Frontrunning: November 14
- Don't jump to conclusions over general, Pentagon chief says (Reuters)
- Bad times for generals: Pentagon demotes 4-star General Ward (Reuters)
- Investors Pay to Lend Germany Money (WSJ)
- Noda will no longer be watching... watching: Japan PM honors pledge with December 16 vote date, to lose job (Reuters)
- New China leadership takes shape (FT)
- Hispanic Workers Lack Education as Numbers Grow in U.S. (Bloomberg)
- Anti-austerity strikes sweep Europe (Reuters)
- Amazon faces new obstacles in fight for holiday dollars (Reuters)
- Quest for EU single bank supervisor stumbles (FT)
- SEC Expands Knight Probe (WSJ)
- Singapore’s Casinos Lose Luster as Gaming Revenue Decline (Bloomberg)
- Amid Petraeus sex scandal, Air Force to release abuse report (Reuters)
- Geithner’s Money Fund Overhaul Push Sparks New Opposition (Bloomberg)
- Respected China vice-premier tipped to head anti-graft effort (Reuters)
- Goldman’s Blankfein in Warning Over Cuts (FT)
- Microsoft Said to Push Out Windows’ Sinofsky After Clash (Bloomberg)
Overnight Media Digest
* U.S. President Barack Obama will start budget talks with congressional leaders on Friday by calling for $1.6 trillion in additional tax revenue in the next decade, far more than Republicans will likely accept.
* Netflix Inc is steeling itself to do battle with activist investor Carl Icahn, who bought a 10 percent stake in the video-steaming company and is pushing for its sale to a cash-rich technology company.
* The Securities and Exchange Commission has deepened its probe into whether Knight Capital Group Inc did enough to police its trading systems before computer errors nearly destroyed the brokerage.
* Goldman Sachs Group Inc is becoming the Wal-Mart of Wall Street. Chairman and Chief Executive Officer Lloyd Blankfein told an audience of investors on Tuesday that the firm was increasingly focused on being the "low-cost provider," adapting technology and focusing on operational efficiency to maintain profit growth.
* Chesapeake Energy Corp's prospects of coaxing crude oil from Ohio's rust belt have dimmed, the company's chief executive said on Tuesday, though he maintained the region remains key to the natural-gas giant's future.
GOVERNMENT READY TO DELAY WELFARE REFORM
Britain's government is prepared to delay its welfare reform amid fears the changes may need to be more thoroughly tested before being extended to all benefit claimants.
STANCHART TRIES TO KICK START SHARE PRICE
Standard Chartered this week flew 20 of its top shareholders to Beijing for a three-day immersion into the operations in China.
FRESH SCANDAL ROCKS PENTAGON
The US national security establishment was rocked by further scandal on Tuesday when the Pentagon said its top Afghanistan commander was under investigation.
GREECE WINS TIME ON BAILOUT IMPASSE
International lenders were granted more time to resolve their differences over changes to Greece's 174 billion euros bailout when Athens managed to raise sufficient funds.
VODAFONE IN 6 BLN POUNDS EUROPE WRITEDOWN
Vodafone has been forced to write down almost 6 billion pounds from its operations in economically ravaged countries in southern Europe.
BP PAYS RUSSIAN $325 MLN TO DROP LAWSUITS
BP has paid its Russian oligarch partners $325 million to drop all outstanding litigation against it.
GOLDMAN WARNING OVER CUTS
The financial industry should not go "overboard" in cutting costs in reaction to current market conditions, the chief executive of Goldman Sachs has warned.
CUBAN DIABETES DRUG SET FOR EUROPE TESTS
A revolutionary medicine for diabetes developed by Cuban scientists is set to be tested in late-stage clinical trials in Europe next year.
CARLYLE FINDS CASHEW GROUP TO ITS TASTE
Carlyle is to lead a $210 million private equity investment in an African agricultural commodity merchant that is one of the world's largest traders of cashew nuts.
* An accumulation of run-ins with other company leaders led to Steven Sinofsky's departure, according to several current and former Microsoft Corp executives. ()
* Authorities have reached a $210 million settlement with a BNY Mellon subsidiary, Ivy Asset Management, for advising clients to invest with Bernard Madoff, whose multibillion-dollar fraud landed him in federal prison, New York's attorney general, Eric T. Schneiderman, said on Tuesday. ()
* The Washington Post, facing steep financial challenges and striving to find profitability as readers abandon print newspapers for digital formats, changed its newsroom leadership on Tuesday. The Post announced that Marcus Brauchli, its executive editor for the last four years, will step aside but remain with the company. Martin Baron, editor of The Boston Globe, will replace Brauchli effective Jan. 2. ()
* Cisco Systems Inc, the world's largest computer networking company, enjoyed years of rapid growth in the early days of the Internet, only to struggle against new competitors. While the company is unlikely to see sustained double-digit growth, the efforts of John Chambers, Cisco's chief executive, to get Cisco into newer businesses like Internet video and maintain a disciplined cost-consciousness have plumped profits.
THE GLOBE AND MAIL
* McGill University is suing a former star of the Canadian medical establishment for C$317,154 ($316,800), saying he has reneged on a loan and collected salary he should have never been paid.
The university filed the suit against Arthur Porter -- who left the country and his job as CEO of the McGill University Health Centre under a cloud -- alleging that he failed to repay C$287,000 of a C$500,000 low-interest loan the university provided him in 2008 to help pay for real estate.
* As free trade talks with the European Union reach the endgame, Ottawa is signalling it is prepared to give the Europeans at least part of what they asked for on drug patents - a move that could cost Canadians up to C$900 million a year.
With negotiations at the bureaucratic level nearing closure, International Trade Minister Ed Fast will meet his European counterpart in Brussels next week, taking the discussions to the next level.
Reports in the business section:
* Canada's largest newspaper chain, Sun Media Corp , is slashing 500 jobs, shutting down two printing presses and erecting more paywalls as it tries to cut costs by more than C$45 million to deal with declining advertising revenue for its printed papers.
* BHP Billiton Ltd is out of the diamond business, fed up with prolonged dull prices for gemstones and few opportunities to improve profit margins.
The world's largest diversified miner said on Tuesday it sold its controlling stake in Ekati, Canada's first ever diamond mine, to diamond retailer Harry Winston Diamond Corp for $500 million, well below what analysts expected. Billiton's diamond marketing operations are also included in the sale.
* Speaking in Fredericton on Tuesday, Finance Minister Jim Flaherty gave an update on the state of the federal government's books. Economic growth is coming in slower than had been expected, he reported.
That means that the deficit is going to come in C$5 billion higher than thought this year, and will continue to be higher in years to come, as the economy grows - but grows slowly. The end result: Ottawa won't be getting its books back to balance until 2016/17, a year later than expected.
* The Department of Citizenship and Immigration spent almost C$750,000 monitoring ethnic media over the past three years, including assessments of election campaign events and "perceptions" of minister Jason Kenney.
A series of contracts from March 2009 through May 2012 cost taxpayers C$745,050, according to documents obtained by The Canadian Press under access to information law.
* Finance Minister Jim Flaherty says U.S. politicians need to get to work quickly on putting together a fiscal compromise that will avoid an economic crisis.
Flaherty says failure to reach a fiscal deal before Jan. 1 will plunge the United States into a recession quickly, with Canada to follow shortly afterward.
* Canadian airlines joined their international counterparts Tuesday in lauding the decision by the European Commission to "stop the clock" temporarily on the industry's inclusion in the emission trading scheme for the 27 member states.
The European Union said the decision was made to give the international community time to come up with an alternative, global strategy for combating carbon dioxide emissions.
CHINA SECURITIES JOURNAL
-- The government is expected to give securities firms more freedom to make decisions regarding the setting up of their operational branches. They will be allowed to decide the number, types and locations of branches to be set up.
-- China's state planner, the National Development and Reform Commission, will invest 1.4 billion yuan ($224.85 million) in the construction of a premium cotton production base in Xinjiang during the 12th five-year plan period.
SHANGHAI SECURITIES NEWS
-- China's State Council has approved a plan to raise the Renminbi Qualified Foreign Institutional Investor (RQFII) scheme by 200 billion yuan.
-- Several Chinese government departments, including the Ministry of Industry and Information Technology, said they were looking at implementing policies to support the aircraft manufacturing industry.
CHINA DAILY (www.chinadaily.com.cn)
-- China Telecom Corp Ltd, the country's biggest fixed-line operator by revenue, will increase its pace of overseas expansion, the company's chairman Wang Xiaochu told the paper, adding that the company expected its global business unit to chalk up 10 billion yuan in sales this year.
-- PepsiCo Inc, the world's second-largest soft-drink maker, opened its largest research centre outside the U.S. in Shanghai on Tuesday.
-- China will further open up low-altitude airspace to private planes next year with communications and surveillance facilities already built to ensure flight safety, an official with the state air traffic control commission told the paper at the Zhuhai airshow.
-- Heavy snow continues to cause havoc in China's northeast provinces, leading to the closure of all highways in Heilongjiang and schools in Jilin.
21st CENTURY BUSINESS HERALD
-- A report on "The reform of the acquisition of land" has recently been formally included in the Communist Party report, indicating a step closer to improving compensation for farmers displaced by land acquisitions.
-- Contents of Hu Jintao's speech at the 18th Communist Party Congress revealed that the government has given more emphasis on its objective of securing and improving the lives of citizens, a professor at the Communist Party school said after studying the speech.
Fly on the Wall 7:00 am Market Snapshot
Cisco (CSCO) upgraded to Outperform from Sector Perform at Pacific Crest
Credicorp (BAP) upgraded to Neutral from Underweight at HSBC
Hub Group (HUBG) upgraded to Outperform from Neutral at RW Baird
ICF International (ICFI) upgraded to Buy from Neutral at SunTrust
Oasis Petroleum (OAS) upgraded to Buy from Neutral at SunTrust
PacWest Bancorp (PACW) upgraded to Buy from Hold at Wunderlich
Weatherford (WFT) upgraded to Hold from Underperform at Jefferies
Edwards Lifesciences (EW) downgraded to Sell from Neutral at UBS
Hi-Crush Partners (HCLP) downgraded to Neutral from Outperform at RW Baird
Home Depot (HD) downgraded to Market Perform from Outperform at Raymond James
J.C. Penney (JCP) downgraded to Neutral from Overweight at JPMorgan
Mosaic (MOS) downgraded to Hold from Buy at Canaccord
Northern Tier (NTI) downgraded to Hold from Buy at Deutsche Bank
Potash (POT) downgraded to Hold from Buy at Canaccord
Siemens (SI) downgraded to Sector Perform from Outperform at RBC Capital
Marathon Petroleum (MPC) initiated with an Outperform at Imperial Capital
Standard Pacific (SPF) initiated with an Outperform at Credit Suisse
Western Refining (WNR) initiated with an In-Line at Imperial Capital
Cisco (CSCO) CEO Chambers: Expects Asia Pacific, China, Japan to improve
At a crossroads regarding what to do with overseas cash
Planning to invest in Canada, government is favorable there
Mosaic (MOS) lowered Q2 phosphates volume guidance to 2.9M-3.1M tons
VmpelCom (VIP) to roll out LTE Networks in Moscow, 6 regions by end 2013
To roll out LTE Networks across Russia by end of 2019
U.S. Bancorp (USB) acquired AIS Fund Administration
ITT Corp. (ITT) sold shape cutting product lines to Lincoln Electric (LECO)
IAMGOLD (IAG) revised FY13 gold production guidance to 875K-950K ounces
China Shengda Packaging (CPGI) chairman withdraws preliminary offer to "go private"
Syngenta (SYT) divested U.S. flowers distribution and brokerage
Tyco (TYC) said revenue relating to contracts in China was improperly recorded
Companies that beat consensus earnings expectations last night and today include:
SORL Auto Parts (SORL), Staples (SPLS), VimpelCom (VIP), Giant Interactive (GA), Home Inns (HMIN), Synergy Pharmaceuticals (SGYP), Griffon (GFF), AdCare (ADK), Cisco (CSCO), Woodward (WWD)
Companies that missed consensus earnings expectations include:
Tyco (TYC), Dawson Geophysical (DWSN), IAMGOLD (IAG), American Midstream Partners (AMID), Repros Therapeutics (RPRX), Kythera (KYTH)
Companies that matched consensus earnings expectations include:
Retalix (RTLX), Silvercorp Metals (SVM), Cinedigm Digital (CIDM)
Netflix (NFLX) CEO Reed Hastings and Carl Icahn are squaring off over the future of Netflix, a pioneering video-streaming company whose business is under attack by Amazon.com (AMZN). Icahn called Hastings on Halloween with a message that no executive wants to hear: His company was about to be put in play, the Wall Street Journal reports
A UAW health-care trust that holds a minority stake in Chrysler Group LLC said it wants Fiat (FIATY) to pay $342.9M for a 3.3% stake in the Detroit auto maker, more than double Fiat's offer, the Wall Street Journal reports
Federal Reserve Vice Chair Janet Yellen said that U.S. short-term interest rates may need to stay near zero until early 2016 to forcefully lift employment, Reuters reports
Retailers from Wal-Mart Stores (WMT) and Target (TGT) to Toys "R" Us, are going after Amazon (AMZN), competing more aggressively on price and offering speedier delivery through better websites and stores that double as distribution warehouses, Reuters reports
JPMorgan Chase & Co. (JPM), underwriter for New Jersey’s $2.6B notes, will purchase any unsold debt from the state’s tax-and-revenue anticipation note deal set to price tomorrow, according to bond documents, Bloomberg reports
Goldman Sachs Group (GS) would have $728B in risk-weighted assets under new capital rules, a 67% increase from the amount it had under earlier regulations, Bloomberg reports
Brookfield Residential Properties (BRP) commences offering of 8M common shares
Carrols Restaurant (TAST) files to sell 4.09M shares of common stock for holders
Comstock Mining (LODE) announces common stock offering
MAKO Surgical (MAKO) files to sell common stock
MarkWest Energy (MWE) 8.5M share Secondary priced at $46.50
Sealed Air (SEE) files to sell 15.03M shares of common stock for SC Johnson affiliate
Spectra Energy Partners (SEP) commences offering of 4.75M common units
Supernus Pharmaceuticals (SUPN) files to sell common stock