Frontrunning: October 30
- Morning Humor from Hilsenrath - Fed Balance Sheet Not Seen Returning to Normal Until at Least 2019 (WSJ)
- Health Policies Canceled in Latest Hurdle for Obamacare (BBG)
- Was there anything RBS was not manipulating? RBS Said to Review Currency-Trading Practices Amid Probe (BBG)
- Sebelius to Testify Before House Panel (WSJ)
- And more humor: Spain's Statistics Institute Confirms End of Recession (WSJ) ... and now we await the triple dip
- Finally some credible reporting on Yellen's "foresight" - Yellen feared housing bust but did not raise public alarm (Reuters)
- Japan government moves closer to Fukushima takeover (FT)
- China to step up own security after new NSA allegations (Reuters)
- Blackstone Vies With Goldman in Spain Rental Housing Bet (BBG)
- In new U.S. budget talks, Republican proposal has flipped the script (Reuters)
- Madoff Money to Japan Mob Ties Breed Banks’ Global Pains (BBG)
- German Unemployment Rises a Third Month as Growth Slows (BBG)
- China Detains Five Over Tiananmen Crash, Calls It 'Terrorist Attack' (WSJ)
- Top Central Banker in Norway Prefers Housing Slump to Gains (BBG)
Overnight Media Digest
* U.S. officials said electronic spying that ignited a political firestorm in France and Spain recently was carried out by their own intelligence services and not by the NSA. The phone records were shared with the U.S.
* Problems surrounding the launch of the federal health-care law broadened, as concerns that thousands of Americans are getting insurance-cancellation notices bubbled over at a hearing on Capitol Hill.
* SAC Capital will plead guilty to securities fraud as part of a landmark criminal insider-trading settlement with federal prosecutors set to be announced by next week.
* Dutch lender Rabobank agreed to pay $1.07 billion to settle accusations that it skewed key financial benchmarks and its chief executive resigned, the latest casualty of a global interest-rate-rigging scandal.
* A multibillion-dollar settlement between JPMorgan Chase and the U.S. over soured mortgage bonds is at risk of collapsing because of disagreements related to a criminal probe of the bank and its effort to get penalties reimbursed by a government-controlled fund, according to people familiar with the discussions.
* Operators of U.S. truck fleets are accelerating a shift to natural gas fueled trucks, betting on new engines that promise to drop the cost of shifting from diesel fuel.
* BlackBerry Ltd executives flew to California to meet with Facebook Inc last week to gauge its interest in a potential bid for the struggling smartphone maker, according to people familiar with the matter.
* Google Inc's smartwatch is in late-stage development and the company is in talks with Asian suppliers to begin mass production of the device, people familiar with the matter said.
Rabobank agreed to a $1 billion fine to U.S., British and Dutch authorities, admitting that dozens of employees manipulated the Libor and other key benchmark interest rates over six years.
Barclays may need to pay out as much as $700 million to U.S. hedge fund Black Diamond, after losing an appeal in a five-year legal struggle when a New York supreme court found the bank liable for breach of contract over a vast credit derivatives transaction.
Creditor banks of Brazilian tycoon Eike Batista's OGX on Monday struck a private deal to sell off the troubled oil company's natural gas business. The move has other creditors and shareholders anxious that they will be left with next to nothing if OGX files for bankruptcy.
BP's Chief Executive Bob Dudley said the UK oil major plans to sell a further $10 billion worth of assets by the end of 2015, which could signal higher payouts to investors.
DVD rental chain Blockbuster's British arm is set to go back into administration for the second time in 10 months, putting 2,000 jobs at risk after poor retail and rental sales.
* Twitter, which has been built around 140-character snippets of text since its founding in 2006, has added photo and video previews to the feed of items that users see when they log onto the service from the Web or mobile applications.
* When Brian Sozzi, the Chief Executive of Belus Capital Advisors, visited Sears locations in New York and New Jersey this month, he said, he found barren shelves, haphazard displays and badly stained carpets. Also missing: customers.
* The Senate voted unanimously to confirm President Obama's two picks for the Federal Communications Commission, Tom Wheeler as chairman and Michael O'Rielly as a commissioner.
* Samsung recorded its highest share of smartphone shipments to date in the third quarter, while Apple showed more modest gains, according to a new report from Strategy Analytics.
* The White House has long been aware in general terms of the National Security Agency's overseas eavesdropping, the nation's top spymaster told a House hearing on Tuesday.
* The CBS Corp is developing a 24-hour news channel that would be streamed online and would mainly repurpose video and reporting already produced by CBS News, according to executives involved in the planning.
* LinkedIn announced strong user growth and better-than-expected third-quarter revenue on Tuesday, but issued a conservative revenue forecast for the fourth quarter and the 2013 fiscal year.
* After months of wrangling and tough negotiating, Dell Inc is finally going private. The computer company said on Tuesday that its $24.9 billion sale to its founder, Michael Dell, and the investment firm Silver Lake had closed.
* Nextdoor, a social network for neighbors, is moving into elite territory. The San Francisco startup announced a $60 million investment on Tuesday, led by Kleiner Perkins Caufield & Byers and Tiger Global Management, two prominent venture capital firms.
* Infosys, the giant Indian technology outsourcing company, has agreed to pay $34 million in a civil settlement after federal prosecutors in Texas found it had committed "systemic visa fraud and abuse" when bringing temporary workers from India for jobs in American businesses, according to court documents and officials familiar with the case.
THE GLOBE AND MAIL
* Canada has promised the European Union it will be able to take advantage of any further loosening of foreign investment restrictions on the country's telecom sector.
* A heated debate is raging among some of the biggest names in the food world over a boycott of Canadian seafood, a move aimed at ending the annual seal hunt.
Reports in the business section:
* United States Steel Corp will permanently cease steel production at its Hamilton mill at the end of the year, ending an era that goes back more than a century. The permanent end of steel making in what was the cradle of the Canadian steel industry is the latest step in what has been a troubled history for U.S. Steel.
* The race is on for one of Canada's hottest retail sites after Sears Canada Inc abandoned its flagship store at the Toronto Eaton Center. U.S. department store Nordstrom Inc is in talks with the mall's owner, Cadillac Fairview Corp, to move into the space - and could be close to a deal, industry sources said.
* A report tabled Tuesday by the federal Conservative government in the House of Commons, explaining the final negotiated outcomes of the Canada-EU free-trade agreement, has shed more light on what is being billed as the largest and most wide-ranging free trade deal for Canada since the North American Free Trade Agreement.
* The unsteady sand of who is considered a terrorist in Canada has once again shifted in favor of a Tamil woman living in Toronto, whose politician husband was assassinated in Sri Lanka while attending Christmas Eve mass in 2005. Weeks after Joseph Pararajasingham, a member of parliament in Sri Lanka, was shot dead, Canada granted residency to his widow. In 2011, however, the Immigration and Refugee Board concluded that the woman was a member of a terrorist group and should be deported because of her ties to her husband, who had ties to the Tamil Tigers.
* Stephen Poloz, Canada's new head of monetary policy, is already being credited with putting a kinder, gentler face on the Bank of Canada, and cutting through decades-old jargon that is central-bank speak.
* Any chill in foreign investment resulting from tougher Industry Canada reviews hasn't caught up with the British, who are warming up to the Western Canadian energy economy like never before. Energy giants such as Centrica, BG Group, BP, Royal Dutch Shell, are all growing their Western Canadian operations, encouraged by the British government, the recently announced Canada-EU free trade deal and perception that the Canadian government welcomes their business.
CHINA SECURITIES JOURNAL
- The net profit of 116 Chinese property companies increased 30.6 percent in the first nine months of this year, according to Wind, a financial data provider.
SHANGHAI SECURITIES NEWS
- China Development Bank Corp is working with local governments and enterprises to review re-mortgage financing issues of photovoltaic power plants, according to sources. The bank is developing new finance rules to address industry financing difficulties, they said.
CHINA BUSINESS NEWS
- China Vanke Co Ltd confirmed on Tuesday that it will buy up to HK$3 billion ($386.9 million) worth of shares in the Hong Kong IPO of Huishang Bank, making it the largest shareholder.
- China's central bank has set up a firewall that can distinguish between accounts set up within and outside of Shanghai's pilot free-trade zone so that authorities can monitor transactions in real time, said Li Xunlei, chief economist at Haitong Securities.
- Sixteen percent of Chinese households have had their homes demolished or seized during China's urbanization drive, but few have received support in gaining employment or access to social security services, a survey of some 12,500 people nationwide showed.
Less than 80 percent of those who had land seized said they received compensation, while 94 percent of those whose homes were demolished had received compensation.
Fly On The Wall 7:00 AM Market Snapshot
Agree Realty (ADC) upgraded to Outperform from Market Perform at Raymond James
BP (BP) upgraded to Buy from Hold at Societe Generale
Baidu (BIDU) upgraded to Buy from Hold at Brean Capital
Baidu (BIDU) upgraded to Buy from Hold at Jefferies
Electronic Arts (EA) upgraded to Strong Buy from Hold at Needham
Facebook (FB) upgraded to Buy from Neutral at BTIG
Masco (MAS) upgraded to Market Perform from Underperform at Raymond James
Nanometrics (NANO) upgraded to Outperform from Sector Perform at Pacific Crest
Nike (NKE) upgraded to Overweight from Equal Weight at Morgan Stanley
Aflac (AFL) downgraded to Market Perform from Outperform at Raymond James
Ambarella (AMBA) downgraded to Equal Weight from Overweight at Morgan Stanley
Axiall (AXLL) downgraded to Neutral from Buy at Citigroup
Bed Bath & Beyond (BBBY) downgraded to Hold from Buy at Canaccord
Buffalo Wild Wings (BWLD) downgraded to Market Perform at Raymond James
CAI International (CAP) downgraded to Neutral from Outperform at Credit Suisse
Calix (CALX) downgraded to Market Perform from Outperform at Raymond James
Carpenter Technology (CRS) downgraded to Neutral from Buy at Goldman
Changyou.com (CYOU) downgraded to Neutral from Buy at Citigroup
Chesapeake Granite (CHKR) downgraded to Sell from Neutral at Goldman
Cirrus Logic (CRUS) downgraded to Underweight from Equal Weight at Barclays
Cyan (CYNI) downgraded to Hold from Buy at Jefferies
Cyan (CYNI) downgraded to Sector Perform from Outperform at Pacific Crest
Dana Holding (DAN) downgraded to Fair Value from Buy at CRT Capital
Dana Holding (DAN) downgraded to Hold from Buy at KeyBanc
Digital Realty (DLR) downgraded to Equal Weight from Overweight at Evercore
Digital Realty (DLR) downgraded to Market Perform from Outperform at Raymond James
Edwards Lifesciences (EW) downgraded to Underweight from Neutral at JPMorgan
Plantronics (PLT) downgraded to Market Perform from Outperform at Raymond James
Questcor (QCOR) downgraded to Fair Value from Buy at CRT Capital
SanDisk (SNDK) downgraded to Neutral from Buy at BofA/Merrill
Sensata (ST) downgraded to Market Perform from Outperform at BMO Capital
U.S. Steel (X) downgraded to Hold from Buy at Deutsche Bank
UBS (UBS) downgraded to Neutral from Buy at BofA/Merrill
Union Pacific (UNP) downgraded to Neutral from Outperform at RW Baird
Western Union (WU) downgraded to Market Perform from Outperform at Raymond James
Willis Group (WSH) downgraded to Neutral from Buy at BofA/Merrill
Xylem (XYL) downgraded to Hold from Buy at KeyBanc
Cherry Hill Mortgage (CHMI) initiated with an Outperform at FBR Capital
Dick's Sporting (DKS) initiated with a Hold at Jefferies
Ecolab (ECL) initiated with a Buy at UBS
Skechers (SKX) initiated with a Buy at Brean Capital
Barclays (BCS) said cooperating with foreign exchange trading probe
Nidec (NJ) to acquire Honda Elesys (HMC) for about $500M
Teleflex (TFX) to acquire Vidacare for $262.5M
Western Union (WU) no longer expects operating profit growth in 2014
LinkedIn (LNKD) said mobile continues to be 'fastest' growing product
Aflac (AFL) sees FY14 share repurchases $800M-$1B
Wi-LAN (WILN) to explore strategic alternatives
Companies that beat consensus earnings expectations last night and today include:
Pioneer Energy (PES), TE Connectivity (TEL), AU Optronics (AUO), Range Resources (RRC), Trulia (TRLA), Charles River Labs (CRL), NuVasive (NUVA), Ameriprise (AMP), Ryland Group (RYL), Take-Two (TTWO), DreamWorks (DWA), Questcor (QCOR), IAC (IACI), Western Union (WU), LinkedIn (LNKD), Electronic Arts (EA), Buffalo Wild Wings (BWLD), Gilead (GILD)
Companies that missed consensus earnings expectations include:
Praxair (PX), Universal Health (UHS), SL Industries (SLI), EXCO Resources (XCO), Genworth (GNW), Wabash (WNC), Arthur J. Gallagher (AJG), Aflac (AFL), Cabot (CBT), CBRE Group (CBG), Big 5 Sporting (BGFV), Rubicon (RBCN), Caesar's (CZR), Yelp (YELP), Plantronics (PLT), CAI International (CAP)
Companies that matched consensus earnings expectations include:
NICE Systems (NICE), Ocean Shore Holding (OSHC), RPX Corp. (RPXC), FEI Company (FEIC), PAREXEL (PRXL), Kforce (KFRC), Danaos (DAC), Sonus Networks (SONS)
- Operators of some of the largest U.S. truck fleets, including Lowe’s (LOW), Procter & Gamble (PG) and UPS (UPS) are accelerating a shift to natural gas fueled trucks (CMI, VOLVY, CNW, SWFT), betting on new engine technology that promises to lower the cost of shifting from diesel fuel, the Wall Street Journal reports
- For the holidays, Barnes & Noble (BKS) is heavily discounting Nook HD tablets originally introduced in the fall of 2012. The only new device it will sell during the holidays is an updated version of its Nook GlowLight black and white e-reader. The device will be unveiled today, the Wall Street Journal reports
- The Federal Reserve is expected to maintain its massive bond-buying campaign when it concludes a two-day meeting on Wednesday and may point to softer readings on the U.S. economy to signal that the policy will be extended into 2014. An announcement will come at 2 p.m., Reuters reports
- Adobe Systems (ADBE) said the scope of a cyber-security breach disclosed on October 3 was far bigger than initially reported, with attackers obtaining data on more than 38M customer accounts. Hackers also had stolen part of the source code to Photoshop editing software widely used by professional photographers, Reuters reports
- Allowing Americans more time to enroll for health coverage under Obamacare may increase premiums and cut into profits, insurers (AET, WLP, UNH, HNT) are telling members of Congress in a bid to stop such a move, Bloomberg reports
- Pioneer Natural Resources (PXD), with over 7,000 wells in the largest U.S. oil field, may draw buyers from Chevron (CVX) to ConocoPhillips (COP) to one of the industry’s biggest takeover targets. Pioneer’s market value more than doubled this year to $29B, Bloomberg reports
Ascent Solar (ASTI) raises $10M in a registered direct offering
Brixmor (BRX) 41.25M share IPO priced at $20.00
Criteo (CRTO) 8.08M share IPO priced at $31.00
HCA Holdings (HCA) files to sell 30M shares of common stock for holders
Mazor Robotics (MZOR) 2.4M share Secondary priced at $17.00
Surgical Care Affiliates (SCAI) 9.778M share IPO priced at $24.00
Veracyte (VCYT) 5M share IPO priced at $13.00
Yelp (YELP) files to sell $250M of Class A common stock
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