Frontrunning: August 19
- Just how many rats are there? Steven Cohen's Firm Loses Another Top Executive (WSJ)
- Iceland Sees a Potential Volcanic Eruption, and Airlines Cower (Bloomberg)
- Iraqi forces battle to drive jihadists from Saddam's home town (Reuters)
- Israel, Palestinians Agree to Extend Gaza Truce for 24 Hours (BBG)
- Pimco now buying junk (BusinessWeek)
- Pakistan arrests 147 in Punjab towns as protests in capital continue (Reuters)
- Ex-Rabobank Employee Pleads Guilty in Libor-Rigging Probe (BBG)
- BHP Billiton to Spin Off Some Assets (WSJ)
- Ebola Orphans Targeted by Aid Groups as Newest Victims (BBG)
- Two California youths accused of plotting high school shooting spree (Reuters)
- Only Rich Know Wage Gains With No Raises for U.S Workers (BBG)
- In Phoenix, a Realty Check as Market Moderates (WSJ)
- Selling the Plaza Hotel, From an Indian Jail Cell (BBG)
- Celebrities in firing line as China steps up drug war (Reuters)
- U.S. Orange-Juice Sales Fall to Record Low (WSJ)
Overnight Media Digest
* Tensions flared Monday night as a large contingent of police confronted demonstrators in Ferguson after hours of peaceful marching to protest the fatal shooting of Michael Brown. (http://on.wsj.com/1mfpRNq)
* Ukraine accused pro-Russian separatists of killing dozens of civilians by firing on a refugee convoy, the latest example of residents caught in the line of fire of a four-month-old war that has caused more than 2,000 deaths. Rebels denied any role in the attack, or that an attack had taken place. The U.S. State Department condemned the "shelling and rocketing" of the convoy but said it couldn't confirm who was responsible. (http://on.wsj.com/1oVPZg4)
* Dollar General Corp offered to pay $9 billion in cash for Family Dollar Stores Inc, the latest in a wave of retail mergers that comes as companies struggle with weak traffic and a glut of stores. The offer is an attempt to elbow out the smallest of the three rivals, Dollar Tree Inc, which signed an agreement to acquire Family Dollar three weeks ago. (http://on.wsj.com/1pEFv9K)
* U.S. orange-juice retail sales fell to the lowest level on record as the formerly popular American breakfast beverage continued to fall out of favor with consumers. (http://on.wsj.com/1mft5Ak)
* Point72 Asset Management said Thomas Conheeney, who rose over 15 years to become president of Cohen's giant hedge-fund firm, resigned on Monday, capping a tenure as head of the firm during which eight current or former employees were convicted on criminal charges related to insider trading. (http://on.wsj.com/1qllTUu)
* Treasury Department officials are assembling a list of administrative options for Secretary Jacob Lew to consider for ways to deter or prevent U.S. companies from reorganizing overseas primarily to avoid paying federal taxes, an agency official said on Monday. (http://on.wsj.com/1w2tMGV)
* Aeropostal Inc said on Monday Chief Executive Thomas Johnson and the board mutually agreed that he would step down from the post, and Julian Geiger has rejoined the company as chief executive, effective immediately. Johnson was one of the two CEOs who replaced Geiger in 2010. (http://on.wsj.com/Ys7oYp)
* Verizon Communications Inc last week added many new routes to a dataset called the Border Gateway Protocol routing table. The telecom company consolidated its routes back into a smaller list within minutes, pushing the size of the database back below the red zone, but the spike had already caused ripples in the Internet's fabric. (http://on.wsj.com/1pGyyFa)
* SoftBank Corp gave a glimpse of its plans to tackle the U.S. cellphone market, unveiling a deal to develop low-cost smartphones for its Sprint Corp unit and a new service that would allow unlimited downloads from select applications. (http://on.wsj.com/1riwFkN)
* Continental AG, one of the world's largest automotive parts makers, picked a Google Inc self-driving-car executive Seval Oz to lead a new Silicon Valley-based operation aimed at intelligent transportation efforts. (http://on.wsj.com/1o7YIvo)
* Until now, Roku has only offered streaming video through its own hardware, either a set-top box or a dongle. Next month, Roku - which has grown into a household name - becomes the operating system for TVs from TCL and Hisense, two big TV makers that are largely unknown in the United States. (http://on.wsj.com/1pXg42i)
Standard Chartered Plc is in talks to pay up to $300 million to U.S. authorities to settle allegations the bank failed to identify suspicious transactions, despite promising to improve its procedures after it was fined for violating U.S. sanctions two years ago.
Kremlin-controlled Rosneft will start drilling its first oil well in Norway with the help of Norwegian state-backed Statoil despite the Russian oil industry facing extensive European sanctions.
The British government has been ordered to pay 224 million pounds ($374.66 million) to U.S. weapons maker Raytheon for unlawfully terminating a border security deal with the company in 2010.
British insurer Amlin Plc is predicting a fresh wave of consolidation in the insurance industry as growing competition eats into returns.
German lender Deutsche Bank AG hired one executive each from Goldman Sachs Group Inc and Royal Bank of Scotland Group Plc to bolster its IT compliance and security
Avangardco, Ukraine's largest egg producer, plans to challenge the forced nationalisation of its assets in Crimea by local officials.
* Although the United States has yet to significantly embrace e-bikes, they are catching on in countries that already have a strong bicycle culture. (http://nyti.ms/1BvJeeU)
* Dollar General Corp offered to buy Family Dollar Stores Inc for $8.9 billion, hoping to break up its fellow deep-discount retailer Dollar Tree's agreed-upon $8.5 billion merger with Family Dollar. (http://nyti.ms/1p5uNJt)
* Steven Cohen announced the departure of Thomas Conheeney, president of Point72 Asset Management and a top lieutenant, on Monday. Conheeney will be replaced by Douglas Haynes, 48, a former McKinsey & Company director. (http://nyti.ms/1uPLtbg)
* Bitcoin's price has been noticeably falling in recent weeks after a period of relative stability, though those who trade in the virtual currency say the drop is par for the course. (http://nyti.ms/VAWk9s)
* With American Apparel Inc and its newly restructured management facing intense investor scrutiny, the company's earnings for the second quarter reinforced the retailer's troubled financial footing. (http://nyti.ms/1qlebJU)
* An academic paper argues that the American tax code's loopholes result in effective rates that make U.S. corporations more competitive than their competitors based overseas, not less. (http://nyti.ms/1leeev2)
* The activist hedge fund Jana Partners LLC has added an anonymous package to its arsenal in a campaign for change at PetSmart Inc. The multibillion-dollar hedge fund disclosed on Monday that it had received an anonymous package containing a sensitive internal presentation outlining how the company planned to improve its results over the next two quarters. (http://nyti.ms/1pGqiFd)
* Community Health Systems, a publicly traded hospital operator based in Franklin, Tennessee, said that personal data, including names, social security numbers and addresses for 4.5 million patients had been compromised in a Chinese cyber attack on its systems from April to June. (http://nyti.ms/1oVSEX5)
* Uber is back in business in Berlin, at least for now. The smartphone-based car service won a reprieve on Monday when a local court suspended a ban from the city's authorities, who had ruled that Uber did not comply with passenger safety standards. (http://nyti.ms/1qlnRUW)
THE GLOBE AND MAIL
* Canada's Transportation Safety Board will release the final results of a year-long investigation into the Lac-Megantic train disaster on Tuesday, offering the first definitive account of the series of events that led to the worst rail accident in modern Canadian history. (http://bit.ly/1oMm8MQ)
* Toronto City Council's licensing and standards committee has moved one step closer toward resolving a liquor-licence dispute between the city and the province that left restaurateurs caught in the middle. The committee voted on Monday to remove a new condition it had imposed on businesses seeking a new liquor license to have a letter of recommendation from their local Member of Provincial Parliament. (http://bit.ly/VC8gbm)
Reports in the business section:
* The Canada Revenue Agency's small list of approved foreign charities has been whittled down to zero, meaning Canadian donors hoping to give money to former U.S. president Bill Clinton's foundation, for example, are out of luck if they were banking on a tax credit. The CRA says foreign charities that receive a donation must then apply to the CRA to be registered as a qualified foreign charity, and they must either be involved in disaster relief, humanitarian aid or "activities in the national interest of Canada." (http://bit.ly/1uQDvi7)
* Three Manitoba border guards have been suspended without pay for leaving their posts and helping the Royal Canadian Mounted Police to corral a local fugitive, according to their union. As per the union, two Emerson RCMP officers had zeroed in on a local hotel containing a man wanted on outstanding warrants and suspected of being armed. (http://bit.ly/1vbt06g)
* According to a joint report published by the CBC and the Swiss public broadcaster on Monday, Ben Aissa, former SNC-Lavalin Group Inc executive, suspected of participating in a bribery scheme connected to the McGill University Health Centre super hospital project, has now agreed to plead guilty to charges of bribery, money laundering and corruption in exchange for a sentence recommendation that could see him liberated from Swiss prison by April. (http://bit.ly/VBuk5z)
* Global investors cut their holdings of Canadian federal government bonds by a record in June, Statistics Canada said on Monday. The net divestment of C$9.42 billion came from both sales and bonds reaching maturity, the agency said from Ottawa. (http://bit.ly/1kQULAl)
- China's real estate market will not collapse because fundamental demand is rigid, said the chief economist of the State Information Center, a unit of the National Development and Reform Commission, at a forum.
SHANGHAI SECURITIES NEWS
- The Shenzhen Stock Exchange will start testing a stock option trial programme on Sept. 9.
- Chinese President Xi Jinping said on Monday China would build new classes of more credible and competitive media and integrate traditional media with new media.
Shanghai's consumer watchdog found high levels of cancer-causing formaldehyde in children's Arena brand swimwear made by Shanghai Decente Business Co Ltd.
- Communists need to conduct reform with courage. If the Party cannot reform, then it will find itself in a blind alley, the newspaper said in a commentary.
TAXPAYER MUST PAY 224 MLN STG TO U.S. FIRM OVER BORDER 'MESS'
The taxpayer has been lumbered with a bill of nearly a quarter of a billion pounds after Theresa May, the home secretary, unlawfully sacked a U.S. firm tasked with building an IT system to control immigration.
HOUSE PRICES FALL BY 8,000 STG IN A MONTH
The housing market frenzy ground to a halt in August, with asking prices across England and Wales falling by almost 8,000 pounds in just one month.
DAVID CAMERON REBUKED OVER JOBS CLAIM Prime Minister claimed majority of new jobs created last year were taken by UK nationals, but no official figures for new jobs are collected.
CHALLENGER BANK ALDERMORE GEARING UP FOR FLOAT
Challenger bank Aldermore is gearing up for a stock exchange listing that is likely to make it one of the first major companies to debut on London's markets after a summer lull.
PUNCH TAVERNS IN LAST DITCH PUSH FOR DEBT-FOR-EQUITY SWAP One of Britain's largest pub companies unveils restructuring plans in a bid to get backing for their attempts to reduce 2.3 billion pounds of debt
WSP GLOBAL LEADS RACE FOR 700 MLN STG BALFOUR ARM
A Canadian engineering consultancy has moved into pole position to acquire a division of Balfour Beatty, the British construction company, as rival Carillion decides whether to sweeten a 3 billion pound proposal to merge the two companies.
Fly On The Wall Pre-Market Buzz
Domestic economic reports scheduled for today include:
ICSC-Goldman Store Sales at 7:45am
Consumer Price Index for July at 8:30am -- consensus: CPI M/M change: 0.1%; CPI less food & energy: 0.2%
Housing starts for July at 8:30am -- consensus 0.963M
Redbook at 8:55am
Almost Family (AFAM) upgraded to Buy from Hold at Jefferies
Brinker (EAT) upgraded to Buy from Hold at Wunderlich
Family Dollar (FDO) upgraded to Equal Weight from Underweight at Barclays
Heartland Payment (HPY) upgraded to Outperform from Market Perform at Keefe Bruyette
MedAssets (MDAS) upgraded to Outperform from Market Perform at Leerink
Teekay (TK) upgraded to Strong Buy from Outperform at Raymond James
Urban Outfitters (URBN) upgraded to Outperform from Neutral at RW Baird
Wolverine World Wide (WWW) upgraded to Buy from Hold at KeyBanc
CNOOC (CEO) downgraded to Hold from Buy at Jefferies
Guess (GES) downgraded to Neutral from Overweight at Piper Jaffray
Monster Beverage (MNST) downgraded to Neutral from Buy at SunTrust
Saint Joe Co. (JOE) downgraded to Market Perform from Outperform at Raymond James
SolarCity (SCTY) downgraded to Neutral from Outperform at RW Baird
Autohome (ATHM) initiated with a Buy at Brean Capital
Bitauto (BITA) initiated with a Buy at Brean Capital
El Pollo Loco (LOCO) initiated with a Hold at Jefferies
El Pollo Loco (LOCO) initiated with an Underweight at Morgan Stanley
Fiat (FIATY) initiated with an Underperform at Credit Suisse
Innocoll (INNL) initiated with an Overweight at Piper Jaffray
North Atlantic Drilling (NADL) initiated with a Neutral at Goldman
Ocular Therapeutix (OCUL) initiated with an Outperform at Oppenheimer
Ocular Therapeutix (OCUL) initiated with an Outperform at RBC Capital
Performance Sports Group (PSG) initiated with an Overweight at Morgan Stanley
Home Depot (HD) reported Q2 SSS up 5.8%; U.S. comp sales up 6.4%
BHP Billiton (BHP) to create an independent metals and mining company. BHP said it continues to review Nickel West, smaller assets
Sprint (S) introduced Sprint Family Share Pack data plan, doubles high-speed data
PDL BioPharma (PDLI) said it delivered a notice of default to Wellstat Diagnostics
Aeropostale (ARO), which raised its Q2 EPS view, said Julian Geiger will rejoin the company as CEO
Skilled Healthcare (SKH) said it will combine with Genesis HealthCare in 100% stock deal
WPX Energy (WPX) announced the sale of mature coalbed methane holdings in the Powder River Basin for $155M in cash
Companies that beat consensus earnings expectations last night and today include:
Home Depot (HD), Perfect World (PWRD), Jumei (JMEI), PDL BioPharma (PDLI)
Companies that missed consensus earnings expectations include:
American Apparel (APP)
Companies that matched consensus earnings expectations include:
Urban Outfitters (URBN)
Home Depot (HD) raises FY14 EPS to $4.52 from $4.42, consensus $4.41
BHP Billiton (BHP) reports FY14 underlying profit $13.45B vs. $12.21B last year
Ohr Pharmaceutical (OHRP) reports Q3 EPS (9c), one estimate (10c)
American Apparel (APP) sees FY14 adjusted EBITDA $40M-$45M
Perfect World (PWRD) sees Q3 revenue RMB 956M-RMB 1B
Aeropostale (ARO) sees Q2 adjusted EPS (45c)-(42c), consensus (58c)
General Electric (GE) in talks with Electrolux (ELUXY) to sell appliance business, WSJ reports
Google (GOOG) to offer accounts to children under 13, WSJ reports
Standard Chartered (SCBFF) in talks to pay up to $300M to settle U.S. allegations, FT reports
Wal-Mart (WMT) not likely to bid for Family Dollar (FDO), Bloomberg reports
PG&E (PCG) enters not guilty plea to obstructing San Bruno blast probe, Bloomberg says
Apache (APA) looks cheap, Barron's says
American Midstream Partners (AMID) revises private placement to $120M from $200M
CTI Industries (CTIB) files to sell 700,000 shares of common stock
Extra Space Storage (EXR) files to sell 3.9M shares for selling holders
Tesoro Logistics (TLLP) files to sell 2.1M common units for limited partners
UR-Energy (URG) files $100M mixed securities shelf
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