Early Tour 11.28.12

Good Morning... European Markets off 20-90 bps ASX -0.21%, NKY -1.22%, KOSPI -0.65%, SHCOMP ... -0.89%, HSI -0.62%

EUR 1.2922 (-0.16%) JPY 81.86 (+0.36%) EUR/JPY 105.79 (-0.52%) Spain 10yr 5.44% Italy 10yr 4.66% US 10yr 1.62%

Futures: Dow -13, Nasdaq -6, S&P -2 DXY $80.40 (unch) Crude $86.81 (-37c) Gold $1742.50 (-$2.30) Copper -0.38%

European markets fading post the US move yesterday following Harry Reid's comments reiterating that little progress has been made thus far in fiscal cliff talks. There also continues to be second thoughts around the deal that was struck yesterday for Greece. After reviewing EU documents, the FT is now saying that Greek debt will only fall to 126.4% by 2020, not 124% as reported yesterday — noting further debt relief has been postponed to a later date (after German elections) and will likely force losses on Eurozone creditors. SHCOMP action -0.89% not helping sentiment either as it continues to break down. And the Nikkei had its 15t down day in 5 sessions. New home sales & beige book out later in the US along with a handful of retail earnings. But all in all fairly quiet so far this morning. SPA's -2 handles = 1395 last.

***Mortgage Apps @ 7am, New Home Sales @ 10am, Fed's Beige Book @ 2pm ***

**AEO & ANN report pre-open / ARO & GES report after close"

Jefferies Global Energy Conference (Houston) begins

***13 CEOs meet with Obama today to discuss fiscal cliff"'

• Green Mountain Q4 easily beat (profit surged 22%) on k-cup sales boosted FY2013 view (trading +20%)

• Analog Devices profit fell as most segments saw sales fall & gave weak guidance (trading -3%)

• Groupon Board discussing CEO change given growth slowdown (shares off 80% since IPO) (All Things Digital)

• Costco to pay investors $3B with special $7/shr dividend (total November comp sales +6% vs 5.5% ests)

• Smith & Nephew to buy Healthpoint (private) for $782 million in cash (SN/ LN trading -0.90%)

• ARM: Daily Mail speculation that Intel may bid for company (speculation only) (trading +1.9%)

• Unilever: 3 day investor seminar begins in Paris today (CFO Thurs & CEO Fri) (trading -0.03%)

EFTA00400698

• United Utilities H1 EBIT and pretax in line, leakage targets on track, no surprises (trading +1.9%)

• Thomas Cook FY prelims in line, current trading good, further £100mn costs savings (trading +3.1%)

• Continental: Handlesblatt reports company aiming to become top 3 tyre manufacturer (trading +0.90%)

• Celesio: Haniel to cut stake by 4.63% to 50.01% via accelerated book build placement (trading -2.2%)

• Metro: Haniel to reduce stake over the next 18 months by 4.23% to 30.01% (trading -3.2%)

• Betfair announce appointment of new CFO Alexander Gersh (trading -0.80%)

• Bridgewater's Ray Dalio in Beijing says he sees China GDP growth slowing to 6.0%-6.5%

• Philippine growth unexpectedly grew 7.1% last quarter (fastest pace since 2010)

Leading European Sectors: Food/Bev +0.09%, Retail +0.08%, Autos/Parts +0.03% Lagging European Sectors: Banks -0.95%, Basic Res -0.77%, Construction -0.47%

TNGO $20M buyback — LOJN resumes buyback — CFI 50c special div

UTI penny light — GWRE revenues better — FMCN penny better

PVH eps guidance up — PSMT declares dividend — MRTN 75c dividend

CPRT eps inline, revs beat — KEX acquires Penn Maritime — YGE revs beat

Notable Options Activity Yesterday:

HLF ($46.52 -2.4%) there was a large amount of put buying Tuesday, with volume 7.5x average. Most of the activity came in the afternoon and centered around the Dec 40 puts (7600 on the tape), the Dec 45 puts (3500) and the Jan 37.5 puts. The 15% rise in implied volatility indicates someone is expecting a swift move to the downside in upcoming weeks.

GES ($23.96 -2.4%) with earnings due out Wednesday afternoon, one trader purchased 1750 December 25-28 call spreads for $.90. The trade looks for shares to rally, with a breakeven of $25.90 at expiration.

STZ ($34.82 +1.2%) 14,220 April 27.5 puts were purchased for $1.025 vs buying 213,300 shares $34.92. It is difficult to tell if this was a stock replacement or a hedge against long stock.

NXY ($24.20 -2.3%) amid concerns of a deal with Cnooc, the options saw bearish flow on Tuesday. Over 11,000 December 27 calls were sold vs buying the Jan 20 puts throughout the day. The bulk of the spreads traded at $1.00, giving the investor a $19 break even at Jan expiration.

Secondaries (announced/priced): ECTE, CAP, FLT, PRGX, MCC

EFTA00400699

IPO's: N/A

Key Research: BMO initiates CHKP (mp), Piper initiates WDAY (neut) upgrades AKAM & cuts CTLNVIN

Key Research: Cowen initiates LNKD/P (neut) & assumes AMZN/GOOG (op) and EBAY/IACUNFLXNHOO (neut's)

Key Research: DB upgrades HERO/NBR/PES/PTEN (buy's) & cuts ESV/RDC/SDRL & makes BHI top pick

Key Research: Raja initiates DKUSXE (op's), Macquarie upgrades ETR, Bofa upgrades SCHN, Nomura cuts SHW

Key Research: Citi upgrades VNO (buy), Baird initiates VOD (op), DB initiates IDIX (buy)

Key Research: JEFF upgrade CPG LN, MS upgrade KRKA PW, RBC upgrade SVT LN, Kepler upgrade RCO FP

Key Research: MS upgrade ENI IM, MS downgrade REP SM, GS upgrade SWMA SS, Numis downgrade 117 LN

Key Research: Berenberg downgrade VOD LN, Berenberg downgrade LG FP, CS downgrade ELI1V FH

Key Research: CS upgrade TDC DC, Exane upgrade DELB BB, BofAML upgrade PFG SJ, Akros cuts BMPS IM

Key Research: HSBC upgrade DEB LN, Citi initiate UU/ LN (b), JEFF upgrade GFS LN, Nomura upgrade MC FP

Key Research: UBS cuts RSL LN, Raja initiate ZIGGO NA (up), Barc cuts SKFB SS, Baird initiate VOD LN (op)

Reporting Pre-Open: AEO, ANN, EXPR, GAGA, GLNG, JASO, JOSB, LEDS, MOV, NPD, SPH, TFM, WILC, YGE, POST

Reporting Post-Close: PLL, ARO, BLOX, CWTR, FSC, GES, GMAN, LZB, NWY, RUE, SMTC, TIVO, WDAY

Economic Data: MBA Mortgage Applications @ 7am, New Home Sales @ 10am, Fed's Beige Book @ 2am

Treasury auction in 5yr notes @ 1pm ($35B)

Fed Speakers: Tarullo @ 12:15pm (New Haven, CT)

Conferences: Citi Basic Materials Symposium (NYC), GS Metals, Mining, & Steel (NYC), Piper Health Care (NYC)

Conferences: UBS Global Real Estate (London), CS Tech (Scottsdale, AZ), MS Offshore Exploration (Boston)

Conferences: CS Aerospace & Defense (NYC), Jefferies Global Energy (Houston), JPM SMid Cap (NYC)

Analyst/Investor Days: N/A

EFTA00400700

Non•Deal Roadshows: ABC, AERL, AMAT, ARMH, BIRT, CS, CTRX, CVE, DLTR, ECA, EHTH, ELOS, ERIC, EXPE, EXPO, FARM, FCN, ICGE, KAI, LEG, LSE, MGAM, MHLD, MSPD, NOAH, OSIS, PACW, PERI, PERY, PRA, QRE, RBA, RTIX, SGNT, SNTS, SONC, SRDX, STRM, TASR, TROW, UPS, VAR, VRX, WFR, WU, WWW, ALK, DAL

Shareholder Meetings: LTXC, ECTY

Equity/Mixed SheIfs: TAC ($2B), THC, ABC

Stoxx600 Changes effective as of open Dec 24: Adds (SMURFIT KAPPA, SKY DEUTSCHLAND, HOWDEN JOINERY, FLUGHAFEN ZURICH, JUPITER FUND MANAGEMENT, RUBIS, THROMBOGENICS, ZIGGO and POLYUS GOLD) .. Deletes (WACKER CHEMIE, STRAUMANN, SOFINA, PZ CUSSONS, PUMA, NOBEL BIOCARE, LEONI, INDUSTRIVARDEN and BOURBON)

Other Newspaper Articles & Stories

WSJ positive: ConAgra's purchase of Ralcorp (CAG, RAH) WSJ

• Greek Debt Deal Explained WSJ

• Europeans Scrimp on Gifts as Economy Clouds Holiday WSJ

• Global Steel Industry Faces Capacity Glut WSJ

• German Car Stocks Outpace Their European Rivals WSJ

• The Other Greek Crisis WSJ

• Greek Debt Plan Relies on Rosy Outlook WSJ

• Federal Student Lending Swells WSJ

• Buybacks Expected to Increase NYT

• With a Billion Birthdays on File, Facebook Adds a Gift Store NYT

• Mortgage 'Attack' Could Mark Sea Change: Shiller CNBC

• Eurozone states face losses on Greek debt FT

• Greek patient gets more life support FT

• 'Package will have to be reopened again' FT

• Eurozone offers more Greek myths FT

• Peripheral bank debt on investors' radar FT

• Greece - meze of remedies Lex

EFTA00400701

• Obama must do more than raise taxes FT

• Japan's nationalism is a sign of weakness FT

• The endgame remains the same for Greece The Times

• Fitch downgrades Argentina by five and predicts default Telegraph

• Hollande insight with threat to nationalize ArcelorMittal Telegraph

• Carney a 'significant positive' for banks Telegraph

• Debt deal secures Greece's place in eurozone Telegraph

• Greece hails rebirth of a nation Guardian

• The private wealth discrepancy at the heart of Europe Guardian

• Barclays Libor case has severe consequences Guardian

Key Events This Week

Thursday: GDP, Retailers SSS, Kansas City Fed Manufacturing Index, Earnings (KR, TIF, NJR, ZUMZ)

Friday: Personal Income and Spending, Chicago PMI, China Manufacturing PMI (8pm), MSCI Semi-Annual Index Rebalance

Key Events on the Horizon

December 3 — Eurogroup meeting, Eurozone PMI's, US ISM Manufacturing

December 6 — ECB & BOE rate decisions, US Nov Retail Comps

December 12 — FOMC rate decision

December 22-January 20 - US Congress scheduled to adjourn

January 30 — Launch date for RIM's Blackberry 10

EFTA00400702

Ike Groff | 680 Washington Blvd | Stamford, CT 06901

This e-mail and any files 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 prohibited. If you have received this e-mail in error please immediately notify the sender at or 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 financialinstruments. Email transmission cannot be guaranteed to be secure, timely or error free. Tourmaline Partners, MX may review and store both incoming and outgoing messages. Use by other than the intended recipients is prohibited.

EFTA00400703