Frontrunning: October 23
- Moody’s Cuts Ratings on Catalonia, Four Other Spanish Regions (Bloomberg)
- And the market top: Billionaire Ross Interested in Buying Spanish Bank Assets (Bloomberg)
- Japan Jojima denies govt seeks $250 bln BOJ asset buying boost (Reuters)
- China hints at move to strengthen Communist rule (Reuters)... well everyone else is doing it
- Euro-Area Bailout Fund Faces Challenge at EU’s Highest Court (Bloomberg)
- Obama, Romney now tied in presidential race: Reuters/Ipsos poll (Reuters)
- Former China Leader Jiang Resurfaces Before Political Transition (Bloomberg)
- Some in Congress look to $55 billion fiscal cliff 'fallback' (Reuters)
- CLOs stage comeback in US (FT)
- TXU Teeters as Firms Reap $528 Million Fees (Bloomberg)
- China’s Factories Losing Pricing Power in Earnings Threat (Bloomberg)
- ECB needs regulation authority over all euro zone banks – Constancio (Reuters)
- Cameron signals EU budget deal to Berlin (FT)
- Japan's Justice Minister Resigns (WSJ)
Overnight Media Digest
* Republican presidential nominee Mitt Romney called for a firmer demonstration of American strength on the world stage, while President Barack Obama argued his opponent offered an inconsistent and reckless global vision, as the two candidates met Monday night in their third and final debate.
* Marissa Mayer has injected a feeling of hope inside Yahoo Inc, but her first quarterly report card points to a tough slog for the long-ailing internet pioneer.
* BP Plc confirmed it is selling its stake in its troubled Russian venture TNK-BP in a deal that will make the British giant a one-fifth holder of the Kremlin's oil champion, a company that will control nearly 40 percent of Russian output.
* Four people filed phone-hacking claims against Trinity Mirror Plc's Mirror Group Newspapers on Monday afternoon, marking the first batch of major civil phone-hacking cases to be filed against British newspapers not owned by News Corp.
* Caterpillar Inc said it is going ahead with opening new U.S. assembly plants despite a glut of unsold construction and mining machinery that forced it to lower sales and profit forecasts for 2012 and to predict flat demand for 2013.
MIRROR GROUP FACES HACKING CLAIMS
British newspapers belonging to Trinity Mirror are facing legal claims for phone hacking by four people, including former England football coach Sven Goran Eriksson.
ROSNEFT TO TAKE FULL CONTROL OF TNK-BP
BP announced on Monday it had agreed to sell its stake in its Russian joint venture TNK-BP to Rosneft for about $26 billion.
SAVILE TAKES TOLL AS COVER-UP FEARS GROW
Pressure is growing on BBC chief George Entwistle to explain why the media organisation axed its own expose of alleged abuse of underage girls Jimmy Savile.
LOW RATES BLAMED FOR INSURERS' RISK TAKING
Persistent low interest rates are creating potentially big risks for the UK insurers, the City of London watchdog has warned.
MEGAFON POSTPONES ITS LONDON OFFERING
Russian mobile phone company MegaFon said on Monday it will not start a roadshow for a stock market listing in London.
WPP RESEARCH UNIT SETTLE ONLINE CLAIM
An internet research group owned by advertising conglomerate WPP has settled U.S. Federal Trade Commission charges that it violated federal law and deceived consumer.
BAE SHAREHOLDERS CALL FOR CHAIRMAN TO GO
A group of BAE Systems shareholders has demanded the resignation of chairman Dick Olver.
VODAFONE TO EXPAND M-PESA TRANSFERS
Vodafone will launch an international mobile money transfer service as part of a wider expansion of the M-Pesa financial services platform.
* President Obama and Mitt Romney wrapped up a series of defining debates on Monday night with a bristling exchange over America's place in the world as each sought to portray the other as an unreliable commander in chief in a dangerous era.
* Leveraged buyout firm Cerberus Capital Management has been lining up at least $4 billion in financing to support a potential bid for embattled supermarket operator Supervalu Inc , a person briefed on the matter said.
* Standard & Poor's released an analysis on Monday contending that Goldman Sachs and Morgan Stanley, more than any other Wall Street giant, could suffer under the so-called Volcker Rule.
* Five people may have died over the past three years after drinking Monster Energy, a popular energy drink that is high in caffeine, according to incident reports recently released by the Food and Drug Administration.
* A British government study found that the increasing prevalence of computerized trading might lead to isolated incidents of instability in the financial markets.
THE GLOBE AND MAIL
* Dalton McGuinty won't be challenging Justin Trudeau for the federal Liberal leadership. The Ontario premier has decided to look for challenges outside politics altogether.
McGuinty has been under mounting pressure to run for the federal party's top job since he shocked the nation last week by announcing his intention to resign as premier.
* A national index of well being, to be released Tuesday, shows that growing economic output since the recession has not translated into a better quality of life for many Canadians.
Reports in the business section:
* The federal government's surprise move to block the takeover of Progress Energy Resources Corp is adding to growing concerns about a "Canadian discount" that weighs on share prices and frustrates companies' ability to raise capital and do deals.
The government's decision immediately reminded investors of previous high-profile deals in Canada that fell apart amid government or regulatory scrutiny, and has created uncertainty about the bid for Calgary's Nexen Inc by China's CNOOC Ltd.
* TransCanada Corp said on Monday it had restarted its major oil pipeline to the central United States from Canada following a five-day outage to check for a potential defect on the line in the U.S. Midwest.
* U.S. President Barack Obama repeatedly attacked Republican challenger Mitt Romney on foreign policy on Monday in their third and final debate in an effort to blunt his opponent's surge in the polls with two weeks left until election day.
* Despite accusations that they are "killers of the sick and elderly," a growing number of British Columbia healthcare workers are resisting a mandatory flu shot, arguing that it is an issue of personal choice.
* Several reports stated that Royal Bank of Canada is on the verge of a deal to acquire the Canadian operations of Ally Financial Inc, the former auto finance arm of General Motors Corp now majority owned by the U.S. Treasury, for around $4 billion.
RBC and Ally both declined to comment on the matter, but analysts speculated that a sale, whether to the Royal or another Canadian bank, is likely.
* Canadian National Railway Co's third quarter result came in slightly ahead of expectations. But the country's largest railway also warned it was expecting a "challenging end to the year" given the uncertainty in the broader economy and some rising expenses that will likely carry on into 2013.
CHINA SECURITIES JOURNAL
--As of Oct. 22, 247 China A-share listed companies have released their third quarter earnings results. Of these, 85.9 percent achieved profitability.
--China State Construction Engineering Corp said in a statement that it has signed five major contracts, worth a total of 26.8 billion yuan ($4.28 billion).
SHANGHAI SECURITIES NEWS
--Qianhai, a city close to Shenzhen in southern China, is expected to release detailed regulations on new tax and financial regulations governing its special economic zone by the end of the year. Beijing recently established a test zone to try out full yuan convertibility in Qianhai.
CHINA BUSINESS NEWS
--China's total income tax revenue rose 8.6 percent in January to September from a year earlier.
Fly on the Wall 7:00 AM Market Snapshot
Check Point (CHKP) upgraded to Overweight from Neutral at JPMorgan
Cleco (CNL) upgraded to Buy from Neutral at Goldman
Cleco (CNL) upgraded to Outperform from Market Perform at Wells Fargo
McClatchy (MNI) upgraded to Buy from Neutral at Citigroup
Power Integrations (POWI) upgraded to Buy from Neutral at Sterne Agee
Public Storage (PSA) upgraded to Hold from Sell at Cantor
RenaissanceRe (RNR) upgraded to Outperform from Market Perform at Keefe Bruyette
Teekay Offshore Partners (TOO) upgraded to Overweight from Neutral at JPMorgan
XL Group (XL) upgraded to Outperform from Market Perform at Keefe Bruyette
Yahoo! (YHOO) upgraded to Positive from Neutral at Susquehanna
AMC Networks (AMCX) downgraded to Neutral from Overweight at JPMorgan
Access Midstream Partners (ACMP) downgraded to Neutral from Buy at UBS
Bank of Marin (BMRC) downgraded to Hold from Buy at Wunderlich
Edison International (EIX) downgraded to Neutral from Buy at Goldman
MicroStrategy (MSTR) downgraded to Market Perform from Outperform at BMO Capital
Monster Beverage (MNST) downgraded to Buy from Conviction Buy at Goldman
NetApp (NTAP) downgraded to Neutral from Outperform at RW Baird
Omega Healthcare (OHI) downgraded to Hold from Buy at Jefferies
Peabody Energy (BTU) downgraded to Neutral from Buy at Goldman
Pinnacle West (PNW) downgraded to Sell from Neutral at Goldman
SunTrust (STI) downgraded to Neutral from Positive at Susquehanna
Ventas (VTR) downgraded to Hold from Buy at Jefferies
Willis Group (WSH) downgraded to Market Perform from Outperform at Keefe Bruyette
Delta Air Lines (DAL) initiated with a Buy at Buckingham
Dunkin' Brands (DNKN) initiated with a Hold at Miller Tabak
PennantPark (PNNT) initiated with an Outperform at Credit Suisse
Qualys (QLYS) initiated with a Neutral at Credit Suisse
Qualys (QLYS) initiated with an Outperform at JMP Securities
Qualys (QLYS) initiated with an Outperform at RBC Capital
Qualys (QLYS) initiated with an Overweight at JPMorgan
Summit Midstream (SMLP) initiated with an Outperform at RW Baird
Summit Midstream (SMLP) initiated with a Neutral at Goldman
TransDigm (TDG) initiated with an Underweight at Morgan Stanley
US Airways (LCC) initiated with a Buy at Buckingham
United Continental (UAL) initiated with a Buy at Buckingham
Moody's downgraded five Spanish regions, confirms ratings of other five regions
Celanese (CE) sees FY13 earnings growth of 12%-14%
Texas Instruments (TXN) sees weak demand environment continuing into Q4
Said customers are cautious, delaying orders
Has no plans of taking any more capacity off-line
Starwood (STWD) to sell interest in first mortgage and mezzanine financing to Vornado (VNO)
Western Digital (WDC): Global macroeconomic weakness impacting overall IT spending
Yahoo (YHOO) said not prepared to give guidance at current time
Said top priority is a "focused coherent mobile strategy"
Looking for smaller scale acquisitions that align with overall business
F.N.B. Corp. (FNB) announced merger agreement with Annapolis Bancorp (ANNB)
CFTC ordered Morgan Stanley Smith Barney (MS) to pay $200,000 for violations
DuPont (DD) restructuring plan to cut about 1,500 jobs worldwide
Kimco Realty (KIM) executed a purchase and sale agreement for InTown Suites
PepsiCo (PEP) and Suntory agreed to form strategic beverage alliance in Vietnam
Sempra Mexico (SRE) to construct pipeline network in Mexico
BBCN Bank (BBCN) announced acquisition of Pacific International Bancor
Emerald Oil (EOX) announced 1-for-7 reverse stock split
BGI-Shenzhen extended tender offer for Complete Genomics (GNOM) to November 21
Companies that beat consensus earnings expectations last night and today include: United Technologies (UTX), Centene (CNC), Whirlpool (WHR), Signature Bank (SBNY), Crane (CR), F.N.B. Corp. (FNB), Celanese (CE), Wilshire Bancorp (WIBC), Zions Bancorp (ZION), Hexcel (HXL), Western Digital (WDC), Yahoo! (YHOO), W. R. Berkley (WRB)
Companies that missed consensus earnings expectations include:
DuPont (DD), RadioShack (RSH), Carlisle (CSL), JAKKS Pacific (JAKK), BBCN Bank (BBCN), Helix Energy (HLX), Texas Instruments (TXN), Health Management (HMA)
Companies that matched consensus earnings expectations include:
1st United Bancorp (FUBC), Supertex (SUPX), Chemical Financial (CHFC)
Extremely low U.S. interest rates are squeezing bank profits, complicating the industry's recovery from the financial crisis. Net interest margin has fallen to its lowest level in three years. The measure tracks how much banks earn when they borrow from depositors and then lend or invest those funds, the Wall Street Journal reports
Apple’s (AAPL) expected announcement today of a new, smaller iPad is more than another product launch. It is a chance for the company to prove it is still ahead of the curve, the Wall Street Journal reports
France wants PSA Peugeot Citroen (PEUGY) to appoint government and worker representatives to its board, reduce job cuts and guarantee plants in return for a lending bailout, says Industry Minister Arnaud Montebourg, Reuters reports
The Obama administration should pressure Exxon Mobil (XOM) to slow down dealings with Iraqi Kurdistan as they could worsen disputes between Baghdad and the northern province, says Jabir Habeb, Iraq's ambassador to the U.S., Reuters reports
U.S. home values increased 1.3% in Q3, the biggest gain since 2006, in an uneven recovery across the country, according to property data company Zillow, Inc. (Z), Bloomberg reports
Billionaire Wilbur Ross, who’s taken stakes in distressed U.S. and European lenders, said he’s interested in Spanish banking assets as the country takes steps to resolve bad loans stemming from its real-estate bubble, Bloomberg reports
Navarre (NAVR) files to sell $20M of common and preferred stock
Virtusa (VRTU) files to sell $100M of common stock
Comcast (CMCSA) reports 12.8% stake in Clearwire (CLWR)
Ken Langone reports 5% stake in Unifi (UFI)
Park West reports 5.5% passive stake in CafePress (PRSS)
Steadfast Capital reports 5.07% passive stake in Chicago Bridge & Iron (CBI)
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