Frontrunning: September 11
- Obama Holds Fire on Syria, Waits on Russia Plan (WSJ)
- China Shadow Banking Returns as Growth Rebound Adds Risk (Reuters)
- Not one but two: Greece May Need Two More Aid Packages Says ECB’s Coene (WSJ)
- BoJ insider warns of need for wage rises (FT) ... as we have been warning since November, and as has not been happening
- California city backs plan to seize negative equity mortgages (Reuters)
- Home Depot Is Accused of Shaking Down Suspected Shoplifters (BBG)
- Most-Connected Man at Deutsche Bank Favors Lightest Touch (BBG)
- Norway Pledges to Limit Oil Spending (BBG)
- China Shadow Banking Returns as Growth Rebound Adds Risk (BBG)
- Gundlach Says Fed Is Mistaken in How It's Ending Easing (BBG)
- Republican Senator Isaksan Has Concerns About Summers for Fed (Reuters)
- Rohani Says Iran Plans to Restart Nuclear Talks in N.Y. (BBG)
- Barroso Says Political Instability is Biggest Threat to EU Recovery (FT)
- Maersk Invests in Emerging Markets as Bondholders Flee (BBG)
Overnight Media Digest
* Verizon will sell as much as $49 billion worth of bonds to raise funds for the planned buyout of its U.S. wireless partner, highlighting an investor stampede into highly rated debt investments amid a strengthening economy.
* A Dish Network director who resigned in recent weeks did so amid a disagreement over the company's handling of a bid for a telecom firm that could deliver hundreds of millions of dollars of personal profits to Dish Chairman Charlie Ergen.
* Gogo Inc, a provider of inflight Internet, is unveiling a new system that uses a combination of satellites and cellular towers to speed up connections.
* Apple introduced two iPhones, the 5S and lower-cost 5C, in an effort to expand the company's reach into new markets while solidifying its foothold in high-end smartphones.
* The prospect of Syria surrendering its chemical weapons has fueled hopes that the United States will avert its fourth conflict in a decade, but U.S. officials face a daunting array of political, diplomatic and security obstacles.
* President Barack Obama says he will pursue a newly energized diplomatic course to try to resolve the standoff with Syria, but insisted the U.S. must conduct military strikes, if needed, in response to the alleged use of chemical weapons.
* The Canadian government sold part of its stake in General Motors, as it begins its exit from a company it bought into during the 2009 auto bailout.
* Tesco agreed to dispose of most of its money-losing Fresh & Easy chain in the United States, handing it to billionaire Ron Burkle under a plan that will cost Tesco about $235 million.
* Brazilian tycoon Eike Batista took another step to sell assets of his industrial conglomerate as he seeks cash to keep his heavily indebted companies solvent.
* The European Commission green lighted a lower priced "biosimilar" version of Johnson & Johnson and Merck & Co's Remicade treatment for rheumatoid arthritis, in the first of what will likely be a string of approvals creating competition for a class of expensive therapies.
Commodities trader Glencore Xstrata Chief Executive Ivan Glasenberg on Tuesday said the company expected to save at least $2 billion next year from its record-breaking takeover of Xstrata takeover ever.
A British High Court judge ruled in favour of Gulf Keystone Petroleum in a billion-pound court case against it by a former U.S. special forces captain, over the Kurdistan-focused oil explorer's ownership of giant oilfields.
Intel said it was working on a new line of ultra-small microchips for wearable devices like smartwatches and bracelets, in a bid to leapfrog the smartphone and tablet era that it arrived late for.
James Dyson, owner of British appliance maker Dyson, has taken South Korea's Samsung Electronics Co to the English High court, alleging that Samsung's Motion Sync vacuum cleaner infringed Dyson's patented pivot steering technology used in its DC37 and DC39 cylinder vacuum cleaners.
Ferrari plans to increase its investment in new technology by half to 2 billion euros ($2.65 billion) by 2017 as the Italian luxury carmaker aims to build the world's most fuel-efficient, high-performance engines.
* Apple Inc has grown too big for just one iPhone. That is why Apple is releasing two new iPhones this month instead of just one, including a cheaper model aimed at less wealthy countries where new Apple phones have been desired but are out of reach because of their price.
* In a major legal setback for Google Inc, a federal appeals court here said on Tuesday that a lawsuit accusing the Internet giant of illegal wiretapping could proceed. The ruling, which comes at a moment when online privacy is being hotly debated, has its origins in a much-publicized Google initiative, Street View, which tried to map the inhabited world.
* Intelligence officials released secret documents on Tuesday showing that a judge reprimanded the National Security Agency in 2009 for violating its own procedures and misleading the nation's intelligence court about how it used the telephone call logs it gathers in the hunt for terrorists.
* Jon Corzine, the former New Jersey governor accused of a failure of leadership at the helm of the brokerage firm MF Global, is fighting back. Lawyers for Corzine filed a motion late Tuesday to dismiss a civil case against him brought by the Commodity Futures Trading Commission, the federal agency that regulated MF Global until its demise in 2011.
* The Dow Jones industrial average is shaking up its roster. Alcoa Inc, Bank of America Corp and Hewlett-Packard Co - three stalwarts of corporate America that have fallen out of favor lately with investors - will be removed from the Dow, to be replaced by Goldman Sachs Group Inc, Visa Inc and Nike Inc, the parent company of the index said on Tuesday.
* Automakers are making slow but steady progress improving fuel efficiency, as the industry hit a high for the average miles per gallon of new vehicles sold in August in the United States. A study released by the University of Michigan on Tuesday said that the average fuel economy on the window stickers of cars and trucks sold last month was 24.9 miles per gallon, nearly five miles per gallon better than the 20.1 mpg recorded in October 2007.
* Tesco Plc, the British supermarket chain, completed its retreat from the United States on Tuesday after selling most of its Fresh & Easy convenience stores to an affiliate of the money-management firm run by the billionaire Ronald Burkle.
* The top 10 percent of earners took more than half of the country's total income in 2012, the highest level recorded since the government began collecting the relevant data a century ago, according to an updated study by the prominent economists Emmanuel Saez and Thomas Piketty.
THE GLOBE AND MAIL
* The Conservative government is girding for a constitutional battle with the separatist Parti Québécois government, vowing to launch a Charter challenge of Quebec's plans to ban religious symbols in the province's civil service.
* As Rogers Communications Inc zeroes in on hiring a new leader, the company's media division is likely to feature prominently in any discussions with a would-be successor despite its relatively small place in the firm's empire.
Reports in the business section:
* Tensions between Rona Inc and its store owners are simmering over complaints from the merchants about their diminishing returns and the home-improvement retailer's weak performance. In a letter to Rona chief executive officer Robert Sawyer late last month, a group of Rona merchants expressed their growing frustration.
* Air Canada has emerged as one of the country's top performing stocks, rising by more than 50 per cent in the past five weeks, as investors bet on the airline's expansion plans and ability to reduce costs. The stock climbed 5.5 per cent on Tuesday and is up 12 per cent since the company announced last Thursday plans to refinance its long-term debt at a lower cost because of an improved financial position and reported a record August load factor.
* Ontario Premier Kathleen Wynne kicked off the fall session of the Ontario legislature Monday by warning she'll call an election if the Opposition keeps preventing any bills from being passed.
* The Canadian and Ontario governments have entered into an agreement to sell 30 million General Motors shares worth roughly C$1.1 billion. The deal with Bank of America Merrill Lynch and RBC Capital Markets in an unregistered block trade reduces Canada's stake by 21 percent.
SHANGHAI SECURITIES NEWS
- Three cities in Guangdong have applied to establish private banks, the paper said, without giving more details.
- BYD, the Warren Buffett-backed company best known for making electric cars, plans to roll out a hybrid Sport Utility Vehicle and develop a super electric sports car next year.
- A survey shows 16 percent of Chinese employers are planning to add staff in the fourth quarter, compared with 2 percent who plan to cut headcount.
- Investors suing mainland brokerage China Everbright Securities over an insider trading scandal in August are awaiting the reaction of Shanghai courts to several lawsuits filed there, after a court in Guangdong rejected a shareholder lawsuit on the grounds that it lacked jurisdiction.
- Russian oil producer Rosneft has offered a 30 percent stake in oil firm Taas-Yuryakh to China National Petroleum Corp.
Fly On The Wall 7:00 AM Market Snapshot
ConAgra (CAG) upgraded to Buy from Neutral at Goldman
Covidien (COV) upgraded to Buy from Neutral at Goldman
DiamondRock (DRH) upgraded to Outperform from Market Perform at FBR Capital
Liquidity Services (LQDT) upgraded to Buy from Neutral at BofA/Merrill
Marriott (MAR) upgraded to Buy from Neutral at UBS
Melco Crown (MPEL) upgraded to Buy from Hold at Deutsche Bank
Morgan Stanley (MS) upgraded to Buy from Neutral at UBS
Nokia (NOK) upgraded to Buy from Neutral at BofA/Merrill
Nokia (NOK) upgraded to Outperform from Sector Perform at RBC Capital
RF Micro Devices (RFMD) upgraded to Strong Buy from Market Perform at Raymond James
SYNNEX (SNX) upgraded to Market Perform from Underperform at Raymond James
Skyworks (SWKS) upgraded to Strong Buy from Outperform at Raymond James
Snap-On (SNA) upgraded to Buy from Neutral at Janney Capital
Xcel Energy (XEL) upgraded to Buy from Hold at Jefferies
iGATE (IGTE) upgraded to Buy from Neutral at Janney Capital
Apache (APA) downgraded to Neutral from Buy at UBS
Apple (AAPL) downgraded to Neutral from Buy at BofA/Merrill
Apple (AAPL) downgraded to Neutral from Outperform at Credit Suisse
Axiall (AXLL) downgraded to Neutral from Overweight at JPMorgan
BlackRock (BLK) downgraded to Neutral from Buy at UBS
Coldwater Creek (CWTR) downgraded to Neutral from Overweight at Piper Jaffray
Consolidated Edison (ED) downgraded to Hold from Buy at Jefferies
HD Supply (HDS) downgraded to Neutral from Overweight at JPMorgan
HSBC (HBC) downgraded to Neutral from Overweight at JPMorgan
ITG (ITG) downgraded to Market Perform from Outperform at Keefe Bruyette
Lionsgate (LGF) downgraded to Market Perform from Outperform at Cowen
Rush Enterprises (RUSHA) downgraded to Market Perform from Outperform at Raymond James
Westlake Chemical (WLK) downgraded to Neutral from Overweight at JPMorgan
21st Century Fox (FOXA) initiated with a Strong Buy at ISI Group
AMC Networks (AMCX) initiated with a Buy at Janney Capital
Amazon.com (AMZN) initiated with a Neutral at Wedbush
Arris (ARRS) initiated with an Overweight at Barclays
CBS (CBS) initiated with a Buy at ISI Group
Denny's (DENN) initiated with a Buy at Janney Capital
Discovery (DISCA) initiated with a Neutral at ISI Group
Disney (DIS) initiated with a Neutral at ISI Group
Emulex (ELX) initiated with an Equal Weight at Barclays
Finisar (FNSR) initiated with an Overweight at Barclays
JDSU (JDSU) initiated with an Equal Weight at Barclays
Jones Energy (JONE) initiated with an Outperform at Wells Fargo
Madison Square Garden (MSG) initiated with a Buy at ISI Group
National CineMedia (NCMI) initiated with a Hold at Benchmark Co.
Nationstar (NSM) initiated with an Overweight at Morgan Stanley
PHH Corp. (PHH) initiated with an Equal Weight at Morgan Stanley
QLogic (QLGC) initiated with an Overweight at Barclays
STAG Industrial (STAG) initiated with a Buy at MLV & Co.
Scripps Networks (SNI) initiated with a Neutral at ISI Group
Sophiris Bio (SPHS) initiated with an Outperform at Leerink
Southern Copper (SCCO) initiated with a Market Perform at BMO Capital
Spectrum Brands (SPB) initiated with an Outperform at Oppenheimer
Time Warner (TWX) initiated with a Buy at ISI Group
Tutor Perini (TPC) initiated with an Outperform at FBR Capital
Viacom (VIAB) initiated with a Buy at ISI Group
WCI Communities (WCIC) initiated with a Strong Buy at Raymond James
SYNNEX (SNX) to buy IBM's (IBM) customer care business processing unit for $505M
International Paper (IP) announced $1.5B share repurchase plan, raised dividend 17%
Harvest Natural (HNR) announced negotiations to sell company, spin-off assets
Fitch downgraded Dell's (DELL) IDR to 'BB-', Outlook stable
U.S. Appeals Court said Google (GOOG) not exempt from wiretap law in Wi-Spy suit
Disney (DIS) delayed release of ''Pirates of the Caribbean 5,' Bloomberg reports
Brocade (BRCD) to cut 300 jobs, consolidate facilities, take $30M-$40M in charges
Delaware court dismissed derivative claims against China Automotive (CAAS)
Companies that beat consensus earnings expectations last night and today include:
Restoration Hardware (RH), Lannett (LCI), Oxford Industries (OXM)
Companies that missed consensus earnings expectations include:
Coldwater Creek (CWTR), Unilife (UNIS)
- Wall Street is bracing for a ruling that may hasten the exit of several banks (JPM, GS, MS) from businesses such as metals warehousing, oil shipping and power generation. The Fed is expected to issue guidelines as soon as this month limiting bank participation in so-called physical-commodities businesses, and the rules would apply to all U.S. banking companies, the Wall Street Journal reports
- AMR Corp. (AAMRQ) and US Airways (LCC), whose expected merger has been held up by a Justice Department antitrust complaint that is slated to go to trial Nov. 25, reiterated their support for the combination and told AMR creditors that the two carriers plan to ask their respective boards to extend the merger termination date beyond its current Dec. 17 expiration, sources say, the Wall Street Journal reports
- Vodafone (VOD) has secured nearly 20% of shares in Kabel Deutschland, meaning it needs another 55% to be tendered on Wednesday for its $10.2B offer for Germany's largest cable company to succeed. Its share offer runs out at midnight, but it will lapse if holders of less than three quarters of the Kabels shares agree to sell, Reuters reports
- Volkswagen (VLKAY) may launch commercial vehicles in the U.S, as part of steps to expand its core namesake brand here, Reuters reports
- Dell (DELL) and Silver Lake Management LLC have secured enough votes for approval of their proposed $24.9B leveraged buyout, sources say, Bloomberg reports
- JPMorgan Chase (JPM) is easing mortgage lending standards in housing markets hard hit by the crash where prices are surging, Bloomberg reports
Atlantic Coast Financial (ACFC) files to sell $46M of common stock
Canada GEN Investment to sell 30M shares of General Motors (GM)
FleetCor (FLT) files to sell 2.75M shares of common stock for holders
Genesis Energy (GEL) files to sell 4.5M shares of common stock
Idera Pharmaceuticals (IDRA) files $75M mixed securities shelf
Neonode (NEON) files to sell 1.9M shares of common stock
Plug Power (PLUG) files to sell common stock
SunEdison (SUNE) announces proposed public offering of 30M shares
TriMas (TRS) 4.5M share Secondary priced at $35.40
UMB Financial (UMBF) 3.9M share Secondary priced at $54.00
Universal American (UAM) files to sell 46.42M shares of common stock for holders
XOMA (XOMA) files $150M mixed securities shelf
Xoom (XOOM) 4.4M share Secondary priced at $30.50
Southeastern Asset reports 11.9% passive stake in News Corp. (NWSA)
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