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November 23, 2014 6:43 PM EST
Updated: Nov 21, 2014 7:09 AM EST  

Cantor Morning News®

 

 

Today's Stories From Cantor Fitzgerald

        Dogukan Aksoy  (212) 610-2348

        Nick Cernero (212) 610-3629

        Friday  November  21st   2014

 

 

TOP NEWS

o   US STOCK FUTURES:

o  US futures are trading higher, buoyed by firmer European indices as well as the news that China is cutting interest rates leading to a recent spike higher in equity prices. Global markets have moved higher in reaction, particularly basic resources. There are no major economic releases scheduled

o   FX: The potential for EU QE led the EUR/USD to test below the 1.2435 area and sent peripheral yields back to record lows. USD/JPY edged away from 7-year highs after Japan Fin Min Aso commented that the current JPY currency  decline was a bit too fast. USD/JPY was hovering around 117.70 just ahead of the NY session. EUR/CHF tested 1-week highs at 1.2030 on suspected SNB defense of the 1.20 floor in the cross

o  GOLD: Gold rose, reversing earlier losses, after China cut benchmark interest rates for the first time since July 2012. Gold for immediate delivery rose 0.2 percent to $1,196.37 an ounce by 10:50 a.m. in London, according to Bloomberg generic pricing. Gold for December delivery climbed 0.4 percent to $1,195.80 on the Comex in New York.

o  CRUDE:Brent crude traded above $80 a barrel for the first time in a week after China, the world’s second-largest oil consumer, cuts its interest rates for the first time since 2012 to bolster its economy. West Texas Intermediate also rose in New York.

o  TREASURIES: The U.S. 10-year yield was little changed at 2.33 percent as of 6:43 a.m. in London, according to Bloomberg Bond Trader data. The price of the 2.25 percent note due in November 2024 was 99 9/32. The yield has climbed from 2.22 percent a month ago. Treasuries are the worst-performing developed-market bonds for the past month. They’re delivering gains to international investors thanks to a dollar rally. Yields have increased in line with predictions the Fed will raise interest rates next year.

o   Europe Markets:

o  European stocks rally further as China cuts rates; miners, autos see intraday gains and as ECB chief Draghi hints of possible QE to combat low inflation. More dovish comments by SNB's Zurbruegg saying the franc cap will enforce with the utmost determination and UKIP's winning of a parliamentary seat overnight influenced the regions' asset prices. Greece will submit its 2015 budget to parliament despite no agreement with Troika. Pan-European indices are currently at session highs, with all country benchmark indices in positive territory. All 19 STOXX Europe sectors trade higher.

o  Asian Markets:

o  Chinese stocks rallied on Friday, with the Shanghai Composite Index adding 1.39%. After the close, the PBoC announced it cut interest rates in an unexpected move. The Nikkei closed up +0.3% on Friday. The index traded lower in the morning, corresponding to strength in the yen after cautious statements from Finance Minister Taro Aso. The yen renewed some of its weakness in afternoon trade, helping to support equities. It was a volatile trading week for the Nikkei, which lost (0.8%) this week. Japanese equities will be offline Monday for the Labor Thanksgiving Day public holiday.

o   BIG STORIES TODAY

o  PBoC cuts interest rates: The PBoC cut the one-year deposit rate by 25 bp to 2.75%. It also cut the one-year lending rate by 40 bp to 5.6%. The move was unexpected as Beijing has repeatedly pushed back against calls for more aggressive stimulus, favoring its policy of targeted easing measures.

o  Trading volume subdued in the first week of Hong Kong-Shanghai stock market connect: After the first week of the program, both northbound and southbound trading volume was subdued. The  WSJ attributed the lack of cash flow to more reforms being needed for the mainland markets. The article cited the short-notice period before the launch and capital gains exemptions for foreigners, and general lack of clarification, as examples of the immaturity of mainland Chinese capital markets.

o  PBoC said to inject funds amid cash squeeze: Bloomberg reported that the PBoC was said to have added money to the banking system today as a cash shortage stemming from IPOs drove the benchmark money-market rate up by the most since July. The article cited sources who said the central bank supplied funds on a short-term basis.-BBG

o  Aso says yen dropped too fast:  Reuters cited Finance Minister Taro Aso who warned on the yen's recent weakness. Aso said that the yen had weakened "too fast" this week. Note that the yen has moved from ~¥115.5 to the USD to almost touch ¥119 late yesterday. However Aso reiterated that the volatility did not require the government to intervene in forex markets.-Reuters

o  ECB President Draghi says would broaden channels of intervention if policy not effective: ECB chief Draghi stressed that the inflation situation was increasingly challenging and would seek to raise inflation as fast as possible; reiterated view that Council was ready to step up action if needed. Committed to adjust size, pace and composition of asset purchases if needed. He highlighted that large asset purchases in the US, Japan led to exchange rate depreciation.-TTN

o  Eurozone bonds yields fall after Draghi comments: Eurozone bond markets rallied after comments from ECB President Draghi were taken as a signal that sovereign QE was looking more likely. This is due to the fact that Draghi said short-term inflation expectations were excessively low and it is essential to bring it back to target without delay. There was notable outperformance in periphery markets, which stand to benefit the most from an expansion in the ECB's asset purchase programme. The biggest moves were seen in Italian, Spanish and Portuguese yields, which were around 8 bps to 9 bps lower.

o  FED SPEAK: Fed's Williams spoke in South Korea, saying he sees encouraging signs that weakness in labor participation is diminishing. Williams added that the environment of low global growth with low real interest rate around the world is inherently risky. Fed's Bullard urged FOMC to hold a press conference after every FOMC meeting, so that policy action can be taken more freely. Bullard also reiterated expectation for US growth at 3% through 2015, and offered optimism that US would achieve long-run jobless rate very soon.-TTN

o  U.S. Liquidity Indicators Turn Less Negative for Short Term: The liquidity outlook for the coming week is much less negative than it was a week ago.  The news is best on the supply side.  New offerings should slow to virtually nothing as underwriters take Thanksgiving vacations.  In the past decade, new offerings in Thanksgiving week averaged only $1.8 billion and did not exceed $5.3 billion.-TRIMTABS

o  Alibaba prints jumbo deal without China premium:  Alibaba Group Holding sold the largest bond by an Asian company last night via a $8 bln six-tranche offering. The tight pricing achieved on the deal led many to believe the US-listed Chinese ecommerce giant got away without paying a Chinese premium.-Reuters

o  Blackstone to buy GE's property assets in japan for $1.6 bln:  Blackstone Group LP, the world's largest private equity investor in real estate, said it will buy residential assets in Japan from General Electric Co's property unit in a deal worth more than 190 billion yen, Japan's largest property deal this year.-Reuters

o  ADSK Autodesk Inc (ADSK). The company reported better-than-expected quarterly revenue, as the maker of computer-aided design software benefits from its switch to a cloud-based subscription model.-Reuters

o  GPS Gap Inc (GPS). The apparel retailer cut its full-year earnings forecast as sales at the Gap brand continued to fall and demand for the cheaper Old Navy clothing slowed.-Reuters

o  HPQ Hewlett-Packard Selects Team to Manage Split Into Two Companies:  Hewlett-Packard Co. is moving forward with its plan to split into two companies, and has moved several executives into new roles to execute the plan.-BBG

o  HTZ Hertz Global Holdings Inc (HTZ). The car rental company named John Tague as chief executive, overlooking a candidate put forward by activist investor Jana Partners. Tague was most recently the CEO of transportation and logistics provider Cardinal Logistics Holdings.-Reuters

o  MRVL Marvell Technology Group Ltd (MRVL). The company forecast lower-than-expected revenue for the current quarter as weak demand for its chips used in third-generation mobile communication offset a rise in sales of its more profitable 4G LTE chips-Reuters

o  SPLK Splunk Inc (SPLK). The data analytics software maker reported a better-than-expected 48 percent jump in quarterly revenue as it added more customers-Reuters

o  SYY Sysco/US Foods Merger Seen Approved on Disposals:  Federal Trade Commission expected to give green light to merger once Sysco strikes deal to divest some assets, New York Post reports

o   TOP STOCK AND SECTOR MOVING STORIES

o   M&A

o    

o   SYY FTC expected to approve Sysco's purchase of US Foods soon - NY Post

o   Samsung may be interested in Saipem - Milano Finanza

o   FMC FMC Corp taps BoA M/L and Goldman sachs to help with sale of alkali unit; could be valued around $1.5B -- Reuters

o   PETM PetSmart holder Jana Partners has lined up 5 nominees for PetSmart board

o   NXST Nexstar Broadcasting to acquire CBS affiliate KLAS-TV for $145M in accretive transaction

o  SYNDICATE

o  IPO

o  NEFF Neff Corporation announces 10.5M share IPO priced at $15/sh through Morgan Stanley, Jefferies and Piper Jaffray

o  SKIS Peak Resorts 10M-share IPO priced at $9/share through FBR, Stifel and Baird

o  OTHER

o  AHP Ashford Prime files $152.7M equity shelf; registers 8.8M shares for holders

o  ROX Castle Brands files $10M common stock sales agreement with Barrington Research Associates

o  KMI Kinder Morgan files mixed shelf of indeterminate amount

o  OTIV On Track Innovations announces 6.25M share secondary offering priced at $1.60/sh through Northland

o  LXRX Lexicon 49.8M-share secondary priced at $1.005/share through JPMorgan and Goldman Sachs

o  NYMT New York Mortgage secondary priced at $7.94/share through UBS, Deutsche Bank, Barclays, RBC, and Credit Suisse

o  IBIO iBio files $100M mixed shelf

o   TECH/MEDIA/TELECOM  

o   Pentagon looking to shift money to new technologies - WSJ

o   FEYE WSJ's Heard on the Street column is positive on FireEye

o  STMicroelectronics CEO says may miss mid-year profit target on weaker chip market – Bloomberg

o  A Agilent Technologies announces quarterly cash dividend of 10 cents per share

o  FINANCIALS/REITS

o  Fed to review how it supervises big banks - WSJ

o  BB&T CEO expresses concerns about pricing of commercial loans –Reuters

o  Co-operative Bank to end contract under which it provides ATMs based in the group's food stores

o  TCPC TCP Capital secondary priced at $17.05/share through Deutsche, BofA, Raymond James, KBW and RBC

o  NYMT New York Mortgage secondary priced at $7.94/share through UBS, Deutsche Bank, Barclays, RBC, and Credit Suisse,

o  EDR Education Realty Trust announces 1-for-3 reverse stock split

o   HEALTHCARE

o  CELG Celgene receives positive opinion from CHMP for Otezla (apremilast) for treatment of psoriasis and psoriatic arthritis

o  LXRX Lexicon Pharmaceuticals prices $80M 5.25% convertible senior notes due 2021

o  LXRX Lexicon 49.8M-share secondary priced at $1.005/share through JPMorgan and Goldman Sachs

o  WX WuXi PharmaTech downgraded to hold from buy at Jefferies

o  PRGO Perrigo 5.9M-share secondary priced at $152/share through JPMorgan, Barclays, and BofA M/L

o  AGN Pershing Square & Valeant joint venture fund sells Valeant's stake in Allergan

o  LBIO Lion Biotechnologies files $100M mixed shelf

o  IBIO iBio files $100M mixed shelf

o  CCXI ChemoCentryx issues press release on previously reported orphan drug designation for aHUS drug

o  EYEG EyeGate Pharmaceuticals files amended S-1; to offer 1.4M shares in range of $6-8 per share through Aegis

o  GALE Galena Biopharma announces purchase agreement for up to $55.0M with Lincoln Park Capital Fund

o  CLTX: Celsus Therapeutics files $46M secondary offering through Cowen and Piper Jaffray

o  CLTX Celsus Therapeutics files $46M secondary offering through Cowen and Piper Jaffray

o  NRX NephroGenex closes $12M term loan facility

o  SIEN Sientra, Inc. reports Q3

o   ENERGY/UTILITIES

o  KMI Kinder Morgan files mixed shelf of indeterminate amount

o  MMP Magellan Midstream Partners extends open season to 15-Dec, expands origin options for Saddlehorn Pipeline

o  WMT: Wal-Mart Stores to install up to 400 new solar projects; to use SolarCity and SunEdison

o  SCTY SolarCity enters into contract with Walmart for installation of new solar projects

o  RDC Rowan Companies provides fleet contract status update as of 20-Nov

o  ETP Energy Transfer Partners enters equity distribution agreements for up to $1.5B

o  GEOS Geospace Technologies reports Q4

o  MMP Magellan Midstream Partners CEO Michael Mears discsloses sale of 20K common units in form 5

o   MATERIALS/INDUSTRIALS:

o  MYE Myers Industries holder GAMCO requests board does not engage in a transaction until it sells Lawn & Garden segment

o  CLF Canada has not been good for Cliffs Natural Resources - Globe and Mail

o  FMC FMC Corp taps BoA M/L and Goldman sachs to help with sale of alkali unit; could be valued around $1.5B -- Reuters

o  CERE Ceres reports FY

o  FFHL Fuwei Films reports Q3 

o   CONSUMERS/SERVICES:

o  WTSL The Wet Seal names Thomas Hillebrandt interim CFO effective 1-Dec

o  NKE Nike increases quarterly dividend by 16.7%

o  ROX Castle Brands files $10M common stock sales agreement with Barrington Research Associates

o  HRL Hormel Foods initiated hold at Deutsche Bank

o  SYY FTC expected to approve Sysco's purchase of US Foods soon - NY Post   

o  WSM Williams-Sonoma, Inc. to expand upholstered furniture manufacturing in the U.S.; add over 500 new jobs

o  SYY FTC expected to approve Sysco's purchase of US Foods soon - NY Post

o  AMZN Amazon.com initiated buy at Nomura Securities

o  FISV Fiserv downgraded to equal-weight from overweight at Barclays

o  GME Gamestop downgraded to market perform from outperform at Telsey Advisory Group

o  BBY Best Buy upgraded to outperform from market perform at Telsey Advisory Group

o  MANU Manchester United upgraded to overweight from neutral at JPMorgan

o  BID Departure of Sotheby's CEO William Ruprecht not completely out of left field - WSJ

o  SKIS Peak Resorts 10M-share IPO priced at $9/share through FBR, Stifel and Baird

o  Topeka Capital Markets initiates ADP, FISV, FIS, PAYX

o  BID Sotheby's CEO William Ruprecht will step down by mutual agreement with the board

o  WMT: Wal-Mart Stores to install up to 400 new solar projects; to use SolarCity and SunEdison

o  SCTY SolarCity enters into contract with Walmart for installation of new solar projects

o  GMAN Gordmans names Lisa Evans Chief Merchandising Officer; effective 5-Jan-15

o  RNG RingCentral initiated buy at Jefferies

o  DVD Dover Motorsports holder GAMCO seeks removal of poison pill

o  PETM PetSmart holder Jana Partners has lined up 5 nominees for PetSmart board 

o   AUTOS/TRANSPORTS:

o  KSU Kansas City Southern files mixed securities shelf of indeterminate amount 

o  GAMING, LODGING, & LEISURE

o  HOT Starwood sells Sheraton on the Park in Sydney to Sunshine Insurance Group for A$463.0M

o  HOT Starwood Hotels declares $0.65/share special dividend

 

 

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