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Frontrunning: June 3

Tyler Durden's picture




 
  • At least 74 dead in crashes similar to those GM linked to faulty switches (Reuters)
  • Obama Calls for $1 Billion Europe Security Fund; Will Increase U.S. Military Presence in Eastern Europe (WSJ)
  • Euro Inflation Slowing More Than Forecast Pressures ECB (BBG)
  • China accelerates as euro zone stumbles (Reuters)
  • Russia says Ukraine situation worsening, submits U.N. resolution (Reuters)
  • Secondary Sales Squeeze Investors (WSJ)
  • Barclays Said to Start Cutting Jobs in Investment Banking Unit (Bloomberg)
  • Backlash Grows on Release of Sgt. Bowe Bergdahl in Taliban Prisoner Swap (WSJ)
  • For fallen soldiers' families, Bergdahl release stirs resentment (Reuters)
  • PIMCO's Gross stares at record outflow (Reuters)
  • China Builds Sulawesi Smelters as Ore Ban Cuts Jobs (BBG)
  • Toilet Shortage Fuels India Rape as Women Are Prey (BBG)
  • Bank of America Says Mistake Inflated Reported Size of Dark Pool (BBG)
  • Six shot at Chicago laundry facility (Reuters)
  • Norway Oil Riches at Stake as Political Brinkmanship Rules (BBG)
  • Ex-Bankers Upgrade the Good Life as Violin Pools Beckon (BBG)

 

Overnight Media Digest

WSJ

* The Phoenix VA Health Care System, at the heart of the crisis at the Department of Veterans Affairs, is among a number of VA hospitals that show significantly higher rates of mortality and dangerous infections than the agency's top-tier hospitals, internal records show. (http://r.reuters.com/xus79v)

* Two years after three major book publishers settled a major civil antitrust lawsuit with the federal government, the Justice Department has gone back to the publishers asking about any recent pricing discussions they may have had with others in the industry, say people familiar with the situation. (http://r.reuters.com/mes79v)

* New federal caps on carbon emissions unveiled by the Environmental Protection Agency on Monday would force sweeping changes in the U.S. electric system but wouldn't deliver the knockout blow to coal that mining companies and some power producers had feared. The proposed regulations give both states and utilities credit for reductions they already have made, including moving from coal to more natural gas and deploying renewable energy. (http://r.reuters.com/cus79v)

* Pilgrim's Pride Corp raised its offer for Hillshire Brands Co by more than $1 billion, according to people familiar with the matter. The new offer from Pilgrim's, a unit of Brazilian meat giant JBS SA, values the Chicago-based meats and desserts company at $55 a share, or more than $6.7 billion. (http://r.reuters.com/mur79v)

* United States Steel Corp said it would temporarily close plants in Texas and Pennsylvania and blamed illegally-priced imports, raising the volume on trade disputes with China and South Korea. The steel-maker's decision to close its plants will affect 260 workers. (http://r.reuters.com/fus79v)

* A dozen companies including Google Inc, J. Crew Group Inc, and Deere & Co acknowledged they or their suppliers may have obtained metals from mines in a region known to use mining to fund armed militias, according to filings with the Securities and Exchange Commission. (http://r.reuters.com/jus79v)

* The Pentagon on Monday awarded Lockheed Martin Corp a $915 million contract for the first phase of its Space Fence, a radar system that would track more of the fast-growing field of debris in space that threatens satellites and manned spacecraft. (http://r.reuters.com/pus79v)

* Live Nation Entertainment Inc's Ticketmaster agreed to a tentative settlement in a 2003 class action lawsuit that, if approved, would offer to issue roughly $400 million in credit to 50 million ticket buyers. (http://r.reuters.com/rus79v)

* Activist investor William Ackman and Valeant Pharmaceuticals International Inc shifted their strategy yet again as they looked to pressure Allergan Inc on Monday to succumb to a $52.7 billion takeover. Ackman will now seek a more definitive vote to throw out a majority of Allergan's board. (http://r.reuters.com/zus79v)

* The U.S. Supreme Court on Monday declined to make it easier to hold companies liable for encouraging others to commit patent infringement. The ruling, which came in patent litigation between Internet services companies Akamai Technologies Inc and Limelight Networks Inc restored prior legal rules that were loosened when a U.S. appeals court sided with Akamai in 2012. (http://r.reuters.com/cys79v)

* Patients with the skin cancer melanoma, who received drugs from Bristol-Myers Squibb Co and Merck & Co Inc , have survived longer than other cancer patients. Doctors say the outcomes were impressive because until recently, most patients with advanced melanoma could be expected to live for less than a year. (http://r.reuters.com/fys79v)

* The Federal Reserve is hiring Thomas Sullivan, who served as Connecticut Insurance Commissioner during the financial crisis, to lead its oversight of big insurance firms. Sullivan will lead oversight of some of the nation's largest insurers and represent the Fed in global discussions about rules for the industry. (http://r.reuters.com/gys79v)

 

FT

U.S. private equity firm KKR & Co LP has shuttered its $510 million equities hedge fund a mere three years after roping in a group of former Goldman Sachs proprietary traders to run it.

European private equity firms Montagu and Astorg are to buy back French diagnostics company Sebia four years after selling it to private equity group Cinven, highlighting a scarcity of buyout opportunities in Europe.

British interdealer broker Tullett Prebon is in advanced talks to appoint a successor to Chief Executive Terry Smith. Former Nomura and Lehman Brothers executive John Phizackerley is the leading contender, two sources said.

Bank of America Merrill Lynch has poached UK banking industry veteran Tim Waddell from rival UBS to be its new vice-chairman of global corporate and investment banking for Europe, the Middle East and Africa.

Global security company G4S is under further pressure after a British government-funded watchdog agreed to investigate its activities in Israel and the occupied Palestinian territories.

 

NYT

* Enormous amounts of capital investment - up to $2.5 trillion a year - will be needed to supply the world's energy needs through 2035, according to a report released Monday by the International Energy Agency, the intergovernmental organization based in Paris. And even that amount of investment would not eliminate many of the issues the industry faces. (http://r.reuters.com/ves79v)

* Facing the prospect of a guilty plea in the United States, the giant French bank BNP Paribas SA, which is suspected of doing business with Sudan and other countries blacklisted by the United States, has enlisted the support of a powerful ally: its own government, including top regulators and even the French president. (http://r.reuters.com/ces79v)

* From the moment it was announced, the $53 billion joint bid for Allergan, the maker of Botox, made by Valeant Pharmaceuticals and the hedge fund manager William Ackman, was highly unconventional. In the last week, the joint bid has evolved from an already unusual deal into one of the most confounding takeover attempts in recent memory. (http://r.reuters.com/ses79v)

* Pilgrim's Pride has raised its takeover bid for Hillshire Brands to $55 a share, people briefed on the matter said, turning up the heat in a battle over the maker of Jimmy Dean Sausages and Ball Park hot dogs. (http://r.reuters.com/kes79v)

* The Subway restaurant chain is taking a foot-long approach to original online video programming, sponsoring a second web series and considering a renewal for its first entry into the growing field. Subway is to announce on Tuesday that it will sponsor an original scripted web comedy series called "Summer With Cimorelli," featuring six singing sisters whose pop music has become popular through YouTube. (http://r.reuters.com/wes79v)

* Authorities in China have made Google Inc's services largely inaccessible in recent days, a move most likely related to the government's broad efforts to stifle discussion of the 25th anniversary of the crackdown on pro-democracy demonstrators in Tiananmen Square on June 3 and 4, 1989. In addition to Google's search engines being blocked, the company's products, including Gmail, Calendar and Translate, have been affected. (http://r.reuters.com/sus79v)

* The Seattle city council went where no big-city lawmakers have gone before on Monday, raising the local minimum wage to $15 an hour, more than double the federal minimum, and pushing Seattle to the forefront of urban efforts to address income inequality.(http://r.reuters.com/nus79v)

 

Canada

THE GLOBE AND MAIL

* The union representing Ontario's provincial police has released two ads targeting Progressive Conservative Leader Tim Hudak, a first in its 60-year history. The 15-second TV ads feature a voice-over saying Hudak will tear up the union's contracts, which would lead to "labor strife and extensive litigation." (http://r.reuters.com/wyt79v)

* Canadian Prime Minister Stephen Harper will leave for Europe this week to discuss the fate of Ukraine. However, he will be dogged by questions over why Ottawa has failed to finalize a multibillion-dollar free-trade agreement Canada and the European Union announced more than seven months ago. (http://r.reuters.com/bav79v)

Reports in the business section:

* Sotheby's International Realty Canada is planning to double its presence in Calgary, a testament to the growing number of luxury properties that are selling in the city. Sotheby's opened its first office in Calgary less than two years ago, with about 20 real estate agents. It now wants to grow its team to close to 60 people. (http://r.reuters.com/cav79v)

NATIONAL POST

* Cities across Canada have launched an effort to preserve door-to-door mail delivery, even as the first cuts loom this fall. Canada Post announced last December that it would phase out door-to-door delivery, bringing in annual savings of $500 million. Since then, over 70 municipalities have joined together in opposing the measure. (http://r.reuters.com/vav79v)

* Canadian Prime Minister Stephen Harper ignored the federal government selection committee's nominee Lisa Campbell and chose Daniel Therrien as the next privacy commissioner. National Democratic Party leader Tom Mulcair has sent a letter to the government warning that Therrien will face conflicts since he helped establish controversial information-sharing arrangements with the United States that the previous privacy commissioner criticized. (http://r.reuters.com/bev79v)

FINANCIAL POST

* Canada and Mexico are working together to boost oil and gas production. A high-level delegation from Mexico was in Calgary on Monday to invite Canadian companies to take advantage of its sweeping energy reforms. (http://r.reuters.com/gev79v)

* Sentry Investments Inc has launched a proxy fight to overhaul Timmins Gold Corp's board, a relatively unique situation that experts believe could become more common in the future. Sentry said it is calling for change after Vancouver-based Timmins ignored shareholder requests to allow potential acquirers to conduct due diligence. (http://r.reuters.com/pev79v)

 

China

SHANGHAI SECURITIES

- The government's decision last Friday to lower the reserve requirement for more banks to shore up China's economic growth does not mean it was easing monetary policy, economists say.

- China's economy growth will not rebound sharply even though it posted over the weekend that its official Purchasing Managers' Index rose to 50.8 in May from April's 50.4, better than the market had expected, analysts say.

CHINA SECURITIES JOURNAL

- The Shanghai Stock Exchange adjusted the components of its main blue-chip stock index, the SSE180, to include 18 new firms, such as the newly listed Shaanxi Coal Industry Co Ltd .

- With another 20 firms publishing their draft share issue prospectuses on the China Securities Regulatory Commission website over the weekend, the total number of companies that have published such prospectuses as part of their initial public offering process has reached 430.

CHINA DAILY

- The persistent existence and rampancy of cult activities in China reveals failures in education and administration, an editorial by this official newspaper said after the murder of a woman at a fastfood restaurant in China last week sparked a national outcry as it was revealed she was beaten to death for refusing to give her telephone number to members of a banned religious group.

SECURITIES TIMES

- China Vanke Co Ltd said a Shenzhen-based financial firm representing 1,320 of Vanke's employees has bought Vanke shares worth a combined 723 million yuan ($116 million) over the past three trading days.

PEOPLE'S DAILY

- Asia must guard against Cold War-like solutions that result in division, and those countries hoping to use military alliances to strike balance should abandon Cold War thinking, a commentary by this ruling Communist Party of China's newspaper said after China, Japan and the United States exchanged harsh words at an Asian Security meeting in Singapore over the weekend.

 

Britain

* Enormous amounts of capital investment - up to $2.5 trillion a year - will be needed to supply the world's energy needs through 2035, according to a report released Monday by the International Energy Agency, the intergovernmental organization based in Paris. And even that amount of investment would not eliminate many of the issues the industry faces. (http://r.reuters.com/ves79v)

* Facing the prospect of a guilty plea in the United States, the giant French bank BNP Paribas SA, which is suspected of doing business with Sudan and other countries blacklisted by the United States, has enlisted the support of a powerful ally: its own government, including top regulators and even the French president. (http://r.reuters.com/ces79v)

* From the moment it was announced, the $53 billion joint bid for Allergan, the maker of Botox, made by Valeant Pharmaceuticals and the hedge fund manager William Ackman, was highly unconventional. In the last week, the joint bid has evolved from an already unusual deal into one of the most confounding takeover attempts in recent memory. (http://r.reuters.com/ses79v)

* Pilgrim's Pride has raised its takeover bid for Hillshire Brands to $55 a share, people briefed on the matter said, turning up the heat in a battle over the maker of Jimmy Dean Sausages and Ball Park hot dogs. (http://r.reuters.com/kes79v)

* The Subway restaurant chain is taking a foot-long approach to original online video programming, sponsoring a second web series and considering a renewal for its first entry into the growing field. Subway is to announce on Tuesday that it will sponsor an original scripted web comedy series called "Summer With Cimorelli," featuring six singing sisters whose pop music has become popular through YouTube. (http://r.reuters.com/wes79v)

* Authorities in China have made Google Inc's services largely inaccessible in recent days, a move most likely related to the government's broad efforts to stifle discussion of the 25th anniversary of the crackdown on pro-democracy demonstrators in Tiananmen Square on June 3 and 4, 1989. In addition to Google's search engines being blocked, the company's products, including Gmail, Calendar and Translate, have been affected. (http://r.reuters.com/sus79v)

* The Seattle city council went where no big-city lawmakers have gone before on Monday, raising the local minimum wage to $15 an hour, more than double the federal minimum, and pushing Seattle to the forefront of urban efforts to address income inequality.(http://r.reuters.com/nus79v)

 

 

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled today include:
Factory orders for April at 10:00--consensus up 0.5%

ANALYST RESEARCH

Upgrades

BRF S.A. (BRFS) upgraded to Buy from Neutral at Goldman
China Mobile (CHL) upgraded to Buy from Neutral at Nomura
Devon Energy (DVN) upgraded to Outperform from Market Perform at Wells Fargo
East West Bancorp (EWBC) upgraded to Overweight from Equalweight at Barclays
LIN Media (LIN) upgraded to Overweight from Equal Weight at Evercore
Synovus (SNV) upgraded to Outperform from Market Perform at Keefe Bruyette

Downgrades

Allergan (AGN) downgraded to Neutral from Outperform at Credit Suisse
Broadcom (BRCM) downgraded to Hold from Buy at Stifel
Centene (CNC) downgraded to Sell from Neutral at Citigroup
Clovis (CLVS) downgraded to Neutral from Buy at Citigroup
Danone (DANOY) downgraded to Sell from Neutral at Goldman
Heineken (HEINY) downgraded to Sell from Neutral at Goldman
TPG Specialty Lending (TSLX) downgraded to Market Perform at Wells Fargo

Initiations

Alcentra Capital (ABDC) initiated with a Market Perform at Keefe Bruyette
Alcentra Capital (ABDC) initiated with a Neutral at RW Baird
Alcentra Capital (ABDC) initiated with an Outperform at Oppenheimer
Applied Materials (AMAT) initiated with a Buy at Jefferies
Devon Energy (DVN) initiated with an Accumulate at KLR Group
Emerge Energy (EMES) initiated with a Buy at Wunderlich
Kroger (KR) initiated with an Outperform at Oppenheimer
Lam Research (LRCX) initiated with a Buy at Jefferies
Lazard (LAZ) initiated with an Outperform at Bernstein
MeadWestvaco (MWV) initiated with a Buy at KeyBanc
Medley Capital (MCC) initiated with a Buy at MLV & Co.
Multimedia Games (MGAM) initiated with a Buy at Stifel
ONE Gas (OGS) initiated with an Underperform at BofA/Merrill
PBF Logistics (PBFX) initiated with a Buy at Citigroup
PBF Logistics (PBFX) initiated with a Buy at UBS
PBF Logistics (PBFX) initiated with an Outperform at Credit Suisse
PBF Logistics (PBFX) initiated with an Overweight at Barclays
RAIT Financial (RAS) initiated with a Buy at MLV & Co.
SuperValu (SVU) initiated with an Outperform at Oppenheimer

COMPANY NEWS

Pilgrim's Pride (PPC) confirmed revised proposal to acquire Hillshire (HSH) at $55 per share
Hillshire Brands (HSH) board authorized discussions with Pilgrim's Pride (PPC), Tyson Foods (TSN), says does not have right to terminate Pinnacle Foods (PF) merger on the basis of either of these proposals
IBM (IBM) disclosed conclusion of SEC investigation regarding cloud revenue, says SEC does not intend to recommend any enforcement action against company
Lockheed Martin (LMT) was awarded a $914.7M Space Fence contract
NPS Pharmaceuticals (NPSP) disclosed in a filing that it has not had any communication with Shire (SHPG) concerning a purported acquisition offer

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Guidewire (GWRE)

Companies that missed consensus earnings expectations include:
Quiksilver (ZQK)

Companies that matched consensus earnings expectations include:
Krispy Kreme (KKD)

NEWSPAPERS/WEBSITES

Analysis says 74 deaths like those GM (GM) linked to switches, Reuters reports
Goldman (GS) planning to increase the size of its commercial bank and wealth management division, FT reports
Barclays (BCS) said to begin reducing 100 jobs in Asia-Pacific, Bloomberg reports
Humana (HUM) claims Medtronic (MDT) conspired with physicians, WSJ reports
France to stand by BNP (BNPQY) against possible U.S. fine, Reuters says
Marathon Oil (MRO) could jump 20% after unloading Norway assets, Barron's says

SYNDICATE
1347 Property Insurance (PIH) files to sell 2.5M shares of common stock
Berry Plastics (BERY) files to sell 10M shares of common stock for holders
CoStar Group (CSGP) files to sell 2M shares of common stock
CommScope (COMM) files to sell 15M shares of common stock for holders
Nielsen (NLSN) files to sell 20M shares of common stock for holders
Oxygen Biotherapeutics (OXBT) files to sell 5.29M shares for holders
Profire Energy (PFIE) files to sell $17.42M of common stock
Wesco Aircraft (WAIR) files to sell 6M shares of common stock for Carlyle

 

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Tue, 06/03/2014 - 07:40 | 4819595 GetZeeGold
GetZeeGold's picture

 

 

Backlash Grows on Release of Sgt. Bowe Bergdahl in Taliban Prisoner Swap

 

Sooooooo.....maybe negotiating with terrorists isn't a good idea?

Worked out pretty good for them....not sure what we got out of the deal just yet.

Tue, 06/03/2014 - 07:48 | 4819613 valley chick
valley chick's picture

We got yet another distraction for the masses. Dead veterans is now old news.

Tue, 06/03/2014 - 10:16 | 4819924 disabledvet
disabledvet's picture

Yeah, no shit. "Bo Bergdahl...deserter."

Give me a phucking break. Let's blame the whole war effort on Bo!

Wait until the the counter offensive. The USA doesn't even have an Army right now.

Great job SOCOM...and all the rest. Let Israel and the Pope get their guns and go on their killing sprees.

Regards! America!

Tue, 06/03/2014 - 08:13 | 4819642 Bioscale
Bioscale's picture

Sounds familiar.

The story of major car manufacturer (GM) recall formula from Fight Club:

http://www.youtube.com/watch?v=SMVkUgQR9NQ

Tue, 06/03/2014 - 08:19 | 4819660 medium giraffe
medium giraffe's picture

Nothing to see here, just BTFTuesday.

Tue, 06/03/2014 - 10:29 | 4819956 Son of Loki
Son of Loki's picture

- The persistent existence and rampancy of cult activities in China reveals failures in education and administration, an editorial by this official newspaper said after the murder of a woman at a fastfood restaurant in China last week sparked a national outcry as it was revealed she was beaten to death for refusing to give her telephone number to members of a banned religious group.

 

Very gruesome and the men stood by watching sipping their Mocchachinos watching, no tlifting a finger to help the skinny young girl:

 

http://www.youtube.com/watch?v=1X2Wi34qdD8

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