Frontrunning: April 3
- Cyprus leader invites family firm probe (FT)
- How the Fed fueled an explosion in subprime auto loans (Reuters)
- Wal-Mart Customers Complain Bare Shelves Are Widespread (BBG)
- JC Penney CEO gets no bonus, stock award after dismal year (Reuters)
- New Bird Flu Virus Kills 2 in China, Sparking WHO Probe (BBG)
- Algorithms Play Matchmaker to Fight 7.7% U.S. Unemployment (BBG)
- Fed hawk Lacker and dove Evans face off over inflation (Reuters)
- Infamous silver market "cornerer" WH Hunt Becomes Billionaire on Bakken Oil After Bankruptcy (BBG)
- Japan Auto Sales Fall on Subsidy End as Korea Extends Drop (BBG)
- Black Hawks Near North Korea Show Risk in U.S. Command Shift (BBG)
- SEC Embraces Social Media (WSJ)
- Tesla Touts ‘True Out of Pocket’ Financing for Model S (BBG)
- U.K. Banks Try to Dodge Bonus Caps by Defining Risk-Taker (BBG)
- EU data watchdogs take aim at Google (FT)
Overnight Media Digest
* Rio Tinto Plc is seeking a buyer for controlling stakes in two Australian coal mines, the latest $1 billion-plus asset sale targeted by the mining company as it looks to cut costs and boost shareholder returns, people familiar with the matter said on Wednesday.
* The Barclays Plc U.S. Aggregate Bond Index, known as "the Agg" - which tracks the broader debt market the way the Standard & Poor's-500 follows stocks - declined 0.12 percent in the first quarter, its first negative return in that period since 2006.
* J.C. Penney Co Inc awarded no bonuses or stock awards to Chief Executive Ron Johnson or his chief operating officer for the last fiscal year, when the department store chain's sales fell by 25 percent and its stock fell by half.
* The U.S. Securities and Exchange Commission backed companies' use of social media such as Facebook Inc and Twitter Inc to disclose important information, so long as investors have been told which outlets will be used.
* A group of holdout creditors, led by hedge funds Aurelius Capital Management and Elliott Management Corp unit NML Capital Ltd, must respond by mid-April to a new proposal by Argentina to offer restructured bonds in hopes of resolving litigation that has prevented it from making payments on its previously restructured debt, a U.S. appeals court said on Tuesday.
* Shares of health insurance companies, including Humana Inc , UnitedHealth Group Inc and Cigna Corp, soared on Tuesday after U.S. federal officials scrapped proposed payment cuts to carriers that run Medicare plans amid pressure from senior citizens and lawmakers.
* Arkansas lawmakers are considering $125 million in state financing for a new $1.1 billion steel plant - a test of the political appetite for government subsidies for companies at a time of economic weakness.
* Tesla Motors Inc after building anticipation for several days with social-media teasers promising a significant development, on Tuesday said it would do what all other makers have done for years: offer lease financing on its electric cars.
* Reserve Bank of Australia Governor Glenn Stevens has been reappointed for a further three years, the country's Treasurer Wayne Swan said on Wednesday at a news conference in Canberra
A parliamentary report into the failure of HBOS to be published on Thursday is set to be highly critical of the men who ran the bank.
Data protection authorities from six European countries have launched a co-ordinated action against Google Inc to force it to put right alleged breaches of privacy rules.
Sir Richard Branson's Virgin Atlantic is preparing to talk to Air France-KLM and Alitalia about setting up a joint venture.
Royal Bank of Scotland could name Nathan Bostock as finance director, replacing Bruce van Saun who is set to be appointed head of the bank's U.S. arm Citizens.
Verizon Communications said it is not interested in buying or merging with Vodafone, following press speculation that it was working with rival AT&T Inc on a bid for the British company.
* Michalis Sarris, the Cypriot finance minister who negotiated Cyprus's bailout agreement with international creditors, resigned on Tuesday, citing the beginning of a government inquiry into the collapse of the country's banking industry.
* Verizon Communications Inc said on Tuesday that it did not "currently have any intention to merge with or make an offer for Vodafone Group Plc, whether alone or in conjunction with others," following a report that it was working with AT&T Inc on a joint bid.
* A ruptured Exxon Mobil Corp pipeline has prompted new criticism from opponents of the proposed Keystone XL project, while raising more questions about whether the U.S. federal government is adequately monitoring the nation's vast labyrinth of pipelines.
* The U.S. Securities and Exchange Commission on Tuesday outlined new disclosure rules that clarify how companies can use Facebook Inc, Twitter Inc and other social networks to disseminate information provided they meet certain requirements.
* Automakers reported on Tuesday that March sales of new cars and trucks were the highest monthly total in five years, providing more evidence of a sustained turnaround in the industry.
* In a clear sign of its dissatisfaction with the direction of the company, the board of J.C. Penney Co Inc gave its chief executive, Ron Johnson, a pay cut of almost 97 percent, to $1.9 million, for 2012, according to a regulatory filing on Tuesday.
* A Faruqi & Faruqi law firm partner who was sued last month, accused of sexual harassment, fired back on Tuesday at the junior lawyer who brought the case, contending that she fabricated her claims and was obsessed with him.
THE GLOBE AND MAIL
* Conservative Senator Pamela Wallin stepped down on Tuesday as chair of the Senate's national security and defense committee, citing personal reasons.
* A group of First Nation communities in mineral-rich Northern Ontario is asking the province to postpone implementation of new mining regulations that went into effect this week, claiming the rules were drafted without full consultation.
* Newcomers to Canada are being bluntly told in a revised federal guidebook for immigrants that polygamy and forced marriages are illegal in this country.
Reports in the business section:
* TransCanada Corp has moved a major step forward on its plan to ship Western Canadian crude to the country's eastern refineries and export facilities, so far facing few of the political hurdles that have dogged other pipeline projects aimed at moving crude out of Alberta.
* Suncor Energy Inc said its tests show an industrial water release at an oil sands site last week didn't have any effect on aquatic life in the Athabasca river.
* Companies are taking advantage of record-low interest rates and strong demand for corporate bonds to bulk up their growing piles of cash, holding on to those reserves in part as an insurance policy against economic turmoil.
* A CBC investigation has fingered a third man from London, Ontario, with possible links to a terrorist attack on an Algerian gas plant in January.
Aaron Yoon was a classmate of Xristos Katsiroubas and Ali Medlej, two men the public broadcaster identified on Monday as being among 29 Islamist extremists who stormed the In Amenas plant and held hundreds of workers hostage for four days.
* The owner of Canada's only major league baseball team, Rogers Communications Inc, and its chief competitor BCE Inc, are both hoping that the desire of die-hard sports fans to watch live events will defend the business of television distribution against a sudden and growing trend.
That threat to purveyors of traditional TV is one that Rogers hopes to counter, in part, with bulked-up sports programming and promotion across multiple platforms.
CHINA SECURITIES JOURNAL
-- China's national security fund posted revenue of 64.54 billion yuan ($10.41 billion) in 2012, with a real-yield of 4.38 percent, the highest level in three years, according to statistics from the National Council for Social Security Fund.
SHANGHAI SECURITIES NEWS
-- The 1,260 Shanghai and Shenzhen-listed companies that have already announced 2012 results, posted total net profits of 1.6 trillion yuan, up 2.6 percent from 2011.
-- The Ministry of Industry and Information Technology published a list of 45 Chinese steel firms that met national iron and steel standards on Tuesday, a move to tackle the excess production capacity that has plagued the sector.
-- Chinese President Xi Jinping said on Tuesday that stronger military cooperation between China and Saudi Arabia would benefit bilateral relations. He was meeting the oil-rich country's deputy defence minister.
Fly On The Wall 7:00 AM Market Snapshot
Affiliated Managers (AMG) upgraded to Buy from Neutral at BofA/Merrill
Alexza Pharmaceuticals (ALXA) upgraded to Overweight from Neutral at Piper Jaffray
Atmel (ATML) upgraded to Outperform from Market Perform at FBR Capital
Dollar Tree (DLTR) upgraded to Overweight from Equal Weight at Morgan Stanley
Key Energy (KEG) upgraded to Outperform from Market Perform at FBR Capital
NewStar Financial (NEWS) upgraded to Neutral from Sell at Janney Capital
NextEra Energy (NEE) upgraded to Conviction Buy from Neutral at Goldman
Niska Gas (NKA) upgraded to Neutral from Sell at Goldman
Panera Bread (PNRA) upgraded to Market Perform from Underperform at Raymond James
SolarWinds (SWI) upgraded to Equal Weight from Underweight at Morgan Stanley
Xcel Energy (XEL) upgraded to Buy from Neutral at Goldman
ADT Corp. (ADT) downgraded to Underweight from Equal Weight at Morgan Stanley
AngloGold (AU) downgraded to Neutral from Outperform at Credit Suisse
Bank of the Ozarks (OZRK) downgraded to Hold from Buy at Wunderlich
Boston Scientific (BSX) downgraded to Neutral from Outperform at Credit Suisse
Casey's General Stores (CASY) downgraded to Neutral from Buy at BofA/Merrill
Caterpillar (CAT) downgraded to Neutral from Buy at Goldman
Central European Media (CETV) downgraded to Hold from Buy at Jefferies
Charles River Labs (CRL) downgraded to Sell from Neutral at Citigroup
Cigna (CI) downgraded to Neutral from Buy at Citigroup
Cubist (CBST) downgraded to Sell from Hold at Cantor
Duke Energy (DUK) downgraded to Neutral from Buy at Goldman
Eaton Vance (EV) downgraded to Underperform from Neutral at BofA/Merrill
Gold Fields (GFI) downgraded to Neutral from Outperform at Credit Suisse
Great Plains Energy (GXP) downgraded to Neutral from Buy at Goldman
H&E Equipment (HEES) downgraded to Hold from Buy at KeyBanc
Linear Technology (LLTC) downgraded to Neutral from Buy at Longbow
Northeast Utilities (NU) downgraded to Neutral from Buy at Goldman
PBF Energy (PBF) downgraded to Neutral from Outperform at Credit Suisse
Tiffany (TIF) downgraded to Neutral from Overweight at Atlantic Equities
CARBO Ceramics (CRR) initiated with a Neutral at Goldman
Cedar Fair (FUN) initiated with a Neutral at Goldman
Eaton (ETN) initiated with an Equal Weight at Morgan Stanley
Qualcomm (QCOM) initiated with an Outperform at Northland Securities
Scorpio Tankers (STNG) initiated with a Neutral at Credit Suisse
Six Flags (SIX) initiated with a Conviction Buy at Goldman
Sucampo (SCMP) initiated with a Buy at Cantor
SEC confirmed backing social media for company disclosures
Verizon (VZ) said no intention to merge or make offer for Vodafone (VOD)
PHMSA requiring Exxon (XOM) get written consent before reopening Arkansas pipeline
Tesla Motors (TSLA), in partnership with Wells Fargo (WFC) and U.S. Bancorp (USB), created a financing product guaranteeing resale value of Model S
HSBC (HBC) to sell group term life, group medical insurance units in Singapore to AXA Life Insurance Singapore Private Limited (AXAHY)
Zynga (ZNGA) to begin first real money games in U.K
Weight Watchers (WTW) refinanced debt, sees 15c per share impact in FY13
Companies that beat consensus earnings expectations last night and today include:
JoS. A. Bank (JOSB), G-III Apparel (GIII)
Companies that missed consensus earnings expectations include:
Oxford Industries (OXM), Team (TISI), Global Payments (GPN)
Companies that matched consensus earnings expectations include:
Resources Connection (RECN)
- The Barclays U.S. Aggregate Bond Index, known as "the Agg", which tracks the broader debt market, dropped 0.12% in Q1, its first negative return in that period since 2006, the Wall Street Journal reports
- Wells Fargo (WFC) has become the dominant U.S. mortgage lender, taking an unprecedented 28.8% share of all home loans issued nationwide last year, up from 11.2% in 2007, the year before it bought Wachovia, the Wall Street Journal reports
- Google (GOOG) will launch a new version of its Nexus 7 tablet powered by Qualcomm’s (QCOM) Snapdragon processor around July, sources say, Reuters reports
- Japanese automakers' sales (TM, HMC, NSANY) in China in the first three months of 2013 have yet to recover fully from last year's slump, and foreign rivals are capitalizing in a market which expects 7% growth this year, Reuters reports
- HSBC Holdings (HBC) is leading the drive to convert companies to bonds from loans in Asia, helping it enter the global top 10 for junk issuance. The bank managed $5.3B of high-yield debt globally in Q1, Bloomberg reports
- Coal prices in Asia are poised to stall after the biggest quarterly gain in two years as demand from China fails to absorb increased exports from Australia, Colombia and Indonesia (RIO, XSRAY), Bloomberg reports
Ares Capital (ARCC) plans to offer 16.65M shares of common stock
Independent Bank (IBTX) 3.2M share IPO priced at $26.00
Javelin Mortgage (JMI) files to sell $143.75M in common stock
Spectra Energy Partners (SEP) commences offering of 4.5M common units
Standard Parking (STAN) files to sell 6.2M shares of common stock for holders
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