Frontrunning: October 29

  • Fed puts December rate hike firmly on the agenda (Reuters)
  • Charting the Markets: A More Hawkish Fed Rattles Investors (BBG)
  • China to modernize and improve fiscal and tax systems (Reuters)
  • Deutsche Bank to Cut 35,000 Jobs in Overhaul (WSJ)
  • Deutsche Bank Said to Near $200 Million Sanctions Settlement (BBG)
  • Barclays profits drop as it abandons cost-cutting targets (FT)
  • Noisy GOP Debate Leaves Republican Race Unsettled (WSJ)
  • European stocks firm, dollar rises as Fed revives Dec hike talk (Reuters)
  • Shell Has Biggest Loss in More Than a Decade on Price Slump (BBG)
  • Republicans pick Ryan for speaker; House passes budget deal (Reuters)
  • The Tiny Pharmacy at the Center of Valeant's Money Mystery (BBG)
  • Pimco Loss Is Prudential Fund's Gain as Investors Add $7 Billion (BBG)
  • London and Hong Kong Facing Housing Bubble Risk, UBS Says (BBG)
  • China Signs $17 Billion Deal to Buy 130 Airbus Planes (BBG)
  • U.S., Chinese navy chiefs to discuss South China Sea on Thursday (Reuters)
  • Samsung Deploys Cash With $10 Billion Buyback, Capex Boost (BBG)

 

Overnight Media Digest

WSJ

- Drugmakers Pfizer Inc and Allergan Plc are considering combining, in what would be a blockbuster merger capping off a torrid stretch for health care and other takeovers. Pfizer recently approached Allergan about a deal, according to people familiar with the matter, with one of them adding that the process is early and may not yield an agreement. Other details of the talks are unclear. (http://on.wsj.com/1LD8eFO)

- Federal Reserve officials Wednesday kept short-term interest rates unchanged near zero, but opened the door more explicitly than they have before to raising rates at a final 2015 meeting in December. (http://on.wsj.com/1OZcJOK)

- Toshiba Corp said Wednesday it would sell its image-sensor unit to Sony Corp, as Toshiba presses to shed unprofitable businesses after an accounting scandal rocked the company earlier this year. (http://on.wsj.com/1Rfentr)

- Billionaire investors Carl Icahn and John Paulson are pressing American International Group Inc to split into three parts, the latest evidence of how new rules passed since the financial crisis are roiling the financial-services industry. (http://on.wsj.com/1MirVQy)

- Deutsche Bank AG will not pay shareholders a dividend this year or next, as the German lender tries to meet financial targets tied to a sweeping restructuring. (http://on.wsj.com/1WjLy09)

 

FT

Deutsche Bank AG said on Wednesday it is scrapping this year's and next year's dividends as new Chief Executive Officer John Cryan overhauls Germany's biggest bank to restore growth and strengthen the company's balance sheet.

Barclays Plc agreed on Wednesday to spin out its natural resource private equity investing arm to Global Natural Resource Investments in return for remaining as an investor in its existing portfolio.

GlaxoSmithKline Plc reported better-than-expected earnings on Wednesday, helped by growth in HIV drugs and vaccines, which offset a further slide in sales of respiratory medicine Advair that is facing mounting competition in the United States and Europe.

 

NYT

- Leaders of the United Automobile Workers approved a tentative four-year deal with General Motors that includes a more lucrative signing bonus than what Fiat Chrysler workers were given, and $1.9 billion in new investments that will retain or create 3,300 jobs at a dozen G.M. sites. (http://nyti.ms/1P6KdJF)

- Deutsche Bank AG, the German financial giant with a big presence on Wall Street, is close to settling one of the many government investigations it currently faces. In a deal that is expected to be announced as soon as next week, Deutsche Bank would pay at least $200 million to resolve investigations into its dealings with countries like Iran and Syria, according to officials briefed on the matter. (http://nyti.ms/1LYXCPm)

- The Federal Reserve said on Wednesday, after a two-day meeting of its policy-making committee, that it would keep rates near zero for now, as expected, but it added an unusually explicit statement that it would consider raising rates at its final meeting of the year in mid-December. (http://nyti.ms/1RCvGUX)

- European policy makers moved ahead on Wednesday with plans to begin subjecting cars to on-the-road testing of exhaust emissions, rather than rely solely on laboratory tests. (http://nyti.ms/1GxXUQJ)

- Hyatt Hotels Corp is in talks to acquire Starwood Hotels and Resorts Worldwide Inc, two people briefed on the matter said, a combination that would create one of the largest lodging chains in the world. Hyatt is preparing a cash-and-stock bid that could be announced within the next few weeks, said the people, who requested anonymity because the talks are private. The discussions may yet fall apart, they said. (http://nyti.ms/1jSQ3TA)

 

Canada

THE GLOBE AND MAIL

** The oil patch is cutting ever deeper to cope with the longest crude-price rout in more than 15 years. Royal Dutch Shell Plc took the drastic step of halting its multibillion-dollar Carmon Creek oil sands development in Alberta after it had already started construction. The oil major blamed weak crude markets and insufficient pipeline capacity to export the eventual production. (http://bit.ly/1MVUALT)

** Spending by Chinese travelers to Canada is up sharply, as China closes in on second place among the country's largest sources of foreign tourists. The most recent report on debit and credit card spending in Canada, released by payment processor Moneris Solutions Corp, shows that Chinese visitors increased their use of credit cards by 30.2 percent in the third quarter of 2015 compared with the year-earlier period. (http://bit.ly/1MVUmnQ)

** Under heavy fire and facing a possible audit, Premier Kathleen Wynne has pulled an abrupt U-turn, telling a surprised legislature she will force teachers' unions to provide receipts before they receive multi-million dollar payments to cover negotiating expenses. Education Minister Liz Sandals previously insisted no receipts from the unions were necessary. (http://bit.ly/1RBx0Yh)

NATIONAL POST

** Barrick Gold Corp delivered solid third-quarter earnings, generating positive cash flow for the second straight quarter after a long period of negative cash flow. The world's biggest gold producer also reduced its cost guidance and said it is close to meeting its $3 billion debt reduction target for 2015. (http://bit.ly/1GLRJs0)

** Alberta's NDP government is taking bold steps to reduce its reliance on oil, including borrowing heavily to boost infrastructure and sponsoring economic diversification. Alberta still needs an oil-price recovery to balance its books or it could end up in a risky spot. The likely unintended outcome would be higher the debt, the more Alberta will need oil and gas to be its reliable cash cow. (http://bit.ly/1kdgjHX)

 

China

SHANGHAI SECURITIES NEWS

- The finance ministry's supervision office said on Wednesday it would investigate local governments to see whether they had disclosed their final accounts, and would publish the results of the investigation.

CHINA SECURITIES JOURNAL

- China National Offshore Oil Corp (CNOOC) said unaudited oil and gas sales revenue fell 32.3 percent to 36.3 billion yuan ($5.71 billion) in the third quarter from the same period a year earlier.

21ST CENTURY BUSINESS HERALD

- An investigation of 96 domestic tourism routes found "serious problems" in nearly three-quarters of them, according to a report by China Consumer Association released on Wednesday without giving details.

PEOPLE'S DAILY

- China does not stir up trouble but it is also not timid and the Chinese people will not stand for anyone violating China's sovereignty, said an editorial that called on the United States to stop harming peace and stability in the South China Sea.

 

Britain

The Times

Dyson has been accused by the maker of Bosch and Siemens AG vacuum cleaners of falsely alleging that it cheated energy efficiency tests in a manner similar to the Volkswagen AG emissions scandal. (http://thetim.es/1LCVnUa)

One of Britain's biggest housing associations plans to cut the number of affordable homes it builds each year and double the amount of properties it will sell after George Osborne said he would cut social rents. (http://thetim.es/1Wivh0D)

The Guardian

David Cameron refused six times under questioning from the Labour leader, Jeremy Corbyn, to say whether people would be left worse off by cuts to tax credits after the Treasury revises the proposals. (http://bit.ly/1RBJ0ZS)

BT Gorup Plc's proposed 12.5 billion stg takeover of EE, the UK's largest mobile phone operator, has been given provisional clearance by the competition watchdog after it said the deal was unlikely to damage consumers. (http://bit.ly/1RBJ0ZS)

The Telegraph

The Football Association was consulting its lawyers on Wednesday night following Sepp Blatter's stunning disclosure that Fifa had decided to give the 2018 World Cup finals tournament to Russia before the vote even took place. (http://bit.ly/1ihsqlU)

Sky News

State-backed Lloyds Banking Group has set aside an additional 500 million stg to cover the payment protection insurance (PPI) mis-selling scandal, taking its total provision so far to 13.9 billion stg. (http://bit.ly/1MUT0JX)

The Independent

The UK has come in at number six in the World Bank rankings of the best places to do business, its highest ranking since 2011. (http://ind.pn/1Hb3dAg)