Frontrunning: January 2

  • Threatening snowstorm may be early test for N.Y. Mayor de Blasio (Reuters), U.S. Northeast Threatened With Blizzard, Travel Delays (BBG)
  • Scarred U.S. consumers a hard sell for traditional retail (Reuters)
  • Edward Snowden, Whistle-Blower (NYT)
  • A Few Brave Investors Scored Huge, Market-Beating Wins (WSJ)
  • Fiat gets full control of Chrysler for $4.35 billion (Reuters)
  • Billions Vanish in Kazakh Banking Scandal (WSJ)
  • SAC’s Cohen Focus of Trial as Martoma Rebuffs U.S. (BBG)
  • World’s first state-licensed marijuana retailers open doors in Colorado (Reuters)
  • Hyundai, Kia face fading growth as currency tides buoy Japan rivals (Reuters)
  • Bond investors braced for new year shock (FT)
  • Putin vows total destruction of ‘terrorists’ after bombings (AFP)
  • Hackers post account info of 4.6 million Snapchat users (Reuters)
  • AllThingsD Editors Unveil Technology-News Site Called Re/Code (BBG)
  • Euro Supporter Credit Suisse Joins Bears (BBG)
  • Chinese balloonist lands in midst of isle dispute with Japan (Reuters)


Overnight Media Digest


A trader who made more than $100 million from a $10 million bet against gold. A hedge fund that gained 42 percent after a bullish wager on stocks. A firm that saw returns of 48 percent thanks in part to soaring Japanese stocks.

These were among the winning investors who managed to rack up huge gains forecasting a handful of key shifts in a year that vexed many market gurus.

* Kazakhstan’s BTA Bank accused its former chairman of fraud and embezzlement, sparking a complex legal drama that includes private eyes, gendarmes disguised as gardeners, a disputed deportation and billion-dollar court judgments.

* Fiat agreed to pay $4.35 billion to buy the rest of Chrysler, ending a standoff that clouded the future of both companies. The deal is likely to end the U.S. auto maker’s preparations for an IPO.

* U.S. stocks rose on the final trading day of 2013, capping the Dow industrials’ biggest annual rally in 18 years.

* After three fiery train accidents involving crude oil from North Dakota, regulators and industry officials are probing whether additives to the oil or mislabeling of the liquid contributed to the blasts.

* Steven A. Cohen is exiting the hedge-fund stage with a 2013 performance that is ahead of the pack.

* Apple said it never worked with the National Security Agency to create a backdoor way for the organization to spy on iPhone users.

* Google Inc’s Motorola Mobility unit dropped the price on its flagship smartphone Moto X on Wednesday, continuing its assault on the high margins of its smartphone rivals.



Fiat will pay $3.65bn to acquire the 41.5 percent of Chrysler it does not already own, resolving one of the car industry’s biggest strategic issues.

Richard Desmond has asked advisers to work on a possible sale of Channel 5, the British free-to-air TV broadcaster, that would seek to raise more than £700m for the media entrepreneur.

Britain’s economic recovery is expected to strengthen in 2014 as the world’s sixth-largest economy shrugs off fears over the sustainability of the upswing, according to a poll of economists.

A historic change in the way insurance companies protect themselves against natural catastrophes has helped the industry secure the biggest drop in reinsurance prices in 15 years.

European Central Bank action has had only modest success in easing big differences in interest rates paid by businesses across the eurozone, which remain near peaks seen at the height of the region’s debt crisis.



* A legion of buyers, buoyed by a growing economy and a soaring stock market, are shedding whatever reluctance, or self-imposed restraint, they had during the recession by entering showrooms and leaving with trophy cars.

* Fiat SpA said it had reached an agreement to take full ownership of Chrysler Holding LLC in a $4.35 billion deal with the United Automobile Workers retiree health care fund.

* BATS, which has quietly moved closer to the top of the list of the largest stock exchange operators in the world in terms of value of shares traded, in the coming months is set to complete its merger with Direct Edge, in a deal that will turn it into what will most likely be the biggest stock exchange company in the United States, at least on some trading days.

* While global deal-making was basically flat for a fourth consecutive year, annual volume in the United States was up 11 percent in 2013 compared with the previous year, according to Thomson Reuters.

* Walter Mossberg and Kara Swisher, founders of the conference and news business All Things Digital, are expected to start their new venture, ReCode, on Thursday.

* WABC-AM (770), which is owned by Cumulus Media, will introduce a new lineup on Thursday that emphasizes live and local programming, as its two most popular hosts, Rush Limbaugh and Sean Hannity, move to a rival station, WOR-AM (710).




* Julie Paskall, a 53-year-old mother of three, who was savagely beaten as she waited for her son outside a Surrey hockey arena has died. There have been two dozen homicides so far this year in Surrey, which has been battling a reputation for crime for years.

* Jim Coutts, an accomplished political tactician who was a key adviser to two former Liberal prime ministers, Jean Chrétien and Pierre Trudeau, has died after a long battle with cancer.

* Toronto Hydro Corp declared on its Twitter account late Wednesday night that all power outages from last week’s devastating ice storm have been restored, but in reality the number of people without electricity is growing again.

Reports in the business section:

* Italian car maker Fiat SpA said on Wednesday it has signed an agreement to buy the stake in U.S. auto maker Chrysler Group LLC it does not already own, ending months of tense negotiations and allowing Chief Executive Sergio Marchionne to pursue his goal of creating the world’s seventh-largest auto group.


* Police in the Cayman Islands on Wednesday said they suspect a Canadian cruise ship passenger who recently vanished may have fallen off the boat as search crews scoured waters around the British Caribbean territory.

* Service may be free on Toronto’s transit system on New Year’s Eve, but starting Jan. 1, it will cost more for tokens and metro passes. Cash fares will stay the same. The increase is expected to add to Toronto Transit Commission’s revenue and help cover costs of more riders on more public transit services.


* Tough new regulations aimed at quelling fears that foreigners are snatching jobs from Canadians kicked in on Tuesday, empowering government officials to conduct workplace inspections without warrants and to blacklist employers who break the rules.



The Telegraph


David Cameron claims that more than 6,000 people will move into their own property thanks to the Government’s Help to Buy scheme, just three months after it was launched.


John Lewis is preparing to almost double in size over the next decade as well as launch a French website. The moves are part of ambitious growth plans for the UK and overseas that the department store chain is working on following a successful Christmas.

The Guardian


India has terminated a £466m helicopter order with the British-Italian company AgustaWestland following accusations that the firm bribed officials.


Fresh evidence of the pay deals on offer in the City has emerged, with the biggest US bank, JPMorgan Chase & Co, revealing it gave more than 100 of its top staff in London an average of £2m each in 2012.

The Times


A five-year exodus of companies from the struggling Alternative Investment Market was reversed last year as confidence appeared to return to London’s junior share exchange.


The age-old appeal of Lego provided a hit for yet another year as John Lewis revealed its Christmas bestsellers for 2013.

The Independent


A £16bn tide of overseas money flooded into the London commercial property market last year, fuelling the best year for the capital since the height of the boom in 2007, according to estate agents Jones Lang LaSalle.


A “structural failure” in the financing of small businesses in the UK is impeding the development of world-class technology firms, according to the British Chambers of Commerce.


Fly On The Wall 7:00 AM Market Snapshot



American Eagle (AEO) upgraded to Buy from Hold at Jefferies
American Electric (AEP) upgraded to Outperform from Market Perform at BMO Capital
Ann Inc. (ANN) upgraded to Buy from Hold at Jefferies
Ascena Retail (ASNA) upgraded to Buy from Neutral at Goldman
Astoria Financial (AF) upgraded to Outperform from Market Perform at Keefe Bruyette
Avista (AVA) upgraded to Market Perform from Underperform at BMO Capital
Bank of America (BAC) upgraded to Buy from Neutral at Citigroup
Chico’s FAS (CHS) upgraded to Buy from Hold at Jefferies
Duke Energy (DUK) upgraded to Outperform from Market Perform at BMO Capital
Duke Realty (DRE) upgraded to Outperform from Market Perform at BMO Capital
Liberty Property (LRY) upgraded to Outperform from Market Perform at BMO Capital
Urban Outfitters (URBN) upgraded to Buy from Hold at Jefferies
Xilinx (XLNX) upgraded to Buy from Neutral at Goldman


Abercrombie & Fitch (ANF) downgraded to Hold from Buy at Jefferies
Aeroflex (ARX) downgraded to Neutral from Buy at Goldman
Aeropostale (ARO) downgraded to Hold from Buy at Jefferies
Altera (ALTR) downgraded to Neutral from Buy at Goldman
Analog Devices (ADI) downgraded to Market Perform from Outperform at Wells Fargo
Analog Devices (ADI) downgraded to Sell from Neutral at Goldman
Apple (AAPL) downgraded to Market Perform from Outperform at Wells Fargo
CGG SA (CGG) downgraded to Neutral from Buy at UBS
Elbit Systems (ESLT) downgraded to Neutral from Buy at Citigroup
Endo Health (ENDP) downgraded to Sell from Hold at Cantor
Flushing Financial (FFIC) downgraded to Market Perform at Keefe Bruyette
Health Care REIT (HCN) downgraded to Underperform from Market Perform at BMO Capital
Intersil (ISIL) downgraded to Underweight from Equal Weight at Evercore
NXP Semiconductors (NXPI) downgraded to Neutral from Buy at Goldman
ON Semiconductor (ONNN) downgraded to Neutral from Buy at Goldman
Texas Industries (TXI) downgraded to Neutral from Buy at Longbow
United Insurance (UIHC) downgraded to Neutral from Buy at Sterne Agee
Ventas (VTR) downgraded to Underperform from Market Perform at BMO Capital


Fiat (FIATY) acquired remainder of Chrysler Group from VEBA Trust, announced agreement with UAW, special distribution
Shell (RDS.A) announced purchase price of Repsol LNG portfolio will be $3.8B, not $4.4B
Star China to acquire 21st Century Fox’s (FOXA) 47% stake in Star China TV
Bombardier (BDRBF) announced $2.2B order for 38 business jets
Ford (F) announced C-MAX Solar Energi Concept


  • Investors likely will turn up the heat on certain U.S. CEOs, demanding improved results. Several top bosses hitting their second anniversary on the job in 2014 may feel squeezed by impatient investors, including at Avon Products (AVP), Yahoo (YHOO), and McDonald’s (MCD), the Wall Street Journal reports
  • Google’s (GOOG) Motorola Mobility unit dropped the price on its flagship smartphone, continuing its assault on the high margins of its smartphone rivals. The Moto X with 16 gigabytes of memory would now cost $399 without a wireless contract for U.S. customers, down from $550, the Wall Street Journal reports
  • If there was one lesson from this year’s holiday shopping season, it is that many traditional retailers (WMT, JCP, KSS) are having to work a lot harder to persuade Americans to open their pocketbooks. Even if the economy picks up significantly, retailers of many products could still struggle, Reuters reports
  • Private equity firms (BX, CG, APO) are increasingly seeking to partner with U.S. companies rather than buying them outright, as they struggle to find ways to put their huge piles of money to work at a time when frothy markets have made takeovers expensive, Reuters reports
  • Warren Buffett probably missed his target for the first time in 44 years. Berkshire Hathaway (BRK.A), his $292B company, is poised to report that it failed to increase net worth more rapidly than the S&P’s 500 Index during the past five years, according to analyst estimates, Bloomberg reports
  • Shares of U.S. financial firms (MS, JPM, WFC, BAC, C, GS) just staged their biggest annual rally since 1997, creating a bonanza for Wall Street employees who received bonuses in deferred stock. The new year doesn’t hold the same promise, Bloomberg reports


SAC Capital reports 5% passive stake in Crocs (CROX)


via Zero Hedge Tyler Durden

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