- Moar central banks! Asian Stocks Rise Amid Stimulus Speculation; Topix Jumps (BBG)
- Syria rebels in south emerge as West’s last hope as moderates crushed elsewhere (Reuters)
- Bufett’s Berkshire to Buy Duracell Business From Procter & Gamble in $3B Deal (AP)
- Weak Demand, Real-Estate Slump Signal Headwinds for China (WSJ)
- China Slowdown Deepens as Leaders Said to Mull Cutting Target (BBG)
- Saudis Reject Talk of OPEC Market Share War as Oil Slides (BBG)
- Oil Tankers Stream Toward China as Price Drop Sparks Boom (BBG)
- Brent Extends Drop Below $80 as OPEC Seen Resisting Cuts (BBG)
- Obama to announce action on immigration (Reuters)
- Sony to Test Streaming Video on an Invite-Only Basis (WSJ)
- Takata says subject of U.S. criminal probe on air bag flaws (Reuters)
- Pimco Total Return Fund Cuts Holdings of Short-Term Financial Instruments (WSJ)
- London House-Price Index Drops as Capital Leads Slowdown (BBG)
- Ukraine Tensions Rise as U.S., EU Weigh More Sanctions (BBG)
- Bank of Korea Keeps Rate Unchanged as Lee Weighs Weak Yen (BBG)
- Barclays Pressed by New York’s Bank Regulator in FX Probe (BBG)
Overnight Media Digest
WSJ
* NATO said Russia has sent tanks, howitzers and other weaponry along with troops into eastern Ukraine in recent days, possibly aiming to consolidate separatist enclaves there in preparation for a long-term standoff. (http://on.wsj.com/1pT9v4s)
* President Barack Obama’s plan to curb greenhouse-gas emissions alongside China sets the stage for lengthy confrontations with other nations resistant to making cuts, Republicans who want to roll back regulations and environmentalists pushing for bigger reductions. (http://on.wsj.com/1yBi6YE)
* A Kurdish paramilitary group will help the United States expel Islamic militants in exchange for a stretch of northern Syria to build its vision of utopia. (http://on.wsj.com/1qEHM21)
* The Supreme Court appeared divided over whether Alabama can draw its election map with predominantly black legislative districts that effectively limit racially diverse areas where Democrats can compete. (http://on.wsj.com/1v631ka)
* Sony Corp is aiming to steal away some of the TV industry’s highest-paying subscribers with a streaming video service that it will begin rolling out in the New York area later this month. (http://on.wsj.com/1EE55S0)
* Hasbro Inc is in early talks to buy DreamWorks Animation SKG Inc in a deal that would bring an animation studio that just recently began diversifying beyond the big screen under the fold of a major toy maker, according to people familiar with the matter. (http://on.wsj.com/1wVhHln)
* Federal officials are examining the connections between Boston financial giant State Street Corp and an Ohio lobbyist as part of a broader look at the company’s dealings with public pension funds, according to people familiar with the investigations. (http://on.wsj.com/1yBk77d)
* Valeant, in its fight for Botox maker Allergan Inc, is investing cash and time wooing the doctors it would need on its side after a takeover. (http://on.wsj.com/1sG1BH7)
* Citigroup Inc and JPMorgan Chase & Co agreed to pay more than $1 billion each to resolve allegations that they tried for years to manipulate the foreign-currency market, the biggest fines wrung from a group of six banks by regulators in the United States, the UK and Switzerland. (http://on.wsj.com/1EwjNZd)
* Goldman Sachs Group Inc has promoted 78 people to the coveted role of “partner,” the second-smallest class since the bank’s 1999 initial public offering, underlining the firm’s determination to avoid drastic strategic changes despite the regulatory and market overhaul that followed the financial crisis. (http://on.wsj.com/1EDJLfl)
* Comcast Corp is pushing ahead with its acquisition of Time Warner Cable Inc, despite hiccups in the regulatory review process and looming regulation of the broadband industry. (http://on.wsj.com/1v55prM)
* Pacific Investment Management Co’s Total Return Fund reduced holdings of short-term financial instruments last month, the latest nod to expectations that the Federal Reserve will raise short-term rates next year. (http://on.wsj.com/11154bR)
* Financial services firm BB&T Corp has agreed to buy Susquehanna Bancshares Inc for about $2.5 billion in cash and stock, a move that will grow the North Carolina bank’s footprint in the mid-Atlantic region. (http://on.wsj.com/1tHk7OD)
* Google Inc plans to introduce a YouTube music-subscription service called YouTube Music Key, which will be available on personal computers as well as smartphones running Google’s Android operating system to start. (http://on.wsj.com/1u2rl3a)
* News Corp’s Dow Jones unit has said that it would eliminate certain local-language news products in Germany and Turkey, a radio broadcasting unit and a Sunday insert in partner newspapers resulting in a loss of some 50 to 60 jobs. (http://on.wsj.com/1117WWh)
* Dow Chemical Co said it would sell stakes in two petrochemical joint ventures in Kuwait as part of its efforts to streamline its business and raise cash so the company can buy back more of its own shares. (http://on.wsj.com/14fOSFN)
* Twitter Inc executives have laid out a strong case for their long-term strategy in an attempt to address mounting investor concerns over the company’s growth prospects and muddled vision. (http://on.wsj.com/1xtU9TB)
FT
The sale of G4S’ U.S. government solutions unit will free the company of its Guantanamo Bay duties. The world’s largest security company put the division up for sale since the U.S. government barred it from having any control over its U.S. activities because it is a non-American company.
Six major banks from the United States and United Kingdom have been fined $4.3 billion for their role in a foreign exchange rate-rigging scandal. Regulators fined UBS AG , Citi, JPMorgan Chase, HSBC, Royal Bank of Scotland and Bank of America, although Barclays pulled out of settlement talks, saying it was seeking “a more general co-ordinated settlement” with other regulators.
In a letter to the Financial Times, Britain’s top 50 business figures have appealed to the country’s political parties to commit to take a quick decision on airport expansion plans in their election manifesto, ahead of the due general elections next year.
U.S. retailer Amazon.com is planning to test delivery drones for its Prime Air service in Cambridge, as it kicks off its research operations in Britain. The Seattle-based company has advertised seeking flight test engineers with at least five years of aviation experience, either civilian or military.
NYT
* Hasbro Inc is in advanced talks to buy DreamWorks Animation SKG Inc in a mix of cash and stock deal to form an unusual union of toy maker and animation studio, people familiar with the matter said. Jeffrey Katzenberg, the chief executive of DreamWorks Animation is seeking more than $30 a share, a significant premium over his company’s current stock price. (http://nyti.ms/1xj4Vyr)
* Tens of thousands of Americans who went through bankruptcy are still haunted by debts long after federal judges have extinguished the bills in court. Lawyers are investigating JPMorgan Chase & Co, Bank of America Corp, Citigroup Inc and Synchrony Financial suspecting the banks of violating federal bankruptcy law. (http://nyti.ms/1EDLOQJ)
* United States President Barack Obama will arrive at an international economic meeting in Australia this weekend hoping to press European and Asian leaders to get their economies moving again. United States Treasury Secretary Jacob Lew and Obama will arrive at the G-20 meeting in Brisbane pressing nations to raise their spending and monetary levers while struggling to secure their own economic policies. (http://nyti.ms/1uosUKn)
* Even before President Obama issued his forceful call this week for “the strongest possible rules” to protect an open Internet, Tom Wheeler, the chairman of the Federal Communications Commission, was in a tight spot. Wheeler tries to thread the needle of politics and public policy to safeguard the openness of the Internet, he must also face members of Congress and a technology industry wary of regulations stifling expansion of the Internet. (http://nyti.ms/1xzFMy4)
* The emissions targets announced by United States President Barack Obama and President Xi Jinping of China are expected to be at the heart of a 2015 international climate treaty. Nearly two decades ago, the climate change treaty failed to stop the rise of planet-warming carbon pollution because of a standoff between China and the United States, which never signed the deal. (http://nyti.ms/1GR29n3)
* Churchill Downs Inc, which owns the Kentucky Derby horse race, said it would pay up to $885 million to buy Big Fish Games, a Seattle-based publisher of mobile games founded 12 years ago. Churchill Downs may be the most unconventional suitor yet. (http://nyti.ms/1uedkBa)
* YouTube unveiled YouTube Music Key, a upgrade of its music offerings that will include higher-quality audio for most songs and give users the option of paying $8 a month for extra features, chief among them removing YouTube’s ads. As YouTube pushes into paid content, other online music outlets are being forced to defend or change their business models to better compensate artists. (http://nyti.ms/1uoB1Xa)
* The Obama administration said it would nominate Antonio Weiss, the global head of investment banking at Lazard, as the Treasury Department’s top official for domestic finance matters. If approved by the Senate, he would oversee the Treasury Department’s work on fiscal policy and operations. (http://nyti.ms/1xuOr3P)
* Monte dei Paschi di Siena, Europe’s oldest bank reported a loss of 797 million euros, or $991 million, in the third quarter after it increased the amount of money set aside to cover problem loans. Last week, the bank’s board approved a plan to sell new shares to raise as much as 2.5 billion euros to satisfy European Central Bank demands and to repay a government bailout. (http://nyti.ms/1qEOULR)
* An inquiry found that no one at the Bank of England was involved in unlawful behavior related to the foreign exchange market, but a top official was fired after he failed to follow internal policies. (http://nyti.ms/1BdsADf)
* Mathew Martoma, a portfolio manager for Steven Cohen’s former hedge fund, was denied his request to delay the start of his nine-year prison sentence. It is now up to the trial judge to set a new date for Martoma to begin serving his sentence. (http://nyti.ms/1xPBr8a)
* The Mexican government made a United States securities filing for an issue of bonds that would include new, improved collective action clauses specifically written to keep holdout investors like Paul Singer at bay. (http://nyti.ms/1zlqHzH)
* Goldman Sachs Group Inc has added 78 executives to its ranks of partners. The addition brings the total number of Goldman partners to 467. (http://nyti.ms/1u3TFCe)
Canada
THE GLOBE AND MAIL
** U.S. President Barack Obama and Chinese President Xi Jinping have raised the stakes in the battle over global climate policy, and in doing so, are forcing the hand of Prime Minister Stephen Harper. The U.S.-China accord raises significant challenges heading into an election year for Harper, who has linked Canada’s actions on climate change with those of the United States. (http://bit.ly/1zP269i)
** The recent drop in oil prices has forced Ottawa to chop billions off its revenue projections, a development that when combined with new tax cuts means the government is expecting only modest surpluses in the coming years. (http://bit.ly/1EEJ99r)
** A key executive in charge of Enbridge Inc’s Northern Gateway pipeline is retiring, dealing a blow to the company’s efforts to build support for the project in British Columbia. Janet Holder, who served as executive vice-president, western access, is leaving Enbridge effective Dec. 31. (http://bit.ly/1BeEU6a)
NATIONAL POST
** On Thursday, the Toronto police board will meet to consider Chief Bill Blair’s initial budget request to reduce the complement of officers by 43 and flatline spending, before factoring in any increase negotiated through the collective agreement. (http://bit.ly/1v7j6pG)
** New Brunswick Premier Brian Gallant says his office will look into an email sent from the president of a Liberal riding association that says it is the usual practice that government road contracts are given to supporters of the government. (http://bit.ly/11kg5WK)
** As Canada slips from fall into frostbite season, there is one clothing item shoppers won’t see on the shelves at Target Corp as it fights to grab a much bigger share of the holiday shopping pie this year: wool coats. The retailer’s Canadian executives have been working overtime to try to improve the mass merchant’s disappointing performance before Christmas hits, based on what they learned from last year’s mistakes and ongoing customer research. (http://bit.ly/1sGiaCB)
China
CHINA SECURITIES JOURNAL
– The State Council, China’s cabinet, plans to formulate policy to reduce losses of state-owned assets from state-owned companies, the newspaper reported, citing a source who is familiar with the issue.
– Shanxi province has stipulated that new energy vehicles must account for a minimum of 40 percent of fresh or replaced automobiles at government or social service institutions, according to the provincial government’s latest regulation to promote the new energy industry.
SECURITIES TIMES
– Aviation Industry Corp of China has projected a demand for 5,438 commercial airplanes in China in the next 20 years, including 4,491 passenger jets and 992 regional jets.
SHANGHAI DAILY
– A Chinese man who swindled overseas buyers on online shopping portal eBay was sentenced to 14 months in jail by a Shanghai court. The man sold $23,000 worth of products on eBay, but failed to deliver them, according to the paper.
CHINA DAILY
– Cows sold by dairy giant Modern Farming Group Co Ltd were culled in Shaanxi province after being found infected with bovine tuberculosis and brucellosis. Officials are investigating how the cows came to be transported in the first place.
– China should develop a new-generation heavy lift rocket system that is more powerful than the current Long March 5 rocket, a senior rocket researcher told China Daily on the sidelines of an industry conference on Wednesday. He said the current rocket in use was not strong enough to send a manned mission to the moon.
Britain
The Times
* U.S. regulator attacks ‘weak’ forex fines
New York’s leading financial regulator has warned that a $4.3 billion settlement with six banks over the rigging of foreign exchange markets was “too weak” and attacked the arrangement for allowing big companies to escape proper scrutiny. (http://thetim.es/1xiI464)
* Sainsbury’s scraps new stores after profits fall
Fickle shopping habits and falling food prices have prompted J Sainsbury Plc to abandon construction of dozens of new supermarkets, resulting in a huge write-off on property values that sent the company crashing into the red. (http://thetim.es/1pSNgvj)
The Guardian
* Amazon to begin testing same-day delivery drones in Cambridge
Amazon.com Inc is planning to test drones in Cambridge, England, as the battle to offer consumers same-day deliveries heats up. The U.S. company announced with considerable fanfare late last year that it was considering using drones as a way of dramatically reducing the time it takes to deliver orders to customers. (http://thetim.es/1pSNgvj)
* Interest rates may be held until late 2015 as inflation likely to fall below 1 percent
The Bank of England has signalled that interest rates could remain on hold until next autumn as inflation is likely to fall below 1 percent in early 2015. Plunging commodity prices and weak wage growth against a sluggish backdrop for global growth have triggered a drastic change of view on the outlook for inflation. (http://bit.ly/110MVuZ)
The Telegraph
* Saudi oil minister says falling oil price is ‘purely business’
Saudi Arabia’s oil minister Ali Naimi has finally broken his silence on falling oil prices declaring it’s “purely business” and that recent declines are not a scheme engineered by the kingdom to either bankrupt Russia or shut down the U.S. shale industry. (http://bit.ly/14fj5od)
* G4S shares knocked by elaborate hoax regarding company’s finances
Shares in G4S Plc were hit after the security services company was targeted by a hoax on the same day that it issued an encouraging trading update. A fraudulent statement was emailed to journalists suggesting that the FTSE 100 company had discovered errors in its accounts and that they would be restated. (http://bit.ly/1xzcJe4)
Sky News
* Buyout firm Carlyle eyes 500 mln pounds Serco firesale
Carlyle Group LP, the private equity firm, is among a pack of predators stalking a package of businesses being put up for sale by Serco Group Plc, the struggling outsourcing group. (http://bit.ly/1tHK0xK)
* Colluding traders called themselves ‘A-Team’
Traders who colluded among themselves to fix foreign exchange markets used chat rooms to communicate and referred to themselves as the “A-team,” an 18-month investigation has revealed. The investigation, carried out by the Financial Conduct Authority in the UK and the Commodity Futures Trading Commission in the United States, found bank employees formed groups which shared information about client activity in breach of market rules. (http://bit.ly/11jdBI0)
The Independent
* Unpaid internships cost graduates ‘926 pounds a month’
Graduates are struggling to get on the career ladder because they cannot afford to work for free, research suggests. Almost a third of young people who have recently left university are working as unpaid interns in a bid to improve their job prospects – but many are losing out because the average placement requires them to stump up around 5,000 pound ($7,885). (http://ind.pn/1EBI6qJ)
* Spotify hits back at Taylor Swift: Streaming site has paid $2 bln royalties to artists
Responding to Taylor Swift’s decision to pull her entire back catalogue from Spotify for “taking the word ‘music’ out of the music industry,” the streaming service has made an impassioned defence of its business model revealing it has paid $2 billion to artists since it launched. (http://ind.pn/14fnU0Y)
Fly On The Wall Pre-Market Buzz
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
Jobless claims for week of November 8 at 8:30–consensus 280K
JOLTS job openings for September at 10:00–consensus is 4.8M
Treasury budget for October at 14:00–consensus deficit $117B
ANALYST RESEARCH
Upgrades
Agnico-Eagle (AEM) upgraded to Overweight from Neutral at HSBC
Applied Materials (AMAT) upgraded to Outperform from Neutral at Credit Suisse
Broadcom (BRCM) upgraded to Buy from Neutral at Goldman
Genworth (GNW) upgraded to Outperform from Market Perform at Raymond James
HCP (HCP) upgraded to Overweight from Equal Weight at Morgan Stanley
Quest Diagnostics (DGX) upgraded to Buy from Hold at Deutsche Bank
Rosetta Resources (ROSE) upgraded to Outperform from Market Perform at BMO Capital
SanDisk (SNDK) upgraded to Buy from Neutral at Goldman
Downgrades
Adeptus Health (ADPT) downgraded to Hold from Buy at Deutsche Bank
American Woodmark (AMWD) downgraded to Neutral from Buy at Longbow
Avnet (AVT) downgraded to Sell from Neutral at Goldman
Beazer Homes (BZH) downgraded to Neutral from Overweight at JPMorgan
Bristol-Myers (BMY) downgraded to Equal Weight from Overweight at Morgan Stanley
Centene (CNC) downgraded to Market Perform from Outperform at FBR Capital
Cherry Hill Mortgage (CHMI) downgraded to Equal Weight from Overweight at Barclays
Discover (DFS) downgraded to Hold from Buy at Deutsche Bank
Jabil Circuit (JBL) downgraded to Neutral from Buy at Goldman
LabCorp (LH) downgraded to Hold from Buy at Deutsche Bank
Laredo Petroleum (LPI) downgraded to Market Perform from Outperform at BMO Capital
Macy’s (M) downgraded to Market Perform from Outperform at Wells Fargo
Madison Square Garden (MSG) downgraded to Equal Weight at Morgan Stanley
Marvell (MRVL) downgraded to Sell from Neutral at Goldman
Meritor (MTOR) downgraded to Neutral from Overweight at Piper Jaffray
Verint Systems (VRNT) downgraded to Fair Value from Buy at CRT Capital
ZAIS Financial (ZFC) downgraded to Equal Weight from Overweight at Barclays
Initiations
American Express (AXP) initiated with a Hold at Deutsche Bank
Cabela’s (CAB) initiated with an Outperform at Imperial Capital
Capital One (COF) initiated with a Buy at Deutsche Bank
FMSA Holdings (FMSA) initiated with an Outperform at RBC Capital
Frank’s International (FI) initiated with an Outperform at RBC Capital
Golar LNG (GLNG) initiated with a Buy at Citigroup
InvenSense (INVN) initiated with an Outperform at JMP Securities
JP Energy (JPEP) initiated with an Outperform at RW Baird
Joy Global (JOY) initiated with a Hold at Brean Capital
Manitowoc (MTW) initiated with a Neutral at Citigroup
TubeMogul (tube) initiated with an Overweight at Piper Jaffray
Tyson Foods (TSN) initiated with an Outperform at RBC Capital
Ultratech (UTEK) initiated with a Buy at Stifel
COMPANY NEWS
J.C. Penney (JCP) said it expects to be free cash flow positive for 2014. The retailer said saw a slowdown in September and October, but noted that it is “pleased” with business so far in November against last year’s comps
Cisco (CSCO) announced CFO transition, said Frank Calderoni to step down, Kelly Kramer will succeed Calderoni
La Jolla (LJPC) reported that GCS-100 Phase 2 study met primary endpoint
MagnaChip (MX) announced completion of audit committee investigation
Microsoft (MSFT) said will have sold 10M Xbox One consoles ‘shortly’
Sony (SNE) unveiled PlayStation Vue, a cloud-based TV service
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Maximus (MMS), Cimatron (CIMT), , Popeyes Louisiana Kitchen (PLKI), Surgical Care Affiliates (SCAI), Silvercrest Asset (SAMG), Spark Energy (SPKE), WGL Holdings (WGL), WuXi PharmaTech (WX), Rocket Fuel (FUEL), Brooks Automation (BRKS), InspireMD (NSPR), HubSpot (HUBS), CyberArk (CYBR), Tucows Inc (TCX), Conatus (CNAT), Smart & Final Stores (SFS), Sophiris Bio (SPHS), Radiant Logistics (RLGT), Cisco (CSCO), J.C. Penney (JCP), Revance (RVNC), CymaBay Therapeutics (CBAY), OXiGENE (OXGN), ChipMOS (IMOS)
Companies that missed consensus earnings expectations include:
Vertex Energy (VTNR), RCS Capital (RCAP), Daqo New Energy (DQ), ReWalk Robotics (RWLK), Ryerson (RYI), eLong (LONG), UGI Corporation (UGI), AmeriGas (APU), Luxfer (LXFR), Global Brass & Copper (BRSS), Ultrapetrol (ULTR), ExOne (XONE), IAMGOLD (IAG), World Point Terminals (WPT), Gladstone Capital (GLAD), Five Oaks (OAKS), ARC Group (ARCW), Arc Logistics (ARCX), Acorn Energy (ACFN), Applied Genetic (AGTC), Vitae Pharmaceuticals (VTAE), FTD Companies (FTD), Dermira (DERM), La Jolla (LJPC), Transition Therapeutics (TTHI), Cypress Energy (CELP)
Companies that matched consensus earnings expectations include:
Tyco (TYC), Himax (HIMX), Tetra Tech (TTEK), NetApp (NTAP)
NEWSPAPERS/WEBSITES
Hasbro (HAS) in advanced talks to acquire DreamWorks (DWA), NY Times reports
DreamWorks (DWA) looking for $35 per share in takeover, Deadline reports (HAS)
Amazon’s (AMZN) Web-services chief not threatened by cash threat from rivals, WSJ says (GOOG, MSFT)
Apple’s (AAPL) rumored iPad Pro delayed to 2Q15, AppleInsider reports
Microsoft (MSFT) Xbox sales tripled since price cut, CNet reports
Apple (AAPL) paying little in iTunes taxes outside North America, AFR reports
Comcast (CMCSA) moving ahead with $45B acquisition of Time Warner Cable (TWC), AP reports
SYNDICATE
Alamo Group (ALG) 1.722M share Spot Secondary priced at $43.00
Cherry Hill Mortgage (CHMI) files to sell 1M shares for holders
Energous (watt) files to sell $20M of common stock
Memorial Resource (MRD) 30M share Secondary priced at $23.00
PRA Health (PRAH) 16.97M share IPO priced at $18.00
Premier (PINC) files to sell 3.7M shares for holders
Rexnord (RXN) offers 14.73M shares of common stock for Apollo Global
Texas Capital (TCBI) files to sell 2.5M shares of common stock
Voya Financial (VOYA) announces offering of 34.5M shares by ING Group
Zoe’s Kitchen (ZOES) files to sell 3.8M shares of common stock for holders
via Zero Hedge http://ift.tt/1ufNBbG Tyler Durden