Frontrunning: June 14
- As Goldman's money-printing tentacle Carney arrives, everyone else leaves: Tucker to Leave BOE (WSJ)
- So much for pent up demand: Refinancings Plunge as Bond Yields Rise (WSJ)
- Singapore Censures 20 Banks for Attempts to Rig Benchmark Rates (BBG)
- Behind the Big Profits: A Research Tax Break (WSJ)
- While working for spies, Snowden was secretly prolific online (Reuters)
- Turkey to Await Ruling on Park as Erdogan Meets Protesters (BBG)
- Iran votes for new president, Khamenei slams U.S. doubts (Reuters)
- NSA revelations, modified wheat cast a pall on U.S. trade talks with Europe (WaPo)
- FX Rates Said to Face Global Regulation in Libor Review (BBG)
- Euro zone inflation subdued as employment keeps falling (Reuters)
- Asian Stocks Climb From $1.1 Trillion Slump on U.S. Data (BBG)
- Lack of a prenup imperils oil billionaire's fortune (Reuters)
- Gold Bears Return as ETP Rout Extends to 17th Week (BBG)
- U.S. Corn Belt Expands to North (WSJ)
Overnight Media Digest
* U.S. President Barack Obama authorized his administration to provide arms to rebels fighting Syrian President Bashar al-Assad, officials said Thursday, a major policy shift after the White House said it had confirmed that Damascus used chemical weapons in the country's civil war.
* U.S. lawmakers briefed Thursday on the recently revealed NSA surveillance programs trained their fire on the self-described source of the leaks, Edward Snowden, suggesting he may be cooperating with the Chinese government.
* The Supreme Court unanimously held that human genes cannot be patented, even when isolated from the body, a ruling expected to quickly expand access to genetic testing while potentially allowing inventors to retain rights to artificially created DNA.
* Turkey issued a final warning to protesters defying calls to abandon their encampment, building on a political offensive meant to end the worst unrest in a decade.
* A top Apple Inc executive defended the technology company's approach to selling electronic books when it first entered the market in 2010, even if consumers had to pay a higher price for some e-books at the time.
* Revlon Inc, the beauty products company controlled by billionaire Ronald Perelman, was accused by the U.S. Securities and Exchange Commission of hiding information from independent directors and misleading shareholders regarding a 2009 transaction.
* In a troubling sign for U.S. coal producers, shipments fell 31 percent in April from the prior month, driven largely by an oversupply in Asia for metallurgical coal used in steelmaking.
* Del Monte Corp is exploring a sale of the canned-food business that made it a household name, said people familiar with the matter, as the company increasingly focuses on products for dogs and cats.
International lenders have consented to Ireland delaying its next round of bank stress tests until the first half of 2014, instead of in autumn 2013 as initially scheduled under the country's bailout.
European authorities are investigating allegations that Google Inc supported the Android smartphone platform through cut-price licensing and exclusivity deals.
Clearwire Corp's board on Thursday urged its independent investors to vote against majority shareholder Sprint Nextel Corp's bid and accept Dish Network Corp's $4.40-per-share offer instead.
Perfume and beauty products seller Coty Inc's shares fell more than 3 percent after its market debut on Thursday raised $1 billion - the third largest U.S. initial public offering this year.
Construction supplies company HD Supply - owned by private equity firms including Bain Capital, Carlyle Group and Clayton, Dubilier & Rice - on Thursday filed to raise $1.2 billion in an initial public offering.
Ashley Bacon is taking over as JPMorgan Chase & Co's chief risk officer, replacing John Hogan who took up the role last year at the start of the London Whale debacle.
* Economists were encouraged by reports on Thursday that applications last week for unemployment benefits fell and that retail sales rose 0.6 percent in May from April.
* A top executive at Apple who was a close associate of Steve Jobs said on Thursday that he had thrown himself into negotiations with the major publishing houses as Apple entered the e-book market because "Steve was near the end of his life."
* Gannett Co Inc agreed to buy Belo Corp for about $1.5 billion in cash, in a deal that almost doubles Gannett's television operations.
* Institutional Shareholder Services, the proxy advisory firm, recommended that Clearwire shareholders reject a proposed takeover bid by Sprint Nextel worth $3.40 a share in light of a revised offer from Dish Network worth $4.40 a share. Clearwire's board has recommended that its shareholders also vote in favor of the Dish bid over Sprint's offer.
* The U.S. Securities and Exchange Commission said cosmetics company Revlon had agreed to pay an $850,000 penalty to settle accusations that it deceived shareholders and its independent directors in connection with a failed takeover attempt by billionaire Ronald Perelman.
* Media mogul Rupert Murdoch on Thursday filed for divorce in a New York State Supreme Court, saying his relationship with his wife of 14 years, Wendi, had "broken down."
THE GLOBE AND MAIL
* Toronto police learned of an alleged video that appears to show Mayor Rob Ford smoking crack-cocaine as part of a year-long investigation into drugs and gangs, The Globe and Mail has learned. (http://link.reuters.com/gej88t)
* Members of Parliament from all parties have quietly approved a 6.7 percent increase to their travel related expense budget in addition to a 1.6 percent salary hike. (http://link.reuters.com/hej88t)
* A pipeline that leaked in northern Alberta was only five years old and designed to last for 30, according to top executives with Apache Canada, the company responsible for a large spill of toxic oil and gas waste. (http://link.reuters.com/pej88t)
Reports in the business section:
* Canada's conventional television industry saw profits drop 85 per cent last year, as advertisers found other ways to spend their money and programming costs increased sharply amid competition with online services for rights to popular programming. (http://link.reuters.com/qej88t)
* The Bank of Canada is warning that an "abrupt correction" of Toronto's overheated condo market could quickly spread to the rest of the housing market, threatening the broader economy. (http://link.reuters.com/rej88t)
* Via Rail and the union representing some of its workers reached a tentative deal ahead of a midnight strike deadline, the Canadian Auto Workers said. (http://link.reuters.com/tej88t)
* A few Canadians are fighting in the Syria civil war, some as members of extremist factions, Public Safety Minister Vic Toews said on Thursday after releasing a report on the terrorist threats facing the country. (http://link.reuters.com/sej88t)
* Prime Minister Stephen Harper's parliamentary secretary is demanding that Elections Canada put its cards on the table after more than a year of unresolved allegations concerning his 2008 campaign expenses. (http://link.reuters.com/vej88t)
* More than one hundred charges have been laid against 28-year-old woman Dana Lee, accused of abducting a 42-year-old man last fall and holding him hostage. (http://link.reuters.com/wej88t)
* BlackBerry rose the most in more than two months after Societe Generale SA boosted its rating on the stock to "buy" from "sell" saying channel checks show the smartphone maker's new devices are selling well. (http://link.reuters.com/xej88t)
* Lululemon Athletica Inc, having won over millions of women with its high-priced yoga gear, wants to keep growth going by chasing men. The chain will start opening standalone men's stores by 2016, Chief Executive Christine Day said today in a presentation at a William Blair & Co conference in Chicago. (http://link.reuters.com/buj88t)
CHINA SECURITIES JOURNAL
- A front-page analysis notes weak macro-economic data and predicts that authorities will maintain a relaxed monetary policy stance, but notes a cut in interest rates would carry risks.
SHANGHAI SECURITIES NEWS
- Risk-free arbitrage is the biggest driver for hot-money inflows, so China will not use interest rate cuts as the key measure for curbing hot-money inflows, Zuo Xiaolei, consultant to the executive president of Galaxy Securities, wrote in a research report.
- China could launch 4G mobile phones as early as the third quarter of this year if the ministry of information industry technology grants 4G network licenses soon, sources with China Mobile told the newspaper.
- A feature story notes the trend of wealthy Chinese travelling abroad to seek high-quality medical care.
- Shanghai will raise residential water prices by around 30 percent to 3.65 yuan per cubic metre, an official at the Shanghai Development and Reform Commission said.
- At a meeting with Wu Poh-Hsiung, honorary chairman of Taiwan's Kuomintang party, Chinese president Xi Jinping said mainland China and Taiwan should "heal historical trauma" and set rejuvenation of the Chinese nation as their common goal.
Fly On The Wall 7:00 AM Market Snapshot
CSC (CSC) upgraded to Buy from Hold at BNP Paribas
Consolidated Edison (ED) upgraded to Buy from Neutral at Citigroup
EnerNOC (ENOC) upgraded to Overweight from Neutral at JPMorgan
GameStop (GME) upgraded to Outperform from Perform at Oppenheimer
Groupon (GRPN) upgraded to Buy from Hold at Deutsche Bank
Hormel Foods (HRL) upgraded to Buy from Hold at KeyBanc
Myriad Genetics (MYGN) upgraded to Outperform from Market Perform at JMP Securities
OGE Energy (OGE) upgraded to Buy from Hold at Jefferies
Signature Bank (SBNY) upgraded to Outperform from Market Perform at BMO Capital
SolarCity (SCTY) upgraded to Outperform from Neutral at Credit Suisse
American Express (AXP) downgraded to Equal Weight from Overweight at Barclays
AngloGold (AU) downgraded to Sell from Neutral at UBS
DuPont (DD) downgraded to Neutral from Buy at BofA/Merrill
Myriad Genetics (MYGN) downgraded to Neutral from Buy at BofA/Merrill
Myriad Genetics (MYGN) downgraded to Sector Perform from Outperform at RBC Capital
Progress Software (PRGS) downgraded to Hold from Buy at Needham
Rubicon (RBCN) downgraded to Sell from Neutral at Goldman
Southern Company (SO) downgraded to Hold from Buy at Jefferies
SunTrust (STI) downgraded to Neutral from Buy at UBS
Wells Fargo (WFC) downgraded to Neutral from Buy at Sterne Agee
Automatic Data Processing (ADP) initiated with an Outperform at Raymond James
Auxilium (AUXL) initiated with a Buy at Mizuho
Avanir Pharmaceuticals (AVNR) initiated with a Buy at Mizuho
Ensign Group (ENSG) initiated with a Buy at Cantor
Lloyds Banking (LYG) initiated with a Hold at Jefferies
NewLink Genetics (NLNK) initiated with a Buy at Jefferies
Praxair (PX) initiated with a Strong Buy at Raymond James
Resolute Energy (REN) initiated with an Outperform at Wells Fargo
Royal Bank of Scotland (RBS) initiated with a Buy at Jefferies
Ocwen Financial (OCN) unit purchased $78B in unpaid MSRs from OneWest Bank
ADP (ADP) said network not breached or compromised by attack in international cyber crime conspiracy case
Williams Partners (WPZ) confirmed one fatality, injuries in Geismar plant explosion
Berkshire Hathaway (BRK.A) introduced Berkshire Hathaway Specialty Insurance
Restoration Hardware (RH) to launch two new businesses
Companies that beat consensus earnings expectations last night and today include:
Restoration Hardware (RH)
Companies that missed consensus earnings expectations include:
Rentrak (RENT), Oculus (OCLS), Casey's General Stores (CASY)
Companies that matched consensus earnings expectations include:
Capstone Turbine (CPST)
- The strong Q1 corporate profits may not be as good as they look, according to an analysis by the Wall Street Journal that shows that the extension of a big tax credit quietly boosted the profits of dozens of companies.
- Many investors have lowered their expectations for future inflation, a shift that could get the attention of Fed officials as they consider the course of their bond-buying program at a policy meeting next week. The Fed has a 2% inflation goal and doesn't want consumer prices to veer too much above or below that number over time, the Wall Street Journal reports
- Proxy advisory firm Institutional Shareholder Services urged Clearwire (CLWR) shareholders to vote against majority shareholder Sprint Nextel’s (S) $3.40 per share offer for Clearwire stock it does not already own, Reuters reports
- U.S. investment firm Royalty Pharma said it expects the majority of takeover target Elan's (ELN) shareholders will reject the Irish firm's own proposed acquisition deals at a shareholder meeting on Monday, Reuters reports
- Boeing (BA), coming back from the 787 Dreamliner’s three-month grounding, is moving closer to a further production increase that would reward investors by freeing up billions of dollars for dividends and buybacks, Bloomberg reports
- Fiat (FIATY) and Chrysler Group CEO Sergio Marchionne is closing in on refinancing deals for both automakers ahead of a plan to merge the two companies, sources say, Bloomberg reports
Cempra (CEMP) files to sell common stock
Echo Therapeutics (ECTE) 4.025M share Secondary priced at $2.70
Generac (GNRC) files to sell 6.5M shares of common stock for holders
Himax Technologies (HIMX) 22.086M share Secondary priced at $5.25
J&J (JNJ) files to sell 25.38M shares of Elan (ELN)
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