Early Tour 10.30.13

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Good Morning ... European Markets up 35-120 bps ... NKY +1.23%, SHCOMP +1.48%, HSI +2.0%, KOSPI +0.38%, TWSE +0.52%, ASX +0.28%

EUR 1.3759 (+0.10%) JPY 98.22 (-0.02%) EUR/JPY 135.13 (+0.13%) NZD 0.8281 (+0.28%) AUD 0.9512 (+0.35%)

US 10yr 2.49% Japan 10yr 0.59% Germany 10yr 1.72% Portugal 10yr 6.16% Italy 10yr 4.14% Spain 10yr 4.04%

Futures: Dow +58, Nasdaq +15, S&P +5 DXY $79.56 (-5c) Crude $97.62 (-59c) Gold $1347.30 (+$1.80) Copper +1.04% Silver +0.92%

Asian markets finish higher led by China and Hong Kong as SHIBOR concerns subside since yesterday's reverse repos from the PBOC. Hong Kong listed Macau names rebounded from recent weakness and mainland banks were firmer ahead of a number of results after the close. The Nikkei had another rollercoaster day but remained supported above yesterday's highs as USDJPY regained the 98 level overnight. Earnings remain the focus as the bulk of Japan's names report this week and positive previews from the Nikkei across the Megabanks, the Shippers and Softbank helped sentiment. The Mothers index dragged (-5.7%), however, as retail names were sold after GungHo's hit limit low on worse than expected results. European markets continue the march higher into month end tomorrow with most major indices at or near ytd highs. Although the recent move up in the US has been led by Defensives (Consumer Staples in particular), it is Autos, Oil & Gas, and Basic Resources that are outperforming this morning in Europe. Some big moves in after-hours trading last night in the US with YELP, LNKD, SFLY, IACI all trading lower while BIDU, ERTS, BWLD were a few notable winners. Focus will be on the Fed today with the statement due out @ 2pm EST (the recent government shutdown along with weaker economic data has market expectations for a taper now pushed out to March and beyond). US 10yr yield 2.4898%. SPA's +5 handles = 1773 last.

***Mortgage Apps @ 7am, ADP Employment @ 8:15am, CPI @ 8:30am, FOMC Rate Decision @ 2pm ***

***ADP, AMT, CMCSA, EXC, GLW, GM, GRMN reports pre-open"'

"*ALL, CSC, EQR, EXPE, FB, JDSU, KRFT, LNC, MAR, MET, O1, SBUX, V, OR FP, ING FP #'s post close".

• Linkedln earnings blew past ests (membership +38% y/y) but weak revenue outlook (trading -3%)

• Western Union third quarter net fell 20% & sees compliance costs rising in 2014 (trading -12%)

• WebMD swung to O3 profit on improved advertising/sponsorships & forecast shy of street (trading -5%)

• Baidu beat as revenues from mobile search increased & gave strong sales outlook (trading +5%)

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• Electronic Arts beats but forecast for current qtr missed (ends Tiger Woods partnership) (trading +4%)

• Questcor eps/sales topped but says regulatory investigation expanded (SEC Office joins) (trading -6%)

• IAC/Interactive O3 eps beat but sales missed on lower-than-forecast search-ad revs (trading -13%)

• Buffalo Wild Wings strong qtr as eps/revs/comp sales beat & raised year eps view (trading +11%)

• DreamWorks Animation profit fell 59% on revenue decline but eps/revs beat ests (trading +8%)

• Shutterfly loss narrowed slightly but cut 2013 revenue outlook below expectations (trading -10%)

• Yelp loss widened with costs outweighing rev inc, boosts rev view, $250M secondary (trading -8%)

• Barclays O3 revs slight light, adj profit miss, EPS below, cautious outlook, cost focused (trading +3.7%)

• Sanofi O3 revs & net income light, EPS below, -ve FX fluctuations, sees 2013 EPS towards low end (trading +1.9%)

• Volkswagen O3 revs light, EBIT a shade below, EPS miss, strong FCF, confident will o/p the market (trading +4.3%)

• Orkla O3 sales inline, EBITDA ahead driven by BCG division, outlook unchanged since CMD (trading +3.8%)

• Swedish Orphan Q3 sales miss, gross margin slight below, maintains 2013 forecast (trading +3.3%)

• Eutelsat O3 revs inline, order backlog +3.9%, reaffirms rev growth and EBITDA guidance (trading +2.7%)

• Pearson Q3 IMS, sees lower op profit, lower education margins, restructuring on track, reit FY (trading -3.6%)

• Statoil Q3 revs ahead, pretax in line, EPS light, Norway weak, maintains outlook (trading +0.49%)

• Next O3 sales ahead, EPS boosted by buy back, trading volatile, raises FY pretax forecast (trading +5.6%)

• Schibsted Q3 sales light, net loss worse, positive margin outlook for on line advertising (trading +1.4%)

• Clariant O3 sales shade light, cont ops revs inline, EBIT ahead, confirms 2013 & 2015 forecasts (trading +3.4%)

• ENI Q3 revs miss, EBIT & EPS ahead, strong across all divisions, start 10% buyback program (trading +3.6%)

• Snam O3 adj net & EBIT inline, revs better, confirms capex plan, sees lower Italian nat gas demand (trading -0.16%)

• Standard Life 9mnth sales inline, AUM light @ £237.6bn, SLI inflows well below (trading -3.2%)

• Erste Bank O3 net income shade light, bottom line miss on tax rate, NIl better, mixed outlook (trading +2.2%)

• Abertis O3 net income, revenues & EBITDA better y/y, to pay div E0.26 (trading +0.85%)

• Red Electrica Q3 revs & EBITDA flat y/y, net income better y/y (trading +0.14%)

• Sika O3 sales bang inline, EBIT & net ahead, slower Q4, raising FY EBIT guidance (trading +6.0%)

• Storebrand O3 EPS beats, driven by Sweden & Norway, interest income better (trading +3.9%)

• Tomtom O3 sales inline, adj EPS & EBITDA ahead, raises FY EPS guidance (trading +5.0%)

• Outotec Q3 revs inline (post warning) EBIT shade better, sees improving service demand (trading +1.2%)

• Germany October unemployment change +2k versus estimate 0k (unemployment rate 6.9% = inline)

• Spain O3 preliminary GDP +0.1% q/q versus estimate +0.1%, -1.2% y/y versus estimate -1.2%

• Nintendo posts smaller than expected loss, maintains forecast (#'s came out after the Japan close)

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• Toshiba raises full-year operating profit forecast by 12 percent amid rally in memory-chip prices

• Esprit rises most in 11 months after O1 sales and hiring product chief from Zara (closed +4.9%)

• Honda O2 profit misses estimates on slowing motorcycle sales and demand in Southeast Asia

Leading European Sectors: Autos/Parts +1.70%, Oil & Gas +1.64%, Basic Res +1.10% Lagging European Sectors: Real Estate -0.10%, Media -0.02%, Chemicals +0.07%

EIX boosts forecast — CRUS revs topped — FLEX beat but net fell

CBI eps beat — TRLA sees revs lower — MX cautious outlook

CVD raised guidance — CBG eps miss reaffirms — INVN guides down

PLT eps/revs missed — HGR see yr sales lower — XXIA $190M acquisition

LOPE boosts outlook — LOCK boosts yr rev view — CALX revs missed

ENTR 6c loss — SONS gm view light — RBCN loss forecast wider

CLD cuts ebidta midpt view — AZPN boosts forecast — MOVE penny better

VPRT raised rev view — ULTI inline rev growth view — FISV #'s beat

BGFV eps above street — QGEN #'s better — MN special div

EGOV special div — AFL boosts div — RYL eps forecast above

CWTR restructuring — RPXC guides yr revs up — GILD boosts yr sales view

Notable Options Activity Yesterday:

LOW ($50.58 +0.9%) late in the session someone bought 20,000 November $45 puts for $.08. The 11% out-of-the-money puts are noteworthy because they were opening, and earnings for both LOW and HD are scheduled for after expiration.

NQ ($11.09 +26%) as a way to play a bounce in the stock over the longer term, a customer purchased 7200 March $141$20 call spreads for $1.20. The spreads would pay 4 to 1 if the stock closes north of $20 at expiration.

Secondaries (announced/priced): HCA, YELP, TPEIR GA (1 stapled unit = 1 share + 1 warrant)

IPO's (filed/priced): Surgical Care Affiliates (SCAI) 9.8M-shares priced at $24 (upsized), Brixmor Property Group (BRX) announces 41.3M-shares priced at $20 (mid-pt), Criteo (CRTO) 8.1M-ADS prices at $31/ADS (above range), Veracyte (VCYT) 5.0M-shares priced at $13, Merlin Entertainments price range 280p-330p (pricing Nov 12), Savino Del Bene launches IPO (freight forwarder, est market cap €300-350M)

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US Key Research:

• Barcap downgrades CRUS, Brean upgrades BIDU (buy) & initiates SKX (buy)

•• BTIG upgrades FB (buy), DB downgrades X, Evercore downgrades DLR

•• GS downgrades CRS and CHKR (sell), Jefferies initiates DKS (hold)

• JPM downgrades EW, MS initiates FINUFL (ew) & assumes NKE (ow) and UA (ew)

•• Steme initiates RLGY (neut), Bofa downgrades UBS, SocGen upgrades BP

•• Raja cuts WU/AFUBWLD & upgrades MAS/ADC, FBR initiates BIIB/ENDP/FRXISPRT (mp) & VRX (op)

• UBS initiates ECL (buy), MS downgrades AMBA & upgrades LSI, Maxim initiates KORS

•• BMO downgrades ST, DB downgrades X

Europe Key Research:

•• RBC initiate HNR1 GY (b), SCR FP (op), downgrade DSV DC

•• GS upgrade PFC LN, PRS NO, downgrade FUR NA, SBMO NA, TEC FP

• Citi downgrade UMI BB, GAS SM, initiate AMEAS FH (b), WDF IM (b), YOOX IM (n)

•• SocGen downgrade VIS SM, upgrade BP/ LN, NXI FP, DNB upgrade PRS NO

•• BofAML add NOK1V FH, upgrade PNL NA, downgrade UBSN VX

•• HSBC upgrade EBS AV, UCG IM, Natixis downgrade SWMA SS

• Exane add GRF SM to key ideas, Oddo downgrade DIA SM

IMI downgrade MB IM, KepChev downgrade BSA GR, DBK d/g VOE AV, AZM IM

Reporting Pre-Open: ADP, AMT, BWA, CMCSA, EXC, GAS, GLW, GM, GRMN, HES, PCG, PEG, PSX, PX, SEE, SO, TEL, WEC, ACCO, AEGR, AIT, ARW, AUDC, BAH, BDC, BOKF, BXC, CDI, CETV, CEVA, CFFN, CFR, CPF, DBD, DXYN, EDGW, EGN, EXLS, FELE, GPK, H, HEP, HPY, IBCP, IMN, INGR, JNY, KCG, KVHI, LFUS, LPLA, LVLT, MCGC, MRGE, MSM, NOR, NICE, NVMI, OIIM, PAR, PSE, PSXP, RDEN, SAIA, SAVE, SODA, SPW, STCK, STE, TASR, TEL, TFX, TOWR, WEX, WLT

Reporting Post-Close: ALL, CSC, EQR, EXPE, FB, JDSU, KRFT, LNC, MAR, MET, MUR, 01, PKI, SBUX, V, WMB, XL, ACCL, ACLS, AFFX, AHL, ANIK, AOSL, ARII, ARRS, ATML, ATR, ATX, AVNW, AXS, AXTI, BBSI, BOOM, BYI, CACC, CAR, CARB, CAVM, CCG, CHDN, CHUY, CJES, CNL, CNW, COHR, COHU, CROX, XSCD, CSII, CTHR, CTIC, CUZ, CW, CYH, CYTK, CZR, DHT, DLLR, DMRC, DRCO, DRE, DRIV, DXPE, EDMC, ELGX, EPAX, EQY, EROC, ESS, EXAM, EXEL, EXP, FARO, FICO, FISH, FIX, FLDM, FLT, GLRE, GLUU, GMED, HBI, HOS, HR, HVT, IDIX, INT, IPI, IRF, ISH, ISIG, ISIL, ITMN, ITRI, JAH, JBT, JIVE, KEG, KEYW, JONA, KRA, KS, LGND, MANT, MASI, MDAS, MERU, MGRC, MMLP, MN, MOH, MTGE, MXL, NC, NCMI, NEWP, NSIT, NSR, OIS, PCTI, PFPT, PGI, PGTI, PL, POWI, PRAA, PSMT, PVA, QUIK, RAIL, RATE, RKUS, RM, RNWK, ROVI, RRTS, SAM, SGI, SGK, SHOR, SIGI, SJW, SKUL, SLRC, SPRT, SPWR, SSNI, SSW, STAA, STNR, STR, SUNS, SWKS, TFSL, THG, THOR, TRN, TSYS, TTEC, TTMI, TTS, TUES, UIHC, UNTD, VNR, WPZ, WTW, ZLTQ

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Economic Data: MBA Mortgage Applications @ 7am, ADP Employment Change @ 8:15am, CPI @ 8:30am, FOMC Rate Decision @ 2pm

Conferences: No major conferences

Analyst/Investor Days: JBL, KR, MAT

Non-Deal Roadshows: BDSI, CA, CASY, CVLT, DTLK, GME, GSVC, IRBT, LTM, PLXS, PSDV, SLH, SONS, STT, TXI, XOOM, HA

Shareholder Meetings: DFZ, STX, ONP, XNY

Equity/Mixed Shelfs: CAMP, LTD

Other Newspaper Articles & Stories

Barron's positive: Pfizer (PFE) Barron's

WSJ cautious: Sears Holdings (SHLD) WSJ

• Shake-up on charges for UK asset managers FT

• Day of reckoning as European banks' bill for misconduct mounts FT

• Too rich or too poor for success? FT

• Eike Batista's empire crumbles as talks with OGX creditors fail FT

• Co-op accused of 'sailing close to wind' as ex-chief questioned FT

• Cities warn Miliband over HS2 'conflict' FT

• Washington plays with fire again over America's budget plans FT

• Assad's barbarism goes on unabated FT

• How a digital currency could transform Africa FT

• NSA fights back over eavesdropping claims FT

• Ecotax revolt in France forces new climbdown by Hollande FT

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• Bank of England's Mark Camey places a bet on big finance FT

• Britain's 'great leap forward' was start of nuclear power failure FT

• The EU would be better led by Angela Merkel and Christine Lagarde FT

• Carmaker strikes hit S Korean industrial output FT

• WCB: Blessed are the cheesemakers Lex

• X-factor: energy bankruptcies Lex

• Deutsche Bank: worry beads Lex

• Nokia: Finnishing up Lex

• Europeans Shared Spy Data With U.S. WSJ

• Al Gore and David Blood: The Coming Carbon Asset Bubble WSJ

• Facebook Stock's Status: It's Complicated WSJ

• Twitter IPO Offers Banks an Entree to Spoils WSJ

• Activist Investor Peltz Puts Pressure on Mondelez WSJ

• Truckers Tap Into Gas Boom WSJ

• German Coalition Talks to Tackle Minimum Wage WSJ

• Canceled Policies Heat Up Health Fight WSJ

• House Is Expected to Pass a Change to Swaps Rules WSJ

• Dutch Real Estate Gets New Lease on Life WSJ

• Dutch Bank Settles Case Over Libor Deceptions NYT

• We should have made cuts before crash, says Blair The Times

• Europe is still bugged by weak leadership The Times

• France's Malaise The Times

• Pension charges could be capped to stop millions of workers facing 'rip off' The Times

• Banks and Britain's Muslims are forging a holy alliance The limes

• Banks aim to end juniors' working-all-hours culture The Times

• US government $10bn out of pocket after General Motors bailout Independent

• City chiefs say UK must stay in 'reformed' EU Independent

• James Ashton: Energy bosses' failure to show up for parliamentary grilling may haunt them Independent

• The world has never had it so good - thanks partly to capitalism Telegraph

• JP Morgan sees 'most extreme excess' of global liquidity ever Telegraph

• EU referendum may confuse voters 'not aware country is part of union' Telegraph

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• Newspapers granted final attempt at blocking royal charter approval Guardian

• Independent Scotland would face greater security risk, says Theresa May Guardian

• Forget high speed rail. Driverless cars will revolutionise transport CityAM

• Kickstart institutional investment to build new homes for generation rent CityAM

• Rising fuel costs: The real trigger behind the 2008 subprime crisis CityAM

Key Events This Week

Thursday: Month End, Jobless Claims, Chicago PMI, ISM Milwaukee, China HSBC/NBSD Markit PMI Oct, BOJ rate decision, BOJ Semiannual outlook report, Earnings (ABC, AVP, BEAM, CAH, EL, HAR, IRM, MA, PPL, PWR, TWC, XOM, AIG, FSLR, RSG, SWN)

Friday: Markit US PMI, US Manufacturing ISM Oct, Construction Spending, Global Vehicle Sales, Earnings (CVX, NEE, WPO, BLT)

Saturday: China NBS non-manufacturing PMI

Key Events on the Horizon

Nov 7 — BOE & ECB rate decisions

Nov 28 — US Thanksgiving (market closed)

Dec 5-BOE & ECB rate decisions

Dec 18 FOMC rate decision

Jan 15 — Current CR runs out

Feb 7 — Debt ceiling deadline (Treasury can use extraordinary measures for — 1 month past this date)

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Ike Groff | 680 Washington Blvd | Stamford, CT 06901

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