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Frontrunning: January 9

Tyler Durden's picture




 
  • Police Surround Paris Terror Suspects Near CDG Airport (BBG)
  • ECB Said to Study Bond-Purchase Models Up to 500 Billion Euros (BBG)
  • How OPEC Weaponized the Price of Oil Against U.S. Drillers (BBG)
  • German Industrial Production Falls Amid Plunge in Energy Output (BBG)
  • Car Loans See Rise In Missed Payments (WSJ)
  • Jim O'Neill threatens he will replace BRICs with ICs (BBG)
  • Oil heads for seventh weekly loss as supply glut drags (Reuters)
  • Armed man takes hostage in kosher grocery in Paris (AFP)
  • Janus Chairman Didn’t Know Details of Gross’s Investment (WSJ)
  • Kaisa Bondholders Dream of White Knight as Default Becomes Real (BBG)
  • China’s Stock Rally Fades in Last Hour as Volatility Surges (BBG)
  • Record-breaking cold closes U.S. schools, sends penguins inside (Reuters)
  • Petrobras Contagion Ignites Worst Start Since ’02 (BBG)
  • Continental CEO Ex-Wife Cashes $1 Billion Check, Lawyer Says (BBG)
  • Arrested RBS forex trader named as Paul Nash (Reuters)
  • Hackers Demand $12,000 for Client Data Stolen From Geneva Bank (BBG)
  • Dartmouth Gives Students a Lesson -- Don’t Cheat in Ethics Class (BBG)
  • Turkey’s Corruption Probe Turns Into Plot and Power for Erdogan (BBG)
  • Dealers Cut Treasuries as Fed Plans to Raise Interest Rates (BBG)

 

Overnight Media Digest

WSJ

* One of the French-born brothers who allegedly stormed the newsroom of the satirical magazine Charlie Hebdo in the deadly rampage that left 12 dead is believed by U.S. and French intelligence to have received weapons training from an al Qaeda offshoot in Yemen, U.S. officials said. (http://on.wsj.com/1BGHmjG)

* Europe's ascendant anti-immigration and nationalist movements tried to capitalize on a deadly attack in Paris this week to trumpet a theme they have pressed for years, but rarely before with this much urgency: a loss of cultural identity. (http://on.wsj.com/1BNo8a1)

* Nelson Peltz's Trian Fund launched a proxy fight against DuPont to add four directors to the board, setting up one of the biggest board battles ever initiated by an activist investor. (http://on.wsj.com/1xKCvNh)

* The chairman of Janus Capital Group said he didn't know that a single California brokerage office that handles money for Bill Gross accounted for a vast majority of the cash in Gross's new mutual fund at the company. (http://on.wsj.com/1IxjxLE)

* The Federal Reserve Bank of New York's failure to examine J.P. Morgan Chase's investment unit ahead of the bank's 2012 "London Whale" trading debacle stemmed from turf battles with other regulators, an overreliance on J.P. Morgan's solid reputation and financial crisis-related distractions. (http://on.wsj.com/1BSxD8e)

* Macy's is thinking about starting an off-price business for its namesake brand, a reminder that Americans remain value-conscious even though the recent holiday-sales season is on track to be the strongest in three years. (http://on.wsj.com/1DrArgy)

* Starbucks Corp's Chief Operating Officer Troy Alstead will take an indefinite leave of absence, the company said on Thursday, a year after he was promoted to be the coffee chain's second in command. Alstead's last day in his current role will be March 1, the company said. Starbucks didn't say when his leave would end. (http://on.wsj.com/1DED7EN)

 

FT

Tesco PLC's Chief Executive Dave Lewis set out a blueprint for recovery, including closing the head office, cutting thousands of jobs and scrapping this year's dividend, a move considered as the most radical overhaul for Britain's biggest retailer's 96-year history.

Syrian-based terrorists are plotting attacks in the UK similar to the one that killed 12 people at French satirical newspaper Charlie Hebdo, Andrew Parker, the head of Britain's MI5 Security Service warned.

The future of televised leaders' debates suffered a setback on Thursday night after British Prime Minister David Cameron indicated he would not take part in such debates if the Green party were excluded.

British Finance Minister George Osborne has this week put energy at the centre of early election campaigning. But anyone wishing for a speedy response to the UK chancellor's call for suppliers to cut household fuel bills - and pass on savings from falling oil prices - is likely to be let down.

 

NYT

* Trian Fund, investment firm run by activist investor Nelson Peltz and one of DuPont's largest shareholders, announced on Thursday that it had nominated four directors to the board, escalating its campaign to break up the $67.5 billion chemical maker. (http://nyti.ms/1x1ALKg)

* New York's state attorney general, Eric Schneiderman, was expected to reach a settlement on Friday with a debt buyer, the Encore Capital Group, over concerns that the company filed thousands of flawed debt collection lawsuits against state residents, according to several people familiar with the matter. The settlement requires Encore to pay a $675,000 penalty and vacate more than 4,500 court judgments against borrowers. (http://nyti.ms/1xX7wPX)

* Coca-Cola Co said on Thursday that it was cutting 1,600 to 1,800 jobs globally as part of $3 billion in costs it hopes to pare over the next several years. The company said in the fall that it would cut jobs but did not say how many until Thursday. (http://nyti.ms/1wAsf67)

* The National Highway Transportation Safety Administration has fined Honda Motor Co a record $70 million for grossly underreporting fatal accidents and injuries to the government, regulators said on Thursday. (http://nyti.ms/1IxmuMk)

 

Canada

THE GLOBE AND MAIL

** Cracks are emerging in Calgary's once red-hot market for commercial and residential real estate, adding to fears that rapidly sinking oil prices will trigger a broad slowdown beyond the energy sector. (http://bit.ly/1IxU44A)

** The Conservative government is preparing to make deep cuts to youth labor agreements with its international allies, a move that would scale back the largest source of temporary foreign workers in Canada. (http://bit.ly/1xOnwCc)

** Canada's government is considering new tax rules to level the playing field for e-commerce vendors that complain foreign giants such as Amazon.com Inc, Apple Inc and Netflix Inc have an unfair edge when selling digital products. (http://bit.ly/1tStJgI)

NATIONAL POST

** Calgary Member of Parliament Michelle Rempel took to Facebook on Thursday with an impassioned plea for Canadians to resist the urge to "explain away" the threat of Islamic extremism in the aftermath of the Charlie Hebdo shooting. (http://bit.ly/1xYvAPq)

** The lower loonie won't be enough to assure General Motors Co's future in Canada, says Chief Executive Mary Barra. "We don't make major footprint decisions based on those types of currency fluctuations," Barra said on Thursday during a media roundtable in Detroit. (http://bit.ly/1xLSjPE)

 

China

CHINA SECURITIES JOURNAL

- China's securities watchdog will step up measures against market manipulation, insider trading and other illegal behaviour, according to two revised regulations released by the China Securities Regulatory Commission (CSRC).

- China will give preferential tax policies to firms that invest in non-monetary assets in a bid to support mergers and reorganization of enterprises, the CSRC and the State Administration of Taxation said in an announcement.

SHANGHAI SECURITIES NEWS

- Institutions in Shanghai's banking sector had total net assets of 11 trillion yuan ($1.77 trillion) by the end of November last year, according to the city's banking regulator. This was up almost 14 percent from a year earlier.

CHINA DAILY

- China is pushing to make potatoes a staple food to address a shortage of irrigation water for farming. Potatoes, which require less water than grains, will make up to 30 percent of the materials used to make breads, steamed buns and noodles, the National Development and Reform Commission said.

- China's Ministry of Agriculture is launching measures to support dairy farmers who have been hit hard by plunging milk prices, according to an internal circular from the ministry this week. Some dairy farmers have gone as far as pouring milk down the drain and culling dairy herds.

SHANGHAI DAILY

- The Shanghai Stock Exchange has banned individual investors from investing in bonds issued by small and medium-sized enterprises via private placement offerings, as Beijing looks to curb the risks of corporate defaults.

 

Britain

The Times

Dave Lewis, the chief executive of Tesco, wielded the axe over pensions, jobs, dividend payouts, stores and non-core businesses in an attempt to save 250 million pounds ($377.08 million) annually by cutting overhead by 30 percent. (thetim.es/1IufUWV)

The rate of annual house price growth in the UK slowed in December, in a further sign that the demand for homes could have peaked amid waning affordability and the possibility of an interest rate rise. (thetim.es/1xWBILc)

 
The Guardian

Standard Chartered Plc chief executive Peter Sands moved aggressively on Thursday to reverse the Asia-focused bank's fortunes by closing the bulk of its global equities business and axing 4,000 jobs in retail banking. (bit.ly/1xMEqRM)

Marks and Spencer Group Plc has unveiled another grim Christmas, with a big decline in sales of clothing and homewares, blaming distribution problems, mild weather and fierce discounting by rivals for its poor performance. (bit.ly/1BMOWqX)

The Telegraph

Shares in Tesco Plc surged by the most in a single day for 27 years after the company's new chief executive Dave Lewis said he will close its headquarters in Cheshunt, shut 43 unprofitable stores and scrap plans to build 49 new supermarkets as part of a series of drastic measures. (bit.ly/1tOLpEm)

Banco Santander has announced plans to raise up to 7.5 billion euros ($8.84 billion) from shareholders to boost its capital in an unexpected move that sees Ana Botín, its new chairman, put her stamp on the eurozone's biggest bank. (bit.ly/1zXUvAK)

Sky News

WM Morrison Supermarkets Plc, UK's fourth-biggest supermarket chain, will announce on Friday that it is to take over from Bupa as the long-standing sponsor of the Great North Run. (bit.ly/1s9IGJY)

Drivers have been benefiting from lower prices at UK pumps as the cost of oil plummets on world markets - the result of a glut in supply and fears for global economic growth. (bit.ly/1sayzVi)

The Independent

The Bank of England is likely to be asked to target a new inflation measure after an independent review commissioned by the UK Statistics Authority recommended scrapping the Consumer Prices Index (CPI) as the headline measure of price increases. (ind.pn/1tNr7er)

British designer clothing brand Ted Baker Plc registered a 22.8 percent jump in retail sales for the eight weeks to Jan. 3, with online sales jumping nearly 66 percent, as women splashed out on partywear and men treated themselves to new suits. (ind.pn/1AuZBHx)

 

 

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
Nonfarm payrolls for December at 8:30--consensus up 245K
Unemployment rate for December at 8:30--consensus 5.7%
Wholesale trade inventories for November at 10:00--consensus up 0.3%
Wholesale trade sales for November at 10:00--consensus flat

ANALYST RESEARCH

Upgrades

AECOM (ACM) upgraded to Overweight from Equal Weight at Barclays
Advanced Energy (AEIS) upgraded to Buy from Hold at Needham
Advanced Energy (AEIS) upgraded to Buy from Neutral at BofA/Merrill
Allegiant Travel (ALGT) upgraded to Neutral from Underperform at BofA/Merrill
Booz Allen (BAH) upgraded to Buy from Neutral at BofA/Merrill
Calpine (CPN) upgraded to Outperform from Sector Perform at RBC Capital
Crescent Point Energy (CPG) upgraded to Overweight from Equal Weight at Barclays
Edison International (EIX) upgraded to Outperform from Sector Perform at RBC Capital
Energizer (ENR) upgraded to Buy from Hold at Jefferies
Exelon (EXC) upgraded to Outperform from Sector Perform at RBC Capital
Fiat Chrysler (FCAU) upgraded to Neutral from Underperform at Credit Suisse
Gaming and Leisure Properties (GLPI) upgraded to Overweight from Neutral at JPMorgan
Merck KGaA (MKGAY) upgraded to Outperform from Neutral at Credit Suisse
Mobile Mini (MINI) upgraded to Buy from Neutral at SunTrust
Noble Corp. (NE) upgraded to Outperform from Sector Perform at RBC Capital
PG&E (PCG) upgraded to Buy from Fair Value at CRT Capital
Pengrowth Energy (PGH) upgraded to Overweight from Equal Weight at Barclays
Pier 1 Imports (PIR) upgraded to Outperform from Neutral at Credit Suisse
Plains All American (PAA) upgraded to Buy from Hold at Jefferies
Plains GP Holdings (PAGP) upgraded to Buy from Hold at Jefferies
Schnitzer Steel (SCHN) upgraded to Hold from Underperform at Jefferies
Towers Watson (TW) upgraded to Buy from Neutral at Citigroup
Veolia Environment (VE) upgraded to Neutral from Underperform at Credit Suisse
Voya Financial (VOYA) upgraded to Outperform from Market Perform at Wells Fargo
Westpac Banking (WBK) upgraded to Buy from Neutral at BofA/Merrill
Yelp (YELP) upgraded to Buy from Neutral at BofA/Merrill

Downgrades

ACE Limited (ACE) downgraded to Market Perform from Outperform at Wells Fargo
Advance Auto Parts (AAP) downgraded to Outperform from Top Pick at RBC Capital
Akamai (AKAM) downgraded to Neutral from Buy at B. Riley
Alexandria Real Estate (ARE) downgraded to Neutral from Buy at UBS
Anixter (AXE) downgraded to Hold from Buy at BB&T
Astoria Financial (AF) downgraded to Neutral from Buy at Guggenheim
Becton Dickinson (BDX) downgraded to Neutral from Buy at SunTrust
Bruker (BRKR) downgraded to Underperform from Market Perform at Cowen
CMS Energy (CMS) downgraded to Sector Perform from Outperform at RBC Capital
Conatus (CNAT) downgraded to Neutral from Overweight at Piper Jaffray
Cornerstone OnDemand (CSOD) downgraded to Neutral from Buy at Goldman
Crocs (CROX) downgraded to Neutral from Overweight at Piper Jaffray
Dick's Sporting (DKS) downgraded to Neutral from Outperform at RW Baird
Dick's Sporting (DKS) downgraded to Neutral from Positive at Susquehanna
E2open (EOPN) downgraded to Hold from Buy at Benchmark Co.
E2open (EOPN) downgraded to Hold from Buy at Canaccord
Enerplus (ERF) downgraded to Equal Weight from Overweight at Barclays
FibroGen (FGEN) downgraded to Neutral from Buy at Goldman
Foot Locker (FL) downgraded to Neutral from Outperform at Credit Suisse
Helmerich & Payne (HP) downgraded to Hold from Buy at KeyBanc
Legacy Oil + Gas (LEGPF) downgraded to Underweight from Equal Weight at Barclays
MKS Instruments (MKSI) downgraded to Underperform from Neutral at BofA/Merrill
McDermott (MDR) downgraded to Equal Weight from Overweight at Barclays
Millicom (MIICF) downgraded to Neutral from Overweight at JPMorgan
Nabors Industries (NBR) downgraded to Hold from Buy at KeyBanc
National Fuel (NFG) downgraded to Hold from Buy at Jefferies
Nuance (NUAN) downgraded to Sell from Neutral at Goldman
O'Reilly Automotive (ORLY) downgraded to Sector Perform from Outperform at RBC Capital
Pinnacle West (PNW) downgraded to Underperform from Sector Perform at RBC Capital
Polaris Industries (PII) downgraded to Market Perform from Outperform at BMO Capital
Qlik Technologies (QLIK) downgraded to Neutral from Buy at Goldman
Ralph Lauren (RL) downgraded to Neutral from Buy at Janney Capital
Rowan Companies (RDC) downgraded to Sector Perform from Outperform at RBC Capital
Stanley Black & Decker (SWK) downgraded to Neutral from Buy at Longbow
Staples (SPLS) downgraded to Neutral from Outperform at Credit Suisse
Starwood (HOT) downgraded to Neutral from Overweight at JPMorgan
Unitil (UTL) downgraded to Underperform from Sector Perform at RBC Capital
Webster Financial (WBS) downgraded to Neutral from Buy at Guggenheim
Wright Medical (WMGI) downgraded to Hold from Buy at Needham
Xcel Energy (XEL) downgraded to Sector Perform from Outperform at RBC Capital
Zimmer (ZMH) downgraded to Neutral from Buy at SunTrust

Initiations

Acceleron (XLRN) initiated with a Buy at Janney Capital
Amicus Therapeutics (FOLD) coverage resumed with a Buy at Janney Capital
Baker Hughes (BHI) initiated with a Hold at KeyBanc
Baker Hughes (BHI) initiated with an Overweight at Barclays
Cameron (CAM) initiated with a Hold at KeyBanc
Cameron (CAM) initiated with an Equal Weight at Barclays
Cara Therapeutics (CARA) initiated with a Buy at Canaccord
Chico's FAS (CHS) initiated with a Neutral at Wedbush
Dril-Quip (DRQ) initiated with an Underweight at Barclays
FMC Technologies (FTI) initiated with a Hold at KeyBanc
FMC Technologies (FTI) initiated with an Overweight at Barclays
Forum Energy (FET) initiated with an Underweight at Barclays
Halliburton (HAL) initiated with a Hold at KeyBanc
Halliburton (HAL) initiated with an Overweight at Barclays
Keurig Green Mountain (GMCR) initiated with a Buy, $182 target at UBS
Kite Pharma (KITE) initiated with a Buy at Mizuho
Lear (LEA) resumed with a Buy at Citigroup
Mead Johnson (MJN) initiated with a Buy at Nomura
National Oilwell (NOV) initiated with a Buy at KeyBanc
National Oilwell (NOV) initiated with an Overweight at Barclays
Novavax (NVAX) initiated with a Buy at Janney Capital
Onconova (ONTX) coverage resumed with a Neutral at Janney Capital
Regeneron (REGN) initiated with a Buy at Janney Capital
Sally Beauty (SBH) initiated with a Neutral at Nomura
Schlumberger (SLB) initiated with a Hold at KeyBanc
Schlumberger (SLB) initiated with an Equal Weight at Barclays
Superior Energy (SPN) initiated with an Equal Weight at Barclays
Ulta Salon (ULTA) initiated with a Neutral at Nomura
Vanda (VNDA) initiated with a Buy at Canaccord
Vertex (VRTX) coverage resumed with a Neutral at Janney Capital
Weatherford (WFT) initiated with a Hold at KeyBanc
Weatherford (WFT) initiated with an Equal Weight at Barclays

COMPANY NEWS

Starbucks (SBUX) COO Troy Alstead, a 23-year veteran of the company who also served for many years as the company’s CFO, is taking an extended unpaid leave from the company. His last day in his current role will be March 1
Trian Fund Management, one of the largest stockholders of DuPont (DD), announced that it has nominated four candidates for election to the DuPont board at the 2015 annual meeting of stockholders
Macy's (M) announced initiatives to to evolve its business model and invest in continued growth opportunities, including a restructuring of merchandising and marketing functions at Macy’s and Bloomingdale’s. Additionally, the retailer will close 14 stores. The changes are estimated to generate savings of approximately $140M per year, beginning in 2015
XL Group (XL) announced the acquisition of Catlin Group for 388p in cash and 0.13 share of XL for each Catlin common share. The deal is expected to create double digit EPS accretion
Revance Therapeutics (RVNC) said a RT002 Phase 1/2 study met efficacy and safety endpoints
Gap (GPS) reported holiday SSS up 3%, December SSS up 1%

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Infosys (INFY), SandRidge Energy (SD), VOXX (VOXX), Bed Bath & Beyond (BBBY), AngioDynamics (ANGO), E2open (EOPN), Barracuda Networks (CUDA), Helen of Troy (HELE)

Companies that missed consensus earnings expectations include:
PriceSmart (PSMT)

Companies that matched consensus earnings expectations include:
Franklin Covey (FC), Ruby Tuesday (RT), Container Store (TCS)

Macy's (M) backs FY14 EPS view $4.25-$4.35, consensus $4.36 and narrowed Q4 SSS view to up 2.5%-3% from prior view of up 2%-3%
AbbVie (ABBV) sees FY15 adjusted EPS $4.25-$4.45, consensus $4.30
Bed Bath & Beyond (BBBY) sees EPS approximately $1.78-$1.83, consensus $1.80, sees Q4 net sales up 4.4%-5.4%, consensus $3.37B. The company sees FY14 EPS approximately $5.05-$5.09, consensus $5.04, and FY14 net sales up 3.4%-3.6%, consensus $11.93B

NEWSPAPERS/WEBSITES

Gilead (GILD) struck a Hepatitis C deal with Anthem (ANTHM), Bloomberg reports
GoPro (GPRO) international expansion to focus on China, Financial Times reports
Wet Seal (WTSL) could file for bankruptcy next week, source says, WSJ reports
McDonald's (MCD) to eliminate 63 positions at corporate headquarters, Reuters reports
Samsung (SSNLF) grabs processor orders for Apple Watch (AAPL), DigiTimes reports
Bank of America (BAC) is a buy ahead of earnings, Barrons says
Ford (F) shares could go higher, Barron's says

SYNDICATE

Alcobra (ADHD) files to sell common stock
BreitBurn Energy (BBEP) files to sell 19.74M common units representing limited partners
Golar LNG Partners (GMLP) files to sell 7.17M shares of common stock for partners
Medical Properties Trust (MPW) 30M share Secondary priced at $14.50
Otonomy (OTIC) files to sell $75M of common stock
Star Bulk Carriers (SBLK) files to sell $200M in common stock
Stifel Financial (SF) files automatic mixed securities shelf
SunEdison Semiconductor (SEMI) files to sell 12M ordinary shares for holders

 

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Fri, 01/09/2015 - 09:10 | 5640982 papaswamp
papaswamp's picture

The car loan story...next bubble to pop. Then we will see a collapse in US manufacturing since cars are one of the biggest drives.

Fri, 01/09/2015 - 09:17 | 5641012 Bill of Rights
Bill of Rights's picture

The car story is hilarious, I especially enjoyed the part where the women had her car repossessed and now shes worried that her credit is ruined and she can't buy a home ha ha ha.

 

You can't afford a home DUMB ASS!

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