Frontrunning: July 3
- Obama Decries Big Bonuses at Bank Trading Desks as Risky (BBG)
- India central bank seeks to swap gold to improve reserves quality (Reuters)
- There goes Q3 GDP: Arthur Strengthens to Become First Atlantic Hurricane (BBG)
- Airports Serving U.S. Tighten Checks on Stealth-Bomb Threat (BBG)
- Fear, cash shortages hinder fight against Ebola outbreak (Reuters)
- Brent Declines as Libya Rebels Say Ports Are Open (BBG)
- Shiites Train for Battle in Iraqi Holy City (WSJ)
- Dimon’s Cancer Has 90% Cure Rate With Demanding Therapy (BBG)
- Goldman says client data leaked, wants Google to delete email (Reuters)
- ECB Watchers in the Dark Look to Draghi for Illumination (BBG)
- Saudi Arabia Sends 30,000 Troops to Iraq Border (Reuters)
- Dollar Bulls Practicing Art of Stealth Capitulation (BBG)
- Deadly Violence Escalates in Israel After Palestinian Youth, Israeli Teens Killed (WSJ)
- Stevens Renewed Jawboning Hits Mark to Spur Aussie Drop (BBG)
- U.S., UK officials prepare inspection order for all F-35s (Reuters)
- U.S. Gives New Contract To Firm That Vetted NSA Leaker Edward Snowden (WSJ)
Overnight Media Digest
* Violent clashes erupted in Jerusalem over the killing of an Arab teenager that Palestinians blamed on Jewish settlers, raising fears of a spiral of vengeance spurred by the earlier killings of three Israeli teenagers. (http://on.wsj.com/1qxOzP9)
* The Department of Homeland Security awarded a $190 million contract to the company accused of methodically defrauding the government while carrying out background checks on millions of people, including Edward Snowden. (http://on.wsj.com/1iZdbxK)
* Japan said Thursday it would lift some sanctions on North Korea in return for Pyongyang's decision to open an investigation into the fate of Japanese citizens it abducted decades ago. (http://on.wsj.com/1marDSz)
* Two U.S. senators have asked the U.S. Commerce Department to provide details about recent federal rulings that may allow exports of some American oil that hasn't gone through the traditional refining process. (http://on.wsj.com/1iZdk4q)
* Facebook said that since the study on emotions, it has implemented stricter guidelines on Data Science team research. Since at least the beginning of this year, research beyond routine product testing is reviewed by a panel drawn from a group of 50 internal experts in fields such as privacy and data security. (http://on.wsj.com/1qoOj3w)
* Federal Reserve Chairwoman Janet Yellen pushed back against the notion that the central bank should consider raising interest rates to address concerns about financial stability. (http://on.wsj.com/1o3rwWf)
* Federal regulators are looking at commissions that buyout firms receive for helping companies they control get goods and services at discount prices, as part of a stepped-up probe of private-equity fees. (http://on.wsj.com/TPREfg)
* The announcement by JP Morgan Chase CEO James Dimon that he will undergo treatment for throat cancer puts the spotlight on succession at the U.S. banking giant. (http://on.wsj.com/1lB6zQP)
Telefonica SA 8.6 billion euro takeover of KPN's German mobile unit E-plus won conditional approval from Brussels, after Spain's largest telecom operator promised to rent out part of the merged company's network capacity and divest some radio wave spectrum to smaller rivals.
Rival banks will have to consider the benefits of clearing the French lender's dollar transactions, following BNP Paribas's $8.9 billion settlement with U.S. authorities for violating sanctions against Sudan, Cuba and Iran that forced the behind-the-scenes role of correspondent banking into the open.
Chinese authorities have informed U.S. consular officials that "on grounds of privacy" they will not be able to attend the trial of British investigator and his American wife and business partner who have been detained in China because of their work for drugmaker GlaxoSmithKline, sources said.
Federal Reserve Chair Janet Yellen has mounted a forceful defence to keep monetary policy loose signs of a rise in asset prices, and has argued that the central bank did not need to raise interest rates to tackle financial instability as it had other tools at its disposal.
With another regulator saying that will quiz Facebook on its psychological experiment, the social networking site's chief operating officer, Sheryl Sandberg, told NDTV in an interview that the company will not try to control its users' emotions.
Venture Capitalist Tim Draper, a billionaire who is campaigning to split California into six states, has emerged as the sole winning bidder of bitcoins worth about $18 million auctioned by the United States Marshals Service.
* Standard General, a little-known hedge fund backing Dov Charney, the ousted executive of American Apparel, is in talks with the company's board over the possibility of bringing in new leadership, including a cadre of experienced board members, while keeping the company's signature manufacturing in the United States. (http://nyti.ms/1z9cI12)
* Privacy and Civil Liberties Oversight Board, the federal privacy board that sharply criticized the collection of the phone records of Americans by the National Security Agency, has concluded that the surveillance program is largely in compliance with both the Constitution and a surveillance law that Congress passed six years ago. (http://nyti.ms/1s0Jcpt)
* Security researchers at the RSA Security division of the EMC Corp have uncovered what they believe is a significant cyber-crime operation in Brazil that took aim at $3.75 billion in transactions by Brazilians. (http://nyti.ms/1iYg9Tn)
* Venture capitalist Tim Draper, winner of the government auction of nearly 30,000 Bitcoins on Friday, intends to make the coins available for use in emerging markets via a partnership with the Bitcoin exchange start-up Vaurum. (http://nyti.ms/1mmAkei)
* The Weinstein Company, best known for its Oscar-winning film operation, is exploring plans to spin off its TV division into a separate company that could be sold to a strategic partner or taken public. (http://nyti.ms/1iYgF41)
* Federal auto regulators, criticized recently for not acting aggressively enough on safety issues, turned some of their fire on Chrysler on Wednesday, saying in a harshly worded letter that the automaker was taking too long to repair 1.6 million recalled Jeep sport utility vehicles. (http://nyti.ms/1oqkA8K)
* Target is "respectfully" asking its customers to not bring firearms into its stores, even where it is allowed by law. Molly Snyder, a Target spokeswoman, said that Target's move was a "request and not a prohibition." (http://nyti.ms/1masx1n)
* The Wall Street Journal has cut between 20 and 40 staff members in recent weeks, according to people with knowledge of the matter, as part of a re-evaluation of its newsroom that came at the end of its financial year. (http://nyti.ms/VfVwY7)
* China said it would permit banks to set their own exchange rates for the renminbi against the dollar in deals with clients, in a step to relax controls to make the currency more market-driven. (http://nyti.ms/1iZgK71)
THE GLOBE AND MAIL
** On the eve of a Throne Speech outlining Ontario Premier Kathleen Wynne's plan for her new majority mandate, Moody's has issued a stark warning on Ontario's growing deficit. The bond rating agency has changed its outlook on the province to "negative," cautioning its credit rating could be downgraded if it doesn't show progress either cutting spending or hiking revenues. (http://bit.ly/1lVPNAO)
** Kyle Lowry, the basketball veteran who led the Toronto Raptors to their first postseason appearance in five years, said on Wednesday on Twitter he's staying put. Lowry's deal is $48 million through four years with an opt-out after the third year, according to multiple reports. (http://bit.ly/1qAINfN)
Reports in the business section:
** Auto sales stayed in overdrive last month in Canada, putting six-month deliveries ahead of the record pace set last year. Canadians snapped up 175,428 new cars, trucks, crossovers and mini-vans in June, up 2 percent from 171,608 a year earlier and making last month the best June on record. (http://bit.ly/VgTBm4)
* Toronto Mayor Rob Ford admitted Wednesday to using "every drug that you can think of" including crack, marijuana, cocaine and magic mushrooms but not heroin and never in his office, in his first one-on-one interviews since returning from addiction treatment. (http://bit.ly/VgTXsQ)
* Environment Canada is warning that tropical storm Arthur could impact Atlantic Canada this weekend. The Canadian Hurricane Centre says the storm is expected to intensify to hurricane strength overnight as it moves north-eastward up the East Coast of the United States. (http://bit.ly/1xl71eB)
* The Globe and Mail narrowly avoided a strike on Wednesday, with the parties agreeing to return to the bargaining table on Tuesday after unionized workers voted overwhelmingly to reject a contract offer from management. (http://bit.ly/1lVRcY1)
* Canada is one step closer to having a new airline after Canada Jetlines Ltd announced plans to raise $10 million and list on the TSX Venture Exchange. (http://bit.ly/1z9NZcY)
SHANGHAI SECURITIES NEWS
- China's securities regulator will soon publish rules that will expedite delisting of loss-making publicly traded firms as part of efforts to reform the country's capital markets.
- The China Insurance Regulatory Commission, the country's insurance regulator, has started a crackdown in Shanghai on illegal sales of wealth management products by insurance agents.
- Harvest Fund Management Co will sell a product that will allow Chinese investors to subscribe to IPO shares of Alibaba Group Holdings Ltd <IPO-BABA.N>.
- Chinese electronics retailer Suning Commerce Group Co Ltd , which has acquired video site PPTV, may roll out Internet TV products to join the war to penetrate consumers' living rooms.
- In an editorial, the People's Daily warned Japan not to disrupt the current international system and said China will have enough power to construct a world of peace and mutual prosperity.
- Chinese President Xi Jinping told former U.S. Treasury secretary Hank Paulson the United States should objectively view China's national conditions and policies, and the two sides should avoid suspicion, confrontation and "plant more flowers, not thorns" in their relations.
SECURITY TO BE STEPPED UP AT UK AIRPORTS AMID TERROR FEARS
Security at British airports is being increased after the United States called for heightened precautions amid reports two terror networks are working together on a bomb that could evade existing measures.
NHS CANCER CARE: PLANNED SWITCH TO PRIVATE CONTRACTS IN 700 MLN STG PLANS
Cancer care in the NHS could be privatised for the first time in the health service's biggest ever outsourcing of services worth over 1.2 billion pounds.
SHARE PRICE RIGGING ON LSE IS RIFE, MPS ALLEGE
Regulators are under pressure to open an investigation into the suspected manipulation of the closing prices of ordinary shares traded in London after it was claimed in Parliament yesterday that attempted market abuse was rife.
BAE SYSTEMS WINS U.S. DEAL FOR 'ANTI-INSURGENT' MISSILE
UK defence contractor BAE Systems has been chosen to further develop its 'anti-insurgent' missile system for the U.S. military.
Fly On The Wall 7:00 AM Market Snapshot
Domestic economic reports scheduled for today include:
Non-farm payrolls for June at 8:30--consensus 211K
Unemployment rate for June at 8:30--consensus 6.3%
Jobless claims for week of June 28 at 8:30--consensus 314K
International trade balance for May at 8:30--consensus deficit $45.1B
ISM non-manufacturing index for June at 10:00--consensus 56.2
Athlon Energy (ATHL) upgraded to Buy from Neutral at UBS
Cree (CREE) upgraded to Outperform from Perform at Oppenheimer
Comerica (CMA) downgraded to Neutral from Buy at Citigroup
Lazard (LAZ) downgraded to Outperform from Strong Buy at Raymond James
RSP Permian (RSPP) downgraded to Neutral from Buy at UBS
ResMed (RMD) downgraded to Hold from Buy at Deutsche Bank
Sibanye Gold (SBGL) downgraded to Sell from Neutral at UBS
Chatham Lodging (CLDT) reinstated with an Overweight at Barclays
Ericsson (ERIC) initiated with a Hold at Jefferies
KeyCorp (KEY) assumed with a Neutral at Citigroup
PAREXEL (PRXL) initiated with a Hold at KeyBanc
Regions Financial (RF) assumed with a Neutral at Citigroup
Sterling Bancorp (STL) initiated with an Outperform at Raymond James
SunTrust (STI) assumed with a Neutral at Citigroup
American Railcar (ARII) announces resignation of Carl Icahn from board
Ares (ARES) to acquire Graphite Capital stake in London Square for GBP 110M
Coach (COH) sees 'Transformation Plan' charges related to inventory $75M-$85M
Impax (IPXL) acquires two generic products from Actavis
Medtronic (MDT) announces insulin pump more effective than daily injection
Qualcomm (QCOM) acquires Wilocity
Salesforce.com (CRM) announces strategic partnership with Deutsche Telekom
Tekmira (TKMR) receives notice of clinical hold for TKM-Ebola Phase I trial
Wausau Paper (WPP), Starboard reach agreement
Yahoo (YHOO) shuts down less popular products to focus on core areas
Companies that beat consensus earnings expectations last night and today include:
Barrick Gold (ABX) hires bank to sell Golden Sunlight mine, WSJ reports
Dethroned American Apparel (APP) CEO gives stake to hedge fund, Reuters says
Facebook (FB) Data Science group had little oversight, WSJ reports
lululemon (LULU) founder exploring taking company private, WSJ reports
NHTSA says Chrysler too slow to amend older Jeep issue, Reuters says
LED lighting to reach 94% of street lighting by 2023, DigiTimes
Occidental (OXY) ends Middle East stake sale effort without deal, Bloomberg says
SEC looking into buyout firm (KKR, BX) commissions, WSJ reports
Volkswagen denies reports of PACCAR (PCAR) takeover, Dow reports
Access Pharmaceuticals (ACCP) files to sell $23M of common stock
American Residential Properties (ARPI) files to sell 6.6M shares of common stock
Centene (CNC) files to sell 746,369 shares for holders
Good Times Restaurants (GTIM) files to sell 2.09M shares for holders
Knightsbridge Tankers (VLCCF) files to sell 18.6M shares for holders
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