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Frontrunning: September 26

Tyler Durden's picture




 
  • China To Maintain Prudent Monetary Policy (China Daily)
  • Why Exit Is An Option For Germany (FT)
  • China-Japan Ministers Hold 'Severe' Talks As Spat Damages Trade (Bloomberg)
  • Eurozone Deal Over Bank Bailout In Doubt (FT)
  • UBS Co-Workers Knew of Fake Trades, Adoboli Told Lawyer (Bloomberg)
  • Banks Seek Changes To Research Settlement (FT)
  • Secession Crisis Heaps Pain On Spain (FT)
  • SEC: NY Firm Allowed HFT Manipulation (Bloomberg) - busted 'providing liquidity'?
  • Germany To Tap Brakes ON High-Speed Trading (WSJ)
  • Rajoy Outlines Fresh Overhauls (WSJ)
  • BBC Apologizes To Queen Over Radical Cleric Leak (Reuters)
  • British Banks Step Back From Libor Role (WSJ)
  • Obama Seeks To Recast Ties With Arab World (FT)

 

Overnight Media Digest

WSJ

* The British Bankers' Association is preparing to give up responsibility for the London interbank offered rate, the scandal-plagued benchmark interest rate that the group once called "the world's most important number."

* Google Inc's popular mapping application likely won't migrate to Apple Inc's iPhone 5 anytime soon, the Internet search giant's executive chairman Eric Schmidt said Tuesday.

* Toyota Motor Corp said Tuesday it would adjust production at plants in China and a Lexus factory in Japan to match a slowdown in Chinese orders and sales, signaling the possible onset of a more prolonged chill in economic relations between the world's second- and third-largest economies.

* Sharp Corp has submitted a new restructuring plan to its lenders setting out job cuts of more than 10,000 and the sale of assets including overseas plants, as the consumer-electronics maker seeks to convince banks it can return to profitability even without a planned cash infusion from Taiwan's Hon Hai Precision Industry Co.

* On Tuesday, Staples Inc said it plans to reduce its U.S. store space by 15 percent as part of a wider reorganization of its business, the latest example of how office-supply chains are struggling to stay relevant as more shoppers buy products like computers, pens, paper and paper clips online.

* Like rivals OfficeMax Inc and Office Depot Inc , Staples has been shrinking its stores and opening smaller, convenience-focused shops, as it tries to adapt to the changes in shopping behavior that are hurting many big-box specialty retailers.

* The Spanish government will restrict programs that make it possible for people to take early retirement as part of coming overhauls that seek to rein in the country's debt and revive its embattled economy.

* The German government is set to approve a new bill in cabinet to rein in high-frequency trading, but the bill is stoking fears that tougher rules could stunt the trading sector's growth in Europe.

* Barnes & Noble is adding two new HD versions of its Nook tablet, hoping to keep pace with rivals ahead of the holiday shopping season.

* A.P. Moller-Maersk said it would reduce its capacity and raise shipping rates as sluggish global trade continued to weigh on the shipping industry.

* Luxury electric car maker Tesla Motors Inc, facing a revenue squeeze from production problems, said on Tuesday it would sell about 5 million shares to raise cash after winning breathing room on terms of a $465 million U.S. Energy Department loan.

* Profits earned by the China operations of foreign banks surged in 2011, according to a new report, a remarkable turnaround from previous years but one the banks may struggle to maintain.

* Some U.S. administration officials are trying to develop a more sustainable legal framework for how governments should use drone strikes.

 

FT

BRITISH BANKS BODY BOWS OUT OF LIBOR

The British Bankers' Association (BBA) is willing to give up its responsibility for setting the Libor interbank borrowing rate.

SECESSION CRISIS HEAPS PAIN ON SPAIN

Spain lurched further towards a full-blown constitutional crisis as Catalonia announced a snap election.

SCHRODERS BOWS TO NEW MOOD ON AUDITS

PwC's auditing relationship with Schroders is at risk after the fund manager put its contract out to tender.

BUMI CONSIDERS CUTTING INDONESIAN TIE

The board of Bumi is weighing up severing ties with one of its Indonesian businesses as part of a restructuring aimed at reviving investor confidence.

TOTAL WARNS AGAINST OIL DRILLING IN ARCTIC

Total's chief executive Christophe de Margerie has said energy companies should not drill for crude in Arctic waters.

BANKS SEEK CHANGES TO RESEARCH SETTLEMENT

Big Wall Street banks are seeking to amend the global research settlement reached with U.S. regulators.

TOYOTA TO REDUCE CHINA-BOUND PRODUCTION

Toyota Motor Corp and Nissan Motor will cut production in China as rising anti-Japan sentiment in the country hurt sales.

TNK-BP PARTNERS EYE BP'S ENTIRE STAKE

BP's Russian billionaire partners in TNK-BP are preparing an all-cash offer for the UK oil company's 50 percent holding in the Russian oil venture.

UBS WORKER DID NOT REPORT 'UMBRELLA'

A co-worker of Kweku Adoboli reported the alleged UBS rogue trader for breaching his trading limits but failed to inform the bank about an 'umbrella' pot of money.

BBC APOLOGISES TO QUEEN

The BBC has issued an apology to the Queen after one of its correspondents divulged details of a private conversation with the monarch.

SYRIAN CHILDREN SUFFER TORTURE AND TRAUMA

Children have been killed and tortured in Syria, a leading charity said on Tuesday, as it called for greater UN monitoring.

 

NYT

* In what could be the ultimate in personalized medicine, animal models, referred to by researchers as avatars, are being used to help determine the best treatment for a patient.

* As Tesla Motors Inc, a maker of electric cars, burns through cash and misses production targets, it is turning to investors and taxpayers for extra financial help.

* The housing market is still gathering strength, new data showed, and the gains appear to be spreading even to the cheapest homes in many cities.

* In an effort to compete with companies like AT&T Inc and Verizon Communications Inc, smaller telecommunications firms asked the FCC to limit ownership of spectrum that is valuable in urban areas.

* The pressures facing the government of Prime Minister Mariano Rajoy mounted on several fronts on Tuesday, as thousands of demonstrators besieged Parliament and Spain's two largest regions took steps that underscored their deepening economic troubles and displeasure with his austerity plans.

* The British Bankers' Association is expected to give up its responsibility for the global interest rate at the center of a recent manipulation scandal.

* In a series of moves meant to expand Barnes & Noble's digital offerings, the company on Tuesday introduced two new color tablets and said a video store for its Nook products would make its debut this fall.

* As Yahoo's newly installed chief executive, Marissa Mayer has given employees free cafeteria food, replaced their BlackBerry phones with iPhone and Android smartphones and closed a long-awaited deal with Alibaba that gives Yahoo $625 million.

But two months in, she has yet to do the one thing that shareholders, analysts and advertisers so desperately seek: articulate a clear vision for the flailing Internet company, whose revenue has flattened and stock price has dropped by half over the last five years.

* Germany intends to be one of the first countries to try to put the brakes on high-frequency trading, the computer-driven force that has been rattling stock markets across the globe.

* Immigrants applying for two-year deportation deferrals can ask employers to verify their job status as one way to meet a requirement showing that they have lived for at least five years in the United States.

But employers who agree to those requests could be acknowledging that they knowingly hired an unauthorized worker - a violation of federal law.

* A former Goldman Sachs programmer charged a second time with stealing valuable computer code from the investment bank is fighting back, demanding that his former employer cover his mounting legal fees.

* Airlines typically try to keep flying through bankruptcy. But simmering labor tensions at American Airlines have boiled over from the negotiating room to the airports in recent weeks, disrupting operations and leaving a trail of delayed and canceled flights that the airline says is the fault of its pilots.

* An elections court in Brazil has ordered the arrest of Google's most senior executive in the country after the company failed to take down YouTube videos attacking a local mayoral candidate.

 

Canada

THE GLOBE AND MAIL

* Top oil industry executives are asking Ottawa for rules to protect Canadian ownership of major oil sands companies from a flood of foreign investment expected in the sector.

* Some of Canada's most popular websites are flouting federal privacy laws by sharing visitors' valuable personal information without their knowledge or permission.

Reports in the business section:

* Finance Minister Jim Flaherty is urging corporate Canada to give the economy a boost, arguing that Ottawa has laid the groundwork for new investment by lowering taxes and that it's time for businesses to invest.

NATIONAL POST

* Ties between well-known construction entrepreneurs and the highest figures in the Italian mafia have been laid out before Quebec's corruption inquiry where, after months of anticipation, the witnesses are starting to name names.

FINANCIAL POST

* The Canadian Auto Workers (CAW) union and Chrysler Group LLC are far apart in talks for a new contract, with Chrysler wanting to eliminate a cost-of-living increase and adjust lump-sum payments the CAW negotiated in contract deals with General Motors Co and Ford Motor Co last week, the head of the union said on Tuesday. 

 

Fly on the Wall 7:00 am Market Snapshot for 9/26

ANALYST RESEARCH

Upgrades

Pacific Premier Bancorp (PPBI) upgraded to Strong Buy from Outperform at Raymond James
Transocean (RIG) upgraded to Neutral from Sell at Goldman

Downgrades

Astoria Financial (AF) downgraded to Underperform from Market Perform at Keefe Bruyette
Bristow Group (BRS) downgraded to Sell from Neutral at Goldman
Carnival (CCL) downgraded to Hold from Buy at Jefferies
Chesapeake (CHK) downgraded to Hold from Buy at Stifel Nicolaus
Electronic Arts (EA) downgraded to Neutral from Buy at BofA/Merrill
Energy Partners (EPL) downgraded to Hold from Buy at Stifel Nicolaus
GT Advanced (GTAT) downgraded to Hold from Buy at Canaccord
Gevo (GEVO) downgraded to Sell from Buy at UBS
Home Bancshares (HOMB) downgraded to Hold from Buy at Stifel Nicolaus
MarketAxess (MKTX) downgraded to Underperform from Neutral at Credit Suisse
Marvell (MRVL) downgraded to Hold from Speculative Buy at Canaccord
Oracle (ORCL) downgraded to Neutral from Overweight at Atlantic Equities
Paccar (PCAR) downgraded to Neutral from Outperform at RW Baird
Public Storage (PSA) downgraded to Market Perform from Outperform at Raymond James
SYNNEX (SNX) downgraded to Buy from Strong Buy at Needham
SanDisk (SNDK) downgraded to Market Perform from Outperform at JMP Securities
Sigma-Aldrich (SIAL) downgraded to Neutral from Buy at UBS
Texas Instruments (TXN) downgraded to Perform from Outperform at Oppenheimer

Initiations

Akorn (AKRX) initiated with a Buy at BofA/Merrill
Cepheid (CPHD) initiated with an Overweight at JPMorgan
Community Health (CYH) initiated with a Buy at SunTrust
Republic Services (RSG) initiated with a Hold at KeyBanc
Tenet Healthcare (THC) initiated with a Neutral at SunTrust
Waste Connections (WCN) initiated with a Buy at KeyBanc
Waste Management (WM) initiated with a Hold at KeyBanc

HOT STOCKS

Jabil Circuit (JBL) sees FY13 cash flow from operations $1B
Said "extremely well positioned" from a liquidity standpoint
Barnes & Noble (BKS) launched NOOK HD and NOOK HD+
Bottomline Technologies (EPAY), Lloyds Bank (LYG) announced strategic partnership in U.K.
Philips (PHG) and Jones Lang LaSalle (JLL) form global lighting partnership
Ericsson (ERIC) acquired ConceptWave, terms not disclosed
AngloGold (AU) Ashanti's workers embarked in unprotected strike
Acacia Research (ACTG) unit acquired radio frequency modulation technology
GSK (GSK) and Theravance (THRX) announced FDA acceptance of FF/VI NDA for COPD in U.S.
Depomed (DEPO) sued FDA seeking Orphan Drug exclusivity for Gralis
Safeway (SWY) expanded recall of ground beef products sold in four states

EARNINGS/GUIDANCE

Companies that beat consensus earnings expectations last night and today include:
Copart (CPRT), CalAmp (CAMP)

Companies that missed consensus earnings expectations include:
Omnova Solutions (OMN), Jabil Circuit (JBL)

Companies that matched consensus earnings expectations include:
SYNNEX (SNX)

NEWSPAPERS/WEBSITES

Home prices showed their best year-to-date gains since 2005, up 5.9% through July, signaling the housing market's steady march toward recovery, the Wall Street Journal reports
IBM (IBM) will increase its efforts to sell so-called cloud computing services to mid size businesses, and has lined up partners to resell its services and is helping software companies adapt their products to IBM's machines. The move puts it in more direct competition with Amazon (AMZN) and Salesforce (CRM), the Wall Street Journal reports

The billionaires who own half of TNK-BP are interested in buying out BP's (BP) entire 50% stake, and will make a binding all-cash offer by mid-October, sources say, Reuters reports
South Korea’s SK Telecom (SKM) will sell part of its stake in steelmaker POSCO (PKX) for $390.66M, leaving it with a 1.42% stake after the sale, Reuters reports

Oil fell to the lowest level in seven weeks after a report showed increasing U.S. stockpiles and  Philadelphia Fed President Charles Plosser said a new stimulus plan probably won’t raise economic growth, Bloomberg reports

Costco Wholesale (COST) workers who sued the retailer for gender bias will be able to proceed with their claims as a group. In San Francisco, U.S. District Judge Edward Chen certified a class, or group, of plaintiffs, seeking monetary relief that includes several hundred women employed since 2002 who have been subject to the company’s system for promotion to management positions, Bloomberg reports

 

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Wed, 09/26/2012 - 07:44 | 2831217 LongSoupLine
LongSoupLine's picture

 

 

Tyler,

This has got to be seriously considered in the running for "humorous/mega B.S. quote of the day":

“The fairness principle that underlies the foundation of our markets demands that prices of securities accurately reflect a genuine supply of and demand for those securities,” Daniel M. Hawke, the chief of the SEC’s enforcement division’s market abuse unit, said in the statement. “The SEC will not tolerate any abusive practice that is designed to distort these natural forces.”

Wed, 09/26/2012 - 08:20 | 2831304 slaughterer
slaughterer's picture

Need a Hilsenroomer about QETotality.  

Wed, 09/26/2012 - 07:48 | 2831224 Bobbyrib
Bobbyrib's picture

SEC: NY Firm Allowed HFT Manipulation (Bloomberg) - busted 'providing liquidity'?

Knowing our President and Chicago, someone should follow the money trail and see how he, or another politician benefited. It's not hard to know how this happens, when you accept the truth that all of our politicians are whores (except for Ron Paul).

They're just getting around to fining them now?

Wed, 09/26/2012 - 08:36 | 2831347 Catullus
Catullus's picture

We're also supposed to believe that clandestine government operations don't fund themselves through HFT operations.

Wed, 09/26/2012 - 09:08 | 2831459 spanish inquisition
spanish inquisition's picture

I think the majority is covered through gun running, drug smuggling and counterfitting $100's that float in the ME. Of course, should a special project be proposed, I believe they would tap HFT for incidentals.

Wed, 09/26/2012 - 07:52 | 2831230 insanelysane
insanelysane's picture

Greece is protesting austerity.  How can anyone protest austerity???  

We demand to spend more money than we make!  

We have a god given right to consume more than we create!!

Everyone deserves to possess someone else's wealth!!!

 

Wed, 09/26/2012 - 08:01 | 2831250 JustObserving
JustObserving's picture

Austerity is only for the poor  - never for the rich.  Endless QE only benefits the rich while the poor are pressured by rising inflation.  The Greeks should try a few of their oligarchs but most of them have already esacped to London along with an estimated $400 billion.

Wed, 09/26/2012 - 08:46 | 2831378 insanelysane
insanelysane's picture

So my wife and I have college degrees in sciences and are managers.  Combined we make over $250k, working 10 hours a day each.  So you want what, 50% tax on us, so one of us is going to work 10 hours a day, 220 days a year, to pay for you to sit home and be stupid?

Wed, 09/26/2012 - 09:02 | 2831427 Innisfree
Innisfree's picture

This.

/thread.

Wed, 09/26/2012 - 09:03 | 2831430 Innisfree
Innisfree's picture

This.

Wed, 09/26/2012 - 08:11 | 2831281 disabledvet
disabledvet's picture

And the THUNDEROUS rhetoric from our Bailout Tycoons continues apace. "AH MAJINDAD...YOU ARE AN UNFUNNY GUY!" Wow...deep stuff New York. What's next? (Shhhh...don't tell anyone but we're bankrupt...

Wed, 09/26/2012 - 08:30 | 2831329 Bastiat009
Bastiat009's picture

Oops, gold is following stocks again and the euro too ... I thought Europe was saved and QE would kill the US$. Back to the beach.

Wed, 09/26/2012 - 08:55 | 2831409 Grand Supercycle
Grand Supercycle's picture

IMPENDING SELL OFF...

Due to recent central bank intervention and short covering spikes, these daily charts are extremely overextended and significant correction expected very soon:

SPX, DOW, NASDAQ, NZDUSD, GBPUSD, AUDUSD, COPPER, CRUDE, GOLD, SILVER. [USD strength will return]

http://www.zerohedge.com/news/2012-12-24/market-analysis

http://trader618.com

Do NOT follow this link or you will be banned from the site!