Frontrunning: March 21

  • Australia says nothing spotted in search for plane (AP)
  • Putin looks to Asia as West threatens to isolate Russia (Reuters)
  • China Billionaire Builds Metals With Dreyfus, Glencore Hires (BBG)
  • China Beige Book Says Economy Slowing (BBG)
  • Caterpillar Said to Be Focus of Senate Overseas Tax Probe (BBG)
  • US Cancels Summit With Divided Group of Gulf Nations (WSJ)
  • Cyprus defense minister suffers aneurysm (AP)
  • Abe to zero in on economy as tax hike looms (Nikkei)
  • Europe strikes deal to complete banking union (Reuters)
  • Barclays Said to Miss Alibaba Fees by Defying SoftBank’s Son (BBG)
  • Tiffany posts 4Q loss due to large charge (AP)
  • Gunmen ram explosives-laden tanker into Iraq police HQ, killing many (Reuters)

 

Overnight Media Digest

WSJ

* U.S. President Barack Obama ordered a second round of financial sanctions on Russian officials and a St. Petersburg bank over Crimea, and the European Union added names to its sanctions list. Moscow responded with penalties against nine U.S. officials. (http://ift.tt/1hMXG6s)

* The Federal Reserve’s annual test of big banks’ financial health showed the largest U.S. firms are strong enough to withstand a severe economic downturn, a sign that many will get the green light soon to reward investors by raising dividends and buying back shares. The Fed said 29 of the 30 largest institutions have enough capital to continue lending even when faced with a hypothetical jolt to the U.S. economy lasting into 2015, including a severe drop in housing prices and a spike in unemployment. (http://ift.tt/1oEpA96)

* Symantec Corp, the computer-security company synonymous with “antivirus,” fired Chief Executive Steve Bennett amid sagging revenue and slumping shares, the second time it has dumped a CEO in less than two years. (http://ift.tt/1jbdWU8)

* Airbnb Inc, which once sold novelty cereal boxes to stay afloat before emerging as a threat to the hotel industry, is close to becoming one of the world’s most valuable startups. The online service that lets people rent their homes to travelers is in advanced talks to raise capital that would value it at about $10 billion. (http://ift.tt/1oEpxtU)

* Major bitcoin exchange Mt. Gox said it found nearly a quarter of the bitcoins it previously said were lost, raising questions about how much of the missing total could eventually be recovered. (http://ift.tt/1jbdW6L)

* The White House is testing smartphones from Samsung Electronics and LG Electronics Inc for internal use, threatening one of the last and most high-profile strongholds of BlackBerry Ltd. (http://ift.tt/1oEpA98)

* Exxon Mobil Corp has agreed to disclose how the regulation of carbon emissions could affect the value of its oil and gas holdings, a sign that America’s biggest energy company is stepping up efforts to address shareholders’ environmental concerns. (http://ift.tt/1jbdWUg)

* Hewlett-Packard Co shareholders have forgiven three company directors they heavily criticized for presiding during some of the firm’s most troubled periods. The company’s longest-serving directors Marc Andreessen, Raymond Lane and Rajiv Gupta, were re-elected by shareholders at HP’s annual meeting on Wednesday, the results weren’t released. (http://ift.tt/1oEpA9d)

 

FT

Airbnb is in talks with private equity firms including TPG Capital Management LP to raise funds that would price the online home-rental marketplace at about $10 billion.

Netflix Inc has accused big internet providers, including Comcast Corp, of using their “market position” to impose tolls for access to their networks, hindering the online video operator’s ability to provide a quality service.

Turkey blocked access to Twitter on Thursday, after Prime Minister Tayyip Erdogan vowed to eradicate the social media site for national security reasons as he battles a damaging corruption scandal.

Chinese e-commerce giant Alibaba Group <IPO-ALIB.N> has invested $215 million in mobile messaging app-maker Tango, valuing it at $1 billion.

Chemicals producer Ineos has accused Asia’s biggest refiner Sinopec Corp of breaching its intellectual property rights over the manufacture of a key industrial compound.

 

NYT

* U.S. President Barack Obama expanded sanctions against Russia on Thursday, blacklisting a bank and several wealthy businessmen with close ties to President Vladimir Putin, as the United States struggled to forestall further Russian incursions into Ukraine. (http://ift.tt/1jbdWUl)

* Technology companies have spent months denying they know anything about broad government spying on people who use their Internet services. But a legal case filed this week against a former Microsoft Corp employee shows the power these companies themselves have to snoop on their customers whenever they want to. (http://ift.tt/1oEpApx)

* Nearly all of the United States’ largest banks have adequate capital to withstand a severe economic downturn and market turmoil, the Federal Reserve has found in its latest annual stress test of the country’s financial system. (http://ift.tt/1jbdW6P)

* Airbnb, the company that was created nearly six years ago as a way to help people find spare rooms and couches to sleep on, is in advanced talks to raise more than $400 million in capital, a round of financing that would value it at more than $10 billion. (http://ift.tt/1oEpxu4)

* Credit Suisse has hired a new head of its power and renewables investment banking group from RBC Capital Markets, the firm announced in an internal memo on Thursday. (http://ift.tt/1jbdWn5)

 

Canada

THE GLOBE AND MAIL

* Canada is looking seriously at levying punitive sanctions against firms in Russian business sectors over Moscow’s seizure of Crimea, an increase in pressure under consideration as Prime Minister Stephen Harper heads to Ukraine to show solidarity with the beleaguered country. (http://ift.tt/1oEpxu6)

* On Friday, the Canadian Supreme Court will rule on whether Prime Minister Stephen Harper’s latest appointee to that court, Justice Marc Nadon of Quebec, has the legal qualifications for the job. (http://ift.tt/1jbdWn9)

Reports in the business section:

* U.S. retailer Nordstrom Inc will delay bringing its low-cost Rack stores to Canada, as it looks to contain expenses and avoid a repeat of Target Corp’s fumbled debut. (http://ift.tt/1oEpxKk)

NATIONAL POST

* Canada’s Conservative government wants to hear from the public about how to rewrite the prostitution laws that were struck down by the Supreme Court late last year. A month-long, online consultation period on the Justice Canada website began Monday and runs to March 17. (http://ift.tt/1jbdXaE)

FINANCIAL POST

* Valero Energy Corp, owner of Canada’s second-largest oil refinery, is working to source the Lévis, Quebec facility’s entire crude oil supply from North America by the end of 2014. The shift would mark a break from the refinery’s near-complete dependence on so-called Atlantic basin crude from Algeria and other overseas nations for the past several decades. (http://ift.tt/1oEpxKm)

* Merchant Law Group LLP, a Canadian class-action law firm, is going after General Motors Co for the automaker’s handling of defective ignition switches in 1.6 million small cars worldwide, including about 235,000 cars sold in this country. (http://ift.tt/1jbdXaG)

 

China

SHANGHAI SECURITIES NEWS

– China Hi-Tech Group Corp will repurchase all H shares of its listed subsidiary Jingwei Textile Machinery Co Ltd with a premium of 30 percent, the company said in a statement.

SECURITIES TIMES

– Hot rolled coils futures starts trading at Shanghai Futures Exchange on Friday with the benchmark price being 3316 yuan per tonne, according to a statement on its website.

NATIONAL BUSINESS NEWS

– China’s urbanization rate is expected to reach 60 percent by 2020, demanding investment of more than 42,00 billion yuan, the vice minister of the Ministry of Finance said. The investment will mainly come from private investors, he added.

21ST CENTURY BUSINESS HERALD

– China’s central bank said in a closed-door meeting that it would not change its supportive stance toward online financing industry, sources told the paper. This comes after it suspended the QR code payment service last week.

CHINA DAILY

– China should maintain diversity in its urbanization process and not harm the cultural and historical heritage preserved in its numerous villages and small towns, an editorial said.

PEOPLE’S DAILY

– The key of the success of China’s ongoing political and economic reform is the enforcement of the pronounced reform policies, the paper which acts as the party’s mouthpiece said in an editorial.

Britain

The Telegraph

BG GROUP PUTS 1,100 UK JOBS AT RISK

Up to 1,100 jobs are at risk at BG Group’s head office in Reading, England after the energy company started a redundancy programme. (http://ift.tt/1j9YgAA)

LIDL CHAIRMAN IN SHOCK EXIT OVER STRATEGY DIFFERENCES

The chairman of budget food retailer Lidl has abruptly resigned due to “unbridgeable” future strategy differences.(http://ift.tt/1j9Yfwu)

The Guardian

BP DRAWN INTO ROW OVER RUSSIA’S ANNEXATION OF CRIMEA

BP has been sucked into the row over Russia’s annexation of Crimea with calls for the delisting from the London Stock Exchange of Rosneft, the Moscow-based oil company in which the British group has a 20 percent holding. (http://ift.tt/1gZ57pr)

NEXT’S PROFITS SET TO OVERTAKE MARKS & SPENCER AFTER 12 PCT ANNUAL RISE

The decline of Marks & Spencer was again brutally underlined on Thursday when Next reported soaring profits that are almost certain to have beaten its venerable high street rival for the first time. (http://ift.tt/1gZ57px)

The Times

MULBERRY CHIEF EXECUTIVE QUITS IN WAKE OF PROFIT WARNING

Designs on pushing Mulberry Group upmarket have received a setback with the resignation of its chief executive only two years after he was appointed. (http://ift.tt/1j9YgQY)

POOR CUSTOMER SERVICE HITS RYANAIR CREDIT RATING

Ryanair’s reputation for abysmal customer service has resulted in a maiden credit rating for the budget airline of three notches above junk. (http://ift.tt/1j9YfMX)

INTU TAPS MARKET TO RAISE MONEY FOR MALLS

Intu Properties has defended its decision to buy three shopping centres from the Westfield Group for 868 million pounds ($1.43 billion) and fund the purchase through a deeply discounted 500 million pound rights issue. (http://ift.tt/1j9YgR4)

The Independent

BLOW FOR SCOTTISH NATIONALISTS AS BAE SAYS SPLIT WOULD DESTROY JOBS

The defence giant BAE Systems has finally warned that Scottish independence could threaten thousands of jobs north of the border, after months of refusing to comment on September’s vote. (http://ift.tt/1j9YgR8)

FAMILY WINS RIGHT TO SUE RBS OVER THEIR LOST FIRM

A family have won a landmark case giving them the green light to sue Royal Bank of Scotland Group for millions over the alleged mis-selling of interest rate swaps that ultimately left them with crippling borrowing costs on a 55 million pound loan. (http://ift.tt/1j9YgRc)

TRADER FINED AND BANNED FOR TRYING TO RIG UK BOND MARKET

A top trader was fined nearly 700,000 pounds and banned for life for manipulating the price of government bonds in an attempt to profit from the taxpayer-backed money printing programme known as QE. (http://ift.tt/1gZ57G7)

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

No domestic economic reports of note are scheduled today.

ANALYST RESEARCH

Upgrades

City National (CYN) upgraded to Outperform from Market Perform at Wells Fargo
Ensco (ESV) upgraded to Buy from Neutral at Guggenheim
Exelon (EXC) upgraded to Outperform from Neutral at Credit Suisse
JDSU (JDSU) upgraded to Buy from Neutral at MKM Partners
Posco (PKX) upgraded to Buy from Neutral at Citigroup
Progressive (PGR) upgraded to Outperform from Market Perform at William Blair
United Technologies (UTX) upgraded to Buy from Neutral at Goldman

Downgrades

Boeing (BA) downgraded to Neutral from Buy at Goldman
Community Health (CYH) downgraded to Fair Value from Buy at CRT Capital
ConAgra (CAG) downgraded to Neutral from Buy at Goldman
Equity One (EQY) downgraded to Hold from Buy at MLV & Co.
Lennar (LEN) downgraded to Neutral from Positive at Susquehanna
Symantec (SYMC) downgraded to Hold from Buy at Jefferies
Symantec (SYMC) downgraded to Market Perform from Outperform at Cowen
Symantec (SYMC) downgraded to Neutral from Buy at UBS
Symantec (SYMC) downgraded to Neutral from Outperform at RW Baird
Symantec (SYMC) downgraded to Sell from Buy at MKM Partners
Walgreens (WAG) downgraded to Sell from Hold at Cantor

Initiations

Apple (AAPL) initiated with an Outperform at Macquarie
Cardiovascular Systems (CSII) initiated with a Strong Buy at Needham
DexCom (DXCM) initiated with a Neutral at Sterne Agee
Erickson Air-Crane (EAC) initiated with a Hold at Canaccord
Insulet (PODD) initiated with a Buy at Sterne Agee
Keryx (KERX) initiated with a Buy at Mizuho
New York Mortgage (NYMT) initiated with a Buy at UBS
Primo Water (PRMW) initiated with a Buy at B. Riley
Spectranetics (SPNC) initiated with a Buy at Needham
Tandem Diabetes (TNDM) initiated with a Neutral at Sterne Agee
Volcano (VOLC) initiated with a Hold at Needham

COMPANY NEWS

The Federal Reserve released stress test results, said banks ‘collectively better positioned’
Netflix (NFLX) CEO said net neutrality ‘must be defended and strengthened’
Nike (NKE) warned that the impact from foreign currencies will impact its Q4 and FY15 results
Golden Gate Capital reported a 9.5% stake in Ann Inc (ANN), and said it intends to, “leverage [its] significant retail expertise and public and private equity experience to assist in creating value for the company’s shareholders
Aveo Pharmaceuticals (AVEO) said it regained worldwide rights to to AV-203, a clinical-stage inhibitory antibody candidate, from Biogen (BIIB)
Symantec (SYMC) terminated the employment of its CEO, Steve Bennett, and named Michael Brown as interim CEO

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Silver Wheaton (SLW), Rally Software (RALY), Nike (NKE), Envivio (ENVI), New York & Co. (NWY), TIBCO (TIBX)

Companies that missed consensus earnings expectations include:
Aeterna Zentaris (AEZS), Shoe Carnival (SCVL), AAR Corp. (AIR)

NEWSPAPERS/WEBSITES

General Motors (GM) CEO to testify before congressional comittee on April 1, WSJ says
Microsoft (MSFT) admits reading Hotmail inbox of blogger, AP reports
Sprint (S) to close three call centers, 55 stores, Re/code reports
Defense companies (LMT, UTX, RTN, GD) find new focus in working against hackers, WSJ reports
Caterpillar (CAT) at center of Senate overseas tax investigation, Bloomberg says
Deutsche Bank (DB) fails to end four U.S. lawsuits over soured mortgages, Reuters reports
Twitter (TWTR) banned in Turkey, VentureBeat says
Judge urges deeper Toyota (TM) probe to include employees, WSJ reports

SYNDICATE

A10 Networks (ATEN) 12.5M share IPO priced at $15.00
Amber Road (AMBR) 7.4M share IPO priced at $13.00
Borderfree (BRDR) 5M share IPO priced at $16.00
China Mobile Games (CMGE) 3.442M share Secondary priced at $24.00
EnLink Midstream Partners (ENLK) files to sell 17.99M common units for holders
Foundation Medicine (FMI) files to sell $150M of common stock
KB Home (KBH) 6.94M share Secondary priced at $18.00
PBF Energy (PBF) files to sell 15M shares of Class A common stock for holders
Sangamo (SGMO) 4.44M share Secondary priced at $22.50
Seacoast Banking (SBCF) files $150M mixed securities shelf
Sonus Networks (SONS) files to sell 43.125M shares for holders
TPG Specialty Lending (TSLX) 7M share IPO priced at $16.00
Tableau (DATA) 4M share Secondary priced at $89.25
TherapeuticsMD (TXMD) 9M share Secondary priced at $7.10
Versartis (VSAR) 6M share IPO priced at $21.00
Wix.com (WIX) files to sell $86.25M of ordinary shares


    

via Zero Hedge http://ift.tt/1fM1jHf Tyler Durden

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