Frontrunning: January 4
- Just like last year: A Postholiday Letdown for Retailers (WSJ)
- Obama Fights Republicans on Debt as Investors Seek Growth (BBG)
- Housing a Sweet Spot for U.S. Economy as Recovery Expands (BBG)
- House chooses Boehner as speaker again despite dissent (Reuters)
- Backlash pushes Republicans to seek cuts (FT)
- Jobs Lost Hit 5 Million With Rigged Currencies (BBG)
- Chavez still has "severe" respiratory problem (Reuters)
- Paris promises flurry of economic reforms (FT)
- Investors Sour on Pro Stock Pickers (WSJ)
- Abe moves to ease South Korea tensions (FT)
- Wildfires Hit Australia Amid Worst Heatwave in Decade (BBG)
- Monti attacks ‘extremist’ rivals (FT)
Overnight Media Summary
* Investors are jumping out of mutual funds managed by professional stock pickers and shifting money into lower-cost funds that echo the broader market. Through November, investors pulled $119.3 billion from so-called actively managed U.S. stock funds in 2012, the biggest yearly outflow since 2008, according to data from research firm Morningstar.
* U.S. antitrust regulators who spent nearly two years probing Google Inc's business practices came up virtually empty-handed, preserving the company's dominant Web-search business and dealing a blow to competitors such as Microsoft Corp.
* Offshore driller Transocean Ltd will pay $1.4 billion to settle all federal civil and criminal claims relating to the 2010 Deepwater Horizon accident in the Gulf of Mexico, the U.S. Department of Justice said.
* Cautious U.S. consumers restrained their spending in December, making for a disappointing holiday season for retailers at what is usually their busiest time of the year.
* The U.S. Securities and Exchange Commission has wrapped up its investigation into possible insider trading by a former top executive at Warren Buffett's Berkshire Hathaway Inc and has decided not to take action, the executive's lawyer said Thursday.
* Wegelin & Co, Switzerland's oldest bank pleaded guilty to a criminal conspiracy charge in the United States on Thursday and admitted that it helped wealthy Americans for years avoid tens of millions of dollars in taxes by hiding their income from secret accounts abroad.
* Boeing Co said Thursday that it delivered 601 commercial jets last year, likely topping rival Airbus to become the world's largest aircraft manufacturer for the first time since 2002.
* U.S. auto sales finished the year strong as consumers largely ignored the debate over the fiscal cliff in Washington, D.C., and headed to dealers to replace aging vehicles.
* Hormel Foods Corp agreed to pay about $700 million for Unilever's Skippy peanut-butter business, seeking to expand its lunchtime offerings in the U.S. and accelerate growth in China.
* The Federal Trade Commission on Thursday handed Google Inc a major victory by declaring, after an investigation of nearly two years, that the company had not violated antitrust or anti-competition statutes in the way it arranges its Web search results.
* Just a few months after announcing a campaign to reduce unemployment, Federal Reserve officials are already debating how soon to stop it, reflecting persistent internal divisions about the effort's value.
* Congressional investigators in the United States are wrapping up an inquiry into the accounting practices of Apple Inc and other technology companies that allocate revenue and intellectual property offshore to lower the taxes they pay in the United States.
* Automakers on Thursday reported their strongest sales year since 2007, posting solid December results in the United States and promising more growth in 2013.
* Transocean Ltd, the driller whose floating Deepwater Horizon oil rig blew out in 2010, causing a massive oil spill, has agreed to settle civil and criminal claims with the U.S. federal government for $1.4 billion, the Justice Department announced Thursday.
* The U.S. Securities and Exchange Commission has decided not to file insider trading charges against David Sokol, a onetime top lieutenant at Berkshire Hathaway, Sokol's lawyer said Thursday.
* Barnes & Noble Inc's Nook unit suffered a 12.6 percent decline in sales compared with the same period a year earlier, a blow to its hopes of building up its digital division to compete with behemoths like Amazon.com.
* The Congressional budget deal brokered this week kept tax breaks in place for a variety of industries in the United States, but biodiesel got something even better: a retroactive reinstatement of a dollar-a-gallon credit going back to January 2012, when it lapsed.
THE GLOBE AND MAIL
* Canada's native leaders have petitioned the Prime Minister Stephen Harper and the Governor-General David Lloyd Johnston to gather three weeks from now to discuss perceived failings in the treaty relationships; but an Ontario chief on a hunger strike to force such a meeting says she can't wait that long.
Theresa Spence, the chief of the impoverished community of Attawapiskat, who has been fasting for 24 days to demand the face-to-face discussion, has told her supporters and other native leaders that a meeting must occur within the next 72 hours, and she will not start eating until it has begun.
Reports in the business section:
* Facebook Inc, has chosen Canada to be the testing ground for an enhanced mobile app that allows users to make free calls from their smartphones.
The world's largest social media site's Canadian pilot project centres on two key upgrades to its messenger app, bolstering the company's foray into the mobile market at a time when more and more consumers are flocking to data-hungry smartphones.
* Canadians drove 1.67 million vehicles off car dealers' lots in 2012, with favourable financing conditions propelling the industry to the second-highest sales year on record.
The best year since the record-setting tally of 1.70 million vehicles in 2002 was propelled by a surge in luxury sales, a strong rebound from 2011 levels by Japan-based auto makers, and continued growth at South Korea-based Kia Canada Inc and Hyundai Auto Canada Corp.
* Canadian domestic extremists are capable of orchestrating "serious acts" of political violence, according to a newly released federal intelligence report that blames such groups for nine bombings since 2004.
* Tiff Macklem, the senior deputy governor of Bank of Canada, is seen by many as the front-runner to take over from Governor Mark Carney.
The central bank has begun the process of finding a new governor and the focus will no doubt be on it's No.2 policymaker.
* Cyber attacks targeting Canada's oil and gas industry and other major energy firms around the globe are occurring with disquieting frequency.
Last March, three confidential "amber" alerts were issued by the U.S. Department of Homeland Security warning of attacks against U.S. and Canadian natural gas pipeline companies.
-- China's trade policies will become more open this year to help boost sluggish imports and exports, said Wei Jianguo, secretary general of the China Center for International Economic Exchanges, a top official Chinese think tank.
-- Pre-owned house sales in Beijing at were at a 23-month high in December, according to statistics from the Beijing Municipal Commission of Housing and Urban-Rural Development. That was a 24 percent rise against the previous month.
-- More than 40 foreigners travelling in China have made use of a 72-hour visa-free stay in Shanghai, under a new policy that came into effect on Jan. 1 with the aim of attracting more overseas travellers.
-- The Chinese currency, the yuan, will rise modestly this year on the back of domestic economic recovery, while trading is likely to fluctuate in a wider band, the official People's Daily reported, citing economists.
Fly On The Wall 7:00 AM Market Snapshot
Cardinal Health (CAH) upgraded to Buy from Neutral at Mizuho
Citigroup (C) upgraded to Conviction Buy from Buy at Goldman
Corcept Therapeutics (CORT) upgraded to Overweight from Underweight at Piper Jaffray
ESCO Technologies (ESE) upgraded to Outperform from Neutral at RW Baird
First Republic Bank (FRC) upgraded to Buy from Hold at Deutsche Bank
Illumina (ILMN) upgraded to Overweight from Neutral at Piper Jaffray
Johnson & Johnson (JNJ) upgraded to Buy from Hold at Deutsche Bank
Mattel (MAT) upgraded to Buy from Hold at Needham
NuVasive (NUVA) upgraded to Underperform from Sell at BMO Capital
PerkinElmer (PKI) upgraded to Overweight from Equal Weight at Morgan Stanley
Quiksilver (ZQK) upgraded to Buy from Neutral at Goldman
Sangamo BioSciences (SGMO) upgraded to Overweight from Underweight at Piper Jaffray
SunTrust (STI) upgraded to Buy from Neutral at Goldman
Target (TGT) upgraded to Buy from Neutral at Janney Capital
Texas Roadhouse (TXRH) upgraded to Buy from Hold at Deutsche Bank
U.S. Bancorp (USB) upgraded to Buy from Hold at Deutsche Bank
Under Armour (UA) upgraded to Outperform from Neutral at Credit Suisse
Urban Outfitters (URBN) upgraded to Outperform from Neutral at Credit Suisse
Abbott (ABT) downgraded to Hold from Buy at Deutsche Bank
AmerisourceBergen (ABC) downgraded to Neutral from Buy at Mizuho
BB&T (BBT) downgraded to Neutral from Buy at Goldman
BNY Mellon (BK) downgraded to Neutral from Buy at Citigroup
Cepheid (CPHD) downgraded to Neutral from Overweight at Piper Jaffray
Dole Food (DOLE) downgraded to Underperform from Buy at BofA/Merrill
First Solar (FSLR) downgraded to Underperform from Market Perform at Raymond James
JPMorgan (JPM) downgraded to Buy from Conviction Buy at Goldman
Ligand Pharmaceuticals (LGND) downgraded to Hold from Buy at Cantor
Ruth's Hospitality (RUTH) downgraded to Hold from Buy at Deutsche Bank
Tanger Factory (SKT) downgraded to Sell from Neutral at Goldman
Waters (WAT) downgraded to Equal Weight from Overweight at Morgan Stanley
Wells Fargo (WFC) downgraded to Neutral from Buy at Goldman
lululemon (LULU) downgraded to Neutral from Outperform at Credit Suisse
AbbVie (ABBV) initiated with a Buy at BofA/Merrill
AbbVie (ABBV) initiated with an Equal Weight at Barclays
Avanir Pharmaceuticals (AVNR) initiated with an Overweight at Piper Jaffray
Cameron (CAM) initiated with an Outperform at Macquarie
Continental Resources (CLR) initiated with a Buy at Deutsche Bank
Cytokinetics (CYTK) initiated with an Overweight at Piper Jaffray
FactSet (FDS) initiated with a Sell at Goldman
National Oilwell (NOV) initiated with an Outperform at Macquarie
Orexigen (OREX) initiated with an Overweight at Piper Jaffray
Prospect Capital (PSEC) initiated with an Overweight at Barclays
Sanchez Energy (SN) initiated with a Buy at C.K. Cooper
Support.com (SPRT) initiated with a Neutral at B. Riley Caris
Transcept Pharmaceuticals (TSPT) initiated with an Overweight at Piper Jaffray
WhiteHorse Finance (WHF) initiated with a Buy at Deutsche Bank
WhiteHorse Finance (WHF) initiated with an Overweight at Barclays
Microsoft (MSFT) criticized the "weak" ruling by the FTC on Google's (GOOG) improper business practices
AMR Corp. (AAMRQ) CEO expects to make merger decision “within matter of weeks,” the Wall Street Journal reports
Liberty Media (LMCA) announced FCC application approval for du jure control of SiriusXM (SIRI)
Abbott (ABT), Johnson & Johnson (JNJ), Sanofi (SNY) said to show interest in Bausch & Lomb bid, Bloomberg reports
Cliffs Natural (CLF), Anglo American (AAUKY) to sell stakes in Brazilian joint venture
Companies that beat consensus earnings expectations last night and today include:
Progress Software (PRGS), Franklin Covey (FC)
Companies that matched consensus earnings expectations include:
Investors are leaving mutual funds managed by professional stock pickers and moving large amounts of money into lower-cost funds that echo the broader market, the Wall Street Journal reports
Last month cautious U.S. consumers restrained their spending, resulting in a disappointing holiday season for retailers at what is usually their busiest time of the year. Indications are that profit margins will suffer, as much of the holiday shopping was late and at discounted prices, the Wall Street Journal reports
Global shares, oil and copper moved lower today, and the dollar gained after Fed officials raised concerns about possible side effects of its stimulus program, Reuters reports
Fiat (FIATY) plans to exercise an option to buy an additional 3.3% in Chrysler Group LLC for $198M, the latest step in its move to buy out the U.S. automaker's minority shareholder, a retiree healthcare trust fund called VEBA, affiliated with the UAW. Fiat now owns 58.5% percent of Chrysler, while the trust owns the rest, Reuters reports
Google (GOOG) Executive Chairman Eric Schmidt may travel to North Korea over opposition from the U.S. State Department, becoming the highest-profile businessman to visit there since Kim Jong Un succeeded his father as leader just over a year ago, Bloomberg reports
BMW sales jumped 39% in the U.S. last month to beat Daimler’s (DDAIF) Mercedes-Benz in luxury-auto deliveries for the year as U.S. light-vehicle sales reached the highest level since 2007. Toyota’s (TM) Lexus was third, Bloomberg reports
Adecogro (AGRO) files to sell 2M common shares for holders
Insulet (PODD) announces sale of $85M of common stock
Synageva Biopharma (GEVA) 2.15M share Secondary priced at $47.53