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Frontrunning: January 14

Tyler Durden's picture





 
  • House Unveils $1.01 Trillion Measure to Fund Government (BBG)
  • Credit Suisse Tells Junior Bankers to Take Saturdays Off (BBG)
  • Spot the odd word out: ECB Sees Bad-Debt Rules as Threat to Credible Bank Review (BBG)
  • Insert laugh track here: Spain GDP grows at fastest pace in almost six years (FT)
  • Scandinavian Debt Crisis Waiting to Happen Puzzles Krugman (BBG)
  • Fed Said to Release Plan to Limit Banks’ Commodities Activities (BBG)
  • Thai Protesters Extend Blockade After Rejecting Poll Talks (BBG)
  • China provinces set lower growth goals for 2014 (BBG)
  • South Korea cuts future reliance on nuclear power, but new plants likely (Reuters)
  • U.S. Posts Record December Surplus on Fannie Mae Payments (BBG)
  • Euro-Zone Industrial Production Jumps (WSJ)

 

Overnight Media Digest

WSJ

The Telegraph

SCOTTISH INDEPENDENCE: UK'S CREDIT RATING COULD BE THREATENED AS TREASURY GUARANTEES SCOTLAND'S DEBT

Bond traders welcome the Treasury's confirmation that it will stand by all UK debt in the event of Scottish independence but credit rating agencies could be concerned about the UK's bigger burden.

OECD SAYS GROWTH CONTINUES TO 'FIRM' IN UK

Britain is leading a small band of advanced economies where growth is "firming" and the recovery gaining traction, according to the Organisation for Economic Co-operation and Development (OECD).

The Guardian

JAPAN'S SUNTORY BUYS MAKER OF JIM BEAM BOURBON

Illinois-based Beam Inc, the drinks group behind Jim Beam bourbon as well as Scotch whiskies Teacher's and Laphroaig, has been sold to Japanese whisky distiller Suntory as part of a $16 billion deal.

HOMESERVE FACES 35 MLN STG REGULATOR FINE

Home emergencies and repairs group HomeServe has received a draft "warning notice" from the Financial Conduct Authority (FCA) and is set to be fined 34.5 million pounds for mis-selling and poor complaints handling.

The Times

PREDATOR RALLIES INVESTORS IN $62 BLN BID FOR TIME WARNER

The American cable television operator Charter Communications stunned Wall Street and the media world on Monday night by mounting an audacious $62.3billion bid, including debt, for its much larger rival Time Warner Cable .

GOOGLE ACQUIRES NEST FOR $3.2 BILLION

Google Inc continued its push into becoming a maker of consumer electronics by acquiring Nest, a company that sells "smart" thermostats and smoke alarms, in a deal worth $3.2 billion.

The Independent

SPORTS DIRECT BUYS 4.6 PERCENT STAKE IN DEBENHAMS

Mike Ashley's Sports Direct has quietly snapped up a 45 million pound stake in struggling department store Debenhams and Ashley has told the retailer's board that he wants to work closely with them.

AMEC OFFERS 1.9 BLN STG TO BUY RIVAL FOSTER WHEELER

Engineering firm Amec today revealed a $3.2 billion (1.9 billion pound) potential offer for rival Foster Wheeler , keeping up this year's hectic start for takeover activity.

 

FT

U.S. cable company Charter Communications Inc on Monday went public with a proposal to buy Time Warner Cable Inc for $61.3 billion, including debt, only for its larger rival to reject its advances as "grossly inadequate."

Google Inc on Monday announced plans to acquire Nest Labs Inc, a maker of smart thermostats and smoke alarms, for $3.2 billion, making a bold bet on the emerging "internet of things".

Suntory Holdings Ltd said on Monday it would buy U.S. spirits company Beam Inc for $16 billion, including debt, in a deal that underscores the Japanese company's acquisitive global ambitions and Asia's growing thirst for premium spirits.

Three former traders at Dutch lender Rabobank were criminally charged by the U.S. Department of Justice on Monday with manipulating the Yen Libor benchmark interest rate and other key benchmark interest rates.

U.S. drugs wholesaler group McKesson Corp said on Monday it had failed to win enough support for a $8.4 billion offer to buy German distributor Celesio, after a battle with Elliott Associates, the activist hedge fund, over the deal.

Hedge fund Elliott Management Corp urged network equipment maker Juniper Networks Inc to start paying dividends and buy back shares worth $3.5 billion, making it the latest technology company to attract criticism for building up a large cash pile.

 

NYT

* Ford Motor, the second-largest American automaker after General Motors, took the wraps off a radically redesigned pickup truck at the annual Detroit auto show. Ford will replace its F-150 truck's traditional steel body panels with aluminum parts, which saves weight and improves fuel economy.

* Charter Communications offered $37.8 billion to acquire Time Warner Cable, the country's second-largest cable operator. Including debt, the offer is valued at $61.3 billion.

* Japan's Suntory announced it would buy Beam Inc , the maker of Jim Beam and Maker's Mark, for $13.6 billion, in one of the biggest takeovers in the liquor business in years which will transform it into the third-largest distiller globally.

* Apple Inc is campaigning aggressively against a court-appointed inspector, appointed to make sure that the company complied with antitrust laws after it was found last summer to have conspired with five publishers to fix prices for e-books, saying he is intruding on operations.

* People signing up for health insurance through the Affordable Care Act's federal and state marketplaces tend to be older and potentially less healthy, officials said on Monday, a demographic trend that could threaten the law's economic foundations and cause premiums to rise in the future.

* House and Senate negotiators reached an agreement on a trillion-dollar spending plan that will finance the government through September, reversing some cuts to military veterans' pensions that were included in a broader budget agreement last month and defeating efforts to rein in President Obama's health care law.

* FBI investigators do not believe Internal Revenue Service officials committed crimes in the unusually heavy scrutiny of conservative groups that applied for tax-exempt status, a law enforcement official said on Monday.

* Google Inc agreed to pay $3.2 billion in cash for Nest Labs, which makes Internet-connected devices like thermostats and smoke alarms.

 

Canada

THE GLOBE AND MAIL

* A special meeting in which the Toronto city council voted unanimously to ask for C$114 million ($105 million) in ice storm funding from the provincial and federal governments descended into a shouting match, with councillors bickering over who was in charge at city hall after the storm. Councillor Karen Stintz, who intends to run against Toronto Mayor Rob Ford this year, took aim at him for not creating a clear chain of leadership after the storm.

* Health Minister Deb Matthews announced that five hospitals in Southern Ontario will permanently close their doors and be replaced with a new acute-care center as part of a massive overhaul of the troubled Niagara Health System.

Reports in the business section:

* Chrysler Group LLC began discussions with the federal and Ontario governments to seek financial assistance for an investment of more than $1 billion to retool a plant in Windsor for a new generation of minivans.

NATIONAL POST

* Round doorknobs are joining incandescent lightbulbs as outdated technology that Canadian governments are seeking to eradicate - in one case for their carbon footprint, in the other for the obstacle they pose to the disabled.

FINANCIAL POST

* Wind Mobile is withdrawing from bidding in Canada's spectrum auction after failing to secure financial backing to participate from its owner VimpelCom Ltd.

* Canada's two national newspapers, The Globe and Mail and Postmedia Network Canada Corp's National Post, told staff about job cuts on Monday. Postmedia also said it would shut down operations at a Calgary call center this spring and outsource the work of selling classified ads for its newspaper chain to U.S.-based Media Sales Plus Inc.

 

China

CHINA SECURITIES JOURNAL

- The China Insurance Regulatory Commission said it was seeking opinions on insurance fund management and was considering raising the investment ratio for insurance companies in capital markets.

- China's ICBC plans to issue 100 billion yuan ($16.55 billion) worth of interbank deposit in 2014, according to company announcement.

SHANGHAI SECURITIES NEWS

- Shanghai's vice mayor said that the Shanghai free-trade zone will allow exchange of the yuan as part of a bold push to reform the world's second largest economy.

CHINA DAILY

- Shanghai Zhenhua Heavy Industries Co Ltd said it has made an offer for JJ Sietas Schiffswerft, a Hamburg-based shipyard, as part of its drive to diversify and expand its maritime engineering business.

- China Investment Corp, the country's $575 billion sovereign wealth fund, favours European infrastructure and real estate because developed markets will drive the next phase of the global economic recovery, CIC Chairman Ding Xuedong said, adding that the United States will also remain a focus for the Beijing-based fund.

SHANGHAI DAILY

- Shanghai residents spent an average of 31,018 yuan last year through Alipay, a third-party payment service founded by China's largest e-commence company Alibaba . Their expenditure accounted for 9.3 percent of the total spending in the country last year.

PEOPLE'S DAILY

- Chinese citizens should focus on progress while authorities should work on solutions for problems, said a commentary in the paper that acts as the Party's mouthpiece.

 

Britain

The Telegraph

SCOTTISH INDEPENDENCE: UK'S CREDIT RATING COULD BE THREATENED AS TREASURY GUARANTEES SCOTLAND'S DEBT

Bond traders welcome the Treasury's confirmation that it will stand by all UK debt in the event of Scottish independence but credit rating agencies could be concerned about the UK's bigger burden.

OECD SAYS GROWTH CONTINUES TO 'FIRM' IN UK

Britain is leading a small band of advanced economies where growth is "firming" and the recovery gaining traction, according to the Organisation for Economic Co-operation and Development (OECD).

The Guardian

JAPAN'S SUNTORY BUYS MAKER OF JIM BEAM BOURBON

Illinois-based Beam Inc, the drinks group behind Jim Beam bourbon as well as Scotch whiskies Teacher's and Laphroaig, has been sold to Japanese whisky distiller Suntory as part of a $16 billion deal.

HOMESERVE FACES 35 MLN STG REGULATOR FINE

Home emergencies and repairs group HomeServe has received a draft "warning notice" from the Financial Conduct Authority (FCA) and is set to be fined 34.5 million pounds for mis-selling and poor complaints handling.

The Times

PREDATOR RALLIES INVESTORS IN $62 BLN BID FOR TIME WARNER

The American cable television operator Charter Communications stunned Wall Street and the media world on Monday night by mounting an audacious $62.3billion bid, including debt, for its much larger rival Time Warner Cable .

GOOGLE ACQUIRES NEST FOR $3.2 BILLION

Google Inc continued its push into becoming a maker of consumer electronics by acquiring Nest, a company that sells "smart" thermostats and smoke alarms, in a deal worth $3.2 billion.

The Independent

SPORTS DIRECT BUYS 4.6 PERCENT STAKE IN DEBENHAMS

Mike Ashley's Sports Direct has quietly snapped up a 45 million pound stake in struggling department store Debenhams and Ashley has told the retailer's board that he wants to work closely with them.

AMEC OFFERS 1.9 BLN STG TO BUY RIVAL FOSTER WHEELER

Engineering firm Amec today revealed a $3.2 billion (1.9 billion pound) potential offer for rival Foster Wheeler , keeping up this year's hectic start for takeover activity.

 

 

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:

Retail sales for December will be reported at 08:30--Current consensus is 0.0% for the month

Business inventories for November will be reported at 10:00--Current consensus is 0.3% for the month

ANALYST RESEARCH

Upgrades

Actuant (ATU) upgraded to Buy from Hold at Jefferies
AstraZeneca (AZN) upgraded to Outperform from Market Perform at Leerink
Barnes Group (B) upgraded to Buy from Hold at Jefferies
Brocade (BRCD) upgraded to Overweight from Neutral at JPMorgan
Cameco (CCJ) upgraded to Buy from Neutral at BofA/Merrill
Cliffs Natural (CLF) upgraded to Buy from Hold at Deutsche Bank
Danaher (DHR) upgraded to Buy from Neutral at BofA/Merrill
Flowserve (FLS) upgraded to Buy from Hold at Jefferies
Gorman-Rupp (GRC) upgraded to Hold from Underperform at Jefferies
Intel (INTC) upgraded to Overweight from Neutral at JPMorgan
Jabil Circuit (JBL) upgraded to Conviction Buy from Neutral at Goldman
Juniper (JNPR) upgraded to Outperform from Perform at Oppenheimer
Kaman (KAMN) upgraded to Buy from Hold at Jefferies
Logitech (LOGI) upgraded to Buy from Neutral at Goldman
Luxottica (LUX) upgraded to Neutral from Reduce at Nomura
MPLX (MPLX) upgraded to Overweight from Equal Weight at Barclays
MSC Industrial (MSM) upgraded to Buy from Hold at Jefferies
Magellan Midstream (MMP) upgraded to Overweight from Equal Weight at Barclays
ON Semiconductor (ONNN) upgraded to Outperform from Neutral at Credit Suisse
Pan American Silver (PAAS) upgraded to Buy from Hold at Deutsche Bank
Southern Copper (SCCO) upgraded to Outperform from Market Perform at FBR Capital
Thompson Creek (TC) upgraded to Buy from Neutral at BofA/Merrill
VeriFone (PAY) upgraded to Overweight from Neutral at JPMorgan
XPO Logistics (XPO) upgraded to Buy from Hold at KeyBanc
Yahoo (YHOO) upgraded to Buy from Fair Value at CRT Capital

Downgrades

ASML (ASML) downgraded to Neutral from Outperform at Credit Suisse
Cameron (CAM) downgraded to Equal Weight from Overweight at Morgan Stanley
Cardtronics (CATM) downgraded to Neutral from Overweight at JPMorgan
Celadon Group (CGI) downgraded to Hold from Buy at Stifel
ChannelAdvisor (ECOM) downgraded to Neutral from Buy at Goldman
Delek Logistics (DKL) downgraded to Equal Weight from Overweight at Barclays
Demandware (DWRE) downgraded to Neutral from Conviction Buy at Goldman
Energy Transfer Partners (ETP) downgraded to Equal Weight from Overweight at Barclays
EverBank Financial (EVER) downgraded to Neutral from Buy at Sterne Agee
Family Dollar (FDO) downgraded to Underweight from Equal Weight at Barclays
Freeport McMoRan (FCX) downgraded to Market Perform from Outperform at FBR Capital
General Mills (GIS) downgraded to Underweight from Equal Weight at Morgan Stanley
Genesis Energy (GEL) downgraded to Equal Weight from Overweight at Barclays
Gentiva Health (GTIV) downgraded to Hold from Buy at Deutsche Bank
Heartland Payment (HPY) downgraded to Neutral from Overweight at JPMorgan
Hi-Crush Partners (HCLP) downgraded to Equal Weight from Overweight at Barclays
KiOR (KIOR) downgraded to Market Perform from Outperform at Cowen
Microsoft (MSFT) downgraded to Neutral from Buy at Citigroup
Plexus (PLXS) downgraded to Neutral from Buy at Goldman
Qualcomm (QCOM) downgraded to Market Perform from Outperform at Raymond James
Rudolph Technologies (RTEC) downgraded to Neutral from Outperform at Credit Suisse
Sirius XM (SIRI) downgraded to Equal Weight from Overweight at Barclays
Southcross Energy (SXE) downgraded to Underweight from Equal Weight at Barclays
StealthGas (GASS) downgraded to Market Perform from Outperform at Wells Fargo
TE Connectivity (TEL) downgraded to Buy from Conviction Buy at Goldman
Veolia Environment (VE) downgraded to Neutral from Buy at Citigroup
Volcano (VOLC) downgraded to Market Perform from Outperform at JMP Securities
Western Union (WU) downgraded to Sell from Neutral at Citigroup
YRC Worldwide (YRCW) downgraded to Hold from Buy at BB&T
ZELTIQ (ZLTQ) downgraded to Neutral from Buy at Goldman

Initiations

3D Systems (DDD) initiated with an Outperform at RBC Capital
American Express (AXP) initiated with a Neutral at UBS
BB&T (BBT) initiated with a Neutral at Janney Capital
Capital One (COF) initiated with a Buy at UBS
CatchMark Timber (CTT) initiated with an Outperform at Raymond James
Comerica (CMA) initiated with a Neutral at Janney Capital
Comstock Resources (CRK) initiated with an Outperform at Imperial Capital
Discover (DFS) initiated with a Neutral at UBS
Dyax (DYAX) initiated with an Outperform at Wedbush
Fifth Third Bancorp (FITB) initiated with a Buy at Janney Capital
KNOT Offshore Partners (KNOP) initiated with an Outperform at RBC Capital
KeyCorp (KEY) initiated with a Buy at Janney Capital
M&T Bank (MTB) initiated with a Neutral at Janney Capital
Neenah Paper (NP) initiated with a Buy at DA Davidson
People's United (PBCT) initiated with a Buy at Janney Capital
Red Hat (RHT) initiated with an Outperform at JMP Securities
Regions Financial (RF) initiated with a Buy at Janney Capital
Stratasys (SSYS) initiated with an Outperform at RBC Capital
Synergy Resources (SYRG) initiated with a Hold at Stifel

HOT STOCKS

Charter (CHTR) offered to buy Time Warner Cable (TWC) for ‘low $130s’ per share
Time Warner Cable (TWC) board rejected Charter (CHTR) offer, called it 'grossly inadequate'
Time Warner Cable (TWC) told Charter (CHTR) it would accept $160/share bid, CNBC reports
Google (GOOG) to acquire Nest for $3.2B in cash
Sears (SHLD) ratings placed on CreditWatch negative by S&P
Osisko board considering Goldcorp's (GG) C$5.95 per share offer
HealthSouth (HLS) sees dividends, opportunistic repurchases through FY16
Yum! Brands (YUM) reports December China division SSS up 2%

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
DragonWave (DRWI), Nautilus (NLS)

NEWSPAPERS/WEBSITES

McKesson (MCK) considers JV following failure of Celesio (CAKFY) bid, Bloomberg reports
Fox (FOXA) won't participate in network TV’s pilot season, Bloomberg reports
Dish's (DISH) Ergen says he bought LightSquared debt for himself, Reuters reports
Malone (LMCA, CHTR) seeks consolidation in Time Warner Cable (TWC) bid, Reuters reports
Pfizer's (PFE) generics unit attracts several suitors (VRX, ACT, MYL), Reuters reports
Nasdaq (NDAQ), S&P (MHFI) interested in acquisitions to grow index businesses, Reuters reports
FBI bulletin: Traders may be front running Fannie (FNMA), Freddie (FMCC), Reuters reports
DirecTV (DTV) wants Weather Channel fee reduction as apps take hold, WSJ reports
Ventas (VTR) and Health Care REIT (HCN) held talks, dealReporter reports
Sears (SHLD) may be cut by S&P, Bloomberg reports
Target's (TGT) problems may benefit security firms, NY Times reports

SYNDICATE

Altisource Residential (RESI) files to sell 10M shares of common stock
AmeriGas (APU) files to sell 8M common shares for Energy Transfer affiliate
Full Circle Capital (FULL) files to sell 1.6M shares of common stock
IHS Inc. (IHS) files to sell 3.48M shares of Class A common stock for holders
Methes Energies (MEIL) files to sell 3.54M shares of common stock for holders
RAIT Financial (RAS) files to sell 10M shares of common stock
Workday (WDAY) files to sell 6M shares of common stock

 


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Tue, 01/14/2014 - 09:25 | Link to Comment RSloane
RSloane's picture

Retail sales for December should be an interesting number [massaged or otherwise]. Let the spins begin!

Tue, 01/14/2014 - 09:27 | Link to Comment Disenchanted
Disenchanted's picture
Peak Oil becomes an Issue Again after the IEA Revised its Predictions

 

But that was then. The most recent edition of World Energy Outlook, published this past November, was a lot more circumspect.  Yes, shale oil, tar sands, and other unconventional fuels will add to global supplies in the years ahead, and, yes, technology will help prolong the life of petroleum.  Nonetheless, it’s easy to forget that we are also witnessing the wholesale depletion of the world’s existing oil fields and so all these increases in shale output must be balanced against declines in conventional production.  Under ideal circumstances -- high levels of investment, continuing technological progress, adequate demand and prices -- it might be possible to avert an imminent peak in worldwide production, but as the latest IEA report makes clear, there is no guarantee whatsoever that this will occur.

Tue, 01/14/2014 - 09:54 | Link to Comment Lumberjack
Lumberjack's picture

CORRECTING and REPLACING Green Bond Principles Created to Help Issuers and Investors Deploy Capital for Green Projects

http://www.marketwatch.com/story/correcting-and-replacing-green-bond-pri...

GREEN BOND PRINCIPLES CREATED TO HELP ISSUERS AND INVESTORS DEPLOY CAPITAL FOR GREEN PROJECTS
A consortium of investment banks today announced their support of the Green Bond Principles – Bank of America Merrill Lynch, Citi, Crédit Agricole Corporate and Investment Bank, JPMorgan Chase, BNP Paribas, Daiwa, Deutsche Bank, Goldman Sachs, HSBC, Mizuho Securities, Morgan Stanley, Rabobank and SEB. These Principles were developed with guidance from issuers, investors and environmental groups and serve as voluntary guidelines on recommended process for the development and issuance of Green Bonds. They encourage transparency, disclosure and integrity in the development of the Green Bond market.
These Green Bond Principles suggest process for designating, disclosing, managing and reporting on the proceeds of a Green Bond. They are designed to provide issuers with guidance on the key components involved in launching a Green Bond, to aid investors by ensuring the availability of information necessary to evaluate the environmental impact of their Green Bond investments and to assist underwriters by moving the market towards standard disclosures which facilitate transactions.
These Principles build on first-to-market issuances by multilaterals and provide a platform for other future Green Bond issuers to direct funding to Green Projects. They are complemented by an appendix of established definitions of Green Project categories that were developed by multilaterals, non-profit and non-government organizations, and other relevant stakeholders. Read more about the Green Bond Principles here .
The four banks that served as a drafting committee for these Principles – Bank of America Merrill Lynch, Citi, Crédit Agricole Corporate and Investment Bank and JPMorgan Chase – will propose in 2014 a governance process that will allow for diverse stakeholder input into the Green Bond Principles. It is anticipated that an independent third party will be designated to serve as a secretariat whose administrative duties will include facilitating information exchange with issuers, investors, underwriters, and other stakeholders such as non-profit environmental organizations, non-government organizations, academics and other thought leaders.
COMMENTS FROM SUPPORTING BANKS:

Tue, 01/14/2014 - 10:00 | Link to Comment JohnFrodo
Tue, 01/14/2014 - 10:34 | Link to Comment Cookie
Cookie's picture

I am a long time resident of Thailand and this is the best summary I have yet seen

http://www.atimes.com/atimes/Southeast_Asia/SEA-01-130114.html

Tue, 01/14/2014 - 10:08 | Link to Comment kralizec
kralizec's picture

Great Weeping Carrot to unveil $1T spending plan.  Awesome!

Team Red holding hands with Team Blue!

What could possibly go wrong?!

Tue, 01/14/2014 - 11:06 | Link to Comment 10mm
10mm's picture

I seen that. I sent to Red Team deniers. But they will continue their epic journey. 

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