Frontrunning: April 2
- Why did Yellen use criminals in her employment case studies? Hilsenrath explainz (Hilsenrath)
- GM avoided defective switch redesign in 2005 to save a dollar each (Reuters)
- Xuzhou Zhongsen Said to Avert Bond Default on Guarantor Aid (BBG)
- France's New Finance Minister Faces Fiscal Challenge (WSJ)
- The magic is gone: Draghi’s Attempt to Talk Down Euro Lost on Traders (BBG)
- Another John Kerry smashing success: U.S. Gambit on Mideast Peace Talks Falters (WSJ)
- Combat-Ready China Military Seen as Xi’s Goal in Graft Battle (BBG)
- Huge earthquake off Chile's north coast triggers tsunami (Reuters)
- Pressure rises on Gross as investors pull $3.1 billion from Pimco's flagship fund (Reuters)
- 'Too Big to Fail' still thriving (Reuters)
- Overdraft Fees at Banks Hit a High, Despite Curbs (WSJ)
- Windows XP: Old Platforms Die Hard, Security Risks Live On (WSJ)
Overnight Media Digest
* Securities and Exchange Commission Chairman Mary Jo White said on Tuesday her agency has "a number" of investigations into potentially unlawful trading practices by high-frequency trading firms. (http://r.reuters.com/sam28v)
* Amid a growing clamor over the role of high-frequency traders in the markets, Virtu Financial Inc has delayed the start of its pitch to investors on its initial public offering. (http://r.reuters.com/hem28v)
* Samsung Electronics Co Ltd copied Apple Inc's breakthrough iPhone to remain competitive, the U.S. company said as a new round opened in their long-running patent feud. Samsung, meanwhile, countered that it was being targeted as a proxy for Apple's rivalry with Google Inc. (http://r.reuters.com/jem28v)
* Goldman Sachs Group Inc is close to selling a once-iconic trading business based on the floor of the New York Stock Exchange to Dutch firm IMC Financial Markets, according to people familiar with the matter. (http://r.reuters.com/qam28v)
* Wells Fargo & Co said Timothy Sloan will leave his current post as finance chief and take over the wholesale banking group, succeeding the retiring David Hoyt. (http://r.reuters.com/dem28v)
* Comcast Corp's deal to buy Time Warner Cable Inc has run into an unexpected source of turbulence: a weak stock price. In the nearly seven weeks since the deal was announced, Comcast's share price has dropped nearly 10 percent, reducing the value of its all-stock offer for Time Warner Cable to $143.55 a share from $158.82 per share when it was announced. (http://link.reuters.com/zem28v)
* A U.S. judge on Tuesday ordered Mt. Gox founder and Chief Executive Mark Karpeles to come to Texas, where the Japanese exchange has filed for U.S. bankruptcy protection. At a hearing in U.S. Bankruptcy Court in Dallas, Judge Stacey Jernigan set an April 17 date for Mr. Karpeles to answer questions under oath from lawyers who represent customers with frozen bitcoin accounts. (http://r.reuters.com/vem28v)
* Two banks have dropped their lawsuit against Target Corp and its security assessor, Trustwave Holdings Inc, following the theft of 40 million credit and debit card numbers from the retailer last year, according to court documents. (http://r.reuters.com/mem28v)
* Federal prosecutors have brought a rare criminal case against PG&E Corp's San Francisco utility over a 2010 fatal pipeline explosion in San Bruno, California, charging the company with knowingly breaking federal safety rules.(http://r.reuters.com/mam28v)
* Banks are turning to overdraft fees as revenue fall on deposit accounts, despite the Federal Reserve stopping them in 2010 from automatically charging customers overdraft fees on debit-card and automated-teller-machine transactions. (http://r.reuters.com/vam28v)
* Investors pulled $3.1 billion from Bill Gross's Pimco Total Return Fund in March, marking the 11th consecutive month of outflows at the marquee fund for Pacific Investment Management Co. The data, released late Tuesday by fund-research firm Morningstar Inc, underscores the challenges confronting the Newport Beach, California-based money manager following a year of record redemptions and a management shake-up. (http://r.reuters.com/pem28v)
* BlackBerry Ltd said late Tuesday that it is ending its licensing agreement with T-Mobile Inc when it expires later this month, a surprise move that comes two months after the two companies' chief executives sparred online. (http://r.reuters.com/rem28v)
* Executives of PricewaterhouseCoopers were put on the spot at a Senate subcommittee hearing on Tuesday by a public reading of their emails discussing how to preserve overseas tax benefits for client Caterpillar Inc. In one 2008 email, Thomas F. Quinn, a PwC tax partner, warned that the giant maker of construction and mining equipment might lose tax benefits if some Swiss-based product managers relocated to the U.S. (http://r.reuters.com/sem28v)
* The spring thaw helped push U.S. auto sales in March to one of the strongest rates in years, putting the industry back on track for growth this year after two months of winter doldrums. (http://r.reuters.com/kem28v)
US law firm Schulte Roth & Zabel has expanded to open a new European practice in London to advice activist hedge funds as its U.S. clients are beginning to examine positions in UK-based companies.
In a move to expand its connected-car market, the Spanish telecom giant, Telefonica will provide Internet connectivity to all Tesla cars in Europe.
Royal Dutch Shell said it will lower its costs in its U.S. shale gas business by switching to cheaper Chinese machinery - a shift which could serve as a potential threat to western industrial equipment makers.
Private hospitals and politicians allege insurance companies such as Bupa "bribe" patients by offering cash payments to use NHS services for procedures such as angioplasty.
Hargreaves Services Plc is in talks to invest in UK Coal, Britain's largest coal miner, which is seeking a 10-million pound government fund to close two of its three pits in Britain and sell-off of its surface mines if the bid by Hargreaves fails.
* As families of crash victims lined the back of the House hearing room, displaying photos of their lost loved ones, General Motors Co's Chief Executive Mary Barra told lawmakers that the company was considering paying damages to victims of accidents in the millions of cars recalled for defective ignition switches. (http://link.reuters.com/fam28v)
* Officials of Caterpillar Inc sparred with members of a Senate panel on Tuesday, defending more than a decade's worth of tax practices that put most of the company's profits out of reach of United States tax authorities. (http://link.reuters.com/gam28v)
* A federal judge ordered the Marvell Technology Group Ltd to pay about $1.54 billion to Carnegie Mellon University for selling billions of semiconductors that infringed the school's two hard disk drive patents. While that amount is 31 percent more than the $1.17 billion initially awarded by a jury in Dec. 2012, it was less than half the maximum $3.75 billion that Carnegie Mellon sought. (http://link.reuters.com/ham28v)
* Glen Taylor, the billionaire owner of the Minnesota Timberwolves basketball team, has signed a letter of intent to buy The Minneapolis Star Tribune, the newspaper announced on Tuesday. Details of the cash offer were not disclosed. (http://link.reuters.com/jam28v)
* Billionaire investor Steven A. Cohen is putting pressure on his traders to try to keep his investment firm SAC Capital Advisors together, as the once-powerful hedge fund awaits a judge's decision next week on its guilty plea to securities fraud charges. (http://link.reuters.com/pam28v)
* As lawyers of Apple Inc and Samsung Electronics Co Ltd made their opening statements in their patent trial in a federal courthouse here, they could not even agree on what the fight was about. Apple said it was seeking money to stop Samsung from copying its products. But Samsung said the case at heart was about Apple's attempt to stifle consumer choice by taking aim at its main competitor in the phone business. (http://link.reuters.com/tam28v)
THE GLOBE AND MAIL
* With only five days of campaigning left ahead of elections, Quebec party leaders are into their final blitz as the Liberals and the Parti Quebecois take aim at some of their traditional strongholds that swung over to the Coalition Avenir Quebec in the most recent election. (http://link.reuters.com/hym28v)
* In a sign of the feverish atmosphere leading up to next week's provincial vote in Quebec, five McGill University students have hired a high-profile human-rights lawyer and filed an emergency court injunction in a bid to get on the Quebec voters' list. (http://link.reuters.com/mym28v)
Reports in the business section:
* After winning a $1 billion rail contract from a South African freight company, Bombardier Inc says it is confident of a bigger breakthrough in the emerging African market - but first it must weather a storm of controversy over its local partners in the deal. (http://link.reuters.com/nym28v)
* Quebec Premier Pauline Marois personally has had a catastrophic few weeks ahead of the provincial elections, from which she will find it difficult to recover. She needs to win a majority next Monday to avoid the guillotine that awaits all Parti Quebecois leaders who disappoint their brothers and sisters in the movement. Such a victory now seems unlikely. (http://link.reuters.com/qym28v)
* Alberta's long-ruling Progressive Conservative Party released another annual report showing it sliding ever further into the red this week, but the disclosure does not show the full picture, a National Post analysis has found. (http://link.reuters.com/sym28v)
* Companies in Ontario and Quebec are among those on the forefront of modernizing the traditional way of harvesting maple syrup, by applying technology to monitor leaks in the long plastic tubes that draw sap from maple trees. (http://link.reuters.com/tym28v)
* The Bank of Canada could lag the U.S. Federal Reserve in starting to raise rates, but it may also lag behind in terms of the pace of hikes during the upcoming cycle, says a Scotiabank outlook. (http://link.reuters.com/zym28v)
SOUTH CHINA MORNING POST
-- A scheme to build homes exclusively for Hong Kong people in an effort to provide middle-class buyers with affordable flats may be shelved. Chief Executive Leung Chun-ying suggested that the scheme could be suspended as the number of outside buyers in the market had dropped to a very low level. (link.reuters.com/wak28v)
-- Hongkong Land and Wharf Holdings will suffer the most should the Occupy Central movement carry out its threat to block streets in the heart of the city, a study by investment bank UBS says. Hongkong Land owns offices in the central business district, while Wharf owns shops in Tsim Sha Tsui and Causeway Bay. (link.reuters.com/zak28v)
-- Researchers at the University of Hong Kong have developed a vaccine that may be the first in the world to offer a shield against many influenza viruses - including the deadly H7N9 bird flu strain - in one simple shot. (link.reuters.com/bek28v)
-- Apex Benchmark, the second-largest shareholder of Midland , urged the property agency to explain its poor financial performance last year. (link.reuters.com/dek28v)
-- SmarTone has been fined HK$150,000 ($19,300) for breaching the Telecommunication Ordinance by making misleading and deceptive claims on its website. (link.reuters.com/jek28v)
-- Japan's first sales tax hike in 17 years is unlikely to affect Hong Kong holiday-makers, travel agencies say. EGL Tours executive director Steve Huen Kwok-chuen said Japan tours during the Easter holidays would not be affected as they were booked before the tax rise. (link.reuters.com/rek28v)
HONG KONG ECONOMIC JOURNAL
-- China Vanke has bought a commercial and residential site in Hong Kong's Wanchai district for HK$860 million ($110.87 million), its first purchase of a private land site in the city.
HONG KONG ECONOMIC TIMES
-- The number of homes due to be completed this year is estimated at 17,600 units, double that in 2013, and is the highest in 10 years, according to Hong Kong government data. Industry experts expect the increased supply to put pressure on property prices.
-- University of Hong Kong students who join the movement Occupy Central can expect support from the university's new and first expatriate chief, Peter Mathieson, who said he backs peaceful protests, free speech and academic freedom.
BRITAIN CAN CUT GAS PRICES BY WORKING WITH EUROPE, SAYS MANDELSON
Lord Mandelson believes working with Europe can end Russia's 'divide and rule' tactics on gas pricing as he warned Britain would be "bonkers" to quit the European Union.
BRITAIN HOLDS LESS FOREIGN CURRENCY RESERVES THAN POLAND, SAYS DEUTSCHE BANK
Research from Deutsche Bank, titled "Mapping the World's Financial Markets", showed that the UK is ranked 24th in a list of the world's largest holders of foreign currency reserves.
VINCE CABLE DEFENDS ROYAL MAIL SELL-OFF IN COMMONS DEBATE
The business secretary, Vince Cable, has refused to apologise over the government's privatisation of Royal Mail , despite a scathing report from the National Audit Office, which said undervaluing the share sale had cost the taxpayer 750 million pounds in a single day.
AIR TRAFFIC CONTROLLERS BEGIN TRIAL AIMING TO REDUCE HEATHROW HOLDING STACKS
The time aeroplanes spend circling Heathrow before landing could be cut as air traffic controllers join forces internationally in a trial. The trial, which began on Tuesday and will last until the end of 2014, hopes to see the time planes spend in holding stacks around Heathrow reduced.
COMPETITION CLIMBDOWN OVER PRIVATE HOSPITAL SALES
The Competition and Markets Authority has dropped its demand that BMI Hospitals sell seven of its private medical centres.
UK COAL BACK ON CRITICAL LIST DESPITE BAILOUT
The last big coal miner in Britain is facing collapse, with the potential loss of 2,000 jobs, unless it receives an emergency cash injection of more than 10 million pounds.
NEW CONSUMER WATCHDOG CMA GOES ON THE PROWL
The Competition and Markets Authority (CMA) has become the UK's primary competition and consumer agency, bringing together the Competition Commission and the Office of Fair Trading.
NPOWER HATCHES NEST DEAL AS ENERGY ROW RAGES
Npower, which is owned by the German utility RWE, is expected to announce this week a partnership with Nest Labs, a connected devices-maker which was acquired by Google for more than 2 billion pounds.
Fly On The Wall 7:00 AM Market Snapshot
Domestic economic reports scheduled today include:
ADP employment report for March at 8:15--consensus 193K
Factory orders for February at 10:00--consensus up 1.2%
Actuant (ATU) upgraded to Buy from Neutral at SunTrust
Ameriprise (AMP) upgraded to Overweight from Equal Weight at Morgan Stanley
Apollo Education (APOL) upgraded to Outperform from Market Perform at Wells Fargo
Arthur J. Gallagher (AJG) upgraded to Buy from Neutral at Compass Point
Carter's (CRI) upgraded to Overweight from Neutral at Piper Jaffray
Cognizant (CTSH) upgraded to Buy from Neutral at UBS
Comerica (CMA) upgraded to Market Perform from Underperform at Wells Fargo
DSW (DSW) upgraded to Hold from Sell at Brean Capital
Dover (DOV) upgraded to Outperform from Neutral at Credit Suisse
Fortinet (FTNT) upgraded to Outperform from Market Perform at Wells Fargo
Laredo Petroleum (LPI) upgraded to Buy from Neutral at SunTrust
Penske Automotive (PAG) upgraded to Buy from Neutral at Sterne Agee
The Pantry (PTRY) upgraded to Buy from Hold at Benchmark Co.
Veeva (VEEV) upgraded to Overweight from Equal Weight at Morgan Stanley
Worthington (WOR) upgraded to Buy from Hold at KeyBanc
ArcelorMittal (MT) downgraded to Neutral from Outperform at Credit Suisse
Essex Property Trust (ESS) downgraded to Neutral from Buy at Goldman
Healthstream (HSTM) downgraded to Market Perform from Outperform at Northland
Imperial Oil (IMO) downgraded to Underperform from Neutral at BofA/Merrill
Nordion (NDZ) downgraded to Hold from Buy at Canaccord
The Medicines Co. (MDCO) downgraded to Neutral from Overweight at Piper Jaffray
Alkermes (ALKS) initiated with an Outperform at Credit Suisse
E-House (EJ) initiated with a Buy at Brean Capital
Ford (F) initiated with a Neutral at Nomura
General Motors (GM) initiated with a Reduce at Nomura
MAG Silver (MVG) initiated with an Outperform at Scotia Capital
Mobile Mini (MINI) initiated with a Neutral at SunTrust
NRG Energy (NRG) reinstated with an Overweight at Barclays
NRG Yield (NYLD) reinstated with an Equalweight at Barclays
National Fuel (NFG) initiated with a Buy at Jefferies
NiSource (NI) initiated with a Hold at Jefferies
Questar (STR) initiated with a Hold at Jefferies
SouFun (SFUN) initiated with a Buy at Brean Capital
Southwest Gas (SWX) initiated with a Hold at Jefferies
GlaxoSmithKline (GSK) confirmed plans to stop MAGRIT Phase III trial
BlackBerry (BRRY) ended T-Mobile U.S. (TMUS) licensing agreement
PG&E (PCG) announced criminal charges filed regarding 2010 San Bruno pipeline accident
MannKind (MNKD) said an FDA advisory panel voted in favor of its Afrezza to treat type 1 and type 2 diabetes
Apollo Education (APOL) disclosed that its University of Phoenix subsidiary received a subpoena from the U.S. Department of Education seeking documents related to, among other things, marketing, recruitment, enrollment and financial aid processing
Myriad Genetics (MYGN) disclosed updated pricing from the Centers for Medicare & Medicaid Services for the sequencing of BRCA1 and BRCA2 genes
Envivio (ENVI) said that it is powering live HD sports channels for Apple TV (AAPL) for a "European Tier 1 service provider"
Ceragon Networks (CRNT) lowers Q1 revenue guidance to $70M-$73M from $83M-$93M
Gold Resource (GORO) reports FY13 EPS 0c, one estimate 10c
Autobytel (ABTL) raises revenue guidance for Q1
Apollo Education (APOL) sees FY14 revenue $3B-$3.1B, consensus $3.06B
Banks (C, GS, JPM, MS, DB) seek to cut derivatives exposure, WSJ says
Hulu, Comcast (CMCSA, CMCSK) expected to strike deal for past NBCU shows, WSJ reports
BHP (BHP) said it sees no near-term relief on coal prices, Reuters reports
Apple (AAPL) to act like Google (GOOG) in ad push, Business Insider reports
Russia says JP Morgan (JPM) 'illegally' blocked embassy money transfer, Bloomberg reports
Comcast (CMCSA, CMCSK) share price drop may be headwind to Time Warner Cable (TWC) deal, WSJ says
Tesla (TSLA) pays Telefonica (TEF) 'millions' in wireless deal, TechCrunch says
Blackstone Mortgage (BXMT) files to sell 8M shares of common stock
Global Telecom & Technology (GTT) files to sell 1M common shares for holders
Gramercy Property Trust (GPT) files to sell 11.54M shares for holders
Intercept (ICPT) files to sell 1M common shares, including 400,000 for holders
McDermott (MDR) raises $242M in a tangible equity units offering
New York Mortgage (NYMT) files to sell 13M shares of common stock
Rubicon Project (RUBI) 6.771M share IPO priced at $15.00
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