US equities finished higher in fairly uneventful trading on Thursday. There did not seem to be any meaningful directional drivers in play. Some better-than-expected manufacturing data out of China was cited as modestly supportive for global recovery sentiment, which has been under some recent scrutiny. However, the recent string of negative surprises continued on the US economic calendar. Another very busy day on the corporate calendar drove most of the notable single stock price action. A few reports also provided some direction for other names in the group. The cyclicals largely outperformed today, though the banking group remained a laggard with some focus on the legal/regulatory overhang. Defensive sectors fared the worst, but the underperformance seemed to be more of a function of earnings takeaways than a shift in risk appetite.
Asian bourses failed to extend the momentum seen in the US, as concerns of a liquidity squeeze in China continued to weigh on markets.
Europe to open lower following Asia and ahead of important economic data.
Today, we’ll watch the German IFO, the UK GDP and US durable goods orders. It feels like tapering is pushed towards la Saint Glinglin (sorry) and overnight Carney announced easier routes for banks to be able to access liquidity.
FILMO. GRAVITY… Houston, I have a bad feeling about this mission.
EXPO. Frida Kahlo. Musée de l’Orangerie (Tuileries). Well well well… Personnally, I’m not a fan.
EXPO. Planète Marker. Centre Pompidou (Movie, documentary on Chris Marker).
RESTO. Grillé. 15 rue St Augustin, Paris 2e. This is my colleague’s favourite fast food. No wonder I’m getting fat.
RESTO. Paris 50 best restaurants by TimeOut. http://www.timeout.com/paris/en/best-restaurants-paris
• Japan Sept. Core Consumer Prices Rise 0.7% Y/Y vs Est 0.7% Rise
• German Ifo Business Confidence Seen Improving for Sixth Month
• Japan Inflation Gauge Ends 4 Years of Declines as Abenomics Boosts Economy
• U.K. GDP Growth Seen Accelerating to Strongest in Three Years
• EU Seeks Spy-Service Rules With U.S. After Merkel Hacking Charge
• Carney Says BOE Overhaul Offers Broader Access to Cheaper Funds
Amazon Reports Jump in Sales Ahead of Holiday Shopping Season
Areva 9-Mo. Sales Up 4.7% Y/y; Forecast Affirmed
Axa Nine-Month Sales Rose 2% on Life-and-Savings Premiums
BBVA 3Q Net Eu195 Mln; Analyst Est. Eu614.5 Mln
Credit Suisse to Citigroup Said to Face U.S. Mortgage-Bond Probe
Crédit Agricole downgraded by Exane.
G4S Replaces U.K. CEO Richard Morris, FT Reports
Kering Shares May Fall After Third-Quarter Sales Miss Estimates
Renault Sales Miss Estimates as Emerging-Market Currencies Drop
Saint-Gobain 3Q Rev Eu10.8b Vs Eu10.95b Y/Y
Saint-Gobain Sales Drop on Euro’s Gains Against Other Currencies
Samsung Posts Record Profit as Smartphones Team With Chips
Thales 9-Mo. Sales Beat Ests.; Confirms Outlook
Vinci Says Tax Surcharge May Hurt Profit as Sales Beat Estimates
Zynga Posts Smaller Quarterly Loss, Names Downie Operating Chief
Atos 3Q Rev. Misses Ests; Confirms 2013 Outlook 7:13
• 3Q rev. EU2.09b; est. EU2.12b (6 analysts)
• Sees strong backlog of EU15.1b; book to bill ration 85%
• Sees 4Q book to bill ratio of 110% to 130%
• 3Q order entry EU1.78b
• Free cash flow EU21m, net cash EU353m at end of Sept.
• Sees 2013 rev. nearly stable to 2012 level
• Reiterates 2013 operating margin of ~7.5% vs 6.6%
• Reiterates free cash flow of >EU350m
• Reiterates 2013 adj. non-diluted EPS to rise 50% vs 2011
• NOTE: 19 analyst ratings 74% buy, 21% hold, 5% sell; avg. PT EU64.95
• Call 8am CET, international +44 207 1620 177, domestic: +33 1 70 99 32 08, pin for both 937498
BASF 3Q Ebit Ex-Items EU1.69b, Est. EU1.62b; Confirms 2013 Goals 7:07
BASF 3Q Ebit ex-items EU1.69b, analyst est. EU1.62b.
• Rev. EU17.7b, est. EU17.6b
• Says confirms 2013 outlook: sees increase in sales, Ebit ex-items
• Sees environment remaining challenging
Thales 9-Mo. Sales Beat Ests.; Confirms Outlook 10/24 17:59
Thales 9-mo. sales EU9.49b vs est. EU9.27b, 3Q sales rise 4% to EU3b.
• 9-mo. order intake EU8.18b, down 10%, organically down 6%
• 9-mo. sales breakdown by division vs Deutsche Bank ests.
• Defense & Security EU4.65b vs est. EU4.62b
• DCNS EU823m vs est. EU758m
• Aerospace EU3b vs est. EU2.91b
• Transport EU900m vs est. EU896m
Kering 3Q Overall Rev., Gucci Comparable Sales Miss Ests.
Kering 3Q total rev. EU2.52b, est. EU2.55b.
• Total luxury 3Q comparable sales growth 5.6%, est. 8%
• Gucci 3Q comp sales growth up 0.6%, est. 2.1%
• Bottega Veneta 3Q comp sales growth up 15.8%, est. 17%
• Saint Laurent 3Q comp sales up 12%, est. 16%
• Other luxury brands 3Q comp sales up 9.4%, est. 14%
• Puma 3Q rev. EU824.8m, est. EU821m
• Puma 3Q comparable sales down 0.8%, est. down 2.3%
• Has pursued process of disposal of La Redoute, in talks with several potential buyers
• Remains confident in performances for overall yr
• Related preview here
• Call 6pm CET +44 (0)20 3427 1911, pw 9572530
China will introduce a new benchmark lending rate, one set by market participants in a reform that the central bank says is an important step towards liberalising interest rates. Under China’s “loan prime rate” (LPR), nine of the country’s biggest banks will every day report the lending rates they are offering to their best clients (presumably, major state-owned enterprises). (FastFT)
Twitter struck a cautious stance in setting a price range of between $17 and $20 a share for its IPO next month — it will be valued at up to $13.9bn on a diluted basis, including restricted stock units and options. This is less than the $15bn which had been widely expected. (Financial Times) (WSJ)
Aberdeen Asset Management is close to buying Scottish Widows Investment Partnership for £500m from Lloyds. Macquarie Group, Australia’s largest investment bank, is apparently also in the running to buy SWIP, which has £145.9bn of assets under management. (Financial Times)
STMicroelectronics (GS, Schafer) Down to Neutral: Outlook challenges our cross-cycle change thesis
We downgrade STM to Neutral, from Buy. We revised our revenue and gross margin expectations downward, which puts into question our prior thesis of improving cross-cycle returns.
Endesa SA (GS, Barasi) Sell: Valuation stretched relative to history, downgrade to Sell
Endesa trades at a 4% premium to the utilities sector, at odds with its historical discount of 15%. We see 8% downside to consensus EPS in 2014E and expect the confirmation of regulatory cuts in Spain to act as a short-term catalyst. Down to Sell.
ABB CUT TO NEUTRAL VS BUY AT UBS
ABERDEEN ASSET RAISED TO BUY VS NEUTRAL AT UBS
ADECCO CUT TO SELL VS NEUTRAL AT UBS
AUTOGRILL CUT TO UNDERPERFORM VS NEUTRAL AT CREDIT SUISSE
BRITISH LAND RAISED TO BUY VS NEUTRAL AT UBS
CREDIT SUISSE CUT TO NEUTRAL VS OVERWEIGHT AT JPMORGAN
DIALOG SEMICONDUCTOR RATED NEW OUTPERFORM AT RBC; PT EU18
ENDESA CUT TO SELL VS NEUTRAL AT GOLDMAN
GEORG FISCHER CUT TO NEUTRAL VS OUTPERFORM AT CREDIT SUISSE
RANDSTAD CUT TO SELL VS NEUTRAL AT UBS
RENEWABLE ENERGY CORP RAISED TO NEUTRAL AT MACQUARIE
SARAS CUT TO NEUTRAL VS BUY AT NOMURA
SPIRIT PUB CO RAISED TO NEUTRAL VS REDUCE AT NOMURA
STMICRO CUT TO NEUTRAL VS BUY AT GOLDMAN
SWEDISH MATCH RATED NEW UNDERWEIGHT AT BARCLAYS; PT SEK190
TELENET PT RAISED TO EU44 AT ING; KEPT AT BUY
WACKER CHEMIE CUT TO NEUTRAL AT MACQUARIE
Nikkei 225 down -347.61 (-2.40%) at 14,139
Topix down -22.41 (-1.86%) at 1,181
Hang Seng down -121.89 (-0.53%) at 22,714
S&P 500 up +5.69 (+0.33%) at 1,752
DJIA up +95.88 (+0.62%) at 15,509
Nasdaq up +21.89 (+0.56%) at 3,929
Eurofirst 300 up +5.90 (+0.46%) at 1,286
FTSE100 up +38.70 (+0.58%) at 6,713
CAC 40 up +15.03 (+0.35%) at 4,276
Dax up +60.77 (+0.68%) at 8,981
€/$ 1.38 (1.38)
$/¥ 97.21 (97.27)
£/$ 1.62 (1.62)
Brent Crude (ICE) up +0.21 at 107.20
Light Crude (Nymex) up +0.23 at 97.34
100 Oz Gold (Comex) unchanged 0.00 at 1,350
Copper (Comex) unchanged 0.00 at 3.26
10-year government bond yields (%)
CDS (closing levels)
Markit iTraxx SovX Western Europe -0.14bps at 70.64bp
Markit iTraxx Europe +0.27bps at 86.5bp
Markit iTraxx Xover +4.02bps at 348.78bp
Sources: FT, Bloomberg, Markit