- Ackman Says Pershing Square Takes 9.8% Stake in Air Products (BBG) - So is APD Carl Icahn's biggest ever short yet
- Latest Hilsenplant: Summers Hedges His Doubts on Fed's Bond Buying (WSJ)
- China Stocks World’s Worst Losing $748 Billion on Slump (BBG)
- U.S. Spy Program Lifts Veil in Court (WSJ)
- Abenomics on the rock again: Japan July manufacturing PMI shows growth at 4-month low (Reuters)
- EADS to be renamed Airbus in shake-up (FT)
- Goldman's GSAM has significantly increased its exposure to European equities (FT) - there is a reason why this is Goldman's worst division
- Japanese Megabanks Post Mega Profit Gains (WSJ) - when one excludes MTM impact from rate surge of course
- Ex-workers sue Apple, seek overtime for daily bag searches (Reuters)
- Following Bernanke Means Using Precedent of Unprecedented Policy (BBG)
- Hong Kong Yuan Deposits Snap Eight-Month Increase on Cash Crunch (BBG)
- Corporate sleuths on edge after China detains foreign consultants (Reuters)
- Downtown NYC Landlords Remake Offices in Shift From Banks (BBG)
Overnight Media Digest
* BP Plc said it has allocated nearly all of a $20 billion compensation fund for the 2010 Deepwater Horizon oil spill, raising fears that the still-mounting costs of the spill may take a bigger-than-expected bite out of future profits. Though the fund still contains about $7 billion, a spokesman said, all but $300 million has been earmarked for various types of injury claims from governments and businesses.
* Management consulting firm Accenture Plc is in talks to acquire rival Booz & Co, a deal that would beef up its strategy and operations consulting services. It isn't clear if they will reach a deal or if Booz has other suitors.
* Alcatel-Lucent USA Inc is selling a small stake to U.S.-based chip maker Qualcomm Inc and hopes to attract other technology investors in order to boost its research budget.
* Cummins Inc's second-quarter earnings fell 12 percent, but the engine maker raised its sales outlook on rising demand for exhaust-treatment systems from truck maker Navistar International Corp.
* The European Union on Tuesday gave approval for a financial guarantee from the French state for PSA Peugeot Citroën's in-house banking unit, saying the aid is essential to help the ailing auto maker return to health.
* Mining-company CEOs who were recently sent packing are beating a trail back to the industry, and two have already established investor funds and are looking for backers. Aaron Regent, the former CEO of Barrick Gold Corp, started a Toronto-based fund this year mainly to buy mines in the Americas. Mick Davis, credited with building Xstrata into the world's fifth largest miner, started a London-based investment fund named X2 Resources.
* Indigo Partners LLC, the investment firm of William Franke, who announced plans on Monday to resign as chairman of Spirit Airlines Inc, is in exclusive talks with Republic Airways Holdings Inc to purchase its Frontier Airlines unit. Franke plans to turn the airline into an ultra low-cost carrier like Spirit.
* Take-Two Interactive Software Inc reported a narrower loss in its latest quarter on lower revenue, as the videogame maker relied on older products while preparing to release its next "Grand Theft Auto" title. Chief Executive Strauss Zelnick said the company didn't have any blockbuster releases during the quarter.
The Bank of England helped facilitate the sale of gold looted by the Nazis following their invasion of Czechoslovakia in 1939, according to a history of the central bank's activities in and around the second world war.
The U.S. Securities and Exchange Commission is suing a former high-ranking Santander executive and a former Spanish judge, charging them with insider trading ahead of BHP Billiton's failed bid for Potash Corp.
Russia's Uralkali has pulled out of one of the two big cartels controlling the potash market in a move the company predicted would bring potash prices down 25 percent.
Barclays and Deutsche Bank have both revealed plans to bolster their balance sheets and meet regulatory demands that they increase the level of equity they hold compared with their overall assets.
BP's chief executive said the company was digging in and was well prepared for a long legal battle to fight damages claims related to the Deepwater Horizon disaster.
U.S. Securities and Exchange Commission lawyers accused former Goldman Sachs trader Fabrice Tourre of lying under oath.
* Chevron Corp has set its lawyers against Steven Donziger, who won an $18 billion case over oil spills in the Ecuadorean jungle, accusing him of manipulating evidence and bribing judges.
* In a significant victory for law enforcement, a federal appeals court on Tuesday said that government authorities could extract historical location data directly from telecommunications carriers without a search warrant.
* Barclays Plc, which has faced several scandals, has come under pressure from British authorities to improve its capital position. The bank said it plans to raise up to $12 billion in new capital.
* Federal authorities, continuing their campaign against insider trading, announced criminal charges on Tuesday against Sandeep Aggarwal, a former technology stocks analyst at the research firm Collins Stewart, in a case connected to last week's indictment of the hedge fund SAC Capital Advisors.
* JP Morgan Chase & Co struck a $410 million settlement with the Federal Energy Regulatory Commission (FERC), which had accused the bank of devising "manipulative schemes" to transform "money-losing power plants into powerful profit centers". JPMorgan is bracing for an even larger penalty stemming from shoddy mortgage securities it sold to the government.
* Fabrice Tourre, the former Goldman Sachs trader, was either a greedy scheming liar or a bright young executive just trying to do his job, according to dueling portraits presented during closing arguments Tuesday in the most prominent case from the financial crisis to go to trial. The trader is accused of scheming with a big hedge fund to defraud investors in connection with a 2007 trade.
* The long-running trade conflicts over solar panels between China and the United States and Europe have sown dissatisfaction all around. But Taiwan, not involved in the disputes, has gained from a U.S. tariff ruling against China, which has created a loophole benefiting Taiwanese manufacturers.
* A report by the Government Accountability Office found that the Agriculture Department lacked the proper controls to make sure the money it sent was going to the right people, with millions in U.S. subsidies going to deceased farmers.
THE GLOBE AND MAIL
* The Vancouver Island Health Authority says the stomach flu-causing norovirus has claimed nine lives and made 100 patients and 50 staff members sick this month at a seniors' home in Victoria, British Columbia, according to a report from Vancouver radio station News 1130.
* The economics of BHP Billiton Ltd's proposed C$14 billion ($13.60 billion) Jansen potash mine, near a tiny Saskatchewan town, have suddenly been thrown into disarray with the collapse of one of the world's two potash cartels. Russia's Uralkali OAO dropped out of Belarus Potash Co, marking a major shift in the global potash industry. Saskatchewan's royalties, incoming investment dollars, and employment rate are set to feel the pinch from potash prices that are expected to tumble because of the cartel's demise.
* Miami-based oil logistics company World Fuel Services Corp is objecting to a Quebec government order to assist with the cleanup of the train derailment and fiery crude-oil explosion in Lac-Megantic. In its statement, World Fuel said it did not expect to be named by the province or in any other government action because "MMA has assumed responsibility for the accident."
Reports in the business section:
* BlackBerry Ltd announced that its brand-new mid-tier phone, the Q5, is coming to Canada on Aug. 13. Previously, the lower-priced version of BlackBerry's Q10 was only available in certain overseas markets. By bringing the Q5 to Canada, BlackBerry joins the list of companies hoping to capitalize on two market trends -- the commoditization of smartphones and the end of three-year contracts.
* TransCanada Corp's proposed Energy East pipeline could give western oil producers back-door access to Asian markets at a reasonable transportation cost if it reaches Saint John. Saint John's ice-free, deep-water port would allow crude to be loaded onto the largest tankers, providing an economical route to India at least, and perhaps China, Bank of Nova Scotia senior economist Patricia Mohr said Tuesday.
* Marcel Coutu will retire as chief executive of Canadian Oil Sands Ltd after 12 years in the position, the company said Tuesday as it reported a more than doubling of second-quarter profit. Coutu, who oversaw the company's expansion to one with a market value of C$10 billion, a fivefold increase from his appointment in 2001, will retire on Jan. 1.
* Concerns over the aging population and the rising cost of pharmaceuticals may be distracting from one of the fastest-growing healthcare expenditures in Canada -- doctors' pay. A report released by the University of Calgary School of Public Policy estimates the average paycheck earned by a typical Canadian physician has risen by about 30 percent over the past decade.
* A struggle is raging behind the scenes as the needs of Canada's military smack up against the Conservative government's desire to turn billions of dollars in planned defense spending into jobs and economic benefits. Last November, then-defense minister Peter MacKay was warned in a briefing note that a policy of always buying military equipment and services from Canadian companies would likely short-change Canada's men and women in uniform.
* Ontario's opposition parties proposed different strategies on Tuesday to get to the bottom of what they say was an attempt by former premier Dalton McGuinty's office to pressure the Speaker of the legislature to change a ruling against the government. Newly released emails show senior Liberals in McGuinty's office tried to get Speaker Dave Levac to change his preliminary finding that then-energy minister Chris Bentley was in contempt for not releasing all documents on two cancelled gas plants.
* Saskatchewan will feel the impact of a global potash price war triggered by Russia but the blow will be softened by industry efficiencies and continuing growth in other sectors such as oil and uranium. The price showdown was initiated by Uralkali OAO, the world's largest potash producer, which quit a marketing venture on Tuesday that controlled about 43 percent of global exports and signaled prices may fall by as much as a quarter.
* In addition to transforming the moribund department store sector in Canada, Chief Executive Richard Baker's vision for Hudson's Bay Co has long involved doing the same for Internet retail, and experts say buying Saks Inc could help him achieve it. Experts say the $2.9 billion deal is also going to force retailers to evaluate their online strategies and reach in Canada.
* WestJet Airlines Ltd Chief Executive Gregg Saretsky shrugged off concerns that the carrier's aggressive growth ambitions would undercut its profit, pointing to the company's record second-quarter earnings as evidence his plan is working. Saretsky said WestJet's growth strategy was aimed at narrowing the gap between its market share and that of rival Air Canada, in part by making it more attractive to business travelers.
CHINA SECURITIES JOURNAL
-- The China Banking Association revealed in a report released on Tuesday that the profit growth of listed banks this year is likely to fall to roughly 8 percent, amid a fluctuating and complex economic environment and tighter regulatory control.
-- China's property prices are not determined by the money supply, but rather the supply and demand of real estate, according to Shengsong Cheng, head of the People's Bank of China's statistics division.
-- Sinopec plans to invest 22.87 billion yuan ($3.73 billion) in environment protection measures in the next two years, putting into effect 803 projects.
SHANGHAI SECURITIES NEWS
-- China will expand simulation testing for listed domestic brokerages to include small and medium-sized institutions in August, with a threshold tentatively set at 500,000 yuan, according to various sources with knowledge of the matter.
-- An explosion at a chemical plant in Fujian province will renew public fear of chemical projects, experts said. A cracked hydrogen pipeline caused fire during a pressure test at a paraxylene factory in Zhengzhou, destroying pipelines but no casualties or pollution has been reported.
-- The State Administration of Industry and Commerce released a report on Wednesday which showed that at the end of 2012, almost 50 percent of China's 13 million private enterprises were five years old or less.
Fly On The Wall 7:00 AM Market Snapshot
Alcatel-Lucent (ALU) upgraded to Buy from Neutral at Nomura
Compass Minerals (CMP) upgraded to Market Perform from Underperform at BMO Capital
Compass Minerals (CMP) upgraded to Neutral from Underweight at JPMorgan
General Growth (GGP) upgraded to Sector Perform from Underperform at RBC Capital
Lin TV (TVL) upgraded to Outperform from Market Perform at Wells Fargo
MeadWestvaco (MWV) upgraded to Sector Perform from Underperform at RBC Capital
ONEOK Partners (OKS) upgraded to Outperform from Neutral at RW Baird
Open Text (OTEX) upgraded to Buy from Hold at Benchmark Co.
Owens & Minor (OMI) upgraded to Neutral from Underperform at RW Baird
Symantec (SYMC) upgraded to Outperform from Neutral at RW Baird
Agree Realty (ADC) downgraded to Hold from Buy at Wunderlich
Agrium (AGU) downgraded to Neutral from Buy at Citigroup
Barclays (BCS) downgraded to Hold from Buy at Societe Generale
BioCryst (BCRX) downgraded to Underperform from Neutral at BofA/Merrill
Chart Industries (GTLS) downgraded to Equal Weight from Overweight at Morgan Stanley
Donaldson (DCI) downgraded to Underperform from Market Perform at BMO Capital
EverBank Financial (EVER) downgraded to Sell from Neutral at Compass Point
Ignite Restaurant (IRG) downgraded to Market Perform from Outperform at Raymond James
Intrepid Potash (IPI) downgraded to Underweight from Equal Weight at Barclays
Jacobs Engineering (JEC) downgraded to Market Perform from Outperform at FBR Capital
Jive Software (JIVE) downgraded to Neutral from Outperform at RW Baird
Mosaic (MOS) downgraded to Equal Weight from Overweight at Morgan Stanley
NVIDIA (NVDA) downgraded to Market Perform from Outperform at Wells Fargo
Northern Tier (NTI) downgraded to Neutral from Outperform at Macquarie
Potash (POT) downgraded to Neutral from Buy at UBS
R.R. Donnelley (RRD) downgraded to Hold from Buy at Benchmark Co.
Rockwell Automation (ROK) downgraded to Market Perform at Wells Fargo
SanDisk (SNDK) downgraded to Underperform from Market Perform at BMO Capital
Sociedad Quimica (SQM) downgraded to Neutral from Buy at Citigroup
Sociedad Quimica (SQM) downgraded to Neutral from Outperform at Credit Suisse
Xylem (XYL) downgraded to Neutral from Overweight at Atlantic Equities
Cablevision (CVC) initiated with an Underweight at Barclays
Charter (CHTR) initiated with an Equal Weight at Barclays
Comcast (CMCSA) initiated with an Overweight at Barclays
DISH (DISH) initiated with an Overweight at Barclays
DirecTV (DTV) initiated with an Equal Weight at Barclays
Goodrich Petroleum (GDP) initiated with a Buy at SunTrust
Intelsat (I) initiated with an Equal Weight at Barclays
Liberty Media (LMCA) initiated with an Overweight at Barclays
Sirius XM (SIRI) initiated with an Overweight at Barclays
Susser Petroleum Partners (SUSP) initiated with a Buy at Benchmark Co.
Time Warner Cable (TWC) initiated with an Equal Weight at Barclays
Ackman’s Pershing Square acquired 9.8% of Air Products (APD) worth $2.2B, CNBC reports
Cubist (CBST) to acquire Optimer (OPTR) for $10.75 per share in cash
Cubist (CBST) to acquire Trius Therapeutics (TSRX) for $13.50 per share in cash
Accenture (ACN) in talks to acquire Booz & Co., WSJ reports
NuVasive (NUVA) received federal administrative subpoena from HHS Office of the Inspector General
Kinder Morgan (KMP, KMI, KMR, EPB), Keyera to construct crude oil rail loading terminal in Edmonton
Oil States (OIS) to spin-off Accommodations business
Buffalo Wild Wings (BWLD) sees FY13 net earnings growth 17%
Wabash (WNC) CEO sees "significant increase" in Q3 trailer shipments
Teleflex (TFX) subsidiary gets FDA clearance to market ARROW catheter
Companies that beat consensus earnings expectations last night and today include:
Humana (HUM), Anthera Pharmaceuticals (ANTH), Orient-Express (OEH), PolyOne (POL), Wabash (WNC), Convergys (CVG), Arthur J. Gallagher (AJG), Aflac (AFL), Take-Two (TTWO), QIAGEN (QGEN), Buffalo Wild Wings (BWLD), NeuStar (NSR), Amgen (AMGN), Fiserv (FISV), Symantec (SYMC)
Companies that missed consensus earnings expectations include:
Buenaventura (BVN), Regal-Beloit (RBC), NewMarket (NEU), Genworth (GNW), RenaissanceRe (RNR), Jones Lang LaSalle (JLL), NuVasive (NUVA), XPO Logistics (XPO), AXIS Capital (AXS), Cloud Peak Energy (CLD), CAI International (CAP)
Companies that matched consensus earnings expectations include:
Huntsman (HUN), SM Energy (SM), Weatherford (WFT), Mueller Water (MWA)
- Bill Ackman's firm, Pershing Square Capital Management, acquired a 9.8% stake in Air Products & Chemicals (APD) valued at $2.2B and is his largest investment by cost, CNBC reports, citing Ackman. Ackman said he thinks Air Products is "a great business that is undervalued" and has "some ideas on how to add value."
- There are signs Google (GOOG) is feeling increased pressure to calibrate how much emphasis it puts on user privacy. Executives are engaged in wide-ranging internal debates and in some cases slowing product launches to address privacy concerns, sources say, the Wall Street Journal reports
- Apple (AAPL) CEO Tim Cook met with the head of China Mobile (CHL) Chairman Xi Guohua in Beijing, the world's largest mobile carrier by subscribers and the only Chinese carrier that doesn't offer iPhones and iPads. The meeting was to discuss matters of cooperation, Reuters reports
- Wall Street banks (JPM, GS) face the prospect of increased scrutiny of their commodity businesses as U.S. regulators and lawmakers pressed for a closer look at their roles in owning warehouses and in trading everything from oil, Reuters reports
- Facebook (FB) attracts more 18- to 24-year-old people during prime-time viewing hours than any of four major television networks (CBS, FOX, CMCSA, DIS), a study from Nielsen found, Bloomberg reports
- Fiat (FIATY) failed to persuade a Delaware judge to set the value of some Chrysler Group LLC shares now owned by a union health-care fund, delaying a plan to combine the two companies, Bloomberg reports
BioCryst (BCRX) files to sell up to $20M in common stock
Cousins Properties (CUZ) 60M share Secondary priced at $10.00
Scorpio Tankers (STNG) files to sell 20M shares of common stock
TriMas (TRS) files to sell 1M shares of common stock for holders
Trovagene (TROV) raised $15M in a registered direct offering