- US braced as cuts deadline passes (FT)
- U.S. stares down start of steep "automatic" budget cuts (Reuters)
- Yeltsin-Era Tycoons Sell Resources for Distance From Kremlin (BBG)
- Italy's center-left leader rules out coalition with Berlusconi (Reuters)
- Apple Required Executives to Hold Triple Their Salary in Stock (WSJ)
- BOJ Seen Spiking Punchbowl in April Under New Chief Kuroda (BBG)
- Diplomatic fallout from EU bonus cap (FT)
- Italy’s Stalemate Jeopardizes Resolution of Crisis, Finland Says (BBG)
- Chinese trader accused of busting Iran missile embargo (Reuters)
- JPMorgan No. 1 Investment Bank Amid a Flurry of New Deals (BBG)
- Eurotunnel’s Ferry Strategy at Risk as Rivals Cry Foul (BBG)
- Telepathic rats team up across continents (FT)
Overnight Media Digest
* The $85 billion in so-called sequester cuts take effect Friday if, as expected, U.S. President Obama and congressional leaders find no way to avoid them.
* Libya's sovereign-wealth fund said it is cooperating with the U.S. Securities and Exchange Commission in the ongoing investigation into Goldman Sachs Group Inc over the securities firm's dealings with the fund when Col. Muammar Gaddafi was in power.
* Some of the biggest U.S. banks were on pace to find a higher rate of past foreclosure mistakes than regulators disclosed in January when they halted a review in favor of a $9.3 billion settlement for homeowners.
* Groupon Inc ousted Chief Executive Andrew Mason a day after reporting a quarterly loss that heightened scrutiny of the company's business model.
* Best Buy Co ended talks with founder Richard Schulze over a deal in which he and a group of buyout firms were proposing to take a minority stake in the firm in exchange for three seats on the board, according to people familiar with the matter.
* Apple Inc earlier this month reversed its stance on a corporate-governance measure related to executive compensation, implementing a new rule that executives must hold triple their base salary in company stock.
* Mexico's political parties are coming together to take on the country's three most powerful businessmen, including the world's richest man Carlos Slim, by negotiating a broad set of constitutional overhauls to boost competition in the country's telephone and television markets.
* A federal jury in Manhattan ordered ESPN Inc to pay Dish Network Corp $4.86 million in damages in a dispute over licensing rates for sports broadcasts.
The United States is braced for automatic across-the-board spending cuts which are set to kick in on Friday under a process known as sequestration.
Groupon co-founder Andrew Mason was fired as chief executive of the daily deals company on Thursday.
RBS Chief Executive Stephen Hester on Thursday signalled that the British bank could be ready for reprivatisation as early as next year.
Lloyds Banking Group will set aside an additional 1.4 billion pounds to cover the mis-selling of payment protection insurance.
European Council president Herman Van Rompuy said Europe would not prioritise treaty change despite British Prime Minister David Cameron's desire for a new settlement to put to a referendum.
Executives at European banks have warned that they are in danger of losing key traders and managers to U.S. and other international rivals after the EU provisionally agreed to a bonus cap for banks.
Carl Icahn and Herbalife have reached an agreement to nominate two directors to the company's board
* U.S. President Obama will formally notify government agencies on Friday that an obscure process known as sequestration is in effect, triggering deep, across-the-board budget cuts that will force federal spending to shrink.
* The American economy grew just barely in the last quarter of 2012. Output expanded at an annual rate of 0.1 percent, far below the growth needed to get unemployment back to normal. However, the economy did not shrink, as the Commerce Department estimated in January.
* One of Citigroup Inc's internal hedge fund units is spinning off, free from its corporate parent and the restrictions that have come with new banking regulations.
* Investment firm Paulson & Company, the largest shareholder in MetroPCS Communications Inc, announced that it would oppose a planned merger with T-Mobile USA, saying the deal would saddle the new company with too much debt.
* After spending four years leading the investigations of some of the world's biggest banks, Lanny Breuer plans to leave the U.S. Justice Department on Friday, then interview at law firms.
* Daily deals website Groupon Inc reported weak fourth-quarter earnings on Wednesday, and fired its chief executive, Andrew Mason, a day later.
* Talks between Best Buy Co Inc and a group comprising its founder and three private equity firms have ended, people briefed on the matter said. By the end, the company's founder, Richard Schulze, had been seeking an enlarged minority stake.
THE GLOBE AND MAIL
* As Alberta's controversial C$10 million inquiry into queue jumping in the healthcare system ended on Thursday after months of testimony - and a few revelations - the retired judge at the helm accused the Alison Redford government of "interference" with the commission's independence.
* Ontario's elementary teachers' union has advised members to continue boycotting students' clubs, sports teams and other after-school activities, sparking parent outrage and raising tensions in the province's public schools.
Reports in the business section:
* The Canadian government is opening a vast new frontier for oil and gas activity in Nunavut's high Arctic with a call for companies to indicate their interest in bidding for exploration rights.
* Renewables could make up as much as 30 percent to 40 percent of the global energy mix by 2060 as oil loses its reign as the world's biggest energy source, Royal Dutch Shell Plc said in a forecast on the energy sector's changing landscape.
* ConocoPhillips said moves by Ottawa to limit foreign investment in Canada's resources have made it more difficult for some buyers.
CHINA SECURITIES JOURNAL
- In a front-page opinion article commenting on two recent alleged investment scams involving Chinese hedge funds, the author says China's hedge fund industry is suffering from a trust gap that must be addressed with more transparency.
SHANGHAI SECURITIES NEWS
- Analysts expect the Government Work Report, which is yet to be approved at the National People's Congress, will set a GDP growth target of 7.5 percent, an inflation target of below 4 percent, and a foreign trade growth target of 8 percent for 2013. The report will keep current "relaxed fiscal policy, prudent monetary policy" stance unchanged.
- Beijing's second land auction of the year showed strong demand from developers, with 35 developers spending 10.7 billion yuan on 13 parcels of land.
- Naw Kham, the Burmese drug lord convicted for the murder of 13 Chinese sailors in 2011, will be executed on Friday in Yunnan province along with three accomplices.
- China should encourage consumer finance operations to boost domestic demand, said a commentary in the newspaper.
Fly on the Wall 7:00 AM Market Snapshot
Aflac (AFL) upgraded to Overweight from Equal Weight at Evercore
Alcatel-Lucent (ALU) upgraded to Market Perform from Underperform at Bernstein
Autodesk (ADSK) upgraded to Buy from Hold at Jefferies
HCP Inc. (HCP) upgraded to Market Perform from Underperform at BMO Capital
Illumina (ILMN) upgraded to Buy from Neutral at UBS
International Paper (IP) upgraded to Outperform from Sector Perform at RBC Capital
Intuitive Surgical (ISRG) upgraded to Buy from Hold at Cantor
Sequenom (SQNM) upgraded to Overweight from Neutral at Piper Jaffray
Target (TGT) upgraded to Outperform from Market Perform at Wells Fargo
Telefonica (TEF) upgraded to Equal Weight from Underweight at Barclays
Telefonica (TEF) upgraded to Neutral from Conviction Sell at Goldman
Westlake Chemical (WLK) upgraded to Overweight from Neutral at JPMorgan
priceline.com (PCLN) upgraded to Buy from Neutral at Lazard Capital
AIG (AIG) downgraded to Equal Weight from Overweight at Evercore
CNOOC (CEO) downgraded to Reduce from Neutral at Nomura
Cincinnati Bell (CBB) downgraded to Outperform from Strong Buy at Raymond James
Darden (DRI) downgraded to Neutral from Buy at UBS
Deutsche Bank (DB) downgraded to Sell from Neutral at Goldman
Duke Energy (DUK) downgraded to Hold from Buy at Deutsche Bank
Duke Energy (DUK) downgraded to Neutral from Buy at Citigroup
Fulton Financial (FULT) downgraded to Neutral from Buy at Sterne Agee
Health Care REIT (HCN) downgraded to Underperform from Market Perform at BMO Capital
MICROS (MCRS) downgraded to Hold from Buy at Jefferies
OmniVision (OVTI) downgraded to Market Perform from Outperform at Raymond James
Royal Bank of Scotland (RBS) downgraded to Hold from Buy at Societe Generale
Triangle Capital (TCAP) downgraded to Market Perform from Outperform at Raymond James
U.S. Silica (SLCA) downgraded to Equal Weight from Overweight at Morgan Stanley
Ventas (VTR) downgraded to Underperform from Market Perform at BMO Capital
Weatherford (WFT) downgraded to Underperform from Market Perform at BMO Capital
Wendy's (WEN) downgraded to Underweight from Equal Weight at Morgan Stanley
Acuity Brands (AYI) initiated with a Market Perform at Northland Securities
Aixtron (AIXG) initiated with an Underperform at Northland Securities
Coronado Biosciences (CNDO) initiated with an Overweight at Piper Jaffray
Cree (CREE) initiated with an Outperform at Northland Securities
Enphase Energy (ENPH) initiated with an Outperform at Northland Securities
First Solar (FSLR) initiated with an Underperform at Northland Securities
Gladstone Land (LAND) initiated with an Outperform at JMP Securities
Horizon Technology (HRZN) initiated with a Buy at Wunderlich
Nanosphere (NSPH) initiated with a Buy at Canaccord
Norwegian Cruise Line (NCLH) initiated with a Hold at Deutsche Bank
Power-One (PWER) initiated with an Outperform at Northland Securities
SunPower (SPWR) initiated with an Outperform at Northland Securities
TCP Capital (TCPC) initiated with a Buy at Wunderlich
Tesla (TSLA) initiated with an Outperform at Northland Securities
Veeco (VECO) initiated with a Market Perform at Northland Securities
Western Gas Equity (WGP) initiated with a Hold at Deutsche Bank
Western Refining (WNR) initiated with an Overweight at Barclays
WhiteHorse Finance (WHF) initiated with a Buy at Wunderlich
Groupon (GRPN) named Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis to newly created Office of the Chief Executive, replacing CEO Andrew Mason
Paulson & Co. to vote against MetroPCS (PCS) merger as currently structured
Flowers Foods (FLO) won Hostess bread assets with $360M bid
Sinclair Broadcast (SBGI) to purchase broadcast assets of 18 television stations owned by Barrington Broadcasting Group for $370M
Sky (BSYBY) to acquire Telefonica (TEF) UK’s broadband and fixed-line telephony business
Fitch upgraded Host Hotels (HST) IDR to 'BB+' from 'BB', outlook stable
Dresser-Rand (DRC) sees 2013 new unit bookings $1.8B-$2B
Morgan Stanley (MS) sold legacy ownership interest in DigitalGlobe (DGI)
Greenbrier (GBX) sold wheelset roller bearing reconditioning business to Timken (TKR)
Publix (PUSH) considering bid for Harris Teeter (HTSI), Bloomberg reports
Magnum Hunter (MHR) to delay filing Form 10-K
Companies that beat consensus earnings expectations last night and today include:
Great Plains Energy (GXP), Universal Health (UHS), Rosetta Stone (RST), Air Lease (AL), SandRidge Energy (SD), Salesforce.com (CRM), Deckers Outdoor (DECK), Gap (GPS)
Companies that missed consensus earnings expectations include:
Buenaventura (BVN), Atlantic Power (AT), Morgans Hotel (MHGC), Dresser-Rand (DRC), McDermott (MDR), Sotheby's (BID)
Companies that matched consensus earnings expectations include:
Autobytel (ABTL), Cell Therapeutics (CTIC)
- Drugstore chains (CVS, WAG, RAD) are branching out into health-care services, as a way to counter a slowdown in prescription drug sales and evolve beyond just dispensing pills. They see big opportunities as millions of uninsured Americans pick up health coverage next year. The upside is in making sure current patients stay on their medications or providing alternative venues for medical treatment, even if it is done virtually, the Wall Street Journal reports.
- What happens when the "bundle" begins to unravel? The question is taking on intense importance for the cable-TV business (CVC, TWX, NWSA, DIS, VZ, CMCSA, DTV). Attacks on the bundle approach have escalated. Now pay-TV executives, as well as its customers, are openly pondering a world where the bundle no longer reigns, even though such a scenario could be years away, the Wall Street Journal reports.
- Glencore (GLNCY) supplied thousands of tons of alumina to the Iranian Aluminum Company (Iralco) that has provided aluminum to Iran's nuclear program, intelligence and diplomatic sources say, Reuters reports
- The $85B in across-the-board "sequestration" cuts designed to hit most U.S. government programs were set to begin today. What they were not likely to do, at least as far as financial markets were concerned, was cause enough damage to derail a U.S. economy that has been gaining momentum, Reuters reports
- The firing of Groupon (GRPN) CEO Andrew Mason puts pressure on Chairman Eric Lefkofsky to find a replacement who can create a money-making business after the daily-deal provider lost $723.8M in the past three years, Bloomberg reports
- Two Chinese Manufacturing indexes revealed a slower-than-estimated pace of expansion, a signal that the nation’s economic recovery may be losing steam, Bloomberg reports
Campus Crest Communities (CCG) 22.2M share Spot Secondary priced at $12.25
DCP Midstream Partners (DPM) 11M share Secondary priced at $40.63
Icahn Enterprises (IEP) 3.175M share Spot Secondary priced at $63.00
Pzena Investment (PZN) files to sell 529,590 shares of Class A common stock
Safe Bulkers (SB) files $300M mixed securities shelf
S.A.C. Capital Advisors reports 5.0% passive stake in Annie's (BNNY)
Waterfall Asset Management reports 9.98% passive stake in Jacksonville Bancorp (JAXB)