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Frontrunning: June 12

Tyler Durden's picture




 
  • Iraqi Drama Catches U.S. Off Guard (WSJ)
  • Al-Qaeda Offshoot on NATO Border Threatens Turkish Rally (BBG)
  • It's just the snow, people: U.S. Economic Recovery Looks Distant as Growth Lingers (NYT)
  • Freed Taliban leaders may remain in Qatar beyond one-year travel ban (Reuters)
  • BNP Paribas Executive Chodron de Courcel to Quit Post (WSJ)
  • Greenmail is back (WSJ)
  • Facebook Places Multiple Bets to Win Messenger Wars (BBG)
  • ECB easing to benefit Ukraine, Russia corporate bonds (Reuters)
  • Rome Shows the World How Not to Run Bike-Sharing Program (BBG)
  • Karachi airport attack signals tactical shift by Taliban (Reuters)
  • Inventor Targets Open-Air Defecation of 600 Million Indians (BBG)
  • CFA Institute Chief Departs After Disclosing Relationship (WSJ)
  • Foreign interns pay the price for Japan's labor shortage (Reuters)
  • China denounces Japan protest over military jets' close brush (Reuters)

 

Overnight Media Digest

WSJ

* The Iraqi forces' rout by a ragtag Islamist militia this week shocked politicians in Baghdad and Washington, but the troops and their American trainers have been warning for years that the Iraqi military wasn't ready for battle. (http://r.reuters.com/zyq99v)

* European regulators have opened formal investigations into the tax affairs of Apple Inc, Starbucks Corp and a unit of Fiat, amid concerns that multinational companies enjoy sweeter tax deals than are permitted under EU law. (http://r.reuters.com/tyq99v)

* BNP Paribas SA has tentatively agreed to oust a senior adviser at the French bank at the behest of New York's top financial regulator as part of a proposed settlement of BNP's alleged violations of U.S. sanctions. (http://r.reuters.com/vyq99v)

* More companies are resorting to an old tactic to get rid of activist investors: pay them to go away. The practice, which involves buying back shares from activist hedge funds, has raised concerns among some investors because it bears similarities to "greenmail," a controversial strategy popular in the 1980s. (http://r.reuters.com/myq99v)

* Auto makers plan a broad shift to aluminum from steel in larger vehicles over the next decade in North America, and 18 percent of all vehicles will have all-aluminum bodies by 2025, compared with less than 1 percent now, according to an industry study released this week. (http://r.reuters.com/qyq99v)

* In a decision likely to influence future litigation over failed law firms, a federal judge in San Francisco ruled that the defunct Heller Ehrman LLP has no right to profits from unfinished legal work its ex-partners brought to their new firms. (http://r.reuters.com/dar99v)

 

FT

Benjamin Lawsky, New York's top banking regulator, is asking for the removal of a senior BNP Paribas adviser as part of the settlement with U.S. authorities over sanction violations, according to a source familiar with the matter.

Siemens and Mitsubishi Heavy Industries are planning a joint bid for Alstom's energy assets - the German and Japanese industrial conglomerates will be going up against General Electric $16.9 billion bid from last month.

Airbus took a blow on Wednesday after Dubai's Emirates Airline scrapped a $16 billion order for 70 of the European planemaker's new A350 passenger jets.

Greece confirmed that it has appointed Yannis Stournaras as its central bank's new governor one day after he stepped down as finance minister in a government reshuffle.

GoPro, which makes of wearable cameras used by extreme sports enthusiasts, is seeking a market capitalisation of as much as $3 billion at a tense time for technology initial public offerings.

 

NYT

* It has been five years since the official end of the severe economic downturn that ran from late 2007 to the middle of 2009. The United States' total annual output has moved substantially above the pre-recession peak, but economic growth has averaged only about 2 percent a year, well below its historical average. A growing number of experts see evidence that the economy will never rebound completely. (http://r.reuters.com/jyq99v)

* Phil Mickelson, the famed golfer, did not trade in the shares of Clorox just as billionaire investor Carl Icahn was mounting an unsolicited takeover bid for the company in 2011, say four people briefed on the matter.(http://r.reuters.com/kyq99v)

* European Union officials on Wednesday announced an investigation into how low-tax nations like Ireland have helped large multi-nationals like Apple and Starbucks reduce their tax bills by billions of dollars. (http://r.reuters.com/wyq99v)

* Goldman Sachs and Bain Capital have agreed to pay a combined $121 million to settle a lawsuit that accused them and other firms of colluding to drive down the prices of takeovers before the financial crisis, according to a court filing on Wednesday. (http://r.reuters.com/xyq99v)

* In a widening safety problem at one of the world's largest auto suppliers, 2.3 million Toyota vehicles are being recalled worldwide because a defective air bag component made by Takata Corporation could injure passengers. Soon after Toyota's announcement, the National Highway Traffic Safety Administration said it was opening an investigation into the other automakers that used parts made by Takata to see if those companies' vehicles should be recalled, too. (http://r.reuters.com/far99v)

* Amazon plans to introduce a limited music streaming feature as early as Thursday, according to several people briefed on its plans. (http://r.reuters.com/har99v)

* The chief executive of General Motors, Mary Barra, and the former prosecutor hired by the company to investigate why it failed to recognize a fatal defect in its small cars, Anton Valukas, will testify before a House subcommittee next Wednesday. (http://r.reuters.com/kar99v)

 

Canada

THE GLOBE AND MAIL

* The National Democratic Party is going to court to challenge the verdict of a secretive House of Commons committee, which found New Democratic Party MPs guilty of improperly spending $1.17 million in parliamentary resources on partisan mass mailings. (http://r.reuters.com/pas99v)

* The Toronto District School Board's newly minted Confucius Institute is in jeopardy after a committee of trustees recommended suspending its partnership with the Chinese government. The board passed a motion on Wednesday evening calling on all TDSB trustees and staff to investigate concerns about censorship by the Chinese government, which is quietly spreading its reach into Canadian classrooms through language and culture programs with virtually no oversight. (http://r.reuters.com/qas99v)

Reports in the business section:

* In the middle of a massive advertising campaign to introduce its re-named Tangerine Bank subsidiary to Canadians, the Bank of Nova Scotia has found itself in a legal battle over its right to use the label. A small financial business based in British Columbia is trying to block Scotiabank's use of the name, saying it owns it and was using it first. A hearing is scheduled to begin on June 18 in Vancouver in British Columbia Supreme Court. (http://r.reuters.com/ras99v)

NATIONAL POST

* For a heart-pounding hour on Tuesday, social media was awash with a disjointed play-by-play of a high-drama event unfolding in Vancouver, that began when a 61-year-old man allegedly shot a 52-year-old man, identified in the media as Paul Dragan. The victim was allegedly shot outside of the Starbucks in Vancouver's upscale Yaletown neighbourhood. The suspect, 61, fled on a bike with two plainclothes officers in steady pursuit. (http://r.reuters.com/vas99v)

* Despite earning a high salary in cabinet, former finance minister Jim Flaherty had a comparatively modest net worth when he died in April, court documents show. Probate records filed in court in Oshawa, Ontario in early May, a month after Flaherty died of a heart attack, list the total value of his assets at $989,045. (http://r.reuters.com/zas99v)

FINANCIAL POST

* Despite aggressive moves by the federal government to limit consumers' exposure to an overheated housing sector, a major global think-tank is warning Ottawa that even tougher measures are needed to protect taxpayers. In particular, the government should gradually reduce its share of the mortgage-insurance market and transfer more of the risk to the private sector, the Organization for Economic Cooperation and Development said on Wednesday. (http://r.reuters.com/bes99v)

 

China

CHINA SECURITIES JOURNAL

- The government of the northeastern city of Shenyang denied it has loosened policies restricting housing purchases.

- Some Beijing property companies have given discounts so as to encourage their staff members to buy houses amid increasing signs that China's property market is heading for a slowdown after a decade of rapid expansion.

SHANGHAI SECURITIES NEWS

- China will promote the development of 5G wireless technologies, said Liu Lihua, the vice minister of the Ministry of Industry and Information Technology.

CHINA BUSINESS NEWS

- An official clampdown on excessive pricing of initial public offerings has drastically cut the commission income of stock brokerages.

CHINA DAILY

- Chinese policymakers need a stronger sense of responsibility and urgency to achieve this year's economic growth target as downward pressure will likely remain heavy for the rest of the year, the newspaper said in an editorial.

21ST CENTURY BUSINESS HERALD

- In a signal that the government is improving its monetary policy management, the People's Bank of China used the word of "precise" adjustment for the first time in a policy report published on Wednesday.

Britain

The Telegraph

CHINA CONSTRUCTION BANK TO BE FIRST UK CLEARING BANK FOR RENMINBI

China Construction Bank, China's second-largest lender, has been selected to become the first clearing service for renminbi trading in London, according to reports. (http://link.reuters.com/vyp99v)

UBER WINS OUT AFTER BLACK CABS GRIDLOCK LONDON

Protests by black cab drivers against a mobile phone application that allows users to book minicabs has resulted in a increase in the number of people using the service. (http://link.reuters.com/wyp99v)

The Guardian

ROLLS-ROYCE LOSES 2.6 BLN STG ENGINE ORDER AFTER EMIRATES CANCELS AIRBUS PURCHASE

Rolls-Royce has lost jet engine orders worth 2.6 billion pounds ($4.37 billion) after Emirates Airline cancelled a planned purchase of 70 A350 aircraft from Airbus . (http://link.reuters.com/xyp99v)

SAINSBURY'S SALES FALL AGAIN AMID SLUGGISH RETAIL ENVIRONMENT

Outgoing Sainsbury's boss Justin King revealed a second quarter of falling sales but insisted he is "not leaving on a low" because the grocer is still outperforming its rivals.(http://link.reuters.com/zyp99v)

The Times

OSBORNE TO REVEAL CITY ABUSES RULES

New rules to deter wrongdoing and punish cheating in the heart of the City of London will be set out by British Finance Minister George Osborne in his Mansion House speech on Thursday. (http://link.reuters.com/ryp99v)

CAR INSURERS TO FEEL WRATH OF WATCHDOG

Britain's leading competition watchdog will press ahead today with a crackdown on motor insurers as part of a drive to give motorists a fairer deal. (http://link.reuters.com/syp99v)

B&M LISTING MAY SETTLE THE VOLATILE MARKET FOR IPOS

A bargain variety retailer that is aggressively expanding across Britain is expected to price its stock market flotation today in a listing that could value the group at 2.7 billion pounds ($4.53 billion). (http://link.reuters.com/typ99v)

The Independent

EMPLOYMENT FIGURES INCREASE BY RECORD-BREAKING 350,000 IN THREE MONTHS, BUT EARNINGS ARE DOWN

The number of people in work has leapt by a record 350,000 in the three months to April, but wages have slumped below inflation which has sparked concerns over levels of pay. (http://link.reuters.com/baq99v)

 

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled today include:
Retail sales for May at 8:30--consensus up 0.6% for the month
Jobless claims for week of June 7 at 8:30--consensus 309K
Import prices for May at 8:30--consensus up 0.2%
Business inventories for April at 10:00--consensus up 0.4%

ANALYST RESEARCH

Upgrades

Achillion (ACHN) upgraded to Buy from Neutral at UBS
Advanced Photonix (API) upgraded to Buy from Neutral at B. Riley
FactSet (FDS) upgraded to Market Perform from Underperform at Raymond James
HP (HPQ) upgraded to Neutral from Sell at Goldman
Halozyme (HALO) upgraded to Buy from Neutral at UBS
ImmunoGen (IMGN) upgraded to Neutral from Sell at UBS
SVB Financial (SIVB) upgraded to Outperform from Sector Perform at RBC Capital
Sprouts Farmers Markets (SFM) upgraded to Outperform from Neutral at Credit Suisse
Triumph Group (TGI) upgraded to Outperform from Neutral at Credit Suisse

Downgrades

AXIS Capital (AXS) downgraded to Sell from Neutral at Goldman
Chesapeake Lodging (CHSP) downgraded to Market Perform from Outperform at FBR Capital
Hawaiian Holdings (HA) downgraded to In-Line from Outperform at Imperial Capital
Rose Rock Midstream (RRMS) downgraded to Neutral from Outperform at RW Baird
Springleaf (LEAF) downgraded to Neutral from Buy at Sterne Agee
Theravance (THRX) downgraded to Hold from Buy at Stifel
Vale (VALE) downgraded to Equal Weight from Overweight at Morgan Stanley

Initiations

Allete (ALE) initiated with a Neutral at JPMorgan
Athlon Energy (ATHL) initiated with a Buy at Mizuho
Cabela's (CAB) initiated with a Neutral at Goldman
Hollysys Automation (HOLI) initiated with a Buy at Goldman
Navios Maritime Partners (NMM) initiated with a Buy at Jefferies
RSP Permian (RSPP) initiated with a Buy at Mizuho
Sunesis (SNSS) initiated with a Buy at UBS

COMPANY NEWS

Amazon (AMZN) announced Prime Music, which has "Over a million songs and hundreds of playlists. Unlimited, ad-free streaming. Free with Amazon Prime"
DDR (DDR) and Blackstone (BX) formed JV to acquire shopping centers for $1.98B
BNP Paribas (BNPQY) announced retirement of COO Chodron de Courcel
lululemon (LULU) announced retirement of CFO John Currie  and announced a $450M share buyback program
Tibco (TIBX) shareholder Praesidium said it sees a substantial opportunity to 'unlock value' in the company
KEYW Holding's (KEYW) wholly-owned subsidiary Hexis Cyber Solutions announced that a U.S. government agency selected its HawkEye G for advanced threat detection
Arena (ARNA) CEO declined to comment on Eisai's (ESALY) interest in buying company
A U.S. Federal Judge again rejected Citibank's (C) motion on rewards program

EARNINGS

Companies that beat consensus earnings expectations last night and today include: lululemon (LULU), Dominion Diamond (DDC), Sigma Designs (SIGM), Restoration Hardware (RH)
lululemon (LULU) lowered FY14 normalized EPS view to $1.71-$1.76 from $1.80-$1.90
Restoration Hardware (RH) upped  FY14 adjusted EPS view to $2.24-$2.30 from $2.14-$2.22
Scotts Miracle-Gro (SMG) backed FY14 EPS view $3.05-$3.20, consensus $3.22

NEWSPAPERS/WEBSITES

Twitter (TWTR) considering shake up of top management, including COO, Re/code reports
Judge considers dismissal of U.S. fraud charges against BofA (BAC), Reuters says
AT&T (T) defends proposed $48B acquisition of DirecTV (DTV), WSJ reports
France still talking to GE (GE) for Alstom (ALSMY) unit, WSJ reports
Goldman Sachs (GS) to pay $67M to settle LBO collusion suit, Reuters reports
U.S. using JPMorgan's (JPM) $13B penalty to speed up other cases, Reuters reports (BAC, C)
BNP Paribas (BNPQY) to oust senior adviser Lévy-Garboua as part of settlement, WSJ reports
Teva (TEVA) CFO says sees doing small acquisitions, Globes reports
Investors should not chase Ulta Salon (ULTA), Barron's reports

SYNDICATE

Acadia Healthcare (ACHC) 7.727M share Secondary priced at $44.00
AdCare (ADK) files to sell 1.64M shares of common stock for holders
AmeriGas (APU) files to sell 8.5M common units for holders
CommScope (COMM) files to sell 15M shares of common stock for holders
Dynagas LNG (DLNG) files to sell 4.8M common units representing limited partners
Installed Building Products (IBP) 8.1M share Secondary priced at $12.50
Nordic American Offshore (NAO) 5.882M share IPO priced at $16.00
PBF Energy (PBF) to offer 18M shares of Class A common stock for holders
Range Resources (RRC) files to sell 4.56M shares of common stock
Retail Opportunity Investments (roic) files to sell 12.5M shares of common stock
Trinseo S.A. (TSE) 10M share IPO priced at $19.00
Vitesse (VTSS) files to sell common stock

 

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Thu, 06/12/2014 - 07:47 | 4847812 GetZeeGold
GetZeeGold's picture

 

 

 

Iraqi Drama Catches U.S. Off Guard

 

That's what happens when you're too busy trading terrorists for freaks.

 

Don't drone me bros!

Thu, 06/12/2014 - 07:59 | 4847833 Headbanger
Headbanger's picture

U.S. Gubmint knew this would happen and let it so we can get back in to Iraq in a big way again to use as a major base versus Iran and the Russian build up there.

That's why we left so much military equipment there.

 

Thu, 06/12/2014 - 07:58 | 4847835 codecode
codecode's picture

"One might ask: Didn't U.S. intelligence know something like Mosul could happen? They did. The February 2014 "Threat Assessment" by the Pentagon's Defense Intelligence Agency virtually predicted it: "AQI/ISIL [aka ISIS] probably will attempt to take territory in Iraq and Syria . . . as demonstrated recently in Ramadi and Fallujah." AQI (al Qaeda in Iraq), the report says, is exploiting the weak security environment "since the departure of U.S. forces at the end of 2011." But to have suggested any mitigating steps to this White House would have been pointless. It won't listen."

While Obama Fiddles

Thu, 06/12/2014 - 07:45 | 4847815 Hindenburg...Oh Man
Hindenburg...Oh Man's picture

Gold up...oh no! wait a second....gold down! 

Thu, 06/12/2014 - 07:49 | 4847821 GetZeeGold
GetZeeGold's picture

 

 

Dude....pace yourself.

 

Stare at it too hard....and you'll go insane.

Thu, 06/12/2014 - 08:23 | 4847890 SoilMyselfRotten
SoilMyselfRotten's picture

Platinum and palladium gettin takin to the woodshed

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