Sunday, November 19, 2017

Barrons weekend summary

Barrons weekend summary: positive features on IBM and select big box retailers 
Cover story: Initial public offerings were once a goal for so-called unicorns, companies worth more than $1B, but these startups are taking longer to go public; “The maturation of IPOs has generally been a good thing, taking the risk out of the system,” but it also reduces potential investor rewards; Leading mutual funds aren’t waiting for IPOs, and are investing in private markets. 

Features: 1) Positive on IBM: The unloved company could be the next slumbering giant to fetch a higher valuation as its large investments in analytic and cloud products increasingly win over customers; 2) Positive on M, WMT, TGT: Retailers have long taken a hit from online rivals, especially AMZN, but experts believe the shopping rush that starts on Black Friday will be the first in which their online arms begin to gain ground. 

Tech Trader: Cautious on CSCO: Tech giant’s fixation on its own balance sheet doesn’t bode well for its competitiveness in years to come, and chief Chuck Robbins has failed to articulate how the company can gain ground in the Internet of Things and the cloud. 

Trader: Higher volatility, instead of scaring investors away from the stock market, could be bringing them in, a situation that would lead to a longer bull market; GE may be giving up on BHI, but investors shouldn’t, though without GE the company “requires a different narrative”; “While the Nafta discussions aren’t due to be settled for months, they have the potential to upend sectors of the market—and make life miserable for investors.” 

Profile: Michael Grant, manager of the Calamos Phineus Long/Short fund, uses “risk regime,” or the kind of hand the market is dealing, as the starting point for investment decisions (top 10 long stocks: AAPL, GS, JPM, MS, PYPL, C, JNJ, RDN, BAC, UBS). 

Interview: Ajay Kapur, Asia-Pacific and emerging markets strategist at Bank of America Merrill Lynch, became bullish on Asia ex-Japan and emerging markets in February after being bearish for five years. ETF 

Special Report: Exchange traded fund experts David Nadig, Barry Ritholtz, Corey Hoffstein, and Ben Fulton discuss innovation in the sector and other topics. 

Follow-Up: The battle over Nelson Peltz’s bid for a PG board seat continues, and a win for the activist investor would be good for the stock. 

European Trader: Cautious on Vestas Wind Systems: The U.S. market, a key one for the company, “is at risk of turning into a turkey, depending on how Washington’s tax-reform plan plays out.” 

Asian Trader: Positive on LG Chem, Samsung SDI, Panasonic: The three companies, which make batteries for electric vehicles, trail rivals in the sector, but continue to merit investor attention. 

Emerging Markets: Venezuela may muddle through its debt crisis with help from Russian and China, so nervous bondholders aren’t likely to band together and seek accelerated bond repayments. 

Commodities: The shutdown of the world’s largest uranium mine, owned by Cameco, has rallied prices and could help revive the market. 

Streetwise: Universities pay steep fees to outside managers, but have balked at allocating money to Warren Buffett’s Berkshire Hathaway, the world’s most successful investor.

Friday, November 17, 2017

Volatility Returns Before the House Passes Tax Reform

TradeTheNews.com Weekly Market Update: Volatility Returns Before the House Passes Tax Reform
Fri, 17 Nov 2017 16:03 PM EST

US stocks rolled over early this week nudged by pressure coming from overseas. The first three sessions of the week saw futures trade lower in the premarket along with European bourses, only to see buyers step in after the opening bell in New York. An aggressive increase in corporate debt offerings may have caused some indigestion. Monday saw ~$2.5B in junk-rated bond deals brought to market compared to ~$1.5B the previous week. By Wednesday risk barometers jumped, with the VIX rising above 14 for the first time since this summer, while the high yield bond ETF (HYG) neared the March 2017 lows. The backdrop also featured a continued flatting of Treasury yield curve. Spreads between the short and long ends of the US curve continued to probe the narrowest levels since early 2007, causing further consternation for some investors. Brexit and US tax reform were most often sited along with carryover from a technical reversal in the DAX last week as contributing factors holding back sentiment and raising volatility.
Thursday saw a significant snapback in stock prices though, as the US House of Representatives finally passed a long awaited tax reform bill. The Russel 2000 led a bounce that recouped much of the first three sessions’ losses for US indices. By week’s end, equity prices were drifting lower once again despite a swath of strong retail earnings reports and management commentary that observed business activity accelerating late in the quarter and into Q4. Supply was likely a factor yet again with six US IPOs opening for trading on Friday alone, to what can be best described as a lukewarm reception by investors. The dollar remained relatively soft probing five-week lows against the Yen and gold broke out to a one-month high on Friday. US rates continued to move lower outside of the 2-year note. For the week, the DJIA lost 0.3%, the S&P500 dropped 0.1%, while the Nasdaq added 0.5%.

In corporate news this week, some large M&A deals are brewing on the horizon. Both Comcast and Verizon are said to have been in talks to acquire assets from 21st Century Fox, following reports last week that Disney also harbored interest in some part of the media giant. Toymaker Mattel is said to have turned down a takeover approach from Hasbro, but terms of the offer are still not publically known. Earnings season slowed down considerably this week, but on the retail front, apparel stores showed some signs of life. Both Gap and Ross Stores posted same store sales above analyst expectations, and sports footwear names bounced in response to better than expected earnings from Shoe Carnival and Foot Locker. On Thursday, Walmart impressed Wall Street with better than expected numbers supported by its surging ecommerce metrics, sending shares up about 10% and adding nearly $30B in market cap. GE ran in the opposite direction during its investor meeting on Monday, where CEO Flannery announced a 50% dividend cut and a restructuring plan which spooked investors, sending GE shares below the $20/share support level, in the stock’s worst day since 2009. Tesla unveiled its long-awaited electric semi truck (and threw in a Roadster announcement for good measure), despite nagging questions that remain about Model 3 production capacity.

MONDAY 11/13
*(CN) CHINA OCT NEW YUAN LOANS (CNY): 663.2B V 783BE
(IN) INDIA OCT CPI Y/Y: 3.6% V 3.4%E
(CN) CHINA OCT AGGREGATE FINANCING (CNY): 1.040T V 1.100TE
GE Guides FY18 framework adj EPS $1.00-1.07 v $1.15e, Organic Rev 0-3% y/y, FCF $6-7B - investor slides
BWLD Reportedly receives >$150/shr takeover offer from Roark Capital - press
REN Announces withdrawal of proposed offering of $550M in 2025 senior notes ;cites 'broader market conditions'
(UK) PM May has granted parliament full vote on Brexit deal - FT
(HK) According to Credit Suisse analysts Macau Nov 1-12th gaming Rev +20-22% y/y v 15%e
(CN) China Oct Home Sales Value Y/Y: -3.4% (biggest decline in approx 3-years)
(HK) Macau Gaming Regulator's Chan: To continue existing regulations on junkets, have banned over 200 people entering casino this year

TUESDAY 11/14
(DE) GERMANY Q3 PRELIMINARY GDP Q/Q: 0.8% V 0.6%E; Y/Y: 2.8% V 2.3%E; GDP NSA Y/Y: 2.3% V 2.0%E
VOD.UK Reports H1 Adj EBIT €2.46B v €2.05B y/y, adj EBITDA €7.39B v €7.09B y/y, Rev €23.1B v €24.1B y/y
(IT) ITALY Q3 PRELIMINARY GDP Q/Q: 0.5% V 0.5%E; Y/Y: 1.8% V 1.7%E
(UK) OCT CPI M/M: 0.1% V 0.2%E; Y/Y: 3.0% V 3.1 %E; CPI CORE Y/Y: 2.7% V 2.8%E
(EU) EURO ZONE Q3 PRELIMINARY GDP Q/Q: 0.6% V 0.6%E; YY: 2.5% V 2.5%E
HD Reports Q3 $1.84 v $1.81e, Rev $25B v $24.5Be
(US) OCT PPI FINAL DEMAND M/M: 0.4% V 0.1%E; Y/Y: 2.8% V 2.4%E
Noting a number of cross currents in newsflow thru the EU session to current time
(US) Fed's Bostic (non-voter, dove): Reiterates gradual Fed hikes are appropriate over next couple of years; US is nearing full employment
(CA) Canada govt files legal challenge of US softwood lumber duties under NAFTA provisions - press
(CL) CHILE CENTRAL BANK (BCCH) LEAVES OVERNIGHT RATE TARGET UNCHANGED AT 2.50%; AS EXPECTED
9064.JP Offers to increase pay for workers by 33% y/y to ¥2,000/hour in December in order to help meet rise in demand – Japanese Press

WEDNESDAY 11/15
700.HK Reports Q3 (CNY) Net 18.0B v 15.7Be, Rev 65.2B v 61Be
(UK) SEPT AVERAGE WEEKLY EARNINGS 3M/Y/Y: 2.2% V 2.1%E; WEEKLY EARNINGS EX BONUS 3M/Y: 2.2% V 2.2%E
(UK) SEPT ILO UNEMPLOYMENT RATE: 4.3% V 4.3%E (matches lowest level since 1975)
(UK) OCT JOBLESS CLAIMS CHANGE: +1.1K V +2.6K PRIOR; CLAIMANT COUNT RATE: 2.3% V 2.3% PRIOR
(DE) GERMANY SELLS €2.475B VS. €3.0B INDICATED IN 0.50%B AUG 2027 BUNDS; AVG YIELD: 0.36% V 0.48% PRIOR; BID-TO-COVER: 1.2X (technically uncovered) V 1.7X PRIOR
(US) OCT ADVANCE RETAIL SALES M/M: 0.2% V 0.0%E; RETAIL SALES EX AUTO M/M: 0.1% V 0.2%E
(US) NOV EMPIRE MANUFACTURING: 19.4 V 25.1E
(US) OCT CPI M/M: 0.1% V 0.1%E; CPI EX FOOD AND ENERGY M/M: 0.2% V 0.2%E; CPI INDEX NSA: 246.663 V 246.646E
(US) Association of American Railroads weekly rail traffic report for week ending Nov 11th: 547.5K carloads and intermodal units, +1.2% y/y
(US) Senator Ron Johnson (R-WI) says he will vote Against the Senate tax bill - press
(US) SEPT TOTAL NET TIC FLOWS:-$51.3B V $125.0B PRIOR; NET LONG-TERM TIC FLOWS: $80.9B V $67.2B PRIOR
CSCO Reports Q1 $0.61 v $0.60e, Rev $12.1B v $12.1Be
MAT Reportedly rejects latest Hasbro acquisition bid - press
(CN) China Banks are conducting stress tests related to loans to property developers - Chinese Press
(AU) AUSTRALIA OCT EMPLOYMENT CHANGE: +3.7K V +18.8KE; UNEMPLOYMENT RATE: 5.4% V 5.5%E
(US) Christie's auction sells last privately held Leonardo da Vinci painting entitled 'Salvator Mundi' sold for record $450.3M (expected $100M+)

THURSDAY 11/16
(UK) Renewed speculation that UK PM May to increase her Brexit financial settlement (divorce bill) in Dec to help kick-start trade talks - financial press
(UK) OCT RETAIL SALES (EX AUTO FUEL) M/M: 0.1% V 0.0%E; Y/Y: -0.3% V -0.4%E
BBY Reports Q3 $0.78 v $0.79e, Rev $9.32B v $9.35Be
WMT Reports Q3 $1.00 v $0.97e, Rev $123.2B v $121.1Be
APC Guides initial FY18 oil production 385-405 MBOPD (implies +14% y/y); capex $4.2-4.6B ('17 plan 4.5-4.7B)
(NO) Norway Sovereign Wealth Fund proposes to divest oil and gas stocks (valued around $35B)
(US) OCT IMPORT PRICE INDEX M/M: 0.2% V 0.4%E; Y/Y: 2.5% V 2.5%E
(US) NOV PHILADELPHIA FED BUSINESS OUTLOOK: 22.7 V 24.6E
(US) OCT INDUSTRIAL PRODUCTION M/M: 0.9% V 0.5%E; CAPACITY UTILIZATION: 77.0% V 76.3%E
(US) NOV NAHB HOUSING MARKET INDEX: 70 V 67E
(US) Judge in Sen Menendez (D-NJ) corruption trial grants mistrial - press
(US) House of Representatives passes GOP tax reform bill (as expected)
AMAT Reports Q4 $0.93 v $0.91e, Rev $3.97B v $3.93Be
GPS Reports Q3 $0.58 v $0.55e, Rev $3.84B v $3.77Be
FOXA Comcast reportedly approached Fox over possible bid; not clear if Comcast sought all of Fox or only some assets - press
FOXA Verizon reportedly also considering acquiring assets from Fox - press
TSLA Unveils prototype electric 'big rig' truck (as expected); production to begin in 2019
(IN) MOODY'S RAISES INDIA SOVEREIGN RATING TO BAA2 FROM BAA3 (1st hike in 14 years); Outlook revised to Stable from Positive

FRIDAY
(CA) CANADA OCT CPI M/M: 0.1% V 0.1%E; Y/Y: 1.4% V 1.4%E
(US) OCT HOUSING STARTS: 1.29M V 1.19ME; BUILDING PERMITS: 1.30M V 1.25ME


Saturday, November 11, 2017

Barrons weekend summary

Barrons weekend summary: 
Cover story on growing competition for TSLA in EV market; positive feature on SNE; cautious on consumer staples Cover story: With electric cars increasingly likely to supplant gas-powered models, major automakers are working on new technologies and initiatives that could benefit customers and shareholders, a sign TSLA will face growing competition. 

Features: 1) Positive on SNE: Japanese electronics giant is finally thriving, with sales of camera chips for smartphones, videogame systems, and software up, while profits from its TV and music divisions are strong; 2) Cautious on PG, CL, KO, UN: Investors who could once count on consumer staples’ slow and steady earnings growth and high dividends can no longer do so as industry trends drag on stalwarts. 

Tech Trader: The success of FB “has made it easy to forget that social networking remains a challenging business model,” leaving many companies—including SNAP and TWTR—struggling to find footing. 

Trader: “There are plenty of reasons to worry the Fed will continue to raise interest rates, which would explain the 0.064-percentage-point increase in the 10-year Treasury on Friday”; The yield curve is the big issue for banks right now, but investors may be making too much of it, says Chris Verrone of Strategas Research Partners; Many of the moves in high-yield bonds last week were as much a matter of catching up to stock moves as something dire lurking under the surface, according to Evercore ISI. 

Profile: Scott Kimball of the BMO TECH Core Plus Bond fund doesn’t hitch the portfolio to sweeping macroeconomic views or use derivatives (top 10 corporates: IBM, ABT, ATVI, GS, HNZ, Coach, EBAY, BDX, Mexichem Sab). Health & Wealth Roundtable: At Barron’s fifth annual gathering, four top advisors—Kathleen Weber of Weber Russo Group, Ann Marie Etergino of RBC Wealth Management, Barbara Archer of High-Tower, and Rob Vinder of The Vinder Group—discuss how to have a healthy and stress-free retirement. 

Follow-Up: Positive on PYPL: Payments company has had a strong year, with shares up 87%, but despite the surge there’s likely more upside ahead. 

European Trader: Positive on AMS: Company’s sensor technology helps power the AAPL iPhone X’s face identification feature, and though shares have tripled this year, they still have room to rise.. 

Asian Trader: Positive on Nintendo: The company’s move to ramp up production of its Switch console and the addition of new games for its devices should help it during the holiday season, and shares could rise by 25%. 

Emerging Markets: “The dramatic arrests of prominent Saudis by their own government has unnerved some investors and raised questions about the timing and structure” of the Saudi Aramco IPO. 

Commodities: Oil prices are set to rise during the next few months, even though West Texas Intermediate crude has already reached a two-year high. 

Streetwise: Reverberations from the palace coup in Saudi Arabia are likely to be felt for a long time, complicating the difficulty investors already face trying to understand the “opaque workings” of the government.

Friday, November 10, 2017

Markets Feel Blip of Anxiety Amid Slow Progress on Policy Talks

TradeTheNews.com Weekly Market Update: Markets Feel Blip of Anxiety Amid Slow Progress on Policy Talks
Fri, 10 Nov 2017 16:08 PM EST

The week opened with stocks continuing to float up to all-time highs on low volatility, but finished on a different note. The volume of corporate announcements remained robust as the third quarter earnings season hit its peak. By midweek a slew of stock and bond offering announcements appeared to begin weighing on markets. The high-yield bond ETF broke through the 200-day moving average, and that coincided with at 15% jump in the VIX volatility index on Thursday. Global Treasury curves remained at some of its flattest levels in about decade before yields lifted on Friday. The underlying risk currents continued to be swayed by headlines from Washington and Brussels. More details started to emerge on the Republican tax plan as it worked its way through Congress. Word that a one-year delay in the implementation of the corporate rate cut to 20% was something being seriously considered seemed to cause some indigestion in US stocks — small caps, in particular. There was no breakthrough in the latest round of Brexit talks, as expected, but renewed reports that both sides continue to prepare for a ‘no deal’ scenario may have also weighed on sentiment. Crude remained one of the few bright spots as oil attracted money flows on the lead-up to the November 30th OPEC meeting and continued fallout from the Saudi crown price consolidating his power. US natural gas futures climbed another 7%, helped by forecasts for the arrival of winter temperatures across the Northeastern US. For the week the DJIA fell 0.5%, the S&P500 slipped 0.2%, and the Nasdaq lost 0.2%.

In corporate news this week, T-Mobile and Sprint formally ended long-running merger discussions, as the two companies were ultimately unable to find mutually agreeable terms. Qualcomm confirmed receipt of a $70/share merger proposal from Broadcom, but reports suggested Qualcomm is poised to reject the offer. CNBC reported that Disney recently held talks to acquire most of 21st Century Fox and later added that, while the talks have paused, the two parties have not given up on the idea of a deal. Disney earnings disappointed but shares were lifted on news that the company intends to take on Netflix with a lower-priced streaming service and that the company plans to produce a new Star Wars trilogy. Macy's reported a miss on revenues, but earnings came in stronger than anticipated on tighter inventory controls which boosted margins.

SUNDAY 11/5
S Softbank announces its intention to raise stake through open market transactions or otherwise, subject to market conditions and other factors
TMUS T-Mobile and Sprint end Merger discussions
(UK) Reportedly UK govt has signaled that it is willing to pay the €60B (£53B) Brexit divorce bill, meeting Brussels' demands - UK press
MONDAY 11/6
*(DE) GERMANY SEPT FACTORY ORDERS M/M: +1.0% V -1.1%E; Y/Y: 9.5% V 7.1%E
(CH) Swiss Oct CPI M/M: 0.1% v 0.1%e; Y/Y: 0.7% v 0.7%e
(EU) EURO ZONE NOV SENTIX INVESTOR CONFIDENCE: 34.0 V 31.0E (highest level since July 2007)
FAST Reports Oct Rev $399.7M, +19.2% y/y
FOXA CNBC's Faber: Disney recently held talks to acquire most of 21st Century Fox; price talks and deal structure can't be learned at this time
QCOM Confirms unsolicited merger proposal from Broadcom for $70/shr in cash and stock valued at $130B with our without NXP
(US) NY Fed President Dudley (FOMC voter) to retire in mid-2018 (as speculated over weekend)
CRM Forms new strategic partnership with Google
TUESDAY 11/7
(CN) CHINA OCT FOREIGN RESERVES: $3.1092T V $3.110TE (9th straight increase)
(CN) CHINA OCT TRADE BALANCE (CNY) 254.5B V 280.5BE
(CN) CHINA OCT TRADE BALANCE: $38.2B V $39.1BE
WEDNESDAY 11/8
ACA.FR Reports Q3 Net €1.07B v €1.03Be, Rev €4.58B v €4.76Be
RMS.FR Reports Q3 Rev €1.34B v €1.31Be
(PL) POLAND CENTRAL BANK (NBP) LEAVES BASE RATE UNCHANGED AT 1.50%; AS EXPECTED
AAPL Reportedly ramping up work on augmented reality headset with new chip and op system - press
(US) Association of American Railroads weekly rail traffic report for week ending Nov 4th: 538.7K carloads and intermodal units, -0.8% y/y
*(NZ) NEW ZEALAND CENTRAL BANK (RBNZ) LEAVES CASH RATE (OCR) UNCHANGED AT 1.75%; AS EXPECTED
(CN) China President Xi: Vast potential exists in China-US economic ties; China willing to significantly raise imports from the US; US/China exploring long term agreement on repatriation
THURSDAY 11/9
SIE.DE Reports Q4 Net €1.29B v €1.25Be, industrial business profit €2.20B v €2.45Be, Rev €22.3B v €24.8Be;
DTE.DE Reports Q3 adj Net €1.24B v €1.15Be, adj EBITDA €7.32B v €5.33B y/y, Rev €18.34B v €18.1B y/y
DPW.DE Reports Q3 Net €641M v €620Me, EBIT €834M v €755M y/y, Rev €14.6B v €13.9B y/y
BRBY.UK Reports H1 adj Op £185M v £163.3Me, Rev £1.26B v £1.24Be; Announces strategic update
AZN.UK Reports Q3 Core EPS $1.12 adj v $1.04e, Rev $6.23 v $6.0Be
*(PH) PHILIPPINES CENTRAL BANK (BSP) LEAVES OVERNIGHT BORROWING RATE UNCHANGED AT 3.00%, AS EXPECTED
ODP Outlines vision to become IT Service co with MRR ahead of analyst day
M Reports Q3 $0.23 v $0.19e, Rev $5.28B v $5.32Be
(US) Senate tax bill reportedly to propose delaying corporate tax cut implementation by one year to 2019 - press
HYG High yield ETF extends below 200-day moving average
*(MX) MEXICO CENTRAL BANK (BANXICO) LEAVES OVERNIGHT RATE UNCHANGED AT 7.00%; AS EXPECTED
(UK) Ireland reportedly has made new demands in Brexit talks regarding the northern border, surprising UK negotiators - UK press
DIS Reports Q4 $1.07 v $1.12e, Rev $12.8B v $13.1Be
NVDA Reports Q3 $1.33 v $0.94e, Rev $2.64B v $2.36Be; raises dividend to $0.15/shr from $0.14 (indicated yield 0.29%)
NRG Withdraws planned $870M offering of 2028 senior unsecured notes on ‘broader market conditions’; as a result to terminate cash tender for 6.625% senior notes due 2023
FRIDAY 11/10
MT.NL Reports Q3 Net $1.21B v $680M y/y, EBITDA $1.92B v $1.88Be, Rev $17.64B v $17.2Be
(FR) FRANCE SEPT INDUSTRIAL PRODUCTION M/M: 0.6% V 0.5%E; Y/Y: 3.2% V 3.1%E
*(UK) SEPT INDUSTRIAL PRODUCTION M/M: 0.7% V 0.3%E; Y/Y: 2.5% V 1.4%E
(UK) EU/UK officials Barnier and Davis hold press conference following the 6th monthly round of Brexit negotiations


Friday, November 3, 2017

Markets Remain Positive on Solid Data and Strong Earnings

TradeTheNews.com Weekly Market Update: Markets Remain Positive on Solid Data and Strong Earnings
Fri, 03 Nov 2017 16:14 PM EST

Investors had an overwhelming amount of information to digest this week, with much of it again emanating out of Washington DC. The week began with news that President Trump’s former campaign chairman, Paul Manafort, would be indicted with others as part of special counsel Mueller’s Russia probe. By Wednesday, House Republicans released the long awaited details of their tax reform proposal after a 24 hour delay, and the following day the President confirmed Jerome Powell was his choice for the next FOMC Chairman. The three DC headlines sandwiched three key central bank meetings. The US Fed and BOJ, as expected, each left rates unchanged and made minimal revisions to their policy statements. That left the Fed squarely on track for a December rate hike. The Bank of England, in a somewhat controversial yet expected decision, raised rates for the first time in a decade taking back last summer’s post-Brexit referendum cut. Nevertheless, the statement was viewed in a somewhat dovish light because it removed previous language that interest rates may need to rise more than markets expected. By Friday, all eyes were on the October jobs report that served up some surprises, but overall along with a 12-year high in the ISM services reading reinforced the notion that the US economy, helped by growth globally, may be gaining traction at higher gear than has been seen over the last decade.

Treasury prices rose, putting modest downward pressure on yields. The long end saw better buying resulting in curve flattening after the Treasury secretary indicated there was little interest in issuing ultra-long bonds at this time, and the size of the quarterly refunding issuance remained unchanged. The Dollar Index pushed back towards the recent 5-month highs helped by the robust US data and hopes for fiscal stimulus. WTI crude futures finished the week at the best levels since this spring as consensus grows that OPEC and its partners will extend their production cuts by 9-months through the end of 2018. The VIX volatility index finished the week not far from the October lows while stocks ended on a high note. For the week, the DJIA gained 0.4%, the S&P500 added 0.3%, and the Nasdaq rose 0.9%.

Earnings season pushed onward with another third of S&P500 names reporting. Once again, many highlights came from the tech space led by Apple on Thursday. Rising material costs and disruptions from the hurricanes wreaked havoc on margins and outlooks for some sectors. Management missteps continued to get punished mercilessly, particularly in retail.

In corporate news this week, Apple recorded another blowout quarter, pointing to strong iPhone 8 and iPhone X orders, as the tech giant’s market cap stretched to $900B. Facebook posted big beats on its top and bottom line, but shares fell when it forecast expenses growing 45-60% next year. Worse than expected same-store sales and a cut to long-term outlook from Starbucks sent its stock tumbling after hours Thursday, but the coffee chain rebounded on Friday as buyers queued up. Tesla was weaker on a wider-than-anticipated loss for the quarter and after the House tax plan put the federal electric vehicle tax credit on the scrap heap. In M&A news, Lennar agreed to acquire CalAtlantic Group for $51.34/share in a $9.3B transaction to create the largest homebuilder in the United States. Power producer Dynegy agreed to a $20B all-stock merger with Vistra Energy in order to address shrinking profit margins in the industry. Rockwell Automation rejected an unsolicited $215/shr bid from Emerson Electric on grounds the offer was not in shareholders’ interests. And on Friday, reports emerged that Broadcom was making a play for chip maker Qualcomm, putting QCOM’s bid for NXP Semiconductor in jeopardy.


MONDAY 10/30
7974.JP Reports H1 Net profit ¥51.5B v ¥38.3B y/y, Op profit ¥40.0B v loss ¥5.95B y/y, Rev ¥374B v ¥137B y/y; Raises FY18 outlook
386.HK Reports Q3 (CNY) Net 11.3B v 9.9B y/y, Op 20.3B v 16.9B y/y, Rev 579.1B v 484.7B y/y
(EU) EURO ZONE OCT BUSINESS CLIMATE INDICATOR: 1.44 V 1.40E ; CONSUMER CONFIDENCE (FINAL): -1.0% V -1.0E
CAA To be acquired for ~$51.34/shr by Lennar in all stock transaction valued at $9.3B inc debt; Creating largest US homebuilder
AMZN Reportedly has slashed seller fees to try to improve its grocery selection online - RECODE
(US) SEPT PCE CORE M/M: 0.1% V 0.1%E; Y/Y: 1.3% V 1.3%E
(US) SEPT PCE DEFLATOR M/M: 0.4% V 0.4%E; Y/Y: 1.6% V 1.6%
(US) SEPT PERSONAL INCOME: 0.4% V 0.4%E; PERSONAL SPENDING: 1.0% V 0.9%E
TATA.IN Reports Q2 (INR) Net 9.76B v 16.6Be, Rev 325B v 323Be
(DE) GERMANY OCT PRELIMINARY CPI M/M: 0.0% V 0.1%E; Y/Y: 1.6% V 1.7%E
(US) Atlanta Fed forecasts initial Q4 GDP at 2.9%
MDLZ Reports Q3 $0.57 v $0.54e, Rev $6.52B v $6.46Be

TUESDAY 10/31
AIR.FR Reports Q3 Net €348M v €50M y/y; Adj EBIT €697M v €632Me, Rev €14.2B v €14.0Be
(FR) FRANCE Q3 ADVANCE GDP Q/Q: 0.5% V 0.5%E; Y/Y: 2.2% V 2.1%E
BP.UK Reports Q3 Net $1.87B v $1.58Be, Underlying replacement cost profit $1.87B v $933M y/y, Total Rev $60B v $48B y/y; to commence share buyback in Q4
(FR) FRANCE OCT PRELIMINARY CPI M/M: 0.1% V 0.1%E; Y/Y: 1.1% V 1.0%E
(FR) FRANCE CONSUMER SPENDING M/M: 0.9% V 0.6%E; Y/Y: 2.8% V 1.9%E
WCG Reports Q3 $4.08 v $1.63 y/y, Rev $4.40B v $4.40Be
(EU) EURO ZONE OCT ADVANCE CPI ESTIMATE Y/Y: 1.4% V 1.5%E; CPI CORE Y/Y: 0.9% V 1.1%E
(US) Nevada reports Sept casino gaming Rev $979.9M, +3.3% y/y; Las Vegas strip rev $567.9M, +4.7% y/y
(US) OCT CONSUMER CONFIDENCE: 125.9 V 121.5E (highest since Dec 2000)
X Reports Q3 $0.92 v $0.67e, Rev $3.25B v $3.04Be

WEDNESDAY 11/1
(HK) Macau Oct Gaming Rev MOP22.6B, +22.1% y/y v 14.5%e
STAN.UK Reports Q3 adj pretax $814M v $861Me, op income $3.59B v $3.64Be
(US) OCT ADP EMPLOYMENT CHANGE: +235K V +200KE
NYT Reports Q3 $0.13 v $0.09e, Rev $385.6M v $388Me (2 est)
(US) OCT FINAL MARKIT MANUFACTURING PMI: 54.6 V 54.5E
(US) OCT ISM MANUFACTURING: 58.7 V 59.5E; PRICES PAID: 68.5 V 67.8E
(US) Atlanta Fed raises Q4 GDP to 4.5% from 2.9% on 10/30
(US) Association of American Railroads weekly rail traffic report for week ending Oct 28th: 546.6K carloads and intermodal units, +0.2% y/y (Strongest month for intermodel in history)
FB Reports Q3 $1.59 v $1.29e, Rev $10.3B v $9.88Be
TSLA Reports Q3 -$2.92 v -$2.45e, Rev $2.98B v $2.92Be
FB CFO: See FY18 total GAAP expenses +45-60%; continue to see decelerated ad revenue growth for the foreseeable future - earnings call comments
COST Reports Oct Total SSS (ex-gas) 5.6%; US SSS (ex-gas) 5.9% v 4.9%e

THURSDAY 11/2
992.HK Reports Q2 Net $139M v $157M y/y, Rev $11.76B v $11.2B y/y
CARLB.DK Reports Q3 (DKK) Rev 16.7B v 17.1Be
CSGN.CH Reports Q3 (CHF) Net 244M v 201Me, adj Pretax 620M v 237M y/y, Rev 4.97B v 4.97Be
RDSA.NL Reports Q3 adj Profit $4.09B v $3.6Be, basic CCS EPS $0.50 v $0.44e, Rev $75.8B v $61.9B y/y
(DE) GERMANY OCT UNEMPLOYMENT CHANGE: -11K V -10KE; UNEMPLOYMENT RATE: 5.6% V 5.6%E
DWDP Reports Q3 $0.55 v $0.45e, Rev $18.3B v $17.5Be; to cut workforce
(CZ) CZECH CENTRAL BANK (CNB) RAISES REPURCHASE RATE BY 25BPS TO 0.50%; AS EXPECTED
(UK) BANK OF ENGLAND (BOE) RAISES INTEREST RATES BY 25BPS TO 0.50%; AS EXPECTED
(UK) BOE NOV MINUTES: VOTED 7-2 TO RAISE INTEREST RATES BY 25BPS TO 0.50% (Ramsen and Cunliffe dissented to keep policy steady)
(US) Q3 PRELIMINARY NONFARM PRODUCTIVITY: 3.0% V 2.6%E; UNIT LABOR COSTS: 0.5% V 0.4%E
DAL Reports Oct Load factor 86.0%, +0.9ppt y/y
SYT Obtains non-exclusive IP license from Broad Institute for CRISPR-Cas9 genome-editing technology for agriculture applications
(US) PRESIDENT TRUMP NOMINATES JEROME POWELL TO FED CHAIR POSITION (AS EXPECTED)
(US) Fed Chair-designate Powell: committed to dual mandate of maximum employment and stable prices - comments in Rose Garden
SBUX Reports Q4 $0.55 v $0.55e, Rev $5.70B v $5.73Be; Raises dividend 20%; Estab $15B 3-yr buyback plan (~19% market cap)
AAPL Reports Q4 $2.07 v $1.87e, Rev $52.6B v $51.2Be
(AU) Australia Sept Retail Sales M/M: 0.0% v 0.4%e; Q3 Ex Inflation Q/Q: 0.1% v 0.0%e
(CN) PBOC CONFIRMS CNY404B MEDIUM-TERM LENDING FACILITY (MLF) OPERATION; Offers 1-year loans at 3.20% v 3.20% prior

FRIDAY 11/3
GLE.FR Reports Q3 adj Net €1.08B v €1.0Be, Gross Op €1.96B v €1.99B y/y, Adj Rev €5.96B v €6.04Be
(UK) OCT SERVICES PMI: 55.6 V 53.3E (15th month of expansion)
(US) OCT UNEMPLOYMENT RATE: 4.1% V 4.2%E (lowest level since Dec 2000)
(US) OCT AVERAGE HOURLY EARNINGS M/M: 0.0% V 0.2%E; Y/Y: 2.4% V 2.7%E; AVERAGE WEEKLY HOURS: 34.4 V 34.4E
(US) SEPT TRADE BALANCE: -$43.5B V -$43.3BE
(US) OCT CHANGE IN NONFARM PAYROLLS: +261K V +313KE
MTB Continues to expect FY17 low-single digit overall loan growth - Investor presentation
(US) OCT ISM NON-MANUFACTURING COMPOSITE: 60.1 V 58.5E (highest since Aug 2005)
QCOM Broadcom reportedly considering bid to acquire Qualcomm - press