentation (from ASH) on efficacy and safety of Iclusig following failure of nilotinib in CP-CML
- In other ARIA news: The EMA's Pharmacovigilance Risk Assessment Committee is looking into Iclusig's clotting risks
- ARIA -5.9% premarket
9:28 AMAbercrombie & Fitch backs CEO Jeffries, investors not so sure
- Abercrombie & Fitch (ANF) says it has restructured an employee agreement with embattled CEO Michael Jeffries.
- Jeffries appears to have been put on a more rigid performance-based compensation package.
- SEC Form 8-K
- Shares of ANF aren't reflecting investor confidence in the move, down 1.4% in premarket action.
9:25 AMStocks poised to add to Friday's sharp gains
- Stock futures indicate a slightly higher open, with the S&P +0.2% and Nasdaq +0.3%, as investors weigh whether the strong November jobs report may push the Fed to begin tapering its bond-buying program.
- European markets are little changed, as weaker than expected German industrial production offsets strong Chinese trade data; Asian markets are mostly higher.
- Sysco +27% premarket on news it's paying $3.5B and taking on $4.7B in debt to acquire US Foods to form a food distribution company with ~$65B in annual revenue.
- Treasury prices are edging higher, sending the yield on the 10-year note down 2 bps to 2.841%.
- No major economic data are scheduled for release, but Fed bank presidents Lacker, Fisher and Bullard will be giving speeches, potentially offering guidance on Fed policy intentions.
9:22 AMTiffany makes another splash in China| Comment!
9:17 AMP-E steps in as Lloyds unloads assets
- Lloyds (LYG) exits more noncore assets, selling a portfolio of U.K. commercial loans to Cerberus for £90M n cash.
- Late last week, the bank sold a portfolio of poorly-performing Irish mortgages to Apollo Group for £257M. This group of assets generated losses of £33M a year ago. Noncore assets at Lloyds fell by £12.6B in Q3 to about £70B, and the bank hopes to bring the figure down to £66B by year end.
9:16 AMVerizon confirms EdgeCast deal, says Vodafone deal to boost EPS
- Verizon (VZ) confirms it's acquiring CDN owner EdgeCast Networks. No price tag is given, but TechCrunch reported over the weekend Verizon is paying $350M+. The companies hope to close the deal in early 2014. (PR)
- Akamai (AKAM) investors aren't responding well to the news; shares -2.5% premarket. The deal could both strengthen an Akamai rival, and end Verizon's partnership with the CDN market leader.
- Verizon notes EdgeCast has 6K+ customers, and says the business complements that of TV Everywhere uploading/encoding service provider upLynk (acquired earlier this year).
- Separately, at a UBS conference talk (webcast), Verizon predicts its $130B purchase of Vodafone's Verizon Wireless stake (financed using both debt and equity) will boost EPS by 10%.
9:15 AMRosetta Genomics jumps on NY approval for kidney test| 3 Comments
9:12 AMEqual Energy to be acquired by Petroflow Energy for $5.43/share
- Equal Energy (EQU) agrees to be acquired by Petroflow Energy in a deal totaling $230M, or $5.43/share, a 23% premium to the $4.43 closing price on Nov. 18 when EQU said its strategic alternatives process had successfully resulted in exclusive negotiations for a proposed transaction.
- Montclair Energy had been attempting the acquire EQU for months but failed to come up with an acceptable offer.
9:05 AMLufthansa to strive for profits via frequent flyer reorganization| Comment!
9:00 AMon the hour
- S&P +0.15%.
- 10-yr +0.11%.
- Euro +0.12% vs. dollar.
- Crude +0.02% to $97.67.
- Gold +0.1% to $1230.2.
8:59 AMRBC boosted, Scotiabank cut at National Bank
- Following Canadian bank earnings last week, Royal Bank of Canada (RY) is boosted to Buy at National Bank, with price target hiked to $75. The team removes Scotiabank (BNS) from the Buy list, downgrading to Hold.
- Scotiabank also appears to have been downgraded by ... Scotiabank, which now rates the stock a Hold with $68 price target.
8:58 AMData from MDS subset of CC-486 study presented at ASH
- Celgene (CELG) says results (presented at ASH) from an ad hoc analysis of an MDS subset from two Phase 1/2 studies of oral azacitidine show 11 of 23 patients achieved an OR, while four of 23 achieved CR.
- Other results: 30% achieved hematologic improvement, red-blood cell TI achieved in five of 12 patients, platelet TI achieved in two of five patients.
- Four patients discontinued treatment due to AEs. (PR)
8:57 AMPetrobras could raise fuel prices in 2014, CEO says
- Petrobras (PBR) could raise fuel prices next year, CEO Maria das Gracas Foster says, after a new mechanism to bring domestic prices in line with international levels was implemented.
- The inability to push through automatic fuel price adjustments has raised questions about Foster's future at the company, but she says she "definitely had not" considered resigning; she also denies a rift between her and Brazil Finance Minister Guido Mantega, who also serves as PBR's chairman and has said any increases to domestic fuel prices can't stoke inflation.
8:53 AMEssex and BRE in exclusive negotiations
- Essex Property Trust (ESS) confirms its proposal to buy BRE Properties, saying it offered $12.33 in cash and $0.2971 of ESS for each share of BRE - $58.08 based on Friday's close. Chatter last week said the offer was higher than a rejected $60 per share bid made by Land & Buildings earlier this year.
- The two companies have entered exclusive negotiations.
- BRE -2% premarket to $58.15
- Essex press release
- BRE press release
8:47 AMOil Search in talks to join InterOil, Total in Papua New Guinea project
- Oil Search International (OIS) says it is in talks about getting involved in development of the Elk and Antelope oil discoveries in Papua New Guinea, which may contain more than 5T cu. ft. of natural gas.
- Just three days ago, InterOil (IOC) agreed to sell a majority interest in the discoveries to Total (TOT) in a deal worth up to US$3.6B, depending on how much gas is confirmed to be there.
- TOT had hinted at a selldown when confirming the deal with IOC but didn’t name a prospective partner; one way to facilitate OIS’s entry into Elk-Antelope could be an equity swap involving part of its stake in the Taza oil and gas discovery in Iraq's Kurdistan.
- IOC +4.8%, TOT -0.6% premarket.
8:39 AMSources deny HSBC IPO plans
- While HSBC did consider a float of its U.K. operations in wake of the financial crisis, people familiar with the matter deny the bank is currently in the process of prepping an IPO, reports the WSJ.
- Among the issues: HSBC already has plenty of liquidity looking to find a good investment home, so what would be the plan to profitably invest the proceeds of a sale?
- Earlier coverage
8:37 AMChobani pushes back as yogurt war heats up
- Chobani plans to air advertisements during the Super Bowl in a major push by the private Greek yogurt firm.
- The yogurt market has heated up with major food companies such as General Mills (GIS), Danone (DANOY), and Muller-PepsiCo (PEP) all investing significantly in new products and marketing.
- What to watch: Chobani has an early edge in Greek with its strong brand reputation helping it command premium prices, but sees even more growth opportunities with low-calorie products.
8:37 AMCytokinetics updates Phase 2b tirasemtiv program
- Cytokinetics (CYTK) updates BENEFIT-ALS (tirasemtiv in ALS) at a conference in Italy.
- Enrollment is complete with 711 patients.
- Measures have been taken to address the study assignment error (reported earlier this year) while maintaining "the original statistical power of the trial and preserv[ing] the statistical integrity of the primary analysis of efficacy."
- The company says the presentation included "interim, double-blind, aggregate data."
- For more, see here.
- CYTK +3% premarket
8:36 AMTullow Oil comes up dry in Ethiopia well
- Tullow Oil (TUWLF, TUWOY) says it will plug and abandon the Tultule-1 wildcat well in the South Omo block in Ethiopia as a dry hole.
- The well reached a total depth of 2,101 meters and was targeting a reservoir section similar to the sands drilled in the nearby Sabisa-1 well, where oil shows were encountered, but these sands were not penetrated in Tultule-1.
8:29 AMRestaurant stocks in focus after McDonald's under-performs in the U.S.
- McDonald's (MCD) falls in early trading after the restaurant chain sees the impact of price increases and a positive mix in the U.S. dwarfed by weaker traffic trends.
- As one of the first reads on the fast-food industry for November, there could be some debate on if McDonald's lost market share in the U.S. or if the whole sector is being pulled down by cautious consumers.
- On watch: Burger chains BKW, WEN, SONC, JACK could see extra volatility due to the poor performance of McDonald's in the U.S. Starbucks (SBUX), Chipotle (CMG), and Panera Bread (PNRA) will also be watched as their performance over the same November period could trail analysts estimates with Black Friday shopping more restrained this year.
- MCD -0.6% premarket.
8:29 AMPeabody to close Wilkie Creek Mine in Australia| 1 Comment
8:26 AMKaryopharm presents Selinexor data at ASH
- Karyopharm Therapeutics' (KPTI) Selinexor "showed preliminary evidence of anti-cancer activity as a single agent" in most relapsed/refractory NHL and CLL patients from a cohort comprised of those with progressive disease on entry.
- Data summary from the Phase 1 trial in advanced hematologic malignancies: PRs, 27%; SD, 50%; tumor shrinkage in 17 of 18 patients. (PR)
8:22 AM3D printing hype overdone, says Nomura's Kim
- "We think recent market optimism about the 'Third Industrial Revolution' potential of 3D printing is overdone, given uncertain growth potential in the consumer market, limited pragmatic applications, and a lack of mass-production ability," says Nomura's James Kim.
- "We do not expect 3D printing to garner a meaningful share of the global manufacturing industry in the near term, with the total market size of 3D printing, as per Wohlers Associates, estimated to grow to $6B by 2017 (from $2B last year), largely falling short of the conventional manufacturing space ($93B)."
- Nevertheless, big players with consumable businesses like Stratasys (SSYS) and 3D Systems (DDD) and pure raw materials supplies could be long-term beneficiaries of 3D printing development, says Kim.
- Also mentioned is ExOne (XONE) for its binder jetting technology currently employed by Ford to create part prototypes, and Organovo (ONVO) for 3D bioprinting technology to create functional human tissue.
- On the 3D printing software side, Dassault (DASTY), Autodesk (ADSK), ANSYS (ANSS), and PTC (PMTC) get a mention, while Proto Labs (PRLB) is noted in services.
8:19 AMNoble Energy eyes new appraisal for natural gas off Cyprus
- Noble Energy (NBL) says it could launch a fresh appraisal of natural gas resources off Cyprus next year and look for new hydrocarbon sources in the same area.
- An appraisal drilling to verify the 2011 find has yielded on average 4.1T cu. ft. of gas, Noble's Israel partners Delek Drilling (DKDRF) and Avner Oil (AVOGF) said last week, lower than the 5T cu. ft. announced in October soon after the conclusion of the appraisal on the well.
- Based on the assessment of data, NBL could by April 2014 decide on where a fresh exploratory drill will take place.
8:17 AMJapan and the U.S. drag down results for McDonald's in November| 1 Comment
8:13 AMHerbalife, Moelis mount offensive in Ackman battle
- "All's fair in love and activism," a securities law professor from Columbia quips, speaking to Bloomberg about an ostensibly innovative strategy being adopted by Herbalife (HLF) in the fight against Bill Ackman.
- Apparently, investment bank Moelis & Co. (which works with the company) arranged a meeting between hedge fund investment adviser Cliffwater LLC and HLF management in an effort to convince investors to withdraw their money from Pershing Square.
- Moelis has also reportedly approached New Jersey's pension fund which has not met with HLF as of yet.
8:11 AMSysco lands US Foods in large foodservice merger
- Sysco (SYY) buys U.S. Foods in a deal that has a total enterprise value of close to $8.2B inclusive of the assumption of debt.
- After the merger closes, US Foods shareholders will hold approximately 87M shares of Sysco.
- The new combined company expects to realize annual synergies of $600M.
- The deal is slated to close in Q3 of 2014.
- SYY +10.2% premarket.
8:10 AMBig drop in delinquent inventory at MGIC| Comment!
8:04 AMAmerican Airlines Group to debut today
- The largest airline in the U.S. will begin trading later today as American Airlines Group (AAL) debuts on the Nasdaq.
- Execs tell The Dallas Morning News the combined company will infuse the corporate culture of both carriers and highlight the significant synergies that can be realized.
- Analyst take: Deutsche Bank is in early with a Buy rating and $35 price target on what it sees as an "attractive" investment opportunity.
8:03 AMPreclinical studies for Ligand's G-CSFR agonist presented at ASH
- A poster presentation at ASH shows Ligand Pharmaceuticals' (LGND) G-CSF receptor agonist LGD-455 "significantly increases peripheral blood neutrophils, inhibits tumor cell growth and increases apoptosis."
- The company evaluated the treatment's ability to stimulate white blood cell counts in cynomolgus monkeys. (PR)
7:57 AMGilead reports data for investigational blood cancer drugs
- Fresh off FDA approval for the game-changing HCV treatment sofosbuvir, Gilead Sciences (GILD) reports (at ASH) interim results from a Phase 2 study of the Syk inhibitor GS-9973 in relapsed or refractory hematologic malignancies.
- Results: 97% of CLL patients receiving at least eight weeks of therapy saw lymph node reduction, 20% saw a 50% or greater reduction in their tumors, and, regarding safety, in a population of 78 CLL and NHL patients receiving at least four weeks of therapy, 64% continued treatment. (PR)
- Also at ASH, GILD reported results from a Phase 2 study of the PI3K inhibitor idelalisib in refractory iNHL.
- OR rate: 57%, medium duration 12.5 months; CRs, 6%; 63% had a partial response.
- Median PFS: 11 months; median OS, 20.3 months. (PR)
- GILD +2.7% premarket
7:50 AMDon't count out TV advertising
- ZenithOptimedia forecasts advertising will grow 5.3% in 2014 to $560B with a solid pace of growth in the U.S. and China supporting the industry.
- TV advertising (CBS, CMCSA, FOXA, DIS, AMCX, DISCA, SNI) is in decline as desktop Internet and mobile continue to draw advertising buyers, but perhaps not as rapidly as some have previously predicted. TV's share of advertising is expected to go from 40.2% of advertising this year to 39.3% in 2016, according to the research firm.
7:48 AMQEP Resources acquires Permain Basin properties for ~$950M
- QEP Resources (QEP) agrees to acquire oil and gas properties in the Permian Basin from an unnamed seller for ~$950M.
- Current net production of the acquired properties is ~6,700 boe/day (68% crude oil) with total estimated net recoverable resources of up to 300M boe.
- QEP plans to fund the purchases with proceeds from its revolving credit facility and cash on hand, and expects to sell various non-core E&P assets during H1 2014.
7:47 AMCME to launch Edmonton Sweet contract| Comment!
7:40 AMFDA to review failed Acura study; shares soar
- Acura's (ACUR) shares surge 18% after the FDA agrees to review the results of the failed Phase II trial of a painkiller that was made with the company's Aversion technology, which is designed to deter drug abuse.
- The results of the study showed that Acura's tablet did not significantly lower likability among abusers.
- The FDA has now agreed to provide a definitive response regarding the suitability of the study that will be used to consider authorization of Acura's product. The agency has requested extra data, although the company doesn't believe it will need to carry out additional studies. (PR)
7:37 AMCoverage underway for Brixmor
- Coverage gets underway at a number of shops for Blackstone's (BX) recently gone-public shopping center owner Brixmor Property Group (BRX).
- Initiating with Buys are KeyCorp, Wells Fargo, BAML, and RBC Capital. Citigroup starts with a Hold.
- The stock is about flat since its mid-October IPO. Blackstone still holds a 73% stake.
7:32 AMNII Holdings announces headcount cuts
- In connection with the recently-announced Project Accelerate initiative, NII Holdings (NIHD) plans reductions of more than 25% of its HQ staff and the elimination of more than 1.4K market operations positions.
- Cash costs related to the severance will be $25M-$35M, but that includes $8.6M in restructuring charges that were already expensed in Q3. Most of the rest of the cost should be taken in Q4. Annualized cost savings are expected to be $50M-$55M.
- Separately, the company expects a higher level of prepaid subscriber deactivations in Mexico after modifying its deactivation policy for inactive prepaid subscribers. THe net subscriber loss in Mexico should run to 400K in Q4.
- Press release
7:24 AMUnited Therapeutics handed subpoena for three treatments
- United Therapeutics (UTHR) has received a subpoena from the Department of Health & Human Services requesting documents related to the company's marketing of three treatments for pulmonary arterial hypertension (PAH).
- The drugs involved, which are United Therapeutics' Remodulin injection, its Tyvaso inhalation solution and its Adcirca tablets, are the firm's only therapies that have received FDA approval.
- The subpoena follows an investigation by the DOJ. (PR)
7:11 AMTerex to offload truck unit to Volvo for $160M
- Terex (TEX) has agreed to sell its truck business, which sells off-highway rigid and articulated haul trucks, to Volvo Construction Equipment for $160M.
- "Trucks no longer fit within our changing portfolio of lifting and material handling businesses," said Terex CEO Ron DeFeo. The deal reflects the company's strategy to "focus on those businesses that provide the greatest returns for our shareholders."
- Terex plans to use the proceeds from the deal to help finance a stock buyback program and dividend payouts. (PR)
7:10 AMAdvantage Rent A Car lands in bankruptcy auction
- The Advantage Rent A Car brand goes for sale in bankruptcy court today after it said a lease agreement with former parent Hertz (HTZ) put it at a competitive disadvantage.
- The FTC forced Hertz to sell off Advantage as a condition for approval of a merger with Dollar Thrifty.
- A Canadian P-E firm and German car-rental company Sixt SE are expected to be bidders at the auction.
7:01 AMJ&J drug for rare cancer performs well in Phase II study
- Johnson & Johnson's (JNJ) Siltuximab drug reduced tumors in a Phase II trial of 79 patients with Castleman disease, a very rare condition that is characterized by enlarged lymph nodes and for which there are no approved therapies.
- A third of the subjects who received siltuximab responded vs none who were given a placebo. A quarter had all symptoms of the disease completely resolved for a median period of 1.3 years.
7:00 AMOn the hour
- S&P +0.02%.
- 10-yr +0.1%.
- Euro +0.09% vs. dollar.
- Crude -0.1% to $97.56.
- Gold -0.16% to $1227.
6:47 AMWhiteWave to acquire Earthbound Farm for $600M in cash
- WhiteWave Foods (WWAV) is acquiring Earthbound Farm - the largest organic produce brand in North America - for $600M in cash
- The acquisition is expected to be accretive to EPS (+$0.07 before transaction costs) in the first year after close. Subject to regulatory approvals etc., it is expected to be completed during Q1 2014. WhiteWave plans to operate Earthbound Farm as a separate business unit.
- Earthbound's anticipated 2013 net sales are over $500M.
- WhiteWave will fund the acquisition with borrowings under its existing credit facilities, and intends to increase its credit facilities by $500M to fund further growth.
- Japan +2.29%.
- Hong Kong +0.29%.
- China +0.05%.
- India +1.57%.
- London -0.22%.
- Paris -0.18%.
- Frankfurt +0.04%.
5:18 AMAsian stocks higher, Europe mixed
- Asian shares rise following strong U.S. jobs data last week, as well as better-than-expected export data from China and inflation that remains relatively tame.
- U.S. stock futures are also higher, albeit not by much, while European shares are mixed.
- Japan +2.3%, Hong Kong +0.3%, Shanghai +0.05%, India +1.4%.
- EU Stoxx 50 -0.05%, London -0.1%, Paris -0.2%, Frankfurt +0.3%, Milan +0.4%, Madrid +0.5%.
- U.S. stock futures: Dow flat. S&P +0.1%. Nasdaq +0.15%
4:56 AMTech giants call on government to limit spying campaign
- Google (GOOG) and Microsoft (MSFT) are among eight technology giants that have started a campaign to limit government online surveillance. The other companies are Apple (AAPL), Yahoo (YHOO), Facebook (FB), Twitter (TWTR), AOL (AOL) and LinkedIn (LNKD).
- The move appears to represent an attempt by the companies to prevent a loss of business because of Edward Snowden's revelations about the scope of the National Security Agency's spying campaign. Forrester estimates that the disclosures could cost the U.S. cloud computing industry $180B by 2016.
- While the firms want limits on governmental authority to collect user information, as well as increased oversight, given the tech industry's own data practices, some might say that there's more than a whiff of the pots calling the kettles black.
4:34 AMActivist investor to turn heat up on Bob Evans
- Sandell Asset Management reportedly intends to announce today that it will begin a consent solicitation at Bob Evans (BOBE), which will enable shareholders to vote on changes at the restauranteur outside an annual meeting.
- Sandell will also reveal that it has heard that Bob Evan has rebuffed buyout interest from at least one private-equity firm.
- The fund's expected move will come after Bob Evans, in which Sandell owns 6.5%, rejected proposals that the latter has made. These include splitting up the company's restaurant and packaged-food businesses, borrowing against its real-estate holdings, and even selling those assets.
- Sandell reckons Bob Evans could be worth above $80 a share, well above Friday's close of $51.31.
4:15 AMKKR, Bain bid for $1.6B Tyco security unit
- Tyco International (TYC) has reportedly attracted initial bids from KKR (KKR) and Bain Capital for ADT Caps, its South Korean security systems unit, which is valued at around $1.6B.
- Other suitors for ADT Caps include CVC Capital Partners, Hong Kong-based Affinity Equity Partners and South Korea's MBK Partners.
- The $1.6B valuation is based on an EBITDA multiple of 10, above the 8X that other deals in the sector attracted.
4:05 AMEADS to axe up to 6,000 jobs
- EADS (EADSF) reportedly plans to reduce headcount by 5,000-6,000, or 5% of the total, and sell its Parisian headquarters as part of a restructuring that also includes renaming the company Airbus.
- However, EADS doesn't intend to lay staff off; rather, it will use voluntary redundancy and transfers to lower the job count, and it will refrain from replacing some of those who leave.
- The overhaul will allow EADS to save an estimated €300-500M from 2014-2016. It will mainly affect the company's defense and space operations, which have suffered from a fall in bookings due to defense cuts by governments.
- EADS is expected to disclose the details of the restructure at a shareholders meeting on Wednesday.
3:58 AMIberdrola gets a €66M contract with Pemex
- Iberdrola (IBDSF, IBDRY) has been awarded a €66M contract in Mexico to build an interconnection system that will join Salamanca’s cogeneration plant to Ingeniero Antonio M. Amor refinery. It is the first agreement between Iberdrola and Pemex.
- The project will be developed during the course of 18 months on a turnkey basis method, and it will include building a concrete rack of over 2.5 kilometers long which will carry high and medium pressure steam generated by Salamanca’s cogeneration plant to the aforementioned refinery, both located in Guanajuato state, central Mexico.
- The initiative also involves implementing a large plant for the treatment of condensation water, a degasification system, several pumping mechanisms and other auxiliary infrastructures.
- Source: press release
3:47 AMGM to slash S Korea output, end Australian production
- GM (GM) is reportedly planning to reduce production in South Korea by up to 20% by 2016 and close its two factories in Australia, where the high dollar has hurt the carmarker's competitiveness. In Korea, the company has had to deal with high wages and labor unrest.
- The cutbacks would add to the shutting of a factory in Germany and GM's decision to significantly scale back Chevrolet sales in Europe.
- The ending of Australian manufacturing would follow similar moves by Ford and Mitsubishi, and would come after the new government indicated it would phase out support for the auto industry.
- "They (GM) are starting to act like a global organization and are breaking up the fiefdoms," says Morgan Stanley auto analyst Adam Jonas. "The financial controls have been changed and there is more accountability to Detroit."
3:32 AMHSBC mulls listing U.K. operations
- HSBC (HSBC) has reportedly asked investors if they would support the bank selling up to 30% of its U.K. unit in an IPO that could value the subsidiary at an estimated £20B.
- A listing of the business would help HSBC comply with the terms of the incoming Vickers rules, which require U.K. banks to ring-fence their domestic retail banking operations. Increasing capital requirements may also make the flotation logical, while it could unlock shareholder value as well, given investor optimism towards the U.K. and its banking sector.
- The news comes as other banks prepare to list subsidiaries in the U.K., including Lloyds, RBS and Santander.
- HSBC's shares are +0.4% in London.
3:14 AMGerman trade surplus falls
- Germany's trade surplus dropped to a seasonally adjusted €16.8B in October from €18.7B in September and missed consensus of €18B.
- Exports rose 0.2% on month, sharply down from +1.6% in September but above forecasts of +0.15%.
- Unadjusted exports increased 0.6% to a record €99.1B, a figure that may add strength to those in Europe who have criticized Germany for relying too much on foreign trade.
- Adjusted imports +2.9% vs -1.9% and +1.6%.
- Current account surplus €19.1B vs €20B. (PR)
- The DAX is +0.4% and the euro is flat at $1.3708.
2:58 AMChina inflation edges closer to 2% handle
- China’s CPI will likely break below 3% in December and fluctuate towards mid-2% in Q1, Reorient analyst Steve Wang notes. CPI eased to 3% in Nov. as food inflation slid to 5.9% from 6.5%. "Unless food prices, especially meat and vegetables, surge beyond reason during the coming holiday season... China faces minimal inflation risk in the months ahead."
- "Non-food CPI was again a non-event at 1.6%, but the strong housing market is beginning to sting, with rental inflation edging higher to 4.7%, the highest in nearly a year and half," suggesting policymakers will likely maintain existing curbs on property markets in order to stem the spillover effect of high housing prices on inflation.
- ETFs: FXI, PGJ, GXC, FXP, HAO, CYB, YINN, CNY, TAO, CHIQ, CHIX, MCHI, YANG, PEK, CQQQ, XPP, QQQC, DSUM, YAO, ASHR, CHXX, CHII, FXCH, CHXF, ECNS, CHIE, YXI, CHIM, KWEB, KFYP, TCHI, FCA, CHLC, CHNA
2:55 AMJapanese Q3 GDP growth weaker than first thought
- Japan's Q3 GDP has been revised down to +0.3% on quarter from a previous estimate of +0.5% and +0.5% in Q2.
- On year, GDP +1.1% vs +1.9% and +1.9%. (PR)
- Bank lending +2.2% in November vs +2% in October. (PR)
- Current account deficit ¥127.9B ($1.24B) in October vs surplus of ¥587.3B in September and consensus of ¥153B. (PR)
- "A downward revision in capital expenditure was what weighed on the revised figures," says RBS Securities Japan chief economist Junko Nishioka. However, the figures mark the bottom of the capex cycle, Nishioka says. "I expect capital spending to return to a recovery trend in the October-December quarter," she predicts.
- The Nikkei is +2.3% and the USD-JPY is +0.2% at ¥103.05, with the stock index and the dollar boosted by the strong U.S. jobs report on Friday.
- ETFs: DXJ, EWJ, FXY, YCS, JGBS, JGBD, DFJ, JYN, NKY, DBJP, EZJ, EWV, YCL, SCJ, JSC, JPP, JGBL, ITF, DXJS, JGBT, JPNL, JPNS, FJP
12:00 AMMonday's economic calendar
- No events scheduled.