Sunday, November 29, 2015

Barrons Saturday summary

TradeTheNews.com Barrons Saturday summary: Positive on community banks, FDX, small cap stocks, STX, GRMN, QCOM, HPQ, IBM WDC, HOLX, CLC, SRPT ; cautious on European financial institutions, human resource tech space

Cover story: Discusses the prospect of impact investing and how many people believe it doesn't mean sacrificing returns in an effort to do good, and that such investments can be less volatile and outperform traditional financial benchmarks, especially in bear markets.

Tech Trader: Open-source software blockchain has the potential to remove multiple layers of processes and intermediaries in the sequence of steps that clear mobile payments, which could have an impact on credit-card networks such as V, MA, AXP, and DFS.

Trader: Economic data will be in focus this week as it could color the Fed's intentions in 2016; The outlook for community banks is brighter now that the Fed seems likely to raise rates, widening their net interest margins (Positive on HIFS, BANR, HSFNX); Positive on FDX as it could benefit from the increasing shift to online buying, and from its ability to pass along price increases.

Interview: Dan Veru, chief investment officer at Palisade Capital Management, says small caps have an advantage over their larger brethren because they rely more on domestic sales, avoiding currency risk (picks: SNA, CNC, QLIK).

Features: 1) Positive on STX GRMN QCOM HPQ IBM WDC: Shares of these tech stocks have taken a hit, but they have stronger prospects than many investors believe, and patient investors should see shares rebound; 2) Profile of Silver Creek founder Eric Dillon, who is looking at trillions of dollars of nonperforming loans on the balance sheets of European financial institutions, plus another trillion in non-core assets and real estate; 3) Positive on HOLX: Company focusing on women's health products has a new leadership team and has undergone a transformation following Carl Icahn's investment, and shares could reach $80 in three to five years; 4) Positive on Numericable-SFR: Management at France's largest cable-TV operator and No. 2 mobile-phone service provider is working to stem customer defections and attract users with a broad range of new offerings.

Small Caps: Positive on CLC as it has the potential to lower its cost structure while growing its business in a restructuring; share upside estimated near 20%

Follow-Up: Positive on SRPT: Pharma company appears to have the only drug for Duchenne muscular dystrophy that will be approved by the FDA following a negative review of rival BMRN's offering. European Trader: Positive on Persimmon, Barratt Developments, Taylor Wimpey: U.K. homebuilders are likely to get a boost from new government measures aimed at promoting homeownership.

Asian Trader: "The once-stable yuan is subject to expectations that it could weaken anywhere from 3% to 10% next year."

Emerging Markets: Positive on Coca-Cola Icecek, Magnit, Airports of Thailand, Pax Global Technology: Jean-Louis Scandella of Baring Asset Management says these four emerging-market stocks are "sleeping beauties" that should benefit from the growing middle class in developing markets.

Commodities: With oil oversupply showing no signs of easing, prices are likely to remain low for some time, with little relief from weather conditions or OPEC.

Streetwise: San Francisco-based cloud firm 1-Page "may be the most revolutionary company you've never heard of," and could disrupt companies in the human-resources space such as LNKD and MWW.

Friday, November 27, 2015

Turkey Tensions Strain Otherwise Quiet Market

TradeTheNews.com Weekly Market Update: Turkey Tensions Strain Otherwise Quiet Market
Fri, 27 Nov 2015 14:49 PM EST

Trading action was subdued this week as the US Thanksgiving holiday made markets sleepy. New growth and inflation data did nothing to deter the expectation of Fed rate liftoff in December. Global tensions briefly ratcheted up after Turkey shot down a Russian warplane that strayed into its airspace, further complicating the fight against ISIS in Syria. The euro continued to weaken in anticipation of the ECB monetary policy meeting next week where the central bank could expand its QE program and further cut key rates. Chinese stocks fell hard on Friday on a new round of crackdowns on brokerage houses, but stocks outside of China did not react significantly to the news. For the week, the DJIA lost 0.1%, the S&P500 was up less than 0.1%, and the Nasdaq edged up 0.4%.

Two more key pieces of the US monetary policy puzzle dropped this week: GDP and PCE inflation. There were no big surprises in the second reading of Q3 GDP. The main components met expectations, with the q/q annualized rate revised up to 2.1% from 1.5% in the advance reading, although this rate remains well below the final second quarter annualized GDP rate of +3.9%. Analysts chalked up the revision higher to an expansion of the inventory components of the data, offset by lower revisions to domestic spending components. Growth in the November Core PCE reading would have more or less clinched a December rate hike, but Wednesday's flat/lower core reading is a more ambiguous outcome. The y/y reading didn't budge from 1.3%, while the m/m figure was 0.046%, barely missing the rounding bar that would have left it flat. Inflation remains suppressed by lower energy costs, but the Fed has repeated ad nauseam that it will look past lower inflation from lower energy prices.

In other US data, the November Markit Manufacturing PMI index slipped to 52.6 from 54.1 in the prior month, putting the index at its lowest level in two years. According to Markit, domestic demand appears to be holding up well, but the sluggish global economy and strong dollar continue to act as dampeners on firms' order book growth. Echoing the slight declines in other US homebuilding data numbers, October existing home sales declined to 5.36M units from 5.55M units in September. The October durables were better than expected and the September figures were revised much higher.

Early on Tuesday, Turkey shot down a Russian SU-24 fighter-bomber on the Turkey/Syria border. The Turkish side claimed the aircraft entered Turkish airspace over the town of Yaylidag and said the plane was warned 10 times in the space of five minutes before it was taken down. Russian President Putin reacted with very harsh words, calling the move a "stab in the back" by "terrorist accomplices," with "serious consequences" for the Russia-Turkey relationship. The incident momentarily sent European equities lower and helped lift crude prices to two-week highs. Russia has followed up by moving a cruiser with anti-aircraft capabilities into the theater and announcing measures to discourage Russian tourism to Turkey. The Kremlin has also signaled it may take additional economic measures against Turkey.

The minutes from the late-Oct Bank of Japan policy meeting indicated the BoJ felt comfortable holding off on additional QE. All members agreed wage growth is somewhat slow, but most also noted the underlying inflation trend is improving. Members remain on edge about risks of slower growth due to FY17 sales tales tax hike. While the BoJ is not interested in more stimulus, the government is not holding back. There were press reports that the Abe cabinet has prepared a new draft plan to deal with low inflation. Tokyo intends to raise minimum wage by 3% next fiscal year and support capex by rewarding companies that invest in plants and equipment that improve energy use.

On Friday, the Shanghai Composite plummeted 5.5%, in its biggest decline since the August stock market tumult. Traders cited the report that Chinese officials are expanding their crackdown on brokerages including CITIC and Guosen Securities. US markets were unfazed by the drop in the Shanghai index, ending holiday shortened session around flat. Brazil shares took a hit this week when police investigating the ever growing Petrobras kickback scandal announced they had arrested the head of the ruling party in the Senate, Senator Amaral, as well as Andre Esteves, the CEO and controlling shareholder of BTG Pactual SA, Latin America's biggest investment bank.

Activist investors are targeting AIG and Alcoa. Back in late October, Carl Icahn pushed AIG to break itself up into three companies. This week, he said he would commence a consent solicitation for shareholders and may seek a board seat. Icahn disclosed that he has been talking with AIG CEO Peter Hancock, although he also indicated AIG's CEO was not taking his advice. AIG responded simply by noting the steps it has taken to streamline the businesses. At Alcoa, Elliott Management disclosed a 6.4% stake and said it was talking with management about steps to "maximize shareholder value," which might include selling its hydropower business, expanding margins, and follow through on splitting up the business.

After a flurry of press talk last week, Pfizer and Allergan have agreed to merge in a tax-inversion deal worth up to about $155 billion that will result in the world's biggest drug maker by sales. Allergan shareholders will be receiving $363.63 worth of Pfizer stock, or 11.3 shares per share. The new firm will retain the Pfizer name and Allergan's domicile in Ireland. Pfizer expects the combined firm to have an adjusted tax rate of 17-18%, lower than its current 25% rate.


Saturday, November 21, 2015

Barrons Saturday summary

TradeTheNews.com Barrons Saturday summary: positive on WHR; cautious on ESRX

Cover story: SRPT and BMRN are seeking regulatory approval for drugs that could slow the progression of Duchenne muscular dystrophy, which affects about 15,000 to 20,000 boys in the U.S. and in Europe, and tens of thousands more around the world; The stakes are high in a battle that involves innovation, a strong advocacy community, skeptical regulators, and a huge market opportunity for investors; A successful family of DMD drugs could bring in $3B-plus in annual U.S. sales, and a similar amount abroad.

Features:
1) Positive on WHR: Appliance maker's shares have been shaken by a strong dollar and troubles in Brazil's economy, but investors have likely overreacted in sending down the shares, and those who buy now are likely to profit handsomely;
2) Cautious on PG: Consumer goods giant "is at a crossroads" as it tries to retain market share amid growing competition and lower demand, and new chief executive David Taylor needs to take radical action, such as a breakup;
3) Profiles of the 16 women who have made the Barron's list of Top 100 Women Advisors for 10 years in a row;
4) Cautious on ESRX: Company hasn't been affected by the problems facing VRX and HZNP, but questions remain about its commitment to cost-containment, a potential risk factor in its stock price;
5) Positive on GOOGL, CELG, SCHW, EA: Four companies could double their earnings per share by the end of the decade with growth not based on gimmicks, and shares could gain 20%.

Tech Trader: Cautious on SQ: Company faces a number of challenges, not the least of which are competitive threats from rivals such as PYPL and AAPL; While the company has reinvented a marketplace that PAY pioneered, questions about how fast it will scale up and what the payoff will be should give investors pause for now.

Trader: The market will be spurred on for the rest of the year by underperforming money managers trying to catch up and boost their annual return by buying during a bullish season for equities, says Jeffrey Saut of Raymond James; Positive on M: Shares are down almost 50% from highs in July, but for investors with a long-term focus, they look cheap, and a double-digit return could be in store; Cautious on LNCE: Shares of snack company appear overvalued, and could drop significantly if the company misses expectations next year.

Small Caps: Positive on MPW: Shares of hospital REIT are down, but they could stage a rebound next year and the 8% dividend looks secure.

Profile: Shawn Driscoll, portfolio manager, T. Rowe Price New Era fund, has departed from the fund's history of being a pure play on commodities by adding names that could benefit from falling commodity prices (top 10 holdings: PXD, CXO, XOM, TOT, OXY, XEC, EOG, EQT, RPM, ARG).

Interview: Larry Jeddeloh of the Institutional Strategist estimates that the growth rate of China's GDP is at about a 3%, as opposed to the 7% claimed by authorities there, and that there isn't much economic justification for the Fed to raise rates.

European Trader: The recent terror attacks in Paris didn't cause the French stock market to fall, and aren't likely to derail government reforms or slow down the country's growth trajectory.

Asian Trader: With semiconductors China's biggest import after oil, state-backed Tsinghua Unigroup is looking for deals and is said to have $47B to spend during the next five years.

Emerging Markets: A year after President Obama normalized relations with Cuba, the country's lack of a stock market and Marxist-Socialist economic model are keeping investors sidelined for now.

Commodities: Gold is down on expectations of a Fed interest-rate hike, and the metal is "likely to remain pressured in the next year's first half."

Streetwise: International relations expert John Mearsheimer of the University of Chicago says the impact of the Paris attacks could negatively effect the great post-World War II European experiment in liberalism.

Friday, November 20, 2015

Markets Undeterred by Terrorist Attacks

TradeTheNews.com Weekly Market Update: Markets Undeterred by Terrorist Attacks
Fri, 20 Nov 2015 16:03 PM EST

The week began with investors largely looking right past headlines related to the disturbing Paris terror attacks. European indices made up all of their losses from last week and US equities returned to gains after last week's retreat. A second straight quarter of negative GDP put Japan back into technical recession, marking another setback for PM Abe's grand plans for reviving his country's economy. A chorus of commentary from US Fed officials book-ended the Oct FOMC minutes midweek, and largely cemented expectations US rates could very well begin going up next month, but that they will only be rising at a very tempered pace. In Europe, ECB President Draghi amped up expectations for more easing, while the PBoC cut short-term borrowing rates, to some extent fulfilling expectations that Beijing would do more to help the flagging Chinese economy. The US Dollar remained buoyed by the divergent central bank outlooks, resulting in a fresh 7-month low in the Euro. WTI crude blipped below $40 briefly but held that level into week's end, while copper saw another fresh 6-year low. For the week the DJIA gained 3.4%, the S&P rose 3.3%, and the Nasdaq rebounded 3.6%.

The minutes from the last FOMC meeting sent fresh signals that the Fed is more and more confident that it will raise interest rates at the December meeting as long as job growth and inflation trends don't take a turn for the worse. Most officials at the October meeting anticipated that December "could well be" the time for rate liftoff. "Most participants anticipated that, based on their assessment of the current economic situation and their outlook for economic activity, the labor market, and inflation, these conditions could well be met by the time of the next meeting," read the minutes. The US Treasury curve flattened following the minutes and stocks surged as markets appeared more comfortable that they can handle a gradual rise in rates.

Japan preliminary third quarter GDP was negative for a second consecutive quarter (-0.2% q/q), marking Japan's first technical recession since mid-2014 (the last one followed the increase in the consumption tax as part of Abe's Three Arrows reform). Corporate capex spending did the most damage, falling -1.3%, while the soft JPY boosted exports in the quarter to +2.6% from -4.3% prior and consumption was nearly flat at +0.5%. The negative print further boosted expectations for more BoJ easing or a supplemental fiscal budget to address the slump, although the BoJ maintained its stance at its policy meeting on Wednesday. The BoJ maintained its annual pace of monetary base expansion at ¥80T and also kept its overall economic assessment unchanged, while it slightly tinkered with its inflation outlook. USD/JPY marked an eight-week high after the GDP and BoJ developments on Wednesday, touching 123.65 before tightening up into week's end.

In a speech on Friday, ECB President Draghi made his case for more easing in December (the ECB Council meets on December 3rd). While the speech largely reiterated his past themes, Draghi added subtle changes that suggested even headline inflation moving towards target will not be enough. He said the ECB needs to be confident that inflation will not only converge to, but also stabilize around levels close to 2% over the medium term, adding inflation stabilization for the first time to ECB forward guidance. Analysts said his remarks suggest the ECB may sustain monetary stimulus even if oil prices push headline inflation above the 2% target. They also highlighted that German inflation hawk Weidmann took a different tack, called lower energy prices more of a stimulus than a deflation signal. The euro kept weakening and closed the week below 1.0650 for the first time since April.

A pair of US housing industry indicators stepped away from their recent highs. The NAHB index of homebuilder confidence declined slightly in November, to 62 from a revised reading of 65 in October. The October reading represented the highest level since late 2005, for a cycle high. Analysts were unsurprised, even as the reading missed expectations, calling the dip back to September levels a heathy correction that was in line with sales and mortgage applications readings. The annualized pace of housing starts fell 11% to a seven-month low in October, although it's worth remembering that October marked the seventh straight month of starts above 1 million units, the longest stretch since 2007.

Two more major US retailers got a thrashing this week despite reporting merely mediocre quarterly results. Target met expectations on the top and bottom lines, reported a good-not-great 1.9% gain in comps and slightly adjusted its FY guidance. Best Buy beat EPS expectations and boosted margins y/y. Investors frowned on initial FY16 guidance that called for nearly flat revenue and a modest decline in the operating income. BBY fell 8% at its worst after reporting, while TGT was off 6% at its worst. Both names recovered into week's end. Home Depot and Lowes saw strong gains on the week thanks to very good comp sales growth and more limited earnings and revenue outperformance.

Big name IPOs made a comeback this week with the initial stock offerings of Square and Match Group. Early in the week, reports said that the companies were being advised to cut their IPO prices to ensure early investors would be happy and indeed Match priced at the lower end of its $12-14/share initial pricing range while Square priced at $9/share, well below its $11-13/share initial range. With their modest pricing, both IPOs saw a big pop on their first day of trading, and each managed to trade above their respecting initial pricing range.

On Thursday, UnitedHeath Group cut its FY15 guidance and offered a slightly soft initial outlook for FY16. The CEO said the company had suspended marketing for Affordable Care Act exchanges and could exit the Obamacare individual health plan business altogether because it is losing money on the business. UNH's shares fell 6% in the session and the comments dragged down most of the sector. Analysts suggested bigger losses may be in the pipeline for other healthcare insurance names more exposed to flawed exchanges.

In M&A news, Starwood Hotels agreed to be acquired by Marriot for $12.2 billion, mostly in stock. Together, the companies will operate or franchise 5,500 hotels with a total of 1.1 million rooms, in around 100 countries. The already shaky $6.3 billion Staples/Office Depot merger was looking worse after the New York Post reported that the FTC might finally block the deal due to antitrust concerns. Shares of ODP were down 12% on the week. Railroad Norfolk Southern received an unsolicited offer from Canadian Pacific valued at $46.72/share in cash and 0.348 fixed share exchange ratio. Norfolk's board described the deal as low-premium and highly conditional but did not reject it out of hand, and CP's leadership indicated they may be willing to increase their offer. Recall that CP tried and failed to buy CSX last year.

The US Treasury implemented stiffer anti-tax inversion merger rules in an attempt to make overseas deals designed to avoid US taxes more difficult. The new rules restrict US firms from inflating the size of the new foreign corporate parent, and thereby avoid the current rule that requires the former owners of the US firm to own less than 80% of the newly combined entity. The move threw a monkey wrench in the ongoing merger talks between Pfizer and Allergan, but did not derail them. At the beginning of November, talks between the two companies were active, while this week reports suggested the deal could be priced as high as $150 billion, for the biggest drug industry deal in history. There were fears the deal might die under the knife of the new Treasury rules, although CNBC's Faber pointed out that the new rules apply to transactions where continuing ownership is in fact 60-80%, and under current talk Pfizer would own 59% of the combined entity with Allergan.


Saturday, November 14, 2015

Barrons Saturday summary

TradeTheNews.com Barrons Saturday summary: positive on EMR and GWR
Cover story: The stance of Donald Trump and some other Republican presidential candidates on China is wrong; If Trump were elected and imposed tariffs, he would risk a protectionist war similar to the one that led to the Great Depression; Contrary to Trump's statements, the renmimbi is fundamentally overvalued, not undervalued.

Features:
1) Positive on EMR: Company's move to spin off its network-power unit and divest some of its industrial-automation business will end up cutting sales but significantly boosting profitability;
2) Positive on NVDA, BBY, CTXS, TXN, DO, MSFT, CBG: Seven companies had big upside surprises in their latest quarterly reports and likely will see better days ahead, though investors should do more research before buying;
3) Positive on GWR: Small railroad stands to benefit if CP and NFKS merger, since they would likely have to divest some of their routes to meet antitrust requirements.

Tech Trader: Cautious on Match Group: Dating site being spun off from IACI will face questions about the sustainability of its business model and growing competition from new online rivals.

Trader: While many investors expected an end-of-year market flourish, says Terry Sandven of U.S. Wealth Bank Management, "the Santa rally actually happened in October"; Positive on CRC, MUSA, PSXP, PSX, MPC: Refinery spinoffs have been winners despite lower oil prices, partly because they benefit from lower feedstock costs and have been better able to showcase their value; Cautious on BHI: Shares could gain about 27% if a merger with HAL is approved, but "there is too much uncertainty here to take that bet."

ETF Special Report: Marco Cortazzo of Macro Consulting Group, Richard Bernstein of Richard Bernstein Advisors, Bill Greiner of Mariner Wealth Advisors, and Bob Smith of Sage Advisory Services share their insights into bond ETFs (Positive on HYG, PFF, CSJ, HYD, ISTB, SUB, SMMU, BSCI, IBMG, IBCC).

Profile: Sandy Rufenacht, head of Aquila Three Peaks Capital Management, seeks to determine how much free cash flow a company can generate 12 months ahead (top ten holdings: SCI, AMSG, CCK, SLGN, NLSN, PF, FIS, SEE, ARMK, LVLT).

Interview: Jim Rogers, international investor, says he has slowed down his investment activity, and says he sees limited opportunities in many markets and thinks mounting worldwide debt and too much easy money will lead to a global bear market.

Follow-Up: Positive on WY: Merger with PCL will create the country's largest private landowner, positioning the timber giant for long-term growth as the housing market improves; Positive on RELY: Recent drop in share price of aluminum recycler and acquisition-oriented firm has seen a drop in its share price, creating a good entry point for investors; Cautious on SUNE: Following another quarter of losses, company's "baroque business strategy" seems harder to justify, and shares could fall from $5 to $2.

European Trader: Positive on Bayer: German life-science company "is reorganizing and retrenching" and has a strong pipeline of drugs that are likely to boost margins and earnings.

Asian Trader: Positive on BIDU: Investors aren't giving the Chinese Internet search giant enough credit for its efforts to build an "online-to-offline" service, which promises to disrupt sectors such as travel agencies and restaurants.

Emerging Markets: Frontier markets such as Vietnam and Pakistan offer potential for investors, with smaller companies especially worthy of attention.
Commodities: Raw-sugar futures have risen by almost 50% since late August, and could keep going up amid continuing erratic weather in Brazil.

CEO Spotlight: NDAQ chief executive Bob Greifeld presides over "an increasingly high-tech company, one that has been transformed under his watch" with 25 markets across the world for stocks, derivatives, currencies, equities, commodities, and private companies.

Streetwise: If industrials were truly in a recession, profits should be declining, but they aren't; Among chief executives who have been in top positions in at least two other companies and who beat the S&P 500 and its peers during those tenures are LMCA's John Malone, TSLA's Elon Musk, DD's Ed Breen, and TPX's Scott Thompson.

Friday, November 13, 2015

Weekly Market Update

TradeTheNews.com TradeTheNews.com Weekly Market Update: Autumn Rally Vanishes
Fri, 13 Nov 2015 16:16 PM EST

US equities broke a six-week winning streak as global economic weakness finally caught up with the autumn rally. After last Friday's big October US jobs report, the reality of Fed rate hikes in December is starting to sink in, but at the same time, the US economic data out this week suggested that the US is hardly a bastion of strength even compared to the anemic global economy. Chinese October economic data was looking pretty poor, and a raft of European preliminary third-quarter GDP numbers were flat or up tenths of a percent. Commodity prices remained under pressure, with markets watching WTI crude move ever closer to $40/bbl. For the week, the DJIA fell 3.7%, the S&P500 lost 3.6% and the Nasdaq swooned 4.3%.

Press reports out this week indicated that the ECB Council was coming to a consensus that interest rates should be cut deeper into negative territory to support the flagging European recovery. The thinking appears to be that a dominant faction on the council wants to see a steeper cut to the deposit rate than current expectations for a ten basis point reduction. Expectations were high for President Draghi's speech on Thursday, however Super Mario merely reiterated his standing positions that QE will run beyond Sept 2016, if needed, and that the ECB is not short of instruments to achieve price stability. Most of Europe reported anemic preliminary third-quarter GDP numbers on Friday, further highlighting the dim prospects for the continent and handing the ECB doves the ammunition they were looking for. EUR/USD was mostly constrained within the 1.0700-1.0800 range for the week, retesting April lows.

The September JOLTS report gives the Fed even more evidence the US economy at or very near to full employment. The JOLTS survey beat expectations, rising to 5.53M and moving it back toward the record high of 5.735M in July. Analysts note that the quits rate has been stalled at 1.9% for the last six surveys, since the April report, arguing the reluctance of workers to quit and seek other (presumably better) jobs shows the labor market is still not entirely healed. Meanwhile, the weekly jobless claims report showed initial claims steady at recent 15-year lows.

October economic data out of Beijing further cemented the belief that the PBoC and the Chinese State Council would be forced to open the door to even more policy easing. China's October trade balance saw the highest surplus on record since 1995, however both exports and imports saw steep declines: Exports fell nearly 7%, the fourth month of decline, while imports fell an eye watering -19%. October CPI slowed to a six-month low of 1.3%. October industrial output slowed to a 7-month low, missing expectations, while urban asset investment hit new multi-year low. Meanwhile, China Securities regulator CSRC provided some stimulus of its own for Chinese equities, saying it was confident in its ability to reopen the China IPO market by the end of 2015 after a four-month suspension due to stability in financial markets.

Crude futures ended the week not far from their late August lows after an eight-session meltdown. WTI cratered came within pennies of $40 and Brent dipped to $44.50. The weekly inventory reports turned in another round of huge builds. Both Russia and Saudi Arabia reiterated their long-standing opposition to cutting production in order to support prices, strongly suggesting that chances of any sort of deal to trim production at the upcoming OPEC meeting is dead. In its monthly report, the IEA forecasted a 2016 slowdown in global demand. However, the strengthening USD and poor economic data reports out of China and Europe are likely the biggest factors behind crude's dramatic retest of its lows.

Alibaba provided 24 hours of running commentary on its big 'Singles Day' sales event, although investors were not impressed. Jack Ma shared that the total value of goods sold at the event was $14.3B, a 60% increase over the year ago total. Ma claimed the positive numbers were not just a good indicator for Alibaba, but also for China's shift to consumer-driven economy. Shares of BABA lost about 10% on the week, mostly reflecting the weaker data out of Beijing. Meanwhile, Amazon continued to notch all-time highs around $675, driven higher by positive analyst commentary.

Three major US retailers suffered double-digit percentage declines this week after reporting third-quarter results. The Gap lost over 10% on the week after warning investors in a preliminary report that it would miss expectations for the quarter on -3% comps. Macys shares cratered after it missed widely on revenue and cut its FY15, on -3.6% same store sales. In addition, Macys disclosed it would not pursue a REIT transaction to extract value from its real estate holdings, citing the many costs associated with the structure. Nordstrom lost nearly 17% on Friday after missing top- and bottom-line expectations and also cutting its FY15 guidance. JC Penny and Kohl's both beat expectations and turned in positive sales comps in the quarter, however shares of both firms have been dragged much lower by their competitors' failures.

Tech was not immune to earnings weakness either. Cisco reported quarterly results that were better than expected but shares sold off on weak guidance.

Homebuilders DR Horton and Beazer Homes reported strong fourth-quarter results. DR Horton's profits rose nearly 45% y/y and revenue gained 27% y/y, although the firm only just met expectations. Beazer's y/y gains in profits and revenue were considerably less, but still pretty positive. However, Beazer's new orders rate flat-lined in the quarter, while DR Horton continues to see double-digit gains.

In M&A news, AB InBev has formally launched its $100 billion-plus offer for SABMiller and agreed to sell the latter's stake in MillerCoors to help win regulatory approval. The deal would be one of the largest mergers in history, worth about £70 billion or $106 billion. Mylan failed in its bid to acquire Perrigo, falling short of the 50% threshold in its unsolicited tender offer. Troubled natural gas producer Apache Corp received and rejected an unsolicited takeover approach from Anadarko. Press reports also said that Syngenta was back on the block, having received and rejected a preliminary offer from ChemChina.

Saturday, November 7, 2015

Barrons Saturday summary

Barrons Saturday summary Barrons Saturday summary: positive on GM, PAH, HPQ; cautious on NUS 

Cover story: For people facing retirement, long-term care "is the elephant in the room than can upend an otherwise meticulously crafted retirement plan"; Story delves into the pros and cons of aging at home, one-stop senior living facilities, and assisted living facilities.

 Features:
1) Positive on GM: The automaker continues to boost profitability; the recent 2% boost in shares simply corrects an undeserved midyear selloff; shares could hit $48, or eight times earnings, for a return of about 40%, including the dividend yield of nearly 5%;
2) Cautious on NUS: Company's charitable program to provide VitaMeals to kids in poor nations brings some risk and poses a number of questions for investors;
3) Positive on PAH: Shares have fallen 60% over concerns about leveraged options, but chief executive and founder Martin Franklin has an strong track record of making roll-ups work, and the stock could see a rebound;
4) Positive on HPQ: Printer and PC half of newly split Hewlett-Packard should be able to maintain the profitability of its leading businesses despite volume declines, and return money to shareholders via buybacks and dividends;
5) A look at picks from the investors who attended the Invest for Kids conference in Chicago (HZNP, CPN, GMCR, ZNGA, GSK, BIDU, RBS, CF, EROS, crude oil, commercial and foreign real estate, Manhattan real estate, junk debt).

Tech Trader: Tech startups are increasingly taking their time going public, creating a growing divide between public and private technology investors; "Popular private start-ups continue to attract cash at higher valuations, but the public has all but turned its back on them"; Underwriters are facing some pushback over valuations during the roadshows that occur between IPO filings and final pricing.

Trader: "The market assessment of the probability of a rate hike has increased markedly since the last FOMC meeting," says J.J. Kinahan of AMTD; Positive on MCD: Howard Penney of Hedgeye Risk says the fast-food chain is successfully managing a turnaround that should continue and send shares up; VRX: A further drop in the pharma company's share price "could have an unpleasant spillover effect on the entire market."

Follow-Up: NSC: Shares have taken a hit because of falling oil prices, but the company has been restructuring, furloughing crews, and taking locomotives out of service, and shares could see 18% upside; RL: With incoming chief Stefan Larsson about to take the reins, investors should hold on to shares, which could have 15% upside, not counting the 1.5% dividend yield; ATVI: The KING acquisition will make the company a leader in the fast-growing casual-gaming segment and give it access to King's $900M cash flow on reasonable terms.

 Profile: Gary Miller of the Victory Sycamore Established Value fund says a selling discipline is as important as the buying process (top 10 holdings: UNM, DG, XYL, CFG, Y, DDR, STI, XRAY, ATO, XEL).

 European Trader: Armundi: "Europe's biggest asset manager could reward investors with quick profits when its shares begin trading in Paris next week."

Asian Trader: A look at how to beat the MSCI Emerging Markets index, more than two-thirds of which consists of Asian stocks (long on Samsung Electronics, TSM, Tencent Holdings; short China Mobile; avoid China Construction Bank, ICBC, and Bank of China).

Emerging Markets: With presidential elections on the horizon in Argentina, the country's stocks and bonds are already rallying on prospects for fiscal and monetary reform.

Commodities: "Big cuts in copper production may have given prices a bump, but any gains will be fleeting until demand returns."

Streetwise: An interest-rate hike will allow banks to earn more money on loans and realize better returns on their investments, boosting earnings--but new regulations could lessen the effect.


Friday, November 6, 2015

Robust Labor Report Fuels Fed Liftoff Expectations

TradeTheNews.com Weekly Market Update: Robust Labor Report Fuels Fed Liftoff Expectations
Fri, 06 Nov 2015 16:08 PM EST

US equities eked out their sixth week of gains as the October jobs report outperformed and earnings season entered the home stretch. After the anemic Q3 GDP report and September's weak job growth, there were real concerns the Fed would not be able to deliver an initial rate hike this year. The October jobs report dispelled the notion. In Europe, there were real concerns about the very weak September German industrial production report, while in China PMI numbers remained pretty poor. By Friday the US Dollar Index reached a new 7-month high, and the benchmark 10-year yield backed up 18 basis points to surpass 2.3% for the first time since July. For the week, the DJIA gained 1.4%, the S&P500 gained 1% and the Nasdaq advanced 1.8%.

A month ago, the September US jobs report was a big bust, with the low headline nonfarm number and significant revision lower to the August payrolls figure raising real questions about the state of the US economy, not to mention the viability of Fed pledges for a 2015 rate liftoff. Friday's October jobs report reversed sentiment about the US jobs market. The nonfarm figure absolutely crushed expectations (+271K v 185Ke) and pulled the three-month nonfarm average to +187K, which is just modestly below the +206K average for the year to date. The annualized unemployment rate fell to 5.0% (the lowest level since May 2008) from 5.1% in September, while underemployment dropped below 10% for the first time since 2008. Meanwhile, the civilian labor force participation rate remains stuck at 62.4%.

The case for a December Fed rate hike looks pretty strong after the October jobs report. Fed fund futures had been gradually creeping up heading into the data, and in the aftermath of the NFP report the contract showed traders believe there is a 70% chance of a 25 basis point hike at the December FOMC meeting. In speeches this week, Chair Yellen said December was a live meeting and Vice Chair Fischer more or less dismissed the argument that inflation was too low to begin raising rates. Moderate FOMC voter Lockhart made the case for rate hikes, while hawk Bullard started talking about the debate that would surround the second round of rate hikes. Even the dove Evans all but made the case for a hike in a CNBC interview after the jobs data, saying conditions "could be ripe" for a rate increase and that he goes into each meeting with an open mind.

Bank of England rate hike expectations are headed in the opposite direction. UK treasury yields tumbled after the BoE signaled in its quarterly inflation report that it would delay raising interest rates due to a more cautious outlook on inflation and growth. Analysts suggested that the details of the inflation report mean the BoE had delayed rate hikes by as much as 10 to 12 months, to late 2016. The minutes for the previous BoE policy meeting came out at the same time, and confirmed that McCafferty was the only MPC member to vote for a rise in interest rates. The 10-year benchmark gilt yield lost as much as five bps to trade 1.967% on Thursday, however the yield was back up as high as 2.049% on Friday after the jobs report.

PMI data out of China last weekend showed little improvement, with two key measures seeing their eighth month of contraction. The official October manufacturing PMI missed expectations for breakeven, remaining on par with last month at 49.8, while the official Services PMI hit a three-year low of 53.1. The SME-oriented Caixin final September manufacturing PMI remained in contraction as well, although it continues to creep a bit closer to growth. China Premier Li again stepped away from the 7% GDP target, mentioning at least twice that the potential for 6.5% annual GDP growth through 2020 would help China accomplish its economic agenda.

After dropping to around $42 last week, front-month WTI crude futures marched higher to retake the $48 handle on Tuesday and Wednesday. The strength couldn't last after both the API and DoE crude inventories turned in another week of sizable builds. Then an unnamed OPEC official was said to have commented there would be no deal to cut the cartel's production at the meeting in December, assuming non-OPEC countries do not move to cut their own production. Finally, on Friday President Obama said the government would reject the Keystone XL pipeline, citing a preference for clean energy efforts and projecting the pipeline would not have generated much economic growth. WTI closed out the week around $44.30 and Brent ended up back around $47.

Valeant's shares fell below the lows seen in October when details of the Philidor pricing scandal were leaked out. VRX plummeted 16% on Thursday and dipped below $80 a share for the first time in more than two years after the WSJ chronicled investor Bill Ackman's response to the fallout over the last few weeks. The WSJ piece suggested Ackman wavered in his support of Valeant CEO Pearson, though he later issued a statement in support of Pearson, as did the Valeant board. The biotech wreckage spread to other names as they released new data this week. Bluebird Bio shares tanked after analysts were unimpressed with new abstracts for its experimental sickle cell disease treatment, and Incyte shares were tripped up on Friday upon release of some early stage cancer data that might indicate limited uses for a new cancer drug under development.

Tech darlings Facebook and Tesla surged after their third-quarter earnings reports, and Facebook shares moved to a new all-time high above $110/share. Facebook's top- and bottom-line results exceeded targets, while both monthly and daily active users rose by double digits. A horde of analysts upgraded price targets on the name and made very positive comments. Shares of Tesla sustained double digit percentage gains after earnings, even though top- and bottom-line results merely met expectations. Investors were heartened by projected Q4 deliveries at a better than expected at 17-19K, although the company slightly narrowed its FY deliveries guidance to 50-52K. On its call, the firm said it aspired to be cash flow positive by the first quarter of 2016. Regarding the new Model X, Tesla said it would achieve steady state production capacity during the first quarter of 2016.

Media names were under pressure after reporting third-quarter results. Time Warner saw strong earnings, while 21st Century Fox missed revenue targets. CBS did quite well, and Disney saw revenue growth across its main business lines. However, it was Time Warner that upset the space, offering a surprise initial FY16 earnings forecast on the company's conference call that was well below expectations. Multiple analysts cut their outlooks on Time Warner, and shares of the name lost around 9% on the week.

The two successor companies of Hewlett-Packard began trading on Monday morning. Shares of HP, Inc. are trading under the old HPQ ticker, while Hewlett Packard Enterprise is trading under ticker HPE on the NYSE. HP, Inc. will focus on personal computers and printers, while Hewlett Packard Enterprise will sell commercial computers systems, software and tech services.

In M&A news, Visa reached a deal to acquire former subsidiary Visa Europe for €16.5 billion ($18.2 billion) in cash and stock, with the potential for an additional payment of up to €4.7 billion. Shire said it would buy Dyax for about $5.9 billion, or $37.30/share, representing a 35.5% premium to Dyax's closing stock price on Friday. Dyax shareholders may also get an additional contingent value right worth $4.00/share if Dyax's DX-2930 drug is approved. AstraZenica snapped up ZS Pharma for $90/share in cash, for a total deal valued around $2.7 billion. Youku Tudou, the so-called YouTube of China, agreed to be acquired by Alibaba for $27.60/ADS in an all cash deal valuing the firm around $4.4 billion. Alibaba already owned one-fifth of the firm.

Monday, November 2, 2015

November-December 2015 Outlook: Trick or Treat

TradeTheNews.com November-December 2015 Outlook: Trick or Treat
Mon, 02 Nov 2015 13:29 PM EST

The last couple of months have been a wild ride for the markets. A summertime scare triggered by the Chinese stock market meltdown sent global equity markets into corrections of 10% or more but they have since erased most of those losses. 10-year treasuries have started to percolate above a 2.00% yield as the Fed creeps closer to a rate hike. The dollar index has zigzagged several times in recent months but is now trying to push higher, though not to the extent of the much-touted prospect of euro parity. Energy prices have resumed a downward trajectory, keeping pressure on weak inflation readings.

Reviewing the last couple of months, like a kid going through the spoils after a long night of trick-or-treating, our baseline expectations were well satisfied with a few surprises tossed in the bag. As expected, worries about Chinese stock market gyrations subsided, though commodity-driven emerging markets are still hurting from China's shift toward a slower growth domestic consumption economy. That has contributed to the weak commodity environment persisting, as predicted, keeping inflation pinned at low levels in the advanced economies and driving the ECB toward more intervention. Some of the political landmines of the last few months were diffused, most surprisingly the debt ceiling debate in Washington (a two year deal that shows Congress is perhaps ready to stop toilet-papering its own House and get down to a serious legislative agenda). Others could still blow up: Brazil's President is still under the cloud of a potential impeachment, and Spanish elections in December could create ripples for Europe.

For the next couple of months markets will be more focused on central bank activity than ever. Expectations are that the ECB will reach back into its goody bag to dole out additional stimulus. China's PBoC and the Bank of Japan may also be handing out more treats. By contrast, the Fed is contemplating withdrawing some accommodation, and many market watchers may feel it's a dirty trick if Fed doesn't raise rates in December. All of these decisions will be tied to data on growth and especially inflation. Central bankers continue to insist that low inflation is linked to transitory factors, but there is a growing sense they may be whistling past the graveyard and feeling more nervous about the issue underneath their masks of cool assuredness.

Rate Liftoff Haunts Markets

After what many Fed members described as a "close call" to keep rates on hold in September, they stood pat in October but withdrew stated concerns about global economic developments restraining growth. The October statement also specifically referenced the next meeting in December as a moment for the Fed to make a choice about rate policy. Though the Fed is always data dependent, this shift in the latest statement, along with recent comments from Chair Yellen and other key committee members that they still forecast a rate hike this year, give a strong indication that the cycle could begin at the December 16 meeting. This view is also supported by the minutes of the September Discount Rate meeting which showed that for the first time a majority of the Fed regional bank boards urged an increase in the discount rate (8 of 12 sought an increase, up from 5 at the prior meeting).

The decision to lean more hawkish at the October meeting but not to pull the trigger on rates gave Yellen's team another six weeks of data to observe before they render their final decision of the year. Among that data are two more non-farm payrolls reports (November 6 and December 4). The Chairwoman will have a good sense of this fresh jobs data by the time she testifies before Congress on December 3, so she may use that platform to present a firmer opinion about the timing of rate liftoff.

Should the Fed take the plunge in December, Yellen will make every effort to put a positive spin on the decision. It will be touted as a show of confidence in the strength of the economic recovery, and be seen as a positive development for savers and for banks that have suffered under the low interest regime. The Fed will also stress that the new neutral rate is much lower than it has been historically and that this tightening cycle will be shallower than in the past and will not be "mechanical" (i.e. not one hike per meeting).

Even senior IMF officials, who have been urging the Fed to postpone liftoff to 2016, recently admitted that a rate hike would not be "cataclysmic." In addition, a Fed decision to move forward could make the path easier for the Bank of England follow suit early next year. For the last several months Governor Carney has stated that the decision to raise interest rates will come into sharper focus around the end of this year. That makes it reasonable to assume that the December 10 BOE meeting could lay out a clearer timeframe for rate liftoff in the UK.

PREDICTIONS: As has often been the case in the post-financial crisis era, the Fed is again facing a communication problem. It would not be a shock if the FOMC decides to raise rates at the December meeting, but it might still be considered a "surprise," given that fed fund futures are still forecasting a less than 50% chance of a hike at that meeting.

On the other hand, if the committee decides to hold off yet again, it could further erode confidence in Fed's forecasting abilities, since they have been indicating for most of 2015 that rate liftoff would occur in the second half of the year. A no-go in December would also fuel theories that the Fed suspects that 'something wicked this way comes.'

Unless another black cat crosses the Fed's path, the likely outcome appears to be a December liftoff. After a brief interlude of spotlighting foreign developments, the Fed can focus back on domestic data to come to its decision. A mixed bag of Q3 earnings reports from multinationals will be weighed on by continued weakness at the energy majors, but should not be bad enough to deter Fed action. A rate hike decision could be supported by two more solid jobs reports and early Q4 GDP indicators that show better growth than Q3's tepid result. The data should make this decision clearer by early December, and when it sinks in the markets may be hit with another "freak out" moment. That panic attack should be brief, however, on the realization that a second rate hike is not imminent (Janet Yellen is not going to peel off a mask to reveal Paul Volcker underneath).

ECB Handing Out More Candy

In the eventuality of a Fed rate hike (perhaps followed closely by a BOE move), other central banks could ease the blow by increasing their accommodation. Central bankers have already injected over $8 trillion into the global economy since the start of the financial crisis, but even more may be on the way.

Even though the ECB's massive is quantitative easing program is less than halfway completed, President Draghi appears to be drawing up plans to offer up more treats for the markets. In his latest press conference Draghi announced that the "degree of monetary policy accommodation will need to re-examined" in December, when new economic projections will be available. He said that while the domestic recovery is showing resilience, external demand from emerging markets is weakening, creating downside risks to inflation and economic growth exacerbated by continued weak commodity prices.

Draghi further extended his dovish commentary by revealing that additional rate cuts are one of the options available, a shift from prior rhetoric that had declared rates are at their lower bound. He made it clear that the choice of instrument has not yet been made from a whole menu of options, but that for the first time a lower deposit rate was among the choices.

The ECB's decision to do more will be complicated by the Fed's path toward withdrawing accommodation. Nearly simultaneous moves in opposite direction are bound to put some stresses on global markets, especially currencies. More talk of the euro-dollar parity is certain to arise in the weeks ahead. Furthermore, any action by the ECB could force the hand of other closely linked central banks, like the Swiss National Bank, which had to abandon its currency peg in January because of forex pressures created by ECB programs.

PREDICTIONS: The ECB has given every indication that more accommodation is on the way. It could come in the form of negative rates, an affirmative extension of the QE program, or some new innovation in monetary policy.

For central bankers, negative rates are still largely experimental, though a few smaller economies have already implemented them during this economic cycle. But at this point, negative rates for an economy the size of the Euro Zone probably has too much of a mad scientist feel to it to throw that switch, not to mention that it would further compress already pan-caked fixed income rates in Europe.

The safest route for Draghi's team would be to expand the QE program, a move that many analysts have been expecting for months, rather than throwing together a witch's brew of new policy measures. If the ECB's choice is to modify the QE program, expectations are that it will be a timeline expansion past the current presumed end date of September 2016, rather than any increase in size of the 60 billion euro per month in bond purchases, which could create an uncomfortable scarcity in certain bond categories. The mere discussion of other options like a negative deposit rate can be held up as evidence that the ECB is serious and prepared to do more in 2016 if deflation starts to take hold.

Treats from the Orient

Like many other central banks in developed economies, the Bank of Japan has struggled to gain traction toward a 2% inflation target despite three years of its own version of QE. Similar to its peers the BOJ has blamed much of the difficultly in achieving the inflation target on transitory weakness in commodity prices. That slow progress has prompted many analysts to call for the BOJ to further boost its 80 trillion yen per year expansion in the monetary base (after its last expansion in October 2014).

Apparently the economic data ahead of the October meeting was good enough that BOJ opted against this move. Instead the central bank pushed back the goal for reaching its inflation target to the second half of next year from the first half.

Still, with the ECB and PBoC moving toward adding stimulus, the BOJ may not be far behind. That decision will lie with the incoming data. Japanese consumer prices excluding fresh food fell 0.1% in both August and September, dipping below zero for the first time since early 2013 (though ex-food & energy readings have been substantially higher). More numbers like this could mean the witching hour is approaching for Japan and could certainly justify new action by the BOJ.

China's central bank has bumped up its stimulus several times this year. Its latest move was to cut key rates just ahead of the Communist Party plenum, a gather of top party officials to craft a new long-term policy agenda.

The plenum set a target of "medium-high" economic growth over the next five years, while a senior PBoC official declared that 6-7% growth remains achievable over that timeframe, though they would not "defend that target to the death." The plenum seemed to put more emphasis on social issues, such as easing the nation's one child policy and beefing up spending on poverty, education, environmental and healthcare programs.

China could get an external boost from an upcoming IMF decision on expanding its currency basket (November 4). All indications are that the IMF is ready to declare that the Chinese currency has matured enough to be added to its Special Drawing Rights after being denied inclusion during the last SDR review five years ago. Reports say the IMF has been sending Beijing encouraging signals about the decision, and even China's surprise currency devaluation in August, which dealt a brief shock to global markets, was praised by the IMF as a positive move toward normalizing the yuan.

Inclusion in the SDR would be a point of prestige, essentially recognizing the yuan as an international reserve currency. It would acknowledge China as meeting two key criteria: the nation's importance to global trade and the currency being "freely usable." China obviously meets the first test, but there may be some reservations about the second given the country's extensive capital controls. The IMF has said, however, that "freely usable" does not necessitate the currency being "fully convertible." By that standard the growing use of the yuan in bank reserves and international transactions should be enough to meet muster.

PREDICTIONS: If the BOJ joins in the new stimulus pageant, a likely scenario would be ramping up purchases of government bonds and other assets to 100 trillion yen a year from the current 80 trillion. Governor Kuroda said earlier this year that "many options" are available for more monetary policy action, so he could put forth a more creative option as well. In any case, more stimulus will translate into a weaker yen after it has been pinned close to 120 to the dollar for the last two months.

In China, the lack of more specific growth targets out of the Plenum seems to indicate that Beijing is willing to sacrifice some growth in favor of its continued reform agenda, which may benefit the country in the long run but could spook economists in the short term. However, despite some discomfort in the Chinese stock market, the consumer market remains fairly healthy. A hard landing for China remains a possibility, but seems a low probability at this point. Policy-makers in Beijing appear content with incremental and targeted stimulus efforts. One future example of this could be to follow through on promised assistance for the reeling Macau casino business.

An endorsement from IMF this month could result in the yuan being included in the SDR as soon as next year. This stamp of approval should lead to even wider use of the yuan for transactions and as a reserve currency and will encourage Beijing to continue on its reform path.

Inflated Ghost Stories

Normal healthy inflation has been absent in developed economies for so long it almost feels like it exists only as a fantastical ghost story told by central bankers. But since returning to inflation targets is at the heart of most central bank policies these days, it's a tale worth listening to.

By most accounts, the bogeyman in the story is the plunge in energy prices. Cheaper oil over the last year has failed to engender the pickup in economic activity that many economists had predicted, and it has laid waste to inflation forecasts across the globe.

Since Saudi Arabia threw off the mantle of swing-producer in favor of maintaining its market share, US oil firms have scrambled to shutter unprofitable wells. After a year of this, US production is at a 12 month low, but the remaining oil rigs are extremely productive and efficient. A couple of brief WTI rallies have been attributed to the ever shrinking North American rig count, but oil prices have not been able to make a sustained move out of the mid-$40's range.

The semi-annual OPEC ministers summit (December 4) would be an opportunity for oil producers to address the oversupply in the market, but it does not appear that Saudi Arabia and its Gulf allies want to take action at this time. The Saudis have shot down the idea of a meeting with non-OPEC producers ahead of the December gathering, indicating they are not ready to relent in putting market share over market price.

Other factors could exert additional forces on the oil market soon. Western sanctions against Iran could be lifted as early as next spring, which will soon flood the market with up to a million barrels per day of additional oil, presuming the Iranians don't violate any provisions of the nuclear accord. The growing US military presence in Syria also poses a risk of an unfortunate incident with Iranian or Russian military forces backing the Assad regime.

A bill to end a 40-year old ban on crude oil exports from the US, enacted during the Arab oil embargo, is moving through Congress. If the export ban is reversed it would force some rapid recalculations in the energy markets and likely narrow the spread between WTI and Brent crude prices. President Obama has issued a veto threat for a version of the bill that has already passed in the House, but the issue could be used a bargaining chip for the White House to get more clean energy funding.

PREDICTION: Oil prices will not be resurgent any time soon: supply remains elevated, storage facilities are awash in excess, and demand is only growing slowly. Producers may have to wait another year before global imbalances resolve themselves, hopefully on the back of a stronger economy.

In the meantime, market watchers may get tired of central bankers calling the phenomenon "transitory." Persistent low inflation will force at least some central banks to hand out more goodies to the market.


CALENDAR

NOVEMBER
1: China Caixin Manufacturing & Services PMI; Turkey Parliamentary Elections
2: UK Manufacturing PMI, US ISM Manufacturing PMI
3: US Factor Orders
4: US Trade Balance; US ISM Non-manufacturing PMI; IMF SDR review; BOJ Minutes
5: German Factory Orders; BOE policy statement & inflation report
6: US Payrolls & Unemployment

9: China CPI & PPI
10: China Trade Balance (tentative)
11: China Industrial Production; UK Claimant Count & Unemployment
12: US JOLTS Job Openings
13: Euro Zone Flash Q3 GDP; US Advance Retail Sales; US PPI; US Preliminary University of Michigan Confidence

15: Japan Preliminary Q3 GDP
16: Euro Zone Final CPI
17: UK CPI & PPI; German Zew Economic Sentiment; US CPI; US Industrial Production
18: US Housing Starts & Building Permits; FOMC Minutes; BOJ Policy Statement (tentative)
19: ECB Minutes; US Philadelphia Fed Business Outlook
20: Euro Zone Flash Manufacturing PMI

23: US Existing Home Sales
24: German Ifo Business Climate; US Advance Q3 GDP; US Consumer Confidence; BOJ Minutes
25: US Durable Goods Orders; US Personal Income & Spending; US New Home Sales; Japan Retail Sales
26: German Preliminary CPI; Tokyo CPI
27: UK Q3 GDP second estimate

30: Chicago PMI; China Manufacturing & Non-manufacturing PMIs; China Caixin Manufacturing PMI
DECEMBER
1: UK Manufacturing PMI; Euro Zone Unemployment; US ISM Manufacturing PMI
2: Euro Zone Flash CPI estimate
3: ECB Policy Statement and Press Conference; US ISM Non-manufacturing PMI; US Factory Orders; Fed Chair Yellen's Congressional testimony
4: German Factory Orders; US Payrolls & Unemployment; OPEC ordinary meeting


7: Japan Final Q3 GDP
8: China Trade Balance (tentative); UK Manufacturing Production; US JOLTS Job Openings; China CPI & PPI
9:
10: BOE Policy Statement
11: China Industrial Production; US Advance Retail Sales; Preliminary University of Michigan Consumer Sentiment

14:
15: German Zew Economic Sentiment; US CPI
16: UK Claimant Count & Unemployment; US Housing Starts & Building Permits; US Industrial Production; FOMC policy statement & press conf
17: German Ifo Business Climate; US Advance Retail Sales; Philadelphia Fed Manufacturing Index
18: BOJ policy statement (tentative)

20: Spain national election
21:
22: Euro Zone Flash PMI; US Final Q3 GDP; US Existing Home Sales
23: UK Q3 Final GDP; US Durable Good Orders; US Personal Income & Spending; US New Home Sales; BOJ Minutes
24: Tokyo CPI
25: Christmas Day

28:
29: US Consumer Confidence; Japan Retail Sales
30: Chicago PMI
31: ECB Minutes; China Manufacturing PMI