Frontrunning: November 29
- As this has been priced in since September 13, it should come as no surprise to anyone: Fed Stimulus Likely in 2013 (Hilsenrath)
- Bowles Says Fiscal Cliff Deal Unlikely by End of Year (Bloomberg)
- Argentina debt repayment order frozen (FT)
- Obama Is Flexible on Highest Tax Rates (WSJ)... not really
- Geithner deployed for fiscal cliff talks (FT)
- Audit firms Deloitte and KPMG sued in HP's Autonomy acquisition (Reuters)
- Euro-Zone Budget Proposal Is Unveiled (WSJ)
- EU Nations Clash on Thresholds for Direct ECB Oversight (Bloomberg)
- LDP leader Abe: BOJ must ease until inflation hits 3 percent (Reuters)
- SNB’s Jordan Says High Swiss Franc Burdens Many Companies (Bloomberg)
- EU to launch free trade negotiations with Japan: EU officials (Reuters)
- AUD Rate cut likely next week, and here's why (Herald Sun)
Overnight Media Digest
* Three months after launching an aggressive push to restart the lumbering U.S. economy, Federal Reserve officials are nearing a decision to continue those efforts into 2013 as the U.S. faces threats from the fiscal cliff at home and fragile economies elsewhere in the world.
* SAC Capital Advisors LP said that securities regulators have warned the hedge-fund firm it may face civil charges over the alleged insider-trading scheme that led to last week's arrest of a former portfolio manager.
* The Obama administration has temporarily blocked BP Plc from obtaining new contracts with the U.S. government, citing a "lack of business integrity" that resulted in the Deepwater Horizon explosion and oil spill in 2010. But the public reprimand will not affect BP's existing operations and oil leases in the Gulf of Mexico, the company said, adding that it expects the suspension to be lifted soon.
* Oil giant Exxon Mobil Corp is counting on the Kearl oil-sands project in Canada and 20 other new projects to jump-start its slumping oil and gas output, which plummeted to three-year lows in its most recent quarter.
* The U.S. auto industry is poised to report November sales cruised to another four-year high, a sign that the domestic market has returned to health even while Europe and Asia sales falter.
* President Barack Obama's renewed outreach to America's top executives took a seemingly positive turn on Wednesday, as a group of business leaders emerged from a White House meeting convinced the Obama administration would move soon on a deficit-reduction plan.
* NCR Corp agreed to buy Retalix Ltd for $650 million in cash, as the maker of automated teller machines and cash registers moves more deeply into software and the retail industry.
SAC NOTIFIED OF POSSIBLE SEC CHARGES
The U.S. government is threatening to file civil securities fraud charges against SAC Capital Advisors and is tightening the regulatory screws around the hedge fund's founder.
M&S AND INVENSYS TACKLE PENSION DEFICITS
Two of Britain's corporate stalwarts Marks and Spencer and Invensys have taken big steps towards reducing their runaway pension deficits.
BP HIT BY TEMPORARY BAN ON US CONTRACTS
BP has been temporarily suspended from any new U.S. government contracts, including drilling leases in the Gulf of Mexico.
DEUTSCHE MAKES PROVISION FOR LIBOR COSTS
Deutsche Bank has made financial provision for a possible settlement with regulators over allegations that employees were trying to rig the Libor interest rate.
GROUPON BOSS PREPARED TO 'DO RIGHT THING'
The chief executive of Groupon has signalled an openness to step aside amid frustration on his board over the poor performance of the Internet company.
GROUPS FEAR US RIVALS' CHEAPER GAS BOOST
Concerns among European companies over the rising gap with U.S. rivals in their cost of energy is mounting with two leading business groups raising alarm over the issue.
ENERGY BILL KEY TO INVESTMENT, SAYS EDF
The government's energy bill is a "defining moment" for the UK that will unlock huge investments in new nuclear power and wind farms, according to the CEO of EDF Energy.
BALLS WARNS OSBORNE ON BANK REFORM
Ed Balls has fired a warning shot against George Osborne over bank reform by warning that there was no "consensus" over the issue.
CAMERON SEEKS TO HEAD OFF LEVESON SPLIT
David Cameron will on Thursday embark on a last-minute round of political diplomacy to try to secure cross-party support for a new system of press regulation.
* The United States government has temporarily banned the British oil company BP Plc from new federal contracts, citing the company's "lack of business integrity." The decision comes after BP agreed to plead guilty this month to criminal charges over the 2010 Deepwater Horizon blowout and oil spill that killed 11 workers and polluted hundreds of miles of Gulf of Mexico shoreline.
* The world's biggest airline, created after United merged with Continental Airlines in 2010, promised an unparalleled global network, with eight major hubs and 5,500 daily flights serving nearly 400 destinations. But two years on, United still grapples with a myriad problems in integrating the two airlines. The result has been hobbled operations, angry passengers and soured relations with employees.
* In recent years, Steven Cohen, the once-reclusive money manager, has carved out a public profile straddling a number of fields: a prodigious art collector, an investor in the New York Mets, a supporter of Mitt Romney's presidential campaign. Now he has been thrust into an unwanted role: defending SAC Capital Advisors, his $14 billion hedge fund, against an intensifying government investigation into insider trading.
* The field of candidates to run the Securities and Exchange Commission is shifting after a contender dropped out of the race. Mary Miller, a senior Treasury Department official, removed her name from consideration in recent days, according to several people briefed on the matter who were not authorized to discuss the selection process.
* President Obama surrounded himself with taxpayers on Wednesday to pitch his plan to preserve current rates for the middle class and raise them for the wealthy. A day before, he met with small-business owners for the same purpose. On Friday, he plans to fly to Pennsylvania to tour a factory to make the same point.
* The F-35 Joint Strike Fighter, still plagued by technological troubles, will ultimately cost American taxpayers $396 billion if the Pentagon sticks to its plan to build 2,443 by the late 2030s.
* The European Commission on Wednesday approved a payment of 37 billion euros ($47.77 billion) from the euro zone bailout fund to four Spanish banks on the condition that they lay off thousands of employees and close offices.
THE GLOBE AND MAIL
* Susan Rice's would-be path to the U.S. State Department hit another snag on Wednesday following revelations that she owns significant stock in Calgary-based TransCanada Corp , the energy giant hoping to win approval from the Obama administration to build its Keystone XL pipeline.
* Canada and Denmark have reached a tentative agreement on where to set the boundary between the two countries in the Lincoln Sea. The body of water is in the Arctic Ocean just north of Ellesmere Island and Greenland. The tentative agreement builds on a 1973 treaty which established the maritime boundary between the two countries.
Reports in the business section:
* Canada's most populous province is settling into a troubling era of stagnant growth that could be alleviated if businesses stop sitting on "dead money" and ramp up investments, a study to be released on Thursday argues. The group singles out the "dead cash" on the balance sheets of Ontario businesses as an opportunity to boost the province's prosperity.
* The North American energy glut is exacting a growing toll on the treasuries of Canada's western provinces, as corporate spending and profits fall far below expectations. With oil backing up behind full pipelines and Canadian energy companies selling their most lucrative product at large discounts, corporate earnings are tumbling far below expectations.
* The latest leak from the Canada-European Union free trade talks -- for what would a closed door, confidential negotiation be without biweekly leaks -- has caused more than the usual consternation among the Usually Consternated. According to the documents, prepared for the EU Trade Commission and leaked to La Presse, the EU is pushing for access to government procurement in areas where its firms are now excluded from bidding, such as energy and public transit.
* In what is ballooning into the largest corporate scandal in Canada's history, Quebec anti-corruption police have arrested Pierre Duhaime, the former chief executive of engineering giant SNC Lavalin Group Inc, and begun efforts to extradite another former company executive who is in a Swiss jail.
* Inmet Mining Corp said it has rejected a takeover proposal from rival copper miner First Quantum Minerals Ltd that values the company at C$70 a share, or about C$4.9 billion. Toronto-based Inmet called the cash-and-stock offer "highly conditional" and said that its board determined that it is not in the best interests of shareholders.
CHINA SECURITIES JOURNAL
-- China's central banker Zhou Xiaochuan said China should promote convertibility of its RMB capital account in accordance with realistic standards.
-- China International Marine Containers (Group) Co Ltd said that Hong Kong Stock Exchange has allowed it to list H-shares, converting from B shares, on the Hong Kong stock exchange.
SHANGHAI SECURITIES NEWS
-- China's securities regulator said glass futures will start trading on Dec. 3.
CHINA DAILY (www.chinadaily.com.cn)
-- A vice-mayor in Guangdong province is being investigated for his alleged connections to local drug gangs and his interference in local police cases involving the gangs, according to a statement from the Qingyuan Party commission for discipline inspection.
-- Chinese Premier Wen Jiabao said in the State Council Executive Meeting on Wednesday that China could boost investment and consumption in the countryside.
Fly On The Wall 7:00 AM Market Snapshot
CarMax (KMX) upgraded to Buy from Neutral at Goldman
EOG Resources (EOG) upgraded to Outperform from Neutral at Macquarie
Guess (GES) upgraded to Overweight from Neutral at Piper Jaffray
InterActiveCorp (IACI) upgraded to Outperform from Market Perform at Wells Fargo
Mid-Con Energy (MCEP) upgraded to Outperform from Neutral at RW Baird
Nike (NKE) upgraded to Overweight from Neutral at HSBC
Northstar Realty (NRF) upgraded to Outperform from Market Perform at FBR Capital
Pentair (PNR) upgraded to Outperform from Market Perform at Bernstein
Plantronics (PLT) upgraded to Overweight from Neutral at JPMorgan
Public Storage (PSA) upgraded to Hold from Underweight at KeyBanc
Research in Motion (RIMM) upgraded to Buy from Neutral at Goldman
Cree (CREE) downgraded to Hold from Buy at Deutsche Bank
Rockwell Collins (COL) downgraded to Perform from Outperform at Oppenheimer
TASER (TASR) downgraded to Neutral from Overweight at JPMorgan
Timken (TKR) downgraded to Hold from Buy at Jefferies
Charter (CHTR) initiated with a Buy at UBS
EMC (EMC) initiated with a Buy at Buckingham
EMC (EMC) initiated with a Buy at CLSA
Jazz Pharmaceuticals (JAZZ) initiated with a Buy at UBS
LinnCo (LNCO) initiated with a Buy at Citigroup
Maxim Integrated (MXIM) initiated with a Buy at SunTrust
NXP Semiconductors (NXPI) initiated with a Buy at SunTrust
NetApp (NTAP) initiated with an Underperform at CLSA
RPM (RPM) initiated with an Overweight at Morgan Stanley
Texas Instruments (TXN) initiated with a Reduce at SunTrust
VMware (VMW) initiated with a Buy at CLSA
Valspar (VAL) initiated with an Underweight at Morgan Stanley
WuXi PharmaTech (WX) initiated with an Overweight at Barclays
NCR (NCR) to acquire Retalix (RTLX) for $650M, or $30.00 per share cash
Humana (HUM) received antitrust clearance to proceed with Metropolitan Health (MDF) merger
Costco (COST) to use $3B of debt offering to pay special $7 per share cash dividend
Disney (DIS) increased annual dividend 25% to 75c per share
Wells Fargo (WFC): SEC does not intend to recommend any enforcement actions following previously disclosed receipt of Wells notice
Eastman Kodak (EKDKQ) accepted new financing totaling $830M
Rio Tinto (RIO) CEO Albanese said positioning pacific aluminum, diamond businesses for sale
Said continuing to "roll back" cost increases
Hitachi (HIT), Mitsubishi Industries to merge power system operations into JV
Gold Fields (GFI) unbundled subsidiary to create new mining company in South Africa
American Greetings' (AM) new world headquarters project delayed
Graphic Packaging (GPK) to acquire A&R Carton's packaging business in Europe
Johnson & Johnson (JNJ) confirmed FDA committee recommended approval of Bedaquiline
QIAGEN (QGN) received FDA approval to market careHPV test in China
FairPoint (FRP) agreed to sell its Idaho operations to Blackfoot for $30M
Companies that beat consensus earnings expectations last night and today include: Descartes Systems (DSGX), Pall Corp. (PLL), Fifth Street Finance (FSC), Semtech (SMTC), Infoblox (BLOX), Workday (WDAY), Aeropostale (ARO), TiVo (TIVO), rue21 (RUE)
Companies that missed consensus earnings expectations include:
Tiffany's (TIF), Gildan Activewear (GIL), La-Z-Boy (LZB), Guess (GES), Cascade (CASC)
Companies that matched consensus earnings expectations include:
Pier 1 Imports (PIR)
Fed officials are close to a decision to continue its stimulus efforts into 2013 as they face critical decisions at their next policy meeting Dec. 11-12. The most pressing is whether to move forward with bond-buying programs in which the Fed is accumulating immense stockpiles of long-term mortgage-backed securities and Treasury bonds, the Wall Street Journal reports
Sharp (SHCAY) is in talks with Dell (DELL), Intel (INTC) and Qualcomm (QCOM) to bolster its balance sheet and has offered a stake to both in return for a stable supply of breakthrough display technology, sources say. Sharp wants an investment of about $240M from both Dell and Intel, and a smaller investment from Qualcomm, the Wall Street Journal reports
A group of some of bankrupt American Airlines' (AAMRQ) key bondholders said it will not support a standalone restructuring unless a new board is brought in. The 12-member bondholder group includes JPMorgan Chase (JPM), Pentwater Capital Management and York Capital Management, Reuters reports
Volkswagen (VLKAY) and China’s FAW Group agreed to extend their partnership beyond its expiration date of 2016, as the German automaker turned aside reports that FAW infringed on Volkswagen's intellectual property rights, Reuters reports
Copper supply shortages will continue into the first half of 2013 as an accelerating Chinese economy more than doubles the pace of growth in global consumption even as mines extract a record amount of metal, Bloomberg reports
AvalonBay (AVB) 14.5M share Secondary priced at $130.00
Equity Residential (EQR) 19M share Secondary priced at $54.75
Progenics (PGNX) 9.47M share Spot Secondary to price tonight
Rexahn Pharmaceuticals (RNN) intends to offer common stock, warrants
Tile Shop (TTS) files to sell 4M shares of common stock for holders
Marcato Capital reports 5.5% stake in DineEquity (DIN)
Stilwell reports 5.1% stake in TF Financial (THRD), hopes to work with management
ValueAct reports 5.0% stake in MSCI (MSCI)