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Frontrunning: June 16

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  • Iraq Army Tries to Roll Back Sunni Militants’ Advance (BBG)
  • Starbucks to Subsidize Workers' Online Degrees (WSJ)
  • ‘Bitcoin Jesus’ Calls Rich to Tax-Free Tropical Paradise (BBG)
  • Medtronic Is Biggest Firm Yet to Renounce U.S. Tax Status (BBG), Medtronic to buy Covidien for $42.9 billion, rebase in Ireland (Reuters)
  • Oil Topping $116 Seen Possible as Iraq Conflict Widens (BBG)
  • Putin Seeks Paris Landmark as Hollande’s Russia Ties Defy Obama (BBG)
  • GM Says It Has a Shield From Some Liability (WSJ)
  • BOJ’s Bond Paralysis Seen Spreading Across Markets (BBG)
  • Here comes 5G: EU, South Korea to Ally on Faster Mobile Access (WSJ)
  • Draghi Stock Rally Runs to Record Price-Earnings Ratio (BBG)
  • China sentences three to death for Tiananmen Square attack (Reuters)
  • Siemens, Mitsubishi Heavy Near Joint Alstom Offer (WSJ)
  • Israel expands West Bank hunt for missing teens, Palestinian killed (Reuters)
  • Could Stocks Melt Up? (WSJ)

 

Overnight Media Digest

WSJ

* German engineering company Siemens AG and Japanese peer Mitsubishi Heavy Industries Ltd were close to finalizing an offer for much of Alstom's energy business, potentially entering a bidding war with General Electric Co for one of France's industrial jewels, said people familiar with the companies' plans. (http://link.reuters.com/xeg22w)

* Medtronic Inc's agreement on Sunday to buy rival medical-device maker Covidien for $42.9 billion is the latest in a wave of recent moves designed, at least in part, to sidestep U.S. corporate taxes. (http://link.reuters.com/gyg22w)

* Williams Co Inc agreed to pay nearly $6 billion to expand its ownership of Access Midstream Partners, a move aimed at increasing the natural-gas pipeline company's presence in areas with growing energy output from shale formations. (http://link.reuters.com/zeg22w)

* In the race to get the world's fastest mobile Internet service, South Korea and the European Union on Monday will unveil a major new pact to join forces on so-called 5G networks, according to a draft of the agreement seen by The Wall Street Journal. The deal sets up a joint group to develop systems, set standards and get radio frequencies ready to accommodate the new technology. The aim is to have a global consensus and vision on 5G by the end of 2015. (http://link.reuters.com/ceg22w)

* Starbucks Corp is planning to foot part of the bill for an online degree for U.S. employees who work at least 20 hours a week in its cafes, corporate offices and roasting plants. The coffee giant is teaming up with Arizona State University to provide tuition reimbursement and financial aid to U.S. employees who enroll in the school's online bachelor's degree program. (http://link.reuters.com/deg22w)

* Fiat SpA approved the sale of as much as 4 billion euros ($5.45 billion) in bonds as the Italian carmaker seeks to refinance at a lower interest rate and lessen the weight of its 10 billion euros ($13.62 billion) in debt. (http://link.reuters.com/reg22w)

* One of Brazil's wealthiest men, banker Moise Yacoub Safra, died Sunday in Sao Paulo. He was 79. One of the founders of Brazilian bank Banco Safra, the magnate suffered from Parkinson's Disease, according to the local press. (http://link.reuters.com/seg22w)

* Germany's Economics Ministry said Sunday it has launched a probe into RWE's planned sale of its upstream oil-and-gas unit to a group of Russian investors, looking at whether the deal would conflict with the country's strategic interest. (http://link.reuters.com/weg22w)

 

FT

An analysis commissioned by senior British military personnel has said that UK's defence spending will soon fall below the target set by NATO.

The International Monetary Fund is looking at changing rules that could require countries seeking its help to extend maturities on their sovereign debt.

Shia militias seem to have slowed Sunni insurgents push to Baghdad even as the insurgents made new territorial gains in northern Iraq on Sunday.

A global study of 400 public sector institutions has said that central banks around the world, including China's, have shifted decisively into investing in equities as low interest rates have hit their revenues.

With Tesla Motors' decision to offer its patents to rivals in an attempt to promote the low-emission vehicles, three of the world's biggest electric-car makers, Tesla, Nissan and BMW are interested in collaborating on charging technology.

 

NYT

* On Monday, New York's attorney general will become the first government authority to take aim at how banks use the databases, according to people briefed on the matter, who spoke on the condition of anonymity. The attorney general's office is expected to announce that Capital One has agreed to fundamentally change the way it uses the largest database, ChexSystems, barring only customers who land in the database for fraud. (http://link.reuters.com/dyg22w)

* Medtronic Inc agreed on Sunday to buy Covidien for $42.9 billion, combining two of the world's biggest medical device makers and helping Medtronic lower some taxes by gaining access to cash held overseas. (http://link.reuters.com/cyg22w)

* The Williams Co Inc said on Sunday that it had agreed to pay nearly $6 billion in cash to acquire control of Access Midstream Partners, a natural gas drilling company active in several areas with shale gas formations. (http://link.reuters.com/fyg22w)

* Competition to acquire French energy equipment maker Alstom was expected to intensify on Monday, as Siemens of Germany and Mitsubishi Heavy Industries of Japan were said to be preparing to make a joint offer that could pressure General Electric to improve its $13.5 billion bid. (http://link.reuters.com/jyg22w)

 

Canada

THE GLOBE AND MAIL

* Mario Beaulieu, the new leader of the Bloc Québécois, is a separatist betting on a shift in strategy to an aggressive promotion of independence to revive the dying party. But the former head of the Société Saint-Jean-Baptiste, a pro-sovereignty organization, faces a huge challenge trying to revive separatism among an unreceptive Quebec electorate that recently voted out the Parti Québécois in the April 7 provincial election. (http://link.reuters.com/zuj22w)

Reports in the business section:

* As it undergoes a massive corporate make over, BlackBerry will have to reassure its long-suffering investors that its new ambition - to become the universal platform for all connected devices - can really counteract the old, declining smartphone business. BlackBerry reports its fiscal 2015 first-quarter results on Thursday before markets open. (http://link.reuters.com/hyj22w)

* Canada's telecom regulator must soon decide whether to restrict billing practices associated with a handful of apps that let users stream live and on-demand television stations on their mobile devices for about $5 per month. Some say it gives the cellular providers' affiliated TV services an unfair leg up over competing online video services. (http://link.reuters.com/jyj22w)

NATIONAL POST

* When a Toronto-area man lost his driver's license due to an impaired driving conviction, an acquaintance alleges he took the unusual - and surprisingly legal - step of simply substituting his truck with a private helicopter. Under Canadian law, there is indeed no automatic link between a drunk driving conviction and the ability to fly. (http://link.reuters.com/vyj22w)

FINANCIAL POST

* Many of Canada's top forecasters will sit down with Joe Oliver on Monday for what is billed as a part number-crunching, part get-acquainted session with the new finance minister. Among other political promises, Oliver has inherited a pledge to eliminate the federal deficit by 2015, the same year as the next scheduled national election. (http://link.reuters.com/wyj22w)

 

China

SHANGHAI SECURITIES NEWS

- China's Securities Regulatory Commission has met with government departments and finance industry bodies to discuss corruption. It stressed that firms cannot be focused solely on business, but are also responsible for catching dishonest behaviour.

- Wu Jinglian, senior research fellow for the State Council Development Research Centre, said he favoured targeted monetary easing but that wider monetary expansion was not feasible.

 
CHINA SECURITIES JOURNAL

- Shanghai's stock exchange plans to compensate investors in Hareon Solar Technology after it made a mistake with the stock's ex-dividend last week which affected the company's share price and subsequently stock market trading.

CHINA DAILY

- More than two hundred Chinese business leaders will accompany Premier Li Keqiang on his visit to Britain this week. The trip is expected to yield more than $30 billion in signed deals between China and Britain.

PEOPLE'S DAILY

- Local ordinary people are helping authorities with their anti-terrorist efforts after recent violence in Xinjiang, helping to create an "impregnable fortress" against future attacks.

 

Britain

The Telegraph

UK POISED TO PUSH FOR MORE CHINESE INVESTMENT

(http://link.reuters.com/qyf22w)

Chinese investment in nuclear energy, high-speed rail and North Sea oil will be high on the diplomatic agenda when Chinese Premier Li Keqiang visits the UK this week, building on what he has described as an "indispensable partnership" between the two countries.

OWNERS OF CHANNEL TUNNEL LINK EYE HS2

(http://link.reuters.com/ryf22w)

The Canadian pension-fund owners of the Channel Tunnel rail link have expressed an interest in bidding for the controversial HS2 line if it is offered up to the private sector.

The Guardian

CRIMINALISE TRADE UNION BULLYING SAYS GRANGEMOUTH REFINERY OPERATOR

(http://link.reuters.com/syf22w)

Ineos, the chemical group at the centre of last year's acrimonious dispute at the Grangemouth refinery, has called on ministers to criminalise trade unions that use intimidation or bullying tactics.

CO-OP GROUP WOOS MEMBERS BEFORE REFORMS VOTE

Members of the Co-operative Group are being offered representatives on the board of the troubled chain of supermarkets, funeral homes and pharmacies in an attempt to win support for a radical overhaul of the way the debt-laden mutual is run.

Sky News

CENTRICA CHIEF LAIDLAW RULES OUT BG SWITCH

Sam Laidlaw, the boss of Centrica, has ruled himself out of the running to take the top job at BG Group, the troubled FTSE 100 energy group.

The Independent

BRITAIN'S BOOMING ADVERTISING INDUSTRY TO OVERTAKE GERMANY

(http://link.reuters.com/tyf22w)

The British advertising market is growing at an "amazingly strong" rate and is set to overtake that of Germany to be the world's fourth-largest in a sign that the UK recovery is accelerating.

PEOPLE DISTRUST GOOGLE, SAYS SMART ENERGY RIVAL

(http://link.reuters.com/wyf22w)

The digital thermostat company Tado has claimed some customers are shying away from rival Google's Nest because they fear the Internet giant is amassing too much information.

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled today include:
Empire State manufacturing survey for June at 8:30--consensus 15.0
Industrial production for May at 9:15--consensus up 0.5% for the month
Housing market index for June at 10:00--consensus 47

ANALYST RESEARCH

Upgrades

CenterPoint Energy (CNP) upgraded to Outperform from Market Perform at BMO Capital
DISH (DISH) upgraded to Overweight from Neutral at JPMorgan
Digital Realty (DLR) upgraded to Buy from Hold at Jefferies
Envision Healthcare (EVHC) upgraded to Conviction Buy from Neutral at Goldman
Medtronic (MDT) upgraded to Outperform from Market Perform at William Blair
Medtronic (MDT) upgraded to Overweight from Neutral at JPMorgan
Micron (MU) upgraded to Outperform from Neutral at RW Baird
MidWestOne (MOFG) upgraded to Outperform from Market Perform at Raymond James
Progressive (PGR) upgraded to Hold from Sell at Deutsche Bank
Silver Standard (SSRI) upgraded to Hold from Sell at Deutsche Bank
Southcross Energy Partners (SXE) upgraded to Neutral from Sell at Goldman
Williams (WMB) upgraded to Buy from Hold at Jefferies

Downgrades

GNC Holdings (GNC) downgraded to Neutral from Outperform at RW Baird
Norwegian Cruise Line (NCLH) downgraded to Neutral from Buy at SunTrust
RenaissanceRe (RNR) downgraded to Market Perform from Outperform at JMP Securities

Initiations

Alliance Data (ADS) initiated with an Outperform at Pacific Crest
American Express (AXP) initiated with a Sector Perform at Pacific Crest
Statoil (STO) initiated with an Underperform at Jefferies
SunEdison Semiconductor (SEMI) initiated with a Buy at Deutsche Bank
SunEdison Semiconductor (SEMI) initiated with a Neutral at Citigroup
SunEdison Semiconductor (SEMI) initiated with an Outperform at Wells Fargo

COMPANY NEWS

Medtronic (MDT) said it will acquire Covidien (COV) for $42.9B in cash and stock
Chevron (CVX) sold interests in Chad and Cameroon for $1.3B
International Game Technology said it "regularly considers, and on occasion explores, a broad range of strategic alternatives... The IGT board and senior management are currently engaged in such an exploration, but no decisions have been made by the board regarding any particular alternative available to the company"
Williams (WMB) said it will acquire the 50% general partner interest and 55.1M limited partner units in Access Midstream Partners (ACMP) held by Global Infrastructure Partners II,GIP, for $5.995B in cash. Williams also announced a proposal to merge Williams Partners (WPZ) with and into Access Midstream Partners
Limelight Networks (LLNW) said Tuition Build offer not an actionable proposal

EARNINGS

Companies that missed consensus earnings expectations include:
Streamline Health (STRM)

Williams Partners (WPZ) lowers FY14 financial guidance due to delays at Geismar

NEWSPAPERS/WEBSITES

Citigroup (C), BofA (BAC) may face lawsuits as DoJ negotiations stall, Bloomberg reports
GM (GM) says 2009 bankruptcy filing a 'shield' for some recall liability, WSJ reports
Analyst: Amazon (AMZN) launching phone to stay competitive with Google (GOOG), NY Times says
AT&T (T) says social security numbers and phone records hacked, Re/code reports
Pilgrim's Pride (PPC) could still buy other processed-foods brands, WSJ reports
Siemens (SI) readies Alstom (ALSMY) bid to obtain turbines, Bloomberg says
Target (TGT) says system glitch causes delays, long lines in stores, USA Today reports
'22 Jump Street' and 'How to Train Your Dragon 2' open strong, WSJ says (SNE, FOX)
Analyst Tunick says TJX (TJX) could rise to $63, Barron's reports
Intel (INTC) poised to rise further, Barron's reports
Franklin Resources (BEN) looks like a probable target for activists, Barron's says
Electronic Arts (EA), Altera (ALTR), Southwest Airlines (LUV), and T. Rowe Price (TROW) should grow into their prices, Barron's says
Alaska Air (ALK) investors may want to leave the stock, Barron's says

SYNDICATE

Fossil (FOSL) files to sell 99,099 shares for holders
InnerWorkings (INWK) files to sell 6.86M shares for holders
LiqTech (LIQT) files to sell $18.5M of common stock, preferred stock, warrants
Sotherly Hotels (SOHO) files to sell $23.4M of common stock

 

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Mon, 06/16/2014 - 07:25 | 4860631 Headbanger
Headbanger's picture

Fuck you Barry!

 

Sincerely,

Medtronic

Mon, 06/16/2014 - 13:06 | 4861682 dizzyfingers
dizzyfingers's picture

UN, some of TPTB of deep politics.

Mon, 06/16/2014 - 08:06 | 4860696 jay28elle
jay28elle's picture

"GM Says It Has a Shield From Some Liability".  I call Bull Shit.

Mon, 06/16/2014 - 21:55 | 4863693 monad
monad's picture

GM is CFR. Tesla is CFR. Here's a helping hand, Egon. You'll repay us later... with interest.

Mon, 06/16/2014 - 09:51 | 4860990 freak of nature
Mon, 06/16/2014 - 12:34 | 4861584 dizzyfingers
dizzyfingers's picture

http://davidstockmanscontracorner.com/11880/ Jobs Friday: What The Bubblevision Revelers Missed

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