Frontrunning: July 12

  • Summers Said to Show Interest in Fed Chairmanship After Bernanke (BBG)
  • Obama Tells Chinese He’s Disappointed Over Snowden Case (BBG)
  • Texas Threat to Abortion Clinics Dodged at Flea Markets (BBG)
  • A Peek at Trucking Data, and Then the Stock Surged (WSJ)
  • China cuts growth target… or does it? (FT) - yes, it does, net of goal seeked Random () of course
  • China Official Suggests Tolerance for Lower Growth (WSJ)
  • Disney Says Wristband Boosts Sales in Disney World Test (BBG) - next up: implanted RFID chips
  • Spain Prepares Cuts in Renewable-Energy Subsidies (WSJ)
  • Bernanke Departure With Duke Heralds Cascade of Fed Appointments (BBG)
  • Europe, U.S. Strike Derivatives Deal (WSJ)
  • New front opens in Syria as rebels say al Qaeda attack means war (Reuters)
  • Foreign-Student Work Plan Cut by U.S. as Complaints Mount (BBG)


Overnight Media Digest


* Hospitals around the United States are trying to change how doctors practice by using data to monitor their progress toward goals.

* Even as federal, state and congressional investigators examine the preferential release to investors of broad economic data-such as the University of Michigan consumer-sentiment survey-some investors tap numerous other more narrowly focused and less well-known industry indicators ahead of the rest of the investing public.

* Glenn Dubin, who co-founded hedge fund Highbridge Capital Management LLC with a childhood friend more than 20 years ago, is stepping down as chief executive. The move comes amid tepid performance from the firm's flagship fund.

* A burst of investor optimism pushed U.S. stock indexes into record territory for the first time since late May, fueled by fresh reassurances that the Federal Reserve would continue to pour cheap money into financial markets.

* Silver Lake and Michael Dell have been discussing turnaround plans ahead for troubled computer maker Dell that would use an accelerated version of the founder's strategy to restore its former luster.

* Chobani has hired a senior executive from cereal giant Kellogg to run its day-to-day operations, freeing the yogurt maker's founder to focus on new markets.

* Verizon Wireless could be on the hook for a lot of unsold iPhones. An obscure securities filing revealed that the country's largest wireless carrier had entered into roughly $45 billion worth of purchase commitments-the bulk of which likely involve Apple Inc's high-end smartphone, according to analyst Craig Moffett of Moffett Research LLC.

* Sprint cut the cost of its unlimited wireless plans, a move aimed at helping the nation's No. 3 wireless carrier by subscribers better compete with its much larger rivals.

* House and Senate lawmakers are $91 billion apart as they draft spending bills for the next fiscal year, putting Congress once again on a collision course with risk of a partial government shutdown this fall.



As much has half the government's stake in Lloyds Banking Group is set to be sold to retail investors, as part of a provisional scenario being contemplated by officials with the sell-off possibly kicking off as early as September.

France's Schneider Electric has made a preliminary takeover approach for Britain's Invensys Plc in a deal that values the company at nearly 3.3 billion pounds ($5 billion), the engineering group said on Thursday.

G4S and rival Serco have been billing the taxpayer for tracking criminals who were either dead, in prison or who had moved abroad, it emerged on Thursday.

Microsoft Chief Executive Steve Ballmer has overhauled the company's operational structure and reshuffled top management in the hope of catching nimbler rivals in a fast-moving technology world.

European Union officials raided the offices of Deutsche Telekom, Orange and Telefonica as part of an investigation into whether the companies abused their dominant position in the internet market.

EasyJet shareholders have backed a multibillion dollar deal to expand the airline's fleet, going against strong opposition from founder Stelios Haji-Ioannou.

China's security ministry said GlaxoSmithKline employees have confessed to accusations of bribing Chinese government officials, medical associations, hospitals and doctors to boost prices of drugs in three of the country's biggest cities.



* Microsoft Corp is creating four new divisions and reassigning nearly every senior executive as it tries to create timely products that consumers want.

* BP Plc told a federal appeals court that a claims administrator misinterpreted the terms of a multibillion-dollar settlement reached last year.

* The Chinese government said employees of British drug giant GlaxoSmithKline Plc had used bribes, taken kickbacks and committed other crimes to bolster drug sales.

* Elizabeth Duke, a Federal Reserve governor who has helped to overhaul the Fed's approach to financial regulation, said on Thursday that she would step down at the end of August.

* Senators Elizabeth Warren and John McCain introduced an aggressive piece of legislation that intends to take the financial industry back to an era when there was a strict divide between traditional banking and speculative activities. The bill, which is also sponsored by two other senators, is named the 21st Century Glass-Steagall Act.

* The rise of personalized medicine has spurred giant pharmaceutical companies to home in on small biotechnology firms.

* Sixteen Democratic senators are asking regulators to examine the use of ATM-style cards to pay hourly employees. Across the country, a growing number of companies are doing away with paper paychecks and, in some instances, direct deposit, to offer prepaid cards.

* Valiant Capital Management, a San Francisco-based hedge fund, and Aberdare Ventures have jointly acquired a 45 percent stake in a pharmacy benefits company, ePharma, for an estimated 169 million reais ($74.6 million).

* A federal judge ruled that jurors in the civil trial of Fabrice Tourre, the former Goldman Sachs trader, can hear about an e-mail that references the nickname "Fabulous Fab".




* Businesses in Lac-Mégantic that depend on rail service are pushing to get trains running again less than a week after a runaway freight derailed and destroyed the downtown core, leaving 24 people dead and dozens more missing.

* A small group of landed immigrants with republican views who have refused Canadian citizenship because the ceremony involves swearing an oath to the Queen will be in a Toronto courtroom on Friday, facing off with the federal government in an attempt to have this citizenship requirement declared unconstitutional.

Reports in the business section:

* The deadly train disaster in Lac-Mégantic, Quebec, is sure to trigger tough new regulations on moving crude oil by rail, Moody's, a major credit-rating, said on Thursday.


* Canada's former spy watchdog and alleged fraudster Arthur Porter tried to broker multi million-dollar deal to build guns abroad.

* In a ruling that illustrates the vexing question of who and what is a parent, Alberta's Court of Appeal has upheld the decision to declare a gay man the legal father of a 10-year-old girl, even though it was his former partner who inseminated the child's mother.

* A Florida woman must again make her case for refugee status in Canada after fleeing north of the border to avoid a 30-year prison sentence in the United States for having sex with a 16-year-old boy who was on her son's baseball team.

* Immigration Minister Jason Kenney has slammed environmentalist David Suzuki's views on immigration as "toxic and irresponsible" after the CBC host said Canada was "full".


* Grocery giant Loblaw Companies Ltd is taking on Whole Foods Market Inc in a test pilot of a new retail concept called Nutshell Live Life Well, a stand-alone franchise catering to the health-conscious crowd.

* Cogeco Cable Inc may get a little bigger over the next year but it does not plan on making any major acquisitions as it focuses on paying down its debt after two recent large buys.




- The gold and silver night futures night trading volume has been steadily increasing since July 8, said a manager at the night exchange department of Shanghai Futures Exchange.


- Some securities regulators are asking brokerages for opinions on the revision of the Securities Law that is expected to put private equity under supervision, unnamed sources said.


- The Chinese government will put forward some mild stimulus measures in the second half of 2013, mainly including infrastructure investment, railway construction and shanty town reconstruction, said a researcher from the central government think-tank.


- Foreign game console companies would be eligible to sell and promote products on China mainland if they register and produce in Shanghai's new free trade zone, however, the decade-long ban on the video game hardware market is still effective as some of the content is too violent or politically sensitive, said an official with the Ministry of Culture.


- As of May 31, the vacant property land in China has decreased by almost 50 percent to 10,700 hectares from a year earlier, according to the Ministry of Land and Resources.

Fly On The Wall 7:00 AM Market Snapshot



Alaska Air (ALK) upgraded to Equal Weight from Underweight at Morgan Stanley
Alpha Natural (ANR) upgraded to Buy from Hold at Deutsche Bank
F5 Networks (FFIV) upgraded to Overweight from Neutral at Piper Jaffray
Hormel Foods (HRL) upgraded to Outperform from Market Perform at BMO Capital
Quality Systems (QSII) upgraded to Outperform from Neutral at RW Baird
Stewart (STC) upgraded to Overweight from Equal Weight at Stephens
Xilinx (XLNX) upgraded to Buy from Neutral at Citigroup


Alliance Resource (ARLP) downgraded to Hold from Buy at Deutsche Bank
Apollo Group (APOL) downgraded to Equal Weight from Overweight at Barclays
Bristol-Myers (BMY) downgraded to Hold from Buy at Jefferies
Ceres (CERE) downgraded to Market Perform from Outperform at Raymond James
Ceres (CERE) downgraded to Neutral from Overweight at Piper Jaffray
Pfizer (PFE) downgraded to Hold from Buy at Jefferies
SodaStream (SODA) downgraded to Perform from Outperform at Oppenheimer
Target (TGT) downgraded to Hold from Buy at Deutsche Bank
Triple-S (GTS) downgraded to Neutral from Buy at Citigroup
VMware (VMW) downgraded to Equal Weight from Overweight at Evercore


A.T. Cross (ATX) initiated with a Buy at Benchmark Co.
Capital Bank (CBF) initiated with a Buy at BB&T
CoreLogic (CLGX) assumed with an Outperform at Keefe Bruyette
DDR Corp. (DDR) initiated with a Buy at SunTrust
Dollar General (DG) initiated with a Neutral at Goldman
Federal Realty (FRT) initiated with a Neutral at SunTrust
Glimcher Realty Trust (GRT) initiated with a Neutral at SunTrust
Hi-Crush Partners (HCLP) initiated with an Outperform at William Blair
Macerich (MAC) initiated with a Neutral at SunTrust
Magnum Hunter (MHR) initiated with a Buy at Topeka
Magnum Hunter (MHR) reinstated with an Equal Weight at Stephens
News Corp. (NWSA) initiated with a Neutral at BofA/Merrill
OpenTable (OPEN) initiated with a Sector Perform at RBC Capital
Regency Centers (REG) initiated with a Neutral at SunTrust
Sabra Health Care (SBRA) initiated with an Outperform at Raymond James
ServiceNow (NOW) initiated with a Strong Buy at Raymond James
Yelp (YELP) initiated with a Buy at Needham


Icahn told Bloomberg: Dell (DELL) holders appraisal rights is a “no brainer”
Icahn:“We're going to add to the bid tomorrow morning (July 12)”
Believes ISS is wrong and Michael Dell knows that the company is worth more
New bid will include warrant “around $20”
Dell (DELL) special committee cautioned holders following Icahn statements
Spreadtrum (SPRD) to be acquired by Tsinghua Unigroup for $31 per share
Microsoft (MSFT) said government not given “blanket or direct access”
Refiners traded lower after Valero (VLO) warned on earnings (TSO, MPC, WNR)
VIVUS (VVUS) may have won proxy fight with First Manhattan, TheStreet reports
Google (GOOG) chairman Schmidt said Glass to be released ”soon,” Bloomberg reports
Sprint (S) launched Sprint Unlimited Guarantee, new unlimited plan and pricing
H&R Block (HRB) sold bank assets to Republic Bank (RBCAA)
Philip Morris (PM) entered agreement with Mitsubishi Tanabe to privatize Medicago
Aveo Pharmaceuticals (AVEO) disclosed SEC subpoena
Penn National (PENN) in talks to develop slot parlor budgeted at over $200M
Steel Excel (SXCL) to acquire up to 44% interest in iGo (IGOI) for $3.95 per share


Companies that beat consensus earnings expectations last night and today include:
Infosys (INFY), E2open (EOPN), AngioDynamics (ANGO)

Companies that missed consensus earnings expectations include:
Ceres (CERE)

Companies that matched consensus earnings expectations include:
Bank of the Ozarks (OZRK), Peregrine (PPHM)


  • Silver Lake Partners may soon be wagering $1.4B on a bet that many analysts think is sheer folly: To restore computing icon Dell (DELL) to its former luster. Silver Lake and founder Michael Dell have been discussing turnaround plans for months, sources say, the Wall Street Journal reports
  • Last March an industry-research firm emailed a monthly report on commercial-truck orders to hedge funds and other subscribers that resulted in shares in truck makers surging, generating a tidy profit for investors who traded on the report.As federal, state and congressional investigators examine the preferential release to investors of broad economic data, some investors tap numerous other more narrowly focused and less well-known industry indicators ahead of the rest of the investing public, the Wall Street Journal reports
  • Fed officials are considering moving the goal posts on U.S. monetary policy with a promise to keep interest rates low for longer in the hopes of heading off a troubling rise in market-set borrowing costs, Reuters reports
  • UBS (UBS) said some of its German offices were searched in connection with an ongoing tax probe of the Swiss bank's clients, confirming earlier media reports, Reuters reports
  • Bookings of the largest oil tankers (FRO) jumped to the highest level for the time of year since at least 2007 as demand for crude cargoes accelerates before a surge in oil refining projected by the International Energy Agency, Bloomberg reports
  • Chinese parents’ distrust of local milk elevated foreign baby-food brands into luxury goods and allowed companies from Danone (DANOY) to Mead Johnson Nutrition (MJN) to fatten margins. Those plump profits are at risk as state-controlled media reported China’s government was investigating them and other overseas competitors for possible price fixing, Bloomberg reports


Fifth Street Senior Floating Rate Corp (FSFR) 6.667M share IPO priced at $15.00
Fly Leasing (FLY) 11.429M share Secondary priced at $14.00
Merrimack (MACK) 5M share Secondary priced at $5.00
Restoration Hardware (RH) 8M share Secondary priced at $70.00
Terreno Realty (TRNO) files to sell 5M shares of common stock


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