Frontrunning: December 6
- MSM discovers window dressing: Fund Managers Lift Results With Timely Trading Sprees (WSJ)
- White House Unyielding on Debt Limit (WSJ)
- Obama, Boehner talk; Geithner prepared to go off "cliff" (Reuters)
- Republicans urged to resist tax rises (FT)
- China looms large over Japanese poll (FT)
- As predicted here two months ago, Greek Bond Buyback Leads S&P to Cut to Selective Default (BBG)
- Japan opposition LDP set to win solid election majority – polls (BBG), but...
- Japan Opposition LDP’s Main Ally Cautions Abe on BOJ Pressure (BBG)
- U.S. and Europe Tackle Russia Trade (WSJ)
- King Seen Maintaining QE as Osborne Extends Fiscal Squeeze (BBG)
- Syria pound fall suggests currency crisis (FT)
- Irish budget seeks extra €3.5bn (FT)
- U.K. Extends Cuts Due to Poor Outlook (WSJ)
- ECB Seen Refraining From Rate Cuts as Yields Sink on Bond Plan (BBG)
- Southeast Asia at a Crossroads on Wages (WSJ)
- U.K. Needs Yuan Swap Deal to Boost Trade, Ex-PBOC Adviser Says (BBG)
- China Tackles Land Grabs, Key Source of Rural Anger (WSJ)
- RBA’s Lowe Calls Australian Dollar ‘Uncomfortably High' (BBG)
Overnight Media Digest
* Underlining his determination to crack down on costs, Citigroup Inc Chief Executive Michael Corbat set out plans on Wednesday to cut 11,000 jobs, close 84 branches and retreat from consumer banking in a handful of countries.
* A consortium of bidders has offered Eastman Kodak Co more than $500 million for a trove of digital patents, people familiar with the matter said.
* Apple Inc and Samsung Electronics Co return to a Silicon Valley courtroom on Thursday, as Samsung fights to get a federal judge to throw out or soften a $1.05 billion patent judgment against the Korean company.
* Zynga Inc has taken its first official step toward offering real-money gambling games in the U.S. by filing preparatory paperwork in Nevada, as the embattled firm manoeuvres to take advantage of a shifting legal landscape.
* The Nasdaq stock exchange said it erroneously postponed an initial public offering set for Wednesday morning, marking another bungled IPO launch this year by an exchange.
* Tesco Plc is poised to leave the U.S. after spending five unprofitable years and 1 billion pounds ($1.61 billion) on an ill-timed American gambit that now ranks among the British retailer's biggest-ever failures.
* The White House hardened its position that Congress should raise the U.S.'s borrowing limit without preconditions, adding an unpredictable new element into the high-stakes budget talks. In a Wednesday speech to top corporate chiefs, President Barack Obama said he wouldn't negotiate with Republicans on this issue as he did in 2011.
* The SEC is scrutinizing "gatekeepers" - the consultants, financiers, auditors and others who helped give Chinese companies access to U.S. capital markets - as part of its continuing probe of accounting questions at Chinese companies
RATING THREAT AFTER UK AUTUMN STATEMENT
Britain's triple-A credit rating was under threat on Wednesday night after George Osborne conceded one of his key public finance targets would be missed and official forecasts dashed his hopes of fighting the election on the back of a revived economy.
FISCAL WATCHDOG CUTS GROWTH FORECAST
The Office for Budget Responsibility on Wednesday took a scythe to its growth forecasts and ruled out all hope of a sharp upturn in the UK's economic fortunes over the next five years.
IRISH PROPERTY TAX PILES ON HOMEOWNERS' MISERY
Five eye-watering austerity budgets in five years have elicited little more than weary resignation from Irish taxpayers forced to live under an international bailout following the bursting of a housing bubble.
DEUTSCHE BANK HID $12BLN, STAFF SAY
Deutsche Bank failed to recognise up to $12 billion of paper losses during the financial crisis, helping the bank avoid a government bail-out, three former bank employees have alleged in complaints to US regulators.
EADS SHAKES UP SHAREHOLDER PACT
EADS on Wednesday outlined the biggest shake-up to its corporate governance since the company's creation in 2000, in changes aimed at providing Berlin with equivalent influence to Paris at the aerospace and defence group.
FREEPORT'S $20BLN OIL MOVE SPURS SHARE FALL
Freeport-McMoRan Copper & Gold has engineered a dramatic re-entry to the oil business with two deals worth a total of about $20 billion, buying Plains Exploration and Production and McMoRan Exploration.
CITI JOINS BANK JOBS CULL BY AXING 11,000
Citigroup's new chief executive has wasted little time putting his stamp on the US bank by axing 11,000 jobs, adding to a wave of staff reductions across the financial services industry.
LOW WATER LEVELS THREATEN US FARM GOODS
Grain and petrochemicals worth billions of dollars risk being marooned far from market, barge operators and grain exporters have warned, as falling Mississippi water levels threaten to close the river to navigation.
STARBUCKS SAYS IT WILL PAY MORE TAX
Starbucks will pay extra tax in the UK under a deal to defuse accusations of tax avoidance, though it denies its previously paid too little, insisting it has followed the law.
HSBC SELLS PING AN STAKE TO THAI GROUP
HSBC has struck a $9.4 billion deal to sell its entire 15.6 percent stake in Ping An Insurance to companies controlled by Thailand's Charoen Pokphand Group.
* Citigroup's announcement that it will slash 11,000 jobs worldwide underscores its major contraction since nearly collapsing during the financial crisis and its continuing battle against high operating costs and persistently sluggish markets.
* Federal investigators have charged many former employees of SAC Capital Advisors, the hedge fund owned by Steven A. Cohen, with trading on insider information. The trail leading to SAC has emerged out of a cluster of cases, many of them connected to the prosecution of the fallen titan Raj Rajaratnam.
* Instagram on Wednesday disabled the ability for Twitter to properly display Instagram photos on its website and in its applications. The move escalates tensions between the two companies, which were once friends in the battle against Facebook but have now become direct competitors.
* Freeport-McMoRan Copper and Gold is expanding further into the energy business, announcing on Wednesday the takeovers of two oil and gas companies worth about $9 billion.
* The antivirus software pioneer John McAfee was arrested in Guatemala City on Wednesday after he slipped over the border from his home in Belize where police want to question him in their investigation of the murder of his neighbor.
* After a campaign that drove a deep wedge between them, President Obama is now trying to rebuild relations with the business community in hopes of enlisting it in his showdown with Republicans in Congress over the looming fiscal crisis.
THE GLOBE AND MAIL
* Premier Dalton McGuinty has been pushing a
reluctant Ontario government to block the walkouts by elementary school
teachers that are set to begin on Monday.
* On the afternoon
after a late night of voting on 47 opposition amendments to the
government's budget bill, tempers flared on both sides of the House,
with a conservative minister having to be separated from a heated
face-to-face argument with senior new democrats.
Reports in the business section:
Struggling home improvement retailer Rona Inc, which spurned a C$1.8
billion ($1.81 billion) takeover proposal by U.S. rival Lowe's Companies
Inc, is moving to streamline its business and sell off non core assets.
* A deep pocketed consortium, led by KingSett Capital, has
launched a C$4.4 billion ($4.43 billion)hostile offer - rare in the
sector - for Primaris Retail Real Estate Investment Trust , in what the
bidders say is the largest takeover battle that Canada's real estate
investment trust sector has seen.
says about 9,000 customers were overcharged ranging from a few cents up
to C$100,000 ($100,700). Spokeswoman Michelle Englot says they believe
the errors happened in the Nov 23 to 29 billing period.
Apple Inc shares fell the most in almost four years on concern that the
company will lose ground in smartphones to Nokia Oyj in China while
giving up market share to Google Inc in tablets.
CHINA SECURITIES JOURNAL
-- Poly Real Estate (Group) Co Ltd said
contract sales rose about 73 percent in floor space and 77 percent in
value in November from a year earlier.
SHANGHAI SECURITIES NEWS
-- China will invest about 350 billion yuan ($56.22 billion)to control air pollution during the 12th five-year plan period.
-- Suning Appliance Co Ltd said it will cooperate with its group company to set up a microcredit firm.
CHINA DAILY (www.chinadaily.com.cn)
Chinese Premier Wen Jiabao said Beijing is ready to offer $10 billion
to central Asian countries for key projects including infrastructure and
-- China's bond issuance volume
has hit 7 trillion yuan as of end November, with the transaction value
reaching 24 trillion yuan.
Fly On The Wall 7:00 AM Market Snapshot
Aimco (AIV) upgraded to Buy from Neutral at UBS
Alexandria Real Estate (ARE) upgraded to Buy from Neutral at UBS
Boston Properties (BXP) upgraded to Buy from Neutral at UBS
Fastenal (FAST) upgraded to Outperform from Market Perform at William Blair
General Growth (GGP) upgraded to Buy from Neutral at UBS
Ocwen Financial (OCN) upgraded to Outperform from Market Perform at Keefe Bruyette
Simon Property (SPG) upgraded to Buy from Neutral at UBS
Southern Copper (SCCO) upgraded to Buy from Neutral at Citigroup
Starbucks (SBUX) upgraded to Outperform from Neutral at RW Baird
Ascena Retail (ASNA) downgraded to Hold from Buy at BB&T
AutoZone (AZO) downgraded to Perform from Outperform at Oppenheimer
CBL & Associates (CBL) downgraded to Sell from Neutral at UBS
Freeport McMoRan (FCX) downgraded to Hold from Buy at Deutsche Bank
Freeport McMoRan (FCX) downgraded to Neutral from Buy at Citigroup
Freeport McMoRan (FCX) downgraded to Neutral from Buy at Goldman
Freeport McMoRan (FCX) downgraded to Neutral from Outperform at Macquarie
Freeport McMoRan (FCX) downgraded to Sector Perform from Outperform at RBC Capital
Grainger (GWW) downgraded to Neutral from Buy at UBS
Scripps Networks (SNI) downgraded to Neutral from Buy at Goldman
Weingarten Realty (WRI) downgraded to Sell from Neutral at UBS
Callon Petroleum (CPE) initiated with a Buy at Brean Capital
Cleveland BioLabs (CBLI) initiated with an Outperform at Oppenheimer
Crocs (CROX) initiated with an Outperform at Imperial Capital
Fusion-io (FIO) initiated with a Buy at BofA/Merrill
Lions Gate (LGF) initiated with a Neutral at Goldman
Mellanox (MLNX) initiated with a Neutral at UBS
Quiksilver (ZQK) initiated with a Neutral at Goldman
Saratoga Resources (SARA) initiated with a Buy at Brean Capital
Synergy Resources (SYRG) initiated with a Buy at Brean Capital
U.S. Energy (USEG) initiated with a Hold at Brean Capital
Intel (INTC) CEO Otellini said internal CEO hire 'most likely outcome', Bloomberg reports
TD Bank Group (TD) to acquire Epoch Holding (EPHC) for $668M in cash
Chevron (CVX) announced $36.7B capital and exploratory budget for FY13
Anticipates reaching 2017 goal of 3.3M barrels per day
SEC charged Wells Fargo (WFC) banker, others in alleged insider trading ring
Boeing (BA), engineers union halt talks until next year
Boeing (BA) and Iclandair announced commitment for 12 737 MAXs, valued at $1.2B
United Technologies (UTX) prepays $1B outstanding balance of Goodrich acquisition credit facility
Standard Chartered (SCBFF) sees paying $330M to settle Iran claims
Barclays (BCS), Absa agreed on strategic combination of Barclays Africa ops with Asba
Broadcom (BRCM) sees Q4 product gross margin up slightly from Q3
Align (ALGN) now expects revenue and EPS at low-end of previous guidance
Travelers (TRV) increased its ownership in its J. Malucelli JV to 49.5% from 43.4%
Towers Watson (TW) amended regular dividend date, announced accelerated FY13 dividend
Lukens (LUC) said 2013 diamond sales expected to increase 75%
Emulex (ELX) to acquire Endace for about $130M
Korn/Ferry (KFY) to acquire PDI Ninth House for $80M
Cloud Peak Energy (CLD) to sell remaining Decker Mine interest to Ambre Energy
ProAssurance (PRA) announced 2-for-1 stock split, $2.50 per share special dividend
Citrix Systems (CTXS) to acquire Zenprise, terms not disclosed
Companies that beat consensus earnings expectations last night and today include:
Korn/Ferry (KFY), H&R Block (HRB), Ambarella (AMBA), Verint Systems (VRNT), Ascena Retail (ASNA), Vera Bradley (VRA), Finisar (FNSR)
Companies that missed consensus earnings expectations include:
Men's Wearhouse (MW), SAIC (SAI)
Companies that matched consensus earnings expectations include:
Shipping some of the newly abundant U.S. natural gas overseas would benefit the nation's economy more than keeping it all at home, according to a long-awaited study by the Energy Information Administration, which has the potential to reshape the global energy market. The endorsement could turn the tide in a politically sensitive issue, the Wall Street Journal reports
Regulators and market analysts say some money managers wait until the last moments of a quarter to bid aggressively for more shares of a stock they already own, which drives up the value of their entire position in the stock. A Wall Street Journal analysis of daily trading in about 10,000 stocks since 2004 found that on the final trading day of each quarter, there was a sharp increase in the number of stocks that beat the market by at least five percentage points, then trailed it by three points or more the next trading day, the Wall Street Journal reports
Apple’s (AAPL) rank in China's smartphone market fell to number six in Q3, or under 10%, as it faces tougher competition from Chinese brands, according to research firm IDC, Reuters reports
The European Central Bank will likely keep interest rates on hold on today but may offer clues on its policy path for next year with updated forecasts likely to present a difficult outlook for the euro zone economy in 2013, Reuters reports
Chevron (CVX), facing its longest slide in energy output in four years, could use its record cash to reignite growth by acquiring Cobalt International Energy (CIE) or Kosmos Energy (KOS), Bloomberg reports
KKR & Co. (KKR) sees investment opportunities in Southeast Asian companies that will benefit from economic growth and increased consumer spending in 2013, Bloomberg reports
Derma Sciences (DSCI) commences common stock offering
KAR Auction (KAR) 13.5M share Secondary priced at $17.50
Memorial Production (MEMP) commences 10.5M common unit offering
NovaBay (NBY) intends to offer common stock and warrants
PRGX Global (PRGX) 6.249M share Secondary priced at $6.39
Pacific Premier (PPBI) commences $30M common stock offering
Roadrunner (RRTS) 3.5M share Spot Secondary priced at $17.25
Select Income REIT (SIR) 7M share Secondary priced at $24.00
Vantiv (VNTV) launches 12.05M share Class A common stock offering for holders