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Frontrunning: May 1

Tyler Durden's picture




 
  • Physical demand up: U.S. Mint Sales of Gold Coins Jump to Highest in Three Years (BBG)
  • Paper demand down: Gold ETP Holdings Cap Record Drop as $17.9 Billion Wiped Out (BBG)
  • It's May 1 not April 1: Fed Seen Slowing Stimulus With QE Cut by End of This Year (BBG)
  • Another great step for Abenomics: Sony leadership to forgo bonuses after broken promise on profits (FT)
  • High-Speed Traders Exploit Loophole (WSJ)
  • It's peanut Breaburn jelly time: How Google UK clouds its tax liabilities (Reuters)
  • Frowny face day at the Mark Zandi household: Obama Said to Choose Watt to Lead Fannie Mae Regulator (BBG)
  • Russia’s 20 Biggest Billionaires Keep Riches From Putin (BBG)
  • China Affair With Cheap Diamonds Heats Mass Market (BBG)
  • China's emotional ties to North Korea run deep in border city (Reuters)
  • US companies must use cash piles for capex (FT) ... and yet they aren't. Tax anyone who doesn't spend for CapEx!
  • Chinese Way of Doing Business: In Cash We Trust (NYT)
  • Accused Colorado gunman's lawyers may enter insanity plea over his objections (Reuters)
  • China Manufacturing Gauge Signals Slowdown Persisting (BBG)
  • Fed weighs tighter cap on bank leverage (FT)

 

Overnight Media Digest

WSJ

* High-speed traders are using a hidden facet of the Chicago Mercantile Exchange's computer system to trade on the direction of the futures market before other investors get the same information.

* Apple sold the largest corporate-bond deal in history Tuesday, a $17 billion offering investors hungrily gobbled up.

* Home prices are rising at the fastest rate in seven years, with some communities seeing double-digit gains, as buyers are returning to a market where the number of properties for sale is in short supply.

* Yahoo decided not to pursue a deal for online-video site Dailymotion after a French government official insisted that it not take majority control.

* Malaysia is one of the most lucrative places in the world for Goldman Sachs, which made profits of more than $200 million from four government-tied bond deals there in the past two years.

* U.S. President Barack Obama is expected to nominate Tom Wheeler, a former top lobbyist for the cable and wireless industries, to lead the Federal Communications Commission (FCC).

 

FT

British Finance Minister George Osborne warned the Bank of England that its overzealous focus on banking stability could undermine the country's near-term economic recovery.

During Kazakh miner Eurasian Natural Resources Corp's 2007 flotation on the London Stock Exchange, lawyers and auditors found evidence that the company's financial records had been falsified or destroyed, according to people familiar with the matter.

The UK Listings Authority has begun investigating Eurasian Natural Resources Corp for potential violations of takeover rules -- transactions being scrutinised include the miner's purchase of a stake in the Camrose business in 2010.

As individuals, companies and governments race to meet a three-year deadline to raise claims over the 2010 Deepwater Horizon oil spill, BP Plc now faces 2,200 related lawsuits.

A suspended Quad Capital trader is under U.S. Federal scrutiny for his involvement in a $1 billion rogue trading scandal regarding the unauthorised purchase of Apple Inc shares, according to attorneys involved in the matter.

UK Coal, Britain's largest coal miner, has proposed liquidation to run its surviving mines after a fire at its largest colliery left the company with insufficient cash to meet running costs.

 

NYT

* Despite its extraordinarily flush balance sheet, technology behemoth Apple Inc borrowed money on Tuesday for the first time in nearly two decades. In a record-size bond deal, the company raised $17 billion, paying interest rates that hovered near the low-cost debt of the United States Treasury.

* U.S. President Barack Obama is expected on Wednesday to nominate Tom Wheeler, a venture capital investor and fund raiser in Obama's presidential campaigns, as chairman of the Federal Communications Commission, two administration officials said Tuesday.

* Wall Street bankers and some of the world's top finance ministers are waging a bitter international campaign to block Washington financial regulators from extending their policing powers far beyond the nation's shores.

* The outspoken chief executive of SoftBank went on the offensive on Tuesday, arguing that his $20 billion offer for Sprint Nextel would prevail unmodified over a bold competing bid made by Charles W. Ergen's Dish Network.

* Earnings at Pfizer, one of the largest drug makers, soared 53 percent as the company benefited from a gain related to a joint venture with China. But the results fell short of Wall Street expectations, and the company lowered its forecast for the year.

* NewSchools Venture Fund, a nonprofit that started out channeling philanthropic donations to charter schools and that now invests in a range of education groups and businesses, is entering into a partnership with a new venture capital fund that could result in millions more in financing.

 

Canada

THE GLOBE AND MAIL

* A deal has been reached to end Alberta's wildcat strike. Union members will report to work at 7 a.m. Wednesday morning after their executive team agreed to a deal on Tuesday night with the province to end an illegal strike that began four days earlier.

* Thousands of workers paraded through central Dhaka on May Day to demand safety at work and the death penalty for the owner of a garment factory building that collapsed last week in the country's worst industrial disaster, killing at least 395 people and injuring 2,500.

* A Jewish advocacy group has called on the University of British Columbia to prevent Leila Khaled, known for her role in hijacking's in 1969 and 1970, from speaking at a conference devoted to Palestinian issues, saying the controversial figure's past should preclude her from having any public platform in Canada.

Reports in the business section:

* Twitter's hiring of Kirstine Stewart, one of the most senior executives at the Canadian Broadcasting Corp, to lead the social media site's first regional office in Canada is a signal of the company's growing ambitions to be connected to television.

* The Retail Council of Canada will develop an updated set of "responsible trade" guidelines in the aftermath of the tragedy in Bangladesh that left almost 390 people dead - mostly in garment factories housed in a building that collapsed last week.

NATIONAL POST

* Nelson Mandela's daughter attacked Jacob Zuma, South Africa's president, Tuesday for inviting television cameras to record a visit to her father which showed him looking frail and bewildered by the politicians jostling around him.

FINANCIAL POST

* Postmedia Network Canada Corp, Canada's largest chain of big city English language daily newspapers, is eliminating the role of local publishers at its papers as part of a move to centralize more of the company's business operations.

* Hudson's Bay Co will open stores-within-a-store for Tommy Hilfiger as the department store chain increases its assortment of the U.S. sportswear brand across Canada, the companies announced Tuesday.

 

Corporate Finance

* Canadian coffee-and-doughnut chain Tim Hortons Inc has come under pressure from hedge fund Highfields Capital, a large investor, to aggressively boost returns through debt-funded share buybacks and a scaling back of U.S. expansion plans, according to documents seen by Reuters and two sources familiar with the matter.

* During Kazakh miner Eurasian Natural Resources Corp's 2007 flotation on the London Stock Exchange, lawyers and auditors found evidence that the company's financial records had been falsified or destroyed, according to people familiar with the matter, the Financial Times reported. ()

* A private equity group made up of Bain Capital LLC and Golden Gate Capital Corp has emerged as the lead contender to buy BMC Software Inc for more than $6.5 billion, three people familiar with the matter said on Tuesday.

* Yahoo! Inc decided not to pursue a deal for online-video site Dailymotion after a French government official insisted that it not take majority control, the Wall Street Journal reported, citing people briefed on the matter. ()

* UK Coal Operations, partly owned by Coalfield Resources , has proposed a voluntary liquidation and the handing over of its remaining mines to a new company, the Financial Times reported, after a fire closed Britain's largest coal mine.

* An investor in Uber, the fast-growing alternative taxi service, has reached out to a venture capital firm about a potential new funding round that could value the company at $1 billion or more, a person familiar with the situation told Reuters.

* Hedge funds, including Paulson & Co. Inc., are pushing Congress to abandon plans to liquidate Fannie Mae and Freddie Mac as investors buy up preferred stock that has long been considered worthless, according to people with knowledge of the discussions, Bloomberg reported. ()

* Fuel supplier Z Energy is looking to raise about $565 million in the second-largest initial public offering proposed in Australia and New Zealand this year, the Wall Street Journal reported, citing people familiar with the matter.

 

ANALYST RESEARCH

Upgrades

Amgen (AMGN) upgraded to Conviction Buy from Neutral at Goldman
Artisan Partners (APAM) upgraded to Outperform from Market Perform at Keefe Bruyette
Del Frisco's (DFRG) upgraded to Strong Buy from Outperform at Raymond James
Ultimate Software (ULTI) upgraded to Buy from Hold at Canaccord

Downgrades

Biogen (BIIB) downgraded to Neutral from Conviction Buy at Goldman
BreitBurn Energy (BBEP) downgraded to Neutral from Buy at Citigroup
Crimson Exploration (CXPO) downgraded to Equal Weight from Overweight at Johnson Rice
EV Energy (EVEP) downgraded to Neutral from Buy at Citigroup
Fiserv (FISV) downgraded to Perform from Outperform at Oppenheimer
LSI Corp. (LSI) downgraded to Neutral from Buy at Goldman
Magellan Health (MGLN) downgraded to Neutral from Buy at Citigroup
MicroStrategy (MSTR) downgraded to Underperform from Market Perform at Raymond James
Mindspeed (MSPD) downgraded to Market Perform from Outperform at Raymond James
ONEOK (OKE) downgraded to Equal Weight from Overweight at Morgan Stanley
Oil States (OIS) downgraded to Market Perform from Outperform at Raymond James
Oil States (OIS) downgraded to Underperform from Market Perform at BMO Capital
QEP Resources (QEP) downgraded to Neutral from Positive at Susquehanna
QIAGEN (QGEN) downgraded to Equal Weight from Overweight at Barclays
Tesoro Logistics (TLLP) downgraded to Outperform from Strong Buy at Raymond James

Initiations

Fiesta Restaurant Group (FRGI) initiated with a Buy at Jefferies
Fiesta Restaurant Group (FRGI) initiated with an Overweight at Piper Jaffray
Fiesta Restaurant Group (FRGI) initiated with an Overweight at Stephens
Matador (MTDR) initiated with a Hold at C.K. Cooper
Polypore (PPO) initiated with a Neutral at Goldman
Sonic (SONC) initiated with a Hold at Jefferies
West Corp. (WSTC) initiated with a Buy at Citigroup
West Corp. (WSTC) initiated with a Buy at Deutsche Bank
West Corp. (WSTC) initiated with a Buy at Goldman
West Corp. (WSTC) initiated with an Outperform at Wells Fargo

HOT STOCKS

Teva (TEVA) confirmed FDA approval of over-the-counter availability of emergency contraceptive Plan B
FMC Corp. (FMC) said exploring sale of Peroxygens business
Mindspeed Technologies (MSPD) hired Morgan Stanley (MS) to evaluate strategic alternatives
NuVasive (NUVA) announced partial settlement in patent litigation with Medtronic (MDT)
Discover (DFS) disclosed New Mexico AG filed suit against company
Humana (HUM) said 2014 earnings growth uncertain at this time
Share repurchase authorization reset to $1B
Manitowoc (MTW) reaffirmed outlook for 2013
Denny's (DENN) sees FY13 system-wide same-store sales growth 0%-1.5%
QEP Resources (QEP) sees 2013 adjusted EBITDA $1.575B-$1.675B
Cloud Peak Energy (CLD) sees 2013 adjusted EBITDA $220M-$270M
Brogdon Family delayed tender offer for majority interest in AdCare (ADK)

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Humana (HUM), UGI Corporation (UGI), Genworth (GNW), FMC Corporation (FMC), Jones Lang LaSalle (JLL), DreamWorks (DWA), Western Union (WU)

Companies that missed consensus earnings expectations include:
Genesee & Wyoming (GWR), ADT Corp. (ADT), Talisman Energy (TLM), Regal-Beloit (RBC), Yamana Gold (AUY), Manitowoc (MTW), Cabot (CBT), Leap Wireless (LEAP)

Companies that matched consensus earnings expectations include:
Wabash (WNC), Jamba (JMBA), Rogers Corp. (ROG), Regal Entertainment (RGC)

NEWSPAPERS/WEBSITES

  • High-speed traders are using a hidden facet of the Chicago Mercantile Exchange’s (CME) computer system to trade on the direction of the futures market before other investors get the same information, the Wall Street Journal reports
  • Home prices are rising at the fastest rate in seven years, with some communities seeing double-digit gains. Prices increased 9.3% in February from a year earlier while mortgage-interest rates hovered near record lows, according to the S&P's/Case-Shiller index, the Wall Street Journal reports
  • Executives from Google (GOOG) and its auditor Ernst & Young will be called again to a British parliament committee to testify on tax, after a Reuters investigation highlighted inconsistencies in the way Google portrays its activities in Britain, Reuters reports
  • Small U.S. businesses cut back on borrowing in March for a fourth straight month, all but reversing a short-lived surge after the Fed launched its asset-buying program directed at boosting growth and jobs, Reuters reports
  • Charles Schwab Corp. (SCHW), whose antitrust claims against banks over manipulation of the London interbank offered rate were thrown out of federal court in New York, sued Bank of America (BAC) and other financial institutions for fraud in state court in San Francisco, Bloomberg reports
  • The CBS (CBS) television network could go off the air and become a cable channel if courts don’t stop the Internet start-up Aereo from retransmitting shows such as “NCIS” without permission, said CBS CEO Leslie Moonves, Bloomberg reports

SYNDICATE

Cascade Microtech (CSCD) files to sell 2.29M shares of common stock for holders
Northern Tier (NTI) Energy LP 12M share Secondary priced at $26.28
Pennsylvania REIT (PEI) announces offering of 10M shares of beneficial interest
comScore (SCOR) files $100M mixed securities shelf, 1M shares of common stock

 

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Wed, 05/01/2013 - 07:35 | 3517117 Zer0head
Zer0head's picture

Frowny face day at the Mark Zandi household

 

LOL 

Wed, 05/01/2013 - 07:36 | 3517118 DavidC
DavidC's picture

BBG - Fed Seen Slowing Stimulus With QE Cut by End of This Year.

Yeah, right. The Fed has painted itself into a corner. ANY indication that QE will change or lessen will tank the markets, interest costs will rise causing devestation for all those leveraged-to-the-hilt.

Unless he bails out (yes, intended), leaving the devestation for his successor to deal with.
DavidC

Wed, 05/01/2013 - 07:49 | 3517135 Headbanger
Headbanger's picture

Yeah, leave some land mines planted for the next administration to deal with. Probably Republican next tiem.

Wed, 05/01/2013 - 08:25 | 3517212 mayhem_korner
mayhem_korner's picture

 

 

Agreed.  Any hints from the Fed about pulling back the punch bowl are simply test balloons to calibrate "market" response so that the TBTF can properly move their positions.  No doubt there will be a few more GLD crashes.  I say bring 'em on.  The closer together and more intense they get, the nearer we are to a new beginning.

Wed, 05/01/2013 - 07:40 | 3517123 Balvan
Balvan's picture

Do you mind giving me vote up?

Wed, 05/01/2013 - 07:48 | 3517129 new game
new game's picture

the great rotation is underway!

FROM:paper/trust instruments TO: anything durable & physical

etf>phys

frn>durables

banks>matress/safe

join in on the hoarding before the SHTF

the party of bartering is just beginning; sharpen your skills

everything is negotible...

Wed, 05/01/2013 - 07:54 | 3517148 Headbanger
Headbanger's picture

And set up a still.  Whiskey was the currency in this country before we had money in wide use.

Also some gunsmithing and reloading skills might come in handy along with horse breeding and riding.

Wed, 05/01/2013 - 07:49 | 3517131 Headbanger
Headbanger's picture

QE CUTBACK!!??   BLASPHEMY!!  BLASPHEMY!!   STONE THEM NOW!!

Wed, 05/01/2013 - 07:52 | 3517138 new game
new game's picture

he who casts the first stone starts the revolution!

(the throw heard around the world-spain?)

Wed, 05/01/2013 - 07:57 | 3517151 Headbanger
Headbanger's picture

Well, we can't get any ammo!!

Wed, 05/01/2013 - 07:51 | 3517133 Never One Roach
Never One Roach's picture

This period in our history will be known as, "The Age of the Cockroaches."

 

 

Wed, 05/01/2013 - 07:50 | 3517139 new game
new game's picture

cock/sock roaches are edible...

Wed, 05/01/2013 - 07:55 | 3517141 Cookie
Cookie's picture

Chinese Way of Doing Business: In Cash We Trust

Sheet, they have only just woken up to what has been reality for thousands of years, with gold being cash for 99% of that time, until the CB was invented


Wed, 05/01/2013 - 07:53 | 3517145 mayhem_korner
mayhem_korner's picture

 

 

From the Bloomberg report:

“This drop has made physical gold much more attractive than paper gold,” Dutkevitch said.

(Admission that Gold and GLD are not the same thing.  Go ahead Ben, pull away the punch bowl.  Give us another physical sale while we watch the stawk "market" plummet).

Wed, 05/01/2013 - 08:19 | 3517205 Sean7k
Sean7k's picture

The US Mint is essentially producing all that comes in and silver planchets are getting harder to source. Primary dealers are on ration and sales are at their highest levels in history. They still haven't minted the 5 oz national parks coins for 2013 and three issues remain on hiatus (including the Eagle proof). 

The press may not want to advertise it, but Americans are buying silver and gold in record quantities. ETF's? Let the big boys bash their heads against the walls. 

Wed, 05/01/2013 - 09:24 | 3517412 machineh
machineh's picture

'Americans'? The word you wanted was 'odd-lotters': the penny-stock punters of the precious metals markets.

Who are always to be faded, by the way.

Anyone who thinks the coin-minting tail wags the bullion price dog doesn't have a clue.

Wed, 05/01/2013 - 10:00 | 3517591 Sean7k
Sean7k's picture

And anyone that thinks bullion paper prices matter is an imbecile.

Wed, 05/01/2013 - 12:01 | 3518246 glenlloyd
glenlloyd's picture

Zandi is such a tool....

Do NOT follow this link or you will be banned from the site!