Frontrunning: December 11
- Fed Seen Pumping Up Assets to $4 Trillion in New Buying (BBG)
- China New Loans Trail Forecasts in Sign of Slower Growth (BBG)
- U.S. "fiscal cliff" talks picking up pace (Reuters)
- Insider-Trading Probe Widens (WSJ)
- U.K.'s Top Banker Sees Currency Risk (Hilsenrath)
- Three Arrested in Libor Probe (WSJ)
- Nine hurt as gunmen fire at Cairo protesters (Reuters)
- Egyptian President Gives Army Police Powers Ahead of Vote (BBG)
- Pax Americana ‘winding down’, says US report (FT)
- Japan Polls Show LDP, Ally Set for Big Majority (DJ)
- HSBC to pay record $1.9 billion U.S. fine in money laundering case (Reuters)
- Abe Poised for Second Turn at Helm as Japan Contracts (BBG)
- Monti in talks to run for Italian PM (FT)
- EU's Rehn says euro zone must pursue structural reforms (Reuters)
- Xi stokes economic reform hopes in China (FT)
- Israel raids Palestinian NGO offices (Reuters)
- Mexican president confident of key reforms in 2013 (Reuters)
Overnight Media Digest
* The Manhattan U.S. attorney's office has launched a broad criminal investigation into whether seven corporate executives cited in a recent Wall Street Journal article traded improperly in shares of their own company's stock, according to a person familiar with the matter.
* HSBC Holdings Plc plans to acknowledge that for years it ignored possible money laundering, part of a record $1.9 billion settlement with U.S. authorities that caps the bank's disastrous foray into the U.S. market.
* Standard Chartered Plc agreed to pay $327 million in penalties for alleged violations of U.S. sanctions against Iran, Libya and other nations, closing another chapter in the U.S. crackdown on banks sidestepping restrictions meant to prevent money laundering.
* A 2011 inspection conducted for a supplier to Wal-Mart Stores Inc found serious fire-safety concerns at a clothing factory outside Dhaka, Bangladesh, that burned down last month, killing 112 people, according to documents reviewed by the Wall Street Journal.
* The Treasury Department said Monday it plans to sell all of its remaining shares in AIG Inc.
* Morgan Stanley might soon ask U.S. regulators to let the securities firm buy back shares for the first time in more than four years, according to people familiar with the firm's thinking.
* SPX Corp has emerged as the front-runner in the auction of industrial-pumps maker Gardner Denver Inc, with the two companies entering into one-on-one talks this week with the goal of hammering out a deal, people familiar with the matter said.
* European Union authorities are considering launching a legal crackdown on some national regulators for restricting European banks from freely moving funds across national borders, according to officials familiar with the matter.
* McDonald's Corp surprised investors on Monday by reporting higher November sales at restaurants open at least 13 months, but analysts remain cautious about the months ahead.
* Intel Corp on Monday disclosed details of a new recipe for making chips for mobile devices, a key element of the technology giant's high-stakes campaign to improve its lagging position in that fast-growing market.
* Federal Reserve officials, frustrated with the sluggish job market and tepid growth, are poised this week to extend the central bank's efforts to spur a stronger recovery.
* Bank of England Governor Mervyn King warned of the risk of currency wars in the coming year as nations search for new ways to spur their economies in a world of slow growth and few other good options.
* North America will become a net energy exporter by 2025, thanks to a surge in oil and gas production and rapid improvements in energy efficiency, Exxon Mobil Corp predicts in its latest long-term energy outlook
WARNING ON COST OF 'SHARES FOR RIGHTS'
George Osborne's "shares for workers' rights" initiative could end up costing Britain £1bn a year in lost revenues, the Office for Budget Responsibility has warned.
UK READY TO 'TRUST' US OVER FAILING BANKS
UK authorities are prepared to "trust" their U.S. counterparts the next time a big American financial company with large London operations runs into financial trouble.
MONTI IN TALKS TO RUN FOR ITALIAN PM
Italy's prime minister Mario Monti is in talks with centrist groups urging him to stand in Italy's elections early next year.
CLARKE TO STEP DOWN FROM MAN GROUP
Man Group said its chief executive would step down in February following a disastrous year in which the company's share price dropped more than 40 percent.
ROTHSCHILD SECURES CAPITAL IN BUMI BATTLE
Nat Rothschild on Monday said he had secured $342.5 million in new equity capital for Bumi as investors line up behind his proposal to restructure the group.
SALES OF AMERICAN EAGLE GOLD COINS SOAR
Demand for gold coins in the U.S. has soared since the presidential election, as small investors fret about the lack of action to address America's ballooning debt.
PACE BIDS FOR GOOGLE SET-TOP BUSINESS
British TV decoder maker Pace said on Monday that it had made an early-stage proposal to Internet group Google to acquire its set-top TV box maker Motorola Home.
EUROPE MUST STAY THE AUSTERITY COURSE, SAYS REHN
Europe must continue with its "far reaching structural reforms" that have helped to rebalance the euro zone economy and rebuild confidence, EU's top economics official, Olli Rehn, said.
* State and federal authorities decided against indicting HSBC Holdings Plc in a money-laundering case over concerns that criminal charges could jeopardize one of the world's largest banks and ultimately destabilize the global financial system. (http://link.reuters.com/cyv54t)
* Taxpayers will soon shed their last holdings in AIG Inc , more than four years after a rescue by the federal government during the most chaotic days of the financial crisis. (http://link.reuters.com/dyv54t)
* The biotechnology giant Amgen Inc, seeking to bolster its drug discovery efforts, said on Monday that it would pay $415 million in cash to acquire Decode Genetics, a gene-hunting firm based in Iceland and known for its discoveries linking genetic variations to disease. (http://link.reuters.com/fyv54t)
* Man Group Plc, the world's largest publicly traded hedge fund management firm, said on Monday that Peter Clarke would retire as chief executive at the end of February after almost 20 years with the firm. (http://link.reuters.com/hyv54t)
* Regulators in the United States and Britain introduced a plan on Monday for averting threats to financial stability when large, cross-border financial institutions fail. (http://link.reuters.com/jyv54t)
* Opel, the unprofitable European unit of General Motors Co , confirmed Monday that it would stop producing cars at its plant in Bochum, Germany, in 2016, a sign that even the Continent's most powerful economy cannot escape the effects of the euro zone crisis. (http://link.reuters.com/kyv54t)
* Some of Japan's largest manufacturers, on Monday, contributed to a $1.8 billion bailout of the struggling chip maker Renesas Electronics. (http://link.reuters.com/myv54t)
* New regulations in Mongolia could stifle a deal to develop the Oyu Tolgoi mine, the world's biggest new source of copper, and hurt the country's broader economy. (http://link.reuters.com/nyv54t)
THE GLOBE AND MAIL
* Ontario's students are bracing to go as long as two years without sports teams, clubs, field trips and after-school help as the dispute between teachers and the Liberal government drags on.
Students have been walking out of class to demand their favorite activities be restored, but they are unlikely to get their wish any time soon.
* In a reaction perhaps unique in labor annals, negotiators for the Health Sciences Association are so outraged by the provincial government's last contract offer that they have called off their latest round of job action.
* B.C. Premier Christy Clark will be seeking a mandate from the province's voters to carry on with her jobs plan, one that she says has already created 50,000 new jobs. Even as a leading economist called the government's job numbers into question.
Reports in the business section:
* Alberta issued a chilly response to Ottawa's new foreign investment rules, with senior ministers concerned that investment in the oilsands will slow now that wealthy state controlled energy firms are essentially off limits for more takeovers in the province.
* Canadian employers expect modest hiring at the start of the next year, though a cloudy economic outlook means many are more apt to hire on a temporary rather than permanent basis.
* Egypt's military assumed responsibility on Monday for protecting state institutions and maintaining security ahead of a Dec. 15 constitutional referendum, as the country braced for another round of mass demonstrations by the supporters of the country's Islamist president and the liberal opposition over the disputed charter.
* The Taliban could take over the government of parts of Afghanistan's south and east, with insurgents being drafted into the cabinet, according to a new peace plan that emerged on the eve of talks in Turkey.
* Bank of Nova Scotia has been waiting more than a year for Chinese regulators to approve a proposed C$720 million ($729.37 million) acquisition of a minority stake in Bank of Guangzhou, but there is no reason to believe the deal will happen any time soon.
CHINA SECURITIES JOURNAL
-- Total net profit of 19 listed securities brokers in November fell 31 percent from October to 470 million yuan. From January to November, total net profit reached 14.3 billion yuan.
-- China's bank's credit lines have been frozen for the year-end period, a banking sources told the newspaper.
-- China Unicom's iPhone 5 demand hit 300,000 after it opened for bookings on Dec. 3.
-- The government of Canada's British Columbia could issue 3A level dim sum bonds as early as January to become the first foreign government to issue dim sum bonds.
-- A survey found the population of the endangered Yangtze River porpoise to have dropped 60 percent since 2006, with experts saying there are only about 1,000 left, making them rarer than the giant panda. Hunting, development and pollution may force the subspecies to the brink of extinction within five years, it said.
CHINA DAILY (www.chinadaily.com.cn)
-- Communist Party chief Xi Jinping's visit to Guangdong sent a political signal and showed his support for the province's achievements in market reforms, analysts said.
Fly on the Wall 7:00 AM Market Digest
Chicago Bridge & Iron (CBI) upgraded to Buy from Neutral at Lazard Capital
Hill-Rom (HRC) upgraded to Buy from Neutral at Goldman
Monster Beverage (MNST) upgraded to Buy from Hold at Stifel Nicolaus
PennyMac (PMT) upgraded to Outperform from Market Perform at Keefe Bruyette
Stryker (SYK) upgraded to Buy from Neutral at Goldman
Arrow Electronics (ARW) downgraded to Underperform from Outperform at CLSA
CBL & Associates (CBL) downgraded to Neutral from Buy at Goldman
Entertainment Properties (EPR) downgraded to Neutral from Buy at Goldman
Foster Wheeler (FWLT) downgraded to Neutral from Buy at Lazard Capital
Hospira (HSP) downgraded to Sell from Neutral at Goldman
Abercrombie & Fitch (ANF) initiated with a Neutral at Goldman
Aeropostale (ARO) initiated with a Neutral at Goldman
Align Technology (ALGN) initiated with a Neutral at Goldman
American Eagle (AEO) initiated with a Neutral at Goldman
Aruba Networks (ARUN) initiated with an Outperform at Oppenheimer
Coach (COH) initiated with a Sell at Goldman
Francesca's (FRAN) initiated with a Neutral at Goldman
Gap (GPS) initiated with a Buy at Goldman
Healthways (HWAY) initiated with a Sell at Citigroup
Hess Corp. (HES) initiated with a Hold at Dahlman Rose
Maximus (MMS) initiated with a Buy at Citigroup
Michael Kors (KORS) initiated with a Conviction Buy at Goldman
Occidental Petroleum (OXY) initiated with a Buy at Dahlman Rose
Ruckus Wireless (RKUS) initiated with a Hold at Deutsche Bank
Ruckus Wireless (RKUS) initiated with an Outperform at Oppenheimer
Ruckus Wireless (RKUS) initiated with an Overweight at Morgan Stanley
Splunk (SPLK) initiated with a Neutral at Mizuho
Tilly's (TLYS) initiated with a Buy at Goldman
Tumi (TUMI) initiated with a Conviction Buy at Goldman
Urban Outfitters (URBN) initiated with a Neutral at Goldman
Spectra Energy (SE) acquired Express-Platte Pipeline System for $1.49B
HSBC (HBC) confirmed $1.92B settlement with U.S. authorities
Nasdaq (NDAQ) acquired 25% of Dutch derivatives trading venue TOM
Hanover Insurance (THG) sees after-tax EPS impact of Hurricane Sandy $2.65-$3.09
AMR Corp. (AAMRQ) reported November traffic, sees revenue impact of $30M from Sandy
Texas Instruments (TXN): Overall demand in industrial generally remains weak
Said utilization will be lower in Q4 vs. Q3, expects orders to decline in Q4
Teavana (TEA) said no guidance or earnings provided due to pending acquisition
by Starbucks (SBUX)
Wi-LAN (WLN) initiated litigation against Research in Motion (RIMM) for patent infringement
Myriad Genetics (MYGN) announced diabetes collaboration with Sanofi (SNY)
Rosetta Resources (ROSE) announced $700M FY13 capital budget
Urban Outfitters (URBN) plans to open 49 new stores during FY13
Casey's General Stores (CASY): Annual goal to increase total number of stores 4%-6%
National Instruments (NATI) acquired Signalion GmbH
SINA (SINA) and AutoNavi (AMAP) formed strategic partnership
Accenture (ACN) and Generali France signed 10 year portfolio management contract
Companies that beat consensus earnings expectations last night and today include:
ABM (ABM), Landauer (LDR), Medley Capital (MCC), Peregrine (PPHM)
Companies that missed consensus earnings expectations include:
Companies that matched consensus earnings expectations include:
Synergetics (SURG), Casey's General Stores (CASY)
Morgan Stanley (MS) might soon ask U.S. regulators to let the securities firm buy back shares for the first time in more than four years, sources say. The bank could make its request to the Fed as soon as January as part of the annual "stress-test" process, the Wall Street Journal reports
North America will become a net energy exporter by 2025, thanks to a surge in oil and gas production and rapid improvements in energy efficiency, Exxon Mobil (XOM) predicts in its latest long-term energy outlook which will be released today, the Wall Street Journal reports
SPX Corp. (SPW) is in exclusive talks to buy rival Gardner Denver (GDI) and hopes to finalize a deal by the end of the year, sources say, in a merger that could create a conglomerate with a market value over $7B, Reuters reports
JPMorgan Chase & Co (JPM) rose to first in a U.S. customer satisfaction survey, as its three biggest rivals, including perennial leader Wells Fargo & Co. (WFC) declined in their scores.
But smaller banks and credit unions continued to record higher numbers than all large banks, according to the American Customer Satisfaction Index annual survey, Reuters reports
Emerging-market stocks rose for a fifth day, lifting the benchmark index to an eight-month high, as investors wait for progress on U.S. budget talks and before Fed policy makers meet. The MSCI Emerging Markets Index gained 0.2% to 1,031.14 as of 4:47 p.m. in Hong Kong, heading for the highest close since April 6, Bloomberg reports
Developers installed 684 megawatts of solar panels in the U.S. in Q3, 44% more than a year earlier, as residential projects rose to a record, according to the Solar Energy Industries Association. About 3.2 gigawatts of solar energy will be installed in the U.S. this year, Bloomberg reports
AIG (AIG) files to sell 234M shares of common stock for U.S. Treasury
Air Lease (AL) files to sell 29.75M shares of common stock for holders
Dynegy (DYN) files to sell 32.93M shares of common stock for holders
Ecolab (ECL) files to sell common stock for holders
Graphic Packaging (GPK) announces offering of 16.5M shares of common for holders
HCA Holdings (HCA) announces secondary offering of 32M shares of common by holders
Hertz Global (HTZ) announces sale of 50M shares of common stock by holders
Kinder Morgan Energy (KMP) files to sell 3.9M common units
Platinum Group (PLG) announces offering of C$180M in common shares
Spectra Energy (SE) files to sell 12.8M shares of common stock