Frontrunning: October 12
- OECD: Japan Public Debt in 'Uncharted Territory' (WSJ)
- Germany holds firm on Greece as IMF pressure mounts (Reuters)
- Schäuble and Lagarde clash over austerity (FT) - it would be great if someone actually implemented austerity...
- Merkel hints at tax cuts for growth boost (FT)
- Hollande Robbed of Growth Engine as Companies Cut Investment (BBG)
- Romney Narrows Gap With Obama in Swing State Polling (BBG)
- Sluggish Growth Seen Into Next Year (WSJ)
- Softbank Founder Has 300-Year Plan in Wooing Sprint Nextel (BBG)
- Singapore Forgoes Currency Stimulus on Inflation Risk (Bloomberg) - as does China day after day
- Sharp Jabs Dominate Combative Vice-Presidential Debate (WSJ)
- Japan and China Agree to Hold Talks on Rift After Noda Call (Bloomberg)
- China’s Banks Said to Resist Cutting Lending Rates (BBG)
- Australia to Hit Gas as Record Rate Cuts Fail (BBG)
Overnight Media Digest
* Japanese phone and internet company Softbank Corp is in talks to buy a significant stake in Sprint Nextel Corp , the ailing U.S. wireless carrier said. A deal would offer a multibillion-dollar lifeline that could help Sprint finance future mergers of its own and better compete with its much bigger and richer rivals.
* Vice President Joe Biden and Republican rival Paul Ryan engaged in a confrontational debate Thursday night that included interruptions, flippant asides and pointed accusations over a wide range of economic, foreign policy and social issues.
* Coca Cola Hellenic Bottling Co, the biggest company by value on the Greek stock market, will move its headquarters to Switzerland and switch its main market listing to London, in the biggest sign yet of southern European companies pulling away from the troubled region.
* Spanish officials voiced defiance on Thursday after a credit downgrade left the country's rating close to junk status at two firms, saying the surprise move wouldn't affect their plans to raise money on financial markets.
* A group of bondholders that specialize in buying debt of distressed companies has, among other proposals, offered to provide between $1 billion and $2 billion in financing in exchange for big ownership stakes in a restructured AMR Corp.
* Best Buy Co is planning to match the prices of internet competitors such as Amazon.com Inc this holiday season, even as it plays down its concerns over shoppers browsing gadgets in stores only to buy them for less online.
* Siemens AG said it is planning to cut costs and simplify its business in an overhaul of Germany's flagship industrial group that may include asset sales.
* International Monetary Fund Managing Director Christine Lagarde said Greece should be given an extra two years to meet its budget targets, publicly wading into euro-zone officials' politically sensitive bailout discussions.
* A onetime Goldman Sachs Group Inc computer programmer has asked a state judge to throw out criminal charges against him, saying he shouldn't be prosecuted a second time over the alleged theft of the investment bank's secret computer code.
BUMI SHARES LEAP AS BAKRIES PROPOSE SPLIT
Indonesia's Bakrie family has proposed splitting from financier Nat Rothschild and Bumi Plc after news of an inquiry into possible wrongdoing.
CLARKE GETS ROLE AS TRADE 'ROCKET BOOSTER'
Ken Clarke, the veteran Conservative politician, is to head a drive to sell expertise from the NHS to China.
GEITHNER HAS PHONE FRIEND AT BLACKROCK
Tim Geithner, U.S. Treasury secretary, spoke with BlackRock's Larry Fink on at least 49 separate occasions, an average of about once every 11 days.
AZERBAIJAN ATTACKS BP FOR MISSING TARGETS
BP has come under a blistering attack from Azerbaijan's president who has accused it of failing to meet production targets over the past three years.
COCA-COLA HELLENIC TO QUIT GREECE
Coca-Cola Hellenic Bottling Company is quitting the debt-stricken country in favour of a London listing and Swiss domicile.
SOFTBANK IN TALK TO TAKE CONTROL OF SPRINT
SoftBank is in discussions to purchase a controlling stake in Sprint Nextel.
SCHAUBLE AND LAGARDE CLASH OVER AUSTERITY
Germany's finance minister rebuked the head of the International Monetary Fund after she warned that EU leaders should ease demands for austerity.
OIL GROUPS SET TO EXPORT US CRUDE
Some of the world's biggest oil companies and traders are poised to export substantial amounts of crude from the U.S. for the first time in decades.
* Sprint Nextel Corp said Thursday that it was in discussions with SoftBank Corp over a "potential substantial investment". The talks, which began this summer, center on SoftBank, a Japanese telecommunications company, paying $12.5 billion for a stake of about 70 percent in Sprint, according to a person briefed on the matter.
* Carl Icahn escalated his proxy fight with the vehicle maker Oshkosh Corp on Thursday by offering to take over the company for $32.50 a share, or about $3 billion.
* After months of battling sweltering heat and drought, a bit of good news emerged for farmers on Thursday: the Agriculture Department revised its estimates for soybean production higher, a sign that the drought had less of an impact on the crop than feared.
* The solar panel manufacturing industry in the United States and Europe has begun a volley of trade cases against imports, following the same track as the steel industry before it - and for many of the same reasons.
THE GLOBE AND MAIL
* The days of France's leaders leaning publicly toward Canadian unity appear to be gone. The country's new government says its approach will be non-interference in Quebec's affairs, and gave no sign it will laud unity.
The former French president Nicolas Sarkozy had broken with tradition by taking sides in the Canadian national unity debate, suggesting that Quebec sovereigntists are an insular movement that is sowing division. But the new government of François Hollande appears to be reverting to the cagey neutrality of the past.
* Canada's financial sector fought a losing battle to stop the national banking regulator from restricting the amount that homeowners can borrow on a home equity line of credit, documents obtained by The Globe and Mail show.
Several members of the industry argued not only that borrowers with good credit would be hurt by the new rules, but also that the regulator's crackdown could prompt banks to issue riskier kinds of loans - such as unsecured lines of credit - to keep their customers.
Reports in the business section:
* The Canadian Broadcasting Corp will lose millions of dollars a year on its free music service for the foreseeable future, as the high cost of content surpasses the advertising revenue the service earns.
CBC Music was launched in February just as the broadcaster was bracing for deep budget cuts that would lead to the loss of 650 jobs and prompt the CBC to request permission to sell advertising on its Radio 2 service.
* Canada's western energy powerhouses are feeling the chill from sluggish natural gas markets.
Sales activity at British Columbia's auction for exploration rights nearly ground to a halt in September, while Alberta and Saskatchewan are being pinched as energy companies scale back their budgets for targeting new natural gas prospects.
* Quebec's opposition is accusing the new Parti Québécois government of planning to turn the province's schools into political assembly lines for churning out supporters.
It reacted angrily to news Thursday that the PQ will decrease English instruction on its list of priorities and increase teaching the history of Quebec's sovereignty movement.
* For six days last week, Calgary mom Jessica Stilwell staged a quiet anti-housework strike in her home - the place devolving into domestic chaos as she simply stopped picking up after her three daughters, whom she jokingly called her "basement trolls" on the blog she kept of her progress called "Crazy Working Mom".
Now, Stilwell is getting international attention for her cheeky experiment, as a hero for doing what many parents dream they could and also reviled for not making her children do their chores much earlier.
* Claude Mongeau, Canadian National Railway Co chief executive, reached out to his largest customers this week in a letter attempting to enlist their help in the railroad's ongoing fight to prevent new regulations on the industry. In it, he argues that while the new regulations are aimed at improving service, they may in fact do the opposite.
His message was met, however, with skepticism from shippers, who deemed it simply a last-ditch effort to stave off the new regulations Ottawa has promised in the coming months.
* CNOOC Ltd executives crafted their $15.1-billion takeover bid for Nexen Inc to pass Canada's net benefit test for foreign acquisitions.
Yet no matter what they offered, the guidelines remain vaguely defined and open to broad interpretation. It makes the deal subject to any number of biases and political motivations.
Fly On The Wall 7:00 Market Digest
3D Systems (DDD) upgraded to Neutral from Underweight at Piper Jaffray
Aon Corp. (AON) upgraded to Buy from Neutral at Goldman
BorgWarner (BWA) upgraded to Buy from Neutral at Citigroup
Coca-Cola Hellenic (CCH) upgraded to Overweight from Neutral at JPMorgan
LinkedIn (LNKD) upgraded to Overweight from Equal Weight at Evercore
OGE Energy (OGE) upgraded to Buy from Hold at Jefferies
Wal-Mart (WMT) upgraded to Buy from Hold at Jefferies
Alpha Natural (ANR) downgraded to Neutral from Buy at Nomura
Alpha Natural (ANR) downgraded to Sell from Buy at CLSA
Avnet (AVT) downgraded to Market Perform from Outperform at Raymond James
CONSOL Energy (CNX) downgraded to Sell from Outperform at CLSA
Dollar Tree (DLTR) downgraded to Hold from Buy at Jefferies
Dollar Tree (DLTR) downgraded to Neutral from Overweight at Piper Jaffray
FleetCor (FLT) downgraded to Market Perform from Outperform at Wells Fargo
Jive Software (JIVE) downgraded to Market Perform from Outperform at BMO Capital
Liquidity Services (LQDT) downgraded to Neutral from Buy at BofA/Merrill
Peabody Energy (BTU) downgraded to Reduce from Neutral at Nomura
Seagate (STX) downgraded to Sell from Buy at Citigroup
SunTrust (STI) downgraded to Neutral from Buy at BTIG
Titanium Metals (TIE) downgraded to Neutral from Buy at Citigroup
Tyco (TYC) downgraded to In-Line from Outperform at Imperial Capital
Walter Energy (WLT) downgraded to Sell from Outperform at CLSA
Western Digital (WDC) downgraded to Sell from Buy at Citigroup
XenoPort (XNPT) downgraded to Neutral from Overweight at Piper Jaffray
Acquity Group (AQ) initiated with a Buy at Roth Capital
Apollo Global (APO) initiated with a Perform at Oppenheimer
ArthroCare (ARTC) initiated with an Outperform at JMP Securities
Brown & Brown (BRO) initiated with a Sell at Goldman
Carlyle Group (CG) initiated with a Perform at Oppenheimer
Colfax (CFX) initiated with a Buy at Deutsche Bank
Embraer (ERJ) initiated with an Outperform at Imperial Capital
General Electric (GE) initiated with a Buy at Deutsche Bank
Groupon (GRPN) initiated with a Neutral at Macquarie
Honeywell (HON) initiated with a Buy at Deutsche Bank
ITT Corp. (ITT) initiated with a Buy at Deutsche Bank
Illinois Tool Works (ITW) initiated with a Buy at Deutsche Bank
LinkedIn (LNKD) initiated with an Outperform at Macquarie
Northern Tier Energy (NTI) initiated with a Buy at Deutsche Bank
OpenTable (OPEN) initiated with an Outperform at Macquarie
Orthofix (OFIX) initiated with an Outperform at JMP Securities
Plains Exploration (PXP) initiated with an Outperform at BMO Capital
RTI Biologics (RTIX) initiated with an Outperform at JMP Securities
Rockwell Automation (ROK) initiated with a Buy at Deutsche Bank
SPX Corp. (SPW) initiated with a Buy at Deutsche Bank
Teradata (TDC) initiated with a Buy at Goldman
Xylem (XYL) initiated with a Buy at Brean Murray
Zimmer (ZMH) initiated with an Outperform at JMP Securities
eMagin (EMAN) initiated with an Overweight at Piper Jaffray
Kraft Foods (KRFT) seeking buyer for Breakstone's dairy business, Bloomberg reported
BAE Systems (BAESY) sees "limited trading disruption" in last quarter of FY12
Forest Oil (FST) to sell all of its properties located in South Louisiana for about $220M.
Starwood Property (STWD) announced $107M capital deployment
Beazer Homes (BZH) announced 1-for-5 reverse stock split
Iron Mountain (IRM) to invest $30M to expand underground wholesale data center space
CorpBanca (BCA) announced agreement to acquire Helm Bank
ExactTarget (ET) acquired iGoDigital for $21M, acquired Pardot for $95.5M
Companies that missed consensus earnings expectations include:
Heartland Express (HTLD), J.B. Hunt (JBHT)
Companies that matched consensus earnings expectations include:
Infosys (INFY), Bank of the Ozarks (OZRK)
Royal Dutch Shell (RDS.A) applied for a permit from the Commerce Department to export crude oil in a sign of how a boom in U.S. oil production from shale rock is reshaping the country's role in the global energy marketplace, the Wall Street Journal reports
Best Buy (BBY) plans to match the prices of Internet competitors such as Amazon.com (AMZN) during the holidays, even as it plays down its concerns over shoppers browsing gadgets in stores only to buy them for less online. The electronics chain also is preparing to offer free home delivery on merchandise that is out of stock in stores, sources say, the Wall Street Journal reports
Germany insists that it’s too soon to say Greece deserved more time to meet its budget-cutting goals even as the head of the IMF laid out the case for leniency, Reuters reports
Softbank Corp. (SFTBF) is in talks with three major Japanese banks to borrow $23B to finance a bid for Sprint Nextel (S), sources say, Reuters reports
The EU may consider delaying when lenders need to start phasing in tougher Basel bank-capital rules by as much as a year after warnings that pressing ahead with the original timetable may drive up costs, sources say, Bloomberg reports
Nasdaq OMX Group (NDAQ), setting up a derivatives trading system in London to compete with Europe’s two biggest futures exchanges, plans to seek over a 10% market share in its first year of operation, Bloomberg reports
Aeterna Zentaris (AEZS) announces offering of common shares/warrants
Immunomedics (IMMU) files to sell 20M shares of common stock
Kinder Morgan (KMI) files to sell 69.3M shares of common stock for holders
Laredo Petroleum (LPI) Holdings 12.5M share Secondary priced at $20.25
LinnCo (LNCO) 30.25M share IPO priced at $36.50
Workday (WDAY) 22.75M share IPO priced at $28.00
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