- Ukraine Shifts to Defense Against Russian Incursion (WSJ)
- U.S. forces carry out operation against al-Shabaab in Somalia (Reuters)
- Bond Markets Tilt Toward Frankfurt as Draghi Negates Fed (BBG)
- Another “unexpectedly” – Swiss Economy Unexpectedly Stalls as Euro Area Takes Toll (BBG)
- Japan’s ‘Abenomics’ feared in trouble as challenges build (Reuters)
- Germany Imposes Nationwide Ban on Uber’s Cab-Hailing Service (WSJ)
- Japan’s ‘forward guidance’, the GPIF, has “already begun a highly anticipated portfolio reshuffle” (WSJ)
- Detroit Brings Bankruptcy Plan to Court With Billionaires (BBG)
- Burger King has maneuvered to cut U.S. tax bill for years (Reuters)
- JPMorgan Operating Risk Rises With Past Seen as Prologue (BBG)
- Apple Investigating Reports of iCloud Vulnerabilities (WSJ)
- U.S. Firms Feel Unwelcome in China, According to Survey (WSJ)
- Compuware Nears Deal to Sell Itself (WSJ)
- Angelo Mozilo Speaks: No Villainy at Countrywide (BBG)
Overnight Media Digest
WSJ
* Ukraine is shifting the focus of its military operation from rooting out pro-Russia rebels in the east to warding off a broader incursion by Russia, following major setbacks for Kiev’s forces in fighting in recent days. (http://on.wsj.com/1uciNGM)
* Accounting firm Arthur Andersen collapsed more than a decade ago in the wake of the Enron Corp scandal, but a group of former Andersen partners are convinced there’s still gold in the Andersen name. A San Francisco-based tax-consulting firm run by former Andersen partners is buying the rights to the Andersen name and plans to rename the firm Andersen Tax. The move is expected to be announced Tuesday. (http://on.wsj.com/1Cl3tfP)
* As Portuguese lender Banco Espirito Santo SA neared collapse this summer, it found a Wall Street ally to help it raise funds: Goldman Sachs Group Inc. Through a Luxembourg financing vehicle created by Goldman, Banco Espirito Santo received $835 million in July, according to a prospectus reviewed by The Wall Street Journal, a time when it was nearly impossible for the troubled lender to borrow directly in the capital markets. (http://on.wsj.com/1x1BQIu)
* French telecommunications company Iliad SA said it isn’t giving up its pursuit of T-Mobile US Inc and is considering teaming up with partners possibly to make a better offer for the U.S.’s fourth-largest mobile operator by subscribers. (http://on.wsj.com/Z5fGpz)
* Apple Inc said it is investigating reports that vulnerabilities in its iCloud service were exploited to hack the accounts of celebrities, leading to the publication of nude photos and videos. Initial media reports suggested that the hacks stemmed from individual accounts on iCloud, an online service to store photos, music and other data from Apple devices. (http://on.wsj.com/1pkmBQL)
* European Union antitrust officials have sent a second wave of extremely detailed questions to the competitors and customers of Facebook Inc and messaging service WhatsApp Inc, an unusual move that might call into question the proposed $19 billion acquisition of the latter by the California-based social network. (http://on.wsj.com/Y7lQ8q)
* Eric Cantor plans to join boutique investment bank Moelis & Co, as the recently defeated House majority leader embarks on a new career on Wall Street. Cantor, 51 years old, will be a vice chairman and board member at the firm, effective this week, he and Moelis founder Ken Moelis said in a joint interview on Monday. (http://on.wsj.com/1A14khC)
NYT
* SolarWorld Americas, the largest manufacturer of solar panels in the United States, has asked the Commerce Department to investigate claims that Chinese military personnel broke into the company’s computers and stole documents important to its business and its long-running trade dispute with China. (http://nyti.ms/1q54sM5)
* The next round of strikes by fast-food workers demanding higher wages is scheduled for Thursday, and this time labor organizers plan to increase the pressure by staging widespread civil disobedience and having thousands of home-care workers join the protests. (http://nyti.ms/1lv2Wm5)
* The shipbuilding and engineering arms of the Samsung Group announced a plan on Monday to merge by the end of the year, in another sign that restructuring is gaining speed at the company, South Korea’s largest conglomerate, in apparent response to the faltering health of its leader. (http://nyti.ms/1ozc447)
* Public pension funds have major stakes in American companies moving overseas to cut their tax bills. But they are saying little about the strategy, which could hurt the nation’s tax base. (http://nyti.ms/W4bdBD)
* Neil Woodford, an influential fund manager in Britain, said on Monday that he had sold his stake in the British bank HSBC Holding Plc over concerns about rapidly escalating fines by regulators in the banking industry. (http://nyti.ms/1q2jhyU)
* The Dutch brewer Heineken said on Monday that it had agreed to sell its Mexican packaging operations to Crown Holdings Inc in a deal that valued the business at about $1.2 billion. (http://nyti.ms/W1d6io)
Canada
THE GLOBE AND MAIL
** Mexico’s state-owned development bank is forging alliances with Canadian financial institutions to boost the stunted levels of commercial lending in the country, especially in the newly reformed energy sector where increased investment is sorely required. (http://bit.ly/1q5WOB9)
** Canadian forces veteran David MacLeod, who served for 27 years in Afghanistan, Bosnia and Kosovo, wants to take on veteran Conservative MP and former defence minister Peter MacKay in his Central Nova riding, setting up a tense dynamic for the 2015 general election. (http://bit.ly/1luRarZ)
** Canadian Prime Minister Stephen Harper is heading to a crucial summit of NATO leaders where the Western military alliance will give itself the power to respond to threats more quickly in the face of Russia’s continued effort to destabilize and break up Ukraine. (http://bit.ly/1lFCJS4)
NATIONAL POST
** The Ontario Securities Commission’s (OSC) fraud allegations against Sino-Forest Corp and five of its former executives are as spectacular as they come in market prosecutions: fraudulent overstatement of assets, falsified evidence of ownership, secret control over both suppliers and customers. Starting Tuesday, those allegations will finally be tested in a much-anticipated OSC tribunal hearing. (http://bit.ly/1pkIrU8)
** The risk that comes with international expansion weighed heavy on the latest results from Canada’s biggest banks, but investors better get used to it. Canada’s biggest banks continue to derive most of their earnings domestically, but a growing percentage of their profits comes from operations south of the border and other international markets. (http://bit.ly/1tq42Co)
** After suffering engine failure over northern England, Canada’s own Avro Lancaster – one of only two airworthy specimens of the iconic Second World War bomber – remains effectively stranded in the UK as its crews scramble to overhaul the stricken 70-year-old warplane. (http://bit.ly/1vHmCXz)
** Thousands of people marched Monday in Toronto’s annual Labour Day Parade to show their support for local unions, with more than 30 labour organizations taking part in the festivities. Joining them was federal Opposition Leader Tom Mulcair, who took shots at Canadian Prime Minister Stephen Harper and Liberal Leader Justin Trudeau for what he called their shortfalls on the labour file. (http://bit.ly/1pCTz4M)
China
CHINA SECURITIES JOURNAL
– China’s financial institutions are estimated to have extended 700 billion yuan ($114 billion) in new loans in August amid concerns over rising non-performing loans, deposit outflow and tightened supervision towards commercial banks.
– An executive of the National Equities Exchange and Quotations Corporation (NEEQ) said it would introduce financing tools such as privately issued bonds by small companies and preferred stocks soon.
SHANGHAI SECURITIES NEWS
– China National Offshore Oil Corp plans to leave its AEGON-CNOOC insurance joint venture with Dutch insurer Aegon NV by transferring its shares, with IT firm Tsinghua Tongfang currently its most likely replacement, the newspaper reported citing unidentified sources.
SECURITIES TIMES
– State-owned China Construction Bank’s Chairman Wang Hongzhang denied that the bank had a “5321 plan,” denoting levels of pay cuts for different levels of personnel.
21ST CENTURY BUSINESS HERALD
– Six companies have launched IPO subscriptions which is expected to lock up over 660 billion yuan ($162.69 billion) of funds.
CHINA DAILY
– The number of foreign offenders receiving legal aid jumped 20 percent to more than 800 cases last year after a law was amended to require the government to provide free help to foreigners facing life sentences or the death penalty.
– The decision to vet candidates standing in Hong Kong’s chief executive elections is ultimately intended to maintain the rule of law in the special administrative region and it is up to “pan-democrats” candidates to win support to stand for election, China Daily said in an editorial.
Britain
The Times
DIAMOND’S FUND AIMS FOR AFRICAN BANKING HAT-TRICK
Atlas Mara Co-Nvest Ltd, the London-listed acquisition vehicle set up by Bob Diamond, the former chief executive officer of Barclays, and Ashish Thakkar, a Ugandan billionaire, said yesterday that it had extended an option agreement to buy a stake in an unidentified Nigerian financial services company. (http://thetim.es/1pjMdx2)
VODAFONE BECOMES LATEST NETWORK TO HANG UP ON PHONES 4U
Phones 4U, the mobile phone retailer, has been left reeling after Vodafone Group Plc became the latest network to cut ties with the company. (http://thetim.es/1lupzaf)
The Guardian
EU-US TRADE DEAL COULD ADD 10 BLN STG TO UK ECONOMY A YEAR, CLAIMS MINISTER
UK’s minister of state for trade and investment Lord Livingston said the Transatlantic Trade and Investment Partnership could add as much as 10 billion pounds ($16.61 billion) to the UK economy a year. (http://bit.ly/1uaz3rG)
TESCO’S NEW BOSS PROMISES TO BRING FRESH PERSPECTIVE
Tesco Plc’s new Chief Executive Dave Lewis said it needs a “fresh perspective” and that his lack of shopkeeping experience did not mean he was the wrong person to turn the ailing supermarket around. (http://bit.ly/W31lZ4)
The Telegraph
‘BORIS ISLAND’ AIRPORT PLAN DUMPED BY DAVIES COMMISSION
Boris Johnson’s plans for a new four-runway airport in the Thames Estuary have been categorically dumped by the government-backed Davies Commission. (http://bit.ly/1B9cOFK)
GOLDMAN SACHS LENT BANCO ESPIRITO SANTO $835 MLN A MONTH BEFORE BAIL-OUT
Goldman Sachs lent over 500 million pounds to Banco Espirito Santo just a month before the Portuguese government was forced to bail out the crisis-hit bank, it has emerged. (http://bit.ly/1oyTVTX)
Sky News
UK INDUSTRY EXPORT ORDERS HIT EURO HEADWINDS
New manufacturing order growth plunged in August, according to the CIPS/Markit Purchasing Managers’ Index, with overall activity at a 14-month low. (http://bit.ly/1nooL2p)
QUINDELL BUYS RAC STAKE IN BLACK BOX VENTURE
Quindell Plc will inform the stock market that it is that it is acquiring RAC’s stake in their fledgling joint venture, Connected Car Solutions. (http://bit.ly/1qVzxOx)
The Independent
RUSSIA LAUNCHES CONSTRUCTION OF GAS PIPELINE TO CHINA IN $400 BILLION DEAL
Russian president Vladimir Putin launched the construction of what will be one of the largest gas pipelines in the world, stretching from China to the Russian Far East, in the village of Us Khatyn in Yakutia. (http://ind.pn/W4hSLZ)
LEN BLAVATNIK IN 700 MLN STG BUYOUT BID FOR PERFORM
Britain’s fourth-richest person, Ukrainian-born tycoon Len Blavatnik is offering to buy Perform Group at 260 pence cash for each share, which values the online sports rights group at 702 million pounds.(http://ind.pn/Z4qHrb)
Fly On The Wall Pre-market Buzz
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
Markit manufacturing PMI for August at 10:00–consensus 58.0
ISM manufacturing PMI for August at 10:00–consensus 57.1
Construction spending for July at 10:00–consensus up 0.9%
ANALYST RESEARCH
Upgrades
Cabot Oil & Gas (COG) upgraded to Buy from Hold at Stifel
Groupon (GRPN) upgraded to Sector Perform from Underperform at RBC Capital
Life Time Fitness (LTM) upgraded to Overweight from Neutral at Piper Jaffray
Northrop Grumman (NOC) upgraded to Outperform from Sector Perform at RBC Capital
Progressive (PGR) upgraded to Buy from Neutral at Goldman
RCS Capital (RCAP) upgraded to Buy from Neutral at Citigroup
SandRidge Energy (SD) upgraded to Buy from Hold at Stifel
Statoil (STO) upgraded to Buy from Hold at Deutsche Bank
Tenaris (TS) upgraded to Neutral from Sell at UBS
Tesla (TSLA) upgraded to Buy from Hold at Stifel
Volkswagen (VLKAY) upgraded to Outperform from Neutral at Exane BNP Paribas
Waddell & Reed (WDR) upgraded to Buy from Hold at Jefferies
Willis Group (WSH) upgraded to Outperform from Market Perform at Keefe Bruyette
Downgrades
American Water (AWK) downgraded to Market Perform from Outperform at Wells Fargo
AutoZone (AZO) downgraded to Neutral from Overweight at JPMorgan
BancorpSouth (BXS) downgraded to Equal-Weight from Overweight at Evercore
Emerge Energy (EMES) downgraded to Neutral from Outperform at RW Baird
Exelixis (EXEL) downgraded to Hold from Buy at Stifel
Exelixis (EXEL) downgraded to Market Perform from Outperform at Cowen
Finisar (FNSR) downgraded to Hold from Buy at Jefferies
OSI Systems (OSIS) downgraded to Perform from Outperform at Oppenheimer
PulteGroup (PHM) downgraded to Market Perform from Outperform at FBR Capital
Republic Services (RSG) downgraded to Hold from Buy at KeyBanc
Smith & Nephew (SNN) downgraded to Hold from Buy at Jefferies
Initiations
Arista Networks (ANET) initiated with a Buy at SunTrust
Auris Medical (EARS) initiated with a Buy at Jefferies
Endo (ENDP) initiated with an Outperform at RBC Capital
Flowserve (FLS) initiated with an Overweight at Barclays
Green Bancorp (GNBC) initiated with a Hold at Jefferies
Green Bancorp (GNBC) initiated with a Neutral at JPMorgan
Green Bancorp (GNBC) initiated with an Outperform at RBC Capital
Hoegh LNG (HMLP) initiated with a Buy at Citigroup
Hoegh LNG (HMLP) initiated with a Neutral at UBS
Hoegh LNG (HMLP) initiated with an Equal Weight at Barclays
Independence Contract Drilling (ICD) initiated with an Outperform at Cowen
Independence Contract Drilling (ICD) initiated with an Outperform at FBR Capital
Independence Contract Drilling (ICD) initiated with an Outperform at RBC Capital
Loxo Oncology (LOXO) initiated with a Buy at Stifel
Loxo Oncology (LOXO) initiated with an Outperform at Cowen
T2 Biosystems (TTOO) initiated with a Neutral at Goldman
iDreamSky (DSKY) initiated with an Overweight at Piper Jaffray
COMPANY NEWS
Dollar General (DG) increased proposal to board of Family Dollar (FDO) to $80 per share
Select Income REIT (SIR) to acquire Cole Corporate Income Trust for $3B
Luxottica (LUX) said Andrea Guerra leaves as CEO
Moelis (MC) appointed Eric Cantor as vice chairman, member of board
Exelixis (EXEL) announce a 70% workforce reduction after COMET-1 phase 3 trial did not meet primary endpoint
Barclays (BCS) sold Spanish businesses to Caixabank (CAIXY) for EUR 800M
Novartis (NVS) heart failure drug LCZ696 showed superiority to enalapril in study
Orbitz (OWW), American Airlines (AAL) reached deal to return fares to sites
EARNINGS
FormFactor (FORM) raises Q3 revenue outlook to $71M-$75M from $68M-$73M
uniQure (QURE) reports Q2 EPS (EUR 0.51) vs. (EUR 80) last year
NEWSPAPERS/WEBSITES
Compuware (CPWR) in advanced talks with PE buyer to sell itself, WSJ reports
Microsoft (MSFT) given deadline to answer antitrust questions in China, WSJ reports
Norwegian Cruise Line (NCLH) in talks to acquire Prestige Cruises for $3B, Reuters reports
Apple (AAPL) has discussed $400 price tag for wearable device, Re/code reports
Apple (AAPL) investigating hack relating to violation of iCloud accounts, Re/code says
Iliad (ILIAF) said to consider PE partner on improved T-Mobile US (TMUS) bid, Bloomberg reports
Time to exit Hertz (HTZ), Barron’s says
Discover (DFS) still looks attractive, Barron’s says
USG (USG) shares could jump 30% with revaluation, Barron’s says
via Zero Hedge http://ift.tt/1rd0Yad Tyler Durden