Tag: finance

With Putin hoping that they can just keep it from going full civil war for a few more days, Ukraine continues to slide towards a dismal result. This morning sees the next level of escalation in the break-away Western region:

• *UKRAINE’S SECURITY SERVICE SAYS WEAPONS CACHE STOLEN: INTERFAX
• *UKRAINE SECURITY SERVICE SAYS PROTESTERS SEIZED 1,500 GUNS
• *UKRAINE SERVICE SAYS PROTESTERS SEIZED 100,000 ROUNDS OF AMMO
• *UKRAINE SERVICE SAYS PROTESTERS GUILTY OF `TERRORIST ACTS’

And with that, the ‘excuse’ the military needed to get involved as Interfax reports the Ukraine’s SBU starts “Anti-terrorist” operation in the Western region of Ivano-Frankvisk. With 25 dead and 241 injured, according to the AP, we suspect these numbers are sadly just the start.

 

Via Interfax,

Volodymyr Porodko, deputy head of the Ukrainian Security Service, said weapons and ammunition have been stolen from the Ukrainian Security Service department in Ivano-Frankivsk.

 

“A total of 268 service pistols, two rifles, three assault rifles, 92 grenades, and some 15,000 cartridges were seized in the Ukrainian Security Service department in Ivano-Frankivsk,” he said while meeting with foreign ambassadors in the Ukrainian Foreign Ministry on Wednesday.

Russia is starting to comment:

Extremists are to blame for the events happening in Ukraine, however opposition forces, which refused the compromise, and Western countries, which interfered in the domestic affairs of Ukraine, bare some responsibility as well, Russian Foreign Minister Sergei Lavrov said.

 

“Of course, the blame is on extremists, who tried all these weeks and all these months to bring the situation to such forceful scenario but considerable share of responsibility is also on opposition activists, who refused compromise, gave the authorities demands outside the legal frame and in the end turned out to be incapable to fulfill what has been agreed,” Lavrov said at a news conference following a meeting with his Kuwaiti counterpart.

Ukraine CDS spiked to 4 year highs…

via Zero Hedge http://ift.tt/O9tGJR Tyler Durden

Despite our insistence that their was nothing new in the BoJ's loan ceiling hike and lack of QE extension (and Goldman's 'this is already priced in' perspective), it still took the machines that are running USDJPY almost 36 hours to figure it out. USDJPY has retraced the entire 100 pip swing and has broken back below the crucial 102.00 level this morning. Time for some more jawboning about the potential for more QE – even as Kuroda insisted last night to the Diet that the government's tax hikes occur (if for no other reason to ensure this does not escalate into the 'monetization miasma' that they fear the market would believe). Of course, as we approach the US open, we would expect the usual ramp-job to lift stocks.

 

 

Remember – as Goldman noted,

As of January 31, the growth-supporting funding facility had provided ¥4 tn (already beyond its planned scale), while the stimulating bank lending facility had provided ¥5 tn for a total of ¥9.16 tn. The bank issued a target for the combined balance of loans to reach ¥18 tn by December 2014 when it announced its quantitative and qualitative easing program on April 4, 2013. With the end-March 2014 deadline for new applications approaching, the BOJ needed in practical terms to extend and expand the two facilities as it announced today in order to meet the end-December target. Today’s facility extension/expansion is already factored into the bank’s monetary base target.

Seems they were right but the market is just slow to 'get it'

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

It seems once again that ‘economists’ and ‘analysts’ misunderstood the weather in winter is cold. Housing Starts dropped a stunning 16% MoM (from an upwardly revised December data) for the biggest miss since June 2013 (and 8 of last 10 months missed expectations). This is the biggest MoM drop in 3 years. Building Permits – more problematic for the weather blamers – also plunged (by 5.4%) missing expectations by the most since June. However, what is the biggest slap in the face for the ‘weather-blamers’ is the collapse in Permits for the West (-26%) while most other regions improved.

Permits missed by most since June back to mid-2013 levels…

 

Starts plunged – missing 8 of the last 10 months..

 

Housing Starts dropped 16% MoM – the 3rd most in 20 years

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

For years, the Netflix streaming business has been growing like a parasite, happy to piggyback on established broadband infrastructures, where the broadband companies themselves have becomes competitors to Netflix for both distribution and content. Until now. Emboldened by the recent Net Neutrality ruling, which has put bandwidth hogs like Netflix which at last check was responsible for over 30% of all downstream US internet traffic…

… broadband providers are finally making their move, and in a preliminary salvo whose ultimate compromise will be NFLX paying lots of money, have started to throttle Netflix traffic. The WSJ reports that the war between the broadband-ers and the video streaming company has finally emerged from the “cold” phase and is fully hot.

Netflix Inc. subscribers have seen a lot more spinning wheels lately as they wait for videos to load, thanks to a standoff deep in the Internet.

 

The online-video service has been at odds with Verizon Communications Inc. VZ and other broadband providers for months over how much Netflix streaming content they will carry without being paid additional fees.

 

Now the long simmering conflict has heated up and is slowing Netflix, in particular, on Verizon’s fiber-optic FiOS service, where Netflix says its average prime-time speeds dropped by 14% last month. The slowdown comes as Netflix is rolling out the new season of its Emmy-winning series “House of Cards.”

Not surprisingly, Netflix wants broadband companies to hook up to its new video-distribution network without paying them fees for carrying its traffic. But the biggest U.S. providers—Verizon, Comcast, Time Warner Cable and AT&T Inc. —have resisted, insisting on compensation.

And while there is no legal basis with which Netflix can be pushed to pay for traffic, backbone companies are quietly putting the squeeze on the House of Cards maker where it hurts most: watching enjoyment.

Until the standoff gets resolved, the bulk of Netflix’s traffic continues to flow across Internet intermediaries, including low-cost carrier Cogent Communications Group Inc. People familiar with Cogent’s and Netflix’s thinking say the cable and telephone companies are delaying upgrading existing connections. Executives at major broadband providers, meanwhile, privately blame the traffic jam on Netflix’s refusal to distribute its traffic more efficiently.

 

Netflix said it carefully plans its routing to make sure customers have the best experience possible. Verizon said it treats all Internet traffic equally. Neither side is budging, people familiar with the matter said, leading to growing congestion.

The result is that the speed of NFLX traffic is crashing, something which will make watching its High Definition content increasingly more unpleasant as buffering times mean more time sitting watching spinning circle, and less time watching content.

The end result: “unwatchable programming”:

The bottleneck has made Netflix unwatchable for Jen Zellinger, an information-technology manager from Carney, Md., who signed up for the service last month. She couldn’t play an episode of “Breaking Bad” without it stopping, she said, even after her family upgraded their FiOS Internet service to a faster, more expensive package.

 

“We tried a couple other shows, and it didn’t seem to make any difference,” she said. Mrs. Zellinger said she plans to drop her Netflix service soon if the picture doesn’t improve, though she will likely hold on to her upgraded FiOS subscription.

 

She and her husband thought about watching “House of Cards,” but she said they probably will skip it. “We’d be interested in getting to that if we could actually pull up the show,” she said.

 

Netflix acknowledges the sluggish performance, though spokesman Joris Evers said that “generally our members are able to watch Netflix, albeit perhaps at a lower quality and with potentially some startup delays at the busiest times of day.”

 

Verizon has a policy of requiring payments from networks that dump more data into its pipes than they carry in return. “When one party’s getting all the benefit and the other’s carrying all the cost, issues will arise,” said Craig Silliman, Verizon’s head of public policy and government affairs.

Ironically, as described above, it is the broadband companies that end up the winners from the NFLX throttling, even as subscribers give the streaming company a chance, then promptly cast it away after a month or so of unwatchable results.

What happens next is that subscribers, unhappy with the throttled distribution whose download speeds will keep declining over time, switch over to competing services – there certainly is an overabundance of those. And in a world in which Amazon can burn through endless cash and be rewarded by the idiot market, it is only a matter of time before broadband companies preferentially reward Jeff Bezos at the expense of putting Netflix ultimately out of business. At which point they can redirect their attention to Amazon Prime of course, and repeat the entire process once more, unless of course Amazon itself hasn’t become the dominant (and money-losing of course) broadband provider by then.

As for Netflix’ relentless parabolic stock price action: good luck with that particular house of cards.

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

For years, the Netflix streaming business has been growing like a parasite, happy to piggyback on established broadband infrastructures, where the broadband companies themselves have becomes competitors to Netflix for both distribution and content. Until now. Emboldened by the recent Net Neutrality ruling, which has put bandwidth hogs like Netflix which at last check was responsible for over 30% of all downstream US internet traffic…

… broadband providers are finally making their move, and in a preliminary salvo whose ultimate compromise will be NFLX paying lots of money, have started to throttle Netflix traffic. The WSJ reports that the war between the broadband-ers and the video streaming company has finally emerged from the “cold” phase and is fully hot.

Netflix Inc. subscribers have seen a lot more spinning wheels lately as they wait for videos to load, thanks to a standoff deep in the Internet.

 

The online-video service has been at odds with Verizon Communications Inc. VZ and other broadband providers for months over how much Netflix streaming content they will carry without being paid additional fees.

 

Now the long simmering conflict has heated up and is slowing Netflix, in particular, on Verizon’s fiber-optic FiOS service, where Netflix says its average prime-time speeds dropped by 14% last month. The slowdown comes as Netflix is rolling out the new season of its Emmy-winning series “House of Cards.”

Not surprisingly, Netflix wants broadband companies to hook up to its new video-distribution network without paying them fees for carrying its traffic. But the biggest U.S. providers—Verizon, Comcast, Time Warner Cable and AT&T Inc. —have resisted, insisting on compensation.

And while there is no legal basis with which Netflix can be pushed to pay for traffic, backbone companies are quietly putting the squeeze on the House of Cards maker where it hurts most: watching enjoyment.

Until the standoff gets resolved, the bulk of Netflix’s traffic continues to flow across Internet intermediaries, including low-cost carrier Cogent Communications Group Inc. People familiar with Cogent’s and Netflix’s thinking say the cable and telephone companies are delaying upgrading existing connections. Executives at major broadband providers, meanwhile, privately blame the traffic jam on Netflix’s refusal to distribute its traffic more efficiently.

 

Netflix said it carefully plans its routing to make sure customers have the best experience possible. Verizon said it treats all Internet traffic equally. Neither side is budging, people familiar with the matter said, leading to growing congestion.

The result is that the speed of NFLX traffic is crashing, something which will make watching its High Definition content increasingly more unpleasant as buffering times mean more time sitting watching spinning circle, and less time watching content.

The end result: “unwatchable programming”:

The bottleneck has made Netflix unwatchable for Jen Zellinger, an information-technology manager from Carney, Md., who signed up for the service last month. She couldn’t play an episode of “Breaking Bad” without it stopping, she said, even after her family upgraded their FiOS Internet service to a faster, more expensive package.

 

“We tried a couple other shows, and it didn’t seem to make any difference,” she said. Mrs. Zellinger said she plans to drop her Netflix service soon if the picture doesn’t improve, though she will likely hold on to her upgraded FiOS subscription.

 

She and her husband thought about watching “House of Cards,” but she said they probably will skip it. “We’d be interested in getting to that if we could actually pull up the show,” she said.

 

Netflix acknowledges the sluggish performance, though spokesman Joris Evers said that “generally our members are able to watch Netflix, albeit perhaps at a lower quality and with potentially some startup delays at the busiest times of day.”

 

Verizon has a policy of requiring payments from networks that dump more data into its pipes than they carry in return. “When one party’s getting all the benefit and the other’s carrying all the cost, issues will arise,” said Craig Silliman, Verizon’s head of public policy and government affairs.

Ironically, as described above, it is the broadband companies that end up the winners from the NFLX throttling, even as subscribers give the streaming company a chance, then promptly cast it away after a month or so of unwatchable results.

What happens next is that subscribers, unhappy with the throttled distribution whose download speeds will keep declining over time, switch over to competing services – there certainly is an overabundance of those. And in a world in which Amazon can burn through endless cash and be rewarded by the idiot market, it is only a matter of time before broadband companies preferentially reward Jeff Bezos at the expense of putting Netflix ultimately out of business. At which point they can redirect their attention to Amazon Prime of course, and repeat the entire process once more, unless of course Amazon itself hasn’t become the dominant (and money-losing of course) broadband provider by then.

As for Netflix’ relentless parabolic stock price action: good luck with that particular house of cards.

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

The past 5 weeks have seen mortgage applications crumble a further 16% – their biggest such drop in 14 months as the index for home purchase applications hovers close to its lowest level since 1995. Non-seasonally-adjusted, this is the worst start to a year in over a decade. Must be the weather?

 

Mortgage Applications dro close to 19 year lows…

 

Worst start to a year for at least a decade

 

Chart: Bloomberg

via Zero Hedge http://ift.tt/N9NE64 Tyler Durden

• Ukraine leader denounces coup bid, West weighs sanctions (Reuters)
• Time to buy Imodium calls: Kuroda Easing Doomed as Yen Seen Missing 120 Level (BBG)
• Teens Disappear From U.S. Workforce (BBG)
• Fed Sets Rules for Foreign Banks (WSJ)
• Quant Funds Feel Investor Bite After Underperforming (BBG)
• China Probes Qualcomm, InterDigital Over Monopoly Concerns (WSJ)
• Capital One says it can show up at cardholders’ homes, workplaces  (LATimes)
• SEC Gains Power to Take Profit Made From Insider Trading (BBG)
• China Unveils New Bank Liquidity Rules After Repeated Cash Squeezes (WSJ)
• California pension rate hikes loom after Calpers vote (Reuters)
• How a CEO Reacts When Robert Redford Pegs Him a Villain (BBG)

 

Overnight Media Digest

WSJ

* General Motors Co is accelerating efforts to field a largely aluminum-bodied pickup truck by late 2018, under pressure from federal fuel efficiency standards and archrival Ford Motor Co, according to people familiar with the matter.

* Coca-Cola Co, the world’s largest beverage firm, missed its yearly growth goals and warned that weaker foreign currencies will lower its operating profit 7 percent this year.

* The New York attorney general plans to announce a settlement with U.S. units of Ranbaxy and Teva Pharmaceutical Industries Ltd over allegations the generic drug makers made an unlawful agreement to restrict competition.

* President Barack Obama on Tuesday ordered his administration to develop and implement new fuel-efficiency standards for medium and heavy-duty commercial trucks by March 2016.

* Americans are beginning to take advantage of easier lending conditions after years of shedding debt, fueling a rise in borrowing that could prop up a shaky economic recovery. ()

* The Arkansas House failed to pass legislation to continue a state program that used Medicaid dollars to enroll low-income residents in private health insurance, throwing the future of the nationally watched program into doubt.

* Seven years after a Supreme Court ruling cleared the way for federal regulation of greenhouse gases, justices will consider whether the agency has stretched its powers too far in applying new emissions rules.

* AT&T Inc received requests on national security grounds for detailed information for at least 35,000 customer accounts in the first six months of 2013, the company disclosed.

* Raising the federal minimum wage to $10.10 per hour would cost the U.S. economy about 500,000 jobs by late 2016, but the increase would lift 900,000 Americans out of poverty at the same time, according to a new study.

 

FT

Private equity companies look to gain from Europe’s road to recovery as the initial public offerings market starts the year with listings worth $8.3 billion, making 2014 the busiest beginning of the year since the financial crisis.

Diageo Plc, the world’s biggest spirits company has warned against Britain leaving the European Union, crediting the bloc’s global trade deals for the company’s whisky exports success.

MetLife said it would sell its bulk annuity unit, MetLife Assurance, to Goldman Sach’s-backed Rothesay Life. The sale is expected to be completed in the second quarter of 2014.

Essar Energy’s plans to delist shares may have been triggered by a drastic share price fall since their listing and meetings with disappointed long-term investors before Christmas, people involved in the matter said.

U.S.-based activist hedge fund SpringOwl said on Tuesday that it has agreed in principle to buy about 6.1 percent in Bwin.Party, a move that could lead to a break up of the online gaming party.

 

NYT

* Homeowners who are trying to avert foreclosure are confronting problems on a new front as the mortgage industry undergoes a shift.

* King Digital Entertainment, the maker of the addictive puzzle game Candy Crush Saga, filed on Tuesday to list its shares on the New York Stock Exchange.

* A popular Democratic proposal to raise the minimum wage to $10.10 an hour, championed by President Obama, could reduce total employment by 500,000 workers by the second half of 2016.

* Senator Charles Schumer, Democrat of New York, has recused himself from reviewing Comcast Corp’s agreement to buy Time Warner Cable after the revelation that his brother, the lawyer Robert Schumer, worked on the merger.

* David Einhorn has filed a lawsuit seeking to unmask the identity of an anonymous financial blogger who, he says, disclosed that Einhorn’s hedge fund was buying shares in a technology company.

* Foreign banks with a major presence on Wall Street will no longer be allowed to avoid many of the tougher rules that the United States introduced after the financial crisis to prevent banking failures and bailouts.

* Corporations should expect an onslaught of enforcement proceedings from investigations into overseas bribery, manipulation of financial benchmark rates and the issuance of toxic mortgage securities. The question is how much money the government will demand as part of the inevitable settlements, a figure that is difficult to calculate.

 

Canada

THE GLOBE AND MAIL

* The head of Canadian Pacific Railway Ltd, Hunter Harrison, called for an immediate ban of the type of older rail cars that exploded in the Lac-Megantic disaster and suggested that trains will become more attractive targets for terrorists if rail companies are forced to tell the public what dangerous goods they are carrying.

* BlackBerry Ltd says it’s “outraged” by a T-Mobile U.S. Inc offer aimed at luring some of its customers to the rival Apple Inc iPhone. BlackBerry’s new chief executive officer John Chen, was referring to T-Mobile’s attempt to get some of its users to switch smartphones, a move that backfired and sent the wireless carrier scrambling to make good.

Reports in the business section:

* The fizz has gone out of the soft-drink business, forcing producers to search for alternative sources of revenue – but even some of those are showing limited growth potential. From Coca-Cola Co to PepsiCo Inc to private-label Cott Corp, soda makers are struggling with declining North American demand for their core carbonated drinks and counting more on other products to diversify and draw back customers.

* The British Columbia government unveiled its tax regime for liquefied natural gas exports, providing an industry framework the province hopes will lead to an avalanche of new revenue.

NATIONAL POST

* Unrepentant and unafraid of new controversy, Toronto Mayor Rob Ford used a series of YouTube videos Tuesday to declare “war” on nearly half of Toronto’s city council and said he could see “no reason” for the city to fly the Pride flag during the Sochi Olympics.

* Yoga-wear retailer Lululemon Athletica Inc has apologized and revised its policy after some customers were banned from its online store after reselling products over the Internet.

FINANCIAL POST

* The explosion of transportation of oil by rail has gone a long way to alleviate pipeline bottlenecks, but Canadian Pacific Railway boss Hunter Harrison is not convinced it has been a boon for his own industry.

* As the newspaper industry considers the merits of cutting certain unprofitable print publication dates, the owner of Quebec’s La Presse has struck a revised printing deal that gives it the option to publish less often.

 

China

SHANGHAI SECURITIES NEWS

– The PBOC drained 48 billion yuan through forward repurchase agreements for the first time in eight months on Tuesday, suggesting a tightening bias after a surge in liquidity following the Spring Festival, according to Liu Yihui, chief economist of Guangfa Securities.

– Wang Chuanfu, chairman of BYD Co Ltd, said demand for new energy cars will rise in 2014 thanks to supportive government policies, including subsidies and efforts to tackle air pollution.

CHINA SECURITIES JOURNAL

– China may soon issue banking licenses to three to five private companies ahead of the National People’s Congress in early March, sources said. Policymakers have expressed support for the formation of privately-owned banks and sources said large and established companies are likely to get their licenses first.

21st CENTURY BUSINESS HERALD

– Deposits of the four major state-owned banks increased by 38 billion yuan ($6.26 billion) as of Feb. 16, regulations toward internet financial services to be expected.

– The Shanghai Free Trade zone will have more financial reforms rolled out before the National People’s Congress in early March. Upcoming policies are expected to provide more flexibility in interest rates and reducing control over foreign exchange, said Jian Danian, vice-chairman of the zone administration. The government is also considering proposals to lower the tax rate for companies registered in the zone to 15 percent.

CHINA DAILY

– The China (Shanghai) Free Trade Pilot Zone launched cross-border yuan payment services on Tuesday under the guidance of the People’s Bank of China. Five third-party payment service providers have received approval to handle renminbi-denominated cross-border payments in the zone, the PBOC’s Shanghai office said.

PEOPLE’S DAILY

– Comprehensive reforms need to be conducted to achieve a better institutional system of socialism and to fulfill the demands of modern governing, and editorial said.

SHANGHAI DAILY

– More than 1200 people close to a realgar mine in Hunan Province have fallen victims to decades-long arsenic refining, with at least 500 mine workers dying from cancer, according to local authorities.

 

Britain

The Telegraph

SCOTLAND CAN ISSUE BONDS – BUT THEY WILL COST MORE

The Government has granted Scotland permission to issue its own bonds – but with a warning that it is “unlikely to be a cost effective form of borrowing”.

COMPENSATE US IF YOU FREEZE THE CARBON TAX, SAYS POWER GIANT DRAX

Power giant Drax Group wants compensation if the Treasury freezes the carbon tax, arguing it would lose out on expected earnings from burning biomass.

The Guardian

BUY TO LET SPECIALIST PARAGON GETS BANKING LICENCE TO FINANCE CAR SALES

Solihull-based buy to let mortgage specialist Paragon has been given a banking licence as part of its drive to offer finance in Britain’s booming car market.

MORE FERRARIS SOLD IN THE UK THAN ANYWHERE ELSE IN EUROPE

Despite rising prices in 2013 as Ferrari cut production, record numbers of the tailor-made vehicles were sold in Britain last year.

The Times

DOOSAN BABCOCK NUCLEAR DEAL TO CREATE 1,000 JOBS

Doosan Babcock has won a 1 billion pounds contract to extend the lives of EDF Energy’s ageing nuclear reactors and help to keep the lights on in the UK.

FUND BOSSES TO LOOK AT INVESTOR CONCERNS OVER ESSAR PROPOSAL

The Association of British Insurers’ investment committee is poised to discuss investor concerns about the contentious bid proposal for Essar Energy from its largest shareholder.

Sky News

RBS BOARD BEGINS PLANNING FOR HAMPTON EXIT

Directors of Royal Bank of Scotland have begun discussions about the appointment of a new chairman as Sir Philip Hampton prepares to step down from the taxpayer-backed lender.

‘INSIDE MAN HELPED 1 MILLION POUND BARCLAYS BANK FRAUD’

Fraudsters stole more than 1 million pounds from a Barclays bank branch after fitting a remote control gadget to a worker’s computer, a court has heard.

 

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Producer Price Index for January at 8:30–consensus up 0.2%
Housing starts for January at 8:30–consensus rate 950K
Housing permits January at 8:30–consensus rate 975K

ANALYST RESEARCH

Upgrades

Actavis (ACT) upgraded to Buy from Neutral at Goldman
Ashford Hospitality (AHT) upgraded to Outperform from Neutral at RW Baird
CEMEX (CX) upgraded to Buy from Neutral at Sterne Agee
Capstone Turbine (CPST) upgraded to Outperform from Market Perform at FBR Capital
Genpact (G) upgraded to Buy from Neutral at Citigroup
Gogo (GOGO) upgraded to Overweight from Equal Weight at Evercore
J.B. Hunt (JBHT) upgraded to Buy from Hold at Wunderlich
M&T Bank (MTB) upgraded to Buy from Neutral at SunTrust
Saia, Inc. (SAIA) upgraded to Buy from Hold at Wunderlich

Downgrades

Atlas Pipeline Partners (APL) downgraded to Equal Weight from Overweight at Barclays
Calpine (CPN) downgraded to Neutral from Buy at UBS
Cape Bancorp (CBNJ) downgraded to Neutral from Buy at Sterne Agee
Con-way (CNW) downgraded to Hold from Buy at Wunderlich
Dresser-Rand (DRC) downgraded to Equal Weight from Overweight at Morgan Stanley
Dresser-Rand (DRC) downgraded to Market Perform from Outperform at Raymond James
Essex Property Trust (ESS) downgraded to Hold from Buy at Cantor
Knight Transportation (KNX) downgraded to Hold from Buy at Wunderlich
NPS Pharmaceuticals (NPSP) downgraded to Hold from Buy at Jefferies
Parkway Properties (PKY) downgraded to Market Perform from Outperform at BMO Capital
SM Energy (SM) downgraded to Hold from Buy at KeyBanc
SolarCity (SCTY) downgraded to Neutral from Outperform at RW Baird
Valspar (VAL) downgraded to Equal Weight from Overweight at First Analysis

Initiations

A.O. Smith (AOS) initiated with an Outperform at FBR Capital
American Eagle Energy (AMZG) initiated with a Buy at SunTrust
Canadian Solar (CSIQ) initiated with a Market Perform at FBR Capital
Dillard’s (DDS) initiated with a Neutral at Citigroup
First Solar (FSLR) initiated with a Market Perform at FBR Capital
Genesco (GCO) initiated with a Sell at Goldman
Hannon Armstrong (HASI) initiated with an Outperform at FBR Capital
J.C. Penney (JCP) initiated with a Neutral at Citigroup
Johnson Controls (JCI) initiated with an Outperform at FBR Capital
Kohl’s (KSS) initiated with a Neutral at Citigroup
Lennox (LII) initiated with an Outperform at FBR Capital
MSA (MSA) initiated with a Hold at Stifel
Macy’s (M) initiated with a Buy at Citigroup
Nordstrom (JWN) initiated with a Neutral at Citigroup
Oshkosh (OSK) initiated with a Buy at Stifel
Polypore (PPO) initiated with a Market Perform at FBR Capital
Power Solutions (PSIX) initiated with an Outperform at FBR Capital
SunEdison (SUNE) initiated with an Outperform at FBR Capital
SunPower (SPWR) initiated with a Market Perform at FBR Capital
Tesla (TSLA) initiated with a Market Perform at FBR Capital
United Rentals (URI) initiated with a Buy at Stifel
Vocera (VCRA) initiated with a Buy at B. Riley
Westport Innovations (WPRT) initiated with an Outperform at FBR Capital

COMPANY NEWS

Canadian Natural (CNQ) acquired certain assets of Devon Canada (DVN) for $3.13B
Bombardier (BDRBF) signed contract with Transport for London valued at $2.1B
Chelsea Therapeutics’ (CHTP) Northera was granted accelerated approval from the FDA for the treatment of symptomatic neurogenic orthostatic hypotension
Crossroads (CRDS) filed patent infringement suits against Cisco (CSCO), NetApp (NTAP), Quantum (QTM)
Verizon (VZ) expects to issue 1.27B common shares to Vodafone (VOD) shareholders as part of its acquisition of Vodafone’s 45% stake in Verizon Wireless
Mattress Firm (MFRM) said it expects Q4 profit and sales to come in below expectations
Analog Devices (ADI) approved increase to share repurchase program to $1B
Energy Transfer Partners (ETP) announced long term agreement with XTO Energy (XTO, XOM)

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Terex (TEX), Oceaneering (OII), Neenah Paper (NP), CF Industries (CF), NPS Pharmaceuticals (NPSP), Panera Bread (PNRA), Herbalife (HLF), Potbelly (PBPB), Flowserve (FLS), Fluor (FLR), Nabors Industries (NBR), Columbia Sportswear (COLM)

Companies that missed consensus earnings expectations include:
NorthWestern (NWE), FreightCar America (RAIL), Yamana Gold (AUY), Phototronics (PLAB), InnerWorkings (INWK), La-Z-Boy (LZB), Greenlight Capital Re (GLRE), DryShips (DRYS), Sykes Enterprises (SYKE)

NEWSPAPERS/WEBSITES

GE (GE) sued IRS to recover $658M in taxes and interest, WSJ reports
China investigating Qualcomm (QCOM), InterDigital (IDCC) over monopoly concerns, WSJ reports
John Malone (DISCA, LBTYA) starts succession planning, FT reports
BlackBerry (BBRY) CEO blasts T-Mobile (TMUS) for pushing change to iPhones (AAPL), Bloomberg reports
AIG (AIG) accused of holding BofA (BAC) $8.5B settlement ‘hostage,’ Reuters reports
Novartis (NVS) Tokyo unit raided by prosecutors, Reuters reports
Target (TGT) CEO Steinhafel faces cybertheft aftermath, WSJ reports
Prosecutors alleged GPB1.25M stolen from Barclays (BCS) in one day, FT reports
Actavis (ACT) expected to seek more deals, WSJ reports
General Mills (GIS) seeks deals in fast growing emerging markets, Reuters reports

SYNDICATE

Advaxis (ADXS) to sell up to $50M in common stock
Arrowhead Research (ARWR) files to sell common stock
Five Oaks (OAKS) files to sell 3M in common stock
Kinder Morgan Energy (KMP) files to sell 6.9M common units
MarkWest Energy (MWE) files to sell $1.2B of common units representing limited partner
Verizon (VZ) to issue 1.27B common shares to Vodafone

via Zero Hedge http://ift.tt/1fgqF3Y Tyler Durden

The events in the Ukraine continue to deteriorate. Moments ago Lawmakers in Ukraine’s Lviv region, declared independence after backers evicted appointed governor overnight. Lviv’s parliament formed executive committee with department heads in Governor Oleh Salo’s administration that will take over functions of regional government, Oksana Dmetryv, a spokeswoman for Speaker Petro Kolodiy, said today by phone from Lviv. Protesters also seized headquarters of security services in Lviv, a region of 2.5 million people bordering Poland. Elsewhere, there were reports of more military vehicles crossing through Kiev: if there are any more Molotov Cocktail video follow ups we will be sure to capture them.

Still, to expect president Yanukovich (or Putin) to just sit there and let the country be torn apart by secessionists is naive. As Reuters reportrs, Yanukovich accused pro-European opposition leaders on Wednesday of trying to seize power by force after at least 26 people died in the worst violence since the former Soviet republic gained independence. European Union leaders said they were urgently preparing targeted sanctions against those responsible for a crackdown on protesters who have been occupying central Kiev for almost three months since Yanukovich spurned a far-reaching trade deal with the EU and accepted a $15-billion Russian bailout.

Russian President Vladimir Putin’s spokesman insisted the Kremlin was sticking to a policy of not intervening in Ukraine, although his point man has called for action to crush the protests. The Kremlin said Putin and Yanukovich spoke by telephone overnight, calling the events an attempted coup. Moscow announced the resumption of stalled aid to Kiev on Monday with a $2-million cash injection hours before the crackdown began.

So far, however, the implicit Russian backing of the Ukraine as is is not doing much as both the Ukraine Dollar short-bonds due June 2014 have fallen more than 2 points to a record low of 94.25 according to Tradeweb, while the Russian Ruble has just tumbled to its lowest levels against the dollar since 2009.

The market is finally starting to notice, and realize that nothing in the Ukraine is contained, and the consequences form a prolonged civil war would be dire for everyone involved. Which, as is the case in every proxy war, just happens to be everyone.

via Zero Hedge http://ift.tt/1gUPz8U Tyler Durden

After surging yesterday for no reason whatsoever because as we explained on several occasions, there were no surprises in the Tuesday BOJ statement, and the doubling and extension of its loan facilities was implicit and factored into the doubling of its monetary policy (as goldman explained quite well), both the Nikkei and the USDJPY has been forced to revert, with the latter all important carry funding pair back to 102 and in danger of sliding lower, as a result ES is now below yesterday’s lows. Which is why the 102 USDJPY “invisible hand” tractor beam will be all important today especially if the market finally starts paying attention to the proxy civil war that has gripped the Ukraine.

Stocks traded lower, albeit in a relatively range-bound range this morning, with the Spanish IBEX-35 underperforming. Banking names remained under pressure, with focus still on yesterday’s reports that Spanish banks’ bad loans marked a fresh record, together with comments by ECB’s Weidmann, who said that sovereign debt purchases would constrain the central bank via political pressure. Similar view was also echoed by ECB’s Nowotny, who said that government bond buying US Fed-style would be difficult to do under ECB’s mandate.

Much of the focus this morning has been on UK related macroeconomic events, with the release of the latest jobs report, which showed an uptick in the ILO Unemployment Rate, coinciding with the MPC minutes which revealed that Carney did not ask MPC to vote on new forward guidance policy. As a result, GBP came under broad based selling pressure, with Bunds and USTs also dragged higher by consequent rally by Gilts. Going forward, market participants will get to digest the release of the latest housing data from the US, FOMC minutes, as well as the API inventories report after the closing bell on Wall Street.

US Event Calendar

• 7:00am: MBA Mortgage Applications, Feb. 14, est. -2.0%
• 8:30am: Bureau of Labor Statistics issues redesigned PPI; PPI m/m, Jan., est. 0.1% (prior 0.1%); PPI Ex Food and Energy m/m, Jan., est. 0.1% (prior 0.0%)
• 8:30am: Housing Starts, Jan., est. 950k (prior 999k); Housing Starts m/m, Jan., est. -4.9% (prior -9.8%); Building Permits, Jan., est. 975k (prior 986k, revised 991k); Building Permits m/m, Jan., est. -1.6% (prior -3%, revised -2.6%)
• 12:15pm: Fed’s Lockhart speaks on economy in Macon, Ga.
• 1:00pm: Fed’s Bullard speaks in Washington
• 2:00pm: Fed releases minutes from Jan. 28-29 FOMC Meeting
• 7:00pm: Fed’s Williams speaks on economy in New York Supply
• 11:00am: POMO – Fed to inject only $1b-$1.25b into Singapore Private Wealth accounts

Bulletin news summary from Bloomberg and RanSquawk

• GBP underperformed its peers following the release of worse than expected ILO Unemployment Rate, while the minutes showed that Carney did not ask MPC to vote on new forward guidance policy on Feb. 6…
• Bunds moved off the best levels of the session after Buba failed to get bids for maximum target at its 2024 Bund auction…
• ECB’s Nowotny says that government bond buying US Fed-style would be difficult to do under ECB’s mandate
  Treasuries gain for a second day, 10Y leads, with yield at lowest in a week; FOMC minutes and discussion of QE tapering in focus, especially as recent economic data has disappointed.
• Britain’s unemployment rate rose to 7.2% in 4Q, first increase since February of last year, from 7.1% in 3Q
• Germany failed to get bids for maximum target at auction of 10Y bunds; received EU4.33b, max target EU5b; percentage retained by Bundesbank jumped to 24%, highest since  Sept. 2012
• The Fed approved new standards for foreign banks that will require the biggest to hold more capital in the U.S., joining other countries in erecting walls around domestic financial systems
• Clashes in Ukraine between police and anti-government activists killed at least 25 people and left hundreds injured in the bloodiest episode of the country’s three- month standoff
• A JPMorgan employee fell to his death from the roof of Chater House, the investment bank’s Asia-Pacific headquarters in Hong Kong
• China reduced its holdings of U.S. Treasury debt in December by the most in two years as the Fed announced plans to slow asset purchases
• Sovereign yields mostly lower. EU peripheral spreads wider. Asian stocks mixed; Nikkei -0.5%, Shanghai +1.1%. European stocks fall, U.S. stock-index futures decline. WTI crude higher, gold and copper lower

Asian Headlines

The Nikkei 225 underperformed its peers amid touted profit taking following yesterday’s gains, with JGBs finishing in minor positive territory as a result. Of note, good sized swaps receiving was noted in 5s, which was said to haven been linked to yesterday’s decision by the BoJ to allow banks to borrow from the central bank at a 0.10% fixed rate for four years. (IFR)

UBS see no hard landing or financial crisis in China this year, as firming exports and recovering consumption should offset slower investment in infrastructure. (BBG)

EU & UK Headlines

ILO Unemployment Rate (Dec) 3M 7.2% vs Exp. 7.1% (Prev. 7.1%)

UK Jobless Claims Change (Jan) M/M -27.6K vs. Exp. -20.0K (Prev. -24.0k, Prev. -27.7K)

BoE February minutes showed MPC voted 9-0 to leave rates and bond purchases unchanged. Carney did not ask MPC to vote on new forward guidance policy on Feb. 6.

ECB’s Weidmann said sovereign debt purchases would constrain the central bank via political pressure. (FAZ)

This follows the German constitutional court’s ruling on the OMT, stating that bond-buying may exceed the ECB’s mandate.

ECB’s Nowotny says need unanimity to agree non-sterilisation of SMP bond purchases and are getting close to that. He also added that government bond buying US Fed-style would be difficult to do under ECB’s mandate. (RTRS/BBG)

Bunds failed to sustain upward traction and moved off high after Buba failed to get bids for maximum target at its 2024 Bund auction. In terms of the bidding data: b/c 1.1 (Prev. 1.8) and avg. yield 1.64% (Prev. 1.77%),
retention 24.1% (Prev. 16.5%).

US Headlines

President Obama’s proposal to raise the minimum wage to $10.10 per hour would cost 500,000 jobs in 2016, according to a report released Tuesday by the nonpartisan Congressional Budget Office. (The Hill)

Equities

The release of an encouraging earnings report by Credit Agricole, which outperformed in France, failed to support other financials in Europe, with the sector under performing on a broader EU-wide breakdown. On the other hand, utilities traded in the green, as the cautious sentiment buoyed investor demand for high dividend yielding stocks.

FX

Combination of worse than expected macroeconomic releases from the UK, as well as expiring options between 1.660-50 levels meant that GBP has underperformed its peers this morning. Elsewhere, touted profit taking following yesterday’s sharp gains, together with somewhat cautious sentiment saw EUR/JPY and USD/JPY trend lower this morning.

Commodities

India may cut their gold import duty by between 2% and 4%. (WSJ)

Morgan Stanley said that China iron ore demand is seen picking up, maintaining its forecasts, whilst seeing a surplus in H2, and suggested not to panic over China iron ore stockpiles. (BBG)

Libyan PM Ali Zaidan commented that Libya reached an agreement to end stand-off with militia, without providing any further details. (BBG)

Iraq has resumed crude exports via the Turkish port of Ceyhan, as the pipeline has been repaired, with oil flow to return to normal at 300,000-325,000 bpd today. (BBG)

* * *

We conclude with the overnight recap from Db’s Jim Reid

Policy expectations ahead of the National People’s Congress on the 5th March is spurring a move higher in Chinese stocks. The Shanghai Composite is just over 1% higher as we  type and is over 5% higher since trading resumed after the Chinese New Year holiday. Looking across our screens this morning, the performance across Asian equity markets have been a bit weaker elsewhere. The KOSPI (-0.4%) and the Nikkei (-0.8%) are both lower. Gains in the JPY is probably weighing on the latter but in reality there could be also some profit taking following yesterday’s 3% rally.

Elsewhere, the markets in Australia (+0.2%) and Indonesia (+0.4%) are both higher. In FX land, the RMB is at its weakest in two months after the PBOC reduced its daily fixing by 0.05% to 6.1103. Treasuries are little changed overnight with the 10yrs hovering around 2.70%.

On the M&A front, the board of Peugeot yesterday approved a EUR3bn capital raising exercise. The plan would see Chinese state-owned Dongfeng Motor become one of PSA’s largest shareholders. Both Dongfeng and the French government will pay c.EUR800m for a 14% stake each in the company. Staying on the corporate theme, Tesla shares closed at a record high of nearly $204/share amid reports of a 2013 meeting held between Tesla’s CEO and Apple’s head of M&A. A potential takeover, a strategic partnership on batteries (a common area of focus for both companies), or a potential new product category such as accelerating hybrid and electric vehicles are all ideas that have been floated by various media outlets previously/overnight. Certainly an interesting story to follow if anything comes out of it. In the meantime, Tesla’s Q4 results briefing today will be interesting.

After the recent rally back in risk around the globe it feels like we’re now entering no mans land where the market is waiting for answers that may not be available for a while. In particular the US data is in limbo while the polar vortex and associated storms pass through. US data was again weak yesterday (see below) but there is very little historical context to try to assess the impact of the weather. We suspect that some of the weakness relative to expectations is part of a multi-year structural issue but we won’t know for a few weeks.

Briefly recapping yesterday’s data flow, it was certainly disappointing for the market to see the weakness in both housing and manufacturing. The NY Fed Empire Manufacturing survey fell more than expected to 4.48 from 12.51. Broad-based weaknesses were evident across new orders, shipments and employment although outlook indicators showed improvement. The NAHB Housing Market index fell to 46 from 56 in January while the consensus was looking for a steady month in February. Joe LaVorgna noted that all three subcomponents of the housing data fell, as did all four regions of the country: current conditions (51 vs. 62), prospective buyers (54 vs. 60), buyer traffic (31 vs. 40); Northeast (33 vs. 41), Midwest (50 vs. 59), South (46 vs. 53) and West (57 vs. 71). The weather has certainly dampened builders sentiment but trying to work out how much is near impossible.

The data picture yesterday was also fairly subdued on the other side of the pond. Germany’s ZEW survey expectations index fell more than expected (55.7 v 61.5). In the UK, headline CPI (+1.9% v +2.0% yoy expected) were softer than expected with core inflation down to its lowest reading (+1.6% yoy v +1.9% expected) since mid-2009. Overall it was an uninspiring day for European and US equity markets yesterday with the S&P 500 up by 0.12% and the Stoxx600 closing flat on the day.

Looking ahead to today, we have housing starts/permits in the US as well as the PPI reading for January. On Fed activities, the FOMC minutes of the last meeting is due today while Lockhart and Bullard are scheduled to speak. In Europe the BoE meeting minutes in the UK will probably be the main focal point.

via Zero Hedge http://ift.tt/1cZ6OSl Tyler Durden

First Mercedes, then Porsche, and now Ferrari and Maserati post record US sales in January…

• *FERRARI POSTS RECORD SALES IN U.S. AND U.K. IN 2013
• *FERRARI AND MASERATI GLOBAL MORE THAN DOUBLE IN JAN TO 2,400

…a month where the non-1%-auto-makers struggled mightily. Of course, the latter missed expectations are blamed on weather (as opposed to dealer inventories stuffed at record levels, a replacement cycle that has run its course, or a consumer that is once again credit-tapped out). So, the clear findings from this is that the 1% – who are buying more luxury cars than ever before in January – clearly don’t feel the weather…

 

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