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Frontrunning: November 30

Tyler Durden's picture




 
  • Turns out no free lunch after all: Greeks rage against pension calamity (Reuters)
  • IMF money for Greece contingent on debt buy back (Reuters)
  • U.N. Gives Palestinians 'State' Status (WSJ)
  • Obama's Cliff Offer Spurned (WSJ)
  • Republicans Reject Obama Budget as He Sells It to Public (Bloomberg)
  • Macau Gangster Who Missed Boom to Be Freed After 14 Years (Bloomberg)
  • China Economic Optimism Returns in Poll as Xi Beats Hu (Bloomberg)
  • Spain May Escape European Bailout, Former ECB Board Member Says (Bloomberg)... but they won't
  • UK banks face up to £50bn shortfall (FT)
  • Athens banks told of debt buyback ‘duty’ (FT)
  • ECB Withholding Secret Greek Swaps File Keeps Taxpayers in Dark (Bloomberg)
  • After a bashing, BOJ weighs "big bang" war on deflation (Reuters)
  • Recession Left Baby Bust as U.S. Births Lowest Since 1920 (Bloomberg)
  • Japan unveils second Y880bn stimulus package (FT)

Overnight Media Digest

WSJ

* The U.S. economy expanded at its fastest pace since late 2011, but those gains could be reversed as superstorm Sandy and the fiscal cliff create a drag during the final three months of 2012.

* President Barack Obama made an opening bid in budget talks with Republicans that calls for a $1.6 trillion tax increase, $50 billion in infrastructure spending in 2013 and new power to raise the federal debt limit, a provocative set of demands that Republicans said represented a step backward in efforts to avoid looming tax increases and spending cuts.

* Deal makers and their clients are hustling to sell chunks of stock or whole companies before possible tax increases in the new year. The threat of losing gains to the tax man has some companies, private-equity shops, venture capitalists and corporate insiders looking to book profits in the waning days of the year.

* After an exhaustive examination of British press ethics, a UK judge issued a withering assessment of some media practices and urged Parliament to pass a law creating a new voluntary regulatory body for the country's newspapers.

* Facebook Inc and Zynga Inc are changing the rules of their relationship. In a bid to become less reliant on Facebook, Zynga disclosed in a filing on Thursday that it has amended the terms of its relationship with the world's largest social network so that it can now host its Web games outside of Facebook's platform, among other things.

* Two former brokers at Euro Pacific Capital Inc were arrested on Thursday and accused of trading ahead of a $1.2 billion acquisition by International Business Machines Corp based on a tip from one broker's roommate, allegedly referring to the deal among a circle of friends as "our horse."

* Ranbaxy Laboratories Ltd has stopped production of its generic version of cholesterol-lowering drug Lipitor as the company investigates what caused tiny glass particles to appear in some bottles, triggering a large recall earlier this month.

* Time Warner Inc named former NBCUniversal Chief Executive Jeff Zucker as the president of CNN Worldwide, betting that the producer who pushed NBC's "Today" show to the top of the ratings for 16 years can lift CNN out of its doldrums.

 

FT

PM FAILS TO BACK LEVESON ON UK PRESS LAW

David Cameron rejected the idea of a law to regulate the British press on Thursday, risking a split in his coalition after an inquiry proposed a watchdog with legal backing.

UK BANKS FACE UP TO 50 BLN POUNDS SHORTFALL

UK banks will have to raise up to 50 billion pounds of new capital after the BoE made it clear it did not trust the way they value their books.

MICROSOFT EYES YEARLY WINDOWS UPDATES

Microsoft is planning to mirror arch-rival Apple by releasing a new version of its Windows operating system every year.

CCB ISSUES 'DIM-SUM' BONDS IN LONDON

China Construction Bank has become the first Chinese bank to issue a renminbi-denominated bond in London.

GOLD FIELDS TO SPIN OFF TWO MATURE MINES

Gold Fields said on Thursday it planned to spin off two of its biggest South African assets into a new company as it restructures its business.

TCHENGUIZ NEARS MOTORWAY SERVICES SALE

Robert Tchenguiz, the property tycoon, is close to selling 300 million pounds worth of service stations as he continues to dismantle his empire.

M STANLEY AIMS TO BOOST INVESTOR RETURNS

Morgan Stanley's chief executive wants to use the bank's excess capital to boost returns for the company's "long suffering" shareholders.

PM REJECTS CLIMATE EXPERT FOR TOP JOB

David Cameron has overruled the head of the civil service and quashed the appointment of climate change expert David Kennedy to lead the energy department.

VIRGIN WINS CONTRACT TO PROVIDE FREE WIFI

Virgin Media Business has won the UK's first contract to provide citywide wireless outside London.

 

NYT

* After months of sparring with President Obama in the heat of the campaign season, Chamber of Commerce executives came to the White House this week with a far more conciliatory tone, offering up suggestions to avert large budget cuts without having to raise taxes.

* Even though government figures showed on Thursday that the economy grew faster than first estimated in the third quarter, economists warned that the pace of expansion could slow drastically in the final months of the year amid the fiscal standoff in Washington and growing caution on the part of businesses.

* Sales at stores open at least a year declined in November at major American store chains, including Macy's, Nordstrom, Kohl's and Target, sending a shiver through the retail world on Thursday. The reporting period included Thanksgiving and Black Friday, the official kick-off of the critical holiday shopping season.

* Ranbaxy Pharmaceuticals, the largest producer of the generic version of Lipitor, has halted production of the drug until it can figure out why glass particles may have ended up in pills that were distributed to the public, the Food and Drug Administration announced on Thursday.

* Barnes & Noble reported a modest profit for its fiscal second quarter on Thursday, but growth in its digital content sales slowed as it faced increased competition from rivals like Amazon and Google.

* Billionaire venture capitalist Vinod Khosla has been pouring money into clean energy start-ups even after seeing many of his own paper gains evaporate.

* Tiffany & Co reported that its third-quarter net income fell about 30 percent, citing a higher-than-expected tax rate, economic weakness and high precious metal and diamond costs.

 

Canada

THE GLOBE AND MAIL

* Public elementary school teachers across Ontario will start one-day walkouts in the second week of December, and high school teachers are considering whether to join their counterparts on the picket lines, The Globe and Mail has learned. Multiple school boards will likely shutter their buildings during the walkouts, leaving parents scrambling to find alternative child care.

* Quebec's corruption inquiry has wrapped up its public hearings for the year after weeks of bombshell-laden testimony that blew up two mayors' careers and managed to rattle the realms of politics, business and organized crime. The Charbonneau Commission is pausing its hearings until Jan. 21, after having toppled the long-standing mayors of Montreal and Laval during its fall session.

Reports in the business section:

* Chevron Corp got off to a rough start in a Toronto courtroom on Thursday as it tried to quash a move by the Amazon villagers attempting to collect on an $18.3 billion environmental judgment levelled against the company by an Ecuadorean court last year. In one of a handful of similar legal actions around the world, lawyers for the Ecuadorean plaintiffs are trying to get Ontario to recognize the massive Ecuadorean ruling against Chevron, which came last year in a tangled fight over decades of oil pollution in the Amazon.

* Canada's richest family is turning to a long-time lieutenant who once worked as a news reporter to manage its vast empire. The Thomson family has elevated David Binet to the top job at Woodbridge Co Ltd, the private holding company that manages most of its C$20 billion ($20.17 billion) plus fortune, including controlling stakes in Thomson Reuters Corp and The Globe and Mail and a large equity position in BCE Inc .

NATIONAL POST

* John Baird, Canada's Minister of Foreign Affairs, stood before the United Nations General Assembly in New York, on Thursday and denounced a resolution recognizing a Palestinian state -- which he knew was about to pass by a huge majority -- while threatening possible repercussions from Canada. Baird called the UN motion "utterly regrettable," accused the UN of abandoning its "policy and principle" and dropped the veiled threat of unspecified actions Canada might take in response.

FINANCIAL POST

* A new report says Ontario businesses need to start spending the "dead cash" languishing in coffers if the province wants to prevent "slow or stagnant" economic growth. The Task Force on Competitiveness, Productivity and Economic Progress says Ontario's economy can no longer afford for companies to hold onto "larger cash balances" instead of investing the money to trigger more productivity.

* Canadian Pacific Railway Ltd's goals for improving its operations are "unachievable" and a double-digit correction may be lying in the wings in the coming months, one analyst warned investors on Thursday. Walter Spracklin, an analyst at RBC Capital Markets, splashed cold water on CP's red-hot stock in the lead up to its investor meeting next week, where the company's new management under recently appointed chief executive, Hunter Harrison, is expected to unveil its turnaround plan

 

China

 CHINA SECURITIES JOURNAL

-- Industrial Bank Co Ltd said regulators have approved its 1.9 billion yuan ($305.1 million) additional share purchase plan.

SECURITIES TIMES

-- Guangdong No.2 Hydropower Engineering Co Ltd said it would buy back its shares at no more than 6.5 yuan per share, for a total amount of 14 million yuan.

-- Wu Gang Steel said its controlling shareholder, Wuhan Iron and Steel Group, planned to raise its stake by 4 percent to 500 million shares.

CHINA DAILY ()

-- Claims that China's aircraft carrier-based J-15 fighter jet was developed from copied foreign technology are "unprofessional, if not an intentional attack", defense ministry spokesman Geng Yansheng said.

PEOPLE'S DAILY

-- The seven-man Politburo Standing Committee appeared at an exhibition entitled "The Road Toward Rejuvenation" at China's National Museum, where Communist Party chief Xi Jinping pledged to continue targeting the goal of China's "great renewal".

 

Fly on the Wall 7:00 am Market Snapshot

ANALYST RESEARCH

Upgrades

Active Network (ACTV) upgraded to Buy from Underperform at BofA/Merrill
Bel Fuse (BELFB) upgraded to Buy from Hold at Needham
Cambrex (CBM) upgraded to Buy from Neutral at Longbow
ConAgra (CAG) upgraded to Buy from Hold at Jefferies
DuPont Fabros (DFT) upgraded to Outperform from Sector Perform at RBC Capital
HMS Holdings (HMSY) upgraded to Buy from Hold at Jefferies
Lockheed Martin (LMT) upgraded to Fair Value from Sell at CRT Capital
St. Jude Medical (STJ) upgraded to Buy from Neutral at Mizuho
Ulta Salon (ULTA) upgraded to Outperform from Market Perform at Wells Fargo
Walter Investment (WAC) upgraded to Outperform from Market Perform at Keefe Bruyette

Downgrades

Brown-Forman (BF.B) downgraded to Sell from Neutral at Goldman
Stanley Black & Decker (SWK) downgraded to Neutral from Buy at Longbow
Tiffany (TIF) downgraded to Neutral from Buy at BofA/Merrill
Yum! Brands (YUM) downgraded to Neutral from Buy at UBS
Yum! Brands (YUM) downgraded to Neutral from Positive at Susquehanna
Yum! Brands (YUM) downgraded to Underperform from Market Perform at Raymond James

Initiations

Allergan (AGN) initiated with a Buy at Citigroup
Bazaarvoice (BV) initiated with a Neutral at Goldman
Bristol-Myers (BMY) initiated with a Neutral at Citigroup
Eli Lilly (LLY) initiated with a Buy at Citigroup
Forest Labs (FRX) initiated with a Buy at Citigroup
Hess Corp. (HES) initiated with a Market Perform at Wells Fargo
LinkedIn (LNKD) initiated with a Neutral at Wedbush
LinnCo (LNCO) initiated with an Outperform at RBC Capital
Marathon Oil (MRO) initiated with an Outperform at Wells Fargo
Merck (MRK) initiated with a Neutral at Citigroup
Murphy Oil (MUR) initiated with an Outperform at Wells Fargo
Occidental Petroleum (OXY) initiated with a Market Perform at Wells Fargo
Pfizer (PFE) initiated with a Buy at Citigroup
Puma Biotechnology (PBYI) initiated with a Buy at BofA/Merrill
Questcor (QCOR) initiated with a Neutral at Mizuho
Salix (SLXP) initiated with a Buy at Mizuho
Versar (VSR) initiated with a Buy at C.K. Cooper

HOT STOCKS

Facebook (FB) and Zynga (ZNGA) entered into amendment to the developer addendum
Facebook can develop own games in amended pact with Zynga
Zynga no longer required to use FB as exclusive social platform for properties
Groupon (GRPN) said CEO Mason will not be replaced in short term, Bloomberg reports
Yum! Brands (YUM) CEO Novak: On track to deliver FY12 EPS growth of at least 13%
Sees FY13 EPS growth of at least 10%
In FY13, anticipates at least 1,800 new international units
SuperValu (SVU) confirmed review of strategic alternatives proceeding
Continues to be in active discussion with several parties
UPS (UPS) and TNT Express (TNTEY) announced remedies have been submitted to EC
Ford (F) sees November hybrid sales at new record exceeding 6,000 units
Holly Energy (HEP) announced two-for-one split of common units
FDA approved Exelixis' (EXEL) COMETRIQ for thyroid cancer
Theravance (THRX) confirmed favorable outcome of FDA advisory meeting on VIBATIV
St. Jude Medical's (STJ) board authorized $1B share repurchase
Seagate (STX) increased quarterly cash dividend to 38c per share from 32c
Regal Entertainment (RGC) declared special dividend of $1 per share
National Beverage (FIZZ) declared special dividend of $2.55 per share

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
OmniVision (OVTI), Avago (AVGO), Five Below (FIVE), Mentor Graphics (MENT), Mitel (MITL), Splunk (SPLK), Christopher & Banks (CBK), Ulta Salon (ULTA)

Companies that missed consensus earnings expectations include:
ReneSola (SOL), Youku.com (YOKU), Zumiez (ZUMZ)

NEWSPAPERS/WEBSITES

The U.S. economy expanded at its fastest pace since late 2011, but those gains could be reversed as superstorm Sandy and the fiscal cliff create a drag during the final three months of 2012. The GDP advanced at an annual rate of 2.7% between July through September, the Commerce Department said, the Wall Street Journal reports
Low interest rates have attracted companies to borrow record amounts in the bond market this year. But a year-end spurt of bond sales has been tied to a different incentive: minimizing taxes, the Wall Street Journal reports
The Canadian government said  pending U.S. approvals for CNOOC’s (CEO) $15.1B bid for Nexen (NXY) will not affect its review of the transaction, Reuters reports
Canada’s Saputo Inc. and Michael Foods are competing to buy Dean Foods’s (DF) Morningstar dairy division, sources say, in a deal valued at $1B to $1.5B, Reuters reports
Microsoft (MSFT) plans to overhaul how it develops the flagship Windows operating system in a strategic shift aimed at keeping pace with nimbler rivals Apple (AAPL) and Google (GOOG), sources say. The company aims to upgrade the software more frequently, about once a year,  with the first updates in 2013, Bloomberg reports
Oil headed for its first monthly gain in New York since August amid signs of economic growth in the U.S. and China, the two largest crude consumers, Bloomberg reports

SYNDICATE

Nexstar (NXST) 8M share Secondary priced at $9.25
Supernus Pharmaceuticals (SUPN) 6M share Secondary priced at $8.00

 

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Fri, 11/30/2012 - 08:32 | 3023150 aymankkhlifat
aymankkhlifat's picture

Yup , Bank of France Governor Sees Paris as Euro Zone's No.1

Fri, 11/30/2012 - 08:39 | 3023155 stocktivity
stocktivity's picture

The printing continues....Rally on! Everything else is all Bullshit!

Fri, 11/30/2012 - 08:40 | 3023156 EscapeKey
EscapeKey's picture

I find this very disturbing and interesting at the same time. The greek "vanish-debt-into-thin-air" trick OBVIOUSLY relies on pension fund writedowns, ie, pension savers will pay for government largesse.

Here in the UK, by law, all PAYE-employees (pay as you earn) now have to pay at least 1% of their paycheque into a pension fund. UH I WONDER IF THAT'S BECAUSE GOVERNMENT PLANS ON CONFISCATING IT DOWN THE ROAD".

Fri, 11/30/2012 - 09:44 | 3023298 SpanishGoop
SpanishGoop's picture

Just call it a " vanish-pension-funds-into-thin-air".

Soon in a country near or really, really (to) close to you.

 

Fri, 11/30/2012 - 10:22 | 3023401 CheapBastard
CheapBastard's picture

"It was a brutal sign of the fury many Greeks feel at the way the country's debt crisis has dashed hopes of a comfortable old age. Greece's pension funds - patchily run in the first place, say unionists and some politicians - have been savaged by austerity and the terms of the international bailout keeping the country afloat."

 

Greek pensions are 401(k) future.

Fri, 11/30/2012 - 08:51 | 3023168 LongSoupLine
LongSoupLine's picture

Tyler,

 

Although these news headlines are informative as to reality, most are not "frontrunning" material.  the reality in frontrunning these days is to scan the same way the algos do.

Fri, 11/30/2012 - 09:20 | 3023219 EscapeKey
EscapeKey's picture

I like them. I often find these the most informative posts of the day. It's a quick overview, and from there, you can pick and choose what you find interesting.

Fri, 11/30/2012 - 08:58 | 3023176 Laura S.
Laura S.'s picture

I would like to present another interesting piece of information related to the Canadian census in 2011. When you see that median age is still growing (currently stays at 40 years), you should be really scared about the real estate. But it seems that Canadians just don´t care, with the rise of the private properties for more than 7 per cent. I think more people in Canada should reconsider their investments, if they want to stay in black numbers in the upcoming decades.

Fri, 11/30/2012 - 09:17 | 3023208 youngman
youngman's picture

You have to look at Austrailia to see some funny Housing costs...man are they thru the roof.....why?

Fri, 11/30/2012 - 09:17 | 3023207 youngman
youngman's picture

Frontrunning...has anyone else noticed that the big moves in stocks happen before any of the markets are open....where the retail investor can play...the big boys fix the start...and the small fry lose right off the bat...we are plying with a 0-1% spread...they get the 0-3% plays

Fri, 11/30/2012 - 09:19 | 3023212 EscapeKey
EscapeKey's picture

The flip side of the coin - volume is incredibly light. I imagine the same market order which moves the market 3% in pre-hour trading, would move it 1% during market open.

Fri, 11/30/2012 - 10:42 | 3023472 earnyermoney
earnyermoney's picture

It would be interesting to see the "nationality" of the trade. Probably Japanese, Chinese and South Korean day trading suckers.

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