Frontrunning: March 4
- Must defend against Chinese colonial expansion and get the Nigerian oil: U. S. Boosts War Role in Africa (WSJ)
- BOJ nominee Kuroda sets out aggressive policy ideas (Reuters)
- China becomes world’s top oil importer (FT)
- Baby Cured of HIV for the First Time, Researchers Say (WSJ)
- Obama to nominate Walmart's Burwell as White House budget chief (Reuters)
- Wal-Mart Anxious to Combat Amazon’s Lead in Web Vendors (BBG)
- Nasdaq executing trades at a loss (FT)
- Spending cut debate casts pall over Obama's second-term agenda (Reuters)
- Russell Indexes to Reclassify Greece as Emerging Market (BBG)
- Bond Bears Collide With Swaps Showing Low Rates (BBG)
- Buffett Deputies Leaving Billionaire in the Dust Get More Funds (BBG)
- Brazil's leftist president fights to win back business (Reuters)
- U.S. Special Forces train Syrian Rebels in Jordan (Le Figaro)
- Carlos Slim Risks Losing World’s Richest Person Title as Troubles Mount (BBG)
- Tata Motors slashes hatchback, sedan prices (Reuters)
Overnight Media Digest
* Google Inc won a key victory in Europe as German lawmakers approved a watered-down copyright bill that would protect the Internet search giant from having to pay fees for displaying links to news articles.
* On Monday, one of the most prestigious banks in Switzerland, Wegelin & Co, is expected to become the first foreign bank to be criminally sentenced in the U.S. for tax violations, according to court documents.
* U.S. Democrats on Capitol Hill are pressing regulators for more details on what led to a $9.3 billion foreclosure settlement after a report last week showed error rates by several large banks were higher than the figures released in January by the Office of the Comptroller of the Currency.
* United Technologies Corp's Pratt & Whitney unit disclosed it has broken up an alleged fraudulent-testing scheme by a sister United Technologies unit, affecting tens of thousands of engine parts used on popular business jets and turboprop aircraft flown by airlines around the world.
* Haruhiko Kuroda, the Japanese government's pick for the next Bank of Japan governor said he would do "everything possible" to beat deflation, in a stark turnaround from his predecessors that signals the bank may be headed for a big, new wave of monetary easing.
* Portugal is seeking to renegotiate parts of its international bailout agreement amid worse-than-expected forecasts for an economy in recession and growing popular protest over deficit-cutting austerity measures imposed by its lenders.
* Greece kicked off fresh talks Sunday with international creditors on securing the country's next aid tranche. The talks come amid hopes that Athens has been keeping pace with its reform efforts and may receive a rare passing grade from a troika of budget inspectors.
* SLM Corp, the largest U.S. student lender, last week sold $1.1 billion of securities backed by private student loans. Demand for the riskiest bunch - those that will lose money first if the loans go bad - was 15 times greater than the supply, people familiar with the deal said.
* U.S. sales of new cars and trucks rose 3.7 percent to 1.2 million last month, a slower pace than a year earlier but healthy enough to lift General Motors Co, Ford Motor Co and Chrysler Group LLC to single-digit percentage gains over a year earlier.
Swiss voters backed curbs on executive pay, which include giving shareholders a binding say on corporate wages.
A housebuilding scheme that rewards councils that oversee the building of new homes has failed to take off.
Political uncertainty over the role of gas in Europe's power generation sector is putting future investment in new production at risk, Statoil warned.
Across-the-board spending cuts in the United States could trigger contract terminations, factory closures and the loss of thousands of jobs, Lockheed Martin warned.
Private equity company CVC Capital Partners is weighing a 500 million pound bid for Britain's largest retirement home builder McCarthy & Stone.
* Experts estimate so-called budget sequestration could cost the United States about 700,000 jobs, but Wall Street doesn't expect the cuts to substantially alter corporate profits or threaten stock markets.
* Some of the biggest U.S. banks, such as Citigroup and JP Morgan Chase & Co, wrongfully foreclosed on more than 700 military members during the housing crisis and seized homes from roughly two dozen other borrowers who were current on their mortgage payments, findings that eclipse earlier estimates of the improper evictions.
* Swiss citizens voted Sunday to impose some of the world's most severe restrictions on executive compensation, ignoring a warning from the business lobby that such curbs would undermine the country's investor-friendly image.
* Internet companies like Microsoft Corp and Facebook Inc are trying to gain market advantage by casting themselves as more privacy-friendly than their rivals. For example, Mozilla, an underdog in the browser market, suggested last week that it would allow its users to disable third-party tracking software altogether.
* Motives for a Chinese cyberattack against Telvent, a company that monitors more than half the oil and gas pipelines in North America, which could range from industrial spying to disabling the power grid, remain obscure.
* British newspaper "the Guardian" is hoping to increase American readership with an advertising campaign exploring controversial American topics, such as women in the military, Internet privacy and gun control, through graphics.
* Vice, a Brooklyn media company, approached television network HBO with the idea of arranging a trip to North Korea that centered on basketball, a sport that the nation's leader, Kim Jong-un, loves.
THE GLOBE AND MAIL
* Justin Trudeau's campaign team has signed up 150,000 new supporters of the federal Liberals, a show of support that seems to put his bid for leadership beyond the reach of his rivals. The new supporters category allows people to vote for the next leader without formally joining the party as dues-paying members.
* British Columbia Premier Christy Clark faced her own cabinet ministers on Sunday in a bid to persuade them she can still lead the ruling Liberals in a May election - despite a firestorm of criticism over her handling of a leaked memo that has stoked party dissent and raised doubts about her leadership.
* Alberta politicians - facing billions of dollars in red ink - get back to business in the house on Tuesday to pass what Premier Alison Redford calls a watershed budget along with a new centerpiece Financial Management Act. "It's been some time in Alberta since we've taken the time to be thoughtful and deliberate about setting that fiscal framework, and I think it's going to be a really exciting session," Redford said in an interview.
Reports in the business section:
* Canada's energy companies are factoring a carbon price into their business planning, even in the absence of federal climate regulations. In a survey to be released on Monday, 10 of the country's top oil and gas and power companies say they currently use a "shadow carbon price" to quantify and manage the risk of higher costs that would arise from future carbon constraints.
* Bank of Montreal is bringing back its controversial 2.99 per cent five-year fixed-rate mortgages. BMO sparked a mortgage price war among the banks early last year when it first introduced the rate, one that angered Finance Minister Jim Flaherty, who has been worrying that Canadians are taking on too much mortgage debt. The bank stopped offering the rate later in 2012.
* Lawyers for Bell Mobility Inc will appear in a Yellowknife courtroom on Monday, facing off in a class-action lawsuit launched on behalf of Northern residents who were charged for 911 service on their cellphone bills despite not being able to dial it in an emergency.
* Canada's newest have-not region, southern Ontario, got its own billion dollar bailout fund from Ottawa in 2009, after recession devastated the province's manufacturing sector. Four years later, the first report card on how the money was spent shows that bustling Toronto scooped up the lion's share of benefits.
* The Liquor Control Board of Ontario has been violating the privacy of people who belong to wine, beer or spirit clubs by tracking their consumption habits, according to the province's Information and Privacy Commissioner Ann Cavoukian.
* Seven weeks after Prime Minister Stephen Harper and First Nations leaders met amid heightened tensions, there's still no date planned for a follow-up meeting, Assembly of First Nations National Chief Shawn Atleo said on Sunday. The meeting on Jan. 11, which occurred with indigenous protests at a fever pitch across the country, concluded with promises of high-level discussions on treaties and comprehensive land claims, as well as a follow-up meeting between Harper and Atleo.
* Amid an extremely difficult period for the global mining industry, the Prospectors and Developers Association of Canada conference remains a source of cautious optimism for shell-shocked companies and investors. The industry's largest event, expected to draw more than 30,000 people, kicked off Sunday in Toronto. And while none of the speakers pretended that these are pleasant times for mining companies, they tried to remind everyone that some positive fundamentals are still in place.
CHINA SECURITIES JOURNAL
-- The China Securities Regulatory Commission (CSRC) issued draft rules to seek opinions to widen financing channels for brokerages, including let them to issue certificates of receipts, a security in which brokerages promise the buyers a return and compensation for agreed securities investment.
-- CSRC Vice Chairman Zhuang Xinyi said China would continue a gradual reform of its initial public offering (IPO) mechanisms as part of efforts to make the process more market-driven.
SHANGHAI SECURITIES NEWS
-- China's top steel producer, Baoshan Iron and Steel Co Ltd said it has spent 2.3 billion yuan ($340 million) to buy back the company's own shares in response to a government appeal for listed firms to buy back their own shares to support the country's stock market.
-- The government's announcement late on Friday that it could raise required downpayments and loan rates for buyers of second homes in cities to further clamp down on the red-hot urban housing market sparked a selling spree in some cities over the weekend.
-- The government should implement a major tax-reduction plan to help its middle class population grow to 600 million by 2020, senior national political adviser Chi Fulin said before the opening of China's annual parliamentary session on March 5.
-- Sany Group, Chinese firm that has sued U.S. President Barack Obama for blocking its wind farm project, is determined to go through with its lawsuit and will appeal to the U.S. circuit court or supreme court if necessary, its spokesman said on Sunday.
-- Communist Party chief Xi Jinping, who is set to take over as China's new president during the annual meeting of parliament beginning on Tuesday, said China will continue comprehensive reform, with maintaining social stability its precondition.
Fly On The Wall 7:00 AM Market Snapshot
AMAG Pharmaceuticals (AMAG) upgraded to Neutral from Underweight at JPMorgan
Aqua America (WTR) upgraded to Overweight from Neutral at HSBC
Cloud Peak Energy (CLD) upgraded to Buy from Neutral at Goldman
DCP Midstream (DPM) upgraded to Outperform from Market Perform at Wells Fargo
Dean Foods (DF) upgraded to Buy from Hold at KeyBanc
DiamondRock (DRH) upgraded to Sector Perform from Underperform at RBC Capital
France Telecom (FTE) upgraded to Overweight from Underweight at Morgan Stanley
Lexmark (LXK) upgraded to Equal Weight from Underweight at Barclays
Merck (MRK) upgraded to Buy from Neutral at BofA/Merrill
Radian Group (RDN) upgraded to Outperform from Market Perform at Keefe Bruyette
Redwood Trust (RWT) upgraded to Outperform from Market Perform at JMP Securities
Spreadtrum (SPRD) upgraded to Overweight from Neutral at HSBC (intra-day Friday)
Telefonica (TEF) upgraded to Overweight from Neutral at JPMorgan
Vornado (VNO) upgraded to Neutral from Cautious at ISI Group
Yahoo! (YHOO) upgraded to Overweight from Equal Weight at Barclays
ASML (ASML) downgraded to Underperform from Sector Perform at RBC Capital
Anglo American (AAUKY) downgraded to Reduce from Neutral at Nomura
Aon Corp. (AON) downgraded to Neutral from Buy at Goldman
Bristol-Myers (BMY) downgraded to Neutral from Buy at BofA/Merrill
CONSOL Energy (CNX) downgraded to Neutral from Buy at Goldman
Duke Energy (DUK) downgraded to Neutral from Buy at ISI Group
ExlService (EXLS) downgraded to Hold from Buy at Needham
First PacTrust Bancorp (BANC) downgraded to Neutral from Outperform at RW Baird
LaSalle Hotel (LHO) downgraded to Sell from Neutral at Goldman
McDermott (MDR) downgraded to Hold from Buy at KeyBanc
NuStar Energy (NS) downgraded to Underperform from Neutral at Credit Suisse
Republic Airways (RJET) downgraded to Underperform from Neutral at BofA/Merrill
Southern Company (SO) downgraded to Neutral from Buy at Citigroup
Coach (COH) initiated with a Buy at Sterne Agee
Fifth & Pacific (FNP) initiated with a Buy at Sterne Agee
Gap (GPS) initiated with an Underperform at Sterne Agee
Health Insurance Innovations (HIIQ) initiated with a Buy at Citigroup
Michael Kors (KORS) initiated with a Neutral at Sterne Agee
Oncolytics Biotech (ONCY) initiated with an Overweight at Piper Jaffray
Pinnacle Entertainment (PNK) initiated with a Buy at BofA/Merrill
Ross Stores (ROST) initiated with a Neutral at Sterne Agee
Sally Beauty (SBH) initiated with a Buy at Sterne Agee
Signet Jewelers (SIG) initiated with a Neutral at Sterne Agee
TJX (TJX) initiated with a Buy at Sterne Agee
Tiffany (TIF) initiated with a Neutral at Sterne Agee
Ulta Salon (ULTA) initiated with a Buy at Sterne Agee
Vera Bradley (VRA) initiated with an Underperform at Sterne Agee
Buffett noted disappointment of Berkshire’s (BRK.A) relative performance to S&P 500
News Corp. (NWSA) to sell stake in New Zealand’s SKY Network Television
Las Vegas Sands (LVS) disclosed in 10K filing of 'likely” violations of Foreign Corrupt Practices Act
DOJ probing Ocwen Financial (OCN) subsidiary related to its participation in mortgage program
Ford (F) launched FORD2GO car sharing program with German dealer network
Companies that beat consensus earnings expectations last night and today include:
Transocean (RIG), PDL BioPharma (PDLI)
Companies that missed consensus earnings expectations include:
Boyd Gaming (BYD), Tech Data (TECD), Vanguard Natural (VNR), Dynavax (DVAX)
- Some five years after Apple (AAPL) began the mobile-apps craze, the industry is booming. App stores run by Apple and Google (GOOG) now offer more than 700,000 apps each. Global revenue from app stores is expected to jump 62% this year to $25B, according to Gartner (IT), the Wall Street Journal reports
- Exxon Mobil (XOM) could use a lower oil price. While this would hurt profits, it would cut the price of acquisition targets. The company may soon need a big deal. Exxon's cash flow remains enviable, but its lead has slipped, the Wall Street Journal reports
- MetroPCS (PCS) is facing pressure from a major investor P. Schoenfeld Asset Management, demanding that merger documents for the pending deal between MetroPCS and the Deutsche Telekom’s (DTEGY) unit T-Mobile USA be updated to reflect the earnings of T-Mobile, Reuters reports
- Japan’s GS Yuasa Corp., maker of lithium-ion battery cells used in Boeing’s (BA) 787 Dreamliner, said it’s working closely with Boeing, lead battery contractor Thales SA of France and regulators to get the 787 back into the air, Reuters reports
- Investors reduced their bearish stock bets to the lowest level since at least 2007 as the bull market in U.S. starts its fifth year. Short sales in the S&P’s Composite 1,500 Index fell to 5.6% of shares available for trading in February, down from a record 12% during the credit crisis and the lowest ever in data compiled by Bespoke Investment Group and Bloomberg starting six years ago, Bloomberg reports
- Iron ore may slide 24% by year’s end as miners expand production of the raw material and Chinese restocking demand slows, according to Deutsche Bank AG (DB), Bloomberg reports
Barnes & Noble (BKS) board shouldn't allow a low bid
Danone (DANOY) could boost profit margins 15.1% by 2015
Forestar Group's (FOR) discount may end with housing market improving
Cisco's (CSCO) purchase of IntuCell should cause a rise in share price
Samsung's (SSNLF) Galaxy drives it to the head of the market
Annie's (BNNY) files to sell 3.5M shares of common stock for holders
Catamaran (CTRX) files automatic mixed securities shelf
Dr Pepper Snapple (DPS) requests withdrawal of registration statement
Exact Sciences (EXAS) files $200M mixed securities shelf
KAR Auction (KAR) files to sell 13M shares of common stock
Mid-Con Energy (MCEP) files automatic mixed securities shelf, files to sell 5.1M common units for holders
NewBridge Bancorp (NBBC) files to sell 12.79M shares of Class A common for holders
US Ecology (ECOL) files $500M mixed securities shelf
Vertex (VRTX) files automatic mixed securities shelf
Adage Capital Partners reports 5.07% passive stake in Accuray (ARAY)
Burlingame reports 19.9% passive stake in NTS, Inc. (NTS)
GlaxoSmithKline (GSK) reports 7.8% stake in Anacor Pharmaceuticals
Icahn reports 13.6% stake in Herbalife (HLF)
Luxor Capital reports 8.0% stake in CommonWealth REIT (CWH)
White Deer Energy reports 16.49% stake in Emerald Oil (EOX)