- GM enters harsh spotlight as Congress hearings begin (Reuters)
- Facebook’s Zuckerberg earns $3.3bn through share options (BBC)
- Sheryl Sandberg has sold more than half her stake in FaceBook (FT)
- Chinese Dragnet Entangles Family of Former Security Chief, Zhou Yongkang (WSJ)
- NHTSA chief: GM did not share critical information with U.S. agency (Reuters)
- Citigroup uncovered rogue trading in Mexico, fired two bond traders (Reuters)
- Corporate America’s overseas cash pile rises to $947bn (FT)
- Thai anti-government protester killed, rekindling political crisis (Reuters)
- China Milk Thirst Hands U.S. Dairies Record 2014 Profits (BBG)
- Caterpillar accused of ‘shifting’ profits (FT)
- New iPhone 6 screens to enter production as early as May (Reuters)
- Draghi Europe Scenario Points to Lowflation Still Painful (BBG)
- NSA infiltrated RSA security more deeply than thought (Reuters)
- Russia Signals It Will Withdraw Troops From Ukraine Border (WSJ)
- Tesla’s Model S Lock Can Be Opened With a Basic Hack (Gizmodo)
Overnight Media Digest
WSJ
* New problems in the federal health-insurance website stymied some of the hundreds of thousands of Americans trying to sign up at the last minute, prompting health plans and officials to brace for the complex task of enrolling people after Monday’s official deadline. (http://ift.tt/1mv0W9I)
* Yahoo Inc is in preliminary talks to acquire online-video service News Distribution Network Inc, a deal that would help Chief Executive Marissa Mayer compete with Google Inc’s YouTube for viewers and ad dollars. (http://ift.tt/1jTBuNP)
* The Federal Bureau of Investigation is probing whether high-speed trading firms are engaging in insider trading by taking advantage of fast-moving market information unavailable to other investors. Among the types of trading under scrutiny is the practice of placing a group of trades and then canceling them to create the false appearance of market activity. (http://ift.tt/1mv0WpX)
* Federal Reserve Chairwoman Janet Yellen offered new assurances that the Fed intends to keep interest rates low, describing in unusually personal terms why the economy needs these policies to support a weak job market. Yellen’s comments, coming less than two weeks after a Fed policy meeting where officials discussed the path to rate increases, were a notable affirmation of her commitment to low rates until the economy is much stronger. (http://ift.tt/1jTBu0c)
* General Motors Co’s chief and the top U.S. auto-safety regulator will face off on Capitol Hill on Tuesday over auto defects linked to 13 deaths. Separately, GM said it was recalling 1.5 million vehicles for a power-steering issue. (http://ift.tt/1mv0Te0)
* The U.S. Chamber of Commerce, among the most powerful business lobbying organizations in Washington, is planning a second outpost in Silicon Valley in an effort to broaden its membership and clout. The Chamber is expected to announce Tuesday that its second-in-command, David Chavern, will relinquish his role as chief operating officer to lead the initiative. (http://ift.tt/1mv0Wq1)
* A hepatitis C pill from Gilead Sciences Inc that costs $1,000 a day is on track to notch among the biggest sales ever for the first year of a newly approved drug, showing how hard it is for insurers to curb usage. It could ring up $5 billion in U.S. sales this year if current prescription patterns hold. Some analysts say the figure might reach $9 billion. (http://ift.tt/1mv0Wq3)
* Caterpillar Inc has deferred or avoided paying $2.4 billion of U.S. taxes under a corporate restructuring 15 years ago that shifted most of the profits from overseas replacement-part sales to a Swiss subsidiary, according to a Senate subcommittee report. (http://ift.tt/1jTBu0f)
* An investment venture set up by former Xstrata Chief Executive Mick Davis and three colleagues looks to finance a new midsize metals and mining group. (http://ift.tt/1mv0Wq7)
* A federal judge upheld the validity of a key U.S. patent for Eli Lilly & Co’s blockbuster lung-cancer drug Alimta, a big legal victory that could relieve sales pressure for the drug maker later this decade. (http://ift.tt/1jTBuNU)
* MetLife Inc was hit with the largest New York state fine against an insurer – $50 million – to settle allegations that its international operations sold insurance in the state to multinational companies without proper licensing. (http://ift.tt/1mv0Wq9)
* Arista Networks Inc disclosed plans to go public that come with an unusual twist: a dispute with one of its founders over software used in the startup’s networking hardware. The company said it received breach-of-contract allegations from a company called Optumsoft Inc that was founded by David Cheriton, a Stanford University computer science professor who stepped down from Arista’s board of directors on March 1. (http://ift.tt/1mv0Tun)
* U.S. safety regulators issued a new and long-awaited rule Monday to require auto makers to install rear-visibility technology in all new vehicles starting in May 2018, the latest in an effort to reduce injuries and deaths caused by backup accidents. (http://ift.tt/1jTBv48)
* Chevron Corp will pursue claims against Washington, D.C., based law firm Patton Boggs Llp against a $9.5 billion environmental verdict in Ecuador saying the firm played “a pivotal role” in concealing misdeeds behind the verdict. (http://ift.tt/1mv0Wqf)
* Exxon Mobil Corp says future regulations to protect the climate don’t threaten the value of its oil and gas reserves, arguing that economies will need the fuels too much to embrace drastic cuts in greenhouse-gas emissions. (http://ift.tt/1huu8Na)
* Total compensation for Facebook Inc chief executive and founder Mark Zuckerberg tumbled 67 percent to $653,165 in 2013, as he declined to participate in the bonus plan for the year and took only a base salary of $1. (http://ift.tt/1jTBv4b)
* Macy’s Inc promoted Chief Merchandising Officer Jeffrey Gennette to president, giving the executive new responsibilities that could eventually pave the way for him to lead the company, people familiar with the situation said. (http://ift.tt/Oad1Vw)
FT
Swiss and British regulators stepped up their scrutiny of alleged manipulation of foreign exchange markets as watchdogs take a closer look at whether banks have a tight enough grip on the behaviour of their traders.
Dutch bank ING said it would restart dividend payments from the next year once it finishes off the repayment of the government bailout sum of 1.23 billion pounds.
The chief executive of Italy’s biggest company Eni is sentenced to three years in prison over inadequate environmental standards at the Porto Tolle power plant at a time when Scaroni was CEO at Italian utility Enel.
Luxury sports car maker Aston Martin is in discussions with Mercedes-Benz over building its first SUV and hopes to have the SUV in showrooms within three to four year, sources said late Monday.
Lufthansa cancelled 3,800 flights for April 2-4, or virtually all of its operations, due to a planned walkout by pilots, in what would be one of the biggest strikes ever to hit the German airline.
NYT
* The nation’s top auto safety regulator will seek to cast blame on General Motors Co when he testifies on Tuesday before a House subcommittee looking into the ignition problem of Chevrolet Cobalts and other cars. In written testimony filed in advance, David Friedman, the acting administrator of the National Highway Traffic Safety Administration, argues that “G.M. had critical information that would have helped identify this defect.” (http://ift.tt/QB9vWk)
* Caterpillar Inc, the big American maker of heavy construction and mining equipment, used a subsidiary in Switzerland to avoid paying $2.4 billion of income taxes over 13 years, according to a Senate investigative report released on Monday. (http://ift.tt/QB9vWo)
* Author Michael Lewis in his new book “Flash Boys” talks about a perverse system on Wall Street that has allowed certain professional investors to pay hundreds of millions of dollars a year to locate their computer servers close to stock exchanges so they can make trades milliseconds ahead of everyone else. (http://ift.tt/1kmcYRg)
* Workers at three Toyota Motor Corp assembly plants in Ontario will vote next week on whether to join Canada’s largest union, an effort that could create the carmaker’s only unionized shop in the country and the United States. (http://ift.tt/1kmd0IY)
* Six years ago, Congress mandated auto safety regulators to pass a federal standard by 2011 that would help keep drivers from running over small children as they backed up their vehicles. On Monday, after three years of repeated delays and a lawsuit, the National Highway Traffic Safety Administration announced the new rule: By May 2018, all new cars and light trucks must be equipped with rearview cameras. (http://ift.tt/1kmcYRi)
* The Federal Communications Commission approved measures on Monday that will free up more airwaves for Wi-Fi and wireless broadband. The agency also moved to help curb increasing cable rates for consumers, but in doing so cracked down hard on the ability of broadcast stations to negotiate jointly in competition with cable systems. (http://ift.tt/QB9wcK)
Hong Kong
SOUTH CHINA MORNING POST
— Pressure is growing on Hong Kong’s pan-democrat lawmakers to join a trip to Shanghai after pro-government figures said they would find a way for them to have an exclusive meeting with Beijing officials. (http://ift.tt/1mv0WGv)
— Qianhai is planning to auction up to 15 parcels of land this year totalling 2.6 million square metres, a third of which will be sold only to Hong Kong companies as a way of attracting more investment from the city. (http://ift.tt/1jTBu0l)
— The Securities and Futures Commission has obtained a Hong Kong court order to appoint interim receivers to take over the management of decorative paper maker Qunxing Paper after its major subsidiary secretly started a bankruptcy proceeding on the mainland. (http://ift.tt/1mv0TKR)
THE STANDARD
— Local yuan deposits rose 3 percent month-on-month to a record 920.35 billion yuan ($148.01 billion) as of February, but the trend may not be sustained amid the recent volatility in the currency. Yuan deposits account for 12.3 percent of the total deposits in Hong Kong. (http://ift.tt/1jTBu0n)
— China Construction Bank plans to sell subordinated debt notes worth 20 billion yuan ($3.22 billion) to replenish capital and may also issue preference shares. (http://ift.tt/1jTBugD)
— The People’s Insurance Company of China will continue to increase its exposure to fixed-income investments in the coming year, according to Vice Chairman Li Liangwen. (http://ift.tt/1mv0TKX)
HONG KONG ECONOMIC JOURNAL
— Chinese gold producer Zijin Mining Group Co Ltd plans to produce 34 tonnes of gold this year, an increase of 7 percent from the previous year, according to Chairman Chen Jinghe, but slower than the 20 percent growth in 2013.
MING PAO DAILY NEWS
— Five major developers — Sun Hung Kai Properties , Henderson Land, New World Development , Cheung Kong and Sino Land — sold 2,700 flats for HK$21.1 billion ($2.72 billion) in the first quarter of 2014, a decrease of 19 percent in terms of the number of flats sold and 30 percent in terms of value when compared with the fourth quarter of 2013.
Britain
The Telegraph
BORIS: HEATHROW COULD OPERATE NEW HUB AIRPORT IN THAMES ESTUARY
Boris Johnson is seeking to strike a compromise with Heathrow in the aviation capacity debate by offering the airport’s owners a role in developing and operating a brand new hub in the Thames Estuary.
LACK OF ‘TOO BIG TO FAIL’ PLAN COULD COST TAXPAYERS BILLIONS, WARNS IMF
British banks deemed “too big to fail” are enjoying implicit government subsidies of up to $110 billion that could expose taxpayers to bail-outs costing hundreds of billions of pounds, the IMF has warned.
The Guardian
ROYAL MAIL: UNDERVALUING SHARES COSTS TAXPAYER 750 MLN STG IN ONE DAY
The public spending watchdog says the business secretary Vince Cable ploughed ahead with plans to float Royal Mail at a maximum price of 330 pence-a-share despite repeated warnings from City experts that the government had vastly undervalued the company.
EXECUTIVE BONUSES FALL FOR THIRD YEAR
Bonuses for Britain’s business leaders are falling for a third year as companies feel the need to be fair to their workforces, according to consulting group PriceWaterCoopers.
The Times
Weir Group opens talks with rival over 8.5 bln stg deal
It is understood that Weir Group is in talks with Metso Oyj, a Helsinki-listed company in much the same market of producing industrial pumps and valves for the global oil and gas and mining markets.
BT accused of abusing rural broadband monopoly
A report by Public Accounts Committee has accused BT of exploiting its monopoly position and criticised the Government for failing to deliver “meaningful competition”.
Sky News
OSBORNE PLEDGES ‘FULL EMPLOYMENT’ FOR UK
The Chancellor defined his commitment as making the country the “best place in the world to create a job, to get a job” and the place with the “highest employment rate of the world’s largest economies”.
HOME SELLERS ‘GETTING 96 PCT OF ASKING PRICE’
Homeowners in Britain are now able to sell their properties on average at more than 96 percent of the asking price, according to a new survey. Hometrack said the rate is even better in some areas, and has now reached a decade-long high in London.
Fly on The Wall 7:00 AM Market Snapshot
ECONOMIC REPORTS
Domestic economic reports scheduled today include:
Markit manufacturing PMI for March at 9:45–consensus 56.0
ISM manufacturing index for March at 10:00–consensus 54.0
Construction spending for February at 10:00–consensus up 0.1%
ANALYST RESEARCH
Upgrades
Bridgepoint Education (BPI) upgraded to Outperform from Market Perform at BMO Capital
Cullen/Frost (CFR) upgraded to Neutral from Underperform at Sterne Agee
Gastar Exploration (GST) upgraded to Buy from Neutral at SunTrust
Informatica (INFA) upgraded to Overweight from Equalweight at Barclays
LabCorp (LH) upgraded to Buy from Neutral at UBS
MEDNAX (MD) upgraded to Buy from Hold at Deutsche Bank
NVIDIA (NVDA) upgraded to Outperform from Market Perform at JMP Securities
National CineMedia (NCMI) upgraded to Overweight from Neutral at JPMorgan
Overseas Shipholding (OSGIQ) upgraded to Outperform at Imperial Capital
PennyMac (PFSI) upgraded to Buy from Hold at Jefferies
Rubicon (RBCN) upgraded to Overweight from Neutral at JPMorgan
Rush Enterprises (RUSHA) upgraded to Outperform from Market Perform at BMO Capital
Tableau (DATA) upgraded to Outperform from Neutral at RW Baird
United Continental (UAL) upgraded to Buy from Neutral at UBS
Waddell & Reed (WDR) upgraded to Buy from Neutral at Goldman
Downgrades
Alaska Air (ALK) downgraded to Equal Weight from Overweight at Evercore
Beam (BEAM) downgraded to Hold from Buy at Stifel
Clean Harbors (CLH) downgraded to Hold from Buy at KeyBanc
Oasis Petroleum (OAS) downgraded to Hold from Buy at Deutsche Bank
Initiations
3D Systems (DDD) initiated with a Neutral at UBS
American Eagle Energy (AMZG) initiated with a Buy at Wunderlich
Aquinox (AQXP) initiated with a Buy at Jefferies
Aquinox (AQXP) initiated with an Outperform at Cowen
Associated Banc-Corp (ASBC) initiated with a Neutral at SunTrust
Bright Horizons (BFAM) initiated with an Outperform at RBC Capital
Cancer Genetics (CGIX) initiated with a Buy at Cantor
Cinedigm (CIDM) initiated with an Overweight at Piper Jaffray
Coupons.com (COUP) initiated with a Buy at BofA/Merrill
Coupons.com (COUP) initiated with a Neutral at Goldman
Delta Apparel (DLA) initiated with a Buy at Ascendiant
Erickson Air-Crane (EAC) initiated with an In-Line at Imperial Capital
Extreme Networks (EXTR) initiated with a Buy at Wunderlich
HealthSouth (HLS) initiated with an Equalweight at Barclays
Independent Bank (INDB) initiated with a Neutral at SunTrust
JA Solar (JASO) initiated with an Outperform at Northland Securities
Key Energy (KEG) initiated with an Outperform at Imperial Capital
Landec (LNDC) initiated with an Outperform at Imperial Capital
MB Financial (MBFI) initiated with a Neutral at SunTrust
Old National Bancorp (ONB) initiated with a Neutral at SunTrust
Pinnacle Financial (PNFP) initiated with a Buy at SunTrust
Piper Jaffray (PJC) initiated with a Neutral at Susquehanna
PrivateBancorp (PVTB) initiated with a Neutral at SunTrust
Qlik Technologies (QLIK) initiated with an Outperform at Macquarie
Signature Bank (SBNY) initiated with a Buy at SunTrust
Splunk (SPLK) initiated with an Outperform at Macquarie
Stratasys (SSYS) initiated with a Buy at UBS
Tableau (DATA) initiated with a Neutral at Macquarie
Wintrust Financial (WTFC) initiated with a Neutral at SunTrust
COMPANY NEWS
General Motors (GM) said it will take Q1 charge up to $750M for recall-related repairs and recalled 1.3M older models to fix power steering
Macy’s (M) named Jeffrey Gennette as president, effective immediately
Amarin (AMRN) announced a co-promotion agreement with Kowa Pharmaceuticals America for its Vascepa capsules in the U.S.
McDermott (MDR) said Q1 results may differ “substantially” from the company’s current expectation
An FDA committee unanimously recommended Durata’s (DRTX) Dalvance
Eli Lilly (LLY) patent for Alimta held up by court through 2022
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Gas Natural (EGAS), Intrexon (XON), Verint Systems (VRNT)
Companies that missed consensus earnings expectations include:
JGWPT Holdings (JGW), Checkpoint Systems (CKP), EveryWare Global (EVRY), Lifeway Foods (LWAY), CUI Global (CUI), WidePoint (WYY)
NEWSPAPERS/WEBSITES
Hewlett-Packard (HPQ) agreed to pay $57M to settle a shareholder lawsuit, Reuters reports
BHP Billiton (BHP) considering spin-off of unwanted businesses, Reuters reports
Sources: Yahoo (YHOO) in talks to buy online video service NDN, WSJ says
Yahoo (YHOO) considers plans to close Shine, sources say, Re/code reports
FBI probing high frequency traders, WSJ says
Microsoft (MSFT) drops Azure prices in response to Google (GOOG), Amazon (AMZN), TechCrunch says
GM’s (GM) Chevrolet Cobalts were seen as lemons for years, NY Times says
SYNDICATE
1347 Property Insurance (PIH) 1.89M share IPO priced at $8.00
Euroseas (ESEA) files to sell 28.41M shares of common stock for holders
Kindred Biosciences (KIN) files to sell $50M of common stock
Magnum Hunter (MHR) files to sell 4.3M shares of common stock for holders
McDermott (MDR) files to sell 10M tangible equity units
via Zero Hedge http://ift.tt/1jTCS2Q Tyler Durden