- China drains cash to curb liquidity (FT) - no longer just a New Year issue...
- Hilesnrath speaks (but nobody cares anymore) - Fed Split Over How Long To Keep Cash Spigot Open (WSJ)
- Chasm opening between weak French and strong German economies (Reuters)
- JPMorgan Said to Seek First Sale of Mortgage Bonds Since Crisis (BBG)
- China's Bo Xilai not cooperating on probe, been on hunger strike (Reuters)
- Fed minutes send warning on durability of bond buying (Reuters)
- Sony Seeks an Extra Life in New PlayStation 4 (BBG)
- Rajoy pledges fresh round of reforms (FT) - and by reforms he means kickbacks?
- Doubts loom over eurozone recovery (BBG)
- China Extending Zhou Stay Seen as Aid to Financial Overhaul (BBG)
- King Pulls Out Stops to Energize Economy in Carney Handover (BBG)
- Central Banks Discussed Nominal GDP Targets at G-20 (Businessweek)
- Grand Central Owner Opposes IPO of Empire State Building (BBG)
Overnight Media Digest
* federal Reserve officials, uneasy with potential risks springing from the central bank's low-interest-rate policies, are split over an early retreat from the experimental programs created to revive the U.S. economy.
* Citigroup Inc's Michael E. O'Neill was among a small group of directors who after the financial crisis urged the company to weigh the pros and cons of splitting up the third-largest U.S. bank, said people familiar with the deliberations.
* Boeing Co is expected to launch a formal plan on Friday to get its grounded Dreamliner back into service, presenting fixes aimed at reducing fire hazards from the jetliner's batteries, according to people familiar with the details.
* A financial-industry regulator is expected to discuss the possibility of banning Jon Corzine, former chief executive of MF Global Holdings Ltd, for life from the futures industry, according to people involved in the process.
* Office Depot Inc and OfficeMax Inc agreed to merge, but the unveiling of the accord was marred by a premature announcement of the deal.
* Sony Corp moved to reinvent its PlayStation videogame console, demonstrating faster, graphics-rich hardware with new Internet-based features to counter stiff competition from the Web and mobile devices.
* The White House threatened China and other countries with trade and diplomatic action over corporate espionage as it cataloged more than a dozen cases of cyberattacks and commercial thefts at some of the biggest U.S. companies.
* Maurice Taylor, the chief executive of Titan International Inc, which had considered buying a tire factory in northern France, wrote to France's industry minister, saying he would be "stupid" to operate in a country where workers get high wages for little actual work. French unions and the government do nothing but talk, Taylor said.
* Key U.S. senators are exploring an immigration bill that would force every U.S. worker - citizen or not - to carry a high-tech identity card to prove a person's legal eligibility to work
Minutes of the U.S. Federal Reserve's January meeting show "many" officials are concerned about the costs and risks of further asset purchases.
The pound slid against the dollar and the euro after minutes of the Bank of England's last meeting showed Governor Mervyn King had wanted to inject more money into the economy.
Top shareholders in RSA Insurance Group attacked the company for cutting its dividend payout by a third, warning the move raised questions about Simon Lee's position as chief executive.
David Cameron's vow that the coalition is cutting Britain's budget deficit is in doubt after the 4G auction raised 1.2 billion pounds less than predicted.
The jury trying the case of Vicky Pryce, former wife of British minister Chris Huhne, was discharged under circumstances that will raise wider questions about the jury system.
David Gill has stepped down as chief executive of Manchester United after ten years at the helm.
Tom Enders has not given up on the idea of combining EADS with BAE Systems but big hurdles could dissuade him from embarking on a second attempt to do a deal between the two companies.
The New York Times Co on Wednesday said it would put its Boston Globe newspaper and related New England media properties on the block, as it focuses solely on its flagship newspaper.
Chesapeake Energy's outgoing Chief Executive Aubrey McClendon has been cleared of "intentional misconduct" in his personal finances by the company's board following a 10-month long investigation.
Anheuser-Busch InBev reached a deal with the U.S. Department of Justice to delay litigation and engage in discussions involving its $20 billion acquisition of Grupo Modelo.
The new breed of chief executives taking over at the four London-listed groups that dominate the mining industry are likely to have more modest ambitions than their predecessors.
The Financial Services Authority has challenged accusations that it was slow to launch an investigation into Libor manipulation and failed to pick up warning signs about rate-rigging.
The battle between financier Nat Rothschild and Bumi Plc's board will come to a head on Thursday, when shareholders must vote to back either Rothschild or the board over their different plans to sever ties with the Bakrie family.
Sony Corp unveiled its next generation PlayStation 4 on Wednesday as it seeks to wrest leadership in the video gaming market from Microsoft's Xbox.
Foxconn has frozen recruitment across most of its factories in China as it slows production of Apple Inc's iPhone 5.
* House Republicans, shrugging off rising pressure from President Obama, are resolutely opposing new tax increases to head off $85 billion in across-the-board spending reductions, all but ensuring the cuts will go into force March 1 and probably remain in place for months, if not longer.
* There are widening divisions among officials of the Federal Reserve over the value of its efforts to reduce unemployment, but the authors of its bond-buying policy remain firmly in control, according to an official account of the January meeting of the Fed's policy-making committee.
* Boeing Co has developed possible fixes for the battery problems in its grounded 787 jets and could have them back in the air within two months, industry and federal officials said on Wednesday.
* The earnings release from office supplies chain Office Depot Inc appeared shortly after 7 a.m. and inadvertently disclosed the terms of a long-awaited merger between the company and OfficeMax Inc. The announcement disappeared from the company's Web site quickly, but not before a gaggle of news outlets began running full-fledged reports about the deal.
* PlayStation 4, introduced by Sony Corp on Wednesday evening, is a bold bid to recapture those long-ago glory days. The first three generations of PlayStation sold more than 300 million units, pioneered a new style of serious video games and produced hefty profits.
* Anheuser-Busch InBev SA and the Justice Department said they were in talks to resolve antitrust concerns over the beer maker's planned deal with Grupo Modelo SAB de CV , the maker of Corona beer and other brands.
* Hackers have hit thousands of American corporations in the last few years, but few companies ever publicly admit it. Most treat online attacks as a dirty secret best kept from customers, shareholders and competitors, lest the disclosure sink their stock price and tarnish them as hapless.
* As Google and other companies begin to build wearable technology like glasses and watches, an industry not known for its fashion sense is facing a new challenge - how to be stylish. Design has always been important to technology, with products like Apple's becoming fashion statements, but designing hardware that people will wear like jewelry is an entirely different task
THE GLOBE AND MAIL
* Former Vancouver mayor Sam Sullivan has taken a major step towards a possible political comeback. Sullivan won the British Columbia Liberal nomination in Vancouver-False Creek, a riding that covers most of downtown Vancouver, setting the stage for his candidacy in the May 14 provincial election.
* Health officials are investigating another massive cross-country beef recall after frozen burgers sold by Canada Safeway Ltd. tested positive for E. coli bacteria.
Reports in the business section:
* A Russian leasing company has agreed to purchase up to 42 Bombardier Inc C-Series aircraft in a potential $3.42-billion deal, the aircraft manufacturer said on Wednesday.
* Canadian goods exports to China surged 15 per cent last year to $19.3-billion, paced by a near-doubling of canola seed and canola oil shipments, according to newly tabulated government trade figures.
* A newly unsealed police affidavit alleges that unidentified administrators of McGill University Health Centre committed fraud in the awarding of a $1.3-billion contract to SNC-Lavalin Group to build a super hospital in Montreal.
* Opposition parliamentarians were dropped from the guest list for an awards ceremony honoring volunteers from across the country, an event that some had worried would become political.
* Lufthansa, United Airlines and Air Canada are set to win approval from the European Union's competition regulator for their transatlantic tie-up with their offer to give up airport slots, a person familiar with the matter said.
* Calgary-based Talisman, which has cut its 2013 capital budget 25 percent to C$3 billion ($3 billion) and plans to raise about C$500 million this year through asset sales and joint ventures, said 90 employees in its Calgary office were being let go because of low North American gas prices and spending reductions.
CHINA SECURITIES JOURNAL
- Data from the China Securities Depository and Clearing Corporation showed the social pension fund opened 30 stock trading accounts in January.
- Daqin Railway Co said it will raise its freight charges, which could lead to an increase of 1.6 billion yuan ($256.51 million) in its operating revenue in 2013.
SHANGHAI SECURITIES NEWS
- Outstanding loans at micro enterprises in Shanghai hit 835.4 billon yuan in the end of 2012, rising 14.6 percent from the beginning of the year, central bank data showed.
- Chinese Defence Ministry's quick response to accusations from the United States that the Chinese government and the military are behind cyber attacks on U.S. websites shows its sincerity and seriousness in addressing cyber security, the paper says in an editorial.
Fly On The Wall 7:00 AM Market Snapshot
Barclays (BCS) upgraded to Outperform from Market Perform at Bernstein
Bruker (BRKR) upgraded to Neutral from Underperform at BofA/Merrill
Cheniere Energy (LNG) upgraded to Overweight from Equal Weight at Barclays
Groupon (GRPN) upgraded to Overweight from Neutral at Piper Jaffray
MasterCard (MA) upgraded to Neutral from Sell at UBS
NetSpend (NTSP) upgraded to Neutral from Sell at Goldman
Nike (NKE) upgraded to Buy from Neutral at Citigroup
ProLogis (PLD) upgraded to Outperform from Sector Perform at RBC Capital
Questcor (QCOR) upgraded to Buy from Neutral at Mizuho
UnitedHealth (UNH) upgraded to Outperform from Perform at Oppenheimer
Vantiv (VNTV) upgraded to Outperform from Market Perform at Wells Fargo
Visa (V) upgraded to Neutral from Sell at UBS
BHP Billiton (BHP) downgraded to Neutral from Buy at Citigroup
Brandywine Realty (BDN) downgraded to Market Perform from Outperform at Wells Fargo
Cheniere Energy Partners (CQP) downgraded to Equal Weight from Overweight at Barclays
Heckmann (HEK) downgraded to Hold from Buy at Jefferies
Office Depot (ODP) downgraded to Neutral from Buy at Janney Capital
OfficeMax (OMX) downgraded to Neutral from Buy at Janney Capital
Pioneer Southwest (PSE) downgraded to Sell from Neutral at UBS
QEP Resources (QEP) downgraded to Hold from Buy at Jefferies
Union First Market (UBSH) downgraded to Neutral from Buy at Compass Point
VeriFone (PAY) downgraded to Neutral from Buy at Citigroup
VeriFone (PAY) downgraded to Neutral from Buy at SunTrust
VeriFone (PAY) downgraded to Neutral from Overweight at JPMorgan
VeriFone (PAY) downgraded to Neutral from Overweight at Piper Jaffray
Cerner (CERN) initiated with a Neutral at B. Riley Caris
Computer Programs (CPSI) initiated with a Neutral at B. Riley Caris
Devon Energy (DVN) initiated with a Neutral at B. Riley Caris
Magellan Petroleum (MPET) initiated with a Buy at C.K. Cooper
Omnicell (OMCL) initiated with a Buy at B. Riley Caris
Dow Chemical (DOW) lost $400M verdict in price-fixing trial, Bloomberg reports
AB InBev (BUD) seeks to resolve DoJ's litigation about acquisition of Grupo Modelo (GPMCF)
VeriFone (PAY) said lower Q1, Q2 estimates due to weak macro's in Europe
Expects to resume net revenue growth in mid-high single digits in FY14
Toll Brothers (TOL) CEO said Q1 always soft on deliveries, will improve in Q3,Q4,
sees strength in 2H deliveries, CNBC reports
AT&T (T), IBM (IBM) expanded relationship to enhance mobile apps
Yamana Gold (AUY) sees FY13 production up 20% to 1.44M-1.60M GEO
Sees FY14 production up 33% to 1.60M-1.77M GEO
Allergan (AGN) confirmed FDA approval of Natrelle 410 breast implants
Cheesecake Factory (CAKE) entered exclusive licensing agreement with Alsea, S.A.B.
Walter Energy (WLT) sees FY13 sales, production of Met coal in line with FY12 levels
Sanderson Farms (SAFM) cautiously optimistic regarding macroeconomic conditions
Companies that beat consensus earnings expectations last night and today include:
Quanta Services (PWR), Integra LifeSciences (IART), SM Energy (SM), American Railcar (ARII), Curtiss-Wright (CW), Questar (STR), Yamana Gold (AUY), Neenah Paper (NP), Trinity Industries (TRN), Crocs (CROX)
Companies that missed consensus earnings expectations include:
Swift Energy (SFY), HEICO (HEI), Orient-Express (OEH), Concho Resources (CXO), Tesla (TSLA), Williams (WMB)
Companies that matched consensus earnings expectations include:
Southwestern Energy (SWN), Boston Beer (SAM), Denny's (DENN), Acadia Healthcare (ACHC)
- Fed officials are split over an early retreat from the experimental programs created to revive the U.S. economy as minutes released from the Fed's January policy meeting show officials concerned that the current easy-money policies could lead to excessive risk-taking and instability in financial markets, the Wall Street Journal reports
- Google (GOOG) has developed the first touchscreen laptops powered by its Chrome operating system to be sold later this year, sources say, as the company tries to go against Microsoft’s (MSFT) Windows operating system, the Wall Street Journal reports
- U.S. builders (TOL, KB, DHI, PHM) broke ground on fewer homes last month but a jump in permits for future construction to a four and a half year high indicated the housing market recovery remains on track. Another report showed wholesale prices increased in January for the first time in four months, Reuters reports
- The Volcker Rule is expected to be finalized as soon as this year. Major banks are already pulling back from private equity investments ahead of the rules. But not Wells Fargo (WFC). The bank invests in buyouts and venture capital deals largely on its own, with capital only from Wells Fargo itself and some employees. By avoiding equity from outside investors, the bank is considered to be engaging in "merchant banking," likely to be exempt under the new rule, Reuters reports
- Americans are eating less fast food and pizza (MCD, BKW, DPZ, YUM). Adults consumed an average of 11.3% of their daily calories from fast food in 2007-2010, a decline from 12.8% in 2003-2006, the Centers for Disease Control and Prevention said, Bloomberg reports
- IBM (IBM) plans to release a prototype next year of an alternative rechargeable lithium-ion battery it calls “lithium air” that would mark a step forward by packing in more storage capacity. Finding a solution to the shortcomings of batteries has the potential to revolutionize everything from transportation to hand-held gadgets, Bloomberg reports
Achillion (ACHN) files to sell $125M of common stock
Generac (GNRC) files to sell 10M shares of common stock for holders
Kinder Morgan Energy Partners (KMP) files to sell 4M common units
Michael Kors (KORS) 25M share Secondary priced at $61.50
TAL International (TAL) files to sell 4.04M shares of common stock for holders
TRW Automotive (TRW) files to sell 10M shares of common stock for holders
SAC Capital reports 5.2% passive stake in Repros Therapeutics (RPRX)