Frontrunning: April 23

  • Ukraine's leaders say have U.S. backing to take on 'aggressors' (Reuters)
  • Goldman Sachs Stands Firm as Banks Exit Commodity Trading (BBG)
  • Obama reassures Japan, other allies on China as Asia trip begins (Reuters)
  • China Challenges Obama’s Asia Pivot With Rapid Military Buildup (BBG)
  • Google’s Stake in $2 Billion Apple-Samsung Trial Revealed (BBG)
  • No bubble here: Numericable Set to Issue Record Junk Bond (WSJ)
  • 'Bridgegate' scandal threatens next World Trade Center tower (Reuters)
  • Supreme Court Conflicted on Legality of Aereo Online Video Service (WSJ)
  • Barclays May Cut 7,500 at Investment Bank, Bernstein Says (BBG)
  • Wal-Mart’s Everyday Low Prices Fail to Stir Brazilians (BBG)
  • China factory activity shrinks for fourth month (Reuters)
  • Banker Bonus Probed in Denmark as Danske’s 200% Fuels Debate (BBG)
  • U.S. mortgage applications fell last week: MBA (Reuters)
  • Elizabeth Warren Book Hits Republicans While Going Easy on Clinton (BBG)


Overnight Media Digest


* Pilots at JetBlue Airways Corp voted to unionize in an about-face that ended the carrier's status as one of the last nonunion airlines in the United States. Unionization "could result in demands that may increase our operating expenses and adversely affect our financial condition and results of operations," the airline said in the filing. (

* A new flurry of drug deals shows how the global pharmaceutical industry is reversing course, as companies narrow their focus after decades of diversifying their drug portfolios. (

* Supreme Court justices expressed unease with online-video startup Aereo but they also voiced concerns about the consequences of ruling for the broadcasters that are challenging the legality of the service. (

* Charter could acquire nearly four million extra subscribers in a two-stage deal under discussion with Comcast , in what would represent a consolation prize for Charter's nearly yearlong pursuit of Time Warner Cable. (

* General Motors Co's global head of engineering is leaving the company and his duties are being split amid new fallout from the auto maker's internal probe over the delay in recalling 2.6 million vehicles with faulty ignition switches. (

* Newmont Mining Corp and Barrick Gold Corp have had continuing contact since the two miners last week broke off talks to create a global mining giant, according to people familiar with the situation. But their senior executives are unlikely to resume formal talks at least until after Newmont's annual general meeting on Wednesday. (

* A federal appeals court on Tuesday ordered a major health system in northwest Ohio to unwind its merger with a local hospital on antitrust grounds. The unanimous decision by a three-judge panel of the Sixth U.S. Circuit Court of Appeals in Cincinnati comes amid growing concerns about hospital mergers and their effect on prices against the backdrop of America's health-care upheaval. (

* Thailand's PTT Exploration & Production, the country's flagship petroleum explorer, will buy the Thai assets of Hess Corp for about $1 billion, in the latest of a string of sales by U.S. energy companies as they switch focus to unconventional oil and gas projects in North America. (



Ukraine's acting president ordered a fresh crackdown on pro-Russian forces in the east after two bodies were discovered with signs they had been tortured.

A multibillion-dollar asset swap between Novartis and GlaxoSmithKline has taken total global pharma deals so far this year to $140 billion, according to data from Dealogic.

Telecoms and cable operator Numericable will sell a record 8.5 billion euros of junk bonds on Wednesday to raise funds to buy SFR, France's second-biggest telecoms group.

The $35 billion merger of Publicis and Omnicom has hit an unforseen tax hurdle, threatening to torpedo plans to create the world's largest advertising and communications company by revenues.

A former Deutsche Bank facing trial in Japan for bribing a public official has admitted providing excessive entertainment to a pensions executive but alleged such conduct was 'institutional' at the bank.

Manchester United confirmed the departure of manager David Moyes, bringing an end to a shortlived and unhappy reign at the club.



* The United States Court of Appeals in Manhattan on Tuesday picked apart the government's case against two former hedge fund traders, Todd Newman and Anthony Chiasson, questioning whether the judge in the trial erred when instructing jurors. In an hour-long hearing, a three-judge panel hinted that it might overturn the convictions, the first real threat to Preet Bharara's sweeping campaign as a United States attorney to root out insider trading on Wall Street. (

* After twice rejecting bids to unionize since 2009, JetBlue Airways pilots overwhelmingly agreed to be represented by the Air Line Pilots Association, the union said on Tuesday. (

* Comcast Corp is laying the groundwork to divest nearly four million subscribers as part of its efforts to appease antitrust regulators scrutinizing the proposed acquisition of Time Warner Cable Inc. In one likely situation, Charter Communications, which had been trying to acquire Time Warner Cable, would become both a buyer and partner to Comcast. (

* The Supreme Court signaled on Tuesday that it was struggling with two conflicting impulses in considering a request from television broadcasters to shut down Aereo, an Internet start-up they say threatens the economic viability of their businesses. (

* The pharmaceutical industry is regaining its swagger, as companies turn to big and sometimes daring deals to expand and reshape their operations. On Tuesday alone, pharmaceutical companies announced $74 billion worth of potential deals, including an unorthodox $45.6 billion bid for Allergan Inc , the maker of Botox, and a flurry of swaps and sales between Novartis AG of Switzerland and GlaxoSmithKline Plc of Britain. (

* General Motors Co moved on Tuesday to prevent future safety lapses by expanding its oversight of problematic vehicles even as the automaker continued to take an aggressive legal posture in dealing with its past missteps. General Motors has asked a federal bankruptcy judge to dismiss dozens of potentially costly lawsuits filed against the company over its handling of a defective ignition switch in millions of cars, and to bar similar cases in the future. (




* A Calgary judge has ordered the suspect in the city's worst mass killing to undergo a 30-day psychological assessment to determine if he is fit to stand trial for the stabbings that cut short five lives at an end-of-school celebration. (

* Canada's food safety system is being pushed beyond its limits, warns the union representing federal food inspectors, which singles out Vancouver-area consumers as potentially the most at risk. (

Reports in the business section:

* Canada's middle class appears to be the richest in a new study of incomes in several big countries. The in-depth report which looks at about 20 nations, indicates that Canadians have bumped Americans out of the top spot they have long held. (


* Ontario's Progressive Conservative Party leader Tim Hudak says he's hopeful that the Liberal victory in Quebec could mean a Tory victory in Ontario. Ontario could be going to the polls this spring if the minority Liberals cannot get at least one of the opposition parties to support their May 1 budget. The Tories have been itching for an election and have nominated candidates in 99 of the province's 107 ridings. (

* Ottawa no longer considers the North Pacific population of humpback whales a threatened species, which lifts many legal protections for the whales' habitat. In an amendment released on Saturday in the latest Canada Gazette, the Environment Department says the status of humpback whales off the British Columbia coast has been upgraded from "threatened" to "species of special concern." (


* Far from giving up on the Keystone XL pipeline to the United States, Finance Minister Joe Oliver said on Tuesday Canada would keep the issue alive with the Obama administration despite a further delay of the U.S. decision on whether to approve it. (

* Botox-maker Allergan Inc facing a hostile takeover play from the formidable duo of acquisition-hungry Valeant Pharmaceuticals International Inc and activist investor Bill Ackman, could still see a Big Pharma white knight step in but the odds are stacked against it, analysts say. (




- China's government will create a 120-billion-yuan ($19.24 billion) fund to support integrated circuit industry, sources told the newspaper.

- China's domestic tax revenue declined by 37.5 billion yuan in the first quarter of 2014 after China moved from a business tax model to a value-added tax policy.


- Chinese healthcare-focused funds were one of the most popular funds in the first quarter of the year, according to data from China's TX Investment Consulting, as China looks to provide medical services to its near 1.4 billion population.


- China is considering easing house purchase restrictions in some second and third-tier cities, although this is not a possibility for first-tier cities, said Zhu Baoliang, a department head at China's State Information Center.


- Chinese authorities in the restive northwest region of Xinjiang have seized hundreds of replica firearms in a crackdown on guns and explosives, local police told the paper.

- Retail sales in China are expected to grow 13 percent this year, according to a government think tank, roughly flat with 2013. Retail sales hit 23.4 trillion yuan last year, the Chinese Academy of International Trade and Economic Cooperation said.


- Chinese cabbies face having their cabs seized if they operate without a license, according to a new regulation from the Shanghai People's Congress. Under existing rules drivers are given a fine or have points taken from their license.


The Times


A blizzard of deals in the pharmaceuticals industry sent drugs stocks flying as GlaxoSmithKline conducted a complex asset swap with Novartis, of Switzerland, and AstraZeneca shored up its defences against a possible American takeover.


The fraud trial of the former executive chairman of JJB Sports has been 'abandoned for the time being', owing to his ill health.

The Guardian

VINCE CABLE TELLS TOP UK FIRMS: CRACK DOWN ON BONUSES OR FACE NEW LAWS Business secretary urges companies to rethink pay deals to regain public trust and move focus off short-term success.

TESCO LAUNCHES FRESH ROUND OF PRICE CUTS Market leader to also offer free click-and-collect grocery orders as it inches toward Asda's "everyday low price" model.

The Telegraph

QUINDELL SHARES CRASH 50 PCT ON DAMNING GOTHAM NOTE Insurance outsourcer Quindell's shares plunge after Gotham Research calls it a "country club built on sand."

Sky News


Barclays will this week suffer a sizeable City rebellion over its decision to hike bonuses last year while simultaneously receiving overwhelming shareholder backing for its future pay plans.


Fly On The Wall 7:00 AM Market Snapshot


Domestic economic reports scheduled today include:
Markit flash manufacturing PMI for April at 9:45--consensus 56.0
New home sales for March at 10:00--consensus up 2.3% to 450K



A.O. Smith (AOS) upgraded to Outperform from Market Perform at BMO Capital
AK Steel (AKS) upgraded to Outperform from Neutral at Macquarie
Agnico-Eagle (AEM) upgraded to Outperform from Sector Perform at RBC Capital
Allergan (AGN) upgraded to Overweight from Neutral at JPMorgan
athenahealth (ATHN) upgraded to Overweight from Equal Weight at Morgan Stanley
E-Trade (ETFC) upgraded to Outperform from Market Perform at Wells Fargo
Equifax (EFX) upgraded to Outperform from Neutral at Credit Suisse
Fluidigm (FLDM) upgraded to Buy from Neutral at Mizuho
Hanmi Financial (HAFC) upgraded to Outperform from Market Perform at Fig Partners
Lumber Liquidators (LL) upgraded to Buy from Neutral at Longbow
Medidata Solutions (MDSO) upgraded to Buy from Neutral at B. Riley
Prologis (PLD) upgraded to Buy from Neutral at ISI Group
SunPower (SPWR) upgraded to Buy from Underperform at BofA/Merrill
TECO Energy (TE) upgraded to Neutral from Sell at UBS


Brown & Brown (BRO) downgraded to Neutral from Buy at Compass Point
CTC Media (CTCM) downgraded to Underperform from Neutral at Credit Suisse
Grupo Televisa (TV) downgraded to Underperform from Neutral at BofA/Merrill
Philips (PHG) downgraded to Sector Perform from Outperform at RBC Capital
Quality Systems (QSII) downgraded to Underweight from Equal Weight at Morgan Stanley
Rexnord (RXN) downgraded to Underperform from Neutral at BofA/Merrill
Tata Motors (TTM) downgraded to Neutral from Outperform at Credit Suisse


Ball Corp. (BLL) initiated with a Neutral at JPMorgan
Central Valley Community Bancorp (CVCY) initiated with an Outperform at Fig Partners
Crown Holdings (CCK) initiated with an Overweight at JPMorgan
First Cash Financial (FCFS) initiated with an Overweight at HSBC
Harman (HAR) initiated with an Outperform at RBC Capital
Interval Leisure (IILG) initiated with an Outperform at Imperial Capital
Kroger (KR) initiated with a Market Perform at Wells Fargo
Manulife Financial (MFC) initiated with a Buy at UBS
Occidental Petroleum (OXY) initiated with a Neutral at Global Hunter
Owens-Illinois (OI) initiated with a Neutral at JPMorgan
Sun Life Financial (SLF) initiated with a Buy at UBS
TPG Specialty Lending (TSLX) initiated with a Neutral at Citigroup
UGI Corporation (UGI) initiated with an Equalweight at Barclays
WhiteWave Foods (WWAV) initiated with a Buy at Deutsche Bank


PTTEP said it will buy Hess Corp.'s (HES) Thailand assets for $1B
BP (BP) agreed to sell interests in four Alaska North Slope assets
Polaris Industries (PII) said 'on track' to generate over $4B in annualized sales
Allergan (AGN) adopted a one-year stockholder rights plan (VRX)
AT&T (T) forecast FY14 earnings growth in the mid-single digit range. The company said it had best revenue growth in more than two years during Q1
Yum! Brands (YUM) reported Q1 SSS growth of 9% for its China division, with total sales for its China division growing 17% for the quarter
Icahn reiterated that he hasn't sold a share of Apple (AAPL)


Companies that beat consensus earnings expectations last night and today include:
Prosperity Bancshares (PB), TE Connectivity (TEL), JAKKS Pacific (JAKK), W.R. Grace (GRA), Polaris Industries (PII), Thermo Fisher (TMO), BE Aerospace (BEAV), Ethan Allen (ETH), Valmont (VMI), Renasant (RNST), Southwest Bancorp (OKSB), Fulton Financial (FULT), Skyworks (SWKS), Xoom (XOOM), ViewPoint Financial (VPFG), Community Bank System (CBU), Trustmark (TRMK), WesBanco (WSBC), IDEX Corp. (IEX), W. R. Berkley (WRB), Sanmina (SANM), Preferred Bank (PFBC), Super Micro Computer (SMCI), Illumina (ILMN), International Game (IGT), iRobot (IRBT), Discover (DFS), C.R. Bard (BCR), Skechers (SKX), Woodward (WWD), FMC Technologies (FTI), Covanta (CVA), Manhattan Associates (MANH), Gilead (GILD), Hawaiian Holdings (HA), Torchmark (TMK), Cree (CREE), Cubist (CBST), VMware (VMW), AT&T (T)

Companies that missed consensus earnings expectations include:
CBIZ, Inc. (CBZ), Pacific Premier (PPBI), Air Products (APD), Flagstar Bancorp (FBC), MSA (MSA), First Midwest (FMBI), Unisys (UIS), Orchids Paper (TIS), Vascular Solutions (VASC), Total System (TSS), Pzena Investment (PZN), Bridge Capital Holdings (BBNK), Amgen (AMGN), Ameris Bancorp (ABCB)

Companies that matched consensus earnings expectations include:
MarketAxess (MKTX), Praxair (PX), First Busey (BUSE), Zhone (ZHNE), ZixCorp (ZIXI), Harmonic (HLIT), Juniper (JNPR)


DISH (DISH) to launch internet-TV service this summer, Bloomberg says
Wal-Mart (WMT) to report how compliance targets impacted executive pay, WSJ reports
Charter (CHTR) close to adding 4M subscribers in deal with Comcast (CMCSA), WSJ reports
Ackman paying Herbalife (HLF) whistleblower, ABC News says
Netflix (NFLX) expanding to France by year-end, Bloomberg says
Barrick Gold's (ABX) Munk says merger with Newmont Mining (NEM) 'inevitable', WSJ reports
Ford (F) CEO said to position board post after retiring, Bloomberg says
Intel (INTC) to launch Bay Trail-Entry to tap entry-level tablet market, DigiTimes says


Hannon Armstrong (HASI) files to sell 5M shares of common stock
Intercloud Systems (ICLD) files to sell 1.71M shares of common stock for holders
Medley Capital (MCC) files to sell 6M shares of common stock
New Source Energy (NSLP) files to sell 2.8M common units for limited partners
Plug Power (PLUG) files to sell common stock
Sarepta (SRPT) files to sell $100M of common stock


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