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Morning @ Cantor
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Today's Stories From Cantor Fitzgerald |
Brian Young (212) 610-3629 Thursday May 23, 2013 |
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Sector News: Energy | Industrials | Transports | TMT | Materials | Autos | Financials | Real Estate | Consumer | Gaming/Lodging/Leisure | Healthcare |
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Top Stock and Sector Moving Stories
today Pre-Market Cantor Trading Recap: Equities | Corporate
Bonds | Converts | Derivatives | Treasuries | Risk Arb | CMBS Cantor Technical Strategist: Technical Compass |
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o US STOCK FUTURES S&P futures fall
19.10 to 1636.50 as the market finally takes a breather after once again
reaching one yr highs early in the session yesterday. A contraction in China
manufacturing numbers is driving futures lower. Markets in Japan plunged almost
7% to their lowest levels since the 2011 Tsunami. Fairly busy day on the US
data front with weekly jobless claims headlining at 830AM EST. We will also see
The US House price index ar 9AM, New home sales report at 10AM and KC Fed
manufacturing numbers at 11AM EST.
o FX: USD index falls .430 to 83.922 pulling back sharply
from 1 yr highs reached during trading yesterday.
o GOLD: rises 22.40 to 1389.80 as investors shy away from risk
this morning turning to the metal as a safe haven.
o BASE METALS are
under pressure across the board this morning on the weaker China PMI print.
o CRUDE falls .88 to 93.40 to its lowest levels of the week.
Brent Crude dropped for a third day to its lowest price in 3 weeks.
o TREASURIES rise early this AM as 10-yr yields fall the
most in a week to 1.99% following weak China PMI data.
o
Europe markets:
FTSE 100 (1.97%), DAX
(2.88%), CAC40 (2.56%)
o
Most
equity markets in Europe have declined by over 2%, after strength in the
Japanese yen and spike in JGB yields helped drive the Nikkei 225 lower by over
7%. Weaker than expected Chinese PMI data, Spain's bond auction and commentary
out of the US Fed have also been cited for today's equity market weakness.
European banks are broadly lower, led by shares of Barclays (-4%) and Deutsche
Bank (-4.5%).
o Asian Markets: Nikkei (7.32%), Hang Seng (2.54%), Shanghai Composite (1.16%)
o Asian equity markets are down across the board, tracking the major
reversal in the US indices after Fed Chairman struck a less dovish tone during
his address of congressional committee. Specifically in the Q/A portion,
Bernanke noted some tapering of the QE could begin over the next few meetings
if labor market improvement supports such retreat
o DATA
o CHINA MAY HSBC FLASH MANUFACTURING PMI: 49.6 V 50.4E (first contraction in 7
months)
o AUSTRALIA MAY CONSUMER INFLATION EXPECTATION: 2.3% V 2.2% PRIOR
o SINGAPORE Q1 FINAL GDP Q/Q: +1.8% V -1.2%E; Y/Y: +0.2% V -0.6%E
o Bank of Japan (BOJ) May Monthly Economic Report: Raises economic assessment (5th
straight month)
o France May Preliminary PMI Manufacturing: 45.5 v 44.7e (9-month high); PMI
Services: 44.3 v 44.5e
o Germany Mar Real Construction Orders nsa -9.2% y/y; YTD: -4.8% y/y
o Germany May Advanced PMI Manufacturing: 49.0 v 48.5e; PMI Services: 49.8 v 50.0e
o Euro Zone May Advanced PMI Manufacturing: 47.8 v 47.0e; PMI Services:
47.5 v 47.2e; PMI Composite: 47.7 v 47.2e
o Italy Mar Retail Sales M/M: -0.3% v -0.1%e; Y/Y: -3.0% v -4.8% prior
o UK Q1 Preliminary GDP Q/Q: 0.3% v 0.3%e; Y/Y: 0.6% v 0.6%e
o Spain Bond
auction
o Sells €4.076B vs target €3-4B
o Sells €1.58B 3.30% 2016 bond, average yield 2.442% vs prior 2.247%,
bid-to-cover 2.24x vs prior 2.34x
o Sells €1.345B 4.50% 2018 bond, average yield 3.001% vs prior 2.789%,
bid-to-cover 1.94x vs prior 2.24x
o Sells €1.152B 5.90% 2026 bond, average yield 4.54% vs prior 4.336%,
bid-to-cover 1.55x vs prior 1.62x
o
ETF
Flows & Leveraged Trades Send Bearish Signals: Rising U.S. Equity ETF flows and outflows from
Leveraged Short Stock ETFs this week offer contrarian signals suggesting
bullish investors stay alert for profit-taking opportunities in the short run.
Furthermore, the TrimTabs Demand Index (TTDI) has fallen below 75 — still in
bullish territory but down 21.5% from the 30-day high of 89.67 set on April 22-
TRIMTABS
o The TTDI
grew notably less bullish in the past week. The TTDI, which uses 21 flow and
sentiment variables to time U.S. equities, closed at 70.38 on May 21 — north of
the neutrality line of 50.0 but down 5.8% from last week. Eight of the TTDI’s
variables are bullish and eight are bearish (five are neutral).
o
Real
Estate Reaches Highest YTD Volume with $25.9bn: Real Estate is the leading SEC Registered ECM sector
in 2013 YTD with $25.9bn via 78 deals. This is the highest Real Estate YTD
volume on record and is up 76% from the $14.7bn raised in 2012 YTD. The
Healthcare sector ranks second for volume with $12.7bn but has seen the highest
activity with 88 deals. 75 out of the 78 Real Estate sector ECM deals have been
REITs. 48 of the total 78 REITs have been Equity REITs, raising $14.7bn,
accounting for 57% of the overall SEC Registered REIT volume in 2013 YTD.
Mortgage REITs account for the remaining 43% ($9.2bn)- Dealogic
o
U.S. Companies Are
Disclosing Fewer Overseas Units: Some of the biggest U.S. companies, including Google
Inc. (GOOG) and FedEx Corp. (FDX), have quietly removed hundreds of offshore
subsidiaries from their publicly disclosed financial filings over the past
several years. For many investors, even small disclosures matter. Information
about a company's subsidiaries provides a gauge of whether its operations have
grown or shrunk, how complex the company may be and how it may be generating or
shifting income around the globe. The lists of subsidiaries are the most easily
accessible and reliable source for such information and are often used as a starting
point for researchers studying how a company has structured itself to minimize
its tax burden.
o
POLITICS:
Obama threatens to veto Republican student loan plan- The White House threatened on Wednesday to veto a
Republican bill to switch federal student loan interest rates to a market-based
system, arguing the plan would create more uncertainty for students and
families. Under the legislation introduced by Republican Representatives John
Kline of Minnesota and Virginia Foxx of North Carolina, subsidized and
unsubsidized Stafford loans would be recalculated every year and pegged to
10-year Treasury notes, plus 2.5 percentage points- Reuters link
o
POLITICS:
Obama, in a Shift, to Limit Targets of Drone Strikes- day after admitting the killing of four Americans
in drone strikes, the president will announce new limits on the program of
targeted attacks. Mr. Obama also plans to renew his effort to close Guantánamo
prison- NYT link
o
Online Gambling Bets
on Return to U.S.:
PokerStars said it remains
confident it will get a seat at the U.S. table. And based on its sheer size,
few analysts are willing to rule it out. Almost a quarter of a million people
played in one of its annual tournaments this year, and millions more tune in to
watch its live televised events. According to Pokerscout.com., which tracks
industry data, PokerStars controls 54% of player market share. That is seven
times its nearest competitor- WSJ link
o
WSJ cautious MSFT
Xbox One-
link
o
Fed Leaves Market
Guessing:
Bernanke
said the Fed could start reducing bond buying "in the next few
meetings" but warned against premature action, amid conflicting messages
that roiled markets- WSJ link
o
Housing Off to Solid
Spring:
Sales of
foreclosed homes fell in April, and the number of properties on the market rose
at the start of the spring selling season, suggesting further improvement in
the housing market this year- WSJ link
o
The landscape for
proxy advisers is getting rockier: Big firms that sell recommendations on how to vote
in corporate elections are losing some of their relevance, as companies more
aggressively court key investors ahead of big votes and those investors handle
more of the voting analysis themselves- WSJ link
o
GAMING:
Macau visitor arrivals +0.7% y/y to 2.40M for April
o
M&A:
LPS Fidelity National Financial, Thomas H Lee near deal to acquire Lender
Processing for about $33/share - Dow Jones
o
M&A:
Volvo Said to Explore Sale of North American Rental Business- Volvo AB, the world’s second-largest truckmaker, is
exploring the sale of its North American construction-equipment rental
business, according to a person familiar with the process. The division, known
as Volvo Rents, may be worth $1 billion to $1.5 billion, the person said, asking
not to be identified because the plans are private. The business has attracted
interest from private-equity firms as well as companies, said the person. No
final decision to sell has been made- BBG
o
AAPL’s policies
unlikely to change without tax reform: Apple’s defence against congressional accusations
that it uses elaborate schemes to avoid taxes on its international profits
rests on a simple premise – that it has been led to do so by an outdated US
corporate tax code. During the hearing, most Republicans seemed to go out of
their way to agree with the company, turning the session into a subset of
Washington’s long-running budget battle rather than an inquiry into Apple
itself- FT link
o
Mitsubishi Motors: report that company planning 1-for-10
reverse stock split, share sale- PR
o
Deutsche Bank chief warns
market bulls: Mr Fitschen, who has led Germany’s flagship bank
for a year, said there were good prospects for the global economy to stabilize
in 2013. “Nonetheless the highly optimistic mood in the financial markets
indicates a risk that some market participants may be underestimating the
fiscal policy difficulties in the US and the consequences of the European debt
crisis,” Mr Fitschen said- Ft link
o
HPQ: Reports Q2 $0.87 v $0.81e, R$27.6B v $28.0Be; +13.9% afterhours
o
PSUN reported a better Q1 and guided Q2 to the high end. Sales in women’s
apparel helped to drive the beat up 7% q/q.
o
AMT American Tower increases quarterly distribution by 3.8% to $0.27 from
$0.26
o
Lenovo Reports FY12/13 Net $635.1M v $475.4M y/y, Rev $33.9B v $29.6B y/y
o
F ford to cut jobs: To close its Broadmeadows vehicle facility and
Geelong engine plant in Australia in 2016; End local car production; To cut
1200 jobs- TTN
o
Brussels to tighten
rules on bank bailouts: Brussels is to impose more stringent conditions on
state bailouts for troubled banks so that shareholders and junior bondholders
suffer losses before taxpayers are asked to foot a rescue bill. The imminent
revision of the EU state aid controls uses the recent Spanish bank bailouts as
a Europe-wide template, ensuring that all 27 member states impose some pain on
creditors, even when it is politically inconvenient and those governments can
afford to use public funds- FT link
o
Germany CDU official Kauder reiterated ECB should not
print money- TTN
o
Germany most popular country in the world- BBC poll
o
EU Emissions Trading System Must Be Reviewed, IEA Chief
Says- BBG
o
IMF studies bond
restructuring reform: The International Monetary Fund is studying changes
to how it handles sovereign debt restructurings after a turbulent period that
has rattled the balance of power between governments and their creditors. According to international officials familiar
with the IMF’s deliberations, the Fund is primarily concerned with countries
delaying necessary restructurings and the difficulties involved in corralling
bondholders into agreements- FT link
o
IMF tells U.K. to
relax austerity and spend for growth: Harsh
austerity is a drag on the U.K. economy, and the government should put more
emphasis on growth, the International Monetary Fund says. The IMF recommends
that the U.K. scale back spending cuts and stimulate economic expansion with infrastructure
spending and tax reduction. "In a range of policy areas, the government
should be more supportive of growth," said David Lipton, the IMF's deputy
managing director- Independent link
o
EBA aims to toughen
safeguards on some securitized debt: The
European Banking Authority has proposed improving safeguards on a certain type
of securitized debt. The rules would outline how the market is supervised and
would require sellers to keep a portion of the issue- Reuters link
o
Poland Central Bank' Bratkowski commented that the
optimal benchmark rate was between 2.0-2.5% (**Note current Base rate is 3.00%) and that the
central bank was clearly behind the curve. Poland in de facto recession as
demand falls but saw signs that Polish economy to hit bottom in Q2 as export
growth and consumer demand were stabilizing. He saw a July Base rate cut unless
economy improved. 1-2 months of deflation was possible in H2 but no threat of
any deflationary spiral- TTN
o
Europe Pushes to
Shed Stigma of a Tax Haven: The European Commission, the union’s executive
arm, has been pushing for years to enlarge the scope of financial information
that is automatically shared among the bloc’s 27 member states. It has also
pressed for a crackdown on “aggressive tax planning” by multinational companies
like Apple, which investigators in Congress say avoided billions of taxes in
America and elsewhere through an elaborate, globe-spanning web of companies
revolving around outfits based in Ireland- NYT link
o
Cyprus to Stay in EU: EU Barroso commented that Cyprus remained firmly
anchored in EMU- BBG
o
South Korean thinktank cuts GDP forecast: South Korea KDI Cuts 2013 GDP to 2.6% from 3.0% in
Nov; Sees 2013 inflation at 1.8%- TTN
o
Dijsselbloem says EU
may give Greece more time to meet fiscal targets: Dijsselbloem said Greece's fiscal progress had been satisfactory so
far, adding euro zone finance ministers would assess whether Greece deserves
further debt relief in 2014. "We will meet at some point in 2014 to see
what more Greece will need on the condition it has met the set targets,"
he said in the interview. "We have not made any decisions on what form
this debt relief will take and whether it will include erasing part of the
bilateral loans."- Reuters link
o
EU's Barnier wants
big companies to reveal national tax bills: Large companies should disclose how much tax they pay in each country
where they operate, the European Commission's top regulatory official said, in
the text of a speech to be delivered on Thursday. Michel Barnier, the European
commissioner in charge of drafting business regulation, said large banks will
already be obliged to disclose their profits, taxes and subsidies in each
member state and in the non-EU countries where they operate- Reuters link
o
Grexit No Longer
Likely, Says Man Who Coined Phrase: The
economist who coined the term "Grexit" says the possibility of Greece
exiting the euro zone has receded "markedly", reversing predictions
he made in July when he saw a 90 percent chance of an exit within the next
12-18 months. Citi Chief Economist
Willem Buiter coined the phrase with his Citigroup colleague Ebrahim Rahbari in
February 2012. "We still believe
that there is a fairly high risk of Grexit in coming years, but no longer put
it in our base case at any particular date," Citi said in a research note
published on Wednesday co-authored by Buiter
o
U.K. groups voice
concerns about European transaction tax: The Confederation of British Industry, the British Bankers' Association
and U.K. manufacturers organization EEF have written in a joint letter to EU
leaders that a proposed financial-transaction tax would make the bloc less
competitive and therefore risk derailing economic recovery. "The FTT is
fundamentally a tax on growth and should be viewed as a major risk to Europe's
ability to recover," according to the letter- BBG link
o
CRISIS WATCH: Iran seeks to speed
up nuclear activity- It is now pressing ahead with installing a more efficient version known
as the IR-2m at its main enrichment plant near the central town of Natanz,
according to the report by the International Atomic Energy Agency (IAEA). It
has also put in place another centrifuge type, the IR-5, for the first time at
a research and development facility at Natanz, joining five others being tested
there, the report issued to member states late on Wednesday said- Reuters link
o
The rapid installation of one of them, the IR-2m, at
a Natanz production unit since it started earlier this year indicates that Iran
can make such equipment, at least to some extent, despite tightening sanctions
on the country.
o
Nikkei plunge sparks
global market retreat: Global stocks are in sharp retreat, led by a
savage plunge in Tokyo, as traders are spooked by the prospect of reduced
central bank support and a slowing Chinese economy. The six-month rally in the
Nikkei 225, which had seen the Tokyo benchmark surge about 80 per cent on hopes
for government and Bank of Japan stimuli, cracked, with the index ending down
7.3 per cent, its biggest daily drop in two years- CNN link
o
Japan’s Amari Says No Need to Be Perturbed Over Stock
Declines: Japan stocks could be related to China production data, investor’s
profit-taking. Abenomics is progressing soundly, he said. BOJ continues to have
close communication with market- BBG
o
JGB announces ¥2T fund supplying operation: BOJ moved to contain volatility in the JGB market,
announcing a ¥2T fund supplying operation after the 10-year yield moved to a
multi-month high level above the 1%- TTN
o
Shanghai Apr FDI rose 14.9% y/y to $1.6B - Shanghai Daily
o
China Tilts Back to
Big Capital Spending: A more detailed look at China's economic
performance in 2012 shows it tipped further off balance, relying more than ever
on credit-fueled investment, a trend it had tried to rein in- WSJ link
o
China urbanization
plan hits roadblock over spending fears: China's plan to spend $6.5 trillion on urbanization
to bolster the economy is running into snags, sources close to the government
said, as top leaders fear another spending binge could push up local debt
levels and inflate a property bubble. Premier Li Keqiang has rejected an
urbanization proposal drafted by the National Development and Reform Commission
(NDRC), seeking changes to put more emphasis on economic reform, according to
the sources, who are familiar with the matter- Reuters link
o
Outlook for China’s
Economy Just Keeps Getting Worse: The unexpected contraction in China's factory
activity in May has heightened the risk of a further slowdown in the second
quarter, after the world's second largest economy grew at its slowest pace in
three years over January to March, said economists- CNBC link
TOP STOCK AND SECTOR
MOVING STORIES
o M&A
o LPS Fidelity National Financial, Thomas H Lee near deal to acquire
Lender Processing for about $33/share - Dow Jones
o Lufthansa, United Airlines, Air
Canada, Continental concessions accepted by EU resolving worries over
transatlantic cooperation - Reuters
o Volvo mulls sale of its North American Rental Business -- Bloomberg
o DELL EU Commission says the
proposed acquisition of Dell by Michael Dell could fall within the scope of the
EC merger regulation
o GE EU Commission says the
proposed acquisition of Avio's aviation business by General Electric could fall
within the scope of the EC merger regulation
o NDZ Nordion agrees to sell
Targeted Therapies business to BTG for $200M in cash
o Lobby group NSW Farmers want
GrainCorp port assets excluded from Archer-Daniels (ADM) sale - Australian
Financial Review
o KFS Kingsway announces
acquisition of HVAC warranty business; terms undisclosed
o FSP Franklin Street
Properties aqcuires multi-tenant office building in Denver for $183M
o BTG confirms Targeted
Therapies acquisition; announces will acquire EKOS for up to $220M, share
placement
o SYNDICATE
o IPO
o CSTM Constellium Holdco 22.2M
shares IPO priced at $15/sh through Goldman, Deutsche, JPMorgan
o BRSS Global Brass and Copper
announces 7M share IPO priced at $11.00 per share
o ECOM ChannelAdvisor 5.8M
share IPO priced at $14 per share through Goldman Sachs and Stifel
o PGEM Ply gem Holdings
announces 15.8M share IPO priced at $21/sh through JP Morgan, Credit Suisse and
Goldman Sachs
o Telecom Italia said to be preparing spin-off of fixed-line assets
o GDCT GDC Technology files
$75M IPO through Barclays, Jefferies and Piper Jaffray
o LXFT Luxoft files $80M IPO
through UBS, Credit Suisse and JPMorgan
o OTHER
o OAK Oaktree Capital Group
7.0M class A secondary priced at $53.50/unit through Morgan Stanley, BofA M/L
and Credit Suisse
o LG The Laclede Group 8.7M
share offering prices at $44.50/share through Wells Fargo, BofA M/L, JP Morgan,
and Morgan Stanley
o BXMT Blackstone Mortgage
Trust 22.5M-share secondary priced at $25.50/share through Citi, BofA, JP
Morgan, Deutsche Bank, Wells Fargo, and UBS
o DPS Dr Pepper Snapple files
mixed shelf of indeterminate amount
o SPWR SunPower announces
pricing of $300M of 0.75% senior convertible debentures due 2018
o WAIR Wesco Aircraft announces
15M share offering for holder Carlyle Group priced at $16.00 per share
o AVB AvalonBay announces 7.9M
share ATM offering by Jupiter Enterprises
o ACTC Advanced Cell Technology
files $35M mixed shelf
o IDA IdaCorp files mixed
shelf of indeterminate amount
o WYN Wyndham Worldwide
announces closing of new $1.5B revolving credit facility; replaces existing $1B
facility
o APRI Apricus Biosciences
announces offering of stocks and warrants of indeterminate amount through
Lazard Capital
o INFN Infinera Corporation
announces $100M convertible note private placement
o MSFT WSJ is cautious on Xbox One
o SoftBank allows US government raft of concessions to get Sprint (S) bid
over line – WSJ
·
http://online.wsj.com/article/SB10001424127887323336104578499651225020178.html?mod=ITP_marketplace_0
o AMT American Tower increases
quarterly distribution by 3.8% to $0.27 from $0.26
o FDS FactSet upgraded to
overweight from neutral at Piper Jaffray
o DELL EU Commission says the
proposed acquisition of Dell by Michael Dell could fall within the scope of the
EC merger regulation
o ECOM ChannelAdvisor 5.8M
share IPO priced at $14 per share through Goldman Sachs and Stifel
o GDCT GDC Technology files
$75M IPO through Barclays, Jefferies and Piper Jaffray
o GAME Shanda Games reports Q1
o SMTC Semtech reports Q1
o LXFT Luxoft files $80M IPO
through UBS, Credit Suisse and JPMorgan
o OESX Orion Energy Systems
reports Q4
o SNPS Synopsys reports Q2
o WDAY Workday reports Q1
o HPQ Hewlett-Packard reports
Q2
o WSTL Westell Technologies
reports Q4
o INFN Infinera Corporation
announces $100M convertible note private placement
o EU to impose stricter rules on troubled bank bailouts - FT
·
http://www.ft.com/intl/cms/s/ef8c6f16-c2ed-11e2-9bcb-00144feab7de,Authorised=false.html
o LPS Fidelity National Financial, Thomas H Lee near deal to acquire
Lender Processing for about $33/share - Dow Jones
·
http://stream.wsj.com/story/latest-headlines/SS-2-63399/SS-2-238537/
o US companies removing hundreds of offshore subsidiaries from public
financial filings - WSJ
·
http://online.wsj.com/article/SB10001424127887323463704578497290099032374.html?mod=ITP_marketplace_0
o KFS Kingsway announces acquisition of HVAC
warranty business; terms undisclosed
o OAK Oaktree Capital Group 7.0M class A secondary
priced at $53.50/unit through Morgan Stanley, BofA M/L and Credit Suisse
o BXMT Blackstone Mortgage Trust 22.5M-share
secondary priced at $25.50/share through Citi, BofA, JP Morgan, Deutsche Bank,
Wells Fargo, and UBS
o AVB AvalonBay announces 7.9M share ATM offering
by Jupiter Enterprises
o EGP EastGroup properties announces recent
investments
o EQR Equity Residential announces 15.1M share
at-the market offering by holder, through Goldman
o HBAN Huntington Bancshares names Dave Anderson
interim CFO to replace Don Kimble
o TRNO Terreno Realty acquires portfolio in Doral,
FL for $23.7M
o FSP Franklin Street Properties aqcuires
multi-tenant office building in Denver for $183M
o GOOD Gladstone Commercial acquires 170K sq. foot
manufacturing facility for $13.4M
o EXR Extra Space Storage increases quarterly
dividend by 60.0% to $0.40 from $0.25
o VOLC Volcano announces
preliminary results from the advise ii study and inclusion in the SYNTAX2 trial
during hot line late breaking clinical trial sessions at EuroPCR 2013
o STJ St. Jude Medical reports
1-year data from the EnligHTN I trial
o MDT Medtronic CoreValve
system gains first approval for transcatheter valve-in-valve procedures
o MDT Medtronic's In.Pact
Falcon Drug-Eluting Balloon Yields Positive Outcomes in Small Coronary Arteries
o NDZ Nordion agrees to sell
Targeted Therapies business to BTG (BTG.LN) for $200M in cash
o RPRX FDA recommends phase 2b
trial of Proellex(R)-V for treatment of severe menstrual bleeding associated
with uterine fibroids
o WCG WellCare elects David
Gallitano as chairman
o MRK FDA panel votes against
the safety of proposed high-end doses of suvorexant
o CEMI Chembio Diagnostics
appoints Sharon Klugewicz as COO; effective 22-May
o APRI Apricus Biosciences
announces offering of stocks and warrants of indeterminate amount through
Lazard Capital
o CONSUMER
o CVGI Commercial Vehicle Group
names Rich Lavin President and CEO effective 28-May
o GDCT GDC Technology files
$75M IPO through Barclays, Jefferies and Piper Jaffray
o TSLA Tesla issues press
release announcing completion of repayment of DOE loan
o SAI SAIC awarded contract by
Defense Advanced Research Projects Agency
o ENERGY
o SPWR
SunPower announces pricing of $300M of 0.75% senior convertible debentures due
2018
o ORIG
Ocean Rig UDW reports Q1
o INDUSTRIALS
o GE EU Commission says the
proposed acquisition of Avio's aviation business by General Electric could fall
within the scope of the EC merger regulation
o Madrid regional government
accusses Ferrovial and Globalia (private) for breaking concession contracts --
Expansion
o Finmeccanica's ad-interim CEO Pansa
might be re-confirmed -- Repubblica
o Sir George Buckley frontrunner to chair Smiths
Group - FT
o WAIR Wesco Aircraft announces
15M share offering for holder Carlyle Group priced at $16.00 per share
o HEI HEICO reports Q2
o DCI Donaldson increases
quarterly dividend by 30.0% to $0.13 from $0.10
o MATERIALS
o WSJ is cautious on Glencore Xstrata
o Brazilian Competition Authority
approves combination of Ahlstrom's Label and Processing business and Munksjö
o PPP Primero Mining completes
acquisition of Cerro Del Gallo
o CSTM Constellium Holdco 22.2M
shares IPO priced at $15/sh through Goldman, Deutsche, JPMorgan
o BRSS Global Brass and Copper
announces 7M share IPO priced at $11.00 per share
o GBG Great Basin Gold
completes sale of its Nevada assets
o SVM Silvercorp Metals
reports Q4
o LYB LyondellBasell announces
share repurchase program; increase to interim dividend
o UTILITIES
o LG The
Laclede Group 8.7M share offering prices at $44.50/share through Wells Fargo,
BofA M/L, JP Morgan, and Morgan Stanley
o POR
Portland General Electric increases quarterly dividend by 1.9% to $0.275 from
$0.27
o IDA
IdaCorp files mixed shelf of indeterminate amount
o DAL EU Commission says the
proposed acquisition of Virgin Atlantic stake by Delta Air Lines could fall
within the scope of the EC merger regulation
o BRS Bristow Group reports Q4
o DRYS DryShips reports Q1
o WSJ looks at online gambling's prospects in US
o HOT Starwood Hotels upgraded
to overweight from equal-weight at Morgan Stanley
CANTOR TRADING RECAP
o Equity Recap
o It was quite a reversal and one can say that
they chose to sell the news, because everyone had to know Big Ben is a dove and
his commentary would follow. There is just the 64,000 dollar question looming
and that is when does QE end? He did say that tightening prematurely would
endanger the recovery which if you look at the action they took in the UK, they
shot merv king down again for his 4th straight time, in regards to him expanding QE and their
feeling over there is, QE doesn’t help any recovering and eventually you have
to take your medicine. The action internally was not of panic but more so
buyers working their tickets lower and sellers came to market vs. trying to
scale them. The earnings today, were good with TOL in homebuilders crushing
their number, while a few of the biggies
missing flat out on their esp. and the others doing the usual where their revs
missed, tough to manage those. From a trading perspective you don’t want to
short the first down day, you rather wait until a few down days of rain and
then pile on, especially with the sentiment so complacent. The typical mindset
is wait and wait and then 5% later or
so, you react or when you get your statements and that’s why the pile on effect
makes more sense. You have to keep in mind, your typical pullback in a bull
market 82% of the time takes you down 5% or so which if so, would take us down
near our 50 day moving average on the s&Pp 500 which is 1,588. The breadth
to the market had declining issues outnumbering advancing issues by 4-1 while internally,
buy and sell names were fairly even. We did see a decent amount of people
legging into some of the names that would be affected if there were an injured
bad, EXXI selling that on for example. This whole SAC thing could really gain
some traction in various ways, when this sec starts digging, they don’t stop
and I’m not saying they are always right, because we’ve seen what happened when
the sec fired out a salvo vs Loch Capital in boston. 2 billion dollar fund who
in the end wasn’t guilty and lost 2billion because no one wanted to be that
guy(the loyal guy). But with SAC
o
Equity
Trading Team
o
Volatility
was quite apparent in the Treasury market today (it had picked up in recent
weeks but clearly not to the extent we encountered today) with wicked price
action, curve shifts and volume- of note the 10 year note fell 38/32 in minutes
(block trades, stops, yen north of 103.5), 10 year future (TYM3) traded close
to 3 million contracts, and the 10s/30s spread very volatile (more than 1
steeper at one point to 2.5bps flatter on the other extreme, 10s the
leader/lagging with mortgages). Today was about the Fed, not the FOMC statement
but the at first comments by Dudley (market opened higher) to Bernanke (initial
reaction was higher only to drop drastically and be very choppy thereafter) to
the FOMC minutes in the afternoon. Please see Harvey Goldsmith's write-ups for
full details. Overall it can be said that the Fed and markets are quite unsure
of when the FOMC may taper but clearly its on the table and could happen sooner
rather than later- keep the July 31st/ September 18th meetings and Jackson Hole
in August in mind if the economy does continue to strengthen. How quick
sentiment has changed, it was only 3 weeks ago that 10s traded to 1.61% as the
fears of a spring swoon, slowing growth and more easing were at the forefront.
All told for the session yields are 0.8bps (2 year) to 8.4bps (7s) higher, 10s
closing north of 2.00% for the first time since March (before the rally started
with Cyprus). Also of note from the auctions 10s and 30s are both back over
20bps!
o
Overnight
we will get PMI numbers from across the globe, Spanish supply and UK GDP. On
tap tomorrow will be weekly claims, new home sales, house price index and KC
Fed on the eco calendar, the $13Bn 10 year TIPS re-opening, TIPS even with the
move higher in rates with B/Es in ~2bps, 10 year B/E at 225bps in over 25bps
from the last 10 year TIPS opening in March, the Treasury's 2s, 5s, 7s announcement
and a Fed purchase int 2019-20 maturities, today they purchased $1.25Bln in the
long end, the lower end of their range with the market are the height of its
volatility right around the operation.
o
Cantor
Primary Dealer
o ETF Flows
o International: The international
markets saw even more volatility then the US on Wednesday. The gold miners initially made a steep rise
before coming off early in the session with a 4.8% range on the day. The same can be said for Emerging markets
index stocks such as EEM and VWO. Japan
stocks were active as well after the strong day in the local markets, but with
movement of the US markets and the currencies, buyers became weary in the
afternoon.
o Commodities: The selloff in commodities continued for the
second day in a row with broad commodity index ETF’s GSG and DBC falling -0.85%
and -0.45% respectively. All of the
energy sectors fell with crude oil ETF USO leading the way down as it fell
-1.90%. Volatility index’s continue to
rally with short term VIX ETF climbing +1.08%.
As Bernanke spoke, gold ETF GLD spiked 2% percent before closing the day
down -0.70% on above average volume.
Grains rallied sharply higher today with its ETN JJG closing the day up
+2.04% and yesterday’s coffee seller made or saved 3% as its ETN JO fell
-3.17%.
o Fixed Income: Statements from the Fed led treasuries lower
and pushed 10 year note yields above 2 percent for the first time since
March. Pain was felt most strongly on
the far end of the treasury curve with 20+ year TLT down 1.49%, while the short
term names BIL and SHV were unchanged.
Total curve ETF GOVT dipped .34%.
Corporate bond etfs, both junk and investment grade, were all negative
on high volume, with HYG most active and most affected (-.62%). International bond ETFs were also all
punished and trading on above average volume.
Some notables were emerging market ETFs EMLC down .48% and PCY down
.13%. The desk saw sellers of BND and
buyers of PFF and TBF.
o Domestic: Bernanke’s comments about the possibility of
tapering the pace of bond purchases sent the market into a tizzy; by end of day
the S&P had dropped .83% and the Nasdaq 1.11%. Pain was felt greatest in Utilities (XLU
-1.69), Tech (XLK -1.09%), Financials (XLF -1.05%) while Consumer Goods (XLP
-.17%) and Health Care (XLV 0.0%) survived with the least bloodshed. The desk saw buyers of IYR, SH, UVXY, VO, and
XLV; sellers of QQQ, VB, XLB and XLU; two way flow on IWM
o Cantor Fitzgerald & Co. | ETF Arbitrage
Group
o 110 E. 59th Street, New York, NY 10022
o Office: 212 829-5411
o Overseas Trading Wrap
o Autos
o SHAEFF announced Q1 13 results on Tuesday.
Group sales down 3.6% year over year, primarily due to Industrial division,
which was down 15% (markets remain very challenging in this segment, especially
Europe). Automotive was up 2.8%, however not sufficient to make up for
Industrial decline. Auto business seems to be doing ok, with growth everywhere
better than market, except South America. EBIT margin at 12.9% for the quarter
vs. 14% for Q1 2012 - EBITDA for the quarter came in at €512 vs. €549 in Q1 12.
Much reduced capex and lower w/c outflow meant that company was FCF generative
during quarter (€52m) vs. -€107m during Q1 12. All y/e 2013 targets were
affirmed.
o Cable
o NUMCAB reported a 1.7% improvement in adjusted
1Q13 EBITDA to EUR 115m from EUR 113m during the same period a year earlier,
according to debtwire. The EBITDA margin was 50.9%, up 110bps sequentially.
Revenues for the quarter increased by 3.5% to EUR 225m on the back of strong
sales of La Box Roll-Out, with more than 60k sales made in the quarter and 180k
orders in place by the end of it. Last year Numericable had sold 121,000 La Box
home gateways, after launching it in June.
o The group spent EUR 58m on capex in the first
quarter of 2013, EUR 4m more than in the previous year, but in line with
full-year guidance levels of between EUR 220m and EUR 240m, which includes the
roll-out of additional 300k/400k Docsis 3.0 plugs and a EUR 20m one-off for the
launch of phase II of its DSP 92 program in the second half. Numericable had
EUR 2.34bn of net debt and was 5.1x leveraged at the end of 1Q13
o Retail
o HOUSF Q4 results out to Jan 26th 2013 were
announced yesterday. Company registered sales growth of 4% (ex VAT) in line
with estimates while Adj EBITDA of £47.8m was marginally below our estimate of
£48.5m. Full year EBITDA thus comes in at £61.1m vs. £58.6m previous year. Net
Debt of £157.2m was below our estimate of c.£160m. Company registered best ever
Christmas sales with LFL sales for the 5 weeks to 05th Jan 2013 up 6.3%. Post
Q4, momentum continues, with LFL sales up an impressive 4.8% for the first 13
weeks of Q1 FY 14
o Ironically, UK retail sales for April
announced yesterday grew by a meagre 0.5% (inc. fuel) vs. +2.0% consensus
estimates. Sales registered a 1.4% decline ex fuel vs. +0.1% expected. Lower
spending on food was the main driver – the quantity of food now bought in the
UK is at 10 yr lows. As one would expect, the BRC blamed poor weather and the
shift in the timing of Easter between 2012 and 2013
o Sachin A. Manchanda, CFA | Distressed, High
Yield and Leveraged Loans |
o CANTOR FITZGERALD EUROPE | t +44(0)207 894
8399
o Equtiy Derivatives Europe/ Morning Comment
o OVERVIEW
o Asia was sharply lower overnight following
Bernanke’s (dovish) speech, within which he failed to rule out QE tapering from
September and Fed minutes revealing more hawks wanted to discuss the issue.
Chinese May flash PMI was also weak (49.6 vs. 50.4 in April). The US closed
down, although significantly rallied into the close. The dollar strengthened,
whilst 10-year government bond yield rose. Gold rose, whilst oil declined.
Today sees US and European PMI releases, Eurozone consumer confidence, UK GDP,
and speeches from Bullard, Draghi and Kuroda
o COMPANIES
o Shaftesbury (SHB LN – HOLD – GBp670) achieved
an H1 NAV beat, although PBT marginally lower than consensus. Mothercare (MTC
LN – SELL – GBp200) FY results in line with little UK improvement.
o TECHNICAL
o VG1 fell outside its ascending channel. Mostly
likely a tug-of-war between bulls and bears will ensue making today's key
direction wise. Supports 2752, 2738, 2727. Resistances 2800, 2821, 2835. SP1
ominously painted a falling-star, a typical reversal signal. Supports: 1632,
1621, 1610. Resistances: 1643, 1660, 1667.
o Turrent| Institutional Equity Derivatives
o 17 Crosswall London EC3N 2LB
o T +44 (0) 20 7894 8840
***All eco data from
Bloomberg and DJ
Prepared by
staff of Cantor Fitzgerald & Co. ("Cantor") and is for
information purposes only. It is not intended to form the basis of any
investment decision, should not be considered a recommendation by Cantor or any
other person and does not constitute an offer or solicitation with respect to the
purchase or sale of any investment nor is it a confirmation of terms. Any calculations and
valuations presented herein are intended as a basis for discussion. Sources of
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losses, costs or claims howsoever arising from any inaccuracies or omissions in
the information contained herein or any reliance on that information. Cantor
may have positions in financial instruments mentioned, may have acquired such positions
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This product may not be reproduced or redistributed outside the recipient's
organization. Sources: Cantor Fitzgerald & Co., Reuters, Bloomberg, CNBC,
Dow Jones, Marketwatch, Trade-Alert, and the Wall Street Journal.
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There will be no Morning @ Cantor Tuesday June 19 or Wednesday June 20. The piece will return Thursday June 21. We thank you for your patience and apologize for the Inconvenience.
Thanks,
Brian Young
Product Manager/Institutional Sales
Cantor Fitzgerald
Phone: 212-610-3629
AIM: bryoung713
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