finance – Page 18220

Frontrunning: November 15

China to Ease One-Child Policy (WSJ), China announces major economic and social reforms (Reuters)
Consumers line up for launch of PlayStation 4 (USAToday)
Trust frays between Obama, Democrats (Politico)
Yellen Stands by Fed Strategy (Hilsenrath)
Hero to zero? Philippine president feels typhoon backlash (Reuters)
Brussels warns Spain and Italy on budgets (FT)
Moody’s Downgrades Four U.S. Banks on Federal Support Review (BBG)
CIA’s Financial Spying Bags Data on Americans (WSJ)
Germany Digs In Against Risk Sharing in EU Bank-Failure Plan (BBG)
Bill Gates wants Norway’s $800 billion fund to spend more in Africa, Asia (RTRS)
Japan in greenhouse gas emissions U-turn (FT)
Buffett takes $3.7bn stake in ExxonMobil (FT)
Jihadist teapartiers go down under: Australia’s Senate Rejects Raising Debt Ceiling to A$500 Billion (BBG)
Jos. A. Bank Drops Bid for Men’s Wearhouse (WSJ)
U.S. official in July feared HealthCare.gov ‘crash’ (Reuters)
The Popularity of Private Restaurants (WSJ)
NSA Fallout: Tech Firms Feel a Chill Inside China (WSJ)

Overnight Media Digest

WSJ

* The White House announced a plan to allow insurance companies to continue offering existing policies next year even if they fall short of standards set by the health law.

* Insurers expressed a range of worries after Obama moved to placate consumers who faced health-plan cancellations.

* Federal Reserve Vice Chairwoman Janet Yellen signaled Thursday that no big changes would come to the central bank under her leadership if she becomes its next chief.

* The Central Intelligence Agency is building a vast database of international money transfers that includes millions of Americans’ financial and personal data, such as Social Security numbers, officials familiar with the program say.

* Big U.S. computer and software companies are reporting a sudden chill in sales to China, and some blame increased government hostility toward the U.S.

* Jefferson County, Alabama, is planning a $1.7 billion debt sale next week, challenging the market maxim that a bankruptcy filing leaves a permanent stain on municipal-bond issuers.

* Switzerland will vote next week on a proposal limiting executive pay to 12 times that of a company’s lowest paid worker, the second time this year the country will use the ballot box in an attempt to rein in corporate compensation.

* Wal-Mart offered little reason for holiday cheer, reporting its third straight quarter of poor sales in the U.S. and painting a gloomy picture for the economic recovery.

* UBS AG says it has long since finished restructuring its investment-banking arm. Behind the scenes, though, the Swiss bank recently toyed with potentially far-reaching alternatives for the unit.

Warren Buffett’s Berkshire Hathaway Inc on Thursday took a $3.45 billion stake in Exxon Mobil Corp, reflecting strong support for a the company which has underperformed compared to its smaller peers.

Leading a consortium of preferred shareholders who want to buy the mortgage guarantee businesses of Fannie Mae and Freddie Mac, Bruce Berkowitz’s fund management group Fairholme said investors in the U.S. housing finance agencies could accept less than full value for their preferred shares in a mooted restructuring plan.

Google Inc on Thursday won a long-running lawsuit by authors who accused the Internet search company of scanning millions of books for an online library without permission, clearing the way over its right to display small extracts of text in response to search queries.

Google Inc’s Motorola unit launched a new low-cost smartphone, Moto G, designed to appeal to cost-conscious consumers in both developed and developing markets offering most of the features found on much more expensive handsets.

Private equity investment firm Motion Equity Partners is in talks with HarbourVest Partners to secure capital to finance deals, after failing to raise new funds since the financial crisis, people with knowledge of the matter said.

Shares in Serco Group Plc fell 17 percent on Thursday after the embattled contractor, which accused of overbilling the British government, warned that the string of corporate embarrassments would hurt profits for the next two years.

NYT

* Eric Holder, the U.S. attorney general, says groups of traders from several major banks may have influenced currency benchmarks to benefit their employers.

* Janet Yellen, the president’s nominee to lead the Federal Reserve, made investors confident that the central bank would stick with policies that have sent shares soaring.

* President Obama, bowing to pressure, said insurers could temporarily keep people on health plans that were to be canceled. But there is no guarantee that insurers will do so, or that the states will allow the renewals.

* SolarCity, a leading installer of solar-power systems in the United States, received a low investment-grade rating for the bonds, which will help finance its rapid expansion.

* Many insurers and state regulators fear that President Obama’s policy reversal to delay the cancellation of policies for a year without penalties might damage the new insurance marketplace.

* Hedge fund billionaire David Tepper is giving his alma mater the largest donation in its history, bringing his total giving to Carnegie Mellon in the last decade to more than $125 million.

* Lawyers for the city of Chicago are investigating marketing claims by producers of narcotic painkillers as a prelude to a possible lawsuit against them, according to interviews and a court filing.

* Daniel Loeb, George Soros and John Paulson disclosed new positions in FedEx on Thursday.

*
New York’s financial services superintendent, Benjamin Lawsky, will conduct a hearing on the feasibility of methods making the virtual currency market more like that for more traditional money.

* Kimberly-Clark said on Thursday that it would pursue a potential spinoff its health care business, becoming the latest company to slim down its operations to help bolster its stock price.

Canada

THE GLOBE AND MAIL

* Unable to persuade Toronto’s troubled mayor to leave office, councillors are taking unprecedented steps to peel away the office from Rob Ford by cutting his budget, staff and power – with some even refusing to call him by his title – all in an effort to control the damage they believe he is inflicting on the city.

* H.J. Heinz Co is closing its plant in Leamington, Ontario, a move that will cost 740 jobs and end more than a century of ketchup making in the Southern Ontario town.

Reports in the business section:

* Canadian Heritage Minister Shelley Glover is taking the first step toward forcing television service providers to let subscribers pay for only those channels they want.

* On Thursday, IKEA Canada announced the purchase of a 20-turbine wind farm near Pincher Creek, Alberta, that should produce 161-gigawatt hours of electricity each year – more than double the company’s current electricity consumption in Canada.

NATIONAL POST

* Justice Minister Peter MacKay is accusing Liberal leader Justin Trudeau of promoting recreational drug use “directly to children” after Trudeau discussed his party’s plans to legalize marijuana while speaking to a Brandon, Manitoba public school.

* Arguments that the Senate can only be abolished with unanimous consent of the provinces, and that provincial input is needed to reform the red chamber, are “wishful thinking,” a federal government lawyer told the Supreme Court of Canada Thursday.

FINANCIAL POST

* Pfizer Inc, the world’s biggest drugmaker, will wean off of BlackBerry Ltd’s phones, citing concerns that the mobile technology company might not be around in the future or may have service interrupted.

* Ottawa said Thursday it plans to crack down on companies hoarding access to the resources needed to deploy rural broadband. Industry Minister James Moore said the government will take a use-it-or-lose-it approach to ensure “Canadians living in rural areas benefit from greater access to high-speed internet services.”

China

CHINA SECURITIES JOURNAL

– Everbright Securities Co Ltd announced on Thursday that it would be fined a total of 523 million yuan ($85.85 million) for insider trading during the “Aug 16 incident.” The four people responsible will be fined 600,000 yuan each and prohibited from trading, while the chairman secretary will be fined 200,000 yuan.

A glitch in Everbright’s computer system caused an unintended placement of buy orders worth 68.6 billion yuan ($11.2 billion) to the Shanghai stock exchange on Aug. 16 and led to a massive but short-lived jump in the country’s main stock index.

SHANGHAI SECURITIES NEWS

– China’s “third board” over-the-counter equity exchange platform is set to expand and roll out new policies to make listing, buying and selling stakes in companies on the platform as “convenient as stocks.”

CHINA DAILY

– Reform now faces unprecedented resistance in the “deepwater zone,” where a combination of convoluted vested interests, such as local protectionism, departmentalism and special interest groups threaten to thwart all the major reforms society badly needs said a commentary in the paper.

SHANGHAI DAILY

– Long-anticipated natural gas shortages have already begun to impact Chinese manufacturers, with PetroChina Co Ltd moving to cut off supply to a chemical fertiliser company in Hunan proving to preserve supply for residential users for the upcoming winter. An official said cities where the “coal-to-gas” initiative had been implemented, intended to migrate consumers from polluting coal to cleaner gas, would be hardest hit by shortages.

PEOPLE’S DAILY

– China should focus on creating a fairer and more just social environment, said a commentary in the paper that acts as the party’s mouthpiece.

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Ball Corp. (BLL) upgraded to Buy from Neutral at BofA/Merrill
China Eastern Airlines (CEA) upgraded to Buy from Hold at Jefferies
Ligand (LGND) upgraded to Hold from Sell at Cantor
MSC Industrial (MSM) upgraded to Outperform from Market Perform at Raymond James
Pentair (PNR) upgraded to Buy from Hold at KeyBanc
SAP (SAP) upgraded to Overweight from Equal Weight at Barclays
Tetra Tech (TTEK) upgraded to Buy from Hold at Brean Capital

Downgrades

DISH (DISH) downgraded to Equal Weight from Overweight at Barclays
Gogo (GOGO) downgraded to Underweight from Equal Weight at Morgan Stanley
Kohl’s (KSS) downgraded to Market Perform from Outperform at BMO Capital
NeoPhotonics (NPTN) downgraded to Buy from Strong Buy at Needham
Prudential (PRU) downgraded to Hold from Buy at Deutsche Bank
Silgan Holdings (SLGN) downgraded to Underperform from Neutral at BofA/Merrill

Initiations

Abercrombie & Fitch (ANF) initiated with a Neutral at Mizuho
Aeropostale (ARO) initiated with a Neutral at Mizuho
AmeriGas (APU) initiated with a Buy at UBS
American Eagle (AEO) initiated with a Neutral at Mizuho
Ann Inc. (ANN) initiated with a Buy at Mizuho
Arena Pharmaceuticals (ARNA) initiated with a Buy at WallachBeth
Chico’s FAS (CHS) initiated with a Neutral at Mizuho
Children’s Place (PLCE) initiated with a Buy at Mizuho
Express (EXPR) initiated with a Buy at Mizuho
Francesca’s (FRAN) initiated with a Neutral at Mizuho
Gap (GPS) initiated with a Buy at Mizuho
Guess (GES) initiated with a Neutral at Mizuho
L Brands (LTD) initiated with a Neutral at Mizuho
LinkedIn (LNKD) initiated with a Buy at Stifel
Marlin Midstream (FISH) initiated with a Buy at Wunderlich
Men’s Wearhouse (MW) initiated with a Neutral at Mizuho
Newpark Resources (NR) initiated with a Buy at DA Davidson
Pacific Sunwear (PSUN) initiated with a Buy at BofA/Merrill
Synageva (GEVA) initiated with a Buy at Goldman
Tilly’s (TLYS) initiated with a Neutral at Mizuho
Twitter (TWTR) initiated with a Neutral at UBS
Urban Outfitters (URBN) initiated with a Buy at Mizuho
VIVUS (VVUS) initiated with a Hold at WallachBeth
Yelp (YELP) initiated with a Buy at Stifel
Yelp (YELP) initiated with a Neutral at Janney Capital
Zumiez (ZUMZ) initiated with a Neutral at Mizuho
bebe stores (BEBE) initiated with a Neutral at Mizuho
lululemon (LULU) initiated with a Neutral at Mizuho

HOT STOCKS

JoS. A. Bank (JOSB) ended acquisition proposal to purchase Men’s Wearhouse (MW)
Kimberly Clark (KMB) pursuing spin-off of healthcare business
RLI Corp. (RLI) declared $3.00 per share special dividend, two-for-one stock split
Innotrac (INOC) to merge with Sterling Partners affiliate for $8.20 per share
Boeing (BA), Gol Linhas (GOL) collaborate to raise sustainable biofuel supply in Brazil
Broadridge (BR), Pitney Bowes (PBI) announced interactive digital communications exchange (AMZN)
WPX Energy (WPX) announced plan to form master limited partnership

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
American Apparel (APP), Youku Tudou (YOKU), Kythera (KYTH), Athersys (ATHX), Key Technology (KTEC), Agilent (A), Nordstrom (JWN), Applied Materials (AMAT)

Companies that missed consensus earnings expectations include:
Matthews (MATW), Bluebird Bio (BL
UE), Reed’s (REED), NuPathe (PATH), Conatus Pharmaceuticals (CNAT), China Cord Blood (CO), S&W Seed (SANW), Trovagene (TROV),

Companies that matched consensus earnings expectations include:
WidePoint (WYY), Lifeway Foods (LWAY)

NEWSPAPERS/WEBSITES

Big U.S. computer and software companies (CSCO, IBM, HPQ, MSFT) are reporting a sudden chill in sales to China, and some blame increased government hostility toward the U.S., the Wall Street Journal reports
A downbeat outlook from Wal-Mart (WMT) was a reminder that even as U.S. stock prices climb to record heights, many Americans remain caught between high joblessness and hits to their paychecks that are limiting their ability to spend (KSS, M), putting a further drag on an already sluggish economy, the Wall Street Journal reports
State economic officials have jumped at the chance to grab a piece of Boeing’s (BA) newest jetliner program after a union vote stalled efforts to build the aircraft in Washington state. Amid a slow U.S. economic recovery and after decades of industrial outsourcing, the race for jobs is intensifying, Reuters reports
Hedge funds took a liking to online music company Pandora Media (P) in Q3 but soured on Apple (AAPL), according to regulatory filings, Reuters reports
Google’s (GOOG) victory in a copyright suit challenging its project to digitally copy millions of books may help cement its dominance of online searches, Bloomberg reports
WPP (WPPGY) denied a U.K. newspaper’s report that the world’s largest advertising company may be preparing a $25 per share cash bid for Interpublic Group of Cos. (IPG), the second-biggest U.S. ad company, Bloomberg reports

SYNDICATE

8×8 Inc (EGHT) 12.5M share Secondary priced at $9.25
ADA-ES (ADES) files to sell common stock
Booz Allen (BAH) 11M share Secondary priced at $17.00
Fiesta Restaurant (FRGI) 2.7M share Secondary priced at $46.00
Lumos Networks (LMOS) 2.512M share Secondary priced at $20.00
Oragenics (OGEN) announces proposed offering of common stock
Relypsa (RLYP) 6.85M share IPO priced at $11.00
Streamline Health Solutions (STRM) files to sell 2.5M shares of common stock
T-Mobile (TMUS) 66.15M share Secondary priced at $25.00
Waterstone Financial (WSBF) files to sell 18.7M-25.3M shares of common stock
zulily (ZU) 11.5M share IPO priced at $22.00

QUARTERLY HEDGE FUND FILINGS

Appaloosa provides quarterly update on stakes
NEW STAKES: J.C. Penney (JCP), Freeport-McMoRan (FCX). INCREASED STAKES: JPMorgan (JPM), HCA Holdings (HCA), Celanese (CE). DECREASED STAKES: Bank of America (BAC), Ford (F), Goodyear Tire (GT). LIQUIDATED STAKES: Comcast (CMCSA), Microsoft (MSFT), Weatherford (WFT).

Berkshire Hathaway provides quarterly update on stakes
NEW STAKES: Exxon Mobil (XOM). INCREASED STAKES: DaVita HealthCare (DVA), Suncor Energy (SU) Verisign (VRSN). DECREASED STAKES: GlaxoSmithKline (GSK), ConocoPhillips (COP), Sanofi (SNY), DirecTV (DTV). LIQUIDATED STAKES: None.

Paulson & Co provides quarterly update on stakes
NEW STAKES: Mallinckrodt (MNK), Time Warner Cable (TWC), FedEx (FDX), WhiteWave (WWAV). INCREASED STAKES: Vodafone (VOD), Family Dollar (FDO), Kodiak Oil & Gas (KOG), Hartford Financial (HIG), Belo Corp. (BLC), AngloGold Ashanti (AU). DECREASED STAKES: MGM Resorts (MGM), Cobalt (CIE), Leap Wireless (LEAP), InterOil (IOC), Realogy (RLGY). LIQUIDATED STAKES: Mead Johnson (MJN), Elan (ELN).

Icahn provides quarterly update on stakes
NEW STAKES: Apple (AAPL), Talisman Energy (TLM). INCREASED STAKES: Federal-Mogul (FDML), Icahn Enterprises (IEP), Chesapeake Energy (CHK), Nuance Communications (NUAN), Navistar (NAV). DECREASED STAKES: None. LIQUIDATED STAKES: Dell (DELL), Hain Celestial (HAIN), WebMD (WBMD).

Third Point provides quarterly update on stakes
NEW STAKES: FedEx (FDX), Google (GOOG), EQT Corp (EQT), Intrexon (XON), Activision Blizzard (ATVI), Gilead Sciences (GILD). INCREASED STAKES: Sotheby’s (BID), Coca-Cola Enterprises (CCE), Constellation Brands (STZ), Elan (ELN). DECREASED STAKES: Yahoo (YHOO), Cabot Oil & Gas (COG), 21st Century Fox (FOXA), Disney (DIS). LIQUIDATED STAKES: Tiffany (TIF), WESCO (WCC), Williams (WMB).

Greenlight Capital provides quarterly update on stakes
NEW STAKES: Intrexon (XON), Tempur Sealy (TPX), NVR, Inc. (NVR). INCREASED STAKES: WPX Energy (WPX), Oil States (OIS), Spirit AeroSystems (SPR). DECREASED STAKES: Aetna (AET), Aspen Insurance (AHL), Legg Mason (LM), NCR Corp (NCR), Cigna (CI). LIQUIDATED STAKES: Oaktree Capital (OAK), State Bank Financial (STBZ), Capital Bank (CBF).

Soros provides quarterly update on stakes
NEW STAKES: Facebook (FB), Avis Budget (CAR), Invesco (IVZ), Molycorp (MCP). INCREASED STAKES: CF Industries (CF), LSI Corp (LSI), J.C. Penney (JCP), Zoetis (ZTS). DECREASED STAKES: AIG (AIG), Brocade (BRCD), Constellation Brands (STZ), Yelp (YELP). LIQUIDATED STAKES: Delta Air Lines (DAL).

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Complete Hedge Fund Q3 13F Holdings And Position Changes Summary

Here is a summary of the key stock additions, sales, initiations and liquidations conducted by the most prominent US hedge funds in the third quarter.

APPALOOSA

Boosted Stakes in HCA, HUN, CE, LCC, TEX in 3Q
Cut Stakes in SPY, BRCM, BAC, HTZ, SNDK in 3Q
Exited Stakes in CMCSA, MSFT, WFT, CHKP, NTAP in 3Q
Took Stakes in JCP, FCX, INGR, CYH, THC in 3Q

BERKSHIRE HATHAWAY

Boosted Stakes in SU, V.N, USB, BK in 3Q
Cut Stakes in COP, DTV, GSK, SNY in 3Q

BP CAPITAL

Boosted Stakes in PXD, WFT, HAL, VLO, APC in 3Q
Exited Stakes in APA, WLL, SU, BCEI, SM in 3Q
Cut Stakes in GDP, TSO, PSX, BAS, YCS in 3Q
Took Stakes in XOM, ATHL, EQT, XON in 3Q

ETON PARK

Cut Stakes in FOXA, DG, DLTR, ELN, EBAY, BIDU in 3Q
Exited Stakes in NLSN, PCLN, ULTA, VC, CHTR in 3Q
Took Stakes in FDO, STZ, BID, EQIX, AUCN, MNK in 3Q

FAIRHOLME CAPITAL

Cut Stakes in JOE, C, WFC, HIG in 3Q
Boosted Stakes in SHLD in 3Q

GATES FOUNDATION

Boosted Stakes in BRK/B, BP in 3Q
Took Stakes in APD in 3Q

GREENLIGHT CAPITAL INC

Boosted Stakes in WPX, OIS, SPR in 3Q
Cut Stakes in AET, AHL, LM, NCR, CI in 3Q
Exited Stakes in OAK, STBZ, CBF in 3Q
Took Stakes in XON, TPX, NVR in 3Q

HIGHFIELDS

Boosted Stakes in MSFT, FDX, VOD, QCOM, Vodafone 3Q
Cut Stakes in FOXA, SLM, UPS, THI, ups, aet in 3Q
Exited Stakes in ILMN, ORCL, JPM, LPS, ORCL TEVA 3Q
Took Stakes in ASH, NWSA, MU, CF, MU, NWSA in 3Q

ICAHN ASSOCIATES

Boosted Stakes in FDML, IEP, CHK, NUAN in 3Q

LONE PINE CAPITAL

Boosted Stakes in MON, QCOM, DG in 3Q
Exited Stakes in ISRG, RL, HTZ, GRA, TMO in 3Q
Took Stakes in BIDU, MA, DVA, P, AMZN in 3Q
Cut Stakes in GOOG, PUN, EBAY, CHTR, HRB in 3Q

OMEGA ADVISORS

Boosted Stakes in SD, C, EXXI, CZR, PMT in 3Q
Cut Stakes in UNE, KMI, ESRX, QCOM, WMB in 3Q
Exited Stakes in OXY, WFC, CROX, ASNA, ORCL in 3Q
Took Stakes in S, FCX, HCA, RLGY, CMCSK in 3Q

PAULSON

Boosted Stakes in VOD, FDO, KOG, MTB, AET in 3Q
Cut Stakes in RLGY, CIE, LIFE, IOC, LEAP in 3Q
Exited Stakes in MJN, ELN, FRP in 3Q
Took Stakes in TWC, S, MNK, FDX, WLL in 3Q

PERSHING SQUARE

Boosted Stake in APD in 3Q
Exited Stake in MATX, JCP in 3Q
Cut Stakes in GGP, PG, CP in 3Q

RELATIONAL

Boosted Stakes in SPW, TKR, HES, PM., TKR, BG in 3Q
Cut Stakes in HPQ, DGX, SPY, MDY in 3Q
Exited Stakes in A, EMN, TEX, IWS in 3Q
Took Stakes in TLM, VSI in 3Q

SAC CAPITAL

Boosted Stakes in YHOO, APD, ISRG, ISO in 3Q
Cut Stakes in CLR, AMZN, SLB, FB, GPS in 3Q
Exited Stakes in PETM, MT, GDX, PF in 3Q
Took Stakes in PNRA, ZNGA, TRN, NOK, PRGO in 3Q

SOROS FUND

Exited Stakes in DAL, UAL, SFLY, ACTG in 3Q
Boosted Stakes in CF, DXJ, PVA, SEMG in 3Q
Cut Stakes in GOOG, HO, AIG, STZ in 3Q
Took Stakes in MSFT, FDX, TEVA, HAL in 3Q

THIRD POINT LLC

Boosted Stakes in BID, CCE, STZ, APC, CF in 3Q
Cut Stakes in YHOO, DIS, TMO, COG, FOXA in 3Q
Exited Stakes in TIF, WCC, WMB in 3Q
Took Stakes in FDX, GOOG, EQT, XON, ATVI in 3Q

TRIAN FUND MANAGEMENT LP

Boosted Stakes in LM in 3Q
Cut Stakes in IR in 3Q
Exited Stakes in STT, BID in 3Q

Source: RanSquawk

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S&P 1800 Or Bust As Futures Ramp Continues

The overnight global scramble to buy stocks, any stocks, anywhere, continued, with the Nikkei soaring higher by 2% as the USDJPY rose firmly over 100, to levels not seen since May as the previously reported speculation that more QE from the BOJ is just around the corner takes a firm hold. Sentiment that the liquidity bonanza would accelerate around the world (with possibly more QE from the ECB) was undented by news of a surge in Chinese short-term money market rates or the Moody’s one-notch downgrade of four TBTF banks on Federal support review. The release of more market-friendly promises from China only added fuel to the fire and as a result S&P futures are now just shy of 1800, a level which will almost certainly be taken out today as the multiple expansion ramp continues unabated. At this point absolutely nobody is even remotely considering standing in front of the centrally-planned liquidity juggernaut that has made “market” down days a thing of the past.

Market Re-Cap

Stocks traded mixed in Europe this morning, with the FTSE-100 in the UK outperforming where Antofagasta traded up over 2%, recovering from losses made yesterday and Hargreaves Lansdown, which was initiated with an overweight rating by JPMorgan Cazenove advanced 1%. Analysts noted that the company’s product offering positions it well to continue to exploit structural growth opportunities in the UK for many years to come. Broad based JPY weakness which ensued overnight on Thursday following comments from Japanese Finance Minister Aso and in turn saw USD/JPY move above 100.00 yesterday for the first time since early Sep continues to be observed across the board today. The price action going forward is expected to remain supported by large option expiries at 100.00 level, good sized strikes are also said to expire next week. Overall, the price action was somewhat muted, but volumes are expected to pick up, as market participants digest the release of the latest Empire Manufacturing and Import Price data reports. Of note, various equity options and futures expiries may result in sharp, albeit brief volume spikes.

US data docket

US: Empire State Manufacturing Index, cons 5.00 (8:30)
US: Industrial production m/m, cons -0.4% (9:15)

Overnight news bulletin from RanSquawk and Bloomberg:

China party reform document: to encourage overseas investment by individuals and companies, to ease one-child policy.
Fitch said China is only at the start of a busy policy making calendar leading up to the national people’s congress in March.
EU says no Euro-area 2014 budget plan in serious non-compliance. Calls on Italy to take necessary measures on 2014 budget and says that Spain may miss 2014 budget-deficit target.
Treasuries advance, with all maturities headed for a weekly gain, after Yellen yesterday signaled she would continue with stimulus and downplayed risks that QE is inflating asset price bubbles.
Yellen left open the possibility that the central bank could reduce the interest rate on reserves as a way of aiding the economy
Germany argued against a joint backstop for struggling euro-area banks as European finance ministers renewed their debate on how to handle the costs of managing failed lenders
China’s Communist Party pledged to loosen its family planning policy, allowing couples to have two children if either parent is an only child; will also abolish the practice of re-education through labor, allow non-state investment in state projects, Xinhua reports
China’s benchmark money-market rate jumped the most in almost five months as the central bank drained cash from the financial system for a second week
Americans seeking cheap insurance on the Obamacare health exchanges may be in for sticker shock if they get sick next year, as consumers trade lower premiums for out-of-pocket costs that can top $6,000 a person
Just hours after Obama announced a one-year reprieve for canceled insurance plans, industry executives warned it would cost taxpayers and consumers while state officials split on their support for it
Sovereign yields mostly higher, EU peripheral spreads widen. Asian and European stocks, U.S. equity-index futures higher. WTI crude, copper and gold lower

Asian Headlines

China party reform document: to encourage overseas investment by individuals and companies, to ease one-child policy.
– To greatly reduce government intervention in resource allocation
– To scrap residence restrictions in small cities and townships.
– To lift restrictions on residence registration in orderly manner in mid-sized cities.

Fitch said China signals long term reform, but implementation is key. Fitch said China is only at the start of a busy policy making calendar leading up to the national people’s congress in March.

Japanese Economy Minister Amari says trying to avoid new debt issuance for coming stimulus package.

EU & UK Headlines

EU says no Euro-area 2014 budget plan in serious non-compliance. Calls on Italy to take necessary measures on 2014 budget and says that Spain may miss 2014 budget-deficit target. EU’s Rehn said that government debt set to stabilise, economy at turning point on road to recovery.
Eurozone CPI (Oct F) Y/Y 0.7% vs. Exp. 0.7% (Prev. 0.7%)
Eurozone CPI (Oct) M/M -0.1% vs. Exp. -0.1% (Prev. 0.5%)
Eurozone CPI Core (Oct F) Y/Y 0.8% vs Exp. 0.8% (Prev. 0.8%)

According to sources, potential buyers of Spain’s rescued banks, which include foreign investors, are pressuring the government to sweeten sales with more state aid.
ECB says banks to repay EUR 3.155bln from 1st 3y LTRO and EUR 431mln from 2nd 3y LTRO.

US Headlines

President Obama, trying to quell a growing furor over the rollout of his health care law, bowed to bipartisan pressure on Thursday and announced a policy reversal that would allow insurance companies to temporarily keep people on health plans that were to be cancelled under the new law because they did not meet minimum standards.

US Senate Banking Committee could vote on Yellen nomination for Fed chair as early as next week, according to a committee aide.

Equities

Stocks moved higher in recent trade, supported by the release of China party reform document which revealed that the country is to encourage overseas investment by individuals and companies, to ease one-child policy. Even though the meeting by Chinese leaders concluded earlier in the week, lack of details on highly-awaited reforms following the meeting initially weighed on the sentiment as market participants questioned any immediate action by China to spur growth.

Moody’s concluded a review of eight large US banks; said outlook stable on all eight bank holdings and their main operating units; Moody’s cut; Goldman Sachs long term senior debt to Baa1 from A3, JP Morgan long term senior debt to A3 from A2, Bank of New York Mellon long term senior debt to A1 from Aa3. Moody’s confirmed; Wells Fargo’s, Bank of America’s and Citigroup’s long term senior debt.

Also, NY Times reported that US is investigates currency trades by major banks. Although the investigation is at an early stage, authorities are already signaling the likelihood of a legal crackdown.

Broad based JPY weakness which ensued overnight on Thursday following comments from Japanese Finance Minister Aso and in turn saw USD/JPY move
above 100.00 yesterday for the first time since early Sep continues to be observed across the board today. As a reminder, Japanese Finance Minister Aso said Japan must always be ready to send signal to markets to curb excessive and one sided FX moves. He added that it is important that Japan has intervention as FX policy option. The price action going forward is expected to remain supported by large option expiries at 100.00 level, good sized strikes are also said to expire next week.

Analysts at HSBC see more weakness for EUR going forward, though maintained year-end forecast of 1.3000 and 1.2400 for end-2014.

Elsewhere, SNB’s Danthine says CHF cap remains an essential instrument and low interest rates not without risks.

Commodities

Hedge fund Paulson & Co maintained its stake in SPDR Gold Trust, the world’s biggest gold-backed exchange-traded fund, in the Q3 after slashing its stake by more than half in the Q2 when prices fell.

China’s nickel pig iron output (NPI) is expected to rise by as much as one third in 2013, on strong demand and new capacity coming on stream, according to Antaike analyst Wang Chongfeng. Furthermore, China’s molybdenum sector is unlikely to find support in domestic demand but policy changes could bolster the market in the future.

US President Obama says we do not want Iran having nuclear weapons, would destabilise entire region and trigger nuclear arms race; leaving all options on table to deal with it.

Iran has only marginally expanded uranium enrichment capacity at Natanz plant since August according to a UN report. According to an official, the drop in supplies from Libya following protests at oil ports has cost the country USD 6bln.

Royal Dutch Shell and Sinopec are reported to be drilling exploration wells to test the shale potential of an unexplored area in central China.

DB’s Jim Reid complete the overnight recap:

Taking a look at markets this morning, demand for carry is the main theme as markets price in a lower probability of tapering in 2013. EM Asian sovereign credit is the main beneficiary of this theme overnight. Indonesian government bonds are around half a point to 1 point higher across the curve and Indo 5yr CDS is around 17bp tighter. Asian EM FX is a focus with selling of USDMYR (- 0.2%) and USDKRW (-0.1%). In the equities space, Asian stocks are performing strongly led by a 1.7% gain in the TOPIX after USDJPY broke through the 100 mark yesterday. USDJPY is currently hovering around 100.2 which is a near four-month high and it comes after comments from the Japanese finance minister yesterday that FX intervention is a tool at Japan’s disposal. Chinese Ashares are around 2.5% firmer after underperforming since the country’s Third Plenary meeting concluded on Tuesday and there is chatter that the government will release further detail on market reforms in the next few days.

Coming back to yesterday, again it was Yellen who provided the spark for markets. Indeed equities were headed south before Yellen spoke, but sentiment bottomed soon after the start of her testimony and the S&P500 rallied 0.6% in the hours following. 10yr USTs yields had a volatile day after rallying on the back of the Senate hearing; tracking higher again after a lacklustre 30yr auction before rallying again into the close to finish 1bp lower on the day at 2.69%. EM assets in EMEA and LATAM performed strongly across equities, FX and fixed income. After the NYSE close, Moody’s announced that it had concluded its review of eight large US banking groups and had decided to downgrade the credit rating of four bank holding companies: BONY Mellon, Goldman Sachs, JPMorgan Chase and Morgan Stanley. The downgrades reflected the rating agency’s view of the reduced probability of US government support for bank holding company debt after what Moody’s describes as “substantive progress in establishing a credible framework to resolve a large, failing bank”. Senior credit spreads on the affected banks jumped up a couple of basis points following the headline but there appeared to be minimal flow given the late timing of the Moody’s announcement. It will be interesting to see how sub-debt trades later today.

In terms of the data flow, there was some focus on the Euro area Q3 GDP. Euro Q3 GDP expanded at 0.1% QoQ which was in line with consensus (-0.4% YoY), but France was the underperformer (-0.1% vs 0% expected). Germany (+0.3%), Spain (+0.1%), Italy (-0.1%) growth numbers were all consistent with market expectations. DB’s Gilles Moec writes that the details of the French GDP report are depressingly consistent with the usual stereotypes of the French economy’s weaknesses, in particular a deeply negative contribution from net exports (-0.7 pp qoq, worst since Q1 2011). Back in the US, initial jobless claims for the week November 9 fell -2k to 339k after the prior week was revised up +5k to 341k. Though the latest week’s jobless claims were above the 330k expected, it had the effect of lowering the 4-week moving average -6k to 344k—which DB’s Joe Lavorgna points out is the lowest level since Oct 12 (338k).

Looking at today’s calendar, the focus returns to the data flow. Starting with Europe, final Eurozone CPI numbers will be published today. Recall that the preliminary number was -0.1% MoM, a number which preceded the ECB’s recent rate cut. Across the Atlantic, a number of important manufacturing-related data releases are scheduled. The first of these is the NY Fed Empire Manufacturing survey where consensus is expecting a bounce to 5.0 in November from 1.52 last month. Industrial production follows shortly afterwards, and wholesale inventories round out this week’s dataflow. In Europe today, there is some expectation that EU finance ministers will today agree on putting in place some form of national backstop for banks, before the ECB’s latest stress tests are completed next year.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ieNgIg1jc6M/story01.htm Tyler Durden

S&P 1800 Or Bust As Futures Ramp Continues

Market Re-Cap

US data docket

US: Empire State Manufacturing Index, cons 5.00 (8:30)
US: Industrial production m/m, cons -0.4% (9:15)

Overnight news bulletin from RanSquawk and Bloomberg:

China party reform document: to encourage overseas investment by individuals and companies, to ease one-child policy.
Fitch said China is only at the start of a busy policy making calendar leading up to the national people’s congress in March.
EU says no Euro-area 2014 budget plan in serious non-compliance. Calls on Italy to take necessary measures on 2014 budget and says that Spain may miss 2014 budget-deficit target.
Treasuries advance, with all maturities headed for a weekly gain, after Yellen yesterday signaled she would continue with stimulus and downplayed risks that QE is inflating asset price bubbles.
Yellen left open the possibility that the central bank could reduce the interest rate on reserves as a way of aiding the economy
Germany argued against a joint backstop for struggling euro-area banks as European finance ministers renewed their debate on how to handle the costs of managing failed lenders
China’s Communist Party pledged to loosen its family planning policy, allowing couples to have two children if either parent is an only child; will also abolish the practice of re-education through labor, allow non-state investment in state projects, Xinhua reports
China’s benchmark money-market rate jumped the most in almost five months as the central bank drained cash from the financial system for a second week
Americans seeking cheap insurance on the Obamacare health exchanges may be in for sticker shock if they get sick next year, as consumers trade lower premiums for out-of-pocket costs that can top $6,000 a person
Just hours after Obama announced a one-year reprieve for canceled insurance plans, industry executives warned it would cost taxpayers and consumers while state officials split on their support for it
Sovereign yields mostly higher, EU peripheral spreads widen. Asian and European stocks, U.S. equity-index futures higher. WTI crude, copper and gold lower

Asian Headlines

Fitch said China signals long term reform, but implementation is key. Fitch said China is only at the start of a busy policy making calendar leading up to the national people’s congress in March.

Japanese Economy Minister Amari says trying to avoid new debt issuance for coming stimulus package.

EU & UK Headlines

US Headlines

US Senate Banking Committee could vote on Yellen nomination for Fed chair as early as next week, according to a committee aide.

Equities

Also, NY Times reported that US is investigates currency trades by major banks. Although the investigation is at an early stage, authorities are already signaling the likelihood of a legal crackdown.

Broad based JPY weakness which ensued overnight on Thursday following comments from Japanese Finance Minister Aso and in turn saw USD/JPY move above 100.00 yesterday for the first time since early Sep continues to be observed across the board today. As a reminder, Japanese Finance Minister Aso said Japan must always be ready to send signal to markets to curb excessive and one sided FX moves. He added that it is important that Japan has intervention as FX policy option. The price action going forward is expected to remain supported by large option expiries at 100.00 level, good sized strikes are also said to expire next week.

Analysts at HSBC see more weakness for EUR going forward, though maintained year-end forecast of 1.3000 and 1.2400 for end-2014.

Elsewhere, SNB’s Danthine says CHF cap remains an essential instrument and low interest rates not without risks.

Commodities

US President Obama says we do not want Iran having nuclear weapons, would destabilise entire region and trigger nuclear arms race; leaving all options on table to deal with it.

Royal Dutch Shell and Sinopec are reported to be drilling exploration wells to test the shale potential of an unexplored area in central China.

DB’s Jim Reid complete the overnight recap:

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ieNgIg1jc6M/story01.htm Tyler Durden

China Releases Third Plenum Reform Pledges, Sends Stocks To Fresh Highs

The initial disclosures from the much anticipated and recently completed Third Chinese Plenum were a dud. Which, in a world where all the upside comes from hope and faith in the future (since the present continues to get worse), meant at least 20-30 S&P points left on the table just because the quality of promises, pledges and emotional words out of the Chinese Communist Party was not strong enough. So in order to change that, Xinhua has just pre-released a document summarizing all the party reform initiatives, this time with the promises taken up to the next level.

Some of the disclosures via Bloomberg:

CHINA COMMUNIST PARTY SAYS IT WILL DEEPEN REFORMS: XINHUA
CHINA TO ACHIEVES GOALS MENTIONED IN DECISION BY 2020: XINHUA
CHINA TO LOOSEN ONE-CHILD POLICY FOR MORE FAMILIES: XINHUA
CHINA TO ACCELERATE YUAN CONVERTIBILITY: XINHUA
CHINA TO TRANSFER 30% STATE-ASSET PROFITS TO STATE: XINHUA
CHINA TO ALLOW TRANSFER OF NON-FARMING RURAL LAND: XINHUA
CHINA TO ESTABLISH DEPOSIT INSURANCE SYSTEM: XINHUA
CHINA TO REDUCE SCALE OF LAND ACQUISITION FROM FARMERS: XINHUA
CHINA TO ABOLISH REEDUCATION-THROUGH-LABOR SYSTEM: XINHUA
CHINA TO SET UP MORE COS. TO MANAGE STATE ASSETS: XINHUA
CHINA TO SET UP NATIONWIDE DATA PLATFORM FOR PROPERTY: XINHUA
CHINA TO ACCELERATE PROPERTY TAX: XINHUA
CHINA TO BUILD OPEN MARKETS WITH NEGATIVE LIST SYSTEM: XINHUA
CHINA TO EXEMPT MOST COS. PROJECTS FROM GOVT APPROVALS: XINHUA
CHINA TO STRENGTHEN ANTI-CORRUPTION CHAIN OF COMMAND: XINHUA
CHINA PLENUM DOCUMENT TO INCLUDE PROPERTY TAX: CAIXIN

Keep in mind that some of these, sich as the end of the one-child policy, were pre-pre-announced before, and nothing happened. But far be it for us to suggest a communist superpower will make promises and not deliver. All that matters is that the announcement has sent futures to fresh record highs. Just keep BTFATH – Bernanke and Yellen pledge that this time central-planning works.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/7KY8kHgDwLA/story01.htm Tyler Durden

House Democrat On Obamacare "I Don't Know How Obama Fucked This Up So Badly"

For five years, congressional Democrats have sprung to his defense when Obama’s been in trouble. Now though, amid the dismal reality of Obamacare, Politico reports a familiar refrain from Democratic sources: Obama’s “if-you-like-it-you-can-keep-it” promise on insurance policies is his “Read my lips, no new taxes” moment — a reference to the broken promise that came to damage President George H.W. Bush’s credibility with his fellow Republicans. His one-time allies are no longer sure that it’s wise to follow him into battle, leaving Obama and his law not only vulnerable to existing critics, but open to new attacks from his own party. Democratic sources say, Obama can expect that lawmakers will be quicker to criticize him — and distance themselves from his policies.

Via Politico,

[Instead of his “fix” and talking points for Obamacare], the White House chief of staff might have been better off revealing a U.S. map with the president’s plan for saving congressional Democrats’ seats — or just apologizing for letting so many Democrats walk out in public and repeat wildly inaccurate White House claims about the health of the enrollment website and Americans’ ability to keep their insurance plans if they liked them.

…

President Barack Obama’s credibility may have taken a big hit with voters, but he’s also in serious danger of permanently losing the trust of Democrats in Congress.

…

“I don’t know how he f—-ed this up so badly,” said one House Democrat who has been very supportive of Obama in the past.

The first test of unity: how many Democrats vote for a bill Friday penned by Michigan Republican Rep. Fred Upton. The legislation would allow people to keep their canceled insurance plans through 2014.

…

Congressional Democrats are on the line in 2014. Many of them voted for Obamacare, defended it in 2010 and will have to stand in front of voters next year and explain the problems.

…

Even some Democrats who have been big supporters of the Affordable Care Act told McDonough that Obama’s plan for an administration fix to address health plan cancellations isn’t enough for them. They need a bill to get behind. Translation: In addition to skepticism about the policy, it’s not good politics for them to just fall in line behind Obama on the fix.

…

Democrats who are leaning toward voting for a GOP bill, due on the House floor Friday, that would address the cancellation issue in much broader fashion than Obama would like.

“We don’t have a policy problem,” Pelosi told her Democrats in the private meeting, a defense of the law written by Congress. “We have a website problem.”

…

No one expects Obama to lose the majority of Democrats on the GOP bill Friday, but even a few dozen defections would be a telling indication that lawmakers are no longer as worried about hurting him as they once were.

…

Rep. Jim Moran (D-Va.), who passionately defended the law in the closed-door meeting Thursday, acknowledged in an interview that the White House was probably a “little too overconfident and the rhetoric, perhaps, got a little hyperbolic in terms of how perfect this is.” But he also acknowledged it is more difficult for House Democrats to sign onto the White House’s promises right now, particularly the assurances that the website will be fixed by the end of the month.

“We’re not going to all get behind a Nov. 30 date, which is probably not going to be realized…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/3b8kgWCwt3M/story01.htm Tyler Durden

House Democrat On Obamacare “I Don’t Know How Obama Fucked This Up So Badly”

Via Politico,

[Instead of his “fix” and talking points for Obamacare], the White House chief of staff might have been better off revealing a U.S. map with the president’s plan for saving congressional Democrats’ seats — or just apologizing for letting so many Democrats walk out in public and repeat wildly inaccurate White House claims about the health of the enrollment website and Americans’ ability to keep their insurance plans if they liked them.

…

President Barack Obama’s credibility may have taken a big hit with voters, but he’s also in serious danger of permanently losing the trust of Democrats in Congress.

…

“I don’t know how he f—-ed this up so badly,” said one House Democrat who has been very supportive of Obama in the past.

The first test of unity: how many Democrats vote for a bill Friday penned by Michigan Republican Rep. Fred Upton. The legislation would allow people to keep their canceled insurance plans through 2014.

…

Congressional Democrats are on the line in 2014. Many of them voted for Obamacare, defended it in 2010 and will have to stand in front of voters next year and explain the problems.

…

Even some Democrats who have been big supporters of the Affordable Care Act told McDonough that Obama’s plan for an administration fix to address health plan cancellations isn’t enough for them. They need a bill to get behind. Translation: In addition to skepticism about the policy, it’s not good politics for them to just fall in line behind Obama on the fix.

…

Democrats who are leaning toward voting for a GOP bill, due on the House floor Friday, that would address the cancellation issue in much broader fashion than Obama would like.

“We don’t have a policy problem,” Pelosi told her Democrats in the private meeting, a defense of the law written by Congress. “We have a website problem.”

…

No one expects Obama to lose the majority of Democrats on the GOP bill Friday, but even a few dozen defections would be a telling indication that lawmakers are no longer as worried about hurting him as they once were.

…

Rep. Jim Moran (D-Va.), who passionately defended the law in the closed-door meeting Thursday, acknowledged in an interview that the White House was probably a “little too overconfident and the rhetoric, perhaps, got a little hyperbolic in terms of how perfect this is.” But he also acknowledged it is more difficult for House Democrats to sign onto the White House’s promises right now, particularly the assurances that the website will be fixed by the end of the month.

“We’re not going to all get behind a Nov. 30 date, which is probably not going to be realized…

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/3b8kgWCwt3M/story01.htm Tyler Durden

China Repo Spikes Most In 5-Month Highs; Japanese Stocks Soar As TEPCO Finds Another Leak

While the Dow has quietly added over 200 points in the last 2 days, the potential for Kuroda and Abe to embark on QQQE has sent Japan’s Nikkei 225 up a magnificently suitable (given the utterly dismal macro data from yesterday) 700 points in the same period. Somehow this jerk higher to near the big collapse-day highs in May makes sense to someone (as TEPCO announces yet another leak). Meanwhile, across the sea, Chinese money-markets are exploding. The last 2 days have seen a combination of no operations yesterday and a big lift in rates today which spiked overnight repo-rates to 5.32% – the highest in 5 months if it closed there – as clearly smaller banks are desperate for liquidity. FX markets are seeing weakness continue in Indonesia, Thailand, and the Philippines. So, all-in-all, total chaos…

TEPCO first – because that is just a fucking shambles:

*TEPCO FINDS NEW LEAK FROM FUKUSHIMA FLANGE-TYPE TANK: KYODO
*TEPCO SAYS TANK WATER LEAK ABOUT A DROP IN 4 SECONDS
*TEPCO PLANS TO PAY PART OF DECONTAMINATION COSTS, KYODO REPORTS

But Japanese stocks are soaring… makes perfect sense after last night’s total #fail for Abenomics… USDJPY is back over 100… so that must be good (Venezuela here we come)…

as The NKY plays catch-up to The Dow once again…

And while the world is awash in liquidity, the locals in China are getting restless – as overnight repo sees the bigggest 2-day spike in 5 months on the back of a non-reverse-repo day and modest tightening by the PBOC on its rates…

Charts: Bloomberg

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/LKMI3qNeRq8/story01.htm Tyler Durden

How JP Morgan Bribed The Chinese Prime Minister's Daughter Using A Fake Name

Submitted by Michael Krieger of Liberty Blitzkrieg blog,

Allegations of JP Morgan’s use of clever tactics to bribe Chinese officials recently received mainstream attention when Salon journalist Alex Pareene mentioned it in a comical and classic interview on CNBC (you need to watch the video before reading this) with presstitute Maria Bartiromo. When Mr.Pareene mentioned these claims against the TBTF bank, CNBC mocked him for the fact that his information had come from the New York Times. Well it appears the paper has now given CNBC a taste of its own medicine; with some actual real reporting, something the clownish financial-tv channel drowning in a zero ratings death spiral doesn’t seem all that interested in doing.

This article from the New York Times details how JP Morgan paid $75,000 a month to an obscure consulting firm called Fullmark Consultants, which had only two employees. The firm was run by a woman named Lily Chang, which in reality was the alias used by Wen Jiabao’s only daughter Wen Ruchun. Wen Jiabao was the Prime Minister of China at the time.

Unsurprisingly, many lucrative deals followed for the JP Morgan in China. How about we #AskJPM about that.