EFTA Document EFTA02120823

From: Sent: Wed 11/27/2013 10:59:48 AM Subject: Early Tour 11.27.13 Good Morning ... European Markets up 0-70 bps (Italy +1.0%, Swiss -0.08%) ... NKY -0.42%, SHCOMP +0.82%, HSI +0.53%, KOSPI +0.31%, TWSE +0.58%, ASX -0.45% EUR 1.3597 (+0.18%) JPY 101.79 (-0.49%) EUR/JPY 138.40 (+0.68%) AUD 0.9128 (+0.01%) NZD 0.8204 (+0.11%) GBP 1.628 (+0.43%) US 10yr 2.72% Japan 10yr 0.61% Germany 10yr 1.70% Portugal 10yr 5.85% Italy 10yr 4.06% Spain 10yr 4.15% Futures: Dow +18, Nasdaq +6, S&P +1 DXY 580.54 (-7c) Crude $93.30 (-38c) Gold $1251.30 (+$9.80) Copper +0.28% Silver +0.99% Asian markets were once again mixed with indices trading in narrow ranges in quiet trade ahead of the Thanksgiving holiday in the US. The Nikkei closed below 15,500 for the first time this week despite the Yen holding on to mid-I01 levels. Shanghai and Hong Kong were stronger following reports the PBOC Governor Thou Xiaochun was looking to expand QFII/QDII investment quotas and also with the CIRC Vice Chairman looking to increase insurance funds equity investment to 20-30% from 10%. Mainland property plays struggled with more tightening measures in Nanjing and Hangzhou. Also of note, Japanese airlines flew through an air-defense zone claimed by China and disputed by Japan today after US unarmed B-52 bombers entered the airspace yesterday (China has embarrassed itself into a corner here). European markets mostly higher as we approach month end on Friday. Royal Mail Group trading +5.8% after its first set of results since listing. Norwegian oil services company Aker Solutions trading +8% after a reverse inquiry from Aker ASA had them pay up to 115 NOK for 16.44M more shares. And hotel operator Accor trading -4% after announcing a restructuring which will separate its operating and ownership units. In Germany, Merkel's CDU/CSU bloc has reached a grand coalition agreement with the SPD and the details will be presented at 12pm CET (early reports suggest that Merkel has agreed to a national minimum wage as well as increasing spending on pensions & infrastructure without raising taxes). The SPD will now hold a referendum vote amongst its members with the outcome due Dec14-15. There is also an article in Sueddeutsche speculating that the ECB is weighing a new LTRO with conditions attached and possibly other measures as well (note many are expecting another LTRO in Q1 2014). Big macro day in the US to as we get the data in before the holiday. HPQ indicated +7% after a strong revenue beat and better cash flow while ADI looking -3% on weaker guidance. SPA's +1 handle = 1803.80 last. EFTA_R1_00754764 EFTA02120823 ***Mortgage Applications 7am, Jobless Claims / Durable Goods i 8:30am*** ***Michigan Confidence @ 9:55am, Leading Indicators @ 10am*** ***China October Industrial Profits tonight*** • Hewlett-Packard revs fell beat ests boosted by corporate demand (bookings +30%) (trading +7%) • Analog Devices Q4 profit up on gm growth but revs missed and sees lower O1 sales growth (trading -3%) • TiVo subscriptions continued to rise & revenues grew but net income fell on prior yr litigation gain (inline) • Tilly's lower third quarter sales & weaker than expected earnings forecast for holiday quarter (trading -15%) • Zale loss narrowed on broad same-store sales (12th qtr of positive comps) & solid margin growth • Amec said to be stalking US rival Foster Wheeler with GS advising them according to the Times • Moncler: upcoming luxury apparel IPO in Italy price range is officially out E8.75-E10.20 (pricing Dec 11) • Amec said to be stalking US rival Foster Wheeler with GS advising them according to the Times • Moncler: upcoming luxury apparel IPO in Italy price range is officially out E8.75-E10.20 (pricing Dec 11) • Vossloll founding family said to be selling a stake (rumoured 22%), estimated price range of E68-€70 (trading -3.8%) • Aker ASA buys 16.44mn shares Aker Solutions (it Nok115 via ABG (reverse inquiry) (AKSO NO +8.0% ) • Accor announce new strategy, nothing new on financial and cost goals, clear vision (trading 4.0%) • Essilor buys 50% of Xiamen Yam' Optical — leader in Chincsc mid-range sunglasses (trading +0.50%) • EADS sells 30 A320's to Chinese budget carrier & identifies E690mn unit synergy potentials (trading +0.80%) • Colruyt HI revs inline, EBITDA better, EBIT ahead, outlook muted by consumer spending patterns (trading +5.3%) • Arcelor & Nippon nearing agreement to buy Thyssen's Alabama plant for 81.5bn (trading +1.6%) • General' investor day in London, increasing cost savings targets, confirms 2015 ROE of 13% (trading +1.8%) • Popolare approves the merger plan for Credit Bergamasco & Italease, boosts core capital by 50bp (trading +6%) EFTA_R1_00754765 EFTA02120824 • Nordex issues 7.35mn new shares. 180 day lock up. said to be covered at f 10 (trading -5%) • Vivendi supervisory board unanimously agree to group planned demerger of SFItiMedia assets (trading +1.8%) • Associated British Foods: Ski' News reports mulls takeover of Tilda for £250M (trading +0.70%) • Veripos: Hexagon holds 27.4% of Veripos, seeks to buy more at Nok34-Shr (trading +12%) • Veolia: EDF places 4.01% stake © 11.90eur/share ovemight (trading -1.7%) • LEG lmmobilien O3 rental income improving, EBITDA declining, vacancy rate 3%, reaffirms outlook (trading -0.10%) • Raiffeisen International O3 net income beats, NIl improvement, trading income good (trading - 0.10%) • Royal Mail H1benfitts from one-offs & lower transformational costs, positive parcel rev outlook, GLS solid (trading +5.8%) • Compass Group FY revs in line, adj pretax ok, new £500mn buyback, encouraging 2014 pipeline (trading +3.6%) • Matas O2 net beats, sales fine, EBIT good, positive outlook, StyleBox op costs unchanged (trading +1.5%) • United Utilities H1 op profit in line, remains confident on goals, looks to maintain dividend policy (trading +1.5%) • Shaftesbury FY net property income ahead, NAV better, EPS in line, rising on property valuations (trading +2.0%) • Punch Tavems Q1 profit in line, improving LfL trends, reiterates guidance (trading +4.5%) • Immunodiagnostics H1 adj EPS & EBIT better y/y, confident will meet all FY goals (trading +5.0%) • Frontline O3 revs improve y/y, vessel impairment loss of $22.4mn, cautious outlook (trading +7.0%) • Findel H1 revs good, EBITDA solid, op profit improving, H2 trading encouraging (trading +1.6%) • Solvay cuts 2016 EBITDA goal, confirms strategy/vision, targets higher growth/better returns (trading -2.1%) • German cartel office starts probe into Rhoen Klinikum and Freensius deal (looking into regional overlap) • Thailand cuts key rate 25bps to 2.25% in a 6-1 vote (all 19 economists surveyed saw no change) Leading European Sectors: Basic Res +1.33%, Trav/Les +1.12%, Media +0.86% Lagging European Sectors: Healthcare -0.09%, Food/Bev +0.02%, Tech +0.10% EFTA_R1_00754766 EFTA02120825 GAME revs missed — AVAV rev midpt above ests — GNC $500M buyback Notable Options Activity Yesterday: DG ($58.79 +0.5%) bullish customer bought the May $62.5 calls 5000x for $3.15 to sell the May $67.5 calls 7500x at $1.775. The trade looks for stock to trade above $62.50 at expiration, with a maximum payout at $67.50. EBAY ($48.76 -0.6%) heavy call volume on Tuesday, with the largest trade being a purchase of 50,000 July $62.5-$65 call spreads for $0.275. The trade is cheap on an absolute level, with potential for 9x ROI if the stock closes above $65.00 at expiration. Secondaries (announced/priced): PF, BRSS, NDX1 GY, VOS GY, VIE FP IPO's: Moncler price range announced (€8.75-€10.20) and start of book building (expected pricing 12/11, start of trading 12/16) US Key Research: • DB initiates QUNR (hold), FBR initiates FUN (op) & SEAS/SIX (mp) • Janney downgrades DENN, Jefferies downgrades OGE, Stifel initiates RKUS (buy) • Piper initiates CMRX/GWPH/INSM/NKTR/RPRX (ow's) • Piper resumes ALXN/AMGN/BIIB/BMRN/GILD/INCY/PCYCNNDA (ow) & CELG/ISIS/MNKD (neut) • Evercore upgrades HPQ & downgrades TIVO, RBC downgrades INTC Europe Key Research: • Barc upgrade BVIC LN, Beren downgrade ZURN SW, upgrade HEI GY, Bern upgrade RCO FP • Citi downgrade DLAR LN, initiate ABG SM (b), CS downgrade ISP IM, Danske upgrade SONG NO EFTA_R1_00754767 EFTA02120826 • DBK upgrade BIJ GY, DNB downgrade YAR NO, GS initiate ELI BB (n), HSBC downgrade MOBB BB • Exane initiate CGG FP (op), SUBC NO (op), WG/ LN (op), PFC LN (n), SDRL NO (n), GBB FP (up), SPM IM (up) • Exane initiate TEC FP (n), AMEC LN (up), Oddo downgrade RCO FP, UBS downgrade MTX GY, MTO LN JEFF initiate BREE LW (b), TYMN LN (b), MLSH LN (h), KepChev downgrade HOLMB SS, SKG ID • BofAML initiate ABG SM (n), Goodbody downgrade SMDS LN, RAYJ downgrade RCO FP, upgrade VER AV • RBC upgrade UBSN VW, Sarasin upgrade BUCN SW, SEB downgrade UNIB SS, SocGen upgrade ZURN VX Reporting Pre-Open: AN, CHOP, FRO, GLNG, GMLP, SFL, SRLP, WUBA Reporting Post-Close: RENN Economic Data: MBA Mortgage Applications © 7am, Jobless Claims / Durable & Cap Goods Orders / Chicago Fed National Activity Index @ 8:30am, Chicago PMI / Bloomberg Consumer Comfort @ 9:45am, U. of Michigan Confidence c 9:55am, Leading Indicators 10am DOE crude oil inventories © 10:30am, EIA natural gas storage © 12pm Conferences: No major confemces Analyst/Investor Days: N/A Non-Deal Roadshows: N/A Shareholder Meetings: FORTY, DQ, VIDE, YY Equity/Mixed Sheds: N/A EFTA_R1_00754768 EFTA02120827 Other Newspaper Articles & Stories WSJ cautious: US Banks WSJ Men's Wearhouse (MW) WSJ • Profits surge at newly privatised Royal Mail FT • Angela Merkel secures right-left German coalition deal FT • Iran opens contacts with oil groups FT • Putin leans on Kiev as protests persist FT • Vivendi: two is better than one FT • SW says banks may have to spend extra $1046 on mortgage cases FT • Free movement within Europe needs to be less free FT Opinion • Rogers, NHL agreement is a big loss for TSN Globe & Mail • US expands China hiring probe to Morgan Stanley Reuters • Bayer / Algeta: the piper pays Lex • Hugo Boss: marginal call Lex • Surging Nasdaq Pierces 4000 WSJ • Obama Administration Proposes New Curbs on Campaigning by Tax-Exempt Groups WSJ • Volatile Loan Securities Are Luring Fund Managers Again WSJ • Durable Goods Look Soft Around the Middle WSJ • Morgan Stanley and Citi Got SEC Inquiries on Foreign Hiring WSJ • 'Black Friday' Feels Like a Month WSJ • I'm a Teen, Watch Me Shop WSJ • New Boom in Subprime Loans, for Smaller Businesses NYT • Risky Investment Vehicle With High Yields Gains Prominence NYT • Amec lining up £5bn deal to capture American rival The Times EFTA_R1_00754769 EFTA02120828 • Fraud inquiry threat looms over Royal Bank of Scotland The Times • Ofgem Would back Miliband's 20-month energy bill freeze' The Times • Chancellor 'must take control of the national debt' The Times • Fruit Shoot puts the lid on its product recall The Times • Tiffany glisters on Asian taste for bling The Times • Mark Carney: RBS allegations 'deeply troubling and extremely serious' Guardian • WTO faces existential crisis Guardian • Mark Camey calls for formal powers over bank leverage ratios Independent • We should have let banks go to the wall. They don't care about our wellbeing Independent Key Events This Week Thursday: Thanksgiving (US market closed), BOE Financial Stability Report, Germany CPI, Eurozone confidence Friday: US markets close early 1pm, ISM Milwaukee, JCP removed from SP500, EU banks face 11/29 deadline to submit data to ECB for current risk assessments, Earnings (FRO) Saturday: China November manufacturing PMI Sunday: China November HSBC manufacturing PMI Key Events on the Horizon Dec 4 — OPEC meets in Vienna Dec 5 — BOE & ECB rate decisions EFTA_R1_00754770 EFTA02120829 Dec 13 — Congress budget deal deadline Dec 18 — FOMC rate decision Jan 15 — Current CR runs out Jan 21 — State of the Union Address Feb 7 — Debt ceiling deadline (Treasury can use extraordinary measures for — 1 month past this date) This e-mail and any tiles transmitted with it are confidential and intended only for the person or entity to which it is addressed. If you are not the intended recipient, you are hereby notified that any dissemination, distribution or copying of this e-mail and any attachment(s) is strictly EFTA_R1_00754771 EFTA02120830 prohibited. If you have received this email in error please immediately notify the sender at 203-302-7300or by replying to this e-mail and delete the e-mail and any attachment(s) from your system. Nothing herein shall be construed as a financial promotion to any person or persons, or a solicitation or recommendation to buy or sell any security or other investment or to engage in any trading strategy. Information presented is from sources believed to be reliable, but is not guaranteed to be accurate or complete. This information should not be taken as an offer nor as a solicitation of an offer to buy or sell securities or other financial instruments. Email transmission cannot be guaranteed to be secure, timely or error free. Tourmaline Partners, U.0 may review and store both incoming and outgoing messages. Use by other than the intended recipients is prohibited. EFTA_R1_00754772 EFTA02120831