EFTA02143841

From: MI Sent: u 13 10:05:54 AM Subject: Early Tour 3.19.13 Good Morning ... European Markets off 20-75 bps (Greece -3.0%) ... ASX -0.56%, NKY +2.03%, KOSPI +0.53%, TWSE +0.35%, SHCOMP +0.78% EUR 1.2928 (-0.22%) JPY 95.40 (-0.20%) AUD 1.0363 (-0.37%) NZD 0.8239 (-0.35%) Spain 10yr 4.98% Italy 10yr 4.66% US 10yr 1.94% Futures: Dow -13, Nasdaq -2. S&P -1 DXY $82.79 (+10c) Crude $93.57 (-17c) Gold $1602.00 (- $2.60) Copper -0.67% Silver -0.20% Most of Asia rebounded from yesterday's steep drop on Cyprus concerns, but volumes were light. Japan outperformed as exporters and shippers climbed as the yen weakened (95.56 last). Macquarie is raising their TOPIX target to 1250 from 1120 (recall MS rose theirs to 1270 from 1200 yesterday). Mainland China finished strong after reporting the first gains in FDI in 9 months. Hong Kong, however, ended off the highs as the EUR came off in the PM session on back of Reuters headlines that the Cyprus Parliament will not approve the bank deposit levy. Macau plays notably stand out following positive broker commentary as channel checks suggest strong gaming revenues for March. India came off sharply following reports of the DMK (one of the government's key allies) withdrawing support of the UPA Government. RBI policy was in line with expectations with the Repo rate cut by 25 bps from 7.75 to 7.5% and Rev Repo cut to 6.5% from 6.75% while the CRR kept unchanged. The RBI said that room for further easing is limited. In Australia, the RBA Minutes showed an easing bias with inflation expected to remain around the middle of target range. Japan will be closed tomorrow for Vernal Equinox Day. Cyprus Parliament to debate and vote on the deposit tax © 4pm GMT today (12pm EST) although there is more talk the vote could be delayed further. They have been given the green light to make the tax more progressive and a draft of the bill outlines only minor changes to spare deposits < E20k, 6.75% levy on deposits between €20k-E100k, and 9.9% levy on deposits > E100k. Cyprus banks remain closed today and tomorrow and their stock exchange will remain shut until Thursday as well for now. European February auto sales accelerate to the downside coming in at -10% for the month led lower by French carmakers as well as Italy's Fiat. Two big block trades from institutional sellers ovemight in Europe in the Luxury and Cable spaces (both at 3.1% discounts to yesterday's close): GS priced 7mm shares of Richemont (CFR VX) © CHF 77.00 while Barclays priced 40mm shares of Ziggo (ZIGGO NA) © E25.05. Neither holding deal price at the moment. Merrill's March FMS is out — a few takeaways: investors long assets driven by US growth and short assets driven by inflation and China, 42% believe Fed will never sell MBS assets, 57% of investors overweight equities, cash remains at 3.8% (still above 3.5% contrarian sell signal), record level of USD bulls, highest allocation to Japan stocks since 2007. US EFTA_R1_00800153 EFTA02143841 housing starts due out i 8:30am. SPA's -1 handle = 1546.40 last. ***Housing Starts & Building Permits @ 8:30am*** •**ADBE & WSM reports #'s after close*** • Electronic Arts CEO to step down & O4 outlook to low end or below previous guidance (trading +2%) • Lululemon to take "significant" financial hit on production problems and pants shortage (trading - 6%) • Boeing wins $15.6 billion contract to supply Ryanair with 175 next generation 737-800 airplanes • Starbucks names Sharon Rothstein global chief marketing officer (prior SVP of marketing at Sephora) • Citigroup agrees to pay $730M to settle bond class action lawsuit (covered by existing litigation reserves) • Blackstone said to mull outbidding Silver Lake in Dell LBO offer (go-shop period ends on March 22) • BlackRock to cut —300 people in restructuring (3% workforce) but will continue to hire (mix will change) • Richemont: GS places 7mm shares for undisclosed institutional seller @ CHF 77, 3.1% discount (trading -3.5%) • Ziggo: Warburg/Cinven place 40mm shs (20%) 25.05, 3.1% discount, retain 17% stake (trading - 4.0%) • Thyssen: Handelsblatt report company is considering Eur1bn cap increase with volume (trading - 6.0%) • BMW FY finals, EBIT margin inline, reit 2016 sales guidance, 'cautiously optimistic" (trading +1.7%) • Rio Tinto sees slowing demand growth in China pressuring Iron ore prices in H2, broker dig (trading - 4.3%) • Arm Holdings CEO Warren East to retire in July, Simon Segars to succeed (trading -2.8%) • Balfour Beatty CEO's wife sold bulk of holding: 79,568 shares @ 270.769p (trading -2.8%) • Spirit Pubs O2 trading update, LFL's ok given adverse weather, maintain guidance (trading -1.1%) • Baloise FY net income better, div inline, new business margin ok, outlook ok (trading -1.3%) • Partners Group FY profit better, div & EBITDA slight ahead, confirms guidance (trading +1.1%) EFTA_R1_00800154 EFTA02143842 • Iliad FY net income ahead, confirms 2015 sales guidance, maintains dividend (trading +6.9%) • Sainsbury Q4 trading statement, LFL's ex fuel top end, "challenging environment" (trading +2.8%) • Cairn Energy FY trading update inline, acquires more west African acreage (trading -1.8%) • Tom Tailor FY net light, recurring EBIT ahead, sees solid franchise openings (trading +3.1%) • Italy industrial production +0.8% m/m versus estimate -0.3% (-3.6% y/y versus estimate -5.6%) • UK Feb inflation accelerates to 2.8% (inline), Spain sells E4 billion in bills (inline with max target) • Italy considering a substantial increase in sales of government debt to boost its private sector (n) • Samsung preparing wristwatch as it races Apple for new market (no details on features or timing) • Emperor Watch & Jewellery trading -4.7% after missing sales #'s yesterday after the local close • Japan's crippled Fukushima Daiichi nuclear station suffered a power failure on Monday night (FT) • India's RBI cuts rates to 7.5% from 7.75% but says that room for further easing is "quite limited" • India's Sensex drops as Singh's biggest coalition ally DMK withdraws support (Sensex -1.11%) • RBA says economy responding to low rates and repeats scope to cut (RBA minutes from 3/5) Leading European Sectors: Teico +1.02%, Media +0.39%, Healthcare +0.28% Lagging European Sectors: Basic Res -2.66%, Construction -0.90%, Insurance -0.75% TNAV $10M buyback — SKUL names ceo — TWER guides revs lower AVB chairman resigns — AFFY slashes 75% jobs — Whitney sees 20% BAC upside Secondaries (announced/priced): TWO, CMLP, LRE, TICC, CFR VX, ZIGGO NA, HE, HPT, HEP, TICC, SBRA (atm) IPO's: N/A US Key Research: EFTA_R1_00800155 EFTA02143843 • Jefferies initiates ACAD (buy) & PSTI (hold), UBS downgrades AGCO/DE & upgrades PDCO (buy) • MS resumes CAR (uw) & downgrades KSS, GS downgrades JNPR (sell) & upgrades INFN & raises targets CYH/HCA/THC • Bofa downgrades RSH, BRiley initiates MEI (neut), MTabak downgrades CBRL, Stifel downgrades PDCE Europe Key Research: • UBS downgrade KABN SW, upgrade MEO GY, BERE downgrade WEIR LN JPM initiate KCHOL TI (ow), INCA NA (ow), MS upgrade TEF SM, GS downgrade RIO LN, AMI LN, BLT LN Chev strategist cuts Italy to underweight, HSBC upgrade RCO FP, downgrade FIA1S FM, • CBK upgrade GU GY, Shore upgrade HSBA LN, Investec downgrade ROR LN, upgrade RBS LN • Numis downgrade BBY LN, Oddo upgrade TOD IM, Cantor upgrade PFL LN, IMI downgrade ISG IM Nordea downgrade NHY NO, ERICB SS, DB downgrade DUFN SW, FRES LN, TKA AV BERN initiate W0H DC (up), SOON VX (up), GN DC (mp), AMP IM (mp) Reporting Pre-Open: AN, DSW, FDS, MBT, RNF, RTK, SBLK, SVNT, WAC Reporting Post-Close: ADBE, CTAS, AIR, FRAN, LFL, PRMW, WSM Economic Data: Housing Starts & Building Permits @ 8:30am API crude oil inventories © 4:30pm Conferences: Howard Weil Energy (New Orleans), Barcap Emerging Payments Forum (Boston), Bofa Global Industrials & EU Autos (London), Bofa Real Estate (London) Analyst/Investor Days: LNT, CWEI, KLIC, BVIC LN EFTA_R1_00800156 EFTA02143844 Non-Deal Roadshows: AOS, ASBC, BANR, BBY, CKEC, CSGP, CSV, EV, FFBC, INAP, LSE, MHLD, OCR, ()LYS, RAX, RM, SRCL, STN, TWI, TXT, V, VRNG, VRTX, XLS, P Shareholder Meetings: ADX, TLR, SHP Equity/Mixed Shelfs: T, CHEF ($300M), SWHC ($250M), ORMP ($25M) Other Newspaper Articles & Stories WSJ positive: Canadian oil producers WSJ • Cyprus scrambles to renegotiate bailout FT • Levy plan 'bleak day for banking union' FT • Citi to pay $730m in subprime settlement FT • ECB role in bailout comes under scrutiny FT • Cyprus banks shut until Thursday FT • Europe's leaders run out of credit in Cyprus FT • Cyprus shows German line is hardening FT • Russia attacks Cypriot bank levy FT • Cyprus and banks: Nicosia in a twist Lex • Food stocks: stay overweight Lex • Cyprus plays for time WSJ • HSBC unit charged in Argentine Tax Case WSJ • Deutsche Boerse faces Lehman style claim WSJ • Tension Rise between Facebook, Developers WSJ • Is bitter medicine for Cyprus a cure for the Euro Zone? WSJ • RBS to invest $1bn in retail banking WSJ EFTA_R1_00800157 EFTA02143845 • Cyprus set to reject bailout levy to protect investors The Times • Cyprus crisis deepens as Russia threatens EU The Times • Moment of madness for the eurozone Telegraph • A brutal bail-out Telegraph • Cyprus 'unfair, unprofessional and dangerous' — Kremlin Telegraph • Cyprus: Nest eggs and broken baskets Guardian • The Cyprus bailout is bank robbery pure and simple Guardian • Eurocrats engage in Cyprus blame game Independent • Effects of bailout will be felt far beyond Cyprus Independent • Baptism of fire awaits Jack Lew in China Independent Key Events This Week Wednesday: FOMC Rate Decision, EU meeting on capital rules for banks, BOE minutes, Eurozone consumer confidence, China HSBC Flash PMI, BB&T Commercial & Industrial Conference (London), Earnings (FDX, LEN, JBL, ORCL) Thursday: Swiss watch data, Philadelphia Fed, FHFA House Pride Index, Existing Home Sales, Eurozone Flash PMI, JPM Insurance Conference (NYC), Earnings (ROST, MU, NKE, WTSL) Friday: Dell go-shop period ends, EU leaders meet in Finland, Earnings (DRI, TIF) Key Events on the Horizon April 8 - Obama to publish his budget April 15 - #NoBudgetNoPay deadline for Congress May 19 — US debt ceiling limit EFTA_R1_00800158 EFTA02143846 May26/27 — Mayoral elections in 720 cities across Italy July 1 — Mark Carney takes over as BOE Governor September — German elections a ll.' 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