This page has been archived and commenting is disabled.

Frontrunning: February 1

Tyler Durden's picture





 
  • 'London Whale' Sounded an Alarm on Risky Bets (WSJ)
  • Deadly Blast Strikes U.S. Embassy in Turkey (WSJ)
  • Abe Shortens List for BOJ Chief as Japan Faces Monetary Overhaul (BBG)
  • Endowment Returns Fail to Keep Pace with College Spending (BBG) - More student loans
  • Mexico rescue workers search for survivors after Pemex blast kills 25 (Reuters)
  • Lingering Bad Debts Stifle Europe Recovery (WSJ)
  • Peregrine Founder Hit With 50 Years (WSJ) - there is hope Corzine will get pardoned yet
  • Deutsche Bank to Limit Immediate Bonuses to 300,000 Euros
  • France's Hollande to visit Mali Saturday (Reuters)
  • France, Africa face tough Sahara phase of Mali war (Reuters)
  • Barclays CEO refuses bonus (Barclays)
  • Edward Koch, Brash New York Mayor During 1980s Boom, Dies at 88 (BBG)
  • Samsung Doubles Tablet PC Market Share Amid Apple’s Lead (BBG)
  • Hagel Endures Republican Criticism as Levin Sees Approval (BBG)
  • U.S. sues to stop beer deal to unite Bud and Corona (Reuters)

Overnight Media Digest

WSJ

* The JP Morgan Chase & Co trader known as the "London whale" tried to alert others at the bank to mounting risks months before his bets ballooned into more than $6 billion in losses, according to people familiar with emails reviewed by J.P. Morgan and a U.S. Senate panel.

* The U.S. government filed suit to block Anheuser-Busch InBev's $20.1 billion deal to buy the rest of Grupo Modelo, saying it would reduce competition.

* Chinese hackers believed to have government links have been conducting wide-ranging electronic surveillance of media companies including The Wall Street Journal, apparently to spy on reporters covering China and other issues, people familiar with incidents said.

* President Barack Obama let his jobs council disband Thursday as its two-year charter expired, sparking criticism among Republicans and conservative economists that the group had provided more show than substantive policy.

* Morgan Stanley said it would increase the salaries of Chairman and Chief Executive James Gorman and other top executives to make their pay more competitive.

* AirAsia Bhd's chief executive hopes to list the group's Indonesia arm on the Jakarta stock exchange in the third quarter as the budget carrier seeks to expand its foothold in Southeast Asia's largest air travel market.

* Roomy Khan, one of the first cooperating witnesses who helped build the U.S. government's case against convicted hedge-fund manager Raj Rajaratnam, was sentenced to one year in prison Thursday.

* Animal-medicine maker Zoetis Inc, which is being carved into a standalone company by drug maker Pfizer Inc, raised about $2.2 billion in an initial public offering, a strong showing for the largest IPO deal from a U.S. company since Facebook Inc debuted last May.

* Best Buy Co is closing 15 of its 75 big-box stores in Canada as its new chief executive tries to stem slumping sales and profits at the consumer electronics chain.

 

FT

BARCLAYS IN QATAR LOAN PROBE - UK authorities are looking into an allegation that Barclays lent Qatar money to invest in the bank during the height of the 2008 financial crisis, allowing it to avoid a government bailout, according to unnamed sources cited by the newspaper.

SEYMOUR PIERCE'S FUTURE UP IN THE AIR - The board of Seymour Pierce held talks on Thursday night over the future of the stockbroker, with an unnamed source saying this has come about due to the FSA previously blocking funding from Ukrainian backers.

AB INBEV'S 20 BILLION DOLLAR DEAL THREATENED BY US SUIT - The United States moved to block Anheuser-Busch InBev in its 20 billion dollar acquisition of Grupo Modelo , the Mexican brewer, saying it would lead to an increase in prices and deter competition.

BERTELSMANN SEEKS BUYER FOR TWO BILLION EURO RTL STAKE - German media group Bertelsmann said it intends to sell a stake in broadcasting subsidiary RTL, aiming to raise up to 2 billion euros

LAWSON URGES FULL NATIONALISATION OF RBS - Former Conservative finance minister, Nigel Lawson said the UK government should nationalise RBS and there was a case for no bonuses to paid this year.

DEUTSCHE BANK RISES ON CAPITAL STRENGTH - The bank offered good news to investors reporting a capital base above expectations, bolstering its share price.

CHINA'S WORKERS ENDURE UNHAPPY NEW YEAR - An austerity drive by the new Chinese leadership of Xi Jinping has led government departments and state-owned enterprises to cut back or cancel new year festivities.

US BANKS SQUEEZED AS MORTGAGE PROFITS HIT - Bonanza profits at US banks from mortgages are being squeezed, raising doubts about earnings at lenders such as Wells Fargo, Bank of America and others.

WASENDORF GETS 50 YEARS JAIL FOR FRAUD - A federal court in the United States sentenced the ex head of collapsed future broker Peregrine Financial Group, Russell Wasendorf Sr., to 50 years in prison.

 

NYT

* The Justice Department has sued to block Anheuser-Busch InBev's proposed $20.1 billion deal to buy control of Grupo Modelo, the first major roadblock in a decade of consolidation by brewers around the world.

* A bankruptcy court judge approved a broad settlement deal on Thursday that paves the way for MF Global customers to recover much of the $1.6 billion that disappeared when the brokerage firm blew up in 2011.

* European antitrust officials on Thursday accused drug giants Johnson & Johnson and Novartis of colluding to delay the availability of a less expensive generic version of a powerful medication often used to ease severe pain in cancer patients.

* James Gorman, chief executive of Morgan Stanley, will receive a huge raise in his base salary this year, but his overall pay package for 2012 was down from 2011, according to a regulatory filing.

* Pfizer Inc's animal health unit, known as Zoetis, raised $2.2 billion in its initial public offering on Thursday, exceeding expectations by pricing its stock at $26 a share, above the expected range of $22 to $25 a share. The sale values the company at about $13 billion.

* Roomy Khan, a central figure in the investigation that led to the conviction of hedge fund manager Raj Rajaratnam, was sentenced to one year in prison on Thursday for illegally passing inside information and obstructing justice.

* Fabrice Tourre, the Goldman Sachs trader accused of misleading clients over a controversial mortgage deal, is no longer working at the firm.

 

Canada

THE GLOBE AND MAIL

* Canada will begin a two-year stint at the helm of the eight-nation Arctic Council amid a clamor of competing calls for leadership, as the ice recedes and the race heats up to extract resource riches while protecting a fragile and now-exposed environment.

* Toronto Mayor Rob Ford is publicly at odds with a key member of his team again, this time in a he-said, she-said spat with the Toronto Transit Commission chair.

The verbal tussle over the approval last week by the transit commission of a 15-year sole-source contract is the latest example of Ford's difficulty seeing eye to eye with even fiscal conservatives on council.

Reports in the business section:

* The Canadian economy expanded at its fastest pace in more than half a year, but the bigger picture is still one of slow growth. The country's gross domestic product rose 0.3 percent in November, Statistics Canada said Thursday, its strongest showing in seven months as auto makers and oil firms ramped up activity.

NATIONAL POST

* Prime Minister Stephen Harper says while some of his Conservative Members of Parliament may not agree, abortion is legal in Canada. Harper made the comments while under questioning in the House of Commons over a letter written by three Tory MPs who want the Royal Canadian Mounted Police to investigate hundreds of abortions as possible homicides.

FINANCIAL POST

* Two of Canada's biggest retailers, Best Buy Canada and Sears Canada Inc, announced layoffs Thursday in what is shaping up to be a turbulent and competitive year for the country's retail sector.

 

China

PEOPLE'S DAILY

-- Premier Wen Jiabao pledged that China would continue its opening up policy during a meeting with foreign experts on Monday.

SHANGHAI SECURITIES NEWS

-- The People's Bank of China (PBOC) drained a net 300 billion yuan ($48 billion) via reverse bond repurchase agreements in its open market operations in January as the country's interbank market was flooded with cash.

-- The recent serious pollution in Beijing has given rise to suspicion of the quality of China's fuel and gasoline.

CHINA SECURITIES JOURNAL

-- Sources say Chinese authorities have suspended a plan to expand an experimental property tax now levied in a few cities including Shanghai and Chongqing.

-- A monthly index issued by China's national fund for protecting stock investors shows that in January, investor confidence in the domestic equity market reached its highest since April 2011 as the main Shanghai Composite Index began a sharp rebound since early December.

CHINA BUSINESS NEWS

-- High costs and bureaucracy have made 78 percent of Chinese firms feel it is difficult to operate in the European Union, according to a survey by the European Union Chamber of Commerce in China.

CHINA DAILY (www.chinadaily.com.cn)

-- In a move aimed at strengthening personal data protection, companies will be instructed to delete customer information after use, according to new guidelines implemented on Friday.

 

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

AB InBev (BUD) upgraded to Outperform from Market Perform at Bernstein
Arthur J. Gallagher (AJG) upgraded to Outperform from Market Perform at William Blair
Audience (ADNC) upgraded to Hold from Sell at Deutsche Bank
Chubb (CB) upgraded to Buy from Hold at Deutsche Bank
Deutsche Bank (DB) upgraded to Buy from Neutral at Citigroup
Ericsson (ERIC) upgraded to Neutral from Underperform at Credit Suisse
GameStop (GME) upgraded to Overweight from Neutral at Piper Jaffray
Greenway Medical (GWAY) upgraded to Strong Buy from Market Perform at Raymond James
Neutral Tandem (IQNT) upgraded to Market Perform from Underperform at Raymond James
Oracle (ORCL) upgraded to Outperform from Market Perform at BMO Capital
PACCAR (PCAR) upgraded to Outperform from Market Perform at Wells Fargo
Verizon (VZ) upgraded to Overweight from Neutral at Piper Jaffray
W. R. Berkley (WRB) upgraded to Hold from Sell at Deutsche Bank
WMS Industries (WMS) upgraded to Neutral from Sell at Goldman
Wynn Resorts (WYNN) upgraded to Buy from Neutral at Janney Capital

Downgrades

AB InBev (BUD) downgraded to Hold from Buy at Societe Generale
ARMOUR Residential (ARR) downgraded to Neutral from Buy at BofA/Merrill
Alkermes (ALKS) downgraded to Neutral from Buy at BofA/Merrill
Amerseco (AMRC) downgraded to Perform from Outperform at Oppenheimer
Bob Evans (BOBE) downgraded to Hold from Buy at KeyBanc
Brightcove (BCOV) downgraded to Outperform from Top Pick at RBC Capital
Colfax (CFX) downgraded to Hold from Buy at KeyBanc
Constellation Brands (STZ) downgraded to Neutral from Buy at BofA/Merrill
Constellation Brands (STZ) downgraded to Neutral from Buy at Goldman
Copart (CPRT) downgraded to Hold from Buy at BB&T
Edison International (EIX) downgraded to Neutral from Buy at SunTrust
HSBC (HBC) downgraded to Neutral from Buy at Citigroup
Harris Teeter (HTSI) downgraded to Hold from Buy at BB&T
Harris Teeter (HTSI) downgraded to Market Perform from Outperform at BMO Capital
HealthSouth (HLS) downgraded to Hold from Buy at Deutsche Bank
Hologic (HOLX) downgraded to Reduce from Neutral at SunTrust
Life Time Fitness (LTM) downgraded to Market Perform from Outperform at William Blair
MasterCard (MA) downgraded to Market Perform from Outperform at Wells Fargo
Quiksilver (ZQK) downgraded to Neutral from Outperform at RW Baird
Royal Dutch Shell (RDS.A) downgraded to Underperform from Neutral at BofA/Merrill
Time Warner Cable (TWC) downgraded to Hold from Buy at Deutsche Bank
Time Warner Cable (TWC) downgraded to Market Perform from Outperform at Wells Fargo
UPS (UPS) downgraded to Neutral from Buy at Citigroup
Viacom (VIAB) downgraded to Neutral from Overweight at Piper Jaffray
Whirlpool (WHR) downgraded to Outperform from Strong Buy at Raymond James

Initiations

Blue Nile (NILE) initiated with an Outperform at Wells Fargo
Edwards Lifesciences (EW) initiated with a Buy at Janney Capital
Helmerich & Payne (HP) initiated with a Neutral at Credit Suisse
NCI Building Systems (NCS) initiated with a Buy at BB&T
Nabors Industries (NBR) initiated with an Underperform at Credit Suisse
National Oilwell (NOV) initiated with a Neutral at Credit Suisse
Oceaneering (OII) initiated with a Neutral at Credit Suisse
Oil States (OIS) initiated with an Outperform at Credit Suisse
Patterson-UTI Energy (PTEN) initiated with a Neutral at Credit Suisse
Precision Drilling (PDS) initiated with a Neutral at Credit Suisse
Shutterfly (SFLY) initiated with a Market Perform at Wells Fargo
Sunshine Heart (SSH) initiated with an Overweight at Piper Jaffray
Zoetis (ZTS) initiated with a Buy at ISI Group

HOT STOCKS

Sprint (S): DISH (DISH) proposal for Clearwire (CLWR) is “illusory”
Moody's said DOJ suit is credit negative for AB InBev (BUD) but doesn’t change rating
Barrick (ABX) considering sale of Barrick Energy unit, other assets, Bloomberg reports
Chubb (CB) announced new $1.3B share repurchase plan
Sees FY13 net written premiums up 2% to 4%
Goodyear Tire (GT) to exit farm tire business in Europe, Middle East and Africa region
OCZ Technology (OCZ) sees 20%-30% company growth year-over-year
Brink's (BCO) to divest cash-in-transit operations in Germany
Said will be “very difficult” to match 2012 earnings
Viad (VVI) sees FY13 revenue decreasing “at a low to mid single-digit rate”
Newell Rubbermaid (NWL) sees FY13 net sales up 1% to 3%

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Viad (VVI), Chubb (CB), C.R. Bard (BCR), Fortune Brands (FBHS), Bally Technologies (BYI), Affymetrix (AFFX), Principal Financial (PFG)

Companies that missed consensus earnings expectations include:
Brink's (BCO), Consolidated Edison (ED), McKesson (MCK), Wynn Resorts (WYNN), bebe stores (BEBE)

Companies that matched consensus earnings expectations include:
Eastman Chemical (EMN), Reinsurance Group (RGA), PerkinElmer (PKI)

NEWSPAPERS/WEBSITES

The JPMorgan Chase (JPM) trader known as the "London whale"--Bruno Iksil--tried to alert others at the bank to mounting risks months before his bets ballooned into more than $6B in losses, sources say, the Wall Street Journal reports
Asian manufacturing data today suggested the region's economic recovery is continuing. HSBC's China PMI reached a two-year high of 52.3 from December's 51.5, while the official PFLP number fell to 50.4 from December's 50.6, the Wall Street Journal reports
Dell (DELL) is close to an agreement to sell itself to a buyout consortium led by its founder and CEO Michael Dell and private equity firm Silver Lake Partners, with a deal coming as soon as Monday, sources say, Reuters reports
Airbus (EADSY) studied alternatives to lithium-ion batteries for its next jet, the A350, and has time to adapt to any rule changes prompted by the problems that have grounded Boeing’s (BA) 787 Dreamliner, says CEO Fabrice Bregier, Reuters reports
Anheuser-Bush InBev (BUD) may have to give up more control of U.S. beer distribution or sell a brewery to settle an antitrust lawsuit by the U.S. to block its $20.1B takeover of the rest of Grupo Modelo SAB (GPMCF), Bloomberg reports
Equity funds attracted six times the money that went into bonds in the week ended January 30, according to a Citigroup (C) report that cited EPFR Global data. Stock funds drew $18.8B, exceeding the $3B that went into bonds, as 58% of the equity inflows went into North American funds, with exchange-traded funds being the largest beneficiaries, the analysts wrote, Bloomberg reports

SYNDICATE

Bonanza Creek (BCEI) 11.5M share Secondary priced at $29.50
Chesapeake Lodging (CHSP) files to sell 6.25M shares of common stock
Echo Therapeutics (ECTE) 13.33M share Spot Secondary priced at 75c
Navios Maritime Partners (NMM) files to sell 4.25M shares of common stock
Penn National (PENN) files to sell convertible preferreds and stock for REIT structure
United Insurance (UIHC) files to sell 717K shares of common stock for holders
Zoetis (ZTS) 86.1M share IPO priced at $26.00

 


- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Fri, 02/01/2013 - 09:12 | Link to Comment Benjamin Glutton
Benjamin Glutton's picture

Did the Whale bets have anything to do with the death of MFGlobal?

 

The apparent reservations of Bruno Iksil, who earned the nickname after making outsize wagers in debt markets, are among the details being examined by the Senate Permanent Subcommittee on Investigations, according to people familiar with the probe.

In one instance, Mr. Iksil told another trader that the size of his bets was getting "scary," according to emails in a Jan. 16 report by J.P. Morgan and to the people familiar with the emails.

Mr. Iksil kept trading early in 2012 even as he expressed doubts to his bosses, and managers didn't stop his trading until late March, the emails show, according to the people familiar with them.

http://dealbook.nytimes.com/2011/10/26/europes-debt-threatens-mf-global-...

Fri, 02/01/2013 - 09:04 | Link to Comment nmewn
nmewn's picture

"France's Hollande to visit Mali Saturday"

...in order to assess the viability of a proposed Sand Tax on the new/old colony ;-)

Fri, 02/01/2013 - 09:03 | Link to Comment Nid
Nid's picture

So futires spiked immediately after yesterday's close...have remained airborne all night...this morning, every "news" outlet reports of today's coming "positve" jobs data? 

Fri, 02/01/2013 - 09:58 | Link to Comment buzzsaw99
buzzsaw99's picture

They know jobs report(s) will never be good enough to stop qe infinity.

Fri, 02/01/2013 - 10:04 | Link to Comment auric1234
auric1234's picture

Treasuries, stocks and Gold all surged at the same time on Fed intervention day.

We know about correlation between treasuries and stocks, but what about gold? Does this suggest that the TBTF are using Fed money to push gold up?

 

Fri, 02/01/2013 - 10:04 | Link to Comment auric1234
auric1234's picture

13:25 UTC to be exact. There is a crystal clear correlation.

 

Do NOT follow this link or you will be banned from the site!