- Germany Can Ratify ESM Fund With Conditions, Court Rules (Bloomberg)
- Obama Discusses Iran Nuclear Threat With Netanyahu (Bloomberg)
- Stocks, Euro Gain as Court Allows ESM; Irish Bonds Climb (Bloomberg)
- U.S. cautions Japan, China over escalating islands row (Reuters)
- Draghi alone cannot save the euro (FT)
- 'New York Post' Runs Boldest Anti-Obama Ad Yet (Bloomberg)
- Another urban legend: Fish Oil Pills Don’t Fix Heart Ills in 24-Year Data Review (Bloomberg)
- Troika Says Portugal’s Program is ‘On Track’ (Bloomberg)
- Russia Wants to Steer Clear of 'Gas War' (WSJ)
- U.S. Said Set to Target First Non-Bank Firms for Scrutiny (Bloomberg)
- Wen Says China’s Policy Strength Will Secure Growth Targets (Bloomberg)
- UK faces clash with Brussels on City (FT)
Overnight media digest:
* A former UBS AG banker who helped the U.S. government unleash an international crackdown on tax evasion was awarded $104 million in what is believed to be the largest-ever whistleblower payout to an individual.
* The directors of Ford Motor Co meet on Thursday and are expected to discuss one of the most pressing issues facing the auto maker-the retirement of Chief Executive Alan Mulally.
* In his first public appearance since Facebook Inc's botched public offering in May, Mark Zuckerberg on Tuesday zoomed through a litany of the company's mobile efforts while admitting that the company's previous mobile strategy was wrong.
* John Compton, PepsiCo Inc president, is leaving the snack and drink company to head privately held Pilot Flying J, in the latest high-profile departure from PepsiCo.
* When Apple Inc introduces its latest device on Wednesday, everyone will be watching to see if it can maintain the place it has long held as top-selling smartphone in the U.S. Months of purportedly leaked parts and images have generated enthusiasm, driving up Apple's stock price.
UK FACES CLASH WITH BRUSSELS ON CITY
Britain faces a fresh fight with Brussels over who has control over the City of London as new EBA reforms are unveiled on Wednesday.
BURBERRY ALERT DAMPS SECTOR SENTIMENT
Burberry issued a profit warning that wiped more than a fifth off its share price, sending shock waves through the luxury goods sector.
UBS WHISTLEBLOWER AWARDED $104 MLN
The whistleblower in a landmark tax-dodging case against Swiss bank UBS has won a record-setting $104 million reward from U.S. authorities.
DEUTSCHE VOWS SHAKE-UP OF BANK CULTURE
Deutsche Bank Co-Chief Executive Anshu Jain said he expected the lender to embark on deeper jobs cuts than the 1,900 already announced.
BLACKROCK FINED FOR CLIENT ASSET BREACH
BlackRock has been fined 9.5 million pounds ($15 million) by Britain's financial regulator for failing to adequately protect client deposits.
CITI TAKES $2.9 BLN HIT ON SMITH BARNEY SALE
Citigroup expects to report a non-cash charge of $2.9 billion after taxes to reflect a lower value for its brokerage joint venture with Morgan Stanley.
KREMLIN SHIELDS GAZPROM FROM EU PROBE
The Kremlin has moved to shield Gazprom from an EU anti-monopoly investigation in a deepening standoff over gas prices.
MOODY'S WARNS ON U.S. CREDIT RATING
Moody's said the U.S. may lose its top credit rating if next year's budget talks do not produce policies that decrease its debt.
APPLICATIONS SOUGHT FOR 'NEAR-IMPOSSIBLE JOB'
The Treasury will post an advertisement in the Economist magazine for the position of the next governor of the Bank of England.
* Bradley Birkenfeld, who got out of jail last month after serving time for helping Americans dodge taxes, received a lavish bonus for his role in exposing tax schemes at UBS.
* Morgan Stanley has reached an agreement to take full control of the Smith Barney retail brokerage joint venture, a business that it has called a crucial part of its future.
* Congressional leaders dug in their heels on Tuesday against any quick deal to resolve a looming fiscal disaster before the election, even as ratings agency Moody's warned that it would downgrade the government's debt if no solution was found by year's end.
* The Ford Motor Co's board will meet this week to consider possible succession plans for the company's chief executive, Alan R. Mulally, a person with knowledge of the meeting said on Tuesday.
THE GLOBE AND MAIL
* One week after Toronto Mayor Rob Ford testified under oath that he no longer uses taxpayer-funded staff and resources for football, fresh evidence has emerged that suggests he continues to do just that. Ford appears to have relied on at least two mayor's office employees and their taxpayer-funded cellphones to help administer the summer football teams he founded after winning Toronto's top political job.
* Spending restraints are fuelling labour unrest in two of Canada's largest provinces, with teachers' unions in Ontario threatening to withdraw from extracurricular activities and public auto-insurance workers in British Columbia getting set to walk off the job.
Reports in the business section:
* Quebecor Inc's campaign to kill BCE Inc's takeover of Astral Media Inc moved from public appeals to regulatory hearings Tuesday, as its chief Pierre Karl Péladeau warned the C$3.4-billion deal would create "a monster in front of us that will kill the business."
* A week after Alberta enacted hard limits on air and water pollutants in its oil sands-rich northeastern corner, Shell Canada published a document that predicts the industry will exceed some of those limits.
* A group of northern Manitoba chiefs is complaining that some aboriginals are being chained up in a hockey arena dressing room instead of an RCMP holding cell because of scarce police resources.
* Canadian Prime Minister Stephen Harper is being hailed as "World Statesman of the Year" by an American organization that previously feted Jean Chretie, British prime minister Gordon Brown and Korean president Lee Myung-bak. The award, for his work as "a champion of democracy, freedom and human rights", comes from an organization called the Appeal of Conscience Foundation.
* Federal Natural Resources Minister Joe Oliver downplayed talk of drafting a formal national energy strategy Tuesday following a meeting with provincial energy and mining ministers. Oliver told a news conference in Charlottetown that he hadn't heard anything in proposals for a strategy that isn't being dealt with already.
* Royal Bank of Canada is among lenders bucking job-cutting trends in the United States and Europe as acquisitions help swell head counts at Canada's biggest banks.
European economic summary:
- France Harmonised CPI 2.4% y/y – higher than expected. Consensus 2.3% y/y. Previous +2.2% y/y.
- Germany Harmonised CPI 2.2% y/y – in line with expectations. Consensus 2.2% y/y. Previous +2.2% y/y.
- Italy Industrial Production -4.4% y/y – higher than expected. Consensus -0.40% m/m -7.60% y/y. Previous -1.4% m/m -8.2% y/y.
- United Kingdom Average Weekly Earnings 1.5% 3m/yoy – lower than expected. Consensus 1.6% 3m/yoy. Previous 1.6% 3m/yoy.
- United Kingdom Claimant Unemployment -15k – lower than expected. Consensus 0k. Previous -6k.
- United Kingdom ILO Unemployment Rate 8.1% - higher than expected. Consensus 8.0%. Previous 8.0%.
- Euro area Industrial Production 0.10% m/m -3.30% y/y – in line with expectations. Consensus 0.10% m/m -3.30% y/y. Previous -0.6% m/m -2.2% y/y.
Fuly On The Wall 7:00 AM Market Snapshot
Agrium (AGU) upgraded to Buy from Neutral at Citigroup
Black Hill (BKH) upgraded to Overweight from Neutral at JPMorgan
Federated Investors (FII) upgraded to Neutral from Sell at Goldman
Great Plains Energy (GXP) upgraded to Overweight from Neutral at JPMorgan
J.B. Hunt (JBHT) upgraded to Buy from Neutral at BofA/Merrill
Kinder Morgan (KMI) upgraded to Neutral from Underperform at BofA/Merrill
Kohl's (KSS) upgraded to Buy from Hold at Deutsche Bank
Rogers Communications (RCI) upgraded to Buy from Neutral at BofA/Merrill
Amgen (AMGN) downgraded to Neutral from Outperform at RW Baird
Automatic Data Processing (ADP) downgraded to Underperform from Hold at Jefferies
Cohen & Steers (CNS) downgraded to Sell from Neutral at Goldman
Exelon (EXC) downgraded to Sell from Neutral at UBS
Finish Line (FINL) downgraded to Underperform from Neutral at Sterne Agee
Holly Energy (HEP) downgraded to Underperform from Neutral at BofA/Merrill
Paccar (PCAR) downgraded to Underperform from Market Perform at Wells Fargo
Packaging Corp. (PKG) downgraded to Market Perform from Outperform at BMO Capital
Paychex (PAYX) downgraded to Underperform from Hold at Jefferies
Potash (POT) downgraded to Neutral from Buy at Citigroup
Standard Pacific (SPF) downgraded to Neutral from Buy at UBS
Synaptics (SYNA) downgraded to Hold from Buy at Needham
Asbury Automotive (ABG) initiated with an Underweight at Morgan Stanley
CarMax (KMX) initiated with an Overweight at Morgan Stanley
Demandware (DWRE) initiated with a Buy at Janney Capital
Dollar General (DG) initiated with an Overweight at Piper Jaffray
Fortinet (FTNT) initiated with an Outperform at Northland Securities
Glu Mobile (GLUU) initiated with a Buy at B. Riley
Lithia Motors (LAD) initiated with an Overweight at Morgan Stanley
LivePerson (LPSN) initiated with a Buy at Benchmark Co.
MasterCard (MA) initiated with an Outperform at Pacific Crest
Renren (RENN) initiated with a Sell at Citigroup
Sohu.com (SOHU) initiated with a Buy at Citigroup
Sonic Automotive (SAH) initiated with an Underweight at Morgan Stanley
Standard Motor Products (SMP) initiated with a Buy at BofA/Merrill
Visa (V) initiated with an Outperform at Pacific Crest
Youku.com (YOKU) initiated with a Buy at Citigroup
Moody's (MCO) raised FY12 guidance
Facebook's (FB) Zuckerberg said key over next 3-5 years is mobile, said no plans for FB phone. Said big opportunity in search
Texas Instruments (TXN) seeing growth in U.S., declines in Europe and Japan
Aetna (AET) said it’s confident in its FY12 commercial medical cost trend projections
KKR & Co. (KKR) to close Prisma Capital Partners acquisition in October
Acacia (ACTG) subsidiary acquired patents on gas modulation control technology
Casey's General Stores (CASY) to acquire 22 convenience stores from Kum & Go
Companies that missed consensus earnings expectations include:
PMFG, Inc. (PMFG), Globecomm (GCOM)
An increasing number of coal-fired plants that were built to run around the clock, seven days a week, now may run only occasionally because of soft demand for electricity and competition from gas-fired plants that are cheaper to run and cleaner to operate, the Wall Street Journal reports
Two public pension funds--the $13.7B Kentucky Retirement Systems and the $20B Alaska Retirement Management Board--have expressed concerns that KKR’s (KKR) upcoming takeover of Prisma Capital Partners LP might hurt the asset manager's returns, the Wall Street Journal reports
U.S. retail sales should increase 3.3% for the 2012 holiday season, on what is expected to be the first increase in shopper traffic since 2007, according to a forecast from research firm ShopperTrak released today, Reuters reports
Four major U.S. banks--JPMorgan Chase (JPM), Bank of America (BAC), Wells Fargo (WFC) and Citigroup (C)--are in talks to link their digital payment systems to allow more consumers to easily transfer money with mobile phone messages and emails instead of cash and checks, Reuters reports
German government bonds declined as the country’s Constitutional Court allowed Europe’s permanent bailout fund to be ratified with conditions, curbing demand for the securities as a refuge, Bloomberg reports
Vodafone (VOD) investors waiting for Verizon Communications (VZ) to approve a dividend from their U.S. mobile-phone venture will have to hold out longer, sources say, as Verizon Wireless’s board doesn’t plan to discuss a potential dividend at a September 19 meeting, Bloomberg reports
ExactTarget (ET) 6.5M share Secondary priced at $22.50
Halcon Resources (HK) files to sell 35M shares for Encap Energy Capital
Palatin Tech (PTN) files to sell 35.86M shares of common stock for holders
Team Health (TMH) commences secondary offering of 8M shares of common stock
Teekay Offshore Partners (TOO) plans to offer 7M common units
Vanguard Natural (VNR) commences public offering of 6M common units
Western Asset Mortgage (WMC) files to sell $100M in common stock
Jana Partners liquidates stake in Barnes & Noble (BKS)
RCM Capital reports 18.8% passive stake in Yelp (YELP)