EFTA02146320

From: Sent: Fri 3/1/2013 11:03:01 AM Subject: Early Tour 3.1.13 Good Morning ... European Markets off 20-100bps (Italy -1.3%) ASX -0.35%, NKY +0.41%, TWSE +0.84%. SHCOMP -0.26%, HSI -0.61% EUR 1.3043 (-0.11%) JPY 92.82 (-0.28%) EUR/JPY 121.06 (+0.17%) GBP 1.5040 (-0.81%) SEK 6.4322 (+0.52%) Spain 10yr 5.07% Italy 10yr 4.7% US 10yr 1.86% Copper -1.62% Silver -1.2% Futures: Dow -20, Nasdaq -3, S&P -4 DXY $82.11 (+17c) Crude $91.08 (-97c) Gold $1569.20 (- $8.90) Asian markets start the month mixed in a relatively quiet session. China's official and HSBC mfg. PMI were the main events of the night. Both readings came in below estimates, but still in expansion territory. Official PMI came in at 50.1 vs est of 50.5 (50.4 in Jan) which is the slowest expansion in 5 months and HSBC came in at 50.4 vs flash of 50.6 (52.3 in Jan) which was the slowest expansion in 4 months. Like most Feb data points, the m/m comparisons are somewhat distorted by the Lunar New Year holiday. HSBC comments said that final Feb mfg. PMI suggests a "slower pace of expansion," but "China's recovery continues on improving domestic demand conditions and the labor market" and that the "pace of ongoing recovery is mild, implying no need for the PBoC to tighten policy any time soon." The NKY closed higher and is up 1.96% for the week, despite Tuesday's sell-off. Jan CPI was out and fell for the 8th time in 9 months, furthering the case for monetary easing — rate sensitive plays continue to led the pack (TOPIX real estate index up 5.1% today). Australia, Japan, Indonesia and Malaysia all have rate decision due next week and China's National People's Congress meeting begins on the 5th (ends on 10) and is likely to provide a number of headlines for the week. Korea was closed today for a holiday. PMI Manufacturing #'s out in Europe as well this morning: Eurozone 47.9 (est 47.8), Germany 50.3 (est 50.1), France 43.9 (est 43.6), UK 47.9 (est 51.0), Swiss 50.8 (est 52.1), Spain 46.8 (est 46.3), Italy 45.8 (est 47.5), Greece 43.0 (41.7 prior). GBP getting hit hard again -0.79% and to 1.5044 level following the weak PMI print. Copper also v weak today -1.6%. Reminder that the Italian Financial Transaction Tax (FTT) takes effect today = 12bps on purchases in companies with market cap > E500M in 2013 (and then reduces to 10bps beginning in 2014 and beyond). Volumes in Italy notably weaker today (-40% of 10d average and —60% of 30d average). Italy's Bersani will present an 8 point plan to Parliament on March 6 to move government forward but will not form a grand coalition with Berlusconi according to La EFTA_R1_00804639 EFTA02146320 Repubblico. European markets had a choppy open but have since faded and currently lower across the board. Obama to meet with Congressional leaders @ 10am on the sequestration (automatic spending set to begin today = $1.2 trillion over 10 years 50% from defense). SPA's -4 handles = 1509 last. "Personal Income & Spending @ 8:30am, Markit US PMI c 8:58amm "—Michigan Confidence @ 9:55am, Construction Spending I ISM Manufacturing @ 10am•'• ***Bernanke speech (tow Long-Term Interest Rates") @ 10pm, China non-manufacturing PMI out Sat night*" ***BBY reports earnings pre-open / BRK.A #'s after close"' • Salesforce.com core profit improved as billings beat & raised FY2014 rev view (trading +3%) • Gap N American sales topped ests (net +61%) boosts dividend & good eps view (trading +3%) • Groupon's Andrew Mason fired as CEO (appoints Lefkofsky & Leonsis) (trading +4%) • Flowers Foods wins bid for Hostess bread assets (including Wonder) with $360M • Sotheby's slight eps miss on lower auction sales & refinanced debt (trading inline) • American Public Education Q4 Ws better but eps outlook below ests ($0.55.0.58 vs $0.60) • Deckers Outdoor O4 eps & 2013 sales forecast beat estimates (trading +10%) • Swatch: Swiss exchange to temporarily allow Swiss GAP, thereby allowing Swatch to remain in SMI Index (trading +0.95%) • Ithaca agree acquisition offer terms with Valiant, 469p per share represents 37% premium to close (trading -10.5%) • William Hill FY revs in line, plans to buy back 29% of WHO for £424mn — has strong shareholder support (trading +7.3%) • Vopak FY revs and EBITDA in line, EPS slight better, modest growth forecast for 2013 will disappoint (trading -9.5%) • Brunel FY miss due to previous overstated US revs, energy sustainability questionable, muted guidance (trading -22%) • Luxottica Q4 EBIT slight ahead, good start to trading year, solid margins, sales already pre- released (trading +2.0%) • USG NA Q4 below, sales & gross profit light, EPS & div miss, includes Eur38mn divestment, no outlook (trading -1.7%) • Alstria FY strong as expected, good mix, cautious outlook weighed by difficult office, dividend of Eur0.5 (trading +0.40%) EFTA_R1_00804640 EFTA02146321 • Andritz Q4 sales & EBIT in line, orders slight light, div slight ahead, positive outlook in tough environment (trading -1.7%) • Hammerson FY net income better, good div, NAV slight ahead, div in line, sees strong growth 2013 (trading +1.7%) • Lloyds FY PBT better, driven by better impairments, CT1 improvement, losses better, weak div comments (trading -5.8%) • Belgacom Q4 adj EBITDA below, FCF better, guidance light on lower roaming profits, increasing Capex (trading -7.8%) • Rightmove FY rev better, underlying good, div slight ahead, confident outlook with "continued growth' (trading +2.0%) • Thales FY EBIT better, revs ahead, div in line, good FCF, raising aerospace guidance (trading +16%) • UBM FY rev miss, sales below, div light, maintains forecasts, tweaks margin guidance (trading - 3.1%) • Old Mutual FY op profit in line, FUM okay, div as expected, maintains long term guidance (trading +1.1%) • WPP FY uneventful, EBITDA slight light, confirms guidance, reaffirms long term goals (trading +0.30%) • Areva FY EBITDA slight light, net loss ok, cancelling div, CEO upbeat about prospects in press (trading -1.9%) • Metro FY pre-release FY, EBIT (ex-items) in line, proposes Eur1 dividend, maintains guidance (trading -3.5%) • Taylor Wimpey FY good, revs and pretax ahead, net debt better, order book solid, focus on outlook (trading +0.90%) • Euro-area unemployment climbs to record as recession deepens (11.9% versus est 11.8%) • Italy unemployment rises to highest level since at least 1992 (11.7% versus est 11.3%) • Eurozone February CPI comes in at +1.8% versus estimate +1.9% and +2.0% in January Leading European Sectors: Trav/Les +0.38%, Food/Bev +0.09%, Healthcare -0.13% Lagging European Sectors: Basic Res -2.51%, Banks -2.19%, Insurance -1.12% ALSK earnings better — RST guidance light — CBST fda approval SPLK sees midpt above — RLH eps below ests — UBNT names cfo ISRG safety probe - OVTI rev/eps missed — YOKU O1 rev outlook light EFTA_R1_00804641 EFTA02146322 Notable Options Activity Yesterday: JCP (17.57 -17%) opening cust sees continued downside bot 30k may 16 puts to sell 60k may 12 puts paying .68 for the 1x2 ps JCP has history of reporting midmay oust wins the most with stock at 12.00 on may 18 LIFE (58.13 +.3%) continued bullish trading in front two months today opening cust bot 2500 apr 60/70 call spreads to sell 2500 apr 55 puts paying .35 for 3way have seen upside march and april call buyers throughout the week AMTD (19.01 -.6%) opening cust bought 40k aug 23 calls paying up to .25 outright Secondaries (announced/priced): IEP, CCG, RWT (convert), DCP IPO's: N/A US Key Research: r Barcap initiates WNR (ow), Jeff upgrades ADSK (buy) & downgrades MCRS • Piper initiates CNDO/INFI (ow's) & upgrades SQNM, UBS upgrades ILMN (buy)  DB downgrades DUK, Northland initiates CREE/PWER/TSLA (op's) & VECO/AYI (mp's) • Raja cuts CBB/OVTI, Well upgrades TOT, RBC upgrades IP, MS downgrades SLCANVEN BMO cuts WFT, Citi cuts DUK, Macquarie initates UPS/FDX/HUBG (op) & CRHW/EXPD (neut's) r William Blair initiates JJSF (op), CSLA upgrades RDC, GS downgrades DB (sell) Europe Key Research: • JPM downgrade EVR LN, upgrade XCH LN, GS upgrade TEF SM, downgrade DBK GY EFTA_R1_00804642 EFTA02146323 • UBS upgrade KUD SW, downgrade EMG LN, Emerging Markets, upgrade Japan • Barc upgrade TEF SM, BofAML upgrade LBH SJ, STJ LN, Jeff downgrade TLSN SS • Citi upgrade DANSKE DC, EN FP, SEBA SS, RWE GY, CS initiate BWNG LN (n) • HSBC downgrade IPS FP, KBC downgrade BRNL NA, Akros downgrade BZU IM, ES IM • ING upgrade UCB BB, Sabadell downgrade CDR SM, FCC SM, Bern upgrade ALU FP • Equinet downgrade MLP GY, upgrade FIE GY, Investec downgrade CLLN LN • Kepler upgrade USG NA, downgrade EBS AV, Exane upgrade Al FP, ABG downgrade SALM NO Natixis initiate ERA FP (n), upgrade POM FP, REP SM, LIBR downgrade KAZ LN Chev downgrade LUX IM, PLT IM, replace CGG FP with TEC FP in top pick - Espirito upgrade SAF FP, downgrade MGGT LN, Nordea downgrade NOR NO ▪ SocGen downgrade GTO FP, POM FP, KAZ LN, RBS LN upgrade ASC LN, LUPE SS Numis downgrade RMV LN Reporting Pre-Open: BBY, POM, AMRC, DRC, EVEP, ELXS, FWLT, GLNG, HPT, MGA, NVAX, NWN, PNM, SHLO, SRI, SUP, WLB, XLS Reporting Post-Close: BRK.A, DHIL, PDLI, VNR Economic Data: Personal Income & Spending @ 8:30am, Markit US PMI @ 8:58am, U. of Michigan Confidence @ 9:55am, Construction Spending / ISM Manufacturing @ 10am Conferences: Goldman Sachs Social Media Forum (NYC) Analyst/Investor Days: ETN, BPOP, EXLS, KEYW Non-Deal Roadshows: ACFN, ARTC, BRE, CCOI, CDNS, DANOY, FMC, FN, HP, HSIC, IEX, ITRI, KSU, LTRX, MA, MDSO, MWA, OZMLY, VAR, VFC, VLTR Shareholder Meetings: N/A EFTA_R1_00804643 EFTA02146324 Equity/Mixed Shelfs: N/A Other Newspaper Articles 8, Stories Barron's positive: Aflac (AFL) Barron's WSJ positive: Green Dot (GDOT) WSJ WSJ cautious: Groupon (GRPN) WSJ • Lib Dems sweep to Eastleigh victory FT • China's manufacturing growth slows FT • RBS moves closer to privatisation FT • Netherlands to miss EU deficit target FT • EU nears deal on single banking rule book FT • Royal Bank of Scotland: for sale signs FT • IAG: falling mainly on the plane Lex • A not-so-secret sterling devaluation ploy FT • Wary Obama cannot shut out the world FT • Japan's chance to end its long stagnation FT • Europe's telcos press deals WSJ • Politics adds pressure on Central Banks WSJ • Companies slow down their Euro Bonds sales WSJ • Mind your Swiss Business WSJ • Spending cuts begin as time runs out WSJ • Cuts Roll In as Time Runs Out WSJ • Pope Bids Faithful a Farewell In Emotional, Historic Exit WSJ EFTA_R1_00804644 EFTA02146325 • Buffett to Update His Acquisition Hunt WSJ • Strassel: The GOP Takes Back Tax Reform WSJ Opinion • RBS Moves to Appease U.K. WSJ • Car Market Still Has Another Gear to Use WSJ • In California, What Price Water? NYT • Walsh defends BA's Spanish deal despite its E1bn losses The Times • Lloyds edges towards selloff amid £570m loss The Times • Google guru takes a seat at Vodafone The Times • US spending cuts loom over global recovery Telegraph • US deficit 'elephant in the room' warns Sorrell Telegraph • China manufacturing slows in February Telegraph • Glencore's £50bn Xstrata takeover delayed Guardian • WPP's pre-tax profit rises to £1.09bn Guardian • Widespread QE risks 'QE wars' and stagnation Guardian • Harvesting the GDP figures Independent Key Events Next Week Monday: ISM New York, Cowen Healthcare Conference (Boston), DB Media, Internet, Telecom Conference (Palm Beach), Earnings (BYD, REGI, SHFL) Tuesday: MS MLP and Diversified Natural Gas Corporate Access Day (NYC), Longbow Basic Materials Conference (NYC), Earnings (BNS CN, CKP, INFI, JMBA, PAY) Wednesday: Italy's Bersani to present 8 point plan to Parliament to move government forward, Beige Book, Citi Financial Services Conference (Boston), Earnings (BF.B, SPLS, MTN, PETM) Thursday: Fed to release stress test results for big banks, Nonfarm Productivity & Unit Labor Costs, Trade Balance, Bofa Refining Conference (NYC), Earnings (KR, HRB, JSDA, SKUL) EFTA_R1_00804645 EFTA02146326 Friday: February Employment Report, Earnings (FL) Key Events on the Horizon March 14 — Fed to release decisions on proposed capital plans of banks, Samsung launch event in NYC (Galaxy S4) March 19 — BOJ governor Masaaki Shirakawa steps down (Haruhiko Kuroda takes over pending Parliament vote in early March) April 15 — #NoBudgetNoPay deadline for Congress May 19 — US debt ceiling limit July 1 — Mark Carney takes over as BOE Governor September — German elections EFTA_R1_00804646 EFTA02146327 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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