Frontrunning: January 28
- CAT beats ex-Chinese fraud: $1.91, Exp. $1.70; Warns 2013 could be a "tough year"; sees 2013 EPS in $7.00-$9.00 range, Exp. $8.54, sees Q1 sales well below Q1, 2012
- Yi Warns on Currency Wars as Yuan Close to ‘Equilibrium’ (BBG)
- Monte Paschi seeks new investor as scandal deepens (Reuters)
- Assault Weapons Ban Lacks Democratic Votes to Pass Senate (BBG)
- Toyota Again World's Largest Auto Maker (WSJ)
- Curious why all those Geneva Libor manipulators moved to Singapore? Bank probes find manipulation in Singapore's offshore FX market (Reuters)
- Japan eased safety standards ahead of Boeing 787 rollout (Reuters) - so like Fukushima?
- Goldman is about to be un charge: Osborne cools on changing inflation target (Telegraph)
- Abe Predicts Bump in Revenue as Japan Emerges From Recession (BBG) - actually, "hopes" is the correct verb here
- Toxic Smog in Beijing Fueling Auto Sales for GM, VW (BBG)
- Fed waits for job market to perk up (Reuters) ... any minute now that S&P to BLS trickle down will hit, promise
- BofA shifts derivatives to UK (FT)
Overnight Media Digest
* Shortly after the U.S. Federal Aviation Administration issued safety rules in 2007 for using lithium-ion batteries on Boeing Co's 787 Dreamliner jets, an industry standards-setting group called for stricter testing to prevent battery fires on aircraft.
But Boeing and FAA officials decided that since design and testing of the plane was so far along, mandating the tougher standards would disrupt years of joint safety work and unfairly delay production of the cutting-edge Dreamliners, said people familiar with the details.
* At least 232 people died in a fire that swept through a crowded nightclub in the southern Brazilian city of Santa Maria early Sunday, local government officials said.
* Barnes & Noble Inc expects to close as many as a third of its retail stores over the next decade, the bookseller's top store executive said, offering the most detailed picture yet of the company's plans for the outlets.
* Nexen Inc, the Canadian oil-sands operator that Chinese state energy giant CNOOC Ltd has agreed to buy, said the two extended the deadline for the closing of that $15.1 billion proposed deal by 30 days, as they await U.S. government approval.
* The head of foreign-exchange sales at Citigroup has created an alter ego, "Berniman," as part of an effort to generate votes in Euromoney's annual ranking of foreign-exchange firms.
* Fisker Automotive Inc, the struggling maker of battery-powered sports cars, is in talks with several potential bidders as it accelerates a search for buyers and investors so it can keep operating, according to people familiar with the discussions.
* EasyJet said Michael Rake is stepping down as chairman of the low-cost airline later this year.
FED WARNS ON LACK OF UNITY BY REGULATORS: Regulators in the United States are warning banks not to assume that countries will cooperate to stop the failure of a big financial group such as Lehman Brothers.
OSBORNE COOLS ON CHANGING INFLATION TARGET: Britain's Finance Minister George Osborne is cooling to the idea of changing the Bank of England's inflation target to one focused on the amount of spending according to unnamed officials at the Treasury.
BARCLAYS AND CREDIT SUISSE SET TO TEST WATER WITH NEW CLOs: In the first such move since new regulations, both the banks are preparing collateralised loan obligations, bundles of corporate loans which boomed until the 2008 subprime crisis in the United States, according to unidentified sources close to the deal.
US FACES FRESH FINANCIAL SHOCK: Spending cuts of $1.2 trillion are likely to go ahead as Republicans in Congress push for reductions in spending at the Pentagon and on government programmes in the face of Obama's objections.
STRONG CAR EXPORTS TO SLASH TRADE DEFICIT: Increased car production in the UK is expected to result in a trade deficit on automobiles of £150 million in 2012, the smallest since 1975.
COMPUTER PATENTS HIT NEW PEAK: Over 14,000 patents were registered in 2012 via the International Patent Co-operation Treaty, up more than 20 percent compared to 2011.()
TERRA FIRMA: HANDS TO 'MOVE ON' WITH 3 BILLION EURO FUNDRAISER The founder of the private equity company Terra Firma is to push ahead with a 3 billion euro fund to buy green energy infrastructure assets, according to people familiar with the matter.
* America's top trade negotiator said President Obama was committed to reaching an agreement to smooth trade with the European Union, but only if it was written in a way that would overcome objections from farm groups and that could win congressional approval.
* As U.S. federal authorities continue to press an insider trading investigation, SAC Capital Advisors, owned by Steven Cohen, is working to retain clients and staff members.
* JPMorgan Chase & Co, the nation's largest bank, said its chief risk officer, John Hogan, would take a sabbatical. His departure follows a shake-up this week, when Martha Gallo was replaced as head of global compliance and regulatory management.
* A bipartisan group of U.S. senators has agreed on a set of principles for a sweeping overhaul of the immigration system, including a pathway to American citizenship for 11 million illegal immigrants that would hinge on progress in securing the borders and ensuring that foreigners leave the country when their visas expire.
* Egypt President Mohamed Mursi declared a state of emergency and a curfew in three major cities on Sunday, as escalating violence in the streets threatened his government and Egypt's democracy.
THE GLOBE AND MAIL
* Kathleen Wynne won the Ontario Liberal leadership race and is set to become the first female premier in the province's history and the sixth female premier currently in office in Canada.
* Canadian Finance Minister Jim Flaherty said the government is not happy with the work of the Parliamentary budget watchdog, the clearest indication yet that Ottawa is rethinking the post as the government's first Parliamentary Budget Officer, Kevin Page, prepares to leave.
Reports in the business section:
* CNOOC Ltd and Nexen Inc have extended a deadline to complete the $15.1 billion takeover of the Canadian oil and gas company by 30 days as they await U.S. regulatory approval.
The deal, the largest Chinese overseas takeover in history, has already cleared regulatory hurdles in Canada, the United Kingdom, the EU and China.
* After days of waiting for harsh Antarctica winds and snow to ease, searchers reached the wreckage of a downed Canadian plane only to discover the blast of winter had dealt another cruel blow. The front end of the Twin Otter aircraft was so embedded in ice and snow, rescuers decided the aircraft was too difficult and dangerous to breach.
The bodies of the three Canadians aboard, who are believed to have perished on impact, will remain inside their icy cockpit on a steep mountain peak - near the summit of Mount Elizabeth - until October.
* Canada's economy could benefit from an influx of toking tourists if weed is legalized, the Liberal Party of Canada said in a new analysis that backs the party's 2012 policy convention resolution.
CHINA SECURITIES JOURNAL
--China would take a long time to boost its shale gas output due to technical and pipeline issues, former top energy official Zhang Guobao said.
SHANGHAI SECURITIES NEWS
--The Chinese Academy of Sciences forecast China's economic growth would rise about 8.4 percent this year, up 0.6 percentage points from last year.
--Shanghai plans to set up a free trade zone in the city this year and has targeted a 7.5-percent economic growth, acting mayor Yang Xiong said at an internal meeting.
CHINA DAILY (www.chinadaily.com.cn)
--China's new leadership should consider setting up an agency to oversee reform and redefine the function of government to make it more focused on maintaining growth, Fan Gang, director of the National Economics Research Institute of the China Reform Foundation, told the paper at the World Economic Forum.
--Shanghai is expected to attract 150 more foreign multinationals to set up their regional headquarters in the city by 2020, bringing the total to 553.
--China's traditional toy makers are feeling pinch of a dramatic decline in exports and the increasing popularity of electronic toys and devices.
--China has published its 2012 government white paper both in Chinese and English versions, which includes topics on rare earths, the Diaoyu island, China's judicial reforms, energy policy and medical sector.
--There is no decision yet on expanding the property tax to more Chinese cities after two major cities --Shanghai and Chongqing--launched a pilot scheme for two years.
Fly On The Wall 7:00 AM Market Snapshot
ASML (ASML) upgraded to Buy from Neutral at Citigroup
Best Buy (BBY) upgraded to Buy from Hold at BB&T
Facebook (FB) upgraded to Outperform from Market Perform at Raymond James
NetApp (NTAP) upgraded to Overweight from Equal Weight at Barclays
News Corp. (NWSA) upgraded to Overweight from Equal Weight at Morgan Stanley
Norfolk Southern (NSC) upgraded to Buy from Hold at Jefferies
Realty Income (O) upgraded to Outperform from Market Perform at Wells Fargo
Sensata (ST) upgraded to Overweight from Equal Weight at Barclays
Sony (SNE) upgraded to Buy from Neutral at Citigroup
Staples (SPLS) upgraded to Neutral from Sell at Goldman
AK Steel (AKS) downgraded to Sell from Neutral at Goldman
American Midstream Partners (AMID) downgraded to Market Perform at Wells Fargo
Apple (AAPL) downgraded to Neutral from Outperform at RW Baird
Bed Bath & Beyond (BBBY) downgraded to Sell from Neutral at Goldman
Brookfield Properties (BPO) downgraded to Sell from Neutral at Citigroup
Buckeye Partners (BPL) downgraded to Neutral from Buy at Goldman
Century Aluminum (CENX) downgraded to Sell from Neutral at Goldman
Corning (GLW) downgraded to Equal Weight from Overweight at Barclays
Enbridge Energy Management (EEQ) downgraded to Market Perform at Wells Fargo
Enbridge Energy (EEP) downgraded to Market Perform from Outperform at Wells Fargo
Energizer (ENR) downgraded to Equal Weight from Overweight at Morgan Stanley
Hancock Holding (HBHC) downgraded to Market Perform from Outperform at Keefe Bruyette
Hancock Holding (HBHC) downgraded to Underperform from Neutral at Credit Suisse
Holly Energy (HEP) downgraded to Sell from Neutral at Goldman
ImmunoGen (IMGN) downgraded to Perform from Outperform at Oppenheimer
Joy Global (JOY) downgraded to Market Perform from Outperform at Raymond James
LRR Energy (LRE) downgraded to Market Perform from Outperform at Wells Fargo
Life Technologies (LIFE) downgraded to Neutral from Buy at UBS
Navios Maritime Partners (NMM) downgraded to Hold from Buy at Deutsche Bank
NYSE Euronext (NYX) downgraded to Neutral from Buy at UBS
Noble Corp. (NE) downgraded to Equal Weight from Overweight at Stephens
PetSmart (PETM) downgraded to Reduce from Neutral at Nomura
Plains All American (PAA) downgraded to Market Perform from Outperform at Wells Fargo
SouFun (SFUN) downgraded to Neutral from Buy at Goldman
Southern Copper (SCCO) downgraded to Underweight from Hold at BB&T
Southern Copper (SCCO) downgraded to Neutral from Overweight at JPMorgan
State Street (STT) downgraded to Market Perform from Outperform at Keefe Bruyette
Weyerhaeuser (WY) downgraded to Sector Perform from Outperform at RBC Capital
Akorn (AKRX) initiated with a Sector Perform at RBC Capital
DaVita (DVA) initiated with a Market Perform at Bernstein
Perrigo (PRGO) initiated with a Sector Perform at RBC Capital
Youku Tudou (YOKU) initiated with a Buy at Deutsche Bank
Daimler (DDAIF), Nissan (NSANY), Ford (F) sign deal on fuel cell cars
Johnson & Johnson (JNJ) to explore sale of women's products business, DJ reports
Dole Food (DOLE) announced resolution of class action lawsuit
BGI-Shenzhen extended tender offer for Complete Genomics (GNOM)
salesforce.com (CRM) to seek 4-for-1 stock split at shareholder meeting
JoS. A. Bank (JOSB) sees opening 45-50 new stores in FY13
CGG Veritas (CGV) to change name, symbol to CGG, reorganizes into three divisions
Companies that missed consensus earnings expectations include:
- Toyota Motor (TM) today reclaimed the title of world's largest automaker, posting a 23% gain in global sales to a record 9.75M in 2012, ahead of GM (GM) and Volkswagen (VLKAY), the Wall Street Journal reports
- The U.S. housing recovery is starting to show up in corporate results. Companies that sell power tools, air conditioners, carpet fibers, furniture and cement mixers are reporting stronger sales for the fourth quarter, providing further evidence that a turnaround in the housing market is taking hold, the Wall Street Journal reports
- Japan's government gave Boeing's (BA) 787 Dreamliner and its made-in-Japan technology a boost in 2008 by easing safety regulations, fast-tracking the rollout of the jet for Japan's biggest airlines, according to records and participants in the process, Reuters reports
- Internal reviews by banks in Singapore found evidence that traders colluded to manipulate rates in the offshore foreign exchange market, sources say, Reuters reports
- The risk of owning sovereign bonds has fallen to a two-year low, setting the stage for more gains by the riskiest government securities as the investors look to an improving world economy, Bloomberg reports
- The lockstep moves in global stocks that dominated equity markets for the past six years are breaking down at the fastest rate on record, a sign investor confidence is finally returning from the financial crisis. A measure of how much the 2,073 companies in the FTSE All- World Developed Index swing in unison has dropped 31% since June, the biggest retreat since at least 1993, according to data compiled by Societe Generale SA and Bloomberg.
A much larger dividend could help Apple's (AAPL) stock
“Made in America” making a comeback (AAPL, CAT, F, GE, WHR, SSNLF, TM)
Companies that benefit from lower natural gas prices could “win” (SWN, LYB, NUE, DOV, CPN, CF, WMB, UNP)
Grand Ole Opry owner Ryman (RHP) could rise 25%
Dole (DOLE) could have a special dividend or share repurchase in future
FreeSeas (FREE) files to sell 3.96M shares of common stock for holder
Carl Icahn reports 5.61% stake in Transocean (RIG), urges $4.00 per share dividend
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