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Frontrunning: June 3

Tyler Durden's picture




 
  • BIS lays out "simple" plan for how to handle bank failures (Reuters) - Are we still holding our breath on Basel III?
  • Deficit Deal Even Less Likely - Improving U.S. Fiscal Health Eases Pressure for a 'Grand Bargain' Amid Gridlock (WSJ)
  • IRS Faulted on Conference Spending (WSJ)
  • Deadly MERS-CoV virus spreads to Italy (CNN)
  • Turkish PM Erdogan calls for calm after days of protests (Reuters)
  • Financial system ‘waiting for next crisis’ (FT)
  • Russia to send nuclear submarines to southern seas (Reuters)
  • China Nuclear Stockpile Grows as India Matches Pakistan Rise (BBG)
  • Bonds’ Point of No Return About a Standard Deviation Away (BBG)
  • Trial of U.S. soldier in WikiLeaks case to get under way (Reuters)
  • China returns to global metals market (FT)
  • Outgoing BOE head Sir Mervyn King: Public are right to be angry at banks (BBC)
  • The European data is about to "go BLS": Spain Prime Minister sees hope for unemployment on day of protests (Reuters)
  • Microsoft Said to Cut Windows for Tablet Prices (BBG)
  • Tax Probe in France Targets UBS Unit (WSJ)

Overnight Media Digest

WSJ

* Shrinking near-term federal deficits, slowing health care cost increases and partisan gridlock have all but wiped out the likelihood for a deal this year to cut long-term deficits, perhaps delaying a compromise until after the 2014 midterm elections.

* SAC Capital Advisors is bracing for investors to pull an estimated $3.5 billion from the firm as the hedge-fund giant continues to battle fallout from an intensifying insider-trading probe.

* Glencore Xstrata and Blackstone Group are among the suitors circling the Canadian iron ore operations that Rio Tinto has put on the block. The 59 percent stake in Iron Ore Co of Canada could fetch about $4 billion.

* Prosecutors are probing whether UBS's French unit helped bankers from the parent company in Switzerland approach and encourage French clients to open Swiss bank accounts that allowed them to evade taxes.

* A month of rising U.S. Treasury yields spurred a selloff last week among dividend-rich stocks such as utilities and REITs that had benefited from rock-bottom interest rates. Now the question is: Will Treasury yields go higher?

* The U.S. Justice Department appears to have an early edge as Apple heads to court Monday to face civil accusations that it conspired with five publishers to drive up the price of e-books.

* Apple signed a music-streaming licensing deal with Warner Music Group, possibly paving the way for other publishers to follow and getting Apple's Internet radio plan closer to reality.

* A prominent proxy adviser said Sprint Nextel shareholders should vote for a $20.1 billion acquisition by SoftBank, but set aside the question of whether the deal is better than a rival proposal from Dish Network

 

FT

Debt-weary Telefonica SA is considering the potential sale of its O2 Ireland mobile operator after receiving "expressions of interest" from suitors including Hutchison Whampoa, the Hong Kong-based owner of rival mobile business Three.

The New York state supreme court will on Monday hear arguments from some of the largest American financial institutions -- including Bank of America and AIG -- as they battle it out over subprime mortgages.

Telecoms group Vodafone is planning to hike up its UK capital expenditure by more than 50 percent to almost 1 billion pounds ($1.52 billion) this year.

Less than a year after the World Trade Organisation raised concerns over Beijing discriminating against foreign card companies, a document shows that the Chinese central bank has blocked MasterCard from processing credit card transactions in renminbi.

The billionaire founders of Eurasian Natural Resources Corp have requested more time to submit a formal takeover bid for the Kazakh miner, according to people familiar with the matter.

Britain's Co-operative Group is cooking up a plan to raise capital at its banking arm that might involve slashing the coupon paid to the bank's junior bondholders.

 

NYT

* Government officials, drug companies and medical experts are considering options to speed development of medicines to combat infections that have developed resistance to available countermeasures.

* The Justice Department's lawsuit that accuses Apple Inc of colluding with publishers to raise e-book prices will begin this week.

* Steven Cohen's SAC Capital Advisors faces billions of dollars in withdrawals from investors by a Monday deadline, as over the next several weeks authorities decide whether to bring a criminal case against the hedge fund related to suspicious trading in two drug stocks.

* In a highly unusual move, the Food and Drug Administration has decided to reopen the case on GlaxoSmithKline's diabetes pill Avandia and will ask a committee whether it should reconsider the restrictions on the drug.

* Behind the bid for Smithfield Foods, America's biggest pork producer, was a group of savvy investors and global deal makers who hold a substantial stake in the Chinese company.

* MSNBC experienced a ratings decline in the last two months as viewers turned away from politics.

 

Canada

THE GLOBE AND MAIL

* Canada's "middle-skill" employment sector continues to erode alongside the growth of high-skill jobs, an indication that the labor market is splintering between well-paid, interesting, permanent jobs - and the rest.

* Civic leaders gathered in Vancouver at the annual meeting of the Federation of Canadian Municipalities, taking time to mark their progress on securing greater financial commitments from Ottawa to battle gridlock and to set new priorities.

Reports in the business section:

* Canada's largest wireless provider Rogers Communications Inc is launching a program in the back-to-school season aimed at bridging the digital divide that separates the poorest of Canada's poor from the Internet.

* HudBay Minerals Inc is making its first big bet overseas with a C$1.5 billion ($1.45 billion) copper mine in Peru. As its engineers work on mine construction, the Toronto-based company's accountants are proceeding with a related project -- preparing to lay out, under contentious new U.S. securities regulations, precisely what revenues it pay.

NATIONAL POST

* An internal review of the immigration files of two men accused of plotting an al-Qaeda-linked attack against a VIA Rail train has prompted the government to order up new legislation narrowing access to the criminal pardon system.

* Toronto's mayor has passed up another chance to directly address allegations of a video in which he appears to be smoking crack cocaine. Rob Ford used his weekly radio show (on Newstalk 1010) to take a swipe at Ontario's governing Liberals and media pundits who have questioned his ability to govern amid the video scandal.

FINANCIAL POST

* Western Potash Corp said on Sunday that a Chinese joint venture company agreed to make a strategic investment that will result in its owning a 19.9 percent stake in the fertilizer company and a seat on its board.

* Police in Algeria raided the country headquarters of SNC-Lavalin Group Inc as the Canadian engineering giant tries to resolve questions about its activity in the North African nation.

 

China

CHINA SECURITIES JOURNAL

- China's Safe Administration of Foreign Exchange has approved $1.335 billion of Renminbi Qualified Foreign Institutional Investor quotas in May, bringing the total to $42.56 billion.

- The Dalian Commodity Exchange will look into launching new futures contracts for natural gas and liquefied petroleum gas to provide a hedging tool for industry participants.

CHINA DAILY

- China's policymakers need to urgently strengthen their oversight of the country's debt as it could become a serious problem if the economy continues to slow, the paper said in an editorial.

PEOPLE'S DAILY

- China will aim to accelerate the building of high-quality milk production bases and strengthen scrutiny over the quality and safety of milk products this year.

 

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

American Campus (ACC) upgraded to Buy from Neutral at ISI Group
Best Buy (BBY) upgraded to Buy from Neutral at SunTrust
Cobalt (CIE) upgraded to Strong Buy from Buy at ISI Group
Healthways (HWAY) upgraded to Overweight from Neutral at Piper Jaffray
ITC Holdings (ITC) upgraded to Buy from Neutral at UBS
MetLife (MET) upgraded to Buy from Hold at Deutsche Bank
Plum Creek Timber (PCL) upgraded to Buy from Neutral at BofA/Merrill
Woodward (WWD) upgraded to Buy from Hold at Jefferies

Downgrades

Actuant (ATU) downgraded to Neutral from Buy at UBS
F5 Networks (FFIV) downgraded to Equal Weight from Overweight at Morgan Stanley
Golar LNG (GMLP) downgraded to Market Perform from Outperform at Raymond James
Koppers Holdings (KOP) downgraded to Hold from Buy at Jefferies
Torchmark (TMK) downgraded to Neutral from Buy at Janney Capital

Initiations

American Residential Properties (ARPI) initiated with a Hold at Jefferies
American Residential Properties (ARPI) initiated with an Outperform at FBR Capital
Apollo Commercial (ARI) initiated with a Market Perform at Keefe Bruyette
Blackstone Mortgage Trust (BXMT) initiated with an Outperform at Keefe Bruyette
Copa Holdings (CPA) initiated with a Buy at Goldman
Cyan (CYNI) initiated with a Neutral at Goldman
Emerge Energy Services (EMES) initiated with an Outperform at Wells Fargo
Freeport McMoRan (FCX) coverage resumed with an Overweight at Barclays
Gol Linhas (GOL) initiated with a Neutral at Goldman
LATAM Airlines (LFL) initiated with a Neutral at Goldman
Laclede (LG) initiated with an Outperform at Wells Fargo
LinkedIn (LNKD) initiated with an Outperform at Credit Suisse
PGT, Inc. (PGTI) initiated with an Outperform at RBC Capital
PennyMac Financial (PFSI) initiated with a Buy at Citigroup
Receptos (RCPT) initiated with an Outperform at Leerink

HOT STOCKS

Mid-America Apartment (MAA), Colonial Properties (CLP) to merge in $8.6B transaction
Sprint (S), SoftBank (SFTBF) confirmed ISS recommendation on transaction
Fujifilm (FUJIY), Dr. Reddy's Labs (RDY) called off JV for generic drugs in Japan
Assured Guaranty (AG) repurchased shares from WL Ross & Co
Penn National (PENN) venture submitted proposal for $225M racing, gaming facility in PA
McGraw Hill Financial (MHFI) seeks to increase investment in CRISIL
Cooper Companies’ (COO) CooperVision to divest Aime
Macerich (MAC) announced sale of five assets for $470M, recent equity issuance
Exeter Resource’s (XRA) Minera Eton in JV with Chilean subsidiary of Atacama Pacific Gold

NEWSPAPERS/WEBSITES

  • Rocked by the mobile-device movement, PC makers (MSFT, INTL, AMD, SSNLF, GOOG, QCOM, AMZN) and their partners are planning a counterattack that leans heavily on two weapons: lower prices and power consumption, and by emulating more of those devices' features, the Wall Street Journal reports
  • Under Armour (UA) wants the same global recognition as Nike (NKE) and Adidas (ADDYY). The company has little following abroad but hopes to change that with a new global strategy to be unveiled at its investor conference Wednesday, the Wall Street Journal reports
  • Telecom Italia’s (TI) board won’t make a decision on a possible tie-up with Hutchison Whampoa at its next meeting on Wednesday, according to Chairman Franco Bernabe, Reuters reports
  • Goldman Sachs (GS) joined Alibaba Group's $8B loan with $500M in financing as the Chinese e-commerce giant prepares for a huge IPO expected as early as Q4. Goldman will be mandated lead arranger and book runner on the three-tranche loan, which has a June 7 deadline, sources say, Reuters reports
  • The worst month in a year for emerging-market currencies will prove to be more than a momentary bout of weakness to strategists at firms from UBS (UBS) to Societe Generale (SCGLY) who see the Fed weaning investors off its extraordinary stimulus, Bloomberg reports
  • Microsoft (MSFT) is lowering the price of its Windows software for small tablets, seeking to shore up foundering efforts to combat Apple (AAPL) in the mobile-computing market, sources say, Bloomberg reports

BARRON’S

Intel's (INTC) price could double in five years
Quality Distribution (QLTY) could rally 30% in the next year
Crimson Wine Group (CWGL) shares look appealing
With many companies divesting in the form of spin-offs, Ingersoll-Rand (IR), Valero Energy's (VLO) spin-off, CST Brands (CST), and Safeway's (SWY) Blackhawk (HAWK) are good ways to take action

SYNDICATE
Superconductor Technologies (SCON) files to offer $12M of common units
TG Therapeutics (TGTX) files $175M common stock shelf

 

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Mon, 06/03/2013 - 07:26 | 3619779 Argent
Mon, 06/03/2013 - 07:46 | 3619792 Urban Redneck
Urban Redneck's picture

In re BIS - http://www.bis.org/publ/qtrpdf/r_qt1306e.pdf

The entire paper is written with mind to TBTF banks - which means DERIVATIVE EXPOSURE

What they actually mean when they discusst maintaining creditor hierarchy and depositor preference is rather FUGLY in the context of a TBTF institution.

In the US, thanks to Joe-Byte-Me and Bankruptcy "Reform" that means all uninsured depositors are EXPLICITLY LOWER IN CREDIT SENIORITY than the myriad trillions of dollars worth of derivative counter-parties Jamie's bitches have signed contracts with...

 

Mon, 06/03/2013 - 07:58 | 3619808 joepast
joepast's picture

Re BIS .where is news about the lawyer whistleblower from world bank >karen hades and her "arrest" for detailing world bank.federal reserve fraud  ??.If true??

Mon, 06/03/2013 - 07:59 | 3619810 Yen Cross
Yen Cross's picture

     We have a frog auction this morning. Just over an hour away.

 

 

06:00       EUR             French 12-Month BTF Auction                 0.055%      
06:00       EUR             French 3-Month BTF Auction                 0.007%      
06:00       EUR             French 6-Month BTF Auction                 0.024%    

Mon, 06/03/2013 - 12:05 | 3620363 screw face
screw face's picture

How do you say .."Nuclear"....... in french.

+1

Great news summery, with timely updates.... for news junkies such as i.

give thanks, ZH!

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