Frontrunning: December 14
- Obama, Boehner hold "frank" meeting amid "fiscal cliff" frustration (Reuters)
- Rice Ends Bid Amid Criticism (WSJ)
- EU summit delays crucial decisions (FT)
- EU moves to cap bank bonuses at 2 times annual salary (CBC)
- Europe Wins a Battle, but Not Yet the War (WSJ)
- Banks Spurn Europe Bond Rush Amid Central Bank Loan Largesse (BBG)
- German-French Sparring Over Euro Caps 2012 Crisis Fight (BBG)
- Fed begins stress tests on bank liquidity (FT)
- Draghi’s rallying cry for new EU powers (FT)
- EU Seeks Plan to Handle Failing Banks Amid Cost Concerns (BBG)
- Berlusconi says Monti has strong EU backing (FT)
- Abe Set for Japan Victory Faces 7-Month Window to Keep Hold (BBG)
- Japan's Abe would try to keep China ties calm-lawmakers (Reuters)
- China Considers Easing Rule on RQFII Investment in Bonds (BBG)
- India Steps Up Policy Overhaul With Land Law (BBG)
- Economic Work Conference to be held (Global Times)
Overnight Media Digest
* U.N. Ambassador Susan Rice withdrew from consideration to be U.S. secretary of state on Thursday in anticipation of a fierce confirmation battle with Republican opponents, marking the first political defeat for President Barack Obama in preparing for his second term.
* UBS AG is close to an agreement to pay more than $1 billion to resolve allegations that it tried to rig interest-rate benchmarks to boost trading profits, said people briefed on the negotiations.
* Euro-zone governments capped another tumultuous year on Thursday with deals to more tightly control their biggest banks and keep their bailout of Greece on track, but face a new set of challenges in 2013.
* Alcatel-Lucent SA has secured a 1.6 billion euros ($2.1 billion) debt financing deal with banks that the money-losing telecom-equipment company hopes will buy enough time to return the company to profitability, according to people familiar with the matter.
* Deutsche Bank AG, grappling with a series of legal problems on both sides of the Atlantic, warned that restructuring costs would result in a substantial hit to the bank's fourth-quarter earnings and could tip it into a loss for the last three months of the year.
* Google Inc's new mapping app quickly became the most downloaded free application for the iPhone, the latest evidence of consumer eagerness for an alternative to Apple Inc's own ill-starred software.
UBS LIBOR FINE COULD TOP $1 BLN
The fine UBS will pay to settle claims it manipulated Libor, a key benchmark interest rate, could top $1 billion.
DRAGHI'S RALLYING CRY FOR NEW EU POWERS
The EU needs fresh powers to wind up failing banks in a speedy push to the next phase of banking union, according to Mario Draghi, president of the European Central Bank.
S&P DOWNGRADES OUTLOOK ON UK TRIPLE-A RATING
Standard & Poor's has become the last big credit ratings agency to give the UK government a bloody nose by downgrading the outlook on Britain's triple A rating to negative.
FED BEGINS STRESS TESTS ON BANK LIQUIDITY
The U.S. Federal Reserve is carrying out its first ever system-wide stress test of bank liquidity in a move that could force banks to change their funding sources.
COUNTER-TERRORISM TOOLS USED TO SPOT STAFF FRAUD
JPMorgan Chase has turned to technology used for countering terrorism to spot fraud risk among its own employees and to tackle various problems.
MAN GROUP FACES HEAVY GLG WRITE-OFF
Man Group is weighing up significant accounting write-offs next year relating to its 2010 acquisition of GLG Partners, a move that will raise eyebrows.
RYANAIR LOSES APPEAL OVER AER LINGUS PROBE
A UK probe into Ryanair's shareholding in Aer Lingus has been given the go-ahead after the low-cost airline lost an appeal that the inquiry undermined a separate EC probe.
OSBORNE OPEN TO DROPPING INFLATION TARGET
George Osborne has signalled that he is considering scrapping Britain's 2 percent inflation target in favour of a more growth-focused goal.
* Susan Rice, the U.S. ambassador to the United Nations removed a major source of tension between the White House and Congressional Republicans, when she took herself out of the running for the U.S. secretary of state.
* President Obama called Speaker John Boehner to the White House on Thursday to try to move talks forward even as pessimism mounted that a broad deal could be struck that bridges the substantial gap between the parties on taxes and entitlements like Medicare.
* Federal prosecutors are close to securing a guilty plea from a UBS AG subsidiary at the center of a global investigation into interest rate manipulation, the first big bank to agree to criminal charges in more than a decade.
* A tour of favorite spots along the Jersey Shore a month after Hurricane Sandy wreaked havoc finds a region slowly starting to recover.
* The outlook for Syria's embattled president darkened considerably on Thursday when his most powerful foreign ally, Russia, acknowledged that he was losing the struggle against an increasingly coordinated insurgency and for the first time said it was making contingency plans to evacuate its citizens from the country.
* N. Joseph Woodland, who six decades ago drew a set of lines in the sand and in the process conceived the modern bar code, died on Sunday at his home in Edgewater, New Jersey. He was 91.
THE GLOBE AND MAIL
* The Harper government is slapping a for-sale sign on a coal shipping terminal Ridley Terminals Inc in northwestern British Columbia -- the first major public asset that Ottawa has decided to unload after a lengthy review of what Crown properties should go on the block.
Reports in the business section:
* Encana Corp reached a C$2.2 billion ($2.24 billion) joint venture with PetroChina Co Ltd to develop its Duvernay property in Alberta, in a deal that will fly just below the radar of Investment Canada's new guidelines on state-owned enterprises.
* Securities regulators are eyeing a crackdown on the mutual fund industry's fees -- including a possible outright ban on some charges, as they look to shield investors from soaring, and often opaque, costs.
* Private television broadcasters are warning that local stations cannot continue to exist on advertising revenue alone, after the Supreme Court of Canada ruled the stations should not be paid for their signals when they are rebroadcast by cable and satellite companies.
* Activists, lawyers, journalists and bloggers have been fleeing Iran in record numbers since the Islamic regime began a brutal crackdown on civil society three years ago, Human Rights Watch reported Thursday.
* Loblaw Cos Ltd has launched a line of gluten-free baked goods through its in house President's Choice brand of goods, as a growing number of consumers try the way of eating popularized by the 2011 book Wheat Belly.
CHINA SECURITIES JOURNAL
-- In 2013, approved projects will put China's urban railway investment at between 280-290 billion yuan ($45-47 billion), up from an estimated 260 billion yuan this year, the newspaper reported quoting statistics from the National Development and Reform Commission.
-- China's mobile phone shipments in the first 11 months of the year hit 417 million, up 10.4 percent in the same period a year earlier. The majority of phones shipped were 3G enabled handsets, experiencing a growth of 80 percent while 2G handset shipments declined 25 percent.
SHANGHAI SECURITIES NEWS
-- Taikang Insurance will sell various types of insurance on Chinese e-commerce platform 360buy.
CHINA DAILY (www.chinadaily.com.cn)
-- The Red Cross Society of China pledged to improve transparency after donations dropped for a second straight year following an embezzlement scandal in 2011.
-- Beijing called for a "prudent" response to North Korea's missile launch by the United Nations, but reiterated that it regrets Pyongyang's decision.
-- Some supermarkets in Shanghai have stopped selling two snacks made by Hsu Fu Chi, a candy-maker 60 percent owned by Nestle, after a Shenzhen court ruled that the company should compensate consumers as the product contained banned substances.
-- The official Communist Party paper urged government departments to trim administrative luxuries such as booking five-star hotels for meetings, in order the maintain credibility in the eyes of the public.
Fly On The Wall 7:00 AM Market Snapshot
Good Morning. It's Friday, December 14, 2012. At this hour, U.S. equity futures are higher. Overseas, the Asian markets were mixed, while the European markets are also mixed.
Adobe (ADBE) upgraded to Outperform from Underperform at JMP Securities
Bazaarvoice (BV) upgraded to Outperform from Neutral at Credit Suisse
Concho Resources (CXO) upgraded to Top Pick from Outperform at RBC Capital
Corporate Office Properties (OFC) upgraded to Neutral from Sell at Citigroup
DaVita (DVA) upgraded to Buy from Neutral at Nomura
Evercore Partners (EVR) upgraded to Outperform from Market Perform at Keefe Bruyette
GFI Group (GFIG) upgraded to Outperform from Market Perform at Keefe Bruyette
Host Hotels (HST) upgraded to Buy from Neutral at Citigroup
ITG (ITG) upgraded to Outperform from Market Perform at Keefe Bruyette
Marathon Oil (MRO) upgraded to Buy from Neutral at Goldman
Raymond James (RJF) upgraded to Outperform from Market Perform at Keefe Bruyette
Royal Dutch Shell (RDS.A) upgraded to Outperform from Neutral at Credit Suisse
Ryder (R) upgraded to Top Pick from Outperform at RBC Capital
SPX Corp. (SPW) upgraded to Buy from Neutral at Nomura
Sanofi (SNY) upgraded to Buy from Hold at Jefferies
WebMD (WBMD) upgraded to Market Perform from Underperform at Raymond James
BP (BP) downgraded to Neutral from Outperform at Credit Suisse
CME Group (CME) downgraded to Underperform from Market Perform at Keefe Bruyette
Ciena (CIEN) downgraded to Market Perform from Outperform at BMO Capital
Exxon Mobil (XOM) downgraded to Neutral from Buy at Goldman
EZCORP (EZPW) downgraded to Neutral from Buy at Nomura
Endo Health (ENDP) downgraded to Underperform from Hold at Needham
Leap Wireless (LEAP) downgraded to Perform from Outperform at Oppenheimer
NASDAQ (NDAQ) downgraded to Market Perform from Outperform at Keefe Bruyette
Wynn Resorts (WYNN) downgraded to Neutral from Buy at UBS
A.P. Pharma (APPA) initiated with a Buy at Jefferies
BMC Software (BMC) initiated with a Buy at Janney Capital
Burger King (BKW) initiated with a Neutral at BofA/Merrill
Carpenter Technology (CRS) initiated with a Buy at Goldman
Copano Energy (CPNO) initiated with a Buy at Citigroup
GulfMark Offshore (GLF) initiated with a Buy at Citigroup
Hornbeck Offshore (HOS) initiated with a Buy at Citigroup
Informatica (INFA) initiated with an Outperform at RBC Capital
Microsoft (MSFT) initiated with a Market Perform at BMO Capital
Microsoft (MSFT) initiated with a Neutral at Janney Capital
Molycorp (MCP) initiated with a Neutral at RW Baird
Oracle (ORCL) initiated with a Buy at Janney Capital
Parametric Technology (PMTC) initiated with a Buy at Janney Capital
SAP (SAP) initiated with a Buy at Janney Capital
Salesforce.com (CRM) initiated with a Neutral at Longbow
Six Flags (SIX) initiated with an Outperform at Wells Fargo
TIBCO (TIBX) initiated with a Neutral at Janney Capital
TIBCO (TIBX) initiated with an Outperform at RBC Capital
Teradata (TDC) initiated with an Outperform at RBC Capital
TiVo (TIVO) initiated with a Buy at Goldman
Tidewater (TDW) initiated with a Buy at Citigroup
PPG (PPG) acquired AkzoNobel North American architectual coatings business for $1.05B
Pfizer (PFE) considering January or February launch of $4B IPO for Zoetis unit, WSJ reports
Coca-Cola Femsa (KOF) acquired 51% of Philippines bottling operation for $688.5M cash
Disney (DIS) announced distribution agreement with Cox Communications
AkzoNobel (AKZOY) divested North American Decorative Paints business to PPG Industries (PPG) for the value of $1.05B
PharMerica (PMC) bought stake in Amerita from Ferrer Freeman, terms not disclosed
DuPont (DD) to begin reporting "Operating Earnings" in 2013, citing more transparency
Wynn Resorts (WYNN) streamlining its board, increasing percentage of independent directors
Pfizer (PFE) and Ligand Pharmaceuticals' (LGND) BZA/CE NDA approved by FDA
Merck (MRK) received FDA approval for revised labeling for Varivax
Jazz Pharma (JAZZ) said FDA denied 'Citizen Petition' filed in July
Amgen (AMGN) announced $2B in additional share buybacks
Dr. Reddy's (RDY) launched recommended public cash offer of all shares of OctoPlus
W. R. Berkley (WRB) estimated losses from Sandy at $40M-$50M pre tax
Spartech (SEH) expects 'low to moderate' sales volume growth in 2013
Companies that beat consensus earnings expectations last night and today include:
Nordson (NDSN), Adobe (ADBE)
Companies that missed consensus earnings expectations include:
Companies that matched consensus earnings expectations include:
With a focus on loopholes, the SEC is facing growing pressure to tighten rules about executives’ preset plans to buy and sell their companies stock, following a Wall Street Journal investigation that found profitable and well-timed trades by more than 1,400 executives.
This holiday season UPS (UPS) and FedEx (FDX) are taking a much more active role than just delivering packages for retailers, as both want a bigger stake of the ecommerce boom, the Wall Street Journal reports
Spanish Prime Minister Mariano Rajoy reiterated that the country does not need a bailout now, and will only request a rescue that would involve the European Central Bank buying the country's debt on the secondary market if it is in their interest, Reuters reports
Investors in U.S.-based funds put the most money into stock exchange-traded funds since mid-September while also putting money into higher-quality corporate bonds in one of the last reporting weeks of the year, according to Thomson Reuters' Lipper service data. Stock ETFs pulled in $8.68B in investor cash in the week ended December 12, Reuters reports
Japan’s Financial Services Agency ordered Standard & Poor’s unit there to improve its system for verifying and updating credit ratings in the regulator’s first action against a ratings company, Bloomberg reports
European car sales slid 10% in November, bringing EU registrations this year to a 19-year low, Bloomberg reports
CorpBanca (BCA) announces 10.68B common share offering
Cytori Therapeutics (CYTX) proposes common stock offering
LaSalle Hotel (LHO) prices 8M common shares at $23.70 per share
Lpath (LPTN) proposes common stock offering