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Frontrunning: July 12

Tyler Durden's picture




 
  • Summers Said to Show Interest in Fed Chairmanship After Bernanke (BBG)
  • Obama Tells Chinese He’s Disappointed Over Snowden Case (BBG)
  • Texas Threat to Abortion Clinics Dodged at Flea Markets (BBG)
  • A Peek at Trucking Data, and Then the Stock Surged (WSJ)
  • China cuts growth target… or does it? (FT) - yes, it does, net of goal seeked Random () of course
  • China Official Suggests Tolerance for Lower Growth (WSJ)
  • Disney Says Wristband Boosts Sales in Disney World Test (BBG) - next up: implanted RFID chips
  • Spain Prepares Cuts in Renewable-Energy Subsidies (WSJ)
  • Bernanke Departure With Duke Heralds Cascade of Fed Appointments (BBG)
  • Europe, U.S. Strike Derivatives Deal (WSJ)
  • New front opens in Syria as rebels say al Qaeda attack means war (Reuters)
  • Foreign-Student Work Plan Cut by U.S. as Complaints Mount (BBG)

 

Overnight Media Digest

WSJ

* Hospitals around the United States are trying to change how doctors practice by using data to monitor their progress toward goals.

* Even as federal, state and congressional investigators examine the preferential release to investors of broad economic data-such as the University of Michigan consumer-sentiment survey-some investors tap numerous other more narrowly focused and less well-known industry indicators ahead of the rest of the investing public.

* Glenn Dubin, who co-founded hedge fund Highbridge Capital Management LLC with a childhood friend more than 20 years ago, is stepping down as chief executive. The move comes amid tepid performance from the firm's flagship fund.

* A burst of investor optimism pushed U.S. stock indexes into record territory for the first time since late May, fueled by fresh reassurances that the Federal Reserve would continue to pour cheap money into financial markets.

* Silver Lake and Michael Dell have been discussing turnaround plans ahead for troubled computer maker Dell that would use an accelerated version of the founder's strategy to restore its former luster.

* Chobani has hired a senior executive from cereal giant Kellogg to run its day-to-day operations, freeing the yogurt maker's founder to focus on new markets.

* Verizon Wireless could be on the hook for a lot of unsold iPhones. An obscure securities filing revealed that the country's largest wireless carrier had entered into roughly $45 billion worth of purchase commitments-the bulk of which likely involve Apple Inc's high-end smartphone, according to analyst Craig Moffett of Moffett Research LLC.

* Sprint cut the cost of its unlimited wireless plans, a move aimed at helping the nation's No. 3 wireless carrier by subscribers better compete with its much larger rivals.

* House and Senate lawmakers are $91 billion apart as they draft spending bills for the next fiscal year, putting Congress once again on a collision course with risk of a partial government shutdown this fall.

 

FT

As much has half the government's stake in Lloyds Banking Group is set to be sold to retail investors, as part of a provisional scenario being contemplated by officials with the sell-off possibly kicking off as early as September.

France's Schneider Electric has made a preliminary takeover approach for Britain's Invensys Plc in a deal that values the company at nearly 3.3 billion pounds ($5 billion), the engineering group said on Thursday.

G4S and rival Serco have been billing the taxpayer for tracking criminals who were either dead, in prison or who had moved abroad, it emerged on Thursday.

Microsoft Chief Executive Steve Ballmer has overhauled the company's operational structure and reshuffled top management in the hope of catching nimbler rivals in a fast-moving technology world.

European Union officials raided the offices of Deutsche Telekom, Orange and Telefonica as part of an investigation into whether the companies abused their dominant position in the internet market.

EasyJet shareholders have backed a multibillion dollar deal to expand the airline's fleet, going against strong opposition from founder Stelios Haji-Ioannou.

China's security ministry said GlaxoSmithKline employees have confessed to accusations of bribing Chinese government officials, medical associations, hospitals and doctors to boost prices of drugs in three of the country's biggest cities.

 

NYT

* Microsoft Corp is creating four new divisions and reassigning nearly every senior executive as it tries to create timely products that consumers want.

* BP Plc told a federal appeals court that a claims administrator misinterpreted the terms of a multibillion-dollar settlement reached last year.

* The Chinese government said employees of British drug giant GlaxoSmithKline Plc had used bribes, taken kickbacks and committed other crimes to bolster drug sales.

* Elizabeth Duke, a Federal Reserve governor who has helped to overhaul the Fed's approach to financial regulation, said on Thursday that she would step down at the end of August.

* Senators Elizabeth Warren and John McCain introduced an aggressive piece of legislation that intends to take the financial industry back to an era when there was a strict divide between traditional banking and speculative activities. The bill, which is also sponsored by two other senators, is named the 21st Century Glass-Steagall Act.

* The rise of personalized medicine has spurred giant pharmaceutical companies to home in on small biotechnology firms.

* Sixteen Democratic senators are asking regulators to examine the use of ATM-style cards to pay hourly employees. Across the country, a growing number of companies are doing away with paper paychecks and, in some instances, direct deposit, to offer prepaid cards.

* Valiant Capital Management, a San Francisco-based hedge fund, and Aberdare Ventures have jointly acquired a 45 percent stake in a pharmacy benefits company, ePharma, for an estimated 169 million reais ($74.6 million).

* A federal judge ruled that jurors in the civil trial of Fabrice Tourre, the former Goldman Sachs trader, can hear about an e-mail that references the nickname "Fabulous Fab".

 

Canada

THE GLOBE AND MAIL

* Businesses in Lac-Mégantic that depend on rail service are pushing to get trains running again less than a week after a runaway freight derailed and destroyed the downtown core, leaving 24 people dead and dozens more missing.

* A small group of landed immigrants with republican views who have refused Canadian citizenship because the ceremony involves swearing an oath to the Queen will be in a Toronto courtroom on Friday, facing off with the federal government in an attempt to have this citizenship requirement declared unconstitutional.

Reports in the business section:

* The deadly train disaster in Lac-Mégantic, Quebec, is sure to trigger tough new regulations on moving crude oil by rail, Moody's, a major credit-rating, said on Thursday.

NATIONAL POST

* Canada's former spy watchdog and alleged fraudster Arthur Porter tried to broker multi million-dollar deal to build guns abroad.

* In a ruling that illustrates the vexing question of who and what is a parent, Alberta's Court of Appeal has upheld the decision to declare a gay man the legal father of a 10-year-old girl, even though it was his former partner who inseminated the child's mother.

* A Florida woman must again make her case for refugee status in Canada after fleeing north of the border to avoid a 30-year prison sentence in the United States for having sex with a 16-year-old boy who was on her son's baseball team.

* Immigration Minister Jason Kenney has slammed environmentalist David Suzuki's views on immigration as "toxic and irresponsible" after the CBC host said Canada was "full".

FINANCIAL POST

* Grocery giant Loblaw Companies Ltd is taking on Whole Foods Market Inc in a test pilot of a new retail concept called Nutshell Live Life Well, a stand-alone franchise catering to the health-conscious crowd.

* Cogeco Cable Inc may get a little bigger over the next year but it does not plan on making any major acquisitions as it focuses on paying down its debt after two recent large buys.

 

China

CHINA SECURITIES JOURNAL

- The gold and silver night futures night trading volume has been steadily increasing since July 8, said a manager at the night exchange department of Shanghai Futures Exchange.

SHANGHAI SECURITIES NEWS

- Some securities regulators are asking brokerages for opinions on the revision of the Securities Law that is expected to put private equity under supervision, unnamed sources said.

CHINA BUSINESS NEWS

- The Chinese government will put forward some mild stimulus measures in the second half of 2013, mainly including infrastructure investment, railway construction and shanty town reconstruction, said a researcher from the central government think-tank.

CHINA DAILY

- Foreign game console companies would be eligible to sell and promote products on China mainland if they register and produce in Shanghai's new free trade zone, however, the decade-long ban on the video game hardware market is still effective as some of the content is too violent or politically sensitive, said an official with the Ministry of Culture.

PEOPLE'S DAILY

- As of May 31, the vacant property land in China has decreased by almost 50 percent to 10,700 hectares from a year earlier, according to the Ministry of Land and Resources.

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Alaska Air (ALK) upgraded to Equal Weight from Underweight at Morgan Stanley
Alpha Natural (ANR) upgraded to Buy from Hold at Deutsche Bank
F5 Networks (FFIV) upgraded to Overweight from Neutral at Piper Jaffray
Hormel Foods (HRL) upgraded to Outperform from Market Perform at BMO Capital
Quality Systems (QSII) upgraded to Outperform from Neutral at RW Baird
Stewart (STC) upgraded to Overweight from Equal Weight at Stephens
Xilinx (XLNX) upgraded to Buy from Neutral at Citigroup

Downgrades

Alliance Resource (ARLP) downgraded to Hold from Buy at Deutsche Bank
Apollo Group (APOL) downgraded to Equal Weight from Overweight at Barclays
Bristol-Myers (BMY) downgraded to Hold from Buy at Jefferies
Ceres (CERE) downgraded to Market Perform from Outperform at Raymond James
Ceres (CERE) downgraded to Neutral from Overweight at Piper Jaffray
Pfizer (PFE) downgraded to Hold from Buy at Jefferies
SodaStream (SODA) downgraded to Perform from Outperform at Oppenheimer
Target (TGT) downgraded to Hold from Buy at Deutsche Bank
Triple-S (GTS) downgraded to Neutral from Buy at Citigroup
VMware (VMW) downgraded to Equal Weight from Overweight at Evercore

Initiations

A.T. Cross (ATX) initiated with a Buy at Benchmark Co.
Capital Bank (CBF) initiated with a Buy at BB&T
CoreLogic (CLGX) assumed with an Outperform at Keefe Bruyette
DDR Corp. (DDR) initiated with a Buy at SunTrust
Dollar General (DG) initiated with a Neutral at Goldman
Federal Realty (FRT) initiated with a Neutral at SunTrust
Glimcher Realty Trust (GRT) initiated with a Neutral at SunTrust
Hi-Crush Partners (HCLP) initiated with an Outperform at William Blair
Macerich (MAC) initiated with a Neutral at SunTrust
Magnum Hunter (MHR) initiated with a Buy at Topeka
Magnum Hunter (MHR) reinstated with an Equal Weight at Stephens
News Corp. (NWSA) initiated with a Neutral at BofA/Merrill
OpenTable (OPEN) initiated with a Sector Perform at RBC Capital
Regency Centers (REG) initiated with a Neutral at SunTrust
Sabra Health Care (SBRA) initiated with an Outperform at Raymond James
ServiceNow (NOW) initiated with a Strong Buy at Raymond James
Yelp (YELP) initiated with a Buy at Needham

HOT STOCKS

Icahn told Bloomberg: Dell (DELL) holders appraisal rights is a “no brainer”
Icahn:“We're going to add to the bid tomorrow morning (July 12)”
Believes ISS is wrong and Michael Dell knows that the company is worth more
New bid will include warrant “around $20”
Dell (DELL) special committee cautioned holders following Icahn statements
Spreadtrum (SPRD) to be acquired by Tsinghua Unigroup for $31 per share
Microsoft (MSFT) said government not given “blanket or direct access”
Refiners traded lower after Valero (VLO) warned on earnings (TSO, MPC, WNR)
VIVUS (VVUS) may have won proxy fight with First Manhattan, TheStreet reports
Google (GOOG) chairman Schmidt said Glass to be released ”soon,” Bloomberg reports
Sprint (S) launched Sprint Unlimited Guarantee, new unlimited plan and pricing
H&R Block (HRB) sold bank assets to Republic Bank (RBCAA)
Philip Morris (PM) entered agreement with Mitsubishi Tanabe to privatize Medicago
Aveo Pharmaceuticals (AVEO) disclosed SEC subpoena
Penn National (PENN) in talks to develop slot parlor budgeted at over $200M
Steel Excel (SXCL) to acquire up to 44% interest in iGo (IGOI) for $3.95 per share

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Infosys (INFY), E2open (EOPN), AngioDynamics (ANGO)

Companies that missed consensus earnings expectations include:
Ceres (CERE)

Companies that matched consensus earnings expectations include:
Bank of the Ozarks (OZRK), Peregrine (PPHM)

NEWSPAPERS/WEBSITES

  • Silver Lake Partners may soon be wagering $1.4B on a bet that many analysts think is sheer folly: To restore computing icon Dell (DELL) to its former luster. Silver Lake and founder Michael Dell have been discussing turnaround plans for months, sources say, the Wall Street Journal reports
  • Last March an industry-research firm emailed a monthly report on commercial-truck orders to hedge funds and other subscribers that resulted in shares in truck makers surging, generating a tidy profit for investors who traded on the report.As federal, state and congressional investigators examine the preferential release to investors of broad economic data, some investors tap numerous other more narrowly focused and less well-known industry indicators ahead of the rest of the investing public, the Wall Street Journal reports
  • Fed officials are considering moving the goal posts on U.S. monetary policy with a promise to keep interest rates low for longer in the hopes of heading off a troubling rise in market-set borrowing costs, Reuters reports
  • UBS (UBS) said some of its German offices were searched in connection with an ongoing tax probe of the Swiss bank's clients, confirming earlier media reports, Reuters reports
  • Bookings of the largest oil tankers (FRO) jumped to the highest level for the time of year since at least 2007 as demand for crude cargoes accelerates before a surge in oil refining projected by the International Energy Agency, Bloomberg reports
  • Chinese parents’ distrust of local milk elevated foreign baby-food brands into luxury goods and allowed companies from Danone (DANOY) to Mead Johnson Nutrition (MJN) to fatten margins. Those plump profits are at risk as state-controlled media reported China’s government was investigating them and other overseas competitors for possible price fixing, Bloomberg reports

SYNDICATE

Fifth Street Senior Floating Rate Corp (FSFR) 6.667M share IPO priced at $15.00
Fly Leasing (FLY) 11.429M share Secondary priced at $14.00
Merrimack (MACK) 5M share Secondary priced at $5.00
Restoration Hardware (RH) 8M share Secondary priced at $70.00
Terreno Realty (TRNO) files to sell 5M shares of common stock

 

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Fri, 07/12/2013 - 08:03 | 3744445 CheapBastard
CheapBastard's picture
Hong Kong Home Prices Decline Most Since 2008(Bloomberg)

 

Hong Kong home prices fell the most in four-and-a-half years in the week ended July 7, on concerns that interest rates will begin to rise if the U.S. Federal Reserve phases out its monetary easing program later this year.

 

Home transactions fell to the lowest since 1996 in the first half after the government doubled stamp duty taxes on property deals in February to quell concerns that an asset bubble is forming.

 

http://www.bloomberg.com/news/2013-07-12/hong-kong-home-prices-decline-m...

Fri, 07/12/2013 - 08:38 | 3744504 Its_the_economy...
Its_the_economy_stupid's picture

It always cracks me up when they try to make you believe they know why something happens (Hong Kong home prices fell).

Fri, 07/12/2013 - 09:26 | 3744668 CPL
CPL's picture

https://www.youtube.com/watch?feature=player_embedded&v=RjENfMdMSRI

 

 

 

Snowden live interview with world leaders Q&A  ATM!!

Fri, 07/12/2013 - 08:11 | 3744456 Its_the_economy...
Fri, 07/12/2013 - 08:12 | 3744458 Catullus
Catullus's picture

Texas Threat to Abortion Clinics Dodged at Flea Markets (BBG)

HAHAHAHAHAHA.

This is such an incredible piece of propoganda it's amazing.  Some shithole mexican flea market in a border town in Texas.  You would NEVER in a million years catch east coast liberal feminists anywhere within hundreds of miles, but somehow they take up the cause now.  It's the new back alley abortion I tell'ya. 

It actually screams for prescription drug deregulation and all drug deregulation, but that would be limiting the size and influence of government on your vagina, so it won't fly.

Fri, 07/12/2013 - 08:24 | 3744478 Azannoth
Azannoth's picture

"Summers Said to Show Interest in Fed Chairmanship After Bernanke" -

The only question now is will Obamaligula nominate this horse to the position ?

Fri, 07/12/2013 - 08:36 | 3744500 reload
reload's picture

Is there a sleazier, more self serving scum bag available?

if not, he is a shoe in, surely.

Fri, 07/12/2013 - 09:47 | 3744735 paint it red ca...
paint it red call it hell's picture

Things must be desperate for summers to be volunteering for that job. Considering being such a senior player and his involvement with greenspan, rubin and also the gingrich congress (phil gramm "the high priest of deregulation,") in keeping derivatives unregulated and repealing Glass-Steagall one would not think he would want to again be in the line of fire when things are not going so very well.

rubin's bio lays his involvement out pretty well

https://en.wikipedia.org/wiki/Robert_Rubin

https://en.wikipedia.org/wiki/Lawrence_H._Summers

https://en.wikipedia.org/wiki/Phil_Gramm

Fri, 07/12/2013 - 09:57 | 3744780 paint it red ca...
paint it red call it hell's picture

i can just hear them introducing him before the finance committee,

"And now a word from the makers of debt servitude and financial clusterfuck, your host Larry Summers"

Fri, 07/12/2013 - 08:44 | 3744521 Never One Roach
Never One Roach's picture
Chicago 'mayhem' prompts politician to call for National Guard

 

The onslaught of gun crime in Chicago has spurred members of Congress to convene a  summit on urban violence and prompted a state lawmaker to demand the National Guard be called in to stop the “mayhem.”

 

http://usnews.nbcnews.com/_news/2013/07/11/19419389-chicago-mayhem-promp...

 

 

Fri, 07/12/2013 - 08:45 | 3744527 muleskinner
muleskinner's picture

In Russia, 64 percent of pregnancies are aborted.

It is tolerated.  However, multiple abortions cause sterility.

Time for Texas to raise a few tolerances.

In 1951 there were 1.5 million abortions in the US, all illegal.

Studies show that countries that have legal abortion and modern contraceptive methods have lower abortion rates.

Fri, 07/12/2013 - 09:29 | 3744681 monad
monad's picture

And then Microsoft died.

Fri, 07/12/2013 - 10:23 | 3744913 polo007
polo007's picture

According to CIBC World Markets:

The world remains a place where enormous amounts of debt just keep stacking up. Paying this debt back is constantly believed to be less of an issue given the crucial assumption that economic growth rates in the order of 3% to 5% will return AND will be sustainable. Even if it does, it must be noted that “total payback” of the debt could be unlikely to ever be achieved. At some US$18 trillion of total debt in the U.S., it would take 14,400 million ounces of gold or some 160 years’ worth of annual global gold mined supply (at the current price of some US$1,240/oz. and at current global output of some 2,800 tonnes per annum) to pay this down. At the same time, gold production is about to take an almighty knock and we won’t be surprised to see as much as 25% less gold output in the next five years.

Still, much of this precarious (let’s just stop the debt load from growing) position is critically dependant on very low interest rates being maintained – once rates start moving higher, debt repayment schedules quickly blow out, while the value of bonds, in particular government bonds, starts to decline. The current dramatic decline in the value of government bonds will already see banks’ balance sheets shrinking again, with possible resultant liquidity squeezes across the globe. Euro sovereign debt costs are already up dramatically and Italy is seemingly also sitting with an apparent +30 billion euro loss in the derivatives market…

This could very quickly turn out to be a very bad scenario, but the point, as far as we are concerned, is really that it does not even need to get to this for the markets to start realizing that currencies will have to depreciate much further – we believe this to be a crucial mechanism for delivering lower sovereign debt levels long term. Gold will be the currency that continues to benefit in the longer term. So, making a positive case for the gold price is not too difficult – particularly if inflation becomes a problem much sooner than everybody currently expects.

The real problem, unfortunately, is that all of this argument is dependant on data that will only become apparent much later down the line. Right now, nobody is willing to go against the Fed. That simply means bonds and gold are both getting the “chop” because the Fed is signaling a return to stronger economic growth – leading to a stronger U.S. dollar.

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