EFTA00410886.pdf

From: Ike Groff Subject: Early Tour 6.20.12 Date: Wed, 20 Jun 2012 10:14:09 +0000 Good Morning ... European Markets mixed (Italy +1.2%, Spain +0.84%) ... Nikkei +1.11%, HSI +0.53%, China -0.34%, KOSPI +0.65% EUR 1.2704 (+0.15%) JPY 78.94 (+0.02%) Silver +0.20% US 10yr 1.626% Futures: Dow +1, Nasdaq +5, S&P -0 $1618.00 (-$5.20) AUD 1.0202 (+0.13%) Copper -0.33% DXY $81.32 (-6c) Crude $83.86 (-17c) Gold Europe markets mixed and spinning its wheels ahead of FOMC later today. Heading into today, it appears to be setting up as one of the more uncertain Fed meetings with both the street and the Fed board itself somewhat divided on what action to take (if any). Consensus seems to be that if they do anything (UBS thinks refrain from easing) they will extend operation twist (and possibly ZIRP), lower economic forecasts and note increased downside risks, reiterate that they will continue to monitor data and all options remain on the table, and in general strike a more dovish tone. An outright expansion of the balance sheet (QE3) via more MRS or long-term UST purchases is also a possibility (GS is calling for this) but it seems that a high bar has been set and the Fed will want to keep powder dry given the Eurozone uncertainty and looming fiscal cliff in the US (although it may get a little trickier from a political perspective the closer we get to the election). G20 summit is over and the final communique can be read here<http://www.g20.utoronto.ca/2012/2012-0619-loscabos.pdf>. There were also some press reports that an Italy proposal to allow the ESM to buy peripheral sovereign debt to lower borrowing costs is gaining some traction although Merkel remains non- committal. Spain 10yr yield -14bps to 6.91%. Greece coalition government expected to be officially announced late today or tomorrow morning between New Democracy, Pasok, and the Democratic Left (troika will send a team to Athens as soon as it is). Proctor & Gamble issues a profit warning at the DB conference in Paris today (following Danone yesterday), causing further weakness in the broader consumer staples space. Flash PMI data out tonight and tomorrow morning for China, Europe, US. GS short basket outperformed by 110bps yesterday indicating some position squaring into the Fed. S&P futures flat after once again running into an "event" = 1350 last. ***FOMC Rate Decision 0 12:30pm (Forecasts 0 2pm & Bernanke Press Conf 0 2:15pm)*** ***Day 2 of DB consumer conference in Paris / BBBY, MU, RHT report 11's after close*** Proctor & Gamble says for April-June quarter organic sales growth in 2-3% range vs 4-5% prior Adobe beats but cuts top end of rev growth forecast (cites weak euro demand) (trading -4.0%) Jabil Circuit reports inline quarter but sees q4 eps/revs below estimates (trading -1.0%) Insight Venture Partners to offer $25.75/share for Quest Software (up from prior offer of $23/share) H&M Q2 beat across the board, Spring sales good, input cost pressures easing (trading +2.8%) +0.54%) Ryanair to make all share cash offer for Aer Lingus, €1.30/share (trading +0.60%) Technip awarded Boyle field contract from Marathon oil worth €300 million (trading Eutelsat to pay $228 million for GE-23 satellite and orbiting rights from GE EFTA00410886 capital (trading +3.2%) ITV: UK press speculation of PE bid of 150p or Pro7 bid between 130-150 (trading +3.2%) Kesa Electricals FY PBT/net debt inline with prior guidance, div cut expected (trading -8.1%) BOE voted 5-4 to maintain asset purchase target (first time King in the minority since Aug 2009) expected) est +2.2%) UK jobless claims +8,100 (forecast was for -4,000) (unemployment rate 8.2% as German PPI slows to a 23-month low in May (-0.3% m/m vs est -0.2%) (+2.1% y/y vs German sells E4.OB 2yr notes (avg yield 0.10% vs 0.07% on May 23) (bid-to-cover 1.9 vs 1.7 prior) Italian industrial orders decreased -1.9% m/m in April (orders -12.3% in unadjusted y/y terms) next week Moody's to publish impact on Spain banks stemming from June's sovereign downgrade LCH lifts margin costs for trading most Spanish government bonds (effective on close June 21) debt (Bild) to close) El Economista says it is being considered to allow EU rescue funds to buy Spanish German lawmakers may pause summer break over Spain (10 week break begins Jun 29) News Corp. offers to buy Consolidate Media for A$2 billion in cash (13.6% premium Japan trade deficit exceeds forecasts (first trade deficit with the EU) (exports to EU -0.9%, US +38.2%) China Securities Journal says China boosts lending (June new CNY loans to increase significantly) China president Hu Jintao will meet with Spanish deputy PM in Spain on way back from G20 today Leading European Sectors: Basic Res +1.89%, Banks +1.27%, Insurance +1.04% Lagging European Sectors: Food/Bev -1.49%, Healthcare -0.85%, Chemicals -0.55% GNC $300M buyback - FSII net forecast below - FCF $50M buyback AMAT names president - CIM cuts dividend - LZB misses on revs FULT 5M shr buyback - RGP equity distribution - MTL profit falls but beats O raises monthly div - AET wins Medicare contract TX - IDIX drug data Notable Options Activity Yesterday: HNR ($5.53 +0.7%) customer bought 5500 July 5 puts for $0.65. GGB ($8.88 +3.1%) volatility buyer purchased 6800 January 7.5 calls for $1.75 and 15,500 January 7.5 puts for $0.72. MET ($30.88 +5%) call buying throughout the day with the most actives being +10k August 33 calls and +2k of each of the July 31 and 32 calls. EFTA00410887 Secondaries (announced/priced): SRO, GNMK, AFFX (convert) IPO's: N/A Key Research: William Blair initiates TIF (mp), Think initiates CTXS (hold), Sterne Agee downgrades ATHN Key Research: Cantor initiates WFM/UNH/HUM (buy's) & AET/HNT/WLP (hold's), Raja downgrades EAT Key Research: GS downgrades COP/COL (sell) & upgrades TSO, Barcap upgrades AMAT, Multiple brokers initiates EVAC Key Research: Jeff downgrades APKT, Bernstein upgrades DTEGY, JMP downgrades ADBE, Bofa cuts SO & upgrades NVE Key Research: UBS downgrades DANOY & initiates AHS/CCRN/LPNT/ASGN/THC/UHS/VHS (nut's) an CYH/HMA (buy's) Key Research: Nomura upgrades Honda Motor (7267 JP) (buy), Baird upgrades CHH, BMO upgrades CSCO Key Research: Wells initiates APOL/CECO/DV/LRN (op's) and ESI/STRA/COCO (mp's), RBC downgrades KEX Key Research: BB&T upgrades SMP (buy), Atlantic downgrades ADBE, Roth initiates NBIX (buy), JPM initiates HBAN (neut) Reporting Pre-Open: ATU, GAGA, JKS, MTL Reporting Post-Close: BBBY, MU, RHT, APOG, CLC, SCS, SONC Economic Data: MBA Mortgage Applications @ 7am, FOMC Rate Decision @ 12:30pm DOE oil inventories @ 10:30am Conferences: MS China Industrials Summit (Beijing), Jefferies Global Consumer (Nantucket), Wells Health Care (Boston) Conferences: DB Global Consumer (Paris), Citi Water & Renewables Investment (NYC), Bofa Utilities & Renewables (London) Analyst/Investor Days: FRX, EQIX, HOT Non-Deal Roadshows: ABT, ALEX, ALTE, ARLP, BPFH, CAVM, CCK, CJES, DHI, DRC, EE, GHM, GLUU, HIG, JWN, KTOS, LKQ, MCRS, MEOH, MGA, MRX, NBR, OIS, OZM, RYN, SA, SD, STO, VZ, WES, XOMA, AET Shareholder Meetings: ZIOP, ATHX, IACI, XRM, BLKB, DXPE, ECHO, KIOR, LAKE, NWY, PFBI, ADUS, GNRG, ANX, DRRX, SUNH, ECTE, FSGI, QBAK, VRNM, CBMX, ONCY, NSR Equity/Mixed Shelf s: BPOP, HEB ($150M), WY, CBI Other Newspaper Articles & Stories Barron's positive: . Smucker (SJM) Barron's mod=BOL_hpp_h ighl ight_top> CFTC Moves to Brake High-Speed Traders WSJ< mod=ITP_moneyandinvesting_0> Associate of Bo Xilai's Wife Arrested WSJ< ref link=barrons_redirect&mg=reno64-wsj> ENS, FLR, SLXP, SSW, SATC, TRAK, Three Parties Near Greek Coalition Deal WSJ EFTA00410888 Hillary Clinton: Trade With Russia Is a Win-Win WSJ Opinion mod=ITP_opinion_0> Investors Plow Equity Into Projects WSJ mod=ITP_moneyandinvesting_0> Trying to Squeeze Life Out of 'Zombie' WSJ mod=ITP_moneyandinvesting_0> Insider NYT< Funds Martin Feldstein: The Fed Shouldn't Bother With More Easing Business Facebook Shifts Its Approach to Payments Rio commits extra $4.2bn to iron ore projects The Australian iron-ore-projects/story-e6frg9df-1226403139142> Hedge funds bet on big Bunds sell-off G20 bid to cut cost of euro borrowing 11e1-84dc-00144feabdc0.htmliazzzlyDZHmeWo> EU bank reforms FT Editorial< 00144feabdc0.html8azzzlyDZHmeWo> FT< EU foreign ministers discuss integration FT< ba23-11e1-84dc-00144feabdc0.html8azzzlyDZHmeWo> Germany urges no shift on Greece bailout FT< ba2f-11e1-84dc-00144feabdc0.html8azzzlyDZHmeWo> Contrarians buy into eurozone at their peril FT< bald-llel-aa8d-00144feabdc0.htmlifaxzzlyDZHmeWo> Spanish banks: banishing bancos' ghosts FT Lex< ba06-11e1-937b-00144feabdc0.htmliazzzlyDZHmeWo> Italian companies focus on survival FT< 11e1-8fbb-00144feabdc0.html8azzzlyDZHmeWo> G20 warns US over deficit amid fears it is the next crisis to hit Telegraph<http://www.telegraph.co.uk/finance/g20-summit/9343110/G20-warns-US-over-deficit- amid-fears-it-is-the-next-crisis-to-hit.html> The summit of delusion Telegraph<http://www.telegraph.co.uk/comment/telegraph- view/9341613/The-summit-of-delusion.html> Europe forced to fill gap as ECB 'refuses' to buy bonds Telegraph<http://www.telegraph.co.uk/finance/financialcrisis/9342802/Debt-crisis-Europe- forced-to-fill-gap-as-ECB-refuses-to-buy-bonds.html> LSE chief says regulation 'killing the equity markets' Telegraph<http://www.telegraph.co.uk/finance/markets/9339975/LSE-chief-says-regulation- killing-the-equity-markets.html> Eurozone leaders prepare for Greek negotiations over bailout terms Guardian<http://www.guardian.co.uk/business/2012/jun/19/eurozone-leaders-greek-bailout-terms> EFTA00410889 Eurozone crisis: Italy next in line for a bailout? Guardian<http://www.guardian.co.uk/business/2012/jun/19/eurozone-crisis-italy> Germans are now thinking the unthinkable on European integration Guardian<http://www.guardian.co.uk/commentisfree/2012/jun/19/germans-european-integration- greek-elections> One bailout may not be enough to rescue Spain The Times<http://www.thetimes.co.uk/tto/business/economics/article3450744.ece> Merkel poised to bring out the big bazooka to save euro The Times<http://www.thetimes.co.uk/tto/news/politics/article3450815.ece> Germans fear that now the party's over The Times<http://www.thetimes.co.uk/tto/business/economics/article3450740.ece> Europe will have to renegotiate Greek bailout, says official The Times<http://www.thetimes.co.uk/tto/news/world/europe/article3450844.ece> Market Report: $10bn if Shell cracks it with Arctic drilling Independent<http://www.independent.co.uk/news/business/sharewatch/market-report-10bn-if- shell-cracks-it-with-arctic-drilling-7866604.html> Global solar demand in 2012 to grow by 20%, says NSP chairman DigiTimes< Key Events This Week Thursday: Eurozone FinMin meeting, Wyman-Berger audit of Spanish Banks due, Germany continues discussion on possible European Redemption Fund, Flash PMI's, Philadelphia Fed, Leading Indicators, Existing Home Sales, Earnings (CAG, KMX, ORCL) Friday: Russell Rebalance, Earnings (DRI), Hollande/Merkel/Rajoy/Monti meeting in Rome, Sweden & Finland closed for Midsummer Holiday Key Events on the Horizon TBA (June) - Supreme Court ruling on Obama's Affordable Care Act Week of June 25 - Moody's to publish impact on Spain banks stemming from June's sovereign downgrade June 28/29 - EU leaders summit (growth measures & roadmap for fiscal union) Ike Groff 1680 Washington Blvd Stamford, CT 069011 • (203) 302-7300 1• mailto: [Description: Description: cid:image001.png801CRB0FB.045D89F0] This e-mail and any files transmitted with it are confidential and intended only for the person or entity to which it is addressed. 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