- Futures rally after BOJ ramps up stimulus (Reuters), Japan’s central bank shocks markets with more easing as inflation slows (Reuters)
- Kuroda Jolts Markets With Assault on Deflation Mindset (BBG)
- Japan Mega-Pension Shifts to Stocks (WSJ)
- Russia Raises Interest Rates (WSJ)
- Not anymore, the BOJ is here: Fed Exit Could Spark Slump in All Markets, ATP CEO Says (BBG)
- Oil-Price Drop Has Saudi Officials Divided (WSJ)
- Wal-Mart Weighs Matching Online Prices from Amazon (WSJ)
- Euro-Area Inflation Picks Up From Five-Year Low on Stimulus (BBG)
- Big Banks Brace for Penalties in Probes (WSJ)
- Ex-UBS Trader Defense Could Be Threat to U.S. Forex Cases (BBG)
- Democrats Lose Their Grip on Voters With Keys to the House (WSJ)
- Weak Wages Stir Voter Ire at Obama Amid Gridlock (BBG)
- Central Banker Hero Becomes Face of Failure in Swedish Tale (BBG)
- Shale Boom Redraws Oil Routes as Alaskans Ship to Korea (BBG)
- TD’s Masrani Says U.S. Buying Spree Is History (BBG)
Overnight Media Digest
WSJ
* Big banks in the United States and Europe are stockpiling billions to pay for a potential trans-Atlantic settlement of allegations that they manipulated foreign-exchange rates as talks heat up with regulators on both continents. (http://on.wsj.com/1DCRQyq)
* The U.S. economy expanded at a healthy 3.5 percent annual pace during the third quarter, a sign of sustained growth fueled by government spending and a narrower trade deficit despite mounting concerns about the health of overseas economies. (http://on.wsj.com/1E5n2IJ)
* Wal-Mart is testing a program to match online prices from rivals like Amazon this holiday season, a move that could make the discounter more competitive but cut into profits. (http://on.wsj.com/1rEZjqj)
* Consumers are spending more and using cash less, a combination that is driving profits higher at MasterCard Inc and Visa Inc, the largest credit-card payment networks in the world. (http://on.wsj.com/1q6xSpJ)
* The National Highway Traffic Safety Administration ordered air bag maker Takata to disclose emails and other information on what it knows about millions of defective air bag systems in older vehicles on the road. (http://on.wsj.com/1wM7ozH)
* Bank of America Corp’s decision to make Brian Moynihan chairman as well as chief executive is drawing fire from some influential shareholders. Three of the largest pension systems in the United States are pushing back on the bank’s move, announced earlier this month. (http://on.wsj.com/1q6yhsl)
* Pacific Investment Management Co in the past month pulled all its futures-clearing business from a unit of State Street Corp after State Street asked Pimco to reduce some positions, said people familiar with the matter. (http://on.wsj.com/1DCSADZ)
FT
Overview U.S. prosecutors have reopened an investigation into Standard Chartered Plc on suspicions that the bank tucked away transactions that violated sanctions laws as it was settling a related action two years ago, people familiar with the matter said.
Britain’s Treasury has dodged a request from Bank of England to be granted powers over buy-to-let lending, saying it wants to gather more evidence on how the market works. The Treasury on Thursday issued a consultation paper suggesting to give the bank’s Financial Policy Committee new legal tools to control residential mortgage lending. The move would allow the Treasury to set mandatory limits on loan-to-value ratios and debt-to-income ratios in residential lending.
Under pressure from Britain’s Treasury, the Democratic Unionist party and Sinn Fein, two biggest parties in the devolved administration in Belfast, agreed to back a budget drafted by the Northern Ireland government that will see public spending be hurt by deep cuts. The budget would likely lead to public spending cuts of up to 1 billion pounds ($1.60 billion).
The Scotland Labour Party is facing a potential electoral defeat in Scotland, with a new poll conducted by Ipsos Mori poll for STV that shows just 23 percent of voters would back the Labour Party if a general election were to be held immediately, compared with 52 percent who would back the Scottish National Party. That would imply 41 Westminster seats that were won in Scotland in 2010 to be no longer in hands of the Labour Party.
NYT
* Russian and Ukrainian officials reached an agreement on Thursday night to resume Russian deliveries of natural gas to prevent shortages over the winter. The deal caps months of laborious talks under the aegis of European Union authorities on how much, and how soon, Ukraine needed to pay Russia for gas it has already consumed, and on the terms for future deliveries. (http://nyti.ms/1uaStQE)
* Timothy D. Cook, Apple Inc’s chief executive, said on Thursday he was gay – the most striking example of how he is in many ways making Apple a more open, less secretive company. (http://nyti.ms/1zN8K0W)
* A U.S. government report on Thursday estimated that the nation’s economic output rose at a healthy 3.5 percent annual rate in the third quarter, driven by gains across the board, bolstered by an unusual burst of military spending and a more favorable trade balance. (http://nyti.ms/1xFu1Eg)
* Citigroup Inc startled investors on Thursday with an announcement that it had to lower its third-quarter profit by $600 million because of “rapidly-evolving regulatory inquiries and investigations”. Citigroup reported its results for the quarter two weeks ago, just before the legal development arose. (http://nyti.ms/10DF4DV)
* Andy Rubin, a high-ranking Google Inc executive who spearheaded the company’s entrance into mobile phones and tablets and was in charge of the company’s nascent robotics group, has left the company to start a tech incubator focused on start-ups interested in building hardware. (http://nyti.ms/1rYoy83)
Canada
THE GLOBE AND MAIL
** Alberta’s new political leadership is calling on Ottawa to take another look at foreign investment rules blamed for a dramatic drop in energy investments from China. “We are urging a review of some of the quick changes that were done to our Investment Canada Act,” said Ron Hoffmann, the province’s newly named senior representative for the Asia-Pacific Basin. (http://bit.ly/1q7tXsS)
** Canadian warplanes are poised to start striking targets in Iraq, with the government saying bombing of Islamic militant forces should begin very shortly. “They haven’t launched strikes yet, but it could happen at any moment,” one government source said. (http://bit.ly/1tHl2TV)
** Prime Minister Stephen Harper has unveiled a package of family-focused tax cuts worth nearly C$27-billion ($24.12 billion) over six years that will shape the political debate heading into the 2015 election campaign. (http://bit.ly/1zjYsEe)
NATIONAL POST
** TransCanada Corp’s twin-cities news conference Thursday to announce the filing of its Energy East application to the National Energy Board was pipeline theatre at its finest. After 18 months of planning, the company presented to the world a 30,000-page document – filling 68 binders in 11 official-looking boxes – to provide evidence in support of the C$12-billion project. (http://bit.ly/1E7TLNQ)
** A chaotic Ottawa police traffic stop on Bank Street in which a plainclothes Ontario Provincial Police officer fired a single shot at a man was part of a Royal Canadian Mounted Police national security investigation, Postmedia News has learned. (http://bit.ly/13oTJUA)
** The Liberal government will reintroduce an updated version of the sex education curriculum for Ontario schools that it withdrew in 2010 because of objections from religious leaders, Education Minister Liz Sandals said Thursday. (http://bit.ly/1tooMrP)
China
CHINA SECURITIES JOURNAL
– Chinese carmaker SAIC Motor Corp Ltd expects to launch its “Internet car” in 2016, the firm’s chairman Chen Hong said. The car is being jointly developed with internet giant Alibaba.
SECURITIES TIMES
– Twenty brokerages have been approved to be involved in a pilot project to issue short-term bonds, the China Securities Regulatory Commission said in a statement.
SHANGHAI SECURITIES NEWS
Companies listed in Shanghai and Shenzhen in China saw profits grow 8.75 percent in the first nine months of the year, according to company filings. This was a slowdown from 14.18 percent growth in the same period last year.
SHANGHAI DAILY
Authorities in Shanghai have closed down two restaurants located within city parks in a crackdown on official extravagance and corruption, the local parks authority said.
CHINA DAILY
– Close to three-quarters of fish species in eastern Shandong province have died out since the 1970s due to severe water pollution and overfishing, the local government said.
Britain
The Times
RIO SET TO WRITE OFF $2.5 BLN ON DELAYED MINE
Rio Tinto Plc appeared set to take a $2.5 billion writedown on its huge but troubled copper project in Mongolia. Construction of the $5 billion Oyu Tolgoi mine has become ensnared in a tax dispute with the government. The mine has the potential to transform an economy that is on a par with Angola or Swaziland in national income per head. The International Monetary Fund says that it will be responsible for a third of the country’s GDP growth by the time it is operational. (http://thetim.es/1sNmxLd)
BARCLAYS SETS ASIDE 500 MLN STG FOR FOREX-RIGGING INVESTIGATION
Barclays Plc has set aside 500 million pounds ($799.75 million) to pay for the cost of the foreign exchange manipulation scandal and warned that its large investment banking arm had a disappointing third quarter. The forex provision comes as the bank prepares to settle with regulators over its role in allegedly attempting to rig foreign exchange benchmarks for its own gain. (http://thetim.es/1nU2sXP)
END NEARER FOR BRENT AS PLATFORMS GO
The giant oilfield that gave the Brent crude index its name and kicked off the North Sea boom in the 1970s is closer to being decommissioned after Shell retired two of its remaining three platforms. The Anglo-Dutch group, which operates the Brent field, said the two platforms were “no longer economical”, but it added that Brent Alpha and Brent Bravo had “significantly exceeded’ their original expected production duration after producing oil and gas for more than 35 years. (http://thetim.es/1tjXaWq)
The Telegraph
MORTGAGE COSTS COULD RISE AS BANK OF ENGLAND INTRODUCES TOUGH SAFETY NETS FOR BANKS
Britain’s banks will be forced to maintain significant financial safety nets under rules announced on Friday that industry leaders say could raise the cost of mortgages and penalise building societies. The Bank of England is expected to go beyond global standards in revealing the leverage ratio, the level of financial reserves banks must hold to protect against a downturn, it expects banks to adopt. (http://bit.ly/13no5ab)
BP RENEWS CALLS FOR OIL SPILL COMPENSATION CHIEF TO BE SACKED
BP Plc has stepped up calls for the man in charge of the Gulf of Mexico compensation fund to be sacked, after discovering a trove of new evidence that allegedly casts doubt on his impartiality. The oil giant had already asked a U.S. court to remove Patrick Juneau from his post overseeing payouts to victims of the Deepwater Horizon disaster, after he was accused of misleading the court about a potential conflict of interest. (http://bit.ly/1FZPU76)
OFFSHORE WIND FARMS MAY BE SCRAPPED DUE TO BUDGET CAP, SCOTTISHPOWER WARNS
Several proposed offshore wind farms may be scrapped in coming months because the government is not awarding enough subsidies, the head of energy giant ScottishPower has said. Keith Anderson, chief corporate officer, said it was cutting the size of its planned 240-turbine East Anglia offshore wind farm because the budget for subsidies to be awarded this year was “not big enough”. The project could be scrapped altogether if it did not secure a subsidy contract this year. (http://bit.ly/1rXxN8y)
Sky News EX-TESCO BOSS LEAHY EYES METAPACK SHARE SALE
A logistics firm that counts the former Tesco Plc boss Sir Terry Leahy among its directors is drawing up plans for a share sale that would crystallise multi-million pound fortunes for its investors. MetaPack, which provides Internet delivery services to leading retailers such as Marks and Spencer, has appointed GP Bullhound, a technology-focused investment bank, to work on the fundraising. (http://bit.ly/1wNC6dd)
RBS LEANS TOWARDS NAMING EY AS NEW AUDITOR
Royal Bank of Scotland Group Plc (RBS) is leaning towards appointing the smallest of the Big Four accountancy firms as its new auditor, a move that would spell the end of its relationship with Fred Goodwin’s erstwhile employer. RBS is closing in on an agreement to hand EY its lucrative audit mandate, although insiders insisted that a final decision had not yet been made and that a rival could yet emerge as the winner. KPMG is also in contention for the role, and an announcement is not expected to be made alongside RBS’s third-quarter results on Friday. (http://bit.ly/1xFXr51)
Fly On The Wall Pre-Morning Buzz
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
Chicago PMI for October at 9:45–consensus 60.5
University of Michigan consumer sentiment index for October at 9:55–consensus 86.4
ANALYST RESEARCH
Upgrades
AXT, Inc. (AXTI) upgraded to Buy from Neutral at B. Riley
Acadia (ACHC) upgraded to Buy from Hold at Deutsche Bank
Atmel (ATML) upgraded to Outperform from Market Perform at FBR Capital
Blue Nile (NILE) upgraded to Buy from Neutral at BofA/Merrill
CEVA (CEVA) upgraded to Buy from Hold at Wunderlich
Coty (COTY) upgraded to Buy from Hold at Stifel
Higher One (ONE) upgraded to Neutral from Sell at Compass Point
Imperva (IMPV) upgraded to Overweight from Neutral at Piper Jaffray
Incyte (INCY) upgraded to Neutral from Sell at Goldman
Intrepid Potash (IPI) upgraded to Market Perform from Underperform at BMO Capital
Medical Properties upgraded to Outperform from Market Perform at JMP Securities
MercadoLibre (MELI) upgraded to Buy from Neutral at BofA/Merrill
Mohawk (MHK) upgraded to Strong Buy from Outperform at Raymond James
SandRidge Mississippian Trust II (SDR) upgraded to Market Perform at Raymond James
Seattle Genetics (SGEN) upgraded to Hold from Sell at Cantor
Veeco (VECO) upgraded to Positive from Neutral at Susquehanna
Downgrades
ARMOUR Residential (ARR) downgraded to Neutral from Buy at Compass Point
Aegerion (AEGR) downgraded to Hold from Buy at Deutsche Bank
Aegerion (AEGR) downgraded to Hold from Buy at Jefferies
Aegerion (AEGR) downgraded to Neutral from Overweight at JPMorgan
American States Water (AWR) downgraded to Hold from Buy at Brean Capital
Audience (ADNC) downgraded to Hold from Buy at Topeka
Audience (ADNC) downgraded to Sector Perform from Outperform at Pacific Crest
Avon Products (AVP) downgraded to Hold from Buy at Stifel
Avon Products (AVP) downgraded to Neutral from Buy at B. Riley
Bottomline Technologies (EPAY) downgraded to Hold from Buy at Canaccord
Bottomline Technologies (EPAY) downgraded to Outperform at Raymond James
CACI (CACI) downgraded to Neutral from Overweight at JPMorgan
Canadian Utilities (CDUAF) downgraded to Underweight from Equal Weight at Barclays
Chesapeake Utilities (CPK) downgraded to Hold from Buy at Brean Capital
Consolidated Communications (CNSL) downgraded to Hold from Buy at Jefferies
Hyster-Yale Materials (HY) downgraded to Neutral at Global Hunter
Legacy Reserves (LGCY) downgraded to Outperform from Top Pick at RBC Capital
M.D.C. Holdings (MDC) downgraded to Neutral from Buy at Sterne Agee
Midcoast Energy (MEP) downgraded to Neutral from Outperform at Credit Suisse
Pacira (PCRX) downgraded to Neutral from Buy at BofA/Merrill
Park Sterling Bank (PSTB) downgraded to Market Perform from Outperform at Raymond James
Regional Management (RM) downgraded to Hold from Buy at Jefferies
Regional Management (RM) downgraded to Market Perform at JMP Securities
Regional Management (RM) downgraded to Market Perform from Outperform at FBR Capital
STAAR Surgical (STAA) downgraded to Hold from Buy at Canaccord
STAAR Surgical (STAA) downgraded to Market Perform from Outperform at William Blair
TASER (TASR) downgraded to Sell from Fair Value at CRT Capital
Time Warner Cable (TWC) downgraded to Hold from Buy at Brean Capital
Trupanion (TRUP) downgraded to Equal Weight from Overweight at Barclays
Ultra Petroleum (UPL) downgraded to Neutral from Buy at UBS
Vectren (VVC) downgraded to Hold from Buy at Brean Capital
WGL Holdings (WGL) downgraded to Hold from Buy at Brean Capital
Walter Energy (WLT) downgraded to Underweight from Hold at BB&T
Westport (WPRT) downgraded to Hold from Buy at Deutsche Bank
Initiations
Eros International (EROS) initiated with an Outperform at Macquarie
New Media (NEWM) initiated with a Buy, $41 price target at Citigroup
Sabra Health Care (SBRA) initiated with a Market Perform at Wells Fargo
COMPANY NEWS
Citigroup (C) lowered Q3 results due to $600M increase in legal accruals
Omega Healthcare (OHI) to acquire all outstanding shares of Aviv REIT (AVIV) in stock-for-stock deal valued at $3B
Royal Bank of Scotland (RBS) CEO said cost reduction remains on track, has ‘long list of conduct and litigation issues’
FDA expressed willingness to conduct ‘rolling review’ of Sarepta (SRPT) eteplirsen NDA
Starbucks (SBUX) said it plans to begin food, beverage delivery service in FY15
Boyd Gaming (BYD) announced that it is evaluating possibility of forming REIT with its real estate assets
LinkedIn (LNKD) reported Q3 members 332M vs. 313M last quarter
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
GoPro (GPRO), LinkedIn (LNKD), Groupon (GRPN), Mylan (MYL), Exelis (XLS), Aon plc (AON), Newell Rubbermaid (NWL), GAIN Capital (GCAP), CommScope (COMM), Genesee & Wyoming (GWR), Tesoro (TSO), Investors Bancorp (ISBC), The Bancorp (TBBK), Empire District Electric (EDE), Green Bancorp (GNBC), Oil States (OIS), AptarGroup (ATR), Heritage Oaks (HEOP), Immersion (IMMR), Oplink Communications (OPLK), Energen (EGN), Ziopharm (ZIOP), TeleNav (TNAV), Ashford Hospitality Prime (AHP), Mercer (MERC), Greatbatch (GB), Baylake Corp. (BYLK), eHealth (EHTH), Cohu (COHU), FreightCar America (RAIL), Globus Medical (GMED), Emulex (ELX), Audience (ADNC), MasTec (MTZ), World Fuel Services (INT), Newpark Resources (NR), Boston Beer (SAM), Zendesk (ZEN), Control4 (CTRL), Vocera (VCRA), MaxLinear (MXL), Ellie Mae (ELLI), Bottomline Technologies (EPAY), Midcoast Energy (MEP), AXT, Inc. (AXTI), YRC Worldwide (YRCW), Lantronix (LTRX), Synageva (GEVA), Brightcove (BCOV), ServiceSource (SREV), Scansource (SCSC), GenMark (GNMK), Westport (WPRT), Seattle Genetics (SGEN), Molina Healthcare (MOH), Silicon Image (SIMG), AMN Healthcare (AHS), Trecora Resources (TREC), Imperva (IMPV), Green Dot (GDOT), Fluor (FLR), Electro Scientific (ESIO), DigitalGlobe (DGI), Live Nation (LYV), NeuStar (NSR), AtriCure (ATRC), FleetCor (FLT), National Instruments (NATI), MercadoLibre (MELI), Cytokinetics (CYTK), Expedia (EXPE), OncoGenex (OGXI), Castlight Health (CSLT), Western Union (WU), Federated National (FNHC), Columbia Sportswear (COLM), Affymetrix (AFFX)
Companies that missed consensus earnings expectations include:
NTELOS (NTLS), Pattern Energy (PEGI), Vantage Drilling (VTG), MB Financial (MBFI), Key Energy (KEG), Tesoro Logistics (TLLP), A.V. Homes (AVHI), , Eldorado Gold (EGO), Erie Indemnity (ERIE), Saul Centers (BFS), QuinStreet (QNST), Cheniere Energy (LNG), WSFS Financial (WSFS), Alliqua (ALQA), First Financial Bancorp (FFBC), CSP Inc. (CSPI), ON Semiconductor (ONNN), Meta Financial (CASH), Trimble (TRMB), Alphatec (ATEC), Tempur Sealy (TPX), Ikanos (IKAN), Digi International (DGII), Aegerion (AEGR), Republic Services (RSG), Unwired Planet (UPIP), NuVasive (NUVA), Tallgrass Energy (TEP), American Vanguard (AVD), Theravance (THRX), A10 Networks (ATEN), Boyd Gaming (BYD), First Bancorp (fbnc), Omnicell (OMCL), STAAR Surgical (STAA), Standard Pacific (SPF), Chemed (CHE), Outerwall (OUTR), Regional Management (RM), Fluidigm (FLDM)
Companies that matched consensus earnings expectations include:
Starbucks (SBUX), Cheniere Energy Partners (CQH), PCTEL, Inc. (PCTI), Territorial Bancorp (TBNK), Kofax (KFX), Cavco Industries (CVCO), Select Medical (SEM), Spansion (CODE), Endologix (ELGX), Microchip (MCHP), TeleCommunication Systems (TSYS), Pixelworks (PXLW), SciQuest (SQI), Virtusa (VRTU), PerkinElmer (PKI), Bally Technologies (BYI), Addus HomeCare (ADUS), Tuesday Morning (TUES)
NEWSPAPERS/WEBSITES
McDonald’s (MCD) reorganizing U.S. structure to respond to customers’ tastes, WSJ reports
Stratasys (SSYS) CEO sees growth despite HP (HPQ) 3D printing plans, Reuters reports
Sony (SNE) sees ‘significant reduction’ in Chinese mobile market, FT reports
Twitter (TWTR) demotes head of product Daniel Graf, WSJ reports
Google’s (GOOG) robotics head Andy Rubin leaving company, WSJ reports
Russia, Ukraine reach deal on natural gas, NY Times reports (OGZPY, E, TOT, BP, RDS.A, RDS.B)
SYNDICATE
Chimerix (CMRX) 3.65M share Secondary priced at $29.00
Corporate Office Properties (OFC) files to sell 4.8M shares of common stock
La Quinta (LQ) files to sell 20M shares of common stock for holders
via Zero Hedge http://ift.tt/1wQ00F3 Tyler Durden