Америка сегодня. Индекс деловой активности.

• CEVA (CEVA) and Waves Audio announced that the companies have collaborated to address the substantial demand for far-field voice pickup and psychoacoustic sound enhancement solutions across the mobile, smart home and wireless audio markets.
• Assembly Biosciences (ASMB) announced it has received early termination of the waiting period required by the Hart-Scott-Rodino Antitrust Improvements Act of 1976, closed the transaction and received the upfront payment from Allergan plc for the research, development, collaboration and license agreement between the two companies announced on January 9, 2017. 
• Mcdermott (MDR) acquires deepwater pipelay and construction vessel Amazon; financial terms not disclosed. 

Major European indices trade mostly higher while the UK's FTSE (-0.1%) has been held back by shares of HSBC after the banking giant reported disappointing results. The euro (1.0535) and the pound (1.2407) show respective losses of 0.7% and 0.4% against the greenback, having retreated after Philadelphia Fed President and FOMC voter Patrick Harker said that a March rate hike is not off the table.

• In economic data:
  • Eurozone February Manufacturing PMI 55.5 (expected 55.0; last 55.2) and Services PMI 55.6 (consensus 53.7; previous 53.7)
  • Germany's February Manufacturing PMI 57.0 (consensus 56.0; previous 56.4) and Services PMI 54.4 (expected 53.6; last 53.4)
  • UK's January Public Sector Net Borrowing -GBP9.82 billion (expected -GBP14.00 billion; previous GBP4.24 billion)
  • France's February Manufacturing PMI 52.3 (consensus 53.5; last 53.6) and Services PMI 56.2 (expected 53.8; previous 54.1). January CPI -0.2% month-over-month, as expected (last -0.2%)

---Equity Markets---

• UK's FTSE is lower by 0.1% with HSBC falling 6.8%. Other financials like RBS, Standard Chartered, Barclays, and Prudential are down between 0.3% and 1.4%. On the upside, energy-related names like BP and Royal Dutch Shell hold respective gains of 2.2% and 1.4%. Homebuilders also display strength with Persimmon, Taylor Wimpey, and Barratt Developments up between 0.5% and 1.3%.
• France's CAC has added 0.2%. Exporters Peugeot, Michelin, and Renault have added between 0.5% and 1.0% while financials are mixed. Societe Generale, AXA, and BNP Paribas are up between 0.3% and 0.7% while Credit Agricole is off 0.2%.
• Germany's DAX trades up 0.6%. Siemens and Lufthansa lead with gains close to 1.7% apiece while Daimler, BMW, and Volkswagen have added between 0.7% and 1.1%. Financials lag with Deutsche Bank trading flat and Commerzbank lower by 0.3%.

Upgrades: 

• Hugo Boss AG (BOSSY) upgraded to Sector Perform from Underperform at RBC Capital Mkts
• Dialog Semi (DLGNF) upgraded to Overweight from Underweight at JP Morgan
• Rolls Royce PLC (RYCEY) upgraded to Buy from Neutral at Goldman
• Royal Bank of Scotland (RBS) upgraded to Equal Weight from Underweight at Barclays
• Air France-KLM (AFLYY) upgraded to Buy from Neutral at Citigroup
• Air France-KLM (AFLYY) upgraded to Buy from Sell at UBS
• Tullow Oil plc (TUWLF) upgraded to Buy from Underperform at Jefferies
• Tullow Oil plc (TUWLF) upgraded to Hold from Sell at Canaccord Genuity

Downgrades: 

• Standard Chartered PLC (SCBFF) downgraded to Neutral at JP Morgan
• Repsol SA (REPYY) downgraded to Neutral from Buy at Goldman
• Carrefour SA (CRRFY) downgraded to Hold from Buy at Societe Generale
• Engas (ENGGF) downgraded to Equal Weight from Overweight at Morgan Stanley
• Vesuvius PLC (CKSNY) downgraded to Hold from Buy at HSBC
• Cobham plc (CBHMF) downgraded to Hold from Buy at Liberum

Miscellaneous: 

• Investment AB Kinnevik (KINNF) initiated with a Buy at Deutsche Bank
• Sage plc (SGPYY) initiated with a Buy at Stifel
• Inmarsat (IMASY) initiated with a Sell at Societe Generale
• Johnson Matthey plc (JMPLY) initiated with a Market Perform at Bernstein
• Royal Dutch Shell (RDS.A) removed from Conviction Buy List at Goldman

Treasuries Slide to Begin Short Week

• U.S. Treasuries are trading sharply lower this morning after eurozone purchasing managers' index data came out much better than expected for February. Activity was stronger in both the manufacturing and service sectors. Nevertheless, the euro is losing 0.67% to $1.0538 this morning and that is helping to lift the U.S. Dollar Index by 0.54% to 101.50. Other international economic data showed that Japanese and British manufacturing activity accelerated in February. The S&P 500 is set to open 0.17% higher at 2,355.1 to start the holiday-shortened week. WTI crude is 1.72% higher at $54.32/bbl. and gold is losing 0.64% at $1,231.2/troy oz.
• Yield Check:
  
  • 2-yr: +3 bps to 1.22%
  • 5-yr: +5 bps to 1.95%
  • 10-yr: +4 bps to 2.45%
  • 30-yr: +4 bps to 3.06%
• International News:
  
  • Japan's manufacturing purchasing managers' index unexpectedly jumped to 53.5 for February from 52.7 in January
    
    • Japan's All Industries Activity Index fell by 0.3% in December, reversing most of a 0.4% increase in November
  • The eurozone's manufacturing purchasing managers' index rose to 55.5 for February, according to preliminary data. Economists had expected a modest decline from January's reading of 55.2
  • The eurozone's services PMI jumped to 56.0 for February from 54.4 for January. Economists had expected a smaller decline
  • An index of eurozone consumer confidence fell to -6.2 in February from -4.8 in January, missing expectations for a more modest drop
  • France's consumer price index fell by 0.2% m/m in January, in line with both forecasts and December's pace
  • In the U.K., CBI Inustrial Trends Orders unexpectedly rose by three points to 8 in Feburary
  • Bank of England Governor Mark Carney told Parliament today that if import price inflation leads to higher wages, then the central bank will tighten policy. The BoE's current bias is neutral, indicating that it's next move is as likely to be a rate cut than a rate hike
  • Switzerland's trade surplus widened more than expected to CHF4.73 bln in January from CHF2.69 bln December

• Fed Speakers:
  
  • Minneapolis Fed President Kashkari (FOMC voter) (08:50 ET)
  • Philadelphia Fed President Harker (FOMC voter) (12:00 ET)
  • San Francisco Fed President Williams (non-FOMC voter) (15:30 ET)
• Treasury Auction:
  • $26 bln 2-year Treasury auction (results at 13:00 ET)

B. Riley Financial, Inc. (RILY) has signed a stock for stock merger agreement to acquire FBR & Co. in a transaction valued at $160.1 million based on Friday's closing price of $17.55 for B. Riley Financial's common shares and an anticipated payment of a cash dividend before closing of $8.50 per share.

• At closing, FBR shareholders will receive .671 shares of B. Riley common stock and an anticipated pre-closing cash dividend of $8.50 per share assuming sufficient funds are available for distribution. FBR is required to deliver a minimum of $33.5 million of cash (net of certain transactional and other expenses) to B. Riley Financial at closing. Based upon B. Riley Financial's closing stock price on Friday, the stock and anticipated pre-closing dividend amounts to $20.28 per FBR share.
• Upon closing, Richard Hendrix, FBR's current Chairman and CEO, will assume the role of CEO of the combined investment banking and brokerage business, which will be a subsidiary of B. Riley Financial.

Additionally, based on preliminary unaudited information, B. Riley Financial expects to report revenue for the fourth quarter of 2016 in the range of $92 million to $94 million, net income for the fourth quarter of 2016 in the range of $12.3 million to $12.8 million, and adjusted EBITDA for the fourth quarter of 2016 in the range of $24.5 million to $25.5 million.

• On February 20, 2017, the company's board of directors approved a regular quarterly dividend of $0.08 per share and a one-time special dividend of $0.18 per share, which will be paid on or about March 13, 2017 to stockholders of record on March 6, 2017.

«The Glatopa 40 mg ANDA remains under regulatory review. The Company believes the application review could be completed at any time. However, under FDA policy, an approval of the application is dependent on the satisfactory resolution of the compliance observations at the Pfizer facility used to make the final product, and Momenta expects that an approval in the first quarter of 2017 is unlikely. Momenta is working with its collaboration partner Sandoz to resolve this matter in order to allow for an ANDA approval as soon as possible.»

• Glatopa (glatiramer acetate injection) is the generic candidate of Teva's Copaxone

European Yields Jump on Strong PMI Data

• European sovereign debt yields are almost universally higher this morning at the 10-year maturity after the eurozone composite PMI jumped to a five-year high for February. Purchasing managers' index data has been performing quite well for the past few months despite a lot of media noise about the Dutch, French, and German elections coming up this year. As noted below, Germany's two-year schatz yield fell to a record low today and that has helped the spread between French and German debt at that tenor widen to a fresh four-year high of 44 basis points, indicating a heightened (but still small) probability of a eurozone breakup. While French right-wing presidential candidate Marine Le Pen still has a very slim chance of victory, the eurozone is perceived as nonviable without France and so her win would almost surely lead to the demise of the single currency bloc
• The German two-year schatz yield hit a record low of -0.872% this morning as the European Central Bank's new year shift into buying securities with yields below the ECB's deposit rate of -0.40% has helped to steepen the German yield curve. Recent data for the ECB's asset purchase program, set to fall by EUR20/bln month to a pace of EUR80 bln/month on April 1, showed increased accumulation of short-term German government debt and so traders are simply piggybacking on the central bank purchases
• The Eurogroup of 19 eurozone finance ministers met on Monday and there appears to be progress between Greece and its official European creditors. Eurogroup president Jeroen Dijsselbloem said that reform would shift «away from austerity» and focus more on «deep reforms.»
  
  • Greece's next big debt repayment is in July
• Central Banks:
  
  • Bank of England Governor Mark Carney told Parliament today that if import price inflation leads to higher wages, then the central bank will tighten policy. The BoE's current bias is neutral, indicating that it's next move is as likely to be a rate cut than a rate hike
• European Economic Data:
  
  • The eurozone's manufacturing purchasing managers' index rose to 55.5 for February, according to preliminary data. Economists had expected a modest decline from January's reading of 55.2
    
    • France: 52.3 (Prior 53.6)
    • Germany: 57.0 (Prior 56.4)
  • The eurozone's services PMI jumped to 56.0 for February from 54.4 for January. Economists had expected a smaller decline
    
    • France: 56.7 (Prior 54.1)
    • Germany: 54.4 (Prior 53.4)
  • The eurozone's composite PMI rose to 56.0 for February from 54.4 for January. Economists had expected a slight dip
    
    • France: 56.2 (Prior 54.0)
    • Germany: 56.1 (Prior 54.8)
  • An index of eurozone consumer confidence fell to -6.2 in February from -4.8 in January, missing expectations for a more modest drop
  • France's consumer price index fell by 0.2% m/m in January, in line with both forecasts and December's pace
  • In the U.K., CBI Industrial Trends Orders unexpectedly rose by three points to 8 in February
    
    • Public sector net borrowing for January rose to a surplus of GBP9.4 bln, up by GBP300 mln y/y. Economists had expected a larger surplus
  • Switzerland's trade surplus widened more than expected to a record high of CHF4.73 bln in January from CHF2.69 bln December
    
    • Weakening vehicle imports and stronger pharmaceutical exports drove the improvement
• Yield Check:
  
  • France, 10-yr OAT: +4 bps to 1.10%
  • Germany, 10-yr bund: +3 bps to 0.33%
  • Greece, 10-yr note: -31 bps to 7.09%
  • Italy, 10-yr BTP: +3 bps to 2.21%
  • Portugal, 10-yr PGB: +2 bps to 3.99%
  • Spain, 10-yr ODE: +3 bps to 1.63%
  • U.K., 10-yr gilt: +3 bps to 1.26%

Gapping up
In reaction to strong earnings/guidance:

• CYH +20.3%, XCRA +11.6%, HLX +8%, EXAS +7.2%, VIPS +6.9%, LL +6.1%, EROS +5.6%, OPME +3.6%
• MDR +3.3%, WMT +3.2%, CTG +3%, AAP +2.4%, MDWD +2.4%, CYRN +2.3%, NRZ +2%, M +1.9%, NDSN +1.7%, HD +1.7%, EXPD +0.9%, WLK +0.6%

M&A news:

• DGAS +16.6% (enters into a definitive agreement to merge with an affiliate of Peoples Natural Gas; Delta shareholders will receive $30.50 in cash/share)
• PLKI +16.4% (Restaurant Brands (QSR) is in advanced discussions to purchase PLKI, according to Bloomberg)
• FCH +15.8% (Ashford Hospitality Trust (AHT) submits non-binding proposal to acquire FelCor for a total consideration of $9.27 per share)
• TROX +14.4% (to acquire the TiO2 business of Cristal for $1.673 bln of cash and Class A ordinary shares)

Select metals/mining stocks trading higher: CLF +2.9%, AKS +2.5%, X +1.5%, MT +1.3%, HBM +1.2%, AUY +0.8%, .

Other news:

• DCTH +46.3% (study demonstrated that 45.7% of patients with ocular melanoma that metastasized to the liver who underwent percutaneous hepatic perfusion using investigational Melphalan/HDS experienced a complete or partial response)
• EYEG +34.1% (enters into exclusive, worldwide licensing agreement with Valeant Pharmaceuticals (VRX))
• APOP +20.1% (announces 'positive' final results from its clinical trial of ApoGraft in healthy donors)
• IDXG +19.5% (announces the initiation of a collaborative research program with Viatar CTC Solutions to detect and characterize early cancer in liquid biopsies)
• VCEL +8.2% (FDA has designated the investigation of ixmyelocel-T for reduction in the risk of death and cardiovascular hospitalization in patients with chronic advanced heart failure due to ischemic dilated cardiomyopathy as a Fast Track Development Program)
• VALE +7.6% (new shareholders' agreement was filed, executed by Litel Participações S.A., Litela Participações S.A., Bradespar S.A., Mitsui & Co., and BNDES Participações 
• RBS +5.4% (provides update on remaining State Aid obligation)
• EW +5.3% (CardiAQ testing has been completed; enrollment has resumed )
• BCLI +4.2% (signs an agreement w/ CCRM to support the market authorization request for NurOwn)
• PGH +3.1% (announcs plan to reduce its outstanding debt through the use of $530 mln cash on hand)
• MDLZ +2.6% (following confirmation that KHC withdrew transaction with UL/UN)
• GRPN +1.9% (continued strength)
• SRPT +1.8% (enters into an agreement to sell its Rare Pediatric Disease Priority Review Voucher for $125 million)
• AEHR +1.5% (receives an order in excess of $4 mln from a subcontractor to its lead customer for the FOX-XP Test and Burn-in System)
• SCON +1.4% (receives a U.S. Patent for an aspect of the RCE-CDR system architecture used in manufacturing Conductus HTS wire)
• GIS +1.3% (following confirmation that KHC withdrew transaction with UL/UN)

Analyst comments:

• JAG +3.7% (initiated with a Outperform at Credit Suisse)
• SBLK +3.1% (upgraded to Buy from Hold at Deutsche Bank)
• ADNT +1.3% (initiated with a Overweight at Morgan Stanley)

Gapping down
In reaction to disappointing earnings/guidance:

• DAKT -25.8%, MNTA -18.4%, HSBC -6.2%, DDS -4.9%, CYOU -4.2%, AMRI -3.5%, SOHU -3.2%, WAB -3%, MGIC -2.6%, UIHC -2.5%
• CBRL -1.6%, AU -1.3%, PWR -1.2%, CRMT -0.6%

M&A news:

• UL -8.5% (Unilever and Kraft Heinz (KHC) jointly confirm that KHC has amicably agreed to withdraw its proposal for a combination of the two companies )
• UN -8.3%, KHC -5% 

Other news:

• TRVN -33.4% (announces its Phase 3 APOLLO-1 and APOLLO-2 pivotal efficacy studies of oliceridine)
• CDTX -32.6% (reports that the Phase 2 RADIANT clinical trial in acute vulvovaginal candidiasi did not show sufficient efficacy to justify further development)
• MNTA -18.9% (receives notice of warning letter from FDA to contracted Glatopa; Approval of the Glatopa 40 mg ANDA will be dependent on resolution of Pfizer (PFE) facility compliance issues)
• DRYS -18.8% (enters into $200 mln stock purchase agreement with Kalani Investments)
• IMMU -3.4% (files a federal lawsuit and a motion seeking injunctive relief against venBio Select Advisor and venBio's four director candidates)
• GMS -3.1% (commences 6 mln common stock offering by its existing stockholders, including certain affiliates of AEA Investors LP)
• ING -1.1% (in sympathy with HSBC earnings)

Analyst comments:

• FCX -3.7% (downgraded to Sell from Hold at Deutsche Bank)
• EIGI -3.2% (downgraded to Underweight from Equal-Weight at Morgan Stanley)
• DKS -1.1% (downgraded to Perform from Outperform at Oppenheimer)
• OHI -0.9% (downgraded to Hold from Buy at Jefferies)
• BLMN -0.8% (downgraded to Neutral from Overweight at JP Morgan)

Filings:

• Mosaic (MOS) files for mixed securities shelf offering
• Stellus Capital (SCM) files for $200 mln mixed securities shelf offering
• Xilinx (XLNX) files for mixed securities shelf offering

Offerings:

• DryShips (DRYS) enters into $200 mln stock purchase agreement with Kalani Investments; company hasw agreed to issue up to $1.5 mln of common stock to Kalani as a commitment fee
• GMS (GMS) commences 6 mln common stock offering by its existing stockholders, including certain affiliates of AEA Investors LP

Pricings:

• Resonant (RESN 4.90) enters $7.5 mln private placement of units w/ an affiliate of Longboard Capital Advisors at a per-unit price of $4.61; each unit consists of one share of its common stock, and one warrant to purchase one share of Common Stock at an exercise price of $8.25/share

• Ultra Electronics Holdings plc and Sparton Corporation (SPA) announced the award of subcontracts valued at $64.6 million to their ERAPSCO joint venture, for the manufacture of sonobuoys for the United States Navy. The award is a GFY17 ERAPSCO Indefinite Delivery Indefinite Quantity contract release for sonobuoy requirements under ERAPSCO's five year contract. ERAPSCO will provide production subcontracts in the amount of million $29.3 and $35.3 million to Ultra Electronics USSI and Sparton De Leon Springs, LLC respectively. Production will take place at Ultra Electronics USSI's Columbia City, IN facility and Sparton's De Leon Springs, FL facility and is expected to be completed by January 2019.
• Intersections (INTX) sold the membership interest of its wholly-owned subsidiary Captira Analytical, LLC effective January 31, 2017 for undisclosed sum; results of which have not had a significant impact on its consolidated financial results. 
• To maximize 5G mobile service opportunities across China Unicom's network, services acceleration company Radisys Corporation (RSYS) and China Unicom, one of the world's largest mobile service providers, are partnering to build and integrate Mobile CORD (M-CORD) development PODs that use open source software. M-CORD, built on top of ONOS and the CORD open source project, combines data center economics and the agility of the cloud with the benefits of a virtualized and disaggregated mobile core, as well as access infrastructure and mobile edge computing for innovation and deployment of 5G services. The companies will work together to develop deployment scenarios for this solution in China Unicom's network.
• Coupa Software (COUP) announced that Gartner, Inc. has included Coupa in the February 2017 Gartner Magic Quadrant for Strategic Sourcing Suites. Gartner first began evaluating and publishing assessments of this market in 2003. 
• Verizon Enterprise Solutions (VZ) has selected Ericsson (ERIC) to provide enabling technologies for its virtualized global Managed Network Services offerings, including Software Defined Wide Area Networking services.
• Immunomedics (IMMU) disclosed in a regulatory filing that as a result of the pending litigation before the Delaware Chancery Court challenging the transactions contemplated by the License Agreement, the Company and Seattle Genetics (SGEN) have committed to the Court not to close the transactions contemplated by the License Agreement until March 10, 2017.

Crude futures for April delivery were up about $1.17 (+2.2%) around the $54.95/barrel level on the heels of last week's headlines that OPEC was considering deeper production cuts & may extend the coordinated output reduction effort with non-OPEC producers at the next official OPEC meeting, scheduled to take place in Vienna, Austria on May 25th. This latest rally brings crude near the top of its trading range (roughly between $50-55/barrel) so far in 2017. Other factors providing a boost to oil prices this morning include:

• At a weekend conference in London, OPEC Secretary General Mohammad Barkindo stated that oil inventories would decline further this year & Jan data showed conformity from participating OPEC nations, with output curbs above 90%. Barkindo stated, «All countries involved remain resolute in the determination to achieve a higher level of conformity.»
• OPEC also stated it was sticking to its agreement to cut production and hoped compliance with the deal would be even higher.
• Analysts at Citi are forecasting crude oil prices to possibly be near $70/barrel by the end of 2017.
• Note: Net long US crude futures & options positions are at a record high & could be a source of increased volatility going forward, given a bearish catalyst.
• Upcoming data reminders (as a result of Monday's holiday):
  • API data will be released tomorrow at 4:30 pm ET.
  • Weekly EIA petroleum data will be released this Thursday at 11:00 am ET.
  • Baker Hughes rig count data will be released at its normally scheduled time on Friday at 1 pm ET.

• Workiva (WK) and OpenGov jointly announced today a partnership to help state and local governments modernize their budgeting and financial reporting processes.
• Cree (CREE) announced that McLaren Health Care has selected Cree LED Lighting and Cree SmartCast Technology to modernize exterior and interior lighting across 11 hospitals. Cree's advanced LED solutions go beyond light with intelligence that automatically adapts to the environment to deliver greater energy savings and personalized environments that promote comfort, safety and security for McLaren patients, visitors and staff. 25,000 Cree outdoor and indoor LED fixtures, including over 12,000 Cree SmartCast intelligent lighting fixtures are installed throughout the facilities, enabling McLaren to reduce their energy costs by 66 percent and realize an estimated savings of over $1.6M annually in energy and operating expenses.
• Nutanix (NTNX) announced an application virtualization project to achieve Internet Segregation for Sapporo City, the fifth largest population in Japan, and the largest city on the northern Japanese island of Hokkaido.
• Veresen (FCGYF) announced it has entered into a suite of separate agreements to sell its power generation business for $1.18 billion. Veresen has maximized the value of its power business by selling the assets in three separate packages.

Co states, " For 2017, we have more than doubled our drilling budget at the GMC, to 34,500 metres, and will continue our efforts to expand and further define the resource base at the Guanajuato and San Ignacio Mines, and the outlying El Horcon Project."

• Estimated Measured and Indicated Mineral Resources at the GMC increased 15% from the previous Mineral Resource (news release of February 22, 2016) to 7,146,076 silver equivalent ounces
• Estimated Measured Mineral Resources at the GMC increased 22% to 5,564,396 Ag eq oz from the previous Measured Mineral Resource, as San Ignacio Mine Indicated Mineral Resources were developed and categorized as Measured, and a slight increase in the Guanajuato Mine Measured Resource.
• Estimated Indicated Mineral Resources at the GMC decreased 12% from the previous Indicated Mineral Resource to 1,581,680 Ag eq oz, due to an upgrade of San Ignacio Mine Indicated Mineral Resources to Measured Mineral Resources, and a slight decrease at the Guanajuato Mine.

The tech sector — XLK — trades modestly behind the broader market. Semiconductors, meanwhile, display relative strength as the SOX index trades +1.19%. Within the SOX index, AMD (+4.22%) outperforms, while ASML (-0.71%) lags. Among other major indices, the SPY is trading 0.55% higher, while the QQQ +0.43% and the NASDAQ +0.18% trade modestly higher on the session. Among tech bellwethers, NVDA (+2.36%) is showing relative strength, while NTES (-1.54%) lags.

Notable gainers following earnings:

• CYOU (+6.3%) reported better than expected Q4 earnings and guided Q1 EPS and revs worse than expected, SOHU (+5.6%), XCRA (+4.6%)

Notable laggards following earnings:

• DAKT (-14.2%) missed on the top and bottom lines for Q3, TVPT (-6.8%)

Gainers on news:

• LMOS (+15.9%) co to be acquired by EQT Infrastructure for $18.00 per share.
• AMZN (+1.1%) co to create 5,000 new full-time jobs this year across the UK.
• VZ (+0.8%) shares trade modestly higher following reports that Verizon (VZ) /YHOO will cut deal price by up to $350 mln.
• ACN (+0.2%) co to acquire SinnerSchrader for EUR9.00 per share.

Laggards on news:

• SITO (-10.9%) co CEO Jerry Hug resigned effective today; Richard O'Connell, Jr. was appointed to serve as Interim CEO. Co also announced that based on sales activity for the first six weeks of Q1 2017, the company is confident that its Q1 Media Placement revenue will deliver strong growth over last year's Q1 Media Placement revenue.
• BIDU (-0.8%) co disclosed that its majority-owned subsidiary Qiyi.com has recently completed the issuance of certain convertible notes to a group of investors for an aggregate investment amount of $1.53 bln.
• TEF (-0.1%) co agreed to sell of up to 40% of Telxius to KKR (KKR) for EUR 1,275 mln.

Among notable analyst upgrades:

• VZ (+0.8%) upgraded to Buy at MoffettNathanson
• ZPIN (-0.2%) to Neutral from Underperform at Credit Suisse

Among notable analyst downgrades:

• EIGI (-2.1%) downgraded to Underweight from Equal Weight at Morgan Stanley
• LMOS (+15.9%) to Market Perform from Outperform at William Blair
• LMOS (+15.9%) to Hold from Buy at Jefferies
• LMOS (+15.9%) to Hold from Buy at Drexel Hamilton
• MMYT (-0.5%) to Reduce at Nomura
• MBLY (+1.3%) to Neutral from Buy at Monness Crespi & Hardt

Scheduled to report earnings after the bell:

• FSLR, HCKT, FUEL, RUBI, SREV, SSNI

Scheduled to report earnings tomorrow morning:

• CRTO, MBLY

Taking an early look at the options market, we found the following names that may be worth watching throughout the day for further indication of investor expectations given their options volume and implied volatility movement.

Stocks seeing volatility buying (bullish call buying/bearish put buying):

Calls:

• QCOM Weekly Mar31 60 calls are seeing interest with 2780 contracts trading vs. open int of 1260, pushing implied vol up around 1 points to ~23% — co is scheduled to present at a Management Q&A on February 27. Co will also present at a Mobile World Congress on March 1 (annual general meeting March 7).  Co is confirmed to report earnings April 19 after the close.

Puts:

• KBW Regional Bank ETF (KRE) Mar 58 puts are seeing interest with 2520 contracts trading vs. open int of 410, pushing implied vol up around 1 points to ~21% — nearly all the volume occurred in one 2.5K contract transaction.

Stocks seeing volatility selling:

• FELE, DDS, AAP, HD, LL implied vol is lower following earnings/guidance

Sentiment: The CBOE Put/Call ratio is currently: 0.71… VIX: (11.64, +0.15, +1.3%).
March 17 is options expiration — the last day to trade March equity options.
*Please use the Talk to Us link at the top of the page to provide feedback on this comment as well as the OPTNX comments.

Rumor Activity was slow to start out the week.

• Legg Mason (LM 38.19 +1.43) vague M&A chatter circulated.
• Nikkei Asian Review discussed that Toshiba (TOBSF 1.68 +0.07) plans to withdraw from nuclear plant plan.

While many rumors circulate during the day, and the validity of the source of these rumors can be questionable, the speculation may increase volatility in the near term

• Eyegate Pharma (EYEG +54.08%) enters into exclusive, worldwide licensing agreement with Valeant Pharmaceuticals (VRX)
• Delcath (DCTH +40.89%) announces a study demonstrated that 45.7% of patients with ocular melanoma that metastasized to the liver who underwent percutaneous hepatic perfusion using investigational Melphalan/HDS experienced a complete or partial response
• Cellect Biotech (APOP +14.75%) announces 'positive' final results from its clinical trial of ApoGraft in healthy donors

• Cidara Therapeutics (CDTX -39.32%) reports that the Phase 2 RADIANT clinical trial in acute vulvovaginal candidiasi did not show sufficient efficacy to justify further development
• Trevana (TRVN -33.94%) announces its Phase 3 APOLLO-1 and APOLLO-2 pivotal efficacy studies of oliceridine in moderate-to-severe acute pain following bunionectomy and abdominoplasty both achieved their primary endpoints
• Amphastar Pharma (AMPH -16.79%) receives a CRL for its NDA for for Naloxone Hydrochloride 2mg/0.5mL Nasal Spray; CRL identifies issues including user human factors study, device evaluation, and other items that need to be addressed before the NDA can be approved

• Community Health (CYH +26.16%) beats by $0.27, beats on revs; sees FY17 EPS in-line with consensus
• EXACT Sciences (EXAS +12.46%) beats by $0.06, reports revs in-line; guides FY17 revs above consensus
• Henry Schien (HSIC +2.96%) beats by $0.04, beats on revs; reaffirms FY17 EPS guidance

• Momenta Pharma (MNTA -15.92%) beats by $0.82, beats on revs; provides expense guidance
• Albany Molecular (AMRI -15.58%) misses by $0.14, misses on revs; guides FY17 EPS below consensus, revs below consensus
• Ardelyx (ARDX -3.07%) reports Q4 GAAP EPS ($0.66) vs ($0.65) Cap IQ consensus and details plans to initiate second phase 3 trial mid-year 2017

• Inspyr Therapeutics (NSPX +16.67%) assumed with a Buy at Rodman & Renshaw; tgt $2
• Miragen Therapeutics (MGEN +12.46%) initiated with an Outperform at Wedbush; $19 tgt
• STRATA Skin Sciences (SSKN +3.3%) assumed with a Buy at Rodman & Renshaw; tgt $1.50

• Healthcare: CYH (8.7 +26.12%), EXAS (22.36 +12.32%)
• Materials: TROX (17.76 +23.15%), KRO (15.46 +8.57%)
• Industrials: SBLK (9.49 +14.89%), GNK (11.1 +12.46%), RBA (34.77 +12.27%), GOGL (6.46 +10.14%), SALT (7.73 +9.57%)
• Consumer Discretionary: LL (18.53 +20.64%), PLKI (78.82 +19.21%), GNC (8.63 +12.96%), SAH (25.95 +9.26%)
• Information Technology: SOHU (42.94 +9.11%), CYOU (27.24 +8.7%), SPWR (8.57 +8.61%)
• Financials: OCN (5.69 +8.59%)
• Energy: HLX (8.41 +13.5%), SDRL (2.15 +10.82%)

• Healthcare: TRVN (4.75 -33.39%), MNTA (15.93 -16.18%), AMPH (15.49 -15.82%), AMRI (16.07 -13.65%), IMMU (4.94 -7.49%), AGIO (50.42 -6.78%)
• Materials: NAK (2.05 -9.29%), FCX (14.12 -5.3%)
• Industrials: VLRS (12.55 -7.99%), WAB (82.72 -5.75%)
• Consumer Discretionary: ENT (4.57 -26.61%), NEWM (15.04 -5.35%)
• Information Technology: DAKT (8.67 -14.24%), PI (28.78 -7.67%), TVPT (13.19 -6.72%)
• Financials: ORC (10.02 -7.56%), UIHC (14.93 -6.39%), HSBC (41.51 -5.47%)
• Consumer Staples: UN (44.95 -7.88%), UL (44.76 -7.77%)

• Healthcare: CYH (14.33 mln +26.12%), TEVA (13.89 mln +3.12%)
• Materials: FCX (31.42 mln -5.3%), VALE (17.26 mln +4.24%), AUY (11.95 mln -2.91%), NAK (9.13 mln -9.29%), X (8.71 mln +2.8%), AKS (8.57 mln +2.26%)
• Consumer Discretionary: F (10.87 mln +0.5%), VIPS (10.76 mln +6.62%), M (9.31 mln +1.24%)
• Information Technology: AMD (24.87 mln +4.57%), AAPL (9.5 mln +0.55%), MU (8.94 mln +1.61%)
• Financials: BAC (30.69 mln +0.79%)
• Energy: CHK (16.86 mln -0.74%), SDRL (10.34 mln +10.82%), PBR (8.16 mln +1.95%), WLL (7.9 mln +3.83%)
• Consumer Staples: WMT (12.06 mln +2.91%)

• Healthcare: TRVN (12.77x -33.39%), CYH (4.59x +26.12%), MNTA (3.55x -16.18%), EXAS (2.79x +12.32%), AMRI (2.29x -13.65%)
• Materials: TROX (3.03x +23.15%), KRO (3.01x +8.57%)
• Industrials: WAB (2.22x -5.75%), DGI (2.1x -2.93%)
• Consumer Discretionary: PLKI (10.92x +19.21%), LL (8.19x +20.64%), ENT (4.11x -26.61%), DIN (2.68x +3.48%), VIPS (2.27x +6.62%), SNI (2.2x +8.47%)
• Information Technology: DAKT (3.38x -14.24%), XCRA (2.2x +5.18%)
• Financials: ORC (3.26x -7.56%), LM (2.49x +4.36%)
• Consumer Staples: UN (2.35x -7.88%)

Treasury Auction Preview

• $26 bln 2-year Treasury auction (results at 13:00 ET)
  
  • Prior auction results
    
    • High yield: 1.210%
    • Bid-to-cover: 2.68
    • Indirect bid: 48.8%
    • Direct bid: 9.3%
  • Average results of prior 12 auctions
    
    • High yield: 0.903%
      
    • Bid-to-cover: 2.71
      
    • Indirect bid: 42.6%
      
    • Direct bid: 15.0%

The broader market begins the week on a high note, led to the upside thus far by the S&P 500 which gains about 10 points (+0.42%) to 2361, the Dow Jones Industrial Average adds 83 (+0.40%) to 20707, and the Nasdaq Composite is up about 13 (+0.22%) to 5851. Action has come on higher than average volume (NYSE 337 vs. avg. of 316; NASDAQ 850 mln vs. avg. of 786), with advancers outpacing decliners (NYSE 1987/998, NASDAQ 1526/1268) and new highs outpacing new lows (NYSE 241/9, NASDAQ 297/23).

Relative Strength:

Poland-EPOL +2.5%, Copper Miners-COPX +2.2%, Clean Energy-PBW +2.2%, Rare Earth Metals-REMX +2.1%, Coal-KOL +2.0%, US Oil-USO +1.9%, Coffee-JO +1.9%, Steel-SLX +1.9%, Greece-GREK +1.7%, India-INP +1.7%, Emrg. Mkts. M. East&Africa-GAF +1.6%, Brazil-EWZ +1.6%, S. Korea-EWY +1.5%, Latin Am. 40-ILF +1.5%.

Relative Weakness:

US Nat Gas-UNG -7.4%, Netherlands-EWN -1.4%, Thailand-THD -1.0%, Colombia-GXG -0.9%, Saudi Arabia-KSA -0.8%, Cocoa-NIB -0.8%, Gold Miners-GDX -0.7%, Biotech-IBB -0.6%, Swiss Franc-FXF -0.6%, Platinum-PPLT -0.6%, Japanese Yen-FXY -0.5%, Silver Miners-SIL -0.5%, Austria-EWO -0.4%, Grains-JJG -0.4%.

• Trading higher following earnings/guidance: LL +15.8%, SNI +7.3%, MDLZ 4.7% (Mondelez Int'l highlights Consumer Analyst Group of New York presentation, reaffirms FY17 outlook), FDP +4%, WMT +3.3%, SEAS 2.8% (SeaWorld Entertainment expects FY16 total revs of $1.344 bln vs $1.345 bln consensus), GPC -3.8% (Genuine Parts increases quarterly dividend to $0.675/share from $0.66/share), AAP +0.5%, M +0.4%
• Trading lower following earnings/guidance: DDS -5.6%, CBRL -4.1%, GPC -3.9%

• Leaders: 
  • PLKI 19.1% / QSR 6.7% (Popeyes Louisiana Kitchen agrees to be acquired by Restaurant Brands for $79.00/share in cash, or approximately $1.8 bln)
  • FCH 10.3% / AHT -0.7% (Ashford Hospitality Trust submits non-binding proposal to acquire FelCor for a total consideration of $9.27 per share; also nominates slate of seven independent directors for election to FelCor's Board)
  • MTN 1.3% (to acquire Stowe Mountain Resort)
  • GM 2% and PEUGF 5.1% (Peugeot SA reports on 'constructive meeting' between IG Metall, Gerneral Motors Opel unit's European Works Council, and PSA Group; also Barron's profiles positive view on General Motors)
  • ZX 1.9% (China Zenix Auto International announces the settlement of a shareholder lawsuit), LOW 0.3% (following HD results), GIS 2.4% (following KHC/Unilever news), BLMN 0.5% (higher despite being downgraded to Neutral from Overweight at JP Morgan), DKS 0.4% (higher despite being downgraded to Perform from Outperform at Oppenheimer), DPZ 0.5% (Tiger Global increases passive stake to 6.2%), IPG 0.4% (in 10-K confirms that one of its standalone domestic agencies has been contacted by the Department of Justice Antitrust Division for documents regarding video production practices and is cooperating with the government
• Laggards: 
  • UN -7.9% and KHC -3.7% (Unilever and Kraft Heinz jointly confirm that KHC has amicably agreed to withdraw its proposal for a combination of the two companies)
  • CZR -1.6% / CACQ -3.1% (Caesars Entertainment and Caesars Acquisition announce amendment to merger agreement; enters into committed financing agreements for proposed new senior secured credit facilities, comprising up to $1,235 mln in the aggregate principal amount of a seven-year senior secured term loan facility and up to $200 mln in the aggregate principal amount of a five-year senior secured revolving credit facility)
  • CIDM -4.6% (executes exchange agreements; sees approx. $480k in annual interest savings)
• Nearly unchanged: SIX (Six Flags signs agreement w/ Riverside Investment Group to build a Six Flags-branded park in Chongqing, which is expected to open in 2020), HAR  (Harman stockholders approved Samsung merger at today's Special Meeting of stockholders)

Looking ahead:

• On the earnings front: ACC, CHEF, DL, HVT, KAR, LZB, NLS, RRGB, SHO, TXRH report after the close

• Today after the close look for the following companies to report:
  • EIX, XPO, FE, ES, TX, NEM, BZUN, QUAD, WCN, HLS, TEX, AWK, KAR, VMI, CXO, VRSK, TXRH, MATX, PZZA, FSLR, LZB, NFX, WLL, SPN, CPRT, CHEF, KALU, RRGB, SHO, EXR, HVT, ACC, WMGI, MMSI, IPHS, WRI, NLS, DEPO, FUEL, DAC, QTS, PSB, ARC, IVR, SSNI, IRWD, SREV, HCKT, RPT, HCI, HCLP, HSTM, LMAT, ENTL, NYMT, DL
• Tomorrow before the open look for the following companies to report:
  • TJX, FMS, SO, LYG, DISH, HFC, UNVR, HST, NI, NCLH, HCN, HSNI, TOL, SBGI, GRMN, TPH, WWW, CLH, PNK, CHS, AVA, GEO, NSM, WLH, SCL, ACCO, UTHR, SUM, LAMR, EV, MYCC, NWHM, ARCC, SIX, DORM, DRH, CRTO, GLDD, SN, ETM, NM, MBLY, GOV, NEO, RGEN, ENZY, ONCE, AG

The major averages climbed to fresh record highs following Tuesday's opening bell, but squandered a portion of their early gains ahead of comments from Philadelphia Fed President Patrick Harker (FOMC voter). The S&P 500 and the Dow are both up near 0.5%, while the Nasdaq (+0.3%) lags at midday.

Mr. Harker didn't provide any new information during his speech today, reiterating his belief that three rate hikes are appropriate for 2017. Still, the event prompted investors to displayed caution in light of Mr. Harker's statements over the weekend, in which he expressed that a March rate hike is on the table.

U.S. Treasuries displayed losses in the early going, but they are now just below their flat lines. Mr. Harker's hawkish tone has been largely offset by dovish comments from Minneapolis Fed President Neel Kashkari (FOMC voter). Mr. Kashkari stated that the U.S. labor market has «more room to run,» suggesting that he believes there is no hurry for the Fed to raise rates. The benchmark 10-yr yield remains unchanged at 2.42% after showing a four basis point gain this morning.

Through all the noise, the fed funds futures market continues pointing to June as the most likely time for the next hike to be announced with an implied probability of 70.9%. The implied probability of a March rate hike did tick up slightly, to 22.1% from Friday's 17.7%.

All eleven sectors trade in the green early this afternoon with energy (+0.9%) leading the advance. The space has profited from a 1.5% rally in crude oil, which comes on the heels of last week's headlines regarding OPEC possibly extending oil production cuts or engaging in deeper ones. The news has overshadowed an increase in U.S. inventories, which hover near record highs.

Earnings news has been highlighted by retailers, which have pushed the SPDR S&P 500 Retail ETF (XRT 44.13, +0.31) higher by 0.7%. Wal-Mart (WMT 71.60, +2.23) has been the biggest post-earnings gainer, adding 3.2%, after the company beat earnings per share estimates and raised its dividend.

The consumer staples sector has responded to Wal-Mart's upbeat earnings report with a 0.7% gain. The remaining sectors show gains between 0.2% (materials) and 0.7% (real estate).

Investors did not receive any economic data on Tuesday.

Treasury Auction Results

• $26 bln 2-year Treasury auction
  
  • Auction results
    
    • High yield: 1.23% (when-issued: 1.235%)
      
    • Bid-to-cover: 2.82
      
    • Indirect bid: 49.8%
      
    • Direct bid: 20.1%
  • Average results of prior 12 auctions
    
    • High yield: 0.903%
    • Bid-to-cover: 2.71
    • Indirect bid: 42.6%
    • Direct bid: 15.0%

• April gold ended today's session down $0.30 (-0.1%) to $1238.80/oz
• Mar silver closed today's session $0.03 lower (-0.2%) at $18.00/oz
• Mar copper closed $0.04 higher (+1.5%) at $2.75/lb

— The dollar index was +0.5% around the 101.40 level.

ETF Weekly Gainers of note:

• Pharma/Health Care: Strong for a second week in a row. While the president has pressed his case for lowering drug prices, market participants were attracted to his added belief that regulations should be reduced and that the drug approval process should be sped up.
  • Notable Pharma/Health Care ETF movers over the past week:
    • PPH +3.1% (VanEck Vectors Pharmaceutical ETF)
    • XLV +2.2% (The Health Care Select Sector SPDR Fund)
    • PTH +2.1% (PowerShares DWA Healthcare Momentum Portfolio)
• Financials/Banks: Bank ETFs led the financial sector ETFs, driven by continued tailwinds of better economic data, increasing rates and prospects for deregulation.
  • Notable movers:
    • KBWB +2.6%(PowerShares KBW Bank Portfolio)
    • KBWR +2.1% (PowerShares KBW Regional Banking Portfolio)
    • XLF +2.1% (The Financial Select Sector SPDR Fund)
    • KRE +1.9%  SPDR S&P Regional Banking ETF)
• Consumer Staples: Gained on M&A prospects with Kraft bidding on Unilever. 
  •  XLP +2.6% The Select Sector SPDR Trust — The Consumer Staples Select Sector SPDR Fund

ETF Weekly Losers of note:

• Energy/Nat Gas/Oil: Natural gas was weak last week and getting hit very hard today, as warmer weather persists around the country. 
  • Notable ETF movers:
    • UNG -10.0% (United States Natural Gas Fund, LP)
    • UNL -8.2% (United States 12 Month Natural Gas Fund, LP)
    • OIH -2.7% (VanEck Vectors Oil Services ETF)
      
      
• Cotton: Indian cotton prices fell from recent highs with local reports citing speculation.
  • Notable ETF movers:
    • BAL -3.7% (iPath Bloomberg Cotton Subindex Total Return ETN)

First Solar (FSLR) is set to report Q4 results tonight after the close with a conference call to follow at 4:30pm ET. FSLR will report shortly after the bell. Current Capital IQ consensus stands at EPS of $0.98 on Revenue of $394 mln.

It has been a difficult year for the solar industry. There are two fronts that are squeezing the industry: 1) An over slow down in demand due to a draw back of some feed in tariffs and uncertainty around future government policies and 2) the miss steps in capacity growth that provided a glut of modules which would flood the market. FSLR was particularly hurt by the glut as its biggest advantage in the industry, low cost thin film modules, were under pressure by a slew of promotional sales by PV module providers in order to work down the capacity glut. How this continues to impact FSLR in 2017 will be key. The impact will be reflected in the company's guidance which will make 2017 projections and commentary key drivers.

There are some tailwinds in FSLR's favor. The company was early in recognizing the issues facing the industry and began taking steps in the middle of 2016 to combat the issue. It accepted the decline in demand as it would not chase cheap deals in order to preserve margins. It also announced that it would be pressing forward with its Line 6 production, evolving from its Line 4 and basically by-passing the Line 5 all together. FSLR viewed the move as prudent as it felt it could take advantage of the lull in demand and get Line 6 up and running. This will bring about an improved gross margin but it could also prolong the slump for FSLR as Line 6 is not expected to be up and running until mid-2018. If the co is able to convince investors that this is running on (or ahead) of target this could help offset low 2017 expectations.

Solar as a whole has been looking better as market participants look at some of the low pricing around the group. SPWR and SEDG have both posted mediocre reports but the idea that there is light at the end of the tunnel has led some people back into the names. FSLR has seen its share price rally approx 13% over the past week ahead of tonight's report. It has broken above itss 100-sma (34.64) and is attempting to break back towards $40. It faces plenty of headline risk today but a surprise showing could share a few more shorts out and lead to some additional investments.

2017 Guidance

• 2017 Net Sales in the range of $2.5-2.6 bln, Capital IQ consensus $2.966 bln
• Gross Margins between 12.4-14.5%
• Operating Expense Non-GAAP $280-300 mln
• Operating Income Non-GAAP $40-80 mln
• Non-GAAP EPS $0.00-0.50, Capital IQ consensus $1.91
• Net Cash Balance $1.4-1.6 bln
• Operating Cash Flow $550-650 mln
• CapEx $525-625 mln
• Shipments 2.4-2.6 GW (Street Expectations were for approx 3.0 GW)
• Co announced an acceleration of Series 6 production into 2018, with approximately 3 Gigawatts of production expected in 2019. Over the course of 2017 and 2018 the Company's existing production facilities will be converted to Series 6 production and the current Series 4 product will be phased out. As a result of the change in roadmap the Company will cancel its Series 5 product. The Company will reduce its workforce at its manufacturing facilities both domestically and internationally as a result of the transition from Series 4 to Series 6 production.
• Additional reductions in administrative and other staff are also planned. Resulting from the transition to Series 6 from Series 4 and other competitive factors, the Company expects to incur restructuring and asset impairment charges of $500 to $700 million, which includes a cash impact of $70 to $100 million. These actions, combined with additional reductions in administrative and other staff, are expected to reduce First Solar's workforce by approximately 1,600 associates, or 27% of its approximately 6,000 global total.

Comments on ASPs (From 11/2)

• ASPs declined in Q3 but have started to level off in Q4. FSLR said it would walk away from deals that did not make economic sense. FSLR was looking at capacity in saturated market. In current ASP Series 4 and 5 margins may be challenged. Series 6 will be most competitive product. Progressing in evaluation initiatives.

FY16 Results

• FSLR reported Q3 (Sep) earnings of $1.22 per share, excluding non-recurring items, $0.56 better than the Capital IQ Consensus of $0.66. Revenues fell 45.9% year/year to $688 mln vs the $985.39 mln Capital IQ Consensus. Co issued guidance for FY16, seeing EPS of $4.30-4.50. FSLR projected FY16 revs in the range of $2.8-2.9 bln (Prior $3.8-4.0 bln), excluding non-recurring items.
• Revenue guidance lowered for revised project sale timing.
• FY16 Guidance
  • Gross Margin 25.5-25.6% (Prior 18.5-19.0%)
  • Operating Expense $375-385 mln (Prior $380-400 mln)
  • Operating Income $340-370 mln (Prior $310-370 mln)
  • Net Cash Balance $12.4-1.5 bln (Prior $1.9-2.2 bln)
  • Operating Cash Flow- ($100 mln)-$0 mln (Prior $500-600 mln)
  • CapEx- $225-275 mln (Prior $275-325 mln)
  • Shipments 2.8-2.9 GW (Prior 2.9-3.0 GW)