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Frontrunning: June 6

Tyler Durden's picture




 
  • Canada Aims to Sell Its Oil Beyond U.S (WSJ)
  • ECB Unanimity May Prove Fleeting (WSJ)
  • Chinese military spending exceeds $145 billion, drones advanced: U.S. (Reuters)
  • France to sell 10 warships to Russia next? BNP Executive Firings Sought by Top New York Bank Regulator Amid Probe (BBG)
  • Vodafone says governments have direct access to eavesdrop in some countries (Reuters)
  • Home Price Gains of 20% Vanish as Hottest Markets Cool (BBG)
  • G-7 Heads Warn Moscow Before Facing Putin (WSJ)
  • Barclays Fine Spurs U.K. Scrutiny of Derivatives Conflict (BBG)
  • "Or Costs" - Obama Says Putin Running Out of Time Over Ukraine (BBG)
  • Banca Monte Paschi Falls After Offering New Stock at 35.5% Discount (BBG)
  • Venezuela Sacrifices Drinking Water to Pay Bondholders (BBG)
  • Texas man fourth in U.S. to die from rare brain disease (Reuters)
  • Japan Child Porn Ban Brings Nation in Line With Industrial Peers (BBG)
  • Chinese Military Shows New Capabilities, Pentagon Says (BBG)
  • Welcome to Baku, the Fiercely Modern, Millennia-Old, Capitalist-Socialist, Filthy-Rich Capital of Azerbaijan (BBG)

Overnight Media Digest

WSJ

* Bank of America is in talks to pay at least $12 billion to settle probes by the Justice Department and a number of states into the bank's alleged handling of shoddy mortgages. (r.reuters.com/rap89v)

* General Motors Co CEO Mary Barra vowed to upend the corporate culture responsible for what she denounced as a "pattern of incompetence and neglect" in the auto maker's failure to recall cars equipped with a defective ignition switch. (r.reuters.com/buq89v)

* Oil-sands and other Canadian crude-oil producers, who have long exported mainly to the United States, would like to diversify their markets but are stymied by poor access to ocean ports. (r.reuters.com/cuq89v)

* SEC Chair Mary Jo White unveiled a sweeping set of initiatives to address mounting concerns about the impact of computer-driven trading on the stock market. (r.reuters.com/fuq89v)

* Credit unions are loosening lending standards and piling into longer-term assets, exposing the firms to potentially significant losses if interest rates rise and worrying regulators. (r.reuters.com/huq89v)

* Shareholders at four companies - Valero Energy Corp , Gannett Co, Boston Properties Inc and Dean Foods Co, have voted in recent weeks to prevent executives from cashing in on certain stock bonuses if their companies are sold, the latest sign that investors are pushing back on the generous pay packages in the event of a merger or sale. (r.reuters.com/juq89v)

 

FT

BNP Paribas, France's biggest bank, is exploring a management shake-up and considering the departure of its chief operating officer as it struggles to reach a settlement with U.S. banking regulators over alleged sanctions violations, according to sources.

Deutsche Bank has warned that the ongoing investigations by global regulators into whether foreign exchange rates were manipulated could have a "material" impact on the Frankfurt-based lender.

A new U.S. government inquiry has concluded that BP's 2010 oil spill in the Gulf of Mexico was in part caused by the failure of a vital piece of safety equipment that the company did not own.

Sir Ken Morrison launched an outspoken assault against the management of Morrisons, the supermarket chain that he once chaired and that his father founded, saying its chief executive was talking "bullshit".

G4S, the world's biggest security firm, said it would end all its Israeli prison contracts within the next three years after its annual general meeting on Thursday was severely disrupted by angry human rights protesters.

 

NYT

* A report released on Thursday after an internal investigation of General Motors set off the dismissal of 15 G.M. employees, including a vice president for regulatory affairs and a senior lawyer responsible for product liability cases, and forced broad changes in how the company handles vehicle safety. (r.reuters.com/heq89v)

* Banks typically make money on the cash they park at a central bank. Now the European Central Bank wants them to pay for the privilege. The move, a so-called negative interest rate, is part of a wide-ranging set of measures aimed at combating the crippling combination of slow growth and super low inflation. The bank president, Mario Draghi, also signaled that he may employ the same powerful, albeit controversial, bond-buying program that was used to restart growth in the United States. (r.reuters.com/keq89v)

* Mark Spitznagel, the founder of the $6 billion hedge fund Universa Investments, on Thursday brought 20 billy goats to graze among abandoned homes and general detritus in Brightmoor, one of Detroit's most blighted neighborhoods. But his goat experiment - called the Idyll Farms Detroit project - appears to have a bigger objective. Spitznagel has a vested interest in seeing Detroit make a comeback. He has personally invested millions of dollars in commercial real estate, something he says has no bearing on the Brightmoor project. (r.reuters.com/neq89v)

* The Securities and Exchange Commission Chairwoman, Mary Jo White, unveiled on Thursday a sweeping package of recommendations for new rules and other changes aimed at strengthening the structure of the market and improving disclosures for investors. (r.reuters.com/peq89v)

* Investment banks typically hold tens of billions of dollars of Treasury bonds on their balance sheets, enormous positions that can create trading profits if the prices of the bonds rise. But this year, the banks slashed those holdings, so much so that they actually had a negative position in government bonds in March, according to data from the Federal Reserve Bank of New York. (r.reuters.com/qeq89v)

* Federal safety regulators warned on Thursday that another disastrous offshore oil well blowout could happen despite regulatory improvements in the four years since a BP well explosion in the Gulf of Mexico killed 11 workers and dumped millions of gallons of oil into the sea. (r.reuters.com/req89v)

* Verizon fired back at Netflix on Thursday with a cease-and-desist letter sent to Netflix's top lawyer, David Hyman. Randal Milch, Verizon's general counsel, demanded that Netflix's error message blaming Verizon's network for slowing the streaming of Netflix's programming be taken down. The accusation "is self-serving, deceptive, inaccurate and an unfair business practice," Milch said. (r.reuters.com/veq89v)

* On Thursday, the OpenSSL Foundation issued a warning to users that a decade-old bug that makes it possible for an attacker to conduct a so-called man-in-the-middle attack on traffic encrypted with OpenSSL. The advisory warns users that someone could use the bug to intercept an encrypted connection, decrypt it, and read the traffic. (r.reuters.com/xeq89v)

 

Canada

THE GLOBE AND MAIL

* Police in New Brunswick confirmed early on Friday that shooting suspect Justin Bourque had been arrested. Bourque, 24, wanted in connection with the shooting deaths of three Royal Canada Mounted Police officers, was taken into custody shortly after midnight. (http://r.reuters.com/hyr89v)

* In a historic vote in the National Assembly, Quebec has become the first province in Canada to legalize doctor-assisted death as part of comprehensive end-of-life legislation. (http://r.reuters.com/xur89v)

Reports in the business section:

* Environmentalists have launched a campaign against Oakville, Ontario-based Tim Hortons Inc, which says the company's deep-fried treats are also bad for orangutans, tigers and the rain forests. Environmentalists want the company to stop making its doughnuts with cooking oil bought from suppliers in Indonesia, Malaysia and Papua New Guinea that destroy the habitats of endangered animals, to plant palm trees. (http://r.reuters.com/kyr89v)

NATIONAL POST

* The Ontario Provincial Police's anti-rackets investigation into an alleged cover-up in Dalton McGuinty's office intensified on Thursday, with detectives serving a court order at Queen's Park for key records, and confirming they have interviewed the former premier about the gas plants scandal. (http://r.reuters.com/nyr89v)

* Progressive Conservative Leader Tim Hudak suggested on Thursday that the Liberals may have made a deal with the Ontario Provincial Police Association in exchange for support during the election. Union president Jim Christie has said that advertisements his association took out against the Progressive Conservative party were not an endorsement of the Liberals or of the New Democratic Party - they just don't want Hudak as premier. (http://r.reuters.com/syr89v)

FINANCIAL POST

* Lévis, Quebec-based Exceldor is taking over Streetsville, Ontario's P&H Foods, as parent company Parrish & Heimbecker Ltd concentrates on its core businesses including grain merchandising and milling. Terms of the transaction were not disclosed. (http://r.reuters.com/wyr89v)

* Suncor Energy Inc, Canada's largest oil sands company, is recycling tailings water from surface mining at its oil sands plant to feed its nearby in-situ operations in northern Alberta. The question is whether the rest of the industry will follow suit. (http://r.reuters.com/zyr89v)

 

China

CHINA SECURITIES JOURNAL

- China's regulator said in an exposure draft that it would vigorously promote innovative development in Chinese fund companies by setting up an open and flexible management system.

SHANGHAI SECURITIES NEWS

- The National Development and Reform Commission has held a meeting with power firms and will hold another one with industry experts next week, indicating that China is going to further advance electric reforms.

CHINA BUSINESS NEWS

- China's May Consumer Price Index (CPI) could rebound to 2.5 percent, the newspaper said in its research report, quoting 20 economists.

CHINA DAILY

- China must take an open-minded and pragmatic approach when revising its immigration policy with an eye to retaining foreign talent, the newspaper said in a commentary.

 

Britain

The Telegraph

SAFETY DEVICE ON BP GULF OF MEXICO RIG WASN'T TESTED PROPERLY

A U.S. board's investigation into BP's Gulf of Mexico oil spill has concluded that a last-ditch safety device on the underwater well had multiple failures, was not tested properly and still poses a risk for many rigs drilling today. (link.reuters.com/nep89v)

 
ELEVEN THROWN OUT OF G4S AGM AFTER PALESTINE PROTEST

Protesters angry at G4S's business interests in Israel and Palestine have disrupted the security company's annual meeting. Guards removed 11 human rights activists from the AGM, which was being held in a conference room at the Excel Centre, London, on Thursday. (link.reuters.com/kep89v)

NEW LEGAL ACTION IN THALIDOMIDE SCANDAL

A new legal action has been launched against the manufacturers of thalidomide, the morning sickness drug which caused harrowing birth defects, on behalf of eight British sufferers claiming they have never received full compensation. (link.reuters.com/pep89v)

ZOOPLA SETS IPO PRICE RANGE AS FLOTATION FLURRY CONTINUES

Online property site Zoopla (IPO-ZPGL.L) is the latest company to test the strength of London's flotation market after it unveiled the price range for its upcoming listing. (link.reuters.com/rep89v)

The Guardian

MORRISONS' FORMER CHAIRMAN ACCUSES MANAGEMENT OF RUINING SUPERMARKET

The former chairman of Morrisons has launched an extraordinary public tirade against the supermarket's leadership, describing the chief executive's strategy as "bullshit" and warning that the business founded by his father had been ruined. (link.reuters.com/tep89v)

ASOS SHARES PLUMMET AFTER PROFITS WARNING

When it first launched under the name As Seen on Screen, ASOS was an online retail ingenue whose title referred to clothing first glimpsed on Hollywood stars, models and celebrities, then rapidly reproduced for trend-hunting consumers.

But on Thursday the stock market turned its lens on the leading light of British e-commerce and sent its shares plummeting by 31 percent as a shock profit warning wiped 1.2 billion pounds ($2.01 billion) off its value. (link.reuters.com/vep89v)

SERIOUS FRAUD OFFICE LOOKING INTO CURRENCY MARKET MANIPULATION CLAIMS

Britain's Serious Fraud Office is examining information related to a global investigation into the possible manipulation of currency markets, although it has yet to open a criminal investigation. (link.reuters.com/wep89v)

The Times

THAMES WATER ORDERED TO PAY 86 MLN STG IN PENALTIES FOR FLOODS MISREPORTING

Thames Water is to stump up a reparations package of 86 million pounds to customers after admitting to misspending money to shore up its sewer system and misleading the regulator. (link.reuters.com/zep89v)

INMARSAT TO END EXECUTIVES' QUIET TIME WITH PLANS FOR IN-FLIGHT BROADBAND

British satellite operator Inmarsat has announced plans to connect European airline passengers to the Internet, allowing the same sort of telecommunications connectivity, in-flight 4G coverage and broadband speeds that many residents on the ground in large parts of Scotland are still crying out for. (link.reuters.com/bup89v)

 

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled today include:
Change in non-farm payrolls for May at 8:30--consensus up 213K
Unemployment rate for May at 8:30--consensus 6.4%
Consumer credit for April at 15:00--consensus $15B

ANALYST RESEARCH

Upgrades

Angie's List (ANGI) upgraded to Buy from Neutral at BofA/Merrill
CONSOL (CNX) upgraded to Buy from Neutral at Goldman
Herman Miller (MLHR) upgraded to Buy from Neutral at Longbow
Humana (HUM) upgraded to Buy from Hold at Stifel
JAKKS Pacific (JAKK) upgraded to Buy from Hold at Needham
Joy Global (JOY) upgraded to Buy from Neutral at BofA/Merrill
Lennox (LII) upgraded to Buy from Hold at KeyBanc
Spirit AeroSystems (SPR) upgraded to Outperform from Market Perform at Cowen
Watts Water (WTS) upgraded to Buy from Hold at KeyBanc

Downgrades

Apache (APA) downgraded to Market Perform from Outperform at Wells Fargo
Approach Resources (AREX) downgraded to Market Perform from Outperform at Wells Fargo
Athlon Energy (ATHL) downgraded to Market Perform from Outperform at Wells Fargo
Chunghwa Telecom (CHT) downgraded to Underweight from Neutral at JPMorgan
Frontier Communications (FTR) downgraded to Hold from Buy at Jefferies
Nexstar (NXST) downgraded to Equal Weight from Overweight at Evercore
Peabody (BTU) downgraded to Neutral from Buy at Goldman
Rally Software (RALY) downgraded to Hold from Buy at Deutsche Bank
Rally Software (RALY) downgraded to Market Perform from Outperform at William Blair
SM Energy (SM) downgraded to Market Perform from Outperform at Wells Fargo
Swift Energy (SFY) downgraded to Market Perform from Outperform at Wells Fargo
Team Health (TMH) downgraded to Hold from Buy at Deutsche Bank

Initiations

CECO Environmental (CECE) initiated with an Outperform at William Blair
Cheetah Mobile (CMCM) initiated with an Overweight at JPMorgan
Republic Services (RSG) initiated with an Outperform at Imperial Capital
Rouse Properties (RSE) initiated with an Outperform at RBC Capital
Sabra Health Care (SBRA) initiated with an Equalweight at Barclays
Sabre (SABR) initiated with an Outperform at Imperial Capital
Theravance Biopharma (TBPH) initiated with a Buy at BofA/Merrill

COMPANY NEWS

AIG (AIG) authorized additional $2B share repurchase plan
eMarketer said Google's (GOOG) share of U.S. mobile search-ad dollars is declining
Men's Wearhouse (MW) sees completion of Jos. A. Bank (JOSB) merger in next few weeks
Comtech (CMTL) reported Q3 earnings and raised FY14 EPS and revenue guidance
Panera Bread (PNRA) announced a new $600M share repurchase plan to replace the company's existing plan
SeaChange (SEAC) reported disappointing Q1 earnings, Q2 guidance and FY14 guidance

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Men's Wearhouse (MW), Rally Software (RALY), Comtech (CMTL), Vail Resorts (MTN), VeriFone (PAY), Cooper Companies (COO), Zoe's Kitchen (ZOES)

Companies that missed consensus earnings expectations include:
Analogic (ALOG), Thor Industries (THO), SeaChange (SEAC), Diamond Foods (DMND)

NEWSPAPERS/WEBSITES

Bank of America (BAC) in talks to pay at least $12B to settle probes, WSJ reports
Lawsky seeks ouster of BNP Paribas (BNPQY) COO, others, Bloomberg says
Barclays (BCS) fine sparks U.K. probe of derivatives dispute, Bloomberg says
Changes may make approval of Sprint (S), T-Mobile (TMUS) tie-up more likely, NY Times reports
Any Sprint (S), T-Mobile (TMUS) deal likely to face regulatory hurdles on two fronts, WSJ reports
Canada to recommend buying 65 Lockheed Martin (LMT) F-35 jets, Reuters reports
Beastie Boys win $1.7M in copyright case with Monster Beverage (MNST), NBC News says

SYNDICATE

Arista Networks (ANET) 5.25M share IPO priced at $43.00
Cheniere Energy (LNG) 1.2M share Block Trade priced at $66.15
CoStar Group (CSGP) 3M share Secondary priced at $160.00
Hudson Technologies (HDSN) files to sell common stock
IGI Laboratories (IG) files to sell $35M of common stock
Laclede (LG) 9M share Secondary priced at $46.25
Marrone Bio (MBII) 4.5M share Secondary priced at $9.50
Novavax (NVAX) 25M share Secondary priced at $4.00
Palo Alto (PANW) files to sell 1.54M shares of common stock for holder
Radius Health (RDUS) 6.5M share IPO priced at $8.00
Star Scientific (STSI) files to sell 26.47M shares for holders
United Insurance (UIHC) files to sell 2.7M shares for holders

 

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Fri, 06/06/2014 - 08:18 | 4829456 disabledvet
disabledvet's picture

THE go to primer to start your trading day.

Good luck Wall Street..."the fate of all humanity is in your hands."

Fri, 06/06/2014 - 08:24 | 4829467 Rakshas
Rakshas's picture

G7 warns Moscow about Ukraine, good god these guys take asshole to a new level; bridges falling down, homelessness continues to skyrocket, people starving on the streets, savings being confiscated daily, constant interference in foreign countries, corruption running rampant all on the road to facist dictatorship...... Yeah G7 is such a wonderful bouquet of Assholes....... 

Fri, 06/06/2014 - 08:40 | 4829533 shovelhead
shovelhead's picture

Record fines and removal of FRENCH BANKERS?

Bu

Bu

BWAHAHAHAHA

Really, it's extra funny because of the bald-faced criminality of American banks.

Dinging Iran is held to magnitudes of importance over the rape of the American people.

But you knew that anyway.

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