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Frontrunning: April 24

Tyler Durden's picture




 
  • Ukraine forces kill up to five rebels, Putin warns of consequences (Reuters)
  • Obama to Russia: More sanctions are 'teed up' (AP)
  • Vienna Banks Bemoan Russia Sanctions Testing Cold War Neutrality (BBG)
  • GE’s $57 Billion Cash Overseas Said to Fuel Alstom Deal (BBG)
  • GM posts lower first-quarter profit after recall costs (Reuters)
  • Apple Stock Split Removes Obstacle to Inclusion in Dow (BBG)
  • U.S. regulators to propose new net neutrality rules in May (Reuters)
  • U.K. Resurrecting Loans for 95% of Value Seen as Risky (BBG)
  • Obama reaffirms commitment to Japan on tour of Asia allies (Reuters)
  • Bank Cutting Commodities Trade Severs Link With Equities (BBG)
  • The left’s secret club (Politico)
  • Russian social media CEO quits, flees country (AP)

 

Overnight Media Digest

WSJ

* The Food and Drug Administration plans Thursday to impose the first federal regulations on electronic cigarettes, eventually banning sales of the popular devices to anyone under 18 and requiring makers to gain FDA approval for their products. (http://r.reuters.com/ruh78v)

* Regulators are proposing new rules on Internet traffic that would allow broadband providers to charge companies a premium for access to their fastest lanes. The Federal Communications Commission plans to put forth its rules on Thursday. The proposal marks the FCC's third attempt at enforcing "net neutrality" - the concept that all Internet traffic should be treated equally. (http://r.reuters.com/sah78v)

* Primark, a clothing chain whose formula of fashionable looks at rock-bottom prices has proved a hit with UK shoppers, said Wednesday it plans to open its first U.S. store late next year in the former Boston home of the original Filene's Department Store. (http://r.reuters.com/meh78v)

* New cars and trucks-including some of the season's hottest sellers-are stacked up outside U.S. factories as auto makers and railroads struggle to overcome delays brought on by winter weather and the rise of production outside the Midwest. The logjams have left dealers short of some popular models, such as the Ford Explorer sport-utility vehicle and Toyota RAV4, ahead of the biggest months of the year for new-car sales. (http://r.reuters.com/buh78v)

* Zynga Inc said founder Mark Pincus is giving up his operating role at the videogame company, one of several management changes announced along with first-quarter results that included a 36 percent decline in revenue. Pincus has decided to give up his role as chief product officer. (http://r.reuters.com/heh78v)

* Apple Inc in a nod to restive shareholders, added $30 billion to its stock-buyback plan, raised its dividend about 8 percent and declared an unusually large 7-for-1 stock split as it reported strong iPhone sales that defied expectations of a slowdown. (http://r.reuters.com/vah78v)

* A surge in prices helped drive down sales of newly built homes in March, the latest indication that the housing market is struggling to regain traction. Sales of new single-family homes fell 14.5 percent from February to a seasonally adjusted annual rate of 384,000, the Commerce Department said Wednesday. That was the lowest annual rate since last July, though the pace for January and February was revised higher. (http://r.reuters.com/weh78v)

* Facebook Inc proved its recent advertising windfalls were no fluke, nearly tripling profit on a 72 percent increase in revenue in its first quarter, surpassing Wall Street expectations. Chief financial officer David Ebersman is stepping down from the company two years after he orchestrated one of the largest, and tumultuous, IPOs in history. (http://r.reuters.com/xah78v)

* Chobani Inc reached a deal for a $750 million investment from private equity firm TPG, as the maker of Greek yogurt prepares for a potential initial public offering and expands into other products such as cooking ingredients and desserts. (http://r.reuters.com/zah78v)

* A federal bankruptcy watchdog overseeing TelexFree's Chapter 11 case found compelling evidence of fraud, dishonesty and gross mismanagement and asked a judge to order the appointment of a trustee to take control of the company. TelexFree has been accused of illegally operating a $1 billion pyramid scheme targeting Brazilian and Dominican immigrants. Most of the company's leadership and several of its promoters have been charged with civil fraud by the Securities and Exchange Commission. (http://r.reuters.com/rah78v)

 

FT

Warren Buffett, whose Berkshire Hathaway Inc is the Coca-Cola Co's largest shareholder, said the U.S. beverage company's equity pay plan was "excessive" but abstained from voting on the scheme on Wednesday.

Mark Pincus, founder of troubled games maker Zynga Inc , is stepping out of day-to-day work at the company as it seeks to remake itself.

A surprise 17 percent jump in iPhone unit sales, driven by China, helped Apple Inc beat revenue expectations for the first quarter, lifting shares by 8 percent.

Facebook Inc, the world's largest social network, posted first-quarter results that sent its stock up 4 percent in after-hours trading, quelling recent doubts over its ability to make money on mobile.

Boeing Co raised its full-year earnings expectations and posted results ahead of analysts' expectations for the first three months of the year, as Chief Executive Jim McNerney said the aerospace and defence group was braced for "significant and sustained growth".

 

NYT

* New York's financial regulator filed a lawsuit against a subprime auto lender, accusing it of violating certain provisions of the Dodd-Frank financial overhaul act. The complaint filed in Federal District Court in Manhattan, contends that Long Island-based Condor Capital Corporation siphoned millions of dollars away from the accounts of unwitting borrowers. (http://r.reuters.com/nah78v)

* The principle that all Internet content should be treated equally as it flows through cables and pipes to consumers looks all but dead. The Federal Communications Commission said on Wednesday that it would propose new rules that allow companies like Walt Disney Co, Google Inc or Netflix Inc to pay Internet service providers like Comcast Corp and Verizon Communications Inc for special, faster lanes to send video and other content to their customers. (http://r.reuters.com/qah78v)

* Going further than any state so far, Vermont on Wednesday passed a law requiring the labeling of foods that contain genetically engineered ingredients. Though the move came in a tiny state far from the nation's population centers, proponents of such labeling immediately hailed the legislative approval as a significant victory. (http://r.reuters.com/ceh78v)

* The Justice Department's criminal division, which oversees some of the biggest investigations into Wall Street and corporate crime, is adding to its ranks. Marshall L. Miller, a longtime federal prosecutor in Brooklyn, was named to the criminal division's No. 2 spot. (http://r.reuters.com/keh78v)

* Amazon.com Inc will stream a selection of HBO series, mini-series and original movies as part of its Prime subscription service, the latest alliance between technology and entertainment companies trying to capture viewers who are moving online. (http://r.reuters.com/neh78v)

* Mark Pincus, the founder of Zynga Inc, is stepping back from the once-hot social gaming company as its new leader seeks a turnaround. Zynga said that Pincus decided to give up all operational responsibilities at the company, though he will remain its chairman and largest shareholder. (http://r.reuters.com/qeh78v)

 

Canada

THE GLOBE AND MAIL

* Canada's Conservative government is launching a national discussion of proposed new pension plans that share the investment risk between employers and employees. (http://r.reuters.com/byj78v)

* No damage was reported after a 6.7 magnitude earthquake hit off the northern coast of Vancouver Island on Wednesday night. The U.S. Geological Survey reported that the epicentre was about 94 kilometres south of Port Hardy and struck at a depth of 11 kilometres. (http://r.reuters.com/nyj78v)

Reports in the business section:

* McDonald's Canada has suspended further use of the temporary foreign worker program after criticism that several franchises at the fast-food chain were favouring foreign workers over seemingly qualified Canadian applicants. (http://r.reuters.com/gyj78v)

NATIONAL POST

* As Philippe Couillard and his Liberal cabinet were sworn in Wednesday at the legislature in Quebec City, the prominent place given the Canadian flag and the lieutenant governor - the Queen's representative - made it plain that the Parti Quebecois era was over. (http://r.reuters.com/syj78v)

* Canada, which has long blocked discussion of Arctic issues at NATO, is under increasing pressure from allies to drop its resistance and come up with a co-ordinated response to Russia's aggressive militarization in the Far North. (http://r.reuters.com/tyj78v)

FINANCIAL POST

* Almost never has an activist investor expressed such love for a company's management and strategy as Bill Ackman's cross-border crush on Valeant Pharmaceuticals International Inc . (http://r.reuters.com/mak78v)

* Crescent Point Energy Corp has signed an agreement to buy CanEra Energy Corp, a privately held oil and gas producer in southeast Saskatchewan, in a deal valued at C$1.1 billion, including debt. (http://r.reuters.com/zak78v)

 

China

CHINA SECURITIES JOURNAL

- Another 10 companies have announced plans to list on China's equity markets, bringing the total number of firms planning listing to 75.

- Total profit of state-owned companies reached 311 billion yuan ($49.86 billion) in the first quarter of this year, up 3.4 percent from a year earlier, the State-owned Assets Supervision and Administration Commission said.

SHANGHAI SECURITIES NEWS

- The China Securities Regulatory Commission said it would perform random checks on companies seeking initial public offering to ensure that the information disclosed in their prospectus are accurate.

- China State Construction Engineering Corp's 2013 net profit rose 29.6 percent to 20.4 billion yuan ($3.27 billion) and said it expects newly signed contracts in 2014 to reach more than 1.2 trillion yuan.

CHINA DAILY

- There will be an oversupply of office space in China in the coming three years, with second-tier cities being hit first, industry analysts said.

- China's household consumption may rise to as high as 50 percent of gross domestic product by 2020, compared with 35 percent today, findings from Nielson Holdings BV showed. The increase will create investment opportunities in second-and third-tier cities.

SHANGHAI DAILY

- China is on track to meet mandatory targets on cutting pollution and improving energy efficiency by 2015, a state planning official said, after the program had fallen behind due to strong economic growth in 2011 and 2012.

 

Britain

The Telegraph

INDEPENDENT SCOTLAND HAS PARALLELS WITH ICELAND, WARNS S&P

Scotland could end up with a banking system much like that of Iceland on the eve of the financial crisis if it votes for independence, according to a warning from one of the world's leading rating agencies. (http://link.reuters.com/dyg78v)

REPORT INTO CO-OP BANK FAILURE TO BLAME GOVERNANCE

The Co-op Bank's near collapse will be blamed on the struggling lender's poor governance, in a report to be published next week by a former senior civil servant. (http://link.reuters.com/fyg78v)

The Guardian

BARCLAYS FACES ROUGH RIDE AT AGM OVER TAX HAVENS AND BANKERS' BONUSES

Barclays is braced for a stormy annual shareholder meeting on Thursday with protesters pledging to question its role in tax havens, funding of coal mines and the 9 billion pounds ($15.10 billion) of bonuses paid out to its investment bankers since the financial crisis. (http://link.reuters.com/hyg78v)

ROYAL MAIL IN SPOTLIGHT AGAIN AS MPS QUESTION BANKERS WHO HANDLED SELL-OFF

The Royal Mail privatisation will be the subject of fresh scrutiny by Members of Parliament next week when bankers from Goldman Sachs and UBS - which handled the sell-off of the 500-year-old institution - are summoned to give evidence to a high-profile parliamentary committee. (http://link.reuters.com/gyg78v)

PRIMARK TO ENTER U.S. MARKET WITH BOSTON STORE

Primark, the fashion store that brought the 3 pound jumper dress to the British shopper, is to open in the United States as it attempts to become a global chain. (http://link.reuters.com/qyg78v)

The Independent

PATISSERIE VALERIE OWNER HOPES TO RAISE 33 MLN STG IN LONDON FLOAT

Serial entrepreneur Luke Johnson, the owner of Patisserie Valerie, is returning to the stock market with the planned 170 million pound flotation of the cafe chain on London's junior AIM exchange. (http://link.reuters.com/jyg78v)

SPORTS DIRECT GOES ON THE ATTACK AFTER MIKE ASHLEY BONUS VOTE

Mike Ashley's Sports Direct has launched an attack against its institutional investors, warning of "further uncertainty" after they refused to back a multimillion-pound payout to the billionaire founder. (http://link.reuters.com/pyg78v)

DRAX TUMBLES OVER GOVERNMENT U-TURN ON SUBSIDY TERMS

Shares in Drax Group fell 10 percent after the government said a new subsidy scheme would only apply to limited part of its plan to convert much of its giant coal-fired plant into biomass burners. (http://link.reuters.com/myg78v) ($1 = 0.5960 British pounds)

 

 

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Aixtron (AIXG) upgraded to Neutral from Underweight at HSBC
Apple (AAPL) upgraded to Buy from Outperform at CLSA
Asbury Automotive (ABG) upgraded to Buy from Hold at BB&T
Ciena (CIEN) upgraded to Buy from Neutral at UBS
Cullen/Frost (CFR) upgraded to Market Perform from Underperform at Keefe Bruyette
Ericsson (ERIC) upgraded to Outperform from Market Perform at BMO Capital
First Midwest (FMBI) upgraded to Buy from Neutral at Guggenheim
Goodyear Tire (GT) upgraded to Conviction Buy from Buy at Goldman
HMS Holdings (HMSY) upgraded to Outperform from Perform at Oppenheimer
Hawaiian Holdings (HA) upgraded to Neutral from Underperform at BofA/Merrill
M&T Bank (MTB) upgraded to Buy from Hold at Deutsche Bank
MicroStrategy (MSTR) upgraded to Buy from Hold at Deutsche Bank
NuStar Energy (NS) upgraded to Buy from Hold at Stifel
O'Reilly Automotive (ORLY) upgraded to Strong Buy from Market Perform at Raymond James
Republic Airways (RJET) upgraded to Neutral from Underperform at BofA/Merrill
Southwest Bancorp (OKSB) upgraded to Outperform from Market Perform at Raymond James
TriQuint (TQNT) upgraded to Outperform from Market Perform at Northland Securities

Downgrades

AT&T (T) downgraded to Long-Term Buy from Buy at Hilliard Lyons
Canadian National (CNI) downgraded to Market Perform from Outperform at BMO Capital
Core Laboratories (CLB) downgraded to Underweight from Overweight at Morgan Stanley
First Industrial Realty (FR) downgraded to Hold from Buy at KeyBanc
Randgold Resources (GOLD) downgraded to Neutral from Overweight at HSBC
Southern Copper (SCCO) downgraded to Neutral from Buy at BofA/Merrill
Susser Holdings (SUSS) downgraded to Neutral from Outperform at Macquarie
Xilinx (XLNX) downgraded to Neutral from Outperform at Credit Suisse

Initiations

NXP Semiconductors (NXPI) initiated with an Outperform at BMO Capital
Nord Anglia (NORD) initiated with an Overweight at JPMorgan
Xerox (XRX) initiated with a Positive at Susquehanna
YY Inc. (YY) initiated with a Buy at Maxim

COMPANY NEWS

Apple (AAPL) announced several capital actions, including a $30B increase in its share repurchase authorization, an 8% increase in its quarterly dividend to $3.29 per share and a 7-for-1 stock split that will take effect in June. Apple's quarterly iPhone sales totaled 43.7M, topping estimates, while iPad sales disappointed
Facebook (FB) said CFO David Ebersman will step down and will be succeeded by David Wehner, currently the company's VP, Corporate Finance and Business Planning. Facebook announced that its mobile daily active users totaled 609M at the end of Q1, and the company's revenue from advertising grew 82% to $2.27B, with 59% of its ad revenue coming from mobile. The company also said Messenger, Instagram both reached 200M monthly active users in Q1
Qualcomm (QCOM) disclosed receipt of a "Wells Notice" from the SEC that the SEC has made a preliminary determination recommending the filing of enforcement action against the company related to anti-bribery violations
Zynga (ZNGA) announced that founder Mark Pincus will move on from his role as Chief Product Officer but continue to serve as chairman of the company's board
Ericsson (ERC) announced the division of business unit networks into two units
Men's Wearhouse (MW) extended its tender offer for Jos. A. Bank (JOSB) to May 7
Herbalife (HLF) said ABC report raises questions Ackman should answer

EARNINGS

Companies that beat consensus earnings expectations last night and today include:

Wyndham (WYN), NorthWestern (NWE), Alamos Gold (AGI), Cabot Microelectronics (CCMP), Starwood Hotels (HOT), Helmerich & Payne (HP), Diamond Offshore (DO), Potash (POT), Cash America (CSH), Stanley Black & Decker (SWK), Aetna (AET), Time Warner Cable (TWC), VASCO Data Security (VDSI), Logitech (LOGI), NXP Semiconductors (NXPI), Northfield Bancorp (NFBK), TriState Capital (TSC), O'Reilly Automotive (ORLY), Teradyne (TER), Orrstown Financial (ORRF), PTC Inc. (PTC), Sun Bancorp (SNBC), Oceaneering (OII), Brookline Bancorp (BRKL), First Interstate (FIBK), Service Corp. (SCI), Eagle Bancorp (EGBN), CVB Financial (CVBF), Equifax (EFX), MKS Instruments (MKSI), Infinera (INFN), Callaway Golf (ELY), CoStar Group (CSGP), West Corp. (WSTC), Financial Institutions (FISI), Selective Insurance (SIGI), Lam Research (LRCX), Fortinet (FTNT), Apple (AAPL), Aspen Insurance (AHL), Tyler Technologies (TYL), Allied World (AWH), Flowserve (FLS), Exponent (EXPO), Hudson Technologies (HDSN), Ferro (FOE), E-Trade (ETFC), Assurant (AIZ), Symetra Financial (SYA), Everest Re (RE), Polycom (PLCM), Citrix (CTXS), Robert Half (RHI), F5 Networks (FFIV), TriQuint (TQNT), Allegiant Travel (ALGT), LSI Corp. (LSI), On Assignment (ASGN), Align Technology (ALGN), Oritani Financial (ORIT), Facebook (FB), Qualcomm (QCOM)

Companies that missed consensus earnings expectations include:

Invacare (IVC), PulteGroup (PHM), Dunkin' Brands (DNKN), Colfax (CFX), WESCO (WCC), Patterson-UTI Energy (PTEN), Safeguard Scientifics (SFE), CARBO Ceramics (CRR), Novartis (NVS), Old Second Bancorp (OSBC), The Bancorp (TBBK), TAL International (TAL), LPL Financial (LPLA), NewMarket (NEU), Morningstar (MORN), Graco (GGG), Kaiser Aluminum (KALU), Churchill Downs (CHDN), Susquehanna (SUSQ), Ingram Micro (IM), Xilinx (XLNX), Electro Scientific (ESIO), Cheesecake Factory (CAKE), Varian Medical (VAR), IPC The Hospitalist Co. (IPCM), Interface (TILE), ResMed (RMD), Famous Dave's (DAVE), Safeway (SWY), Fusion-io (FIO), SunCoke Energy (SXC), Monarch Casino (MCRI), Chicago Bridge & Iron (CBI), Texas Capital (TCBI), Greenhill & Co. (GHL), Datawatch (DWCH), United Stationers (USTR), Tractor Supply (TSCO), Stryker (SYK), Rocky Brands (rcky)

Companies that matched consensus earnings expectations include:

Eli Lilly (LLY), Sequans (SQNS), Core Laboratories (CLB), Blackhawk (HAWK), Innovative Solutions (ISSC), Angie's List (ANGI), Zynga (ZNGA), ServiceNow (NOW)

NEWSPAPERS/WEBSITES

FDA to impose first federal regulations on e-cigarettes (MO, LO, PM, RAI, VGR), WSJ reports
Publicis (PUBGY) sees U.K. tax approval in Omnicom (OMC) deal, WSJ reports
General Electric (GE) in talks to buy Alstom, Bloomberg says
Alstom says 'not aware' of any potential bid by General Electric (GE), WSJ reports
Buffett (BRK.A): Moving oil by rail safely major industry concern, Reuters reports
General Motors (GM) says it has shipped 'thousands' of replacement ignition switches, Reuters says
Nokia (NOK) to not include India phone plant in Microsoft (MSFT) deal, Bloomberg says

SYNDICATE

Agios Pharmaceuticals (AGIO) 2M share Secondary priced at $44.00
Hannon Armstrong (HASI) 5M share Secondary priced at $13.00
New Source Energy (NSLP) 3M share Secondary priced at $23.25
Parametric Sound (HEAR) files to sell $45M in common stock
Sarepta (SRPT) 2.65M share Secondary priced at $38.00
SunCoke Energy Partners (SXCP) files to sell 2.8M common units
Tsakos Energy (TNP) 11M share Spot Secondary; price range $7.25-$7.50
Yingli Green Energy (YGE) files to sell 25M ADSs

 

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Thu, 04/24/2014 - 07:52 | 4689828 Sudden Debt
Sudden Debt's picture

Teed up....

 

teed (up) definition

 

  1. mod. alcohol or drug intoxicated. :  She was totally teed up by midnight.

 

OUR BROTHER IS TALKING SLANG NOW!!

wow..

What's next? Is he going to sell pot to Putin?

Thu, 04/24/2014 - 07:54 | 4689841 achmachat
achmachat's picture

I think he was talking about the only thing he knows about: golf!

teed up: golf ball put on the tee, ready to hit.

Thu, 04/24/2014 - 07:56 | 4689851 Sudden Debt
Sudden Debt's picture

He does know that not everybody plays golf and eats cake all day he?

...

okay... most American's eat cake all day BUT THEY DON'T ALL PLAY GOLF!!!

Thu, 04/24/2014 - 07:53 | 4689838 Sudden Debt
Sudden Debt's picture

Big companies are complaining that earnings will be bad because the euro strenght.

More reason to print mo money I guess..

Thu, 04/24/2014 - 07:55 | 4689846 Sudden Debt
Sudden Debt's picture

GE’s $57 Billion Cash Overseas Said to Fuel Alstom Deal (BBG)

 

nice... yust 6 years ago they where broke as hell and needed government money to stay affloat.

Where did these 57 billion dollars come from?


Thu, 04/24/2014 - 10:39 | 4690551 syntaxterror
syntaxterror's picture

A 0.0% effective tax rate tends to help.

Thu, 04/24/2014 - 08:18 | 4689907 NoDebt
NoDebt's picture

I occurs to me we might want to consder changing this daily article's name from "Frontrunning" to something a little less HFT-ish.

Thu, 04/24/2014 - 08:38 | 4689966 I_Am_
I_Am_'s picture

Teed.. Up, teed.. up, wtf, is it all just a game? Fore...((it's just a noookleear warhead)) sorry.....booom

Thu, 04/24/2014 - 10:38 | 4690547 syntaxterror
syntaxterror's picture

Teed up. Does this faggot ever stop thinking about golf?

Thu, 04/24/2014 - 11:16 | 4690706 DR
DR's picture

Zerohedge,

Keep us updated on the FCC net neutrality happenings.  I don't want to see Zerohedge having to pay a fee to Comcast for preferential access. I already pay to much for internet cable as it is..

 

"Never mind that American carriers already charge some of the world’s highest prices,
around sixty dollars or more per month for broadband, a service that costs less than five dollars to provide. To put it mildly, the cable and telephone companies don’t need more money."

http://www.newyorker.com/online/blogs/elements/2014/04/the-end-of-net-ne...?

Do NOT follow this link or you will be banned from the site!