Frontrunning: June 25
- Obama Administration Widens Export Potential for U.S. Oil (BBG)
- WTI Pares Gains as U.S. Export Ruling Seen Limited (BBG)
- Senator Cochran defeats Tea Party rival in Mississippi Republican runoff (Reuters)
- Militants attack Iraq air base, U.S. assessment teams deploy (Reuters)
- Maliki rules out national emergency govt (AFP)
- Abe Declares Deflation End as Growth Plan Confronts Skeptics (BBG)
- Koch to Start EU Power Trading as It Plans LNG Expansion (BBG)
- Obama Said to Ready Sanctions on Russian Industries (BBG)
- Ghana Sends Plane With $3 Million to Calm World Cup Team (BBG)
- Ghana’s First Hedge Fund Planned by Ex-Exchange Regulator (BBG)
- SEC Is Gearing Up to Focus on Ratings Firms (WSJ)
- Russian lawmakers revoke right to send troops into Ukraine (Reuters)
- French Growth to Miss Hollande’s Target in 2014, Insee Says (BBG)
- Cash stash may reflect fear of wealth going out of fashion (Reuters)
- What's a constitution? Federal judge rules U.S. no-fly list violates Constitution (Reuters)
Overnight Media Digest
* Best Buy Co Inc is considering options, including a sale or partnership, for its Chinese business, according to people familiar with the matter. (http://on.wsj.com/1qv3KpY)
* Google Inc on Tuesday officially began offering the Livestream video-sharing app in its MyGlass store. The software lets Glass wearers share what they are seeing and hearing with other Livestream account holders free of charge by using the command, "OK Glass, start broadcasting." (http://on.wsj.com/1mlz8GP)
* The head of the Securities and Exchange Commission's Office of Credit Ratings, Thomas Butler, said he has referred multiple cases involving rating firms to the agency's enforcement division and is helping complete several industry regulations to address quality and transparency in how big debt deals are rated. (http://on.wsj.com/VlyaR3)
* Walgreen Co Chief Executive Greg Wasson on Tuesday said for the first time that the company is weighing moving outside of the United States, as it considers buying the shares it doesn't already own in European pharmacy Alliance Boots GmbH. (http://on.wsj.com/1lomwOU)
* Brazil's government agreed Tuesday to sign over additional production rights for potentially huge oil fields to state-run oil company Petroleo Brasileiro SA, in exchange for billions of dollars in advance payments. (http://on.wsj.com/1lOcRkd)
* Whole Foods Market Inc will pay about $800,000 in penalties and fees after an investigation found the grocery retailer was overcharging customers in California. (http://on.wsj.com/1o1gOT3)
* Consumer and safety groups are urging the Federal Trade Commission to investigate their allegations that used-vehicle retailer CarMax Inc is failing to check the safety-recall status of the vehicles it sells. (http://on.wsj.com/1wv4qy4)
* Ford Motor Co executives on Tuesday unveiled a redesigned Edge sport-utility vehicle, and confirmed they will launch it in Europe to compete against BMW AG, Daimler AG's Mercedes-Benz and Volkswagen AG's Audi in the growing market for luxury SUVs. (http://on.wsj.com/1v3U7yC)
* Canada's BlackBerry Ltd has laid off 65 employees who were mainly focused on developing mobile apps for consumers, further underscoring the smartphone maker's focus on the enterprise market to return to profitability. (http://on.wsj.com/1pzAuwK)
Rebekah Brooks was cleared of all charges of phone hacking while Andy Coulson, British Prime Minister David Cameron's former press secretary, was convicted at the Old Bailey of conspiracy to intercept voicemail messages.
British MPs have accused Bank of England governor, Mark Carney, of sending out confusing signals over the timing of interest rate rises, with one likening him to an "unreliable boyfriend."
China has proposed doubling the size of registered capital for a proposed global financial institution to $100 billion, to establish a rival to the World Bank and the Asian Development Bank, which Beijing fears are too influenced by the United States and its allies.
U.S. spymasters are stepping up their reliance on Amazon's burgeoning cloud computing infrastructure and are looking to use cloud-based commercial software in their analytical work.
In one of the most outspoken criticisms of western monetary policy by a business leader to date, an industry veteran has said that central bankers are "ruining" the insurance sector by keeping interest rates at historic lows.
* Rebekah Brooks, the former head of Rupert Murdoch's newspaper holdings in Britain, was cleared of phone hacking charges, but her onetime deputy Andy Coulson was found guilty on at least one count. (http://nyti.ms/1mmkcbq)
* Lagardere SCA's Hachette Book Group said on Tuesday it would buy Perseus Books Group, the country's sixth-largest trade publisher. (http://nyti.ms/1lot9km)
* Walgreen Co, the largest drugstore operator in the United States, withdrew its profit and revenue forecasts for 2016, saying it had yet to work out aspects of its planned acquisition of the European drug retailer Alliance Boots. (http://nyti.ms/Vm8GTD)
* Endo International Plc said on Tuesday that it had reached an agreement to acquire generic drugmaker Dava Pharmaceuticals for up to $600 million. (http://nyti.ms/1q7m7U4)
* AT&T Inc and DirecTV told members of Congress on Tuesday that their proposed $48.5 billion merger would be so good for competition that it would do something that has rarely, if ever, happened: pressure cable companies to lower prices. (http://nyti.ms/1jLnFM0)
* Whole Foods Market Inc will pay about $800,000 in penalties and fees after an investigation found the grocery retailer was overcharging customers in California. (http://nyti.ms/1rwxQZY)
* A coalition of 11 consumer groups has asked Federal Trade Commission to investigate CarMax Inc over unfixed recalled cars. The groups say CarMax does not fix vehicles that have been recalled before it sells them, even though the retailer's ads promise that the vehicles have had a rigorous quality inspection. (http://nyti.ms/1yM6m7x)
* Andrew Balson, a longtime managing director at the Boston-based private equity firm Bain Capital, has left to start a new investment fund. (http://nyti.ms/1losnnp)
THE GLOBE AND MAIL
** Ontario MPP Christine Elliott is set to announce a bid for the leadership of Ontario's Progressive Conservatives as the party seeks to rebuild after its devastating election loss. (http://bit.ly/1rx1BtH)
** Raytheon International Inc, a unit of U.S. defence contractor Raytheon Co, lobbied a Canadian senator in the weeks leading up to a Senate report urging Canada to join the warhead interception network, a meeting that raises questions about the credibility of this recommendation. (http://bit.ly/1qvtCBO)
Reports in the business section:
** Canada is becoming a country of two solitudes when it comes to business investment, according to a report released by C.D. Howe institute. The report theorizes that governments in parts of the country may be crowding out and dissuading private investment. The blockage lies in Quebec, Ontario and much of Atlantic Canada, according to the report. (http://bit.ly/1jhlPTc)
** Canadian Prime Minister Stephen Harper urged Quebec on Tuesday to resist isolating itself from the rest of the country. In a speech marking Quebec's annual holiday known as Fete nationale, Harper also asked Quebecers to consider voting for his party in October 2015. (http://bit.ly/1mnz1up)
** Eric Sprott, a former analyst who formed a brokerage firm before setting up his own money management firm two decades back and who is generally regarded as one of the country's legendary precious metals' investors, is reducing his stake in Sprott Inc. He announced Tuesday he was selling at least 25 million shares in Sprott at $3 per share. (http://bit.ly/1jhelzC)
** Canada Pension Plan Investment Board named Heather Munroe-Blum as the chairperson of the board of directors. Her three-year term begins Oct. 27. Munroe-Blum, who spent a decade as principal and vice-chancellor of McGill university, replaces Robert Astley, who has been chairperson since 2008. (http://bit.ly/1iEEf5k)
CHINA SECURITIES JOURNAL
- China said it would support the integrated circuit industry and the aim was to increase the sales revenue of the industry to 350 billion yuan ($56.2 billion) by 2015.
- Beijing Enlight Media Co and Huayi Brothers Media Corp said they plan to issue 2.8 billion yuan and 2.5 billion yuan ($451 million and $402.6 million) respectively via private placement offerings.
- China has make clear it does not make trouble with its neighbours but is not afraid to take action if others create them, it said in a commentary.
- Government officials should avoid corruption and illegal possession and must do real work, said a commentary of the newspaper.
- China security policy should focus on retail investors' benefits, the newspaper said in a commentary in its overseas edition.
MARK CARNEY PLAYS DOWN IMMINENT RATE RISE AMID WEAK WAGE GROWTH
The Bank of England is behaving like an "unreliable boyfriend" and is using "smoke and mirrors" to keep changing its message on interest rates, MPs have claimed.
OIL AND GAS EXPLORATION BLOCKS EXPANDED TO ENTICE FRACKING FIRMS
Energy companies will be offered the chance to explore for shale gas across bigger blocks of land, under a revised system aimed at enticing them to commit to fracking.
VINCE CABLE MOVES TO BAN ZERO-HOURS CONTRACT EXCLUSIVITY CLAUSES
Vince Cable has warned "unscrupulous employers" that he would ban clauses in zero-hours contracts that prevent workers from accepting shifts with more than one employer.
MINISTERS WARN UK RETAILERS TO DO MORE ON HUMAN RIGHTS AND ETHICAL PRODUCTS
Retailers must do more to stamp out human rights abuses by their suppliers after a Guardian investigation found prawns sold in the UK were produced with the help of slaves, ministers are warning.
CARNEY URGED TO BAR CURBS ON HOME LOANS
Bankers seized on fresh evidence that the housing market may be starting to cool to urge the Bank of England to stay its hand and refrain from widely expected curbs on mortgage lending tomorrow.
FIRST-TIME BUYERS PRICED OUT OF 80 PCT OF HOUSES
Four out of five homes on sale in England are now unaffordable for first-time buyers, according to research published today.
CHEMRING FIRES CEO MARK PAPWORTH AFTER HUGE LOSSES
Military equipment maker Chemring has fired chief Mark Papworth after the group was rocked by a 72 million pound pre-tax loss in just six months.
MARK CARNEY PLUNGES MARKETS INTO CONFUSION YET AGAIN OVER EARLY RATE TALK
Traders were thrown into confusion as Governor Mark Carney issued an unexpectedly dovish signal about the likely timing of the first interest rate rise.
Fly On The Wall 7:00 AM Market Snapshot
Domestic economic reports scheduled today include:
Q1 GDP growth at 8:30--consensus -1.8%
Durable goods orders for May at 8:30--consensus flat
Brunswick (BC) upgraded to Buy from Hold at KeyBanc
Kraton Performance (KRA) upgraded to Outperform from Perform at Oppenheimer
Men's Wearhouse (MW) upgraded to Outperform from Market Perform at Cowen
Restoration Hardware (RH) upgraded to Buy from Neutral at BofA/Merrill
Tel. Corp of New Zealand (NZT) upgraded to Buy from Neutral at BofA/Merrill
Trinity Industries (TRN) upgraded to Buy from Neutral at UBS
Walgreens (WAG) upgraded to Buy from Hold at Jefferies
zulily (ZU) upgraded to Buy from Neutral at Goldman
Coach (COH) downgraded to Underperform from Neutral at BofA/Merrill
EV Energy (EVEP) downgraded to Hold from Buy at Wunderlich
Harley-Davidson (HOG) downgraded to Hold from Buy at KeyBanc
AerCap (AER) coverage resumed with a Buy at Citigroup
Brown Shoe (BWS) initiated with a Buy at Buckingham
Brunswick (BC) initiated with a Sector Perform at RBC Capital
Concur (CNQR) initiated with a Buy at Roth Capital
Dollar General (DG) initiated with an Equal Weight at Morgan Stanley
Dollar Tree (DLTR) initiated with an Equal Weight at Morgan Stanley
Finish Line (FINL) initiated with a Neutral at Buckingham
Foot Locker (FL) initiated with a Buy at Buckingham
Harley-Davidson (HOG) initiated with a Sector Perform at RBC Capital
Hibbett Sports (HIBB) initiated with an Outperform at BMO Capital
ImmunoGen (IMGN) initiated with an Underweight at Morgan Stanley
Kroger (KR) initiated with an Overweight at Morgan Stanley
Media General (MEG) initiated with an Outperform at Wedbush
Polaris Industries (PII) initiated with an Outperform at RBC Capital
SuperValu (SVU) initiated with an Underweight at Morgan Stanley
Sysco (SYY) initiated with an Equal Weight at Morgan Stanley
The Fresh Market (TFM) initiated with an Underweight at Morgan Stanley
Time Inc. (TIME) initiated with a Market Perform at FBR Capital
Volcano (VOLC) initiated with a Hold at Cantor
Whole Foods (WFM) initiated with an Overweight at Morgan Stanley
Bristol-Myers Squibb (BMY) said that a Phase 3 study of nivolumab was halted early due to superior data
IMS Health Holding said it will acquire certain Cegedim businesses for $520M
Affymax (AFFY) board announced a decision to dissolve company
Aerie Pharmaceuticals (AERI) said Roclatan showed positive Phase 2b results
Hanesbrands (HBI) said it will acquire DBApparel, acquisition to add 25c in adjusted EPS in 2015
FOX Television (FOXA), Cox Media said they would swap affiliated stations
Shire (SHPG) said New Jersey court found Vyvanse patents infringed (ACT, MYL, NVS)
Companies that missed consensus earnings expectations include:
Apogee Enterprises (APOG)
Apogee Enterprises (APOG) raises FY15 EPS view to $1.40-$1.50 from $1.35-$1.50
Valmont (VMI) sees Q2 EPS $2.35-$2.40, consensus $2.79
Valmont (VMI) lowers FY14 EPS view to $9.35-$9.65 from prior view $10.00-$10.50
PAREXEL (PRXL) sees FY15 GAAP EPS $2.51-$2.75, consensus $2.56
PAREXEL (PRXL) backs FY14 adjusted EPS view $2.11-$2.15, consensus $2.13
PAREXEL (PRXL) backs Q4 GAAP EPS view 59c-63c, consensus 61c
Team (TISI) now sees FY14 adjusted EPS $1.45, consensus $1.57
Team (TISI) budgeting for FY15 EPS target of $2.00, consensus $2.05
Team (TISI) sees Q4 adjusted EPS 60c, consensus 71c
Best Buy (BBY) considers sale of China business, WSJ reports
Google (GOOG) expected to unveil TV set-top box at developer conference, WSJ reports (AMZN, AAPL)
AbbVie (ABBV) may have to raise Shire (SHPG) bid to $51B, Bloomberg reports
Potential penalty against BNP Paribas (BNPQY) worries other European banks, WSJ says (DB, UNCFF, CRARY)
Aetna (AET) contemplates Coventry Health Care assets sale, Reuters reports
Ford (F) expands recall of 2014 F-150 trucks, Detroit News reports
Vertex (VRTX) risky after 40% jump in stock price, Barron's says
E.U. antitrust regulators to decide on Apple (AAPL), Beats agreement, Reuters reports
Actinium Pharmaceuticals (ATNM) files to sell common stock
CVR Refining (CVRR) files to sell 6M units representing limited partners
Dominion (D) files to sell 18M equity units
G-III Apparel (GIII) 1.5M share Secondary priced at $77.63
Golar LNG (GLNG) 11M share offering priced at $54
Heron Therapeutics (HRTX) files to sell common stock
Hilton (HLT) 90M share Secondary priced at $22.50
Imprivata (IMPR) 5M share IPO priced at $15.00
Materialise (MTLS) 8M share IPO priced at $12.00
Ultragenyx (RARE) files to sell $100M in common stock
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