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Frontrunning: June 18

Tyler Durden's picture




 
  • Levin Hearing Ups Volume in High-Frequency Call to Action (BBG)
  • Ukrainian President Fires Central Bank Chief (BBG)
  • Argentina Plans Debt Swap (WSJ)
  • Fed Decision Day Guide From Dot Plots To Exit Strategy (BBG)
  • World Bank Economist: China May Face US-Style Financial Crisis (WSJ)
  • Premier Li says no hard landing for China, expects medium to high growth (Reuters)
  • Putin Talks Peace With Ukraine Leader After Gas Pipe Fire (BBG)
  • Poll Shows Erosion in President's Support (WSJ)
  • U.S. mortgage applications plunge in latest week (Reuters)
  • Ex-Goldman director goes to prison, still owes $13.9 million fine (Reuters)
  • GM's CEO to face more Capitol Hill grilling over safety crisis (Reuters)
  • Google Dismantling Seen as Impossible by Merkel Ally De Maiziere (BBG)
  • As LED Industry Evolves, China Elbows Ahead (NYT)

 

Overnight Media Digest

WSJ

* Foreign crises and domestic economic unease have eroded President Barack Obama's public standing, sapping his ability to respond to overseas conflicts and weighing on fellow Democrats heading into the midterm elections. As clouds gather abroad, a new Wall Street Journal/NBC News poll finds Obama's job approval rating at 41 percent, matching a previous low. (http://on.wsj.com/1pHjXu9)

* China is flexing its growing power over global deals, after it put the kibosh on a shipping alliance that officials here said would hold too much sway over trade lanes to Europe. Tuesday's decision by China's Ministry of Commerce came despite approvals for the shipping alliance in Europe and the U.S. It marks only the second time the Chinese regulator has stepped in to block a corporate combination since the country enacted its antitrust law in 2008. (http://on.wsj.com/1r3st4n)

* Argentina unveiled a controversial plan aimed at preventing the country's second default in 13 years, while hinting it was willing to negotiate with holdout creditors. The moves, announced by the country's economy minister in a televised address on Tuesday, would enable Argentina to escape a U.S. court ruling that requires it to start making payments to the creditors, something it has resisted for years. (http://on.wsj.com/U8TQ1V)

* Seventeen months after Congress authorized up to $16 billion to fix homes wrecked by superstorm Sandy, tens of thousands of people still are living in damaged houses or paying rent on top of a mortgage as they wait for rebuilding help. (http://on.wsj.com/1r4RJHp)

* Online retailer Amazon on Wednesday is expected to reveal its first smartphone, featuring a display designed to respond to users' eye movements and capable of displaying three-dimensional images. (http://on.wsj.com/1uAotZe)

* FedEx Corp told U.S. authorities that it received allegations that its Kenya operation paid bribes to government officials, according to a statement the company issued to The Wall Street Journal. The shipping company has told the U.S. Department of Justice and Securities and Exchange Commission about the allegations it potentially violated the Foreign Corrupt Practices Act, the statement said. (http://on.wsj.com/1i9fI8A)

* A Chinese-led group regained the upper hand in bidding for Aquila Resources Ltd after the Australian iron-ore miner rejected a rival proposal from Mineral Resources Ltd valuing it at 1.54 billion Australian dollars ($1.45 billion). (http://on.wsj.com/1pemuZc)

* Mineral-rights owner Viper Energy Partners LP's initial public offering priced well above expectations Tuesday, people familiar with the deal said, in the latest sign of strong investors demand for high-yielding stocks tied to the energy sector. The Midland, Tex.-based company sold 5 million shares for $26 apiece, these people said, raising $130 million before the potential sale of additional shares to underwriters. (http://on.wsj.com/1r4xNEk)

* Adobe Systems Inc said its fiscal second-quarter earnings rose 16 percent on higher revenue, driven by strong growth in subscription sales. Adobe, the maker of Photoshop and Illustrator design software, has been transitioning to subscription cloud services and away from packaged software. (http://on.wsj.com/1lxmbue)

* McKessonn Corp plans to offer investors more power to oust directors by opening up corporate elections, making it one of a handful of major U.S. companies to take a step long advocated by activist investors. (http://on.wsj.com/1qaZ5t9)

* Target Corp increased yields to sell $2 billion of bonds on Tuesday, as the retailer continues to deal with the fallout from a customer-data breach late last year. Target ultimately received more than $4 billion in investor orders for the debt, one investor said, more than twice the bonds available. But investors said it is unusual that a company would have to increase yields to entice buyers given the recent high demand for corporate bonds. (http://on.wsj.com/1qaZlbs)

 

FT

The Islamic State of Iraq and the Levant, known as Isis, has issued annual reports since 2012, giving details in numerical and geographical points on its operations. The report lists out number of bombings, assassinations, checkpoints, suicide missions, cities taken over and even "apostates" converted to the Isis cause.

European officials are scrambling to avert a public relations disaster over the prospect of Britain losing out to Germany in a row over Brussels jobs at an EU summit in Ypres.

Elon Musk based SolarCity has announced plans to build one of the world's largest solar panel plants in New York state - defying the recent trend for manufacturing to be based in Asia.

In a sign that alternative finance providers are achieving mainstream acceptance, Santander is to become the first high-street bank to refer its customers to an online peer-to-peer lender.

Some of Citigroup's biggest investors are looking to contest a $10 billion settlement to end an investigation over the sale of mortgage-backed securities with the U.S. Department of Justice by going to the court.

NYT

* With a price war underway, Chinese LED manufacturers are taking market share from industry players in the United States, Europe and Japan, the industry pioneers that made crucial technological breakthroughs, and from Taiwan and South Korea, previously the leaders in low-priced LEDs. (http://nyti.ms/1lxjTeO)

* As President Xi Jinping of China prepares to tackle what may be the biggest cases of official corruption in more than six decades of Communist Party rule, new evidence suggests that he has been pushing his own family to sell hundreds of millions of dollars in investments, reducing his own political vulnerability. (http://nyti.ms/1jxwbyb)

* Mary Barra, chief executive of General Motors, is expected to tell a House panel on Wednesday that the auto giant is determined to change its culture and prevent another safety crisis similar to its deadly delay in recalling millions of small cars with a defective switch. (http://nyti.ms/1ygGiB4)

* Just as the federal government reached an agreement on Tuesday with SunTrust Banks over questionable mortgage practices, the government's talks to resolve Citigroup's mortgage issues grew increasingly tense and veered toward a lawsuit. The Justice Department is seeking a $10 billion penalty from Citigroup over its sale of defective mortgage investments, said people briefed on the matter, who spoke on the condition of anonymity because the talks are incomplete. But Citi contends that the amount far exceeds the losses suffered by investors. (http://nyti.ms/1smZaxX)

* After seven years, securities regulators are scrutinizing a deal where the hedge fund manager Bruce Rose, on the eve of the financial crisis, took his firm into the business of collecting mortgage payments from people with tainted credit. The previously unreported investigation is seeking information about how Rose's Carrington Holding Co financed the $188 million deal, which relied in part on the firm's later issuing special securities to the investors in its hedge fund. (http://nyti.ms/1niMVvo)

* The Argentine government said on Tuesday that it had started to take steps to circumvent a United States court order to avoid a technical default. Axel Kicillof, the economy minister, said that the government would pay bondholders of restructured debt under Argentine legislation. (http://nyti.ms/1ygI99h)

 

Canada

THE GLOBE AND MAIL

* For the oil industry, it is far too early to hail Ottawa's approval of Enbridge Inc's Northern Gateway pipeline as the removal of the biggest hurdle before proceeding. The Stephen Harper government's acceptance of the Joint Review Panel's clearance for the project is a key step in the sector's aim of getting growing volumes of oil sands crude to the Pacific Coast and on to lucrative Asian markets. However, the government said Enbridge "clearly" had more work to do to bring many First Nations on side. (http://bit.ly/1yhEYhB)

* A state of emergency has been declared in the central Ontario community of Angus, after a tornado swept the county, tearing off roofs and ripping down trees in its path. The tornado touched down after an afternoon of severe weather warnings in parts of Ontario, and hours after four men were hit by lightning in Stouffville. (http://bit.ly/1neLwVi)

Reports in the business section:

* China's state-owned gold mining company, China National Gold Group Corp, is working on potential partnerships with both Barrick Gold Corp and Newmont Mining Corp , its president said on Tuesday. If the Asian company is successful, the alliances would bring one or both of the Western miners closer to China, a country that is now the world's largest consumer and producer of the yellow metal. (http://bit.ly/1r5jobd)

* Department-store retailer Saks Fifth Avenue will arrive in Canada with a format designed specifically for this country that's even more upscale than its current U.S. stores. Richard Baker, chief executive officer of Hudson's Bay Co, which acquired U.S.-based Saks Inc last year, said on Tuesday that the Canadian stores - up to seven mainstream ones in all - would have some distinct domestic touches, possibly luxury "food halls," when they arrive starting in 2016. (http://bit.ly/1iG3dfl)

* Canada's dominant telecom players faced off against upstart Wind Mobile Tuesday, warning shifting government policies are stifling investment in the wireless industry. Wind, in turn, said the rules surrounding wireless competition are doing their job to help smaller firms compete. (http://bit.ly/1pgidX5)

NATIONAL POST

* The Stephen Harper government is said to be considering a series of retaliatory moves if the Barack Obama administration decides against approving the Keystone XL pipeline and proceeds with protectionist Buy American provisions that block access to the U.S. market for Canadian companies. (http://bit.ly/1r5SqQz)

* Despite Tuesday's approval from the federal government, the Enbridge Northern Gateway Project must still overcome a number of major obstacles before it can proceed to construction phase. The 209 conditions set by the federally mandated Joint Review Panel in December still apply, but other, potentially tougher hurdles have been thrown down by the public at large, with blessings from the British Columbia government. (http://bit.ly/1kMUgRa)

FINANCIAL POST

* BlackBerry Ltd Chief Executive John Chen has taken bold steps in his attempt to revive the technology company - from outsourcing production of its smartphones to selling the bulk of its Canadian real estate. But even if he is confident he can "save the patient," as he told an industry conference recently, Chen still has his work cut out for him to put BlackBerry back on Wall Street's radar. (http://bit.ly/1pgk7qD)

* Canada's taxes are the most business-friendly in the world, according to a new report from KPMG - a fact that might grab the attention of businesses looking for takeover targets. The "Focus on Tax" report ranked developed countries by adding up a wide range of tax costs to businesses - from statutory labor costs to harmonized sales tax - and comparing them to what companies pay in the United States. (http://bit.ly/1uCAr4s)

 

China

CHINA SECURITIES JOURNAL

- China's banks should first report to regulators before issuing any asset-based securities (ABS) products, said a central bank spokesman at the People's Bank of China (PBOC).

CHINA BUSINESS NEWS

- The Chinese provinces of Shanxi, Hunan and Henan as well as the metropolis of Chongqing have opened hundreds of investment projects to private investors, with the total amount hitting 950 billion yuan ($153 billion).

CHINA DAILY

- Close to 10 percent of China's population is now over 65 years old, according to the country's Ministry of Civil Affairs. Around one-third of China's near-1.4 billion people are estimated to be over 60 years old by 2050.

SHANGHAI DAILY

- Work has begun on the world's largest Walt Disney Co retail store, coming up in China's eastern metropolis of Shanghai. The store will have 1,000 sq m of retail space and an outdoor plaza.

 

 

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled today include:
Q1 current account balance at 8:30--consensus ($99.8B)
FOMC meeting announcement and funds rate at 14:00

ANALYST RESEARCH

Upgrades

Core Laboratories (CLB) upgraded to Outperform from Sector Perform at Iberia
Diamond Foods (DMND) upgraded to Buy from Hold at KeyBanc
Franklin Resources (BEN) upgraded to Buy from Neutral at Goldman
Gap (GPS) upgraded to Buy from Speculative Buy at Canaccord
Medtronic (MDT) upgraded to Overweight from Equal Weight at Barclays
Nimble Storage (NMBL) upgraded to Overweight from Equal Weight at Morgan Stanley
Tyson Foods (TSN) upgraded to Outperform from Market Perform at BMO Capital
Walgreens (WAG) upgraded to Overweight from Equal Weight at Barclays

Downgrades

Alumina (AWC) downgraded to Underperform from Neutral at BofA/Merrill
Amdocs (DOX) downgraded to Market Perform from Outperform at Wells Fargo
C.R. Bard (BCR) downgraded to Equal Weight from Overweight at Barclays
Covidien (COV) downgraded to Equal Weight from Overweight at Barclays
GNC Holdings (GNC) downgraded to Neutral from Overweight at JPMorgan
MICROS (MCRS) downgraded to Neutral from Buy at Janney Capital
NewBridge Bancorp (NBBC) downgraded to Market Perform at Keefe Bruyette
Outerwall (OUTR) downgraded to Neutral from Buy at B. Riley
SunPower (SPWR) downgraded to Neutral from Overweight at JPMorgan

Initiations

Cisco (CSCO) initiated with an Overweight at Morgan Stanley
Compugen (CGEN) initiated with an Outperform at JMP Securities
F5 Networks (FFIV) initiated with an Equal Weight at Morgan Stanley
Garmin (GRMN) initiated with an Underweight at Morgan Stanley
Intrepid Potash (IPI) initiated with an Overweight at Piper Jaffray
Ironwood (IRWD) initiated with a Hold at WallachBeth
Juniper (JNPR) initiated with an Equal Weight at Morgan Stanley
MeetMe (MEET) initiated with a Buy at Wunderlich
Qualcomm (QCOM) initiated with an Equal Weight at Morgan Stanley
Summit Midstream (SMLP) initiated with a Buy at Citigroup

COMPANY NEWS

Endocyte (ECYT) announced that Merck (MRK) will no longer pursue development of vintafolide
Flexion Therapeutics (FLXN) announced positive topline results from its Phase 2a pharmacokinetic trial
Pfizer (PFE), Cellectis entered into a global strategic cancer immunotherapy collaboration
SunEdison (SUNE) will partner with Riverstone Holdings in Silver Ridge Power JV
CB&I (CBI) noted unusual trading volume in its common stock related to the issuance of a report by a short seller recommending that stockholders sell CB&I stock. CB&I has reviewed the report and strongly disagrees with its assumptions and conclusions
Adobe (ADBE) sees adding 1M net new Creative Cloud subscriptions in 2H
Shanda Games (GAME) said no timetable set for evaluation of the proposed transaction or any other alternative transaction

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Adobe (ADBE), La-Z-Boy (LZB)

Companies that matched consensus earnings expectations include:
NeoPhotonics (NPTN)

Adobe (ADBE) sees Q3 EPS 22c-28c, consensus 27c
HealthSouth (HLS) sees FY14 EPS at high-end of guidance $1.86-$1.91, consensus $1.92
Shanda Games (GAME) reports Q1 EPS 20c
Daegis (daeg) reports Q4 non-GAAP EPS 7c vs. 3c last year
NeoPhotonics (NPTN) sees Q2 EPS (26c)-(16c), consensus (19c)

NEWSPAPERS/WEBSITES

Oracle (ORCL) near deal to acquire MICROS (MCRS) for over $5B, Bloomberg says
GE (GE) may sell train signal unit as part of sweetened offer to Alstom (ALSMY), WSJ says
T-Mobile (TMUS) makes contingency plans should Sprint (S) merger fail, NY Post says
AT&T (T) CEO says regulators unlikely to approve Sprint (S)-T-Mobile (TMUS) deal, Re/code reports
FedEx (FDX) informs DOJ, SEC about Kenya bribery allegations, WSJ reports
SolarCity (SCTY) planning to build solar panel plant in New York state, FT reports
Appaloosa, bondholders set to sue Caesars (CZR), NY Post reports
Bristol-Myers (BMY) wins ruling in Pennsylvania drug-pricing dispute, Bloomberg says

SYNDICATE

Century Communities (CCS) 4.48M share IPO priced at $23.00
China Biologic (CBPO) files to sell 3.22M shares of common stock
Cincinnati Bell (CBB) to sell 12.5M operating partnership units to CyrusOne
CyrusOne (CONE) files to sell 12.5M shares of common stock
GW Pharmaceuticals (GWPH) files to sell 1.7M ADSs
NGL Energy Partners (NGL) files to sell 8M common units
Receptos (RCPT) files to sell common stock
Signal Genetics (SGNL) 850K share IPO priced at $10.00
Tsakos Energy (TNP) files to sell 23M shares for holders
Viper Energy (VNOM) 5M share IPO priced at $26.00
Williams (WMB) 53.6M share Spot Secondary priced at $57.00
ZS Pharma (ZSPH) 5.9M share IPO priced at $18.00

 

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Wed, 06/18/2014 - 07:59 | 4868417 Racer
Racer's picture

"Ex-Goldman director goes to prison, still owes $13.9 million fine"

Is it 1st April?

Wed, 06/18/2014 - 08:00 | 4868418 RaceToTheBottom
RaceToTheBottom's picture

He has the 7:30 Tee time locked up for the next year or so

Wed, 06/18/2014 - 08:11 | 4868444 Infinite QE
Infinite QE's picture

He wasn't tribe so he's easy fodder for Holder.

Wed, 06/18/2014 - 08:46 | 4868574 CheapBastard
CheapBastard's picture

Circus Acrobats Plan Lawsuit Over RI Accident

 

Lawyers for seven of the eight circus acrobats injured during a hair-hanging stunt say they plan to file a lawsuit after they conclude an investigation into what happened.

 

http://news.yahoo.com/video/circus-acrobats-plan-lawsuit-over-235707982....

 

 

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