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Frontrunning: October 26

Tyler Durden's picture




 
  • Greece Faces Need for Additional Assistance: €30 billion (WSJ)
  • Greeks fail to agree on bailout terms (FT)
  • The report that got the NYT banned on the Chinese interweb: Billions in Hidden Riches for Family of Chinese Leader (NYT)
  • Bo Xilai: China parliament expels disgraced politician (BBC)
  • Japan Adds Stimulus Amid Threat of Bond-Sale Disruption... $9.4 billion (Bloomberg)
  • Hubbard Said to Prefer Treasury Chief to Fed If Romney Wins (Bloomberg)
  • 9 More Banks Subpoenaed Over Libor (WSJ)
  • Romney raises $112m in 17 days (FT)
  • Amid Cutbacks, Greek Doctors Offer Message to Poor: You Are Not Alone (NYT)... no, we are all broke
  • Muni Downgrades Top 2011 Total on Weak Economy: Moody’s (Bloomberg)
  • Ireland urges ECB to commit to bond-buying (FT)
  • Cameron and Clegg unite in EU demands (FT)
  • Wheeler Favours Lower N.Z. Currency Without Unorthodox Policies (Bloomberg)
  • S Korea grows at slowest pace in 3 years (FT)

 

Overnight Media Digest

WSJ

* Apple Inc regained some momentum in its fourth quarter, selling more iPhones than expected while triggering some concerns about the iPad.

* In its first acquisition under Chief Executive Marissa Mayer, Yahoo Inc has purchased a mobile app called Stamped, with the aim of adding mobile-software experts to the struggling internet company's ranks.

* Sprint Nextel Corp's third-quarter loss widened on steep customer losses and the continuing shutdown of its older Nextel network.

* Samsung Electronics Co's third-quarter profit jumped 91 percent in a period when it was the only big manufacturer with new phones at the high end of the market. But the company indicated that momentum may stall in the current quarter.

* Amazon.Com Inc reported its first loss in more than nine years, as the retail giant's revenue growth slowed while it continued to spend heavily on product development for devices such as the Kindle tablets and e-readers, as well as on new warehouses.

* Pearson Plc said talks are under way to combine its Penguin Group with Random House, which is owned by Bertelsmann SE & Co.

* After years of often-fractious relations, Sumner Redstone said his daughter, Shari Redstone, could end up succeeding him as the overseer of his controlling interests in Viacom Inc and CBS Corp flying in the face of conventional wisdom that Viacom CEO Philippe Dauman was assured the role.

* Credit Suisse Group AG is quietly pushing to turn one of its trading venues into an exchange, an unusual bid that, if successful, would create the only U.S. stock exchange owned outright by a Wall Street bank.

* Nine more banks have received subpoenas in connection with a probe into alleged widespread interest-rate manipulation by banks, a person familiar with the investigation said.

* Secret recordings of Raj Rajaratnam sent the hedge-fund manager to prison for insider trading. Now, his lawyers say a government misstep early in the investigation should set him free

 

FT

FORD CUTS 1,400 JOBS AT UK PLANT

Ford Motor announced on Thursday that it would close two of its UK manufacturing operations and cut 1,400 jobs next year.

JAPAN GRAPPLES WITH ITS FISCAL CLIFF

The Japanese finance ministry will hold crisis talks with bond dealers in the world's largest government debt market on Friday.

PENGUIN AND RANDOM HOUSE IN DEAL TALKS

Bertelsmann and Pearson are in talks about combining their publishing divisions, Random House and Penguin.

CREDIT SUISSE TO CUT EXTRA $1 BLN

Credit Suisse reported a 63 percent fall in third-quarter net profits on Thursday and increased its cost-cutting programme by $1 billion.

ECCLESTONE REBUFFS BANK'S $400 MLN F1 DEMAND

Bernie Ecclestone, chief executive of Formula One, has rebuffed a demand for some $400 million in damages from BayernLB, the German bank.

KKR EYES BARGAINS IN SPAIN

Kohlberg Kravis Roberts (KKR), one of the world's biggest private equity firms, is scouring Spain for investment opportunities as property assets are being sold.

BRITAIN MOVES OUT OF RECESSION

Britain's double-dip recession has ended after the economy grew 1 percent between the second and third quarters.

EURO ZONE BANKS START ROAD BACK TO HEALTH

Investors may be jittery about much of southern Europe. But euro zone policy makers can claim significant improvements in crisis-hit banking systems.

COE ON MARKS FOR 12 MLN POUND IMAGE DEAL

Lord Coe could make 12 million pounds ($19.37 million) when he sells the image rights to his future earnings.

 

NYT

* In the last five weeks, Apple Inc has revamped its entire product lineup with new iPods, iPhones and computers. But on Thursday it said those products would be more expensive to make, nibbling into its ample profits.

* Ford Motor Co has broken from the pack of troubled European automakers, announcing deep cuts that include shutting three factories in the region and eliminating 5,700 jobs.

* Pearson Plc, the British media conglomerate that owns Penguin, said it was discussing a potential deal with Random House's owner, Bertelsmann of Germany.

* Amazon.Com Inc said it lost money in the third quarter, continuing a trend of unimpressive earnings reports for the retailer.

* The number of people who said they were sexually assaulted by Jimmy Savile, one of Britain's most popular television hosts, expanded to 300 from 200 in just the last week, and other people may have acted with him, Cmdr. Peter Spindler, the Scotland Yard officer heading the investigation, said.

* Patricia Millett, a lawyer for the former hedge fund manager Raj Rajaratnam asked a panel of federal appeals court judges to set aside his conviction, arguing that the government had used deceptive methods to obtain permission to wiretap his cellphone.

 

Canada

THE GLOBE AND MAIL

* The Quebec-Vermont border is the scene of growing chaos as illegal migrants hop over unguarded entry points or drive through guarded crossings on the outbound lanes, zipping by helpless Canadian border officials.

The goal of the migrants, many of whom come from Roma communities in Europe, is to make their refugee claims from inside Canada, officials say. If captured at the border, they risk being returned to the United States on the basis of a bilateral agreement.

* On the day it was revealed that Toronto's mayor had again run afoul of the integrity commissioner, Rob Ford called for her office and those of two other watchdogs to be abolished because they are a "waste of taxpayers' money."

Reports in the business section:

* The United States is in danger of falling back into recession if its politicians cannot agree on how to avoid a "fiscal cliff" of tax increases and spending cuts, warns the head of the International Monetary Fund.

In an interview with the Globe and Mail, Christine Lagarde said that a failure by the leaders of the world's largest economy to come up with a fiscal plan would have "dire economic consequences" - and is a major risk to a Canadian economy that has outperformed most other industrialized countries.

* Canada's largest chain of metropolitan newspapers will close the gates in the new year and ask readers to pay to read their online content. Postmedia Network said it would put up paywalls at all of its titles early in the new year, including the National Post, as it reported a C$28 million ($28.17 million) third-quarter loss.

NATIONAL POST

* Canadian authorities are claiming to have uncovered a human smuggling ring that has brought hundreds of Romanian refugee claimants to the Toronto area through Mexico, the National Post has learned. The smugglers are charging between C$10,000 and C$30,000 for passage to Canada along a route that runs from Mexico to Texas to greater Toronto.

* Census data released Wednesday reveal Canada's vast linguistic landscape, with 191 distinct languages. And for more than two million Canadians, the language spoken at home is neither English or French.

FINANCIAL POST

* Squeezed between public alarm over increasing ownership of Canadian resources by state-owned entities and investors demanding their payday, Prime Minister Stephen Harper has promised new rules to ensure Canadians don't get short-changed.

* Air Canada's pilots have selected new leaders to oversee the 3,000 member union, a few months after losing an arbitration ruling that imposed a new collective agreement with the country's largest airline.

 

China

CHINA SECURITIES JOURNAL

-- China's 68 fund companies have made a total loss of around 75 billion yuan ($12.02 billion) in the third quarter, consultancy data showed.

-- China is studying a plan on the country's income distribution reform, which is expected to be released by the end of this year, a spokesperson of the ministry of human resources and social security was quoted as saying.

FINANCIAL NEWS

--China Life, the world's largest insurer by market value, saw its total assets grow by 73.75 percent in the first nine months of the year to exceed 20 billion yuan, according to data by the China Insurance Regulatory Commission.

SHANGHAI SECURITIES NEWS

--Chinese securities firms are hoping that a new regulation allowing them to set up a managed fund to trade commodity futures will boost their revenue as the industry battles against cut throat competition with meager brokerage commissions.

CHINA DAILY (www.chinadaily.com.cn)

--China's urban registered unemployment rate stood at 4.1 percent at the end of September, the same level as at the end of the second quarter this year, according to data by the ministry of human resources and social security. This was lower than the officially set ceiling of 4.6 percent for this year.

SHANGHAI DAILY

--Fedex will build a new $100 million freight hub at Shanghai's Pudong International Airport, following rivals DHL and UPS, to tap the booming local cargo market.

--China is mulling a long-awaited law for mental health, which is expected to better protect people's rights by prohibiting abuses of compulsory inpatient treatment.

 

 

Fly On The Wall 7:00 Market Snapshot

ANALYST RESEARCH

Upgrades

AllianceBernstein (AB) upgraded to Equal Weight from Underweight at Morgan Stanley
CME Group (CME) upgraded to Outperform from Market Perform at Raymond James
CarMax (KMX) upgraded to Outperform from Neutral at Credit Suisse
Cerner (CERN) upgraded to Buy from Hold at Jefferies
Dime Community (DCOM) upgraded to Outperform from Underperform at Raymond James
Expedia (EXPE) upgraded to Buy from Hold at Benchmark Co.
Expedia (EXPE) upgraded to Outperform from Market Perform at Raymond James
Expeditors (EXPD) upgraded to Conviction Buy from Sell at Goldman
Huntington Bancshares (HBAN) upgraded to Buy from Neutral at Citigroup
Mylan (MYL) upgraded to Buy from Hold at Canaccord
Paccar (PCAR) upgraded to Market Perform from Underperform at Wells Fargo
PulteGroup (PHM) upgraded to Outperform from Sector Perform at RBC Capital
Rogers Communications (RCI) upgraded to Neutral from Sell at Goldman
StellarOne (STEL) upgraded to Strong Buy from Outperform at Raymond James

Downgrades

BJ's Restaurants (BJRI) downgraded to Market Perform from Outperform at William Blair
Cabela's (CAB) downgraded to Neutral from Overweight at Piper Jaffray
Electronic Arts (EA) downgraded to Sector Perform from Outperform at Pacific Crest
Franklin Resources (BEN) downgraded to Equal Weight from Overweight at Morgan Stanley
Freescale (FSL) downgraded to Neutral from Overweight at Piper Jaffray
M/I Homes (MHO) downgraded to Market Perform from Outperform at JMP Securities
Maxwell (MXWL) downgraded to Equal Weight from Overweight at Stephens
NuStar Energy (NS) downgraded to Underperform from Outperform at Credit Suisse
Plexus (PLXS) downgraded to Hold from Buy at Deutsche Bank
Power-One (PWER) downgraded to Equal Weight from Overweight at Stephens
Spirit AeroSystems (SPR) downgraded to Neutral from Outperform at Credit Suisse
St. Jude Medical (STJ) downgraded to Neutral from Outperform at Credit Suisse
Trex Company (TREX) downgraded to Hold from Buy at BB&T
Vipshop (VIPS) downgraded to Hold from Buy at Deutsche Bank

Initiations

ARIAD (ARIA) initiated with a Buy at Citigroup
Alkermes (ALKS) initiated with a Buy at Citigroup
ArQule (ARQL) initiated with a Buy at Citigroup
Bonanza Creek Energy (BCEI) initiated with a Buy at SunTrust
Dick's Sporting (DKS) initiated with a Market Perform at BMO Capital
The Medicines Co. (MDCO) initiated with a Neutral at Citigroup

HOT STOCKS

Amazon.com (AMZN) to hire over 50,000 for seasonal, holiday positions
Said investing very heavily in capacity
KKR & Co. (KKR) said to struggle with $8B goal for North American LBO fund, Bloomberg reported
Gardner Denver (GDI) confirmed exploration of strategic alternatives
Boeing (BA) acquired Miro Technologies, terms not disclosed
Rbedbox (CSTR), Redbox Instant signed agreements with Warner Bros (TWX)
Emulex (ELX) CEO: Well positioned for share gains in our core markets
Republic Airways (RJET), Caesars Entertainment (CZR) signed three year flight agreement
ITC judge ruled in favor of GSI Technology (GSIT)
Pebblebrook Hotel (PEB) to acquire Hotel Palomar San Francisco for $58M
XPO Logistics (XPO) acquired OHL's Turbo Logistics for $50M
Echo Global (ECHO) acquired Sharp Freight Systems
Forum Energy (FET) acquired Wireline Solutions, LLC
Syngenta (SYT) signed global commercial agreement with Novozymes

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Weyerhaeuser (WY), Cabot Oil & Gas (COG), Dun & Bradstreet (DNB), DeVry (DV), PerkinElmer (PKI), NetSuite (N), VeriSign (VRSN), Regal Entertainment (RGC), Clearwire (CLWR), Bally Technologies (BYI), Expedia (EXPE), Deckers Outdoor (DECK), Chubb (CB)

Companies that missed consensus earnings expectations include:
Olin Corp. (OLN), Callaway Golf (ELY), KLA-Tencor (KLAC), Apple (AAPL), Coinstar (CSTR), BJ's Restaurants (BJRI), Duff & Phelps (DUF), Echo Global (ECHO), Amazon.com (AMZN)

Companies that matched consensus earnings expectations include:
Radware (RDWR), GSI Technology (GSIT), QLogic (QLGC), CA Technologies (CA), Netgear (NTGR), Acme Packet (APKT), Sterling Financial (STSA)

NEWSPAPERS/WEBSITES

Credit Suisse Group (CS) is looking to make one of its trading venues an exchange, an unusual bid that, if successful, would create the only U.S. stock exchange owned outright by a Wall Street bank. The plan centers on a trading platform called Light Pool, started last year, the Wall Street Journal reports
Wal-Mart Stores (WMT) plans to open 100 stores in the next three years in China, a slowdown from its earlier growth rates there. The company will add 18,000 jobs to the current 100,000 in China, the Wall Street Journal reports
Lockheed Martin (LMT) said in an SEC filing that it faced a potential termination liability of $1.1B on the F-35 fighter program unless it received additional funding for production of a sixth group of airplanes by year end, Reuters reports
Samsung (SSNLF) said it will book patent-related provisions once a U.S. court makes a ruling on its more than $1B litigation with Apple (AAPL), Reuters reports
U.S. millionaires would rather match the stock market through an exchange-traded index fund than try to beat it using higher-fee hedge funds or billionaire Warren Buffett’s Berkshire Hathaway (BRK.A), Bloomberg reports
Blackstone Group (BX) Chairman Stephen Schwarzman plans to increase real estate investments in Asia after the firm raised more than $13B for a property fund, Bloomberg reports

SYNDICATE

Acadia Realty Trust (AKR) files to sell 3M shares of common stock
American Campus Communities (ACC) 11M share Secondary priced at $43.75
ChipMOS (IMOS) files to sell common stock for stockholders
Oriental Financial (OFG) 4.39M share Secondary priced at $11.00
WhiteWave Foods (WWAV) 23M share IPO priced at $17.00

 

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Fri, 10/26/2012 - 07:37 | 2920951 new game
new game's picture

read the two nyt articles and you will get a clear picture of where YOUR hard earned money is going and who will be impacted most!

anybody getting a little pissed off yet?

2 g's (hint: one is worth 600 and the other is 1700)

Fri, 10/26/2012 - 08:00 | 2920967 chubbyjjfong
chubbyjjfong's picture

I'm gonna need some coke with my pizza this moring, this could be a rough ride..

Fri, 10/26/2012 - 08:02 | 2920970 Bobbyrib
Bobbyrib's picture

Dow futures below 13K..

Fri, 10/26/2012 - 08:12 | 2920991 Catullus
Catullus's picture

Kohlberg Kravis Roberts (KKR), one of the world's biggest private equity firms, is scouring Spain for investment opportunities as property assets are being sold.

Scumbags.  Remember the playbook: buy on leverage, strip off cash flows, cut CapEx to nothing, sell-off best assets, pay themselves a dividend, default on debt. 

Fri, 10/26/2012 - 08:17 | 2920998 Catullus
Catullus's picture

S&P cut BNP Paribus from AA- to A+.  Yeah shadow banking system meltdown.

http://www.irishtimes.com/newspaper/breaking/2012/1026/breaking18.html

 

Fri, 10/26/2012 - 08:27 | 2921019 Never One Roach
Never One Roach's picture

"Amazon.Com Inc reported its first loss in more than nine years, as the retail giant's revenue growth slowed...."

 

The internet sales tax will weight heavily on these online sales companies. Amazon dropped the ball when it stopped fighting this tax and said it would ship out stuff faster instead.

Fri, 10/26/2012 - 08:38 | 2921034 tooriskytoinvest
tooriskytoinvest's picture

ITS STILL STRENGTHENING: 'WORST STORM IN 100 YEARS' SEEN FOR NORTHEAST U.S... SANDY TO HIT FROM NC TO MASS... DC, VA, MD, WV, DE, PA, NJ, NY, CT, RI...

http://investmentwatchblog.com/its-still-strengthening-worst-storm-in-100-years-seen-for-northeast-u-s-sandy-to-hit-from-nc-to-mass-dc-va-md-wv-de-pa-nj-ny-ct-ri/

Britain rejects US request to use UK bases in nuclear standoff with Iran

http://www.guardian.co.uk/world/2012/oct/25/uk-reject-us-request-bases-iran

PENTAGON: US knew too little to deploy troops to Benghazi

http://news.yahoo.com/us-knew-too-little-deploy-troops-benghazi-pentagon-060316307.html

Fri, 10/26/2012 - 09:01 | 2921095 Meatballs
Meatballs's picture

Glenn Hubbard is a colossal puke.

Fri, 10/26/2012 - 09:32 | 2921198 Temporalist
Fri, 10/26/2012 - 11:09 | 2921565 Meatballs
Meatballs's picture

Yep!

Fri, 10/26/2012 - 09:41 | 2921219 Grand Supercycle
Grand Supercycle's picture

WARNING BEARS ~ the SPX short squeeze election rally is back along with massive USD selling.

http://trader618.com
http://www.zerohedge.com/news/2012-12-24/market-analysis

Fri, 10/26/2012 - 10:05 | 2921297 Perplexed
Perplexed's picture

You know - it's nice that NYT is showing Chinese leadership corruption at its finest but how about doing a series of such exposes about American political leaders.  At least that's something we can have an effect on.

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