EFTA00406606.pdf

From: Ike Groff Subject: Early Tour 8.17.12 Date: Fri, 17 Aug 2012 10:03:29 +0000 Good Morning ... European Markets up 15-70bps (IBEX+1.67%, MIB +1.5%) ... Nikkei +0.77%, HSI +0.77%, SCHOMP +0.13%, KOSPI -0.58%, ASX +0.92% EUR 1.2371 (+0.11%) JPY 79.46 (-0.15%) AUD 1.0446 (-0.62%) Spanish 10yr 6.45% Italy 10yr 5.80% US 10yr 1.83% VIX 14.29 Futures: Dow -2, Nasdaq +5, S&P -1 DXY $82.37 (+2c) Crude $95.13 (-47c) Gold $1619.10 (-10c) Copper +0.49%% Very quiet Friday in August thus far and volumes light even though flattered by options expiry. Most indices in Europe have traded in a fairly tight range all week but resumed their grind higher into the bell yesterday and are holding those gains this morning. Also note the IBEX is now +7.0% in the last 5 trading days on short covering into the weekend and people continue to speculate on if/when Spain will seek formal EFSF assistance. Meanwhile, there was a story in the People's Daily suggesting that China should cut luxury goods tax to help boost consumption (has been speculated before many times) which had Prada closing +3.1% in HK and the European luxury basket is +50bps to start the day. SPA's - flat once again = 1412 last. ***Michigan Confidence @ 9:55am, Leading Indicators @ 10am*** ***UK selling £3 billion of 1-3-6 month bills @ 6:10am**** Brocade eps/revs beat but CEO to resign (Q4 revenue forecast midpoint inline) (trading -1.5%) Aeropostale inline w preannouncement but guides Q3 below estimates (trading -8.5%) Gap domestic sales propelled +29% increase in Q2 profit (raised FY eps outlook) (trading +1.5%) Marvell Q2 revs & eps missed (gross margins fell) (citing global eco weakness) (trading -10%) GM seen planning global reorganization tackling "fiefdoms" according to Bloomberg Merkel says Germany backs Draghi on the conditions for ECB help (in Canada yesterday) EU Commission to give ECB oversight over all important banks (Handelsblatt) Finland is preparing for the break-up of the Eurozone warns foreign minister (Telegraph<http://www.telegraph.co.uk/finance/financialcrisis/9480990/Finland-prepares-for- break-up-of-eurozone.html>) Vivendi Hire Rothschild/DBK for GVT plan, possible sale or IPO (trading +0.85%) Swiss Life H1 beat across the board driven by stronger realized gains (trading +3.5%) Britvic bid speculation in the Daily Mail this am (Unilever, Diageo, PE mentioned) (trading +1.8%) Heineken is said to be in talks with F&N about raising its bid for APB to S$53/share (trading -0.35%) Axel Springer board member donates 1.98 million shares to CEO Mathias Dopfner EFTA00406606 (trading+2.1%) Rank trading statement, all looks inline, usual cautious outlook (trading +5.7%) Aker Q2 inline, solid balance sheet, better interest baring receivables, good outlook (trading -1.2%) Valiant H1 inline with pre-annoucement July 30th, slightly lowering guidance (trading -6.5%) PSP H1 net inline, rental income miss, fair value is 11% (trading +0.40%) Ratos Q2 miss, EBITA weak, CEO guides lower for FY 2012 (trading -5.5%) Pennon H1 IMS, overall inline, SW Water strength continues (trading -1.9%) German July producer prices +0.0% Wm vs est +0.3% (+0.9% y/y vs est +1.2%) Bank of Spain says Spanish banks bad loans rise to 9.42% in June (vs 8.95% in May) Samsung (-3.7%) weighed down the KOSPI on profit taking ahead of patent decision Macau Gaming (+4.9%) market chatter of positive surprises ahead of upcoming results Singapore's export data stronger than expected, driven by electronics and petrochemicals Taiwan cuts growth forecast after GDP shrank more than initial estimates (-0.18% vs est -0.16%) Leading European Sectors: Autos/Parts +1.54%, Banks +1.15%, Construction +0.99% Lagging European Sectors: Healthcare -0.44%, Basic Res -0.30%, Food/Bev -0.12% ADS GY insider sales - ABI BB insider sales - PAA stock split DWA $400M credit pact - FICO 8150M buyback - DECK amended credit agreement VNET eps inline, rev miss - AVGO outlook light - SCSC says Ql may miss Notable Options Activity Yesterday: HUN (14.67 +1.3%) cust rolling protective risk reversal buys 23k aug 13 calls and bot put/sold call in nov 11p/23c risk reversal cust collected .375 to roll PKG (32.16 +.2%) opening cust bought 2000 sep 35 calls for .20 outright -9% upside to breakeven CS upgraded to outperform on 8.13 and have seen twice adv since then EA ($13.81 +5.5%) NY Post report that the company is in talks sell itself brought upside call buyers. 58,000 traded compared to the 3750 average daily volume. 30-day implied volatility was up 30% , and the most active strikes were the September 16 calls where just over 20,000 traded and the September 15 calls where over 9500 traded LNG ($14.30 -1.4%) A customer bought 10,000 Dec 16 calls and sold 20,000 Dec 19 calls, paying a net $0.425 for the spread. The trade is profitable with stock between $14.725 and $21.575 at expiration. ***Also, in general it is interesting to note that we currently find ourselves in a period where front month vols have sold off significantly more than the back months, leaving the difference between mid and long term option premiums at multi-year highs (18-month options are trading roughly 5 vol points over 6-month vols = long-term calendar spreads setting up at attractive levels for IWM, QQQ, GLD, SLV etc). Secondaries (announced/priced): PMT, ARCC IPO's: N/A Key Research: DB initiates CYMI (hold), Raja downgrades APKT, RBC downgrades MRVL, CLSA initiates BEAM (up) EFTA00406607 Key Research: Evercore cuts GRPN, Jefferies raises AAPL pt & downgrades VVUS, Wells upgrades VIAB Key Research: JPM upgrades COG & initiates HFC/VLO (neut's) and PSX/TSO (ow's), FBR initiates FCEL Key Research: Susquehanna initiates SF (neut), Wedbush initiates KKD (op), Northcoast initiates C00 (buy) Key Research: Investec downgrades LLOY LN, MS downgrades LINTA/WLP/CERN/MCK & upgrades FM/WAG Key Research: Citi downgrades BAER VX, Macquarie downgrades XTA LN, UBS downgrades DPW GY, Capstone cuts DGI Key Research: GS downgrades GENL LN & AFR LN, GS upgrades OPHR LN, CS & Numis downgrade CRH LN Key Research: DNB downgrades SONG NO, Nordea downgrades WDH DC (CS sees opportunity to buy weakness) Reporting Pre-Open: SJM, ANN, CMRG, FL, GASS, HIBB, IMOS, KIRK Economic Data: U of Michigan Confidence @ 9:55am, Leading Indicators @ 10am Conferences: No major conferences. Analyst/Investor Days: N/A Non-Deal Roadshows: CAM, DUK, FBP, JCI, KSU, MRX, MYGN, NVO, RDA, RTN, UTX Shareholder Meetings: CCSC, MCHP, SUPX Equity/Mixed Shelfs: N/A Other Newspaper Articles & Stories Barron's positive: Cisco (CSCO) Barron's< mod=BOL_hpp_highlight_top> Wonk Wars: How Big Are EU Deficits? WSJ Dutch Banks Feel Property Pain WSJ Apple May Put Cable in a Box WSJ Heard on the Street mod=ITP_moneyandinvesting_6> Cablevision to Carry NFL Network WSJ< mod=ITP_marketplace_1> In Drought, a Debate Over Quota for Ethanol NYT corn-farmers-and-meat-industry.html> U.S. Battery Maker in Financing Deal With a Chinese Firm NYT chinese-farm.html> SEC may take stock market tip from Australia LA Times 0,3113395.story> Inventor claims Heinz stole 'dip and squeeze' packaging idea The Australian heinz-stole-dip-and-squeeze-packaging-idea/story-fnay3ubk-1226452740210> EFTA00406608  GM Seen Planning Global Reorganization Against 'Fiefdoms' Bloomberg< against-fiefdoms> Eurozone prices steady as output shrinks FT e791-11e1-86bf-00144feab49a.html#axzz23ggoXwFg> Luxembourg to feel pinch of banking union FT< e789-11e1-86bf-00144feab49a.html#axzz23ggoXwFg> Obama needs a plan to cut the deficit FT< llel-bece-00144feab49a.html#axzz23ggoXwFg> Corporate cash power is holding the state hostage FT< We must clean up our act on money laundering FT< e78c-11e1-8686-00144feab49a.htmltaxzz23ggoXwFg> Finland prepares for break-up of eurozone Telegraph<http://www.telegraph.co.uk/finance/financialcrisis/9480990/Finland-prepares-for- break-up-of-eurozone.html> Britain isn't in recession, it's just not growing Telegraph<http://www.telegraph.co.uk/finance/economics/9481540/Britain-isnt-in-recession-its- just-not-growing-says-Bank-rate-setter.html> Recessions always look better with benefit of hindsight Telegraph<http://www.telegraph.co.uk/finance/comment/damianreece/9481325/Recessions-always- look-better-with-benefit-of-hindsight-and-revised-data.html> Delaying a eurozone breakup could make the endgame much worse Guardian<http://www.guardian.co.uk/business/economics-blog/2012/aug/16/eurozone-break-up- nouriel-roubini> Is football finance bubble about to go pop after all? Independent<http://www.independent.co.uk/news/business/comment/simon-english-is-football- finance-bubble-about-to--go-pop-after-a11-8053998.html> Ikea to launch budget hotel chain in Europe Independent<http://www.independent.co.uk/news/business/news/ikea-to-launch-budget-hotel- chain-in-europe-8053096.html> Cineworld wants Starbucks shaken not stirred Independent<http://www.independent.co.uk/news/business/news/cineworld-wants-starbucks-shaken- not-stirred-8053995.html> Twitter Plans to Choke Access to Apps It Doesn't Approve All Things Key Events Next Week Monday: e3.2 billion Greek state bond held by ECB expires, Chicago Fed National Activity Index, Earnings (LOW, URBN) Tuesday: Piper Jaffray California Restaurant Tour, Earnings (BBY, MDT, ADI, DELL, INTU, WTSLA) Wednesday: FOMC Meeting Minutes, Existing Home Sales, Earnings (AEO, HPQ, GES, KKD) Thursday: Flash PMIs (US, China & Europe), Merkel & Holland meeting in Berlin (talks & dinner), New Homes Sales, Earnings (BIG, HRL, PDCO, ADSK, CRM) Friday: Durable & Capital Goods Orders, Earnings (MSG) EFTA00406609 Key Events on the Horizon August 27-30 - Republican National Convention (Tampa, FL) August 31-Sep 1 - Fed's Annual Economic Policy Symposium in Jackson Hole, WY (Bernanke speaks Aug 31 @ 10am, Lagarde speaks Aug 31 @ 2:30pm, Draghi speaks Sep 1 @ 12:25pm) September 3-6 - Democrat National Convention (Charlotte, NC) September 6 - BOE/ECB rate announcements September 7 - Xstrata EGM to vote on Glencore deal September 12 - Germany's Constitutional Court ruling on ESM S Fiscal Pact September 13 - FOMC rate decision (economic & fed funds projections with Bernanke press conference to follow) November 6 - US Presidential Election Ike Groff 1680 Washington Blvd Stamford, CT 069011 • (203) 302-7300 1• mailto: (Description: Description: cid:[email protected]] This e-mail and any files transmitted with it are confidential and intended only for the person or entity to which it is addressed. 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