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Frontrunning: April 29

Tyler Durden's picture




 
  • Gold Bears Defy Rally as Goldman Closes Short Wager (BBG)
  • Still stuck on central-bank life support (Reuters)
  • Ebbing Inflation Means More Easy Money (BBG)
  • So much for socialist wealth redistribution then? François Hollande to woo French business with tax cut (FT)
  • Billionaires Flee Havens as Trillions Pursued Offshore (BBG)
  • Companies Feel Pinch on Sales in Europe (WSJ)
  • Brussels plan will ‘kill off’ money funds (FT)
  • Danes as Most-Indebted in World Resist Credit (BBG)
  • Syria says prime minister survives Damascus bomb attack (Reuters)
  • Syria: Al-Qaeda's battle for control of Assad's chemical weapons plant (Telegraph)
  • Nokia Betting on $20 Handset as It Loses Ground on IPhone (BBG)
  • Rapid rise of chat apps slims texting cash cow for mobile groups (FT)
  • Calgary bitcoin exchange fighting bank backlash in Canada (Calgary Herald)
  • IG poised to widen market for spread bets on Bitcoin (FT)
  • Italy will lead eurozone revolt against austerity (FT)
  • Explosion shakes central Prague, as many as 40 injured (Reuters)

Overnight Media Digest

WSJ

* Hiding behind the profit gains of America's biggest companies is a worrying slowdown in sales growth, reflecting the combined effects of Europe's malaise, a stronger dollar and sluggish consumer spending.

* Deutsche Bank has become a focal point in a debate over the dearth of female executives at German firms.

* Frank Bisignano, JPMorgan's co-chief operating officer, intends to exit the nation's largest bank, the latest executive upheaval to follow a multibillion-dollar trading loss.

* Chinese car maker BYD is setting up shop in the U.S., with small ambitions but a clear goal: Get the government to subsidize the sales of its American-made electric buses.

* Investors in search of higher yields are driving up the shares of dividend paying companies, fueling a debate over whether these haven stocks are getting dangerously expensive.

* The U.S. denied General Motors' request for 2013 cash pay increases for several of the auto maker's top executives while allowing several increases to stock-based compensation.

* Growth in China's industrial profits decelerated sharply in March, raising concern that sputtering expansion of the world's second largest economy could slow further.

* Lawmakers in a number of states are debating whether to put new limits on the burgeoning business of lending money to people involved in lawsuits and collecting when the suits pay out.

* Avon Products said Fred Hassan has resigned just months after taking the chairman's post at the beauty company.

* France is open to China buying some of its companies as Europe's second-largest economy tries to foster more balanced trade relations with the Asian country, French Finance Minister Pierre Moscovici said.

 

FT

JPMorgan Chase & Co Chief Executive Jamie Dimon promoted Matt Zames to chief operating officer, replacing Frank Bisignano in the investment bank's latest executive reshuffle.

Intermediate Capital Group is in talks with Lloyds Banking Group over a 400-million-euro ($521.08 million) collateralised loan obligation, a deal which is expected to close over the summer.

Matthew Elderfield, Ireland's chief banking regulator, will be appointed the new head of compliance at Lloyds Banking Group over the next few days.

French President Francois Hollande intends to cut capital gains taxes, hoping to convince investors that the Socialist government is committed to reviving its stalled economy.

IG Group plans to extend a service that will let its customers bet on the highly volatile price of Bitcoin, the virtual currency that was introduced to the company's platform at the start of April.

WhatsApp Messenger, a mobile messaging app available on platforms including Android and iOS, has been accused of violating international privacy rules by data protection regulators in Canada and the Netherlands.

 

NYT

* Frank Bisignano, a senior executive in the inner circle of Jamie Dimon, JPMorgan Chase's chief executive, is leaving, the latest departure after the bank reported a multibillion-dollar trading loss last year.

* A venomous public battle over a $5.2 billion proposal by the Empire State Building's managing family will face a crucial legal test beginning on Monday.

* Millions of Americans suffered a loss of wealth during the recession and the sluggish recovery that followed. But the last half-decade has proved far worse for black and Hispanic families than for white families, starkly widening the already large gulf in wealth between non-Hispanic white Americans and most minority groups, according to a new study from the Urban Institute.

* Legislation that would force internet retailers to collect sales taxes from their customers has put antitax and small-government activists like Grover Norquist's Americans for Tax Reform and the Heritage Foundation in an unusual position: they're losing.

* The Huffington Post announced Sunday night that Mark Cuban's cable channel AXS TV, previously known as HDNet, would soon carry HuffPost Live's programming for six hours a day.

 

Canada

THE GLOBE AND MAIL

* The federal government will announce sweeping changes to the temporary foreign workers program Monday, aimed at ensuring non-Canadian workers are employed in the country only after every effort has been made to put Canadians in the jobs first.

* Federal provisions that would impede the release of "high-risk" mentally ill offenders are being condemned within the psychiatric establishment as a senseless, counterproductive move.

Reports in the business section:

* Andreas Pohlmann is SNC Lavalin Group Inc's new chief compliance officer, a position created in February to ensure that the engineering firm does not break the law when it seeks out contracts in Canada and abroad.

* Loblaw Cos Ltd and other major Canadian retailers are holding an emergency meeting Monday to grapple with the aftermath of the deadly collapse of an illegally built clothing factory in Bangladesh.

* JPMorgan Chase & Co said on Sunday that Matt Zames will fully assume the role of chief operating officer as his former partner in the job leaves as part of the latest management shakeup at the biggest U.S. bank.

NATIONAL POST

* Two determined anti-abortion protesters who thought they found a loophole in British Columbia's "bubble zone" law against protesting outside abortion clinics have lost in the province's highest court.

* A Canadian boxer who was killed while fighting with jihadists in Russia has emerged as a key contact who may have set the elder Boston bomber on his path to violent extremism.

FINANCIAL POST

* United States Steel locked out almost 1,000 unionized workers at its facility in Nanticoke, Ontario, on Sunday, raising questions from employees about promises the company made to the federal government about continuing production in Canada.

* The Canadian Securities Administrators (CSA) says it is probing the Investment Industry Regulatory Organization of Canada (IIROC) after one of its staff members lost a portable device containing information about tens of thousands of investment dealer clients

 

Global Corporate Finance

* A proposed merger of Valeant Pharmaceuticals International Inc and Actavis Inc was put on hold after the two drugmakers failed to agree on terms of a deal that would have created a healthcare giant with a combined market value of $35 billion, a person familiar with the situation told Reuters on Saturday.

* An Italian judge has rejected an order to seize around 1.8 billion euros ($2.34 billion) of assets from Nomura Holdings Inc as part of a probe into suspected fraud involving troubled lender Monte dei Paschi di Siena, legal sources said on Saturday.

* Japan's Sumitomo Mitsui Banking Corp is in advanced talks to buy a $1.2 billion stake in BTPN, an Indonesian lender backed by TPG Capital, people familiar with the matter told Reuters.

* Russia's second-largest bank VTB has won firm orders for its entire offering of new shares worth $3.3 billion, a source close to the bank said on Sunday, bolstering its capital strength as it eyes a push into retail lending.

* A U.S. unit of Mitsubishi UFJ Financial Group Inc is in talks to acquire the rights to sell trust-banking services to Morgan Stanley's clients, in the bank's latest bid to expand its business abroad, a source familiar with the matter said on Sunday.

* Goldman Sachs Group Inc has arranged a $1.75 billion financing package for J.C. Penney Co Inc, backed by the department store chain's real estate and other assets, a source familiar with the situation said on Friday.

* Bond insurer MBIA Inc is working with law firm Weil Gotshal & Manges as it seeks to avoid possible rehabilitation of its structured finance unit by a New York regulator, a source familiar with the matter said Friday.

* Ambulatory Services of America Inc, a U.S. operator of healthcare facilities controlled by private equity firm Lindsay Goldberg LLC, has appointed Morgan Stanley to explore a sale, three people familiar with the matter said this week.

* U.S. specialty chemicals company Rockwood Holdings Inc has attracted bids from private equity groups for its industrial ceramics unit CeramTec, people familiar with the deal said.

* Indebted Russian steel group Mechel has backed off from selling up to 25 percent of its mining division because of market conditions, sources with knowledge of the matter said.

* Spain's biggest bank Santander is in exclusive talks with U.S. private equity firms Warburg Pincus and General Atlantic LLC to sell a stake in its asset management business, three people familiar with the discussions said.

 

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Disney (DIS) upgraded to Buy from Neutral at UBS
Flir Systems (FLIR) upgraded to Neutral from Underweight at JPMorgan
Harmony Gold (HMY) upgraded to Neutral from Sell at Citigroup
LifePoint Hospitals (LPNT) upgraded to Buy from Neutral at BofA/Merrill
Marathon Oil (MRO) upgraded to Overweight from Equal Weight at Barclays
NII Holdings (NIHD) upgraded to Outperform from Market Perform at Wells Fargo
SunTrust (STI) upgraded to Outperform from Market Perform at FBR Capital
Tenet Healthcare (THC) upgraded to Buy from Neutral at UBS

Downgrades

AB InBev (BUD) downgraded to Market Perform from Outperform at Bernstein
Alliance Holdings (AHGP) downgraded to Neutral from Buy at Citigroup
Allied Nevada Gold (ANV) downgraded to Sector Perform from Outperform at RBC Capital
BreitBurn Energy (BBEP) downgraded to Neutral from Outperform at RW Baird
Cerner (CERN) downgraded to Market Perform from Outperform at Raymond James
Eastman Chemical (EMN) downgraded to Neutral from Overweight at JPMorgan
Ecolab (ECL) downgraded to Neutral from Outperform at RW Baird
Fluidigm (FLDM) downgraded to Market Perform from Outperform at Leerink
Gannett (GCI) downgraded to Underweight from Equal Weight at Barclays
Gold Fields (GFI) downgraded to Neutral from Overweight at HSBC
IBERIABANK (IBKC) downgraded to Market Perform from Outperform at Keefe Bruyette
Leap Wireless (LEAP) downgraded to Underweight from Neutral at JPMorgan
NGL Energy Partners (NGL) downgraded to Neutral from Outperform at RW Baird
Regency Energy Partners (RGP) downgraded to Neutral from Outperform at RW Baird
Santander Mexico (BSMX) downgraded to Sector Perform from Outperform at RBC Capital
Summit Midstream (SMLP) downgraded to Neutral from Outperform at RW Baird
Targa Resources Partners (NGLS) downgraded to Neutral from Outperform at RW Baird
Vanguard Natural (VNR) downgraded to Neutral from Outperform at RW Baird

Initiations

Ann Inc. (ANN) initiated with an Outperform at BlueFin
Dick's Sporting (DKS) initiated with an Overweight at Barclays
Independent Bank (IBTX) initiated with an Overweight at Evercore

HOT STOCKS

Bayer (BAYRY) to acquire Conceptus (CPTS) for $1.1B, or $31.00 per share
Clearwire (CLWR) shareholder Aurelius Capital filed to block Sprint (S) deal, DJ reports
Capstone Mining to purchase BHP's (BHP) Pinto Valley copper mine for $650M
Lloyds Banking (LYG) to sell its Spanish retail banking operations to Banco Sabadell, S.A.
Novartis (NVS) disputed allegations in two U.S. lawsuits
Orville Redenbacher (CAG) recalled Classic Kettle Korn ready-to-eat popcorn
Jim Breyer steps down from Facebook (FB) board

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Aveo Pharmaceuticals (AVEO), Medidata Solutions (MDSO), Compass Minerals (CMP), Boardwalk Pipeline (BWP), UNS Energy (UNS), Sohu.com (SOHU), Conceptus (CPTS), AsiaInfo-Linkage (ASIA)

Companies that missed consensus earnings expectations include:
HomeStreet (HMST), TGC Industries (TGE)

NEWSPAPERS/WEBSITES

  • Fed officials are likely to continue their easy money policies at the central bank's policy meeting this week, in part because several recent inflation measures have fallen well below its 2% target, the Wall Street Journal reports
  • Behind the profit gains of America's largest companies is a worrying slowdown in sales growth. U.S. companies (IBM, UTX, MMM, XRX) have missed revenue forecasts, hurt by a combination of Europe's malaise, a stronger dollar and sluggish consumer spending, the Wall Street Journal reports
  • Verizon Communications’ (VZ) chances of buying the 45% stake in Verizon Wireless owned by  Vodafone (VOD) will hinge, in part, on the quality of tax advice it’s getting. It may have found a way to structure a purchase so Vodafone can avoid a multi-billion dollar U.S. capital gains tax bill, sources say, Reuters reports
  • World advertising expenditure will grow by 3.9% in 2013 and 5% in 2014, driven by internet advertising as the global economy strengthens, according to ZenithOptimedia, the forecasting unit of Publicis Groupe (PUBGY), Reuters reports
  • Economic confidence in the euro area decreased more than economists forecast in April as the 17- nation currency bloc struggled to emerge from a recession and the Cyprus bailout renewed debt-crisis concerns. An index of executive and consumer sentiment dropped to 88.6 from a revised 90.1 in March, the European Commission said today, Bloomberg reports
  • U.S. technology stocks (AAPL, IBM) have declined to the cheapest levels in at least seven years and are vulnerable to more losses as analysts reduce Q2 profit estimates, Bloomberg reports

BARRON’S

Doubts remain after modifications to Boeing's (BA) Dreamliner lithium-ion
batteries
Dell (DELL) shares are still attractive despite Blackstone's (BX) withdrawal
Apple's (AAPL) buyback, dividend provide incentive to own shares
Hanesbrands (HNI) shares could rise 20% due to new products, lower costs (WMT, M)
Gap (GPS) shares could be a good deal for investors
Ecolab (ECL) stock could jump 20% or more
Layne Christensen (LAYN) could see a jump in earnings, share price

SYNDICATE

Carlyle Group (CG) files to sell 263.95M common units from time to time
Central European Media (CETV) files to sell $175M in Class A common stock
Good Times Restaurants (GTIM) files to sell $6M of common stock
PowerSecure (POWR) files to sell 675,160 shares of common stock for holders
Restoration Hardware (RH) files to sell common stock for holders

And completeing the recap of news with a European focus, here is Scott Solano with his final broadcast from dpa-AFX:

 

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Mon, 04/29/2013 - 07:54 | 3509387 q99x2
q99x2's picture

BitCoin exchanges should only operate with real assets and not fiat.

Mon, 04/29/2013 - 08:09 | 3509409 Never One Roach
Never One Roach's picture

<<Gold Bears Defy Rally as Goldman Closes Short Wager (BBG)>>

 

“It’s bizarre that the price has come back so rapidly,” said Donald Selkin, who helps manage about $3 billion of assets as the chief market strategist at National Securities Corp. in New York. “After the big decline, demand jumped like crazy. It’s the old rubber-band theory: You stretch too far, and eventually, it snaps back. Banks came in to buy, and there is record demand for coins around the world.”

 

Bullion rallied 11 percent since reaching a two-year low April 16. The U.S. Mint ran out of its smallest gold coin last week, with sales across its products poised for the best month since December 2009, and the U.K. Mint said purchases tripled. Premiums paid by jewelers in India (XAUINR), the biggest importer, to secure supply surged as much as fivefold in 10 days.

 

http://www.bloomberg.com/news/2013-04-28/gold-bears-defy-rally-as-goldma...

 

Why "bizarre" Mr Selkin?

 

<<Fed officials are likely to continue their easy money policies at the central bank's policy meeting this week>>

 

 

Mon, 04/29/2013 - 08:10 | 3509426 Sudden Debt
Sudden Debt's picture

BELGIUM FINALLY HAS THE HIGHEST TAX RATE IN THE WORLD!!!

I'm feeling so proud right now....

 

Mon, 04/29/2013 - 13:24 | 3510530 monad
monad's picture

Didn't they dump 244 tons of gold in 1994? Deja vu

Mon, 04/29/2013 - 08:37 | 3509487 Hongcha
Hongcha's picture

NeverOneRoach; until you have spoken to a few U.S. stockbrokers and other salesmen, you cannot imagine the unanimity of fear and loathing among them for gold and gold production shares.  That may change when gold climbs past its old high.

Mon, 04/29/2013 - 08:56 | 3509549 Aurora Ex Machina
Aurora Ex Machina's picture

Sea surface temperatures in the Northeast Shelf Large Marine Ecosystem during 2012 were the highest recorded in 150 years, according to the latest Ecosystem Advisory issued by NOAA's Northeast Fisheries Science Center (NEFSC). These high sea surface temperatures (SSTs) are the latest in a trend of above average temperature seen during the spring and summer seasons, and part of a pattern of elevated temperatures occurring in the Northwest Atlantic, but not seen elsewhere in the ocean basin over the past century...

"Many factors are involved in these shifts, including temperature, population size, and the distributions of both prey and predators," said Jon Hare, a scientist in the NEFSC's Oceanography Branch. A number of recent studies have documented changing distributions of fish and shellfish, further supporting NEFSC work reported in 2009 that found about half of the 36 fish stocks studied in the Northwest Atlantic Ocean, many of them commercially valuable species, have been shifting northward over the past four decades.[source 26th April 2013]

 

Winter mixing went to extreme depths in 2013, which will impact the spring bloom by redistributing nutrients and affecting the stratification of the water column as the bloom develops.[source]

 


Smoke them if you've got them.

Mon, 04/29/2013 - 11:41 | 3510193 mudduck
mudduck's picture

Bloomberg published the 100 richest people list. Seem to have left out all the old world royalty and banking money. And no old world industrial (standard oil type) money either. Must have been using tax rolls?

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