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Closing Recap 4:10PM EST

Monday, November 3, 14
Index Up/Down % Last
DJ Industrials -24.34 0.14% 17,366
S&P 500 -0.30 0.01% 2,017
Nasdaq 8.17 0.18% 4,638
Russell 2000 -5.47 0.47 1,168


Equity Market Recap
It was a lackluster trading session for U.S. equities, with the S&P 500 and Dow Industrials holding
around all-time highs reached Friday, while strength in semiconductors boosted the Nasdaq
Composite Index to highs not seen since early 2000 (but markets were little changed). The dollar
surged against rivals on better manufacturing data (extending last week gains after Japan QE
move), which sent oil prices down to its lowest level since June 2012 (closed below $79).
Treasuries fell (but pared losses), wh
Expect a busy week with mid-term elections tomorrow, European Central Bank meeting
Thursday, Monthly same-store sales data on Thursday, and Non-farm Payroll jobs data on Friday.
Not to mention one more very busy week of corporate earnings

Economic Data
Oct. ISM Manufacturing rises to 59.0 vs. est. 56.1 (est. 56.6), as New orders jump to 65.8 vs. 60.0
last month, employment rose to 55.5 from 54.6 last month, while Prices paid fell to 53.5 from
59.5 last month
U.S. Sept. Construction Spending weaker, falling (-0.4%) vs. est. 0.7% (Aug. revised to -0.5% from
-0.8%)Oct Manufacturing Markit PMI Index falls to 55.9 from 57.5 in Sept. (and vs. est. 56.2)
Data overnight in Europe and Asia mixed: 1) China's factory activity unexpectedly fell to a five-
month low in October, as the official Purchasing Managers' Index (PMI) eased to 50.8 in October
from September's 51.1 (and below est. 51.2). 2) Eurozone October manufacturing PMI came in at
50.6 vs preliminary 50.7 and prior 50.3 (14-month low)increases in at 51.4, Netherlands at 53.0
and Ireland at 56.6, while France hit 2-month low

Commodities
Energy ends lowerAfter early weakness, oil prices jumped midday on headlines Saudis increase
crude prices for Asia, Bloomberg reported (the report sent shares of oil stocks across the
spectrum higher but did not last long); after initially popping on the Saudi headline, oil prices
turned quickly lower, closing below the $80 level for the first time since June 2012 ($78.78) the
surging dollar, no official OPEC production cuts, and inventory builds have weighed heavily on oil
prices; Nymex gasoline also, fell, settling at $2.1176 a gallon
Gold prices were down slightly, holding down near 4-year lows at $1,169.80 an ounce, down
$1.80 on the day after falling sharply last week on the further advance in the U.S. dollar. The
Bank of Japan's Friday decision to expand its stimulus programs also fueled dollar demand

Currencies
The dollar index (DXY) surges to fresh 4-year highs ($87.406) helped by better economic data
earlier (USD strength continues after Bank of Japans surprise QE move last Friday, which crushed
the yen); the dollar rises above 114 vs. the yen, before paring gains (now up about 6c since
Thursday night); the euro drops below the 1.25 level against the greenback (note the yen/USD
has not closed with 114 handle since 2007)

Bond Market
Bond yields rallied, but pulled back from earlier highs despite equity strength; commentary from
the Feds Fisher said new wording in FOMC statement released last week shows Fed may well
move to raise rates sooner than thus far assumed. Fed might act earlier if U.S. economy
proceeds along the trajectory I think we are on, he said. The benchmark 10-yr yield touched
2.38% before paring gains (touched 1-month highs), while the shorter term 2-year topped 0.52%
and 5-yr above 1.65%


Macro Up/Down Last
WTI Crude -1.76 78.78
Brent -1.61 84.25
Gold -1.80 1,169.80
EUR/USD -0.0031 1.2492
JPY/USD 1.43 113.76
10-Year Note +0.032 2.35%


Sector News Breakdown
Consumer
Monthly Oct auto sales: 1) GM Oct auto sales rise 0.2% vs. est. 3.1% (says month-end total
inventory 792,489 (94-day supply) vs 81-day supply MoM); 2) F Oct US vehicle sales fell (-1.8%)
vs. est. (-4.3%)/said Ford brand sales down (2.7%) and Lincoln up 25%; 3) FCAU Oct. U.S. sales
rose 22% vs. est. up 20% (Chrysler brand +17%, Jeep brand +52%, Dodge brand -8%, Fiat brand
+1%, Ram brand +36%); 3) HMC Oct. total auto sales up 5.8%, vs. est. up 7.7%; 5) Nissan (NSANY)
unit sales +13.3% to 103,117 (sales growth by brand: Nissan +14.9% to 94,072; Infiniti -1.2% to
9,045); Volkswagen unit sales +7.8% to 30,313
Staples; SYY Q1 eps and revs top views; CHD Q4 eps missed by 4c on better sales/said organic
sales rose 4.7% reaffirms organic sales outlook); HLF shares trade well ahead of earnings tonight
Retail movers; activity ahead of earnings this week in KORS/KATE; TJX upgraded at Wedbush,
while firm downgrades FRAN as does not see signs of a meaningful inflection in 3Q; WMT dips as
one analyst (Cleveland) said trends softening, Holiday outlook more cautious; HD downgraded on
valuation by one analyst
Gaming/Casino; Macau casino regulator expected to post Oct. gross gaming revenue no later
than Nov. 6 (median est. of 21% decline y/y to 28.8b patacas ($3.61b) Bloomberg)




Energy
Massive volatility in energy stocks today; group weak early, jumped midday on headlines that
Saudi Arabia to increase December crude prices to Asia, but succumb to pressure midday with
sell-off across the board; weakness in drillers, as DO falls more than 6% (drillers remain very
weak NE, RIG, ATW); NOV was downgraded by two analysts today

Financials
Bloomberg noted the KBW Bank index rose for an 8
th
day, the most since June, rising more than
0.5% by midday (leaders included RF, WFC, BAC, CMA, JPM); stronger equity tape and slowing
rising interest rates helping the financial sector
Top news; ARCP shares fell after RCAP terminates pact to buy Cole Capital from ARCP
http://goo.gl/ubGMGE and additional probes; AFL falls on amid weakness in yen
Asset Managers, Broker Dealers & Exchange changes at Citigroup as firm upgraded AMTD, and
BLK following C3Q earnings, shifting macro dynamics, seasonal factors and underlying
fundamentals

Healthcare
M&A news in lab sector as CVD to be bought by LH for $105.12 per share/$5.6B deal (net debt)
http://goo.gl/HHBpHb (shares of PRXL, A, ICLR, CRL jumped in sympathy); in more M&A talk,
AGN shares rise after saying it has been approached by another party about a deal (Reuters)
http://goo.gl/UvqQZh
Analyst changes; BMRN raised to Outperform at Wells Fargo and tgt to $103-$107 ahead of
clinical data catalysts; JAZZ tgt raised to $197 at Cantor after conducting scenario analysis around
Xyrem durability; TEVA was upgraded to buy at RBC Capital
Biotech movers mostly to the downside (note IBB rose to new highs Friday); group weakness led
by AMGN, GILG, REGN, etc. weakness in healthcare mostly due to biotech drop
Movers on news; ARNA rises as Eisai & ARNA results of an investigational phase II trial of
Lorcaserin HCl (smoking cessation) met endpoints; GERN up as FDA removed clinical hold for
Imetelstat; HOLX moves on positive reimbursement rates for 2015 from CMS; NYMX plunges on
failure of two Phase 3 clinical trials of NX-1207 for the treatment of benign prostatic hyperplasia;
ABC raises quarterly dividend
Hospitals active ahead of SCOTUS decision; Leerink noted SCOTUS decision on hearing the first
ACA challenge appeal due on Monday firm views a SCOTUS delay as a positive for Hospitals, as
they expect that another successful open enrollment season for Public Exchanges and Medicaid
would make it increasingly difficult to reverse even farther reaching ACA entitlement expansion;
also CYH and THC report after the close (UHS, LPNT, HCA higher early)

Industrials & Materials
Metals & Miners; metals were mostly lower in flat tape, led by weakness in gold mining stocks
(ABX, GG, IAG) as gold prices remain depressed on dollar strength (though group pared losses)
AU the standout gainer in space after putting its mines up for sale as CEO looks to reduce debt
(also upgraded to buy at Deutsche Bank); industrial metal stocks (steel/copper), were also
weaker, possibly on China PMI data (FCX, X); SCCO rallied after its Chairman bought shares
Industrial/machinery stocks; shares of CAT, AGCO dipped after strong gains last week; group may
have been weighed down by softer construction spending data
Containerboard movers ahead of earnings; RKT shares fall ahead of earnings later (IP reports
tomorrow morning) group has been strong of late amid talk on MLP potential
Tankers/shippers; continue to see strong returns for Baltic Dry Index, which rises another 2.0% to
1,456 Points


Technology, Media & Telecom
Top movers; AAPL made new all-time highs earlier company set to hold call with investors
today to discuss a bond sale, Bloomberg reported; ANET rises after Stifel upgrade ahead of
earnings; Semis moving to the upside after big surge last week
Internets; BABA jumps to record highs ahead of earnings tomorrow (YHOO rises in sympathy);
online travel stocks active ahead of PCLN earnings tomorrow; P shares rose on headlines Taylor
Swift ended her relationship with Spotify
Media/Advertising; SAPE to be acquired by Publicis Groupe SA for $25 per share/$3.7B
http://goo.gl/rgHuW2; movie theatre NCMI hit after the DOJ said it filed a civil antitrust lawsuit
seeking to block its $375M acquisition of Screenvision (shares of CKEC fell owns stake); in
general, media stocks CBS, DIS were modestly higher (TWX lagged); earnings from FOXA, DISCA
and DISH tomorrow
Telco/Tower stocks; Goldman and Macquarie both downgraded AMT to Neutral, and Nomura
downgraded CCI to neutralCCI upgraded to Buy at Goldman, while and Raymond James cut its
rating to Outperform from Strong buy (follows CCI report last week); in Telco, Sprint reports after
the close (other carriers were weaker)





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