WALL STREET INTRADAY, WEDNESDAY

Upgrades:

• Yum! Brands (YUM) was upgraded to Outperform from Neutral at Credit Suisse on the idea of the «New Yum» (non-China) which will begin trading on a standalone bases on Nov. 1, though they also see a favorable risk vs reward in Yum China (to be YUMC).
  • Thus far in October, YUM shares are about -5.1%; the stock is up +1.1% this morning, though, as Credit Suisse outlines their favorable view post China separation
• Twitter (TWTR) was upgraded to Hold from Sell at Loop Capital as they feel the company will report Q3 results in-line with firm's slightly below market expectations estimates. They also feel that even if the results or outlook disappoint, shares will have a floor given the recent M&A speculation.
  • TWTR is down a quick -29% in October after a +19% September; shares snap the recent losing streak in the morning trade session with the stock indicated +0.2% on light volume

Downgrades:

• Norwegian Cruise Line (NCLH) was downgraded to Hold from Buy at SunTrust following a pricing survey which indicated that broadly, pricing are in a slowdown across all global regions. 
  • Since the start of August, NCLH has lost about -10%; action has been modestly better as of late, though, as the stock is up +2.1% since the start of September, but peels off a modest -1.2% ahead of the bell today
• VASCO Data Security (VDSI) was downgraded to Neutral from Buy at Dougherty as the pre-announcement and lack of visibility has moved them to the sidelines. The revised outlook from VDSI reflects lengthening sales cycles, which may turn out to be a positive for VDSI as the company is especially well positioned in Europe.
  • After giving prelim Q3 results and lowering full year guidance last night, shares of VDSI trade to near seven-months lows, down -17.8% in pre-market action

• CTXS is expected to report its third quarter earnings report tonight after the close. There is a conference call scheduled for 16:45 (the company typically guides in the press release).

Gainers on news:

• HPE (+1.8%) co reaffirmed FY16 guidance and issues three views of FY17 financial outlook.
• V (+1.2%) co increased its quarterly dividend to $0.165/share from $0.14/share.
• SNPS (+0.4%) co confirmed a federal appellate court has ruled in favor of Mentor Graphics (MENT); said no impact on ZeBu sales or support.

Laggards on news:

• ACM (-0.9%) co, CACI (CACI), General Dynamics (GD) were named as part of potential $231 mln US Navy contract .
• EGHT (-0.8%) co announced it was issued 4 new patents related to its communications technologies by the USPTO.
• SAIC (-0.4%) co received SSC pacific contract to support cyberspace operations systems; potential value of more than $142 million.

• Jim Chanos (Founder and Managing Partner, Kynikos Associates): Chanos is renown short seller (predicted Enron demise). Investment firms are required to disclose long positions but not short positions; thus Kynikos filings do not necessarily reflect the funds' holdings in accurate manner. The most recent quartly filing included new positions in SPDR Metals & Mining (XME) and FEYE (also had call options in both), new position in STRZA. Majority of the positions included both shares and call options. Chanos has been recently associated with several short positions including Cheniere (LNG) [in opposition to Icahn],LC, TSLA, ZLTQ.
• Keith Meister  — Corvex Capital — has been highly supportive of Pandora (P) sale, strategic evaluation of Signet (SIG) and active /proxy contest with Williams Companies (WMB). Other highlights from 2016 Q2 filing included new positions in ZAYO, KSU,WWAV, EVHC, JCI and BEAV; Increased positions in TMH.
• Nelson Peltz - Trian Partners: Most recent qtrly filing disclosed slightly increased BK and SYY positions (as previously disclosed), maintained GE / MDLZ / WEN

Relative Strength:

Oil Svcs.-OIH +3.1%, Jr. Gold Miners-GDXJ +3.0%, Gold Miners-GDX +3.0%, Oil&Gas E&P-XOP +2.7%, US Oil-USO +2.6%, Philippines-EPHE +2.5%, Silver Miners-SIL +2.5%, Metals&Mining-XME +2.4%, Turkey-TUR +1.9%, Peru-EPU +1.6%, Russia-RSX +1.4%, Thailand-THD +1.2%, S. Africa-EZA +1.1%, Canada-EWC +0.9%.

Relative Weakness:

US Nat Gas-UNG -2.0%, Short-Term Futures-VXX -1.8%, Semis-SMH -0.9%, Biotech-IBB -0.7%, Copper Miners-COPX -0.6%, Cons. Staples-XLP -0.6%, Greece-GREK -0.5%, Livestock-COW -0.5%, Israel-EIS -0.4%, Indian Rupee-ICN -0.4%, Sweden-EWD -0.4%, Chinese Yuan-CYB -0.3%, British Pound-FXB -0.2%, Nordic 30-GXF -0.2%.

• Today after the close look for the following companies to report:
  • AXP, KMI, CCK, EBAY, STLK, MAT, LRCX, TSCO, URI, PKG, FTI, CTXS, LSTR, TBI, VMI, HNI, XLNX, HXL, SCSS, SLG, KALU,GGG, LHO, UMPQ, EWBC, BJRI, SLM, FNB, RLI, BXS, CVTI, HLX, CLB, BDN, CATY, WDFC, CNS, CVBF, EXPO, EGBN, EGP,BRKL
• Tomorrow before the open look for the following companies to report:
  • Z, WBA, AAL, TRV, UNP, NUE, DHR, BK, PPG, ITW, TXT, GPI, RCL, LAD, PHM, DGX, ADS, FITB, FAF, DAN, SON, SNA,WBC, POOL, PLD, STC, GNTX, ICLR, DST, GATX, JAKK, SBNY, SXC, NWE, KCG, MNRO, BKU, MNI, DNKN, SXCP, PVTB,BANC, WNS, HOMB, IIIN, UTL, IMAX, STBA, UTEK, SASR

Bullish Call Activity:

• AMD Oct 7 calls are seeing interest following Intel earnings this morning and ahead of its own earnings tomorrow, October 20 after the close (volume: 4990, open int: 28.8K, implied vol: ~207%, prev day implied vol: 129%)
• DNKN Oct 52.5 calls are seeing interest ahead of earnings tomorrow, October 20 before the open (volume: 2110, open int: 380, implied vol: ~102%, prev day implied vol: 61%) 
• DDD Oct 15 calls (volume: 3510, open int: 1910, implied vol: ~89%, prev day implied vol: 74%)  — co is scheduled to present at a Engineering Design Show 2016 conference on October 19. Co is confirmed to report earnings November 3 before the open.
• iShares Gold Trust (IAU) Oct t12 calls (volume: 6000, open int: 6540, implied vol: ~25%, prev day implied vol: 2%) — gold prices higher by 0.7%. 5K traded in a single transaction.

Bearish Put Activity:

• SMH Oct 67 puts are seeing interest following Intel earnings last night (volume: 3000, open int: 8490, implied vol: ~34%, prev day implied vol: 24%) 

• Leaders: LBTYA 1.8% (to acquire the cable business of Multimedia Polska for apporx. $760 mln), KORS 5.3% (report from foreign newspaper being passed around suggesting company considering buyout offer), TRIP 1.3% (vague chatter coincided with the move to highs and options activity), IGT 2.7% (reaches a patent cross-licensing agreement with Everi Games Holding; financial details not disclosed), GNC 12.1% (GNC Holdings has met with a number of Chinese firms in recent weeks about a possible acquisition, according to the WSJ), PAG 3.1% (increases quarterly dividend)
• Laggards: RAD -4.2% / WBA -1.2% (ongoing concerns about WBA/RAD merger), CAG -1% (Pulling back from yesterday's move higher on Analyst Day update), MWW -2% (to provide human capital training and development services to US federal agencies under the $11.5 bln HCaTS contract award vehicle), PERY -0.2% (OXM sympathy)
• Nearly unchanged: MJN flat (underperforming following cautious comments from Abbott regarding the Pediatric Nutrition market in China)