- Police fire tear gas, stun grenades at Missouri protesters (Reuters)
- Putin’s Pipeline Bypassing Ukraine at Risk Amid Conflict (BBG)
- Russia’s Largest Oil Company Seeks $42 billion to Weather Sanctions (WSJ)
- Shells hit central Donetsk, Russian aid convoy heads towards border (Reuters)
- U.S. Tightens Sanctions, Putting More Russian Companies at Risk (BBG)
- How to Blindly Score 43% Profit Overnight in China Stocks (BBG)
- Tears guaranteed: San Diego Pension Dials Up the Risk to Combat a Shortfall (WSJ)
- Euro Recovery Halts as Germany Shrinks, France Stagnates (BBG)
- Billionaire Found in Middle of Bribery Case Avoids U.S. Probe (BBG)
- Hillary Clinton, Barack Obama ‘Hug It Out’ on Martha’s Vineyard (WSJ)
- Putin’s Ukraine gamble hastens exodus of Russian money and talent (Reuters)
- U.S. says rescue mission for Iraq’s Yazidis less likely after visit (Reuters)
- France Risks EU Deficit Clash After Scrapping Targets (BBG)
- Effort to Aid Kurdish Forces Puts Iran, U.S. on Same Side (WSJ)
- Israel Outflanks White House in Pressing Gaza Strategy (WSJ)
- Web of lies: How a Spanish tech star fooled the world (Reuters)
- NewLink says Ebola vaccine trial could start in weeks (Reuters)
- Fed Officials Suggest Limiting Banks’ Repo Exposure (WSJ)
Overnight Media Digest
WSJ
* White House and State Department officials who were leading U.S. efforts to rein in Israel’s military campaign in the Gaza Strip were caught off guard last month when they learned that the Israeli military had been quietly securing supplies of ammunition from the Pentagon without their approval. (http://on.wsj.com/1rtic0S)
* President Barack Obama and Hillary Clinton found themselves on the same small island Wednesday with very different objectives. The president was seeking an escape from the White House. His former secretary of state was taking steps that could land her there. (http://on.wsj.com/1sVF4XP)
* A large California pension manager is using complex derivatives to supercharge its bets as it looks to cover a funding shortfall and diversify its holdings. The new strategy employed by the San Diego County Employees Retirement Association is complicated and potentially risky, but officials close to the system say it is designed to balance out the fund’s holdings and protect it against big losses in the event of a stock-market meltdown. (http://on.wsj.com/1q9h7t3)
* Senior Federal Reserve officials said the “repo” markets that play a fundamental role in moving money around the financial system remain unstable, raising the specter of further limits on big banks’ role in the markets. (http://on.wsj.com/1pOHkQc)
* Rival financial data providers Bloomberg LP and Markit Ltd are separately looking at acquiring the fixed-income index unit of Barclays PLC, operator of a widely used benchmark for fixed income portfolio managers that is up for sale, according to people familiar with the matter.(http://on.wsj.com/XhXh8h)
* The struggles of the embattled Kurdish Peshmerga to repel Islamist insurgents have put the United States and Iran on the same side, with both rushing to reinforce a revered fighting force to defeat a common enemy. (http://on.wsj.com/VlmFZj)
* Coal imports to the United States are rising sharply even as coal mines close throughout Central Appalachia. A big reason: price. It costs $26 a ton to ship coal from Central Appalachia to power plants in Florida compared with $15 a ton to get coal from a mine in Colombia, according to research firm HIS Energy.(http://on.wsj.com/XiKvql)
* Government bond yields in the United States, Germany and the U.K. closed at their lowest levels of the year on Wednesday as bond investors are convinced major central banks will keep interest rates lower for longer to support economic growth.(http://on.wsj.com/1uuAHa3)
* Mexico on Wednesday set aside the bulk of its currently active oil fields for Petróleos Mexicanos but said private companies will be allowed to bid on four-fifths of prospective resources as the government ends the national oil firm’s seven-decade monopoly. (http://on.wsj.com/1uuKsVN)
* Cisco Systems Inc once again moved to cut jobs after reporting a quarter of little sales growth, saying it will remove about 6,000 employees from its payrolls.(http://on.wsj.com/1BfuTmP)
* Argentina’s financial turmoil intensified Wednesday as a hedge fund seeking to collect on defaulted bonds played down settlement hopes, and the peso tumbled to a record low following a surprise interest-rate cut.(http://on.wsj.com/1sVMYAm)
* A lobby group for the biggest banks in the foreign-exchange market is backing tougher codes of conduct for traders, while seeking a cautious approach to tweaking currency benchmarks that are at the center of a yearlong regulatory investigation.(http://on.wsj.com/1uQZEd6)
* When Colombia undertook an extensive tax overhaul, Wall Street rewarded it by making the country a bigger piece of one of the most widely used emerging-market bond indexes. The index reshuffling prompted investors to redirect billions of dollars to the country’s local-currency-denominated debt, causing the value of Colombia’s peso to surge against the dollar and this has affected exports.(http://on.wsj.com/1p8ijjK)
* Amazon.com Inc on Wednesday began offering a mobile-payment service and smartphone-compatible credit-card reader aimed principally at food trucks and mom-and-pop shops. The service, dubbed Local Register, enters a crowded arena, competing against similar offerings from eBay Inc’s PayPal, Square Inc and Intuit Inc as well as more traditional payment systems.(http://on.wsj.com/1t0XvLM)
* T-Mobile US Inc’s chief financial officer called a $15 billion takeover proposal from French wireless company Iliad SA “inadequate” on Wednesday, but hinted that his company may be open to a higher offer. (http://on.wsj.com/1nR2xVO)
* German auto-parts maker ZF Friedrichshafen AG’s attempt to buy U.S. rival TRW Automotive Holdings Corp for more than $10 billion would be the biggest deal to hit the automotive supply chain in years, but it isn’t alone: auto supplier merger and acquisition has sizzled in 2014 and industry executives are hunting for more deals. (http://on.wsj.com/1p8kILj)
* The European Union Chamber of Commerce urged China to ease action taken against foreign companies and to impartially impose corporate laws to boost competition in the country. The call comes as foreign businesses have come under pressure in China, where regulators are attempting to level the corporate playing field by using antitrust laws against multinational companies.(http://on.wsj.com/1uR3rXR)
* The United States is staging air strikes in Iraq, Russian troops are amassing on the Ukraine border and Israel and Hamas are at war. All three conflicts have the potential to threaten oil output. But investors and traders say they are worried less about oil supplies and more about soft demand. They have sent Brent crude, the benchmark for world oil prices, tumbling this week.(http://on.wsj.com/1AfiGwR)
* A standstill in the nation’s retail sector in July showed the U.S. economy struggling to lift off as improvement in the labor market fails to deliver stronger wage and spending growth. Retail sales last month were essentially unchanged from June after adjusting for seasonal differences, the Commerce Department said Wednesday. (http://on.wsj.com/1kCHF9L)
* Amid an industry wide effort to push tablets as smartphones approach the saturation point and subscriber growth stalls, AT&T Inc is quietly beginning a promotion at its stores Wednesday to give customers a $200 discount on an iPad as long as they sign a two-year contract for the device and buy a new iPhone at full price.(http://on.wsj.com/1yy9hOk)
FT
Russian steelmaker Evraz Plc has managed to raise a $425 million loan from a syndicate of European banks – an indication that some Western banks are continuing to lend money in the country, despite mounting concerns over the prospect of toughening international sanctions.
Saga Plc, a UK travel and insurance company specialising in the over 50s, has bought a majority stake in online holiday packages provider Destinology, marking its first acquisition since the company went public earlier this year.
William Ackman has dropped hints that the billionaire investor will look to raise about $4 billion by listing a new investment vehicle on the London Stock Exchange, adopting a strategy other hedge fund titans such as Daniel Loeb and Alan Howard have used in the past.
Biotechnology company InterMune Inc has appointed Centerview Partners and Goldman Sachs Group Inc as financial advisers to help the orphan drugmaker prepare for possible takeover bids from larger sector rivals, sources say.
European companies have lashed out against the Chinese government renewed attempt to crackdown on alleged violations of the country’s anti-monopoly law, with Beijing-based European Chamber of Commerce in China saying that officials have unfairly targeted foreign firms and have subjected them to “intimidation tactics”.
African Minerals Ltd’s board is considering replacing Executive Chairman Frank Timis and said it will strengthen its governance, after the iron ore miner had to launch on internal probe into whether Timis benefited from a $50 million payment he authorised.
NYT
* With the largest ever Ebola outbreak now having killed more than 1,000 people in West Africa, drug companies and doctors are scrambling to see whether any existing medicines or drugs under development can help stem the epidemic. (http://nyti.ms/1uR5iMu)
* Rises in housing prices have been profitable to private equity firms and institutional investors that bought foreclosed homes to flip them or to rent them out. Now the recovery in housing is fueling a niche market for newly minted bonds that are backed by the most troubled mortgages of them all: those on homes on the verge of foreclosure. (http://nyti.ms/1ow0wUT)
* Germany has shown new resolve in imposing sanctions on Russia over the Ukraine crisis, even if German businesses suffer, and the German public has gone along. (http://nyti.ms/1q9nehb)
* In a potent reminder that what consumers say they want and what they actually eat are often very different things, the Burger King Corp said on Wednesday that about two-thirds of its stores would phase out “Satisfries” – the low-fat, low-calorie item that was introduced less than a year ago. (http://nyti.ms/Y75pZC)
* Some officials fear that a verdict against the Arab Bank Plc, which is accused of maintaining an account for Hamas, could threaten banking in risky parts of the world. (http://nyti.ms/1uuOf5o)
* Weeks before the Chinese e-commerce juggernaut Alibaba Group Holding Ltd <IPO-BABA.N> set to start a roadshow for an initial public offering, it has tidied up relations with its payments affiliate. (http://nyti.ms/1mLcSTF)
* Barclays Plc could face as much as $2 billion in additional litigation and other costs this year as it continues to grapple with legacy and regulatory issues, a Sanford C. Bernstein analyst said in a research note on Wednesday. (http://nyti.ms/1sXmznF)
* Lookout, a seven-year-old mobile security company that is riding a wave of concern over cyberthreats, with 50 million people using its app, has now raised $150 million from investors led by T. Rowe Price Associates Inc. (http://nyti.ms/1pOOJPD)
* The Massachusetts fire marshal is focused on an e-cigarette as the possible cause of smoldering in a bag that had to be removed from a jet on Saturday night at Boston’s Logan International Airport. Airport officials are asking the Transportation Department to consider classifying e-cigarettes as hazardous materials. (http://nyti.ms/1p8vQry)
* Hedge fund billionaire Louis Bacon has filed a lawsuit against the Canadian clothing magnate Peter Nygard, claiming a long history of character assassination and numerous environmental misdeeds related to Nygard’s large property in the Bahamas. (http://nyti.ms/VlsTZk)
Canada
THE GLOBE AND MAIL
** Canadians will still be able to get letters delivered to their homes, but only if they have a doctor’s note. Canada Post, which announced last December it plans to phase out home delivery in favour of community mailboxes, is asking residents who can’t physically get to their designated mailboxes to produce a certificate signed by a “health-care professional.” (bit.ly/1nRFom2)
** University of British Columbia on Wednesday announced it has invested C$750,000 in lighting and landscaping to create safer walking routes, as a man wanted in a string of campus sexual assaults is still not caught. The school also said it has strengthened the student safewalk program and added more security bike patrols. (bit.ly/1yz1u2w)
Reports in the business section:
** A leaked copy of the full text of the Canada-EU free trade agreement was posted online late Wednesday and appeared to confirm the fears of the deal’s critics on both sides of the Atlantic. A German television show obtained 521 pages of text, which suggest Canada caved in on the issue of patent protection for drugs and has agreed to limit the number of privately run wine stores in Ontario and British Columbia. (bit.ly/1sWUxaf)
NATIONAL POST
** As the Conservatives repeatedly attack Liberal Party leader Justin Trudeau over his support for the legalization of marijuana, the Canadian government has asked three groups representing Canadian doctors to endorse a taxpayer-funded advertising campaign warning about the drug’s health risks for young people. (bit.ly/1mLQ1ak)
** In the latest chapter in a legal saga that has been ongoing since 2009, a special prosecutor approved polygamy charges against two men in British Columbia on Wednesday. The British Columbia criminal justice branch said Winston Blackmore and James Oler are each charged with one count of polygamy. Blackmore is accused of having 24 marriages, while Oler is accused of four. (bit.ly/1uRVSQV)
FINANCIAL POST
** Ohio-based Health Care REIT Inc said on Wednesday it has agreed to acquire HealthLease Properties REIT and its 53 senior residences in Canada and the U.S. for about C$1 billion. The deal also includes a partnership with HealthLease external adviser Mainstreet Property Group LLC to buy 17 properties that are under construction, with an option to buy 45 additional Mainstreet properties that are scheduled to be completed in 2016. (bit.ly/1q9KyLE)
** Canadian online education provider Desire2Learn Inc got an C$85 million capital injection, which will be used to further the Kitchener, Ontario-based technology company’s global expansion and hire as many as 100 new employees. (bit.ly/1Bg3QaY)
Britain
The Times
LAND SECURITIES SAILS OUT OF BRISTOL
Land Securities Group Plc, Britain’s largest property company, has sold its half share in a Bristol shopping mall for 267.8 million pounds ($447 million) as it reshapes its portfolio.
FALL IN WAGES HEAPS PRESSURE ON HOUSEHOLDS
The squeeze on households in the UK is tightening as official figures showed wages in the UK fell in the three months to June for the first time in five years, despite the unemployment rate falling to its lowest level since 2008.
The Guardian
BANK OF ENGLAND MAKES EMERGENCY PLANS IN CASE OF SCOTTISH INDEPENDENCE
The Bank of England is making emergency plans in case a yes vote in Scotland’s independence referendum threatens the stability of sterling, bank governor Mark Carney has disclosed.
HSBC AWARDS 15 TOP BANKERS 7.1 MLN STG IN MOVE TO SIDESTEP BONUS RULES
HSBC Holdings Plc has given 15 of its top bankers “fixed pay allowance arrangements” worth 7.1 million pounds under a controversial new pay scheme designed to dodge tough new European Union rules on bankers’ bonuses.
The Telegraph
SAS SENT IN TO IRAQ AS US TROOPS LAND ON MOUNT SINJAR
The SAS is on the ground in Iraq as part of the operation to rescue 30,000 “desperate” Yazidi refugees, it emerged on Wednesday, as U.S. forces landed on Mount Sinjar.
UK GOVERNMENT CAN SUE FRENCH BANK OVER ‘MIS-SELLING’ TO NORTHERN ROCK The Government has been told it can sue French banking giant Societe Generale for allegedly mis-selling financial products to Northern Rock that were partly to blame for UK lender’s collapse.
SOUTHERN DENTAL CIRCLED BY PRIVATE EQUITY BIDDERS
Mid-market private equity firms CapVest and Graphite are understood to be fighting it out to secure a 100 million pound deal for Southern Dental, the dentist chain which runs 74 dental practices across the south of the country.
HARGREAVES LANSDOWN DROPS ISA ‘DEATH FEE’ AND SHARE VOTE CHARGE
Hargreaves Lansdown Plc, which has more 600,000 investors signed up to its services, has removed two controversial charges that were introduced earlier this year as part of an overhaul of its offering.
Sky News
CAR INSURANCE PREMIUM FALLS ‘HIT THE BRAKES’
Admiral Group Plc, one of the UK’s biggest car insurance firms, has warned that the recent fall in premium costs may be ending, despite regulatory efforts to bring bills down further.
Fly On The Wall Pre-Market Buzz
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
Jobless claims for week of August 9 at 8:30–consensus 295K
Import prices for July at 8:30–consensus down 0.3%
ANALYST RESEARCH
Upgrades
Aruba Networks (ARUN) upgraded to Buy from Hold at Stifel
Athlon Energy (ATHL) upgraded to Outperform from Neutral at Credit Suisse
Helmerich & Payne (HP) upgraded to Neutral from Underperform at Credit Suisse
Infineon (IFNNY) upgraded to Buy from Neutral at UBS
JAKKS Pacific (JAKK) upgraded to Overweight from Neutral at Piper Jaffray
Liberty Media (LMCA) upgraded to Overweight from Equal-Weight at Evercore
Luxottica (LUX) upgraded to Neutral from Sell at Goldman
NetApp (NTAP) upgraded to Buy from Hold at Needham
PFSweb (PFSW) upgraded to Buy from Neutral at B. Riley
Progressive (PGR) upgraded to Buy from Neutral at Citigroup
Scorpio Tankers (STNG) upgraded to Outperform from Neutral at Credit Suisse
Sotheby’s (BID) upgraded to Perform from Underperform at Williams Capital
Downgrades
Fabrinet (FN) downgraded to Neutral from Buy at B. Riley
Freeport McMoRan (FCX) downgraded to Hold from Buy at Stifel
Infosys (INFY) downgraded to Hold from Buy at Jefferies
InterMune (ITMN) downgraded to Neutral from Buy at Goldman
Jones Energy (JONE) downgraded to Neutral from Overweight at JPMorgan
Madison Square Garden (MSG) downgraded to Hold from Buy at Topeka
Qualys (QLYS) downgraded to Sector Perform from Outperform at RBC Capital
Theravance Biopharma (TBPH) downgraded to Underperform from Neutral at RW Baird
URS Corporation (URS) downgraded to Neutral from Buy at Sterne Agee
ViaSat (VSAT) downgraded to Perform from Outperform at Oppenheimer
Initiations
AMAG Pharmaceuticals (AMAG) initiated with a Market Perform at FBR Capital
Acceleron (XLRN) initiated with an Outperform at FBR Capital
American Axle (AXL) initiated with a Neutral at Credit Suisse
BorgWarner (BWA) initiated with a Neutral at Credit Suisse
Charles Schwab (SCHW) initiated with a Buy at Deutsche Bank
Constellation Brands (STZ) initiated with a Neutral at Credit Suisse
Cowen Group (COWN) initiated with an Outperform at JMP Securities
Delphi Automotive (DLPH) initiated with an Outperform at Credit Suisse
E-Trade (ETFC) initiated with a Hold at Deutsche Bank
Ford (F) initiated with a Neutral at Credit Suisse
General Motors (GM) initiated with an Underperform at Credit Suisse
Guess (GES) initiated with a Buy at Wunderlich
IAC (IACI) initiated with a Buy at Maxim
InterOil (IOC) initiated with an Outperform at Bernstein
Keryx (KERX) initiated with a Market Perform at FBR Capital
Lear (LEA) initiated with an Outperform at Credit Suisse
Magna (MGA) initiated with an Outperform at Credit Suisse
Molson Coors (TAP) initiated with an Outperform at Credit Suisse
Rockwell Medical (RMTI) initiated with an Underperform at FBR Capital
TD Ameritrade (AMTD) initiated with a Buy at Deutsche Bank
TRW Automotive (TRW) initiated with a Neutral at Credit Suisse
TerraForm Power (TERP) initiated with an Equal Weight at Barclays
Tesla (TSLA) initiated with an Outperform at Credit Suisse
COMPANY NEWS
Cisco Systems (CSCO), which reported Q4 results and gave Q1 guidance, announced that it is cutting 6,000 jobs, or 8% of its workforce
Amgen (AMGN) said its Phase 3 clinical trial FOCUS did not meet primary endpoint
Conatus Pharmaceuticals (CNAT) announced that it is deferring the results of its NAFLD/NASH clinical trial to 1Q15
NetApp (NTAP) forecast FY15 EPS growth of just under 10%
Avago (AVGO) to sell Axxia Networking Business to Intel (INTC) for $650M
Tekmira (TKMR) said it sees filing IND, Equiv for TKM-HBV in 2H14
Noodles & Company (NDLS) lowered its FY14 adjusted EPS view to flat with prior year
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Cisco (CSCO), NetApp (NTAP), Dangdang (DANG), NetEase.com (NTES), Oclaro (OCLR), China Distance Education (DL), WuXi PharmaTech (WX), Veracyte (VCYT), Aspen Technology (AZPN), Spartan Stores (SPTN), Sonic Foundry (SOFO), YuMe (YUME), Onconova (ONTX), Papa Murphy’s (FRSH), Conatus (CNAT), Evoke Pharma (EVOK), Vipshop (VIPS)
Companies that missed consensus earnings expectations include:
Sage Therapeutics (SAGE), B2Gold (BTG), Pan American Silver (PAAS), Eclipse Resources (ECR), IAMGOLD (IAG), Silver Wheaton (SLW), Surgical Care Affiliates (SCAI), Energy XXI (EXXI), Alcentra Capital (ABDC), Gevo (GEVO), Arc Logistics (ARCX), Tekmira (TKMR), PDI, Inc. (PDII), Argos Therapeutics (ARGS), Cinedigm (CIDM), ExOne (XONE), Kindred Biosciences (KIN), Noodles & Company (ndls)
Companies that matched consensus earnings expectations include:
Materialise (MTLS), World Point Terminals (WPT), Aegean Marine (ANW), Fifth Street Senior (FSFR)
NEWSPAPERS/WEBSITES
GE (GE) appliance unit drawing interest from Electrolux, Quirky, Bloomberg reports
NASDAQ (NDAQ), CME Group (CME) eye Barclays (BCS) index division, Bloomberg reports
Google (GOOG), HP (HPQ) in talks to collaborate on ‘virtual assistant,’ The Information says
T-Mobile (TMUS) CFO says Iliad (ILIAF) offer ‘flattering,’ but ‘inadequate,’ WSJ reports
Overstock (OSTK) CEO says Bitcoin sales averaging $15K/day, Business Insider reports
EPA advancing criminal probe into chemical spill at Tyson (TSN) plant, WSJ reports
SYNDICATE
Advent Software (ADVS) files to sell 3.75M shares for holders
American Homes 4 Rent (AMH) files to sell 13M Class A common shares
C1 Financial (BNK) 2.632M share IPO priced at $17.00
Cheniere Energy Partners (CQH) files to sell 10.1M shares
Enphase Energy (ENPH) files to sell common stock for holders
Fifth Street Senior (FSFR) files to sell 22.8M shares of common stock
Newfield Exploration (NFX) files automatic mixed securities shelf
Priceline (PCLN) proposes $1B private offering of convertible senior notes
Rice Energy (RICE) 11.94M share Secondary priced at $27.30
Viper Energy (VNOM) files to sell 3.5M common units for limited partners
Zoe’s Kitchen (ZOES) 4.5M share Secondary priced at $30.25
via Zero Hedge http://ift.tt/1uStXjQ Tyler Durden