Frontrunning: June 18

  • Obama Says Bernanke Fed Term Lasting ‘Longer Than He Wanted’ (Bloomberg)
  • Merkel Critical Of Japan's Credit Policy In Meeting With Abe (Nikkei)
  • China Wrestles With Banks' Pleas for Cash (WSJ)
  • Biggest protests in 20 years sweep Brazil (Brazil)
  • Pena Nieto Confident 75-Year Pemex Oil Monopoly to End This Year (Bloomberg)
  • G8 leaders seek common ground on tax (FT)
  • Putin faces isolation over Syria as G8 ratchets up pressure (Reuters)
  • Former Trader Is Charged in U.K. Libor Probe (WSJ) - yup: it was all one 33 year old trader's fault
  • Draghi Says ECB Has ‘Open Mind’ on Non-Standard Measures (BBG)
  • Loeb Raises His Sony Stake, Drive for Entertainment IPO (WSJ)
  • Yahoo says it had as many as 13,000 data requests (Reuters) - so at least supposed terrorists still use Yahoo...
  • Why Citi wants to rack up U.S. taxes (Reuters)


Overnight Media Digest


* President Barack Obama and Russian counterpart Vladimir Putin clashed openly over Syria as world leaders began a summit, sharply underscoring deepening differences over the civil war.

* Clearwire Corp, long the U.S. wireless industry's most embattled carrier, has emerged in recent months as its crown jewel. The company, which has teetered on the brink of bankruptcy, has drawn keen interest from Dish Network and Sprint Nextel Corp for its huge stockpile of spectrum.

* British prosecutors plan to file criminal fraud charges against former UBS and Citigroup trader Tom Hayes for allegedly trying to manipulate benchmark interest rates.

* Investor Daniel Loeb's hedge fund Third Point has boosted its stake in Sony to 6.9 percent, ratcheting up a campaign to convince the company to launch an IPO of its entertainment division.

* China's big banks are pressuring the nation's central bank to free up funds to ease an unusual cash squeeze in the world's No. 2 economy.

* President Enrique Peña Nieto will seek to end a taboo of nearly eight decades by opening the state-run oil and gas industry to private investment and competition.

* Tesla's Elon Musk has made a fortune disrupting the status quo in online shopping and renewable energy. Now, he's up against his toughest challenge yet: Local car dealers. The electric vehicle maker wants to sell directly to consumers, bypassing franchised automobile dealers. Dealers are flexing their considerable muscle in states including Texas and Virginia to stop him.

* The U.S. Supreme Court ruled that courts should give more scrutiny to pharmaceutical industry patent settlements that can delay the entry of generic drugs.

* John Malone's Liberty Global is in talks with Germany's biggest cable operator, Kabel Deutschland, a move that could set off a bidding war with Vodafone Group . Liberty Global has been expanding aggressively in Europe.



Russian president Vladimir Putin refused to abandon support for Syrian president Bashar al-Assad, despite pressure from the U.S. and other western countries at the G8 leaders summit calling for a transition of power in Syria.

U.S. media group Liberty Global Plc has put forward a 7.5 billion euro ($10.01 billion) bid for Germany's biggest cable operator Kabel Deutschland, setting the stage for a potential bidding war with Britain's Vodafone Group Plc

Anthony Bolton--one of the United Kingdom's best-known fund managers, who came out of retirement in 2010 to move to Asia and try his luck investing in China, is to step down from managing the Fidelity China Special Situations Fund next year.

The Co-Operative Group forced listing of its banking subsidiary will serve a bitter blow to the government's advocacy of mutuals as a more sustainable alternative to discredited listed banks.

Russia's Alfa Group has hired former BP chief Lord Browne to advise the company on global energy investments, as it looks to spend some of the $14 billion proceeds from its sale of TNK-BP on oil and gas projects.

Alliance Boots, the pharmacy chain owned by New York private equity group KKR, has accumulated about 5 billion pounds in tax credit over the past six years, prompting calls from MPs to change tax rules that benefit private equtiy.



* The fiscal crisis in Michigan is setting up as a gigantic clash between bondholders and city retirees over what money Detroit has left to pay them. Public finance experts have warned that broad societal problems could follow a loss of faith in municipalities' commitments to honor their pledges.

* On Tuesday, MTV will introduce its latest deep dive into generational behavior: a nationwide study of 1,800 "young millennials." The findings will be presented to marketers and MTV programmers to help show how the channel and its sponsors can speak to the younger end of the audience.

* Over the weekend, Facebook and Microsoft released reports about the overall number of data requests they had received from United States law enforcement agencies. On Monday, Apple Inc and Yahoo joined the chorus. But rather than provide clarity, some of the disclosures have left many questions unanswered.

* Independent reviews of clinical trial data concluded that Medtronic Inc's Infuse, a bioengineered bone product, was not significantly better than a traditional bone graft, and that it might pose risks.

* European Union leaders and United States President Barack Obama announced on Monday the start of negotiations for a far-reaching trans-Atlantic trade deal, but French indignation over recent remarks by a high-ranking Brussels official created a sideshow at the Group of 8 meeting.

* David Green, the director of Britain's Serious Fraud Office, plans to revive the agency's reputation with a criminal investigation into the rigging of the Libor.

* Pharmaceutical companies that pay rivals to keep less-expensive generic versions of best-selling drugs off the market can expect greater federal scrutiny after a Supreme Court ruling on Monday.

* Eddy Cue, a senior vice president at Apple Inc, denied the government's charges that the company was working with e-book publishers to raise prices.

* Davis Polk & Wardwell has hired Jon Leibowitz, former chairman of the Federal Trade Commission, a coup for the law firm as it bolsters its increasing presence in Washington.

* After several years of intense demand for smaller, single-aisle workhorses, European plane maker Airbus on Monday secured a customer for its twin-deck A380 superjumbo jet, in a deal the company hoped would signal a revival in interest in larger passenger jets.

* LinkedIn Corp's Influencers program, which consists of people in leadership positions posting about their lives and careers, has transformed viewer engagement on the site, its chief executive said




* Canadian post-secondary students feel stressed, overwhelmed, lonely and some have even considered suicide in the past year, a new study released on Monday suggested.

* Attitudes toward Canada's oil have shifted dramatically in the United States in recent years, as Americans increasingly view it as a key part of their own energy independence, outgoing U.S. Ambassador to Canada David Jacobson says.

* Liberal Leader Justin Trudeau remained under fire Monday for taking hefty speaking fees from charitable groups after becoming an MP, despite promising to pay back any organization that was dissatisfied.

Reports in the business section:

* U.S. President Barack Obama hinted in an interview aired on Monday that he may be looking for a new chief of the U.S. Federal Reserve Bank, saying current Chairman Ben Bernanke has stayed a lot longer than he had originally planned.

* Embraer SA, a fierce competitor against Bombardier Inc in the market for regional jets, is upgrading its fleet and taking aim at Bombardier's C$3.4 billion ($3.34 billion) C Series.

* Government intervention in the economy is back in vogue and Canada risks being left behind unless it figures out where it can best make a difference, two former federal government economists argue in a new paper.


* A rookie town councillor in Irricana, Alberta, Wayne Niblow, has resigned after being arrested for allegedly possessing a large quantity of crack cocaine for the purpose of trafficking.

* The Montreal replacement mayor, Michael Applebaum, who recently took office amid a corruption scandal, and who promised to restore public trust, has now been arrested in a bribery case.

* Thailand's national Buddhism body said on Monday it is monitoring monks nationwide for any inappropriate behavior following complaints ignited by a video showing Buddhist monks flying on a private jet.


* Northern Gateway oil sands pipeline proponent Enbridge Inc., First Nations leaders, union and provincial government interests, environmental organizations, are putting forward final oral arguments before a joint panel of the National Energy Board and the Canadian Environmental Assessment Agency.

* Subway Restaurants keeps growing steadily in Canada even though the fast-food sandwich purveyor has not followed rivals McDonald's Corp and Tim Hortons Inc in appealing to coffee loving Canadians.




- Some funds may flow back into emerging markets as the policies of both the U.S. Federal Reserve and the Bank of Japan stabilise, the newspaper said in a commentary.

- China's domestic oil prices are forecast to rise on June 21 due to the rising price of crude in the international market, analysts said.


- China's four major state-owned banks said Central Huijin Investment Ltd, a state-owned investment company, has started increasing its share holdings in the banks.


- Harsher regulations on food safety are needed in the face of mounting public outcry over the subject, but the lack of adequate supervision and enforcement of the rules are a bigger problem, the newspaper said in an editorial.


- China's fastest Tianhe-2 computer was ranked first on the Top 500 Supercomputer list, surpassing Titan, the supercomputer owned by the Oak Ridge National Laboratory of the US Energy Department.


Fly On The Wall 7:00 AM Market Snapshot



Flir Systems (FLIR) upgraded to Strong Buy from Market Perform at Raymond James
HSBC (HBC) upgraded to Buy from Neutral at Citigroup
Motorcar Parts (MPAA) upgraded to Buy from Neutral at B. Riley
People's United (PBCT) upgraded to Overweight from Neutral at JPMorgan


Charles River Labs (CRL) downgraded to Sell from Neutral at Goldman
Comerica (CMA) downgraded to Underperform from Market Perform at Wells Fargo
Covance (CVD) downgraded to Underweight from Equal Weight at Barclays
First Horizon (FHN) downgraded to Underperform from Market Perform at Wells Fargo
Genomic Health (GHDX) downgraded to Neutral from Buy at BofA/Merrill
Palo Alto (PANW) downgraded to Buy from Conviction Buy at Goldman
Sanderson Farms (SAFM) downgraded to Hold from Buy at KeyBanc
Toronto-Dominion (TD) downgraded to Equal Weight from Overweight at Barclays
Williams Partners (WPZ) downgraded to Neutral from Buy at Goldman
Williams (WMB) downgraded to Buy from Conviction Buy at Goldman


American Residential Properties (ARPI) initiated with an Outperform at Raymond James
Insmed (INSM) initiated with a Buy at UBS
Intuitive Surgical (ISRG) initiated with an Outperform at Wedbush
Quintiles (Q) initiated with a Buy at Deutsche Bank
Quintiles (Q) initiated with a Hold at Jefferies
Quintiles (Q) initiated with a Neutral at Goldman
Quintiles (Q) initiated with an Outperform at Raymond James
Quintiles (Q) initiated with an Outperform at Wells Fargo
Quintiles (Q) initiated with an Overweight at JPMorgan
Quintiles (Q) initiated with an Overweight at Morgan Stanley
Quintiles (Q) initiated with an Overweight at Piper Jaffray
RCS Capital (RCAP) initiated with an Outperform at JMP Securities
T-Mobile (TMUS) initiated with a Hold at Canaccord


Sprint (S) filed suit against DISH (DISH), Clearwire (CLWR) over tender offer
Elan (ELN) advised holders to withdraw acceptances of Royalty Pharma offer
Bombardier Transportation (BDRBF) won $2B order from Deutsche Bahn for electric locomotives
Oracle (ORCL) secured judgment against ServiceKey
EMCOR Group (EME) to acquire RepconStrickland for $455M
United Continental (UAL) increased Dreamliner (BA) order to 65
Tesoro (TSO) announced sale of Hawaii operations
Campbell Soup (CPB) to acquire Kelsen Group, terms not disclosed
Mattel (MAT) subsidiary to grow broadcast and online presence


Companies that beat consensus earnings expectations last night and today include:
Korn/Ferry (KFY)


  • German cable operator Kabel Deutschland confirmed it received a proposal to be acquired by Liberty Global (LBTYA), potentially creating a bidding war with Vodafone (VOD), the Wall Street Journal reports
  • Mexico’s President Enrique Pena Nieto will seek in the coming months to end a taboo of nearly eight decades by opening the state-run oil-and-gas industry (SLB, HAL) to private investment and competition, a move the government hopes will attract billions of dollars in investment, the Wall Street Journal reports
  • Johnson Controls (JCI) is speaking to private equity firms about selling its nearly $1B automotive electronics unit, after buyout interest from many rival auto parts suppliers failed, sources say, Reuters reports
  • Talisman Energy (TLM) is exploring the sale of its shale assets in the Eagle Ford basin in south Texas, hoping to raise up to $2B, sources say, Reuters reports
  • European car sales fell to a two decade low in May as rising joblessness caused by a recession in the euro region reduced demand at Peugeot (PEUGY), Renault and GM (GM), Bloomberg reports
  • The U.S. oil boom is moving Congress closer than it has been in more than 30 years to easing the ban on exporting crude imposed after the Arab embargo. Net petroleum imports now account for about 40% of demand, down from 60% in 2005, Bloomberg reports


Ares Commercial Real Estate (ACRE) files to sell 18M shares of common stock
Diamondback Energy (FANG) files to sell 5M shares for selling stockholders
Exact Sciences (EXAS) proposes public offering of undisclosed amount of common stock
Liberty Global (LBTYA) files prospectus for 14.39M class A shares
NeuroMetrix (NURO) files to sell 3.97M shares of common stock for holders
New Mountain Finance (NMFC) files to sell 4M shares stock on behalf of a selling holder
Opexa Therapeutics (OPXA) files to sell $17.25M of common stock
Pacific Coast Oil (ROYT) files to sell 20.08M units of beneficial interest for holders
Repros Therapeutics (RPRX) commences offering of 3M shares of common stock
Ship Finance (SFL) files to sell 8M shares of common stock
Valeant (VRX) files to sell $1.75B of common stock


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