- Emerging markets pray for Wall Street tumble (Reuters)
- Yellen Faces Test Bernanke Failed: Ease Bubbles (BBG)
- Samsung sets new smartphone sales record in fourth quarter, widens lead over Apple (Reuters)
- China’s Foreign-Reserves Investment Chief Said to Depart Agency (BBG)
- China’s Rescue of Troubled Trust May Stoke Risk-Taking (BBG)
- Ukraine PM Azarov offers to resign ‘to help end conflict’ (Reuters) … And Russia says may reconsider aid if this happens
- But… but… it was all gold’s fault: India Unexpectedly Raises Rate as Rupee Risks Inflation Goal (BBG)
- Former Belgian king ‘boycotting’ public events after complaining £760,000 is not enough to live on (Telegraph)
- Greek disposable income tumbles 8% in Q3 (Kathimerini)
- A Suspect Emerges in Stock-Trade Hiccups: Regulation NMS (WSJ)
- Obama to Raise Minimum Wage for Contractors to $10.10 (BBG)
- Government Reaches Deal With Tech Firms on Data Requests (WSJ)
Overnight Media Digest
WSJ
* The Obama administration agreed Monday to let technology companies make more information public about how often the government monitors Internet use, a move that aims to ease public distrust and corporate complaints about snooping.
* Attempts to send convoys of food and medicine to thousands of people under siege in a rebel-held area of Homs failed Monday, lowering hopes about the regime’s commitment to confidence-building measures coming out of peace talks in Geneva.
* Apple reported selling fewer iPhones than projected at year-end and said revenue in the current quarter might decline. The results highlighted new dynamics and intensifying competition in the smartphone market. Apple continues to target the market for high-end phones, even as demand accelerates for lower-cost models, particularly in emerging markets. But Apple is resisting the urge to release a truly low-cost phone that could crimp profitability.
* The Securities and Exchange Commission recently released documents related to its probe into the near-collapse of American International Group – with hundreds of redactions to keep information secret.
* Bank branch closures in the United States last year hit the highest level on record so far, a sign that sweeping technological advances in mobile and electronic banking are paying off for lenders but leaving some customers behind.
* Turkey’s central bank, beset by political instability, tumbling confidence and one of the world’s fastest falling currencies, will convene an emergency meeting Tuesday.
* Sergio Ermotti, chief executive of UBS, has a message for the many critics of the Swiss bank and the entire industry: Back off. Ermotti said he is growing frustrated with what he sees as some regulators, politicians, shareholders, clients, journalists and rival banks holding UBS to a higher standard than they hold themselves.
* Global derivatives trade group International Swaps and Derivatives Association Inc (ISDA) on Monday disclosed sweeping changes to calculations of a key interest-rate benchmark, part of a plan that will diminish the role played by traders in the process by moving to an automated rate-setting system.
* Workers at Ranbaxy’s drug plant in Toansa in the northwestern Indian state of Punjab repeatedly fudged test results to make it appear that raw materials and active pharmaceutical ingredients met required standards, according to FDA inspectors.
FT
ADS, a trade organisation for UK aerospace, defence, security and space industries, called for more tax relief for the sector, and warned that UK’s exit from the European Union could erode the country’s 17 percent share of the aerospace market.
The Lloyds Banking Group has told the Financial Conduct Authority that a technological glitch, which caused the banking group subsidiaries’ ATM and debit to stop working for three hours on Sunday, was a “one-off” and payment backlogs were being looked into, an insider at FCA told the Financial Times.
Spain’s Santander bank, which is making a big push in the United States, has appointed Sheila Bair, who was head of the Federal Deposit Insurance Corporation from 2006 to 2011, as an independent director.
The large number of initial public offerings scheduled for 2014 could overstretch existing resources of fund managers, who may be forced to sell their underlying holdings in other companies to tap into new investments, according to small cap fund managers.
About 5,000 workers across Ford’s six UK factories ballot for a strike as they look at receiving some security against job cuts in Britain. The company said discussions over the dispute are “live and open”.
NYT
* The Obama administration will allow Internet
companies to talk more specifically about when they are forced to turn
over customer data to the government, the Justice Department said.
* Marathon Asset Management is starting a new $350 million fund dedicated to distressed debt in Europe.
*
Martin Marietta Materials has agreed to acquire Texas Industries in an
all stock deal worth more than $2 billion, according to people familiar
with the matter. In the deal, Martin Marietta will exchange seven-tenths
of one of its shares, worth about $72, for each Texas Industries share.
A deal is expected to be announced shortly.
* JPMorgan
Chase appears to have settled a dispute with Frank Bisignano, a former
close confidant of its chairman, Jamie Dimon, the latest reminder that
the inner circle that helped the bank weather the financial crisis is no
more.
* Narayana Kocherlakota, president of the
Minneapolis Fed, said the central bank should increase its efforts to
stimulate the economy – a view he conceded had not gained much traction
with his colleagues.
* Apple’s blockbuster phone sales
helped the company post a profit of $13.1 billion on revenue of $57.6
billion. The company set record for iPhones sold in the quarter at 51
million devices.
* Tiger Global Management, the New
York-based hedge fund, will invest nearly $520 million in Brazilian
online retailer B2W Companhia Digital, the company said, a sign that it
continues to see promise in Brazil’s vibrant Internet sector.
*
United Technologies is considering Sikorsky, the maker of the Black
Hawk helicopter, as a candidate for a tax-free spinoff or potentially a
sale to a rival.
* One of the most prominent players in
the Bitcoin universe, Charles Shrem, was arrested on Sunday, accused of
conspiring to facilitate drug transactions on the now-defunct online
bazaar Silk Road.
* More class-action lawsuits were
filed against public companies in 2013 than in the previous year, but
the filers were seeking billions less in damages than they have on
average.
Canada
THE GLOBE AND MAIL
* Police across Canada have been searching the workplaces and homes of prostitutes to find victims of human trafficking. But some sex workers say the initiative, which comes a month after the Supreme Court struck down Canada’s major prostitution laws, is simply an intimidation tactic meant to harass members of their profession in the absence of the ability to lay charges.
* At 9:10 a.m. on Jan. 27, two Russian cosmonauts drifted out of the International Space Station orbiting Earth for a space walk to install two high-tech cameras owned by a Canadian startup. The cameras cost $17 million and are capable of beaming down images and high-definition video from the Russian part of the ISS to UrtheCast, a small Vancouver company that struck a deal with the Russian space agency.
Reports in the business section:
* Two high-ranking Bombardier Commercial Aircraft vice-presidents have departed in a major shakeup in the company’s sales network amid slow sales of the new C Series plane and other aircraft. Raphael Haddad, vice-president of sales for the Middle East and Africa, and Steve Aliment, vice-president of sales for Europe, have left the company.
* Just when Air Canada has put its threatening pension deficit behind it, the sudden fall of the Canadian dollar has thrown the airline another curve ball.
NATIONAL POST
* British Columbia’s top court has upheld a decision to revoke almost a decade of medicare coverage for an immigrant couple, confirming in a rare judgment that provinces have every right to deny health funding to people who spend too much time living abroad.
* Prime Minister Stephen Harper expressed concern Monday that Ukraine is backsliding toward its communist past under the Soviet Union, a clear dig at Russia as it prepares to host next month’s Winter Olympics.
FINANCIAL POST
* BCE Inc is under fire again for its collection and use of wireless customers’ data for marketing purposes as two public interest groups have now filed a complaint with Canada’s telecom regulator over the practice.
China
SHANGHAI SECURITIES NEWS
– The government’s tight liquidity stance in 2013 that decreased cash supply to China’s banking system contributed to the slowest annual asset and liability growth in Chinese banks in a decade last year.
– Chinese premier Li Keqiang advocated the use of new energy cars during a trip to Chinese automaker BYD Co Ltd in the central Chinese city of Xi’an, as a means to tackle China’s severe pollution problem.
– New rules of the Shanghai and Shenzhen stock exchanges that set daily limits for new listings and order suspension at limits, adopted this year to curb rampant speculation in new listings, have caused many newcomers to trade only a few minutes on their debut day. That reflects defects in the new regulations.
CHINA SECURITIES JOURNAL
– The latest reform by the People’s Bank of China to offer cash to smaller banks via the Short-term Lending Facility (SLF) mechanisms has enabled the central bank to adjust liquidity supply in the banking system with precision, a commentary by this major Chinese financial newspaper said.
– Analysts once again propose China’s stock market to adopt a T+0 system, or the same-day trading system, to help activate sluggish trading in large-capitalised blue chips.
PEOPLE’S DAILY
– An editorial by this mouthpiece of the ruling Communist Party of China criticised that some government meetings have been too extravagant. The party is launching a sweeping clampdown on official corruption.
CHINA DAILY
– Chinese authorities in the northern-central Chinese city of Xinzhou have taken a man into custody after he posted rumours about H7N9 bird flu on local social media.
– Fu Weimin, the former director and Party chief of the forestry administration of Dongfang, was removed from his post after he took more than 260,000 yuan ($43,000) in cash gifts at his mother’s funeral, China National Radio reported. Fu hosted feasts for guests over six days in January.
SHANGHAI DAILY
– An H7N9 bird flu epidemic in China is “unlikely” during the country’s week-long Spring Festival holiday in late January and early February, according to the director of the Chinese National Influenza Center. The bid flu virus has killed 19 people in China this year.
– Authorities in Shanghai have jailed four people for using waste oil for cooking, the Changning District People’s Court ruled on Monday. China has struggled with food safety issues from chemical-tainted milk to fake donkey meat.
SECURITIES TIMES
– Seven companies will list on the Shenzhen Stock Exchange on Wednesday, bringing the total number debuting in the mainland bourses in the first three days of this week to 24.
Britain
The Telegraph
OFWAT STEMS FLOW OF RETURNS TO WATER INVESTORS Water companies could have to cut dividend payouts to shareholders, analysts said on Monday, after regulator Ofwat said they should they accept a lower rate of return on investment than they had sought for the next five years. The plans could result in lower household bills, although Ofwat declined to estimate the scale of the impact on customers.
FORMER HBOS BANKER’S FIRM COULD NET 45 MILLION POUNDS FROM MCCOLL’S FLOAT
A private equity firm run by a former HBOS banker could net roughly 45 million pounds from the flotation of convenience store business McColl’s Retail Group. Cavendish Square Partners owns 20 percent of McColl’s and has signalled its intention to sell shares in the company as part of an IPO that was officially unveiled to the stock market on Monday.
The Guardian
GROWTH FIGURE LIKELY TO BOLSTER RECOVERY HOPES
Britain’s recovery is expected to have held up over the final months of 2013, helping the economy to clock up its strongest annual growth for six years. While there is still much ground to cover to get back to pre-crisis levels of output, most economists expect official data on Tuesday to confirm that last year ended on a relatively strong note.
FORD WORKERS BALLOTED ON STRIKE ACTION
Thousands of Ford workers are being balloted for strike action in a row over job security and pensions. Members of the Unite and GMB unions will vote on whether to launch a campaign of industrial action aimed at safeguarding jobs after recent cuts led to Ford ending 100 years of vehicle production at its plant in Southampton.
The Times
BRITAIN “CAN GET BETTER VALUE OUT OF THE EU”
Britain should send more civil servants and regulators to spend time inside the European Union machine in order to wield more influence over laws the UK does not like, according to the most powerful British Parliamentarian in Brussels and chair of the European Parliament’s Economic and Monetary Affairs Committee, Sharon Bowles.
SIGNIFICANT JUMP IN MINIMUM WAGE IS AFFORDABLE, CLAIMS BUSINESS LEADER
Business can afford an inflation-busting increase in the minimum wage, according to Sir Mike Rake, the President of the CBI. His intervention makes him the most senior business figure so far to support calls for a real improvement in earnings for the lowest-paid.
Sky News
ZOOPLA STEPS UP 1.3 BILLION POUNDS FLOAT PLAN
The online property group which abandoned a sponsorship deal recently is accelerating plans for a flotation valuing it at well over 1 billion pounds. Sky News has learnt that Zoopla, which is terminating its association with the Premier League club West Bromwich Albion at the end of the season, has appointed Jefferies, the investment bank, to work on a stock market listing.
PENSIONS TOP-UP PLAN WOULD INCREASE PAYOUT
People in or nearing retirement are to be given the chance to use their savings to top up their state pension. The new scheme will allow eligible pensioners to pay in lump sums from as little 900 pounds. In return they will see an increase in their state pension by as much as 25 pounds a week.
Fly on the Wall 7:00 AM Market Snapshot
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
Durable Goods Orders for December will be reported at 8:30–consensus up 1.6%
Case-Shiller 20-city home price index for October reported at 9:00–consensus up 13.7% from prior year
Consumer Confidence for January will be reported at 10:00–consensus 79.0
ANALYST RESEARCH
Upgrades
ArcelorMittal (MT) upgraded to Outperform from Sector Perform at RBC Capital
Cambrex (CBM) upgraded to Overweight from Equal Weight at First Analysis
CorEnergy (CORR) upgraded to Buy from Neutral at BofA/Merrill
Fortinet (FTNT) upgraded to Outperform from Market Perform at JMP Securities
Maxim Integrated (MXIM) upgraded to Overweight from Equal Weight at Barclays
Sally Beauty (SBH) upgraded to Buy from Neutral at Sterne Agee
Sally Beauty (SBH) upgraded to Buy from Neutral at Sterne Agee
Sanmina (SANM) upgraded to Buy from Hold at Needham
Sanmina (SANM) upgraded to Market Perform from Underperform at Raymond James
Southwest (LUV) upgraded to Outperform from In-Line at Imperial Capital
Texas Capital (TCBI) upgraded to Buy from Neutral at SunTrust
Downgrades
Apple (AAPL) downgraded to Outperform from Strong Buy at Raymond James
Apple (AAPL) downgraded to Perform from Outperform at Oppenheimer
BioCryst (BCRX) downgraded to Underperform from Neutral at BofA/Merrill
Chef’s Warehouse (CHEF) downgraded to Hold from Buy at BB&T
Delek US (DK) downgraded to Neutral from Outperform at Credit Suisse
NVR (NVR) downgraded to Neutral from Positive at Susquehanna
OFS Capital (OFS) downgraded to Underweight from Equal Weight at Barclays
Penn National (PENN) downgraded to Underperform from Buy at BofA/Merrill
Phillips 66 (PSX) downgraded to Neutral from Outperform at Credit Suisse
Synaptics (SYNA) downgraded to Perform from Outperform at Oppenheimer
Tile Shop (TTS) downgraded to Neutral from Outperform at RW Baird
Western Refining (WNR) downgraded to Neutral from Outperform at Credit Suisse
Initiations
Anadarko (APC) initiated with a Market Perform at Cowen
Control4 (CTRL) initiated with an Outperform at Imperial Capital
Devon Energy (DVN) initiated with an Outperform at Cowen
EOG Resources (EOG) initiated with an Outperform at Cowen
Enanta Pharmaceuticals (ENTA) initiated with an Outperform at RW Baird
FireEye (FEYE) initiated with a Hold at Topeka
International Flavors (IFF) initiated with a Buy at Deutsche Bank
Medivation (MDVN) initiated with a Buy at CRT Capital
Noble Energy (NBL) initiated with an Outperform at Cowen
ORBComm (ORBC) initiated with a Buy at Canaccord
Omnicom (OMC) initiated with an Overweight at Barclays
Parkway Properties (PKY) initiated with an Overweight at Barclays
Pioneer Natural (PXD) initiated with a Market Perform at Cowen
Uralkali (URALL) initiated with a Buy at Societe Generale
HOT STOCKS
DOJ reached agreement with tech companies (FB, AAPL, MSFT, GOOG, LNKD, YHOO) on data requests
Casablanca Capital urged Cliffs Natural (CLF) to spin off international assets, Cliffs Natural ‘welcomes communications’ with Casablanca
General Electric (GE) CEO disclosed 40K share purchase at $25.04
Kansas City Southern (KSU) raised dividend to 28c per share from 21.5c per share
Ashland (ASH) expects 800-1,000 employees to leave in 2014 in restructuring plan
DuPont (DD) announced $5B share repurchase program
Check Point (CHKP) expanded share repurchase program by $1B
ITT Educational (ESI) disclosed receipt of subpoenas and/or civil investigative demands
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Danaher (DHR), DuPont (DD), Radware (RDWR), Check Point (CHKP), MicroStrategy (MSTR), U.S. Steel (X), Ashland (ASH), Apple (AAPL), Swift Transport (SWFT), Rambus (RMBS), Covenant Transportation (CVTI), Plantronics (PLT), J & J Snack Foods (JJSF)
Companies that missed consensus earnings expectations include:
CIT Group (CIT), Air Products (APD), Polaris Industries (PII), STMicroelectronics (STM), STMicroelectronics (STM), Rent-A-Center (RCII), Park National (PRK), Zions Bancorp (ZION), Graco (GGG), Seagate (STX)
Companies that matched consensus earnings expectations include:
Steel Dynamics (STLD), Olin Corp. (OLN), PLX Technology (PLXT)
NEWSPAPERS/WEBSITES
- Centerview hired by Time Warner Cable (TWC) to advise on Charter (CHTR) bid, FT reports
- Martin Marietta (MLM) to acquire Texas Industries (TXI) for $72 per share, NY Times reports Intel (INTC) may be considering an exit from smartphone market, DigiTimes reports
- Google (GOOG) adds designer frames in hopes of sharpening Glass, AP reports
- Facebook (FB) hiring editors for news app, Re/code reports
- PE firms (APO, CG) compete for Illinois Tool Works’ (ITW) packaging unit, WSJ reports
- Rio Tinto (RIO) in talks to sell Quebec aluminum plant, Reuters reports
- Credit Suisse (CS) plans $500M CLO of about $500M, Bloomberg reports
- Nintendo (NTDOY) to announce new strategy, NY Times reports
- Ethanol firms (ADM, GPRE)) look to increase exports, WSJ reports
- U.S. Steel (X) wins Supreme Court labor dispute, Reuters reports
SYNDICATE
America First (ATAX) files to sell 7M shares representing limited partner interests
Centene (CNC) 800K share Spot Secondary priced at $59.80
Constellium (CSTM) files to sell 37.56M shares for holders
Prothena (PRTA) files to sell 2.77M ordinary shares for holders
XPO Logistics (XPO) files to sell 15M shares of common stock
via Zero Hedge http://ift.tt/1ndFdEA Tyler Durden