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September 2, 2014 9:57 AM EDT
Updated: Sep 2, 2014 6:53 AM EDT  

Cantor Morning News®

 

Today's Stories From Cantor Fitzgerald

 Dogukan Aksoy  (212) 610-2348

        Nick Cernero (212) 610-3629

       Tuesday, September  2nd  2014

TOP NEWS

o   US STOCK FUTURES: S&P futures +3.1 vs fair value, Nasdaq +11.7 vs fv, Dow +31 vs fv

o   US futures are trading around the same levels as reported earlier and remain above fair value following widespread gains in Europe and a positive session in Asia. Amidst a light earnings calendar, Conn's will post its results before the open. Macro-economic data for today include the Aug PMI Manufacturing out at 9:45 ET, followed by Aug ISM Manufacturing Index and Jul Construction Spending at 10:00 ET.

o  FX: The Euro continued to remain under pressure after yesterday's August manufacturing PMI surveys throughout Europe showed weakness. EUR/USD not far from fresh 12-month lows as the NY morning approached and was holding above the 1.31 level. USD/JPY hit a 7-month high just under the 105 handle after reports that Japan PM Abe to offer LDP dep policy chief Yasuhisa Shiozaki the Health Minister cabinet post. GBP currency was softer after a YouGov poll suggested that support for Scottish independence had risen eight points over the past month.  

o  GOLD: Gold fell to the lowest in a week as a stronger dollar curbed demand for a protection of wealth. Paaldium retreated from a 13-year high.

o   TREASURIES: Treasuries are lower, following the biggest rally in August in seven months, before reports this week that economists predict will show US manufacturing and employment expanded in August.

o  European Markets: FTSE 100 +0.14%, DAX +0.90%, CAC40 +0.45%

o   European markets opened broadly higher following strength in Japanese markets on the back of news that PM Abe is likely to appoint LDP dep policy chief Yasuhisa Shiozaki as Health Minister. Shiozaki has been outspoken on GPIF pension reforms. Markets rallied further into the morning on hopes of an announcement of stimulus by the ECB at its meeting later this week. Peripheral debt spreads narrowed slightly vs bunds as yields generally ticked higher across the region. The geo-political situation remains an uncomfortable backdrop to financial markets, though with little significant macro or corporate newsflow, market participants continue to speculate on ECB action ahead of its 4-Sep meeting. Italy is currently +1.2% higher, Greece +0.9%, Spain +0.6% and Portugal +0.3%.

o   Asian Markets:  Nikkei +1.24%, Hang Seng (0.01%), Shanghai Composite +1.37%

o   The Nikkei closed up +1.2% Tuesday, but ended off session highs. Speculation surrounding GPIF buying was again cited for the buying, with a report that Abe will appoint a close ally to head the ministry in charge of the fund being cited as a catalyst for the speculation. Data was also cited as providing some extra support. The yen was also broadly in focus today as the $-¥ seemed to break out of the 104 upper limit that its been trapped below for most of the year, and approached the 105 level. However some caution as volume remained relatively light with the US out for the Labor Day public holiday. Both the Nikkei and the $-¥ hit their highest levels since January. Chinese stocks rose sharply on Tuesday, with the Shanghai Composite Index adding 1.37% to close at a 15-month high. Bloomberg noted that defense and tech companies led the way on speculation the government will increase support for strategic industries after manufacturing slowed last month.

o   BIG STORIES TODAY

o   France's Hollande and ECB's Draghi agree on threat of deflation: Reuters cited an official at the French president's office, who said that French President Hollande and ECB President agreed on Monday that deflation and weak growth were threatening the European Union's (EU) economy.-Reuters

o   ECB's Draghi may be following in Japan PM Abe's footsteps: CNBC reported that ECB President Draghi may be following in the footsteps of Japan PM Abe, with a three-pronged plan to rescue the Eurozone economy. It noted that a number of market commentators have highlighted Draghi's recent emphasis on structural reforms, a push to boost demand and the third element is public bond purchases and credit easing.-CNBC

o   Germany's booming budget surplus puts pressure on it to spend: Reuters discussed Germany's budget surplus, which reached the largest levels since reunification in the first half of 2014. It said that the number underscores its financial strength at a time when there is growing pressure for it to spend more in order to bolster growth in Europe.-Reuters

o   EU's new foreign policy chief Mogherini says EU to finalise Russian sanctions by Wednesday: The new foreign policy chief Federica Mogherini confirmed that the EU will take the Russian sanctions decision by Friday.-Wires

o   Ukraine signals strategic shift to de facto war with Moscow: The FT noted that Ukraine's defence minister Valeriy Heletey announced an important strategic shift. He said that the country's operation to liberate eastern Ukraine from militants is now over and Ukraine will now focus on defending itself against Russia.-FT

o   Aso reiterates economy remains on recovery trend: Reuters cited statements from Finance Minister Taro Aso who reiterated that Japan's economy remains on the recovery trend despite some doubt brought on by recent economic data. Aso added that following the cabinet reshuffle, expected tomorrow, the government must aim to continue with achieving fiscal consolidation.-Reuters

o   Yamamoto suggests Japan's sales tax increase could be pushed back to April 2017: In an interview with LDP member Kozo Yamamoto, WSJ notes that Yamamoto has said that he has "begun to think we should delay another tax increase." Yamamoto highlighted a slow pickup in the economy following April's sales tax increase, and said that "it's best not to make anymore headwinds."

o   Data weakness may cause BoJ to doubt its optimistic outlook: WSJ cited sources who said that recent weak industrial production figures have been a cause for concern among BoJ officials. Recall that industrial production was +0.2% m/m in July after falling (3.4%) in June.-WSJ

o   Slowdown in August China PMIs warrants more targeted monetary easing: In a front-page editorial following yesterday's August China PMI numbers, which were in line with expectations but indicated a slowdown in manufacturing growth from July, the official China Securities Journal argued that the data highlights downside pressures faced by China's economy, which warrants more targeted monetary easing from authorities. Real estate, a stronger dollar, and softer exports were all seen as a threat to China's economy.-China Securities Journal

o   SEC Gives the Small Cap Tick Size Pilot A Green Light: The Securities and Exchange Commission announced what the equities market had long expected - a test program to allow for a wider minimum tick size increment for small cap stocks. The program will last one year.-Official Press Release

o   Demand Indicators Bullish for Short Term and Extremely Bullish for Intermediate Term: The S&P 500 has been cruising from one record high to another, and we think the rally has more life left in it.  Our liquidity indicators are broadly favorable on both the demand side and the supply side. The outlook further out remains extremely positive.  The TrimTabs Demand Index (TTDI), which uses regression analysis of fund flow and sentiment data for intermediate-term market timing, closed at 93.4 on August 28, the highest level since May 5 (readings above 50 are bullish).-TRIMTABS

o   High-Frequency Data Indicates U.S. Economy Continues to Expand at Moderate Pace: Recent data suggests the U.S. economy remains firmly on a moderate growth track.  The TrimTabs Macroeconomic Index, a correlation weighted composite index of leading economic variables, rose 1.4% in the past eight weeks. -TRIMTABS   

o   TOP STOCK AND SECTOR MOVING STORIES

o   M&A

o  FDO Dollar General confirms increased bid for Family Dollar

o  ARCP American Reality Capital Properties comments on Select Income REIT's acquisition of Cole Corporate Income Trust

o  SIR Select Income REIT to acquire Cole Corporate Income Trust for $3B

o  APO Apollo mulls $2B offer for Kloeckner Pentaplast -- Bloomberg

o  SYNDICATE

o  IPO

o   BABA Alibaba.com planning to launch IPO week of 8-Sep; could begin trading 18th or 19th - WSJ

o   USDP: USD Partners files $150M IPO through Citi, Barclays, Credit Suisse, BofA

o   USDP USD Partners files $150M IPO through Citi, Barclays, Credit Suisse, BofA

o   ENOV Enovation Controls files for $100M IPO through Morgan Stanley and UBS

o   OTHER

o   AFMD Affimed Therapeutics files amended S-1; to offer 6.3M shares in the range of $11-13/sh through Jefferies, Leerink and BMO

o   ASTM Aastrom Biosciences files amended S-1, to offer $35M of common stock through Ladenburg

o   SYRX Sysorex Global Holding registers 5.8M shares for holders

o   PSEC Prospect Capital enters into $50M common stock equity distribution agreement with KeyBanc Goldman, Sachs & and RBC Capital Markets

o   SPEX Spherix files $30M mixed shelf

o   ARP Atlas Resource Partners LP enters $100M common unit distribution agreement with Deutsche, RBC, US Capital

o   ITCI Intra-Cellular Therapies files $150M mixed shelf

o   LXRX Lexicon Pharmaceuticals files $150M mixed securities shelf

o   TMHC Taylor Morrison Home files mixed shelf of indeterminate amount

o   CLB Core Labs enters amended credit agreement

o   TECH/MEDIA/TELECOM  

o   Goldman Sachs resumes AMT, CCI, CMCSA,others

o   GRPN Groupon upgraded to sector perform from underperform at RBC Capital

o   ANET Arista Networks initiated buy at SunTrust Robinson Humphrey

o   DSKY iDreamSky Technology initiated overweight at Piper Jaffray

o   ASTI TFG Radiant increases stake in Ascent Solar

o   NTP Nam Tai Property provides share repurchase update

o   UBER Uber ordered to suspend service across Germany by Frankfurt Court - GigaOm

o   CPWR Compuware near deal to sell itself to PE - WSJ

o   CPWR "Compuware in advanced talks to be sold to a private-equity firm. Scoop from @DanaMattioli" - Tweet by @danacimilluca

o   FB Trouble ahead in EU for Facebook's acquisition of WhatsApp? - WSJ

o   FORM FormFactor expects Q3

o   FB EU sets a provisional deadline of 3-Oct to rule on Facebook's acquisition of WhatsApp

o   MMM 3M completes acquisition of Sumitomo Electric’s interest in Sumitomo 3M

o   AAPL Apple said to reach agreement with American Express on new iPhone payments system - Re/code

o   AAPL Apple has weighed $400 price tag for new wearable device - Re/code

o  FINANCIALS/REITS

o   GNW Genworth Financial assumed market perform at Keefe, Bruyette & Woods

o   WSH Willis Group upgraded to outperform from market perform at Keefe, Bruyette & Woods

o   AGO Assured Guaranty initiated outperform at Keefe, Bruyette & Woods

o   RCAP RCS Capital upgraded to buy from neutral at Citi

o   Keefe, Bruyette & Woods initiates FNHC, HCI,UIHC, others

o   RCAP RCS Capital completes acquisition of Strategic Capital companies

o   GNBC Green Bancorp initiated outperform at RBC Capital

o   ARCP American Reality Capital Properties comments on Select Income REIT's acquisition of Cole Corporate Income Trust

o   SNH Senior Housing agrees to buy 23 Class A medical office buildings in 12 states for $539M

o   SIR Select Income REIT to acquire Cole Corporate Income Trust for $3B

o   PGR Progressive upgraded to buy from neutral at Goldman Sachs

o   KKR EU invites interested parties to comment on KKR, Riverstone Holdings' Trinity River Energy JV

o   EVBN New York to accuse Evans Bank of withholding mortgage lending from minority communities - NYT DealBook

o   ICE IntercontinentalExchange Group sets about remaking NYSE - WSJ

o   KKR Kohlberg Kravis Roberts sells out of China Modern Dairy at HK$3.70/share through Citi - Reuters

o   APO Apollo mulls $2B offer for Kloeckner Pentaplast -- Bloomberg

o   HEALTHCARE

o   LOXO Loxo Oncology initiated outperform at Cowen

o   EXEL Exelixis downgraded to market perform from outperform at Cowen

o   AFMD Affimed Therapeutics files amended S-1; to offer 6.3M shares in the range of $11-13/sh through Jefferies, Leerink and BMO

o   SAGE SAGE Therapeutics presents new preclinical data on SAGE-217

o   TTOO T2 Biosystems initiated market perform at Leerink Partners

o   ASTM Aastrom Biosciences files amended S-1, to offer $35M of common stock through Ladenburg

o   QURE uniQure BV reports Q2

o   TTOO T2 Biosystems initiated neutral at Goldman Sachs

o   MYL Prosonix announced MAA in EU for PSX1001 validated; being assessed under DCP

o   EARS Auris Medical Holding initiated market outperform at JMP Securities

o   ENDP Endo International Plc initiated outperform at RBC Capital

o   LOXO Loxo Oncology initiated buy at Stifel Nicolaus

o   MNOV MediciNova to present data on MN-001 for treatment of idiopathic pulmonary fibrosis

o   STJ New clinical trial results demonstrate importance of St. Jude Medical fractional flow reserve in guiding treatment of NSTEMI patients

o   EXEL COMET-1 phase 3 pivotal trial of cabozantinib in men with metastatic castration-resistant prostate cancer does not meet primary endpoint

o   AMGN SIGNIFY study shows addition of ivabradine in stable coronary artery disease without clinical heart failure did not improve outcome

o   ZMH EU sets a provisional deadline of 3-Oct to rule on Zimmer's acquisition of Biomet

o   ENERGY/UTILITIES

o   ICD Independence Contract Drilling, Inc. initiated outperform at RBC Capital

o   HMLP Höegh LNG Partners initiated buy at Citi

o   HMLP Höegh LNG Partners initiated buy at Bank of America Merrill Lynch

o   HMLP Höegh LNG Partners initiated neutral at UBS

o   ICD Independence Contract Drilling, Inc. initiated outperform at Cowen

o   NSLP New Source Energy Partners Chairman David Chernicky resigns

o   VVC Vectren closes sale of its coal mining business, Vectren Fuels, to Sunrise Coal

o   MATERIALS/INDUSTRIALS:

o   FLS Flowserve initiated overweight at Barclays

o   NOC Northrop Grumman upgraded to outperform from sector perform at RBC Capital

o   BA Boeing having trouble selling early version 787 Dreamliners - WSJ

o   BGG Briggs & Stratton completes acquisition of Allmand Bros

o   BEAV B/E aerospace files registration statement for previously announced spin-off of consumables management business segment

o   TMHC Taylor Morrison Home files mixed shelf of indeterminate amount

o   CCK Crown Holdings confirms to acquire Heineken's Mexican packaging business

o   OCIP OCI Partners restarts its Beaumont facility after conducting repairs on the reformer

o   CONSUMERS/SERVICES:

o   FDO Dollar General confirms increased bid for Family Dollar

o   NUS Bronte Capital publishes post on Nu Skin Enterprises, noting a possible suspicious signature

o   COKE Coca-Cola Bottling Company to expand the bottler’s franchise territory to include the Knoxville, TN

o   LTM Life Time Fitness upgraded to overweight from neutral at Piper Jaffray

o   AZO AutoZone downgraded to neutral from overweight at JPMorgan

o   AUTOS/TRANSPORTS:

o   TSLA Tesla Motors signs agreement for charging network in China - Bloomberg

o   ENOV Enovation Controls files for $100M IPO through Morgan Stanley and UBS

o   NAV Navistar extends expiration of Tax Asset Protection Plan expiration to 3-Nov-14

o   GAMING, LODGING, & LEISURE

o   No news to report.

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