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Todd Hathaway
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Global Equity Trader for Divine Capital Markets - Trading commentary, ideas
  • Divine Capital European Mid-Day

    Europe is near the highs, +80bps, ahead of Yellen's testimony (text at 8:30, testimony at 10am) - Strength is in Machinery & Autos, while there is some weakness in Nestle, Alcatel (Dg at MS), Barclays, and Insurers (UK Flooding). S&P's are +40bps, Commodities better - Oil +30bps, Gold +80bps (1284), Nat Gas +1% (large discovery in China), FX fairly calm (with the exception of KZT!!) and the 10yr is at 2.69%. We're basically set up for a Dove Parade in Congress today - anything that casts doubt on Yellen's perceived stance, or shows monetary prudence, may spark some profit taking. JOLTs at 10am, $30bln 3yr auction results at 1pm, and Fed Speak from Plosser (9am) and Lacker (8pm). Figs due from Sprint, Mosaic, Zoetis, ICE this am, Davita & Xilinx after the close.

    Worth Noting:

    • Kazakhstan - the KZT (Kazak Tenge) devalued by 19% today, now trading in a range of 182-188 - pressure came from outflows into Developed Markets, and a 5.6% YTD depreciation in the RUB (part of their reserves). KAZ LN is probably the widest held equity exposure, which is up 25% ($ revs, KZT costs) - but some of the local GDRs are getting hit - Kcell (KCEL LI, -9%), Halyk Savings Bank (HSBK LI, -9%), Kazkommertsbank (KKB LI), etc - I don't see much spill-over at the moment, but I didn't see this coming either…
    • Solar: Centrotherm (CTNK GR, +20%) saw its order book double in Dec-Jan - says "Customers are ordering wide-ranging equipment packages for expanding their existing production capacities or for setting up new production lines, as the high demand for solar cells and modules, particularly from Japan and the USA, has led to full utilization of their production capacities over the past few months." - and as I type this, Canadian Solar (CSIQ US) boosts guidance..
    • Strong Euro - Sparking some cross boarder M&A? Yesterday Continental (CON GY) bid $1.9bln for Veyance from the Carlyle group. Conti had been a vocal critic of the Strong EUR - but they're using it to their advantage. I was guessing their target would be Fenner (FENR LN) or Semperit (SEM AV) - but Continental went for the USD based asset.
    • Navigation: Yesterday, Alibaba (1688 HK) bid for AutoNavi (AMAP US) to boost its online services ahead of its IPO. Note Bidu and Tencent also have navigation services - TomTom (TOM2 NA, -13%) today just announced results, but also a real-time traffic service in China, Taiwan, & Singapore. While most people think Google has replaced the need for PND, there are parts of the world where Google is not welcome - TomTom might warrant another look…
    • Steel: A fourth steel Co this week is calling for the bottom.. Voestalpine (VOE AV, flattish) missed, but says "Based on the recently placed pipeline projects and the recovery in most other industrial segments in the beginning of 2014, the turnaround of the earnings trend seems recognizable in the final quarter 2013/14." - Arcelor, SSAB, and Aperam made similar comments last Friday.
    • Video Gaming: Ubisoft (UBI FP, +6%) posted figs last night - Digital Sales were up 12% YoY (tough comps too, due to release of Far Cry 3 last yr) - makes me wonder about CD Drive obsolescence and Game Stop's (GME US) business model..

    Ahead for Wednesday: MSCI Quarterly Review Announcement, Figs due from Soc Gen, ING, Storebrand, Sampo, Total, Norsk Hydro, Tullow Oil, Heineken, Reckitt Benckiser, TUI, Faurecia, Prada, Indesit, Boliden, African Barrick, Yara, Smurfit Kappa, Edenred, REC Silicon, Telenor, Corio, Man United, Cemex Latam Hlds, Deere, Cisco, Nvidia, AMAT, NetApp, Lorillard, Alpha Natural Resources, Mondelez, SunPower, MetLife, Progressive, ect.

    Links / Press Releases:

    L'Oreal, Nestle (1), Nestle (2), Barclays, Thomas Cook, Glencore, Bellway, Babcock Int'l, Michelin, Nexans, Ubisoft, Metro, Bilfinger, Centrotherm, Voestalpine, Millicom, Fred. Olsen Energy, Hexagon, Actelion, TomTom

    Regards, Todd

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Additional disclosure: divinecapital.wordpress.com/disclaimer/

    Tags: Solar, EM, Gaming, Steel
    Feb 11 11:41 AM | Link | Comment!
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