Closing Recap 4:05PM EST

Monday, October 6, 14
Index Up/Down % Last
DJ Industrials -17.72 0.10% 16,991
S&P 500 -3.04 0.15% 1,964
Nasdaq -20.82 0.47% 4,454
Russell 2000 -10.01 0.91% 1,094


Equity Market Recap
U.S. equities opened the session stronger, continuing its gains from Friday after better jobs data
helped confirm a stronger economy, but failed to hold. Stocks didnt end so badly, kinda flattish
on the day, but off their best levels, while bonds were stronger. No major data in the U.S. today
(Germany weak dataagain), with a fairly weak calendar overall for the week. Metals & mining
shares active, as well as biotech (downside), commodities bounce on softer dollar. Volumes were
light, though emerging markets were active on Brazil election news, while U.S. Ebola scare news
remains in the spotlight (oil/gold end higher) Tech and Small Caps underperformed
Brazilian stocks (PBR, VALE, RIO, ERJ, GOL) climbed amid surprise Presidential election outcomes;
President Dilma Rousseff pulls in just 42% of the vote in Brazil's 3-way election, and her more-
conservative challenger Aecio Neves gets 34%, well ahead of the 26% support he saw in the most
recent pre-election poll (Finishing in 3rd place is Marina Silva with 21% of the votes)
In an interesting story, digital currency bitcoin saw its price fall by 15% in a selloff that played out
Sunday night and ended in the early hours of the Asian trading day Monday. In this instance, the
currency lost $50, falling from about $340 to $290, before rising back to about $340 (note Bitcoin
topped at $1,147 in December)

Economic Data
German factory orders plunged the most since 2009, falling 5.7% in August, after climbing 4.9%
in July, the (worse than ests to fall (-2.5%). Orders fell 1.3% on the year
No other major economic data points overseas, none in the U.S.; tomorrow data also pretty
quiet here, with highlight this week the Fed Minutes from prior meeting Wednesday at 2:00 pm

Commodities
Gold prices start the week off on a strong note, rising $14.40 or 1.2% to settle at $1,207.30 an
ounce, helped greatly after the dollar index fell 1% on profit taking (rising dollar has been one of
top reasons for latest commodity slide); gold fell late last week after the US reported a greater
jump in jobs than expected, while unemployment fell below 6%


A reversal to the upside mid-to-late day for oil futures, erasing nearly 1% losses earlier for WTI
crude and Brent, as investors trying picking a bottom of a sector that has been unloved for
months. A declining US dollar today (down 1%), helping lift commodity prices off lows, with WTI
ending up 0.7% to $90.34 (prices fell last week on several factors, including a report 10/2 that
Saudi Arabia cut its prices to Asia); Brent bounced of two-year lows

Currencies
Dollar under pressure today (first time in a long time), with the dollar index (DXY) falling to low
of around 86.04 (high was 86.701), after surging to fresh 4-year highs on Friday following the
stronger monthly jobs data and lower unemployment figures; the euro jumped back above 1.26
level touched low of 1.2501 early Friday), while the greenback dropped back to the 109 level
against the yen (touched high of 109.90 late Friday) dollar fell 1%

Bond Market
Bond prices advanced throughout the day, as bond yields back to their downward sloping action,
with the 10-yr yield at 2.418%, this despite better economic data in the U.S. of late, including the
jobs data Friday; the yield was up near 2.6% 2-weeks ago; long end of curve flat to down slightly
(30-yr at 3.125%), while short-end of curve rises (5-yr yield back under 1.7%)


Macro Up/Down Last
WTI Crude 0.60 90.34
Brent 0.58 92.89
Gold 14.40 1,207.30
EUR/USD 0.0089 1.2602
JPY/USD -0.79 108.95
10-Year Note -0.026 2.421%


Sector News Breakdown
Consumer
Retail movers; CONN said to be exploring strategic alternatives, including the possible sales of
company/separating retail and credit businesses; ANF downgraded at Piper, but upgraded at
Mizuho; LB upgraded to Outperform at BMO Capital; Barrons said ANN should sell itself to CHS
or merge with Japans Fast Retailing to expand business; DECK upgraded to Overweight at Piper;
NKE among weaker Dow components today
Leisure/Casinos/Lodging movers; U.S. Macau-based casinos rise as gaming revs drop (-11.7%) vs.
Wells Fargo est. (-13%-15%) and as Macaus Secretary for Economy & Finance Francis Tam
estimated drop of (-12%-13%); shares of WYNN, MPEL, MGM, LVS bounce (but that was the
fourth straight monthly declines); HOG upgraded to Outperform at RBC Capital on reduced
expectations/cleaner channel
Restaurants; PBPB mentioned cautiously in Barrons saying shares overvalued; MCD downgraded
at Morgan Stanley weakening fundamentals combined with U.S. market share loss; BKW
upgraded to Overweight at Morgan citing valuation/merger synergies with THI; YUM to report
earnings Tuesday after the close
Homebuilders outperform overall market today, led by MTH which received analyst upgrade
today; shares of DHI, LEN, PHM up early
Staples ; CL downgraded to equal-weight at Barclays noting emerging markets slowing; DF
receives positive mention after recent weakness amid rising milk prices; strength in direct
marketing names NU and HLF



Energy
Solar stocks big losers (TAN ETF fell, while SUNE, FSLR, TSL fall) after GTAT, which had significant
exposure to the solar industry in the past as a wafer and polysilicon equipment manufacturer,
filed for bankruptcy protection (Northland said bankruptcy filing is company specific and related
to its non-solar opportunities and that the sell-off in other solar stocks on news unwarranted);
recent IPO VSLR plunges further after pricing at $16 last week
Energy in general remains weaker on falling oil prices, downward momentum; no specific news in
space, but more talk of Saudi Arabia cutting prices (which was cited as a main reason for
weakness last week in crude); weakness in HAL, HES, others
Analyst calls; GTLS shares defended at Morgan Stanley and another firm after recent sell-off; COP
was upgraded to buy at UBS

Financials
Earnings coming soon for the group (starts with JPM, WFC, C next Tuesday, the 14
th
); treasury
yields little changed after falling mid-last week and holding helping the group; HRB shares fell
after saying the sale of its banking unit to BofI Federal Bank is being slowed by the regulatory
approval process
Analyst changes; XOOM was downgraded to Underweight at Evercore citing competition from
WU; XL downgraded at FBR Capital

Healthcare
M&A news in Healthcare; CFN acquired by BDX for $12.2B in cash/stock; total valued $58 per
share http://goo.gl/Zp3tS9...ACT ; DRTX to be acquired by ACT for $675M, with holders getting
$23 per share plus up to $5 per share added in contingent value rights http://goo.gl/6QUc5c
(note SLXP shares fell on deal news ACT has been speculated as potential acquirer of SLXP
according to various recent news reports)
Biotech movers; ADHD plunges saying treatment with an experimental formulation of vitamin B6
known as MDX failed to improve the symptoms of ADHD disorder compared to placebo,
according to phase III study results announced; SNSS said its Valor trial doesnt show survival
improvement in AML/missed primary endpoint; large cap names (GILD, VRTX, ALXN) also fell;
ICPT shares fell ahead of expected Oct. 8 release of detailed Phase 2 NASH data in AASLD late
breaking abstracts
Biotech/Ebola movers; CMRX said emergency IND applications for brincidofovir authorized by
FDA for patients with Ebola drug being used to treat Ebola patient in Texas (shares of BCRX and
TKMR fell on report) separately, TKMR downgraded at Leerink amid run-up in shares
Analyst calls; ISRG upgraded to buy at Goldman Sachs and up tgt to $584 from $466 citing an
improving hospital spending environment and long-term uptake of surgery procedures in the
U.S.; PTCT cut at Cowen ahead of EU Translarna debut potentially missing expectations
Other movers; Bellicum Pharma pays ARIA $50M for a full license to Ariad's cell-signaling
technology; UNIS announced supply pact with SNY to be sole provider of wearable injectors;

Industrials & Materials
Transports have been very volatile, paring Fridays 2% gains by about half today on overall
market pullback; not too many specific stories in transport space ahead of earnings next week for
several names; SYKW rises after being upgraded to Outperform at Raymond James
Metals & Mining; the group weaker initially, but got a midday spike after reports Glencore Plc is
laying the groundwork for a potential merger with RIO in the next year that would create the
worlds largest mining company, worth about $160 billion http://goo.gl/uHsRvF (news sent
shares of heavily beaten down miners such as CLF, FCX, VALE, BHP as well as coal stocks higher);
BHP said to increase low-cost production of iron-ore/up on Brazil election
Gold miners mixed as gold bounces off 2014 lows (trading up more than $10 on day, reclaiming
the $1,200 level); NEM, ABX, GG active



Technology, Media & Telecom
Hardware/PC; HPQ splits into two companies; separating its PC/Printer division from its business
services unit; CLSA downgraded Quanta to Underperform on mix deterioration and remains
cautious on Lenovo for the next 2-3 quarters; UIS shares fell 10% after news the CEO was ousted
Internet security names giving back some of Fridays gains when news of the JPM data breach
and positive sell-side commentary on PANW sent shares higher; today group paring gains, led by
FTNT after Morgan Stanley cut rating noting sales productivity has been declining over the last 6
quarters (shares of FEYE, PANW fall)
Surveillance tech names/Mounted camera operators; GPRO tgt raised to $105 and reiterate
Outperform at JMP after store checks; TASR announces multiple orders of TASER Smart Weapons
Software movers; Morgan Stanley upgraded shares of SPLK and DATA to Overweight, and
downgraded QLIK to Equal-weight, saying SPLK as Big Data pure play, benefits from strong
secular tailwinds and significant market momentum (SPLK user conference also starts today)
Semis; MU/SNDK fall after reports of Samsung new chip plant plans (was mentioned positively in
Barrons over the weekend); EZCH cut its Q3 forecast; the SIA reported late Friday that
semiconductor sales grew +1.3%/9.4% MoM/YoY in August to $28.4B, slightly below seasonality
but still up 10%+ YTD; GTAT fell 90% after it and Its subsidiaries file for Bankruptcy Court
Protection under Chapter 11 (UCTT a customer fell in reaction)
Media; LINTA splitting into two tracking stocks, one for its cable shopping business QVC Group
and the other for its digital commerce, Liberty Digital Commerce. Under the deal, LVNTA will
receive $1B in cash while LINTA holders will receive about 67.7M shares of LVNTA stock, or about
0.14 Liberty Ventures share for each Liberty Interactive share held http://goo.gl/Og9bip
Telco movers; GSAT active after Kerrisdale Capital w/negative rpt claiming spectrum issues
http://goo.gl/SYKi68; PT shares spiked midday after reports Altice said to seek PT bid to unravel
Oi S.A (OIBR) merger http://goo.gl/3sSFml





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