- Confusion as Ukraine and Russia announce progress towards peace (Reuters)… but not for stock buying algos, they know everything
- Obama Expresses Skepticism About Possible Ukraine Cease-Fire (WSJ)
- Fighters Unwind in Russia Where Beer Doesn’t Spell Death (BBG)
- Despite dangers, U.S. journalist Sotloff was determined to record Arab Spring’s human toll (Reuters)
- New Beheading Video Spurs Calls for Global Response (BBG)
- Christie’s Spending on Outside Lawyers Passes $50 Million (BBG)
- IEX to Apply for Exchange Status (WSJ)
- UK says not ruling out airstrikes against Islamic State, says hostage video genuine (Reuters)
- Murdered journalist Steven Sotloff had dual US-Israeli citizenship (Guardian)
- Netflix Reaches Global Licensing Pact With Warner Bros. for ‘Gotham’ (WSJ)
- West Africa struggles to contain Ebola as warnings and deaths mount (Reuters)
- Money Chases Non-U.S. Real Estate at Record Rate in ETFs (BBG)
- U.S. bank regulators set to adopt liquidity, swaps margin rules (Reuters)
Overnight Media Digest
WSJ
* The extremist group Islamic State posted a video purporting to show the beheading of American journalist Steven Sotloff, bringing calls for the U.S. to more forcefully confront the militants in both Iraq and Syria. (http://on.wsj.com/1nV1kxG)
* California regulators want PG&E Corp’s utility to pay $1.4 billion in fines and penalties over a fatal natural-gas pipeline explosion in San Bruno, California. The state Public Utilities Commission proposed fining Pacific Gas & Electric Co $950 million over allegations that the company violated federal and state pipeline safety rules before the 2010 pipeline explosion. (http://on.wsj.com/1ly45JF)
* Private-equity firm KKR & Co LP said Tuesday it agreed to buy a minority stake in Savant Systems LLC, a closely held Hyannis, Massachusetts, company that sells systems that let homeowners control everything from thermostats and stereos to lighting and lawn sprinklers, from their smartphones. KKR is leading an investment of about $90 million in the company and the firm will have a roughly 35 percent stake in Savant, according to a person familiar with the matter. (http://on.wsj.com/1BaH17E)
* Home Depot Inc is working with banks and law enforcement agencies to investigate a potential breach of customer credit- or debit-card data. The home-improvement retailer said on Tuesday it is looking into what it called unusual activity and said that if it confirms a breach occurred, it will immediately notify customers. (http://on.wsj.com/1nwyEem)
* A key employee leading Google Inc’s efforts to beam Internet access from satellites has abruptly left the company and is now working closely with Space Exploration Technologies Corp and its founder Elon Musk, according to people familiar with the matter. (http://on.wsj.com/1tsh3LA)
* The Federal Bureau of Investigation hasn’t found any evidence to suggest the hacker or hackers who successfully penetrated the computer system at JPMorgan Chase & Co scored any similar successes against other big U.S. banks, four people close to the investigation said. (http://on.wsj.com/1pGzVFa)
* IEX Group Inc, an upstart private trading venue launched less than a year ago, plans within a week to seek U.S. regulatory approval to become a full-fledged stock exchange, according to people familiar with the company’s plans. (http://on.wsj.com/1lH58HC)
* An internal Credit Suisse Group AG investigation into allegations of inappropriate employee behavior has roiled the bank’s European stock-trading desk, according to people familiar with the probe, in the latest example of a major bank uncovering potential problems as it sifts through employees’ electronic communications. (http://on.wsj.com/1ux5LTD)
* Halliburton Co will pay $1.1 billion to Gulf Coast residents, local governments and businesses affected by the 2010 Deepwater Horizon oil spill, moving to limit its liabilities ahead of a court ruling that could have increased its costs. (http://on.wsj.com/1x6PJVT)
* Wet Seal Inc disclosed Tuesday that its chief executive left the company, effective Aug. 26, according to a filing with the Securities and Exchange Commission. (http://on.wsj.com/Z6vhW1)
FT
Luxury eyewear maker Luxottica Group SpA’s founder and Executive Chairman Leonardo Del Vecchio is expected to pursue acquisitions and wants to double the groups revenue to more than 14 billion euros ($18.38 billion)in the next decade.
BP Plc asked a U.S. court on Tuesday to fire the court-appointed lawyer tasked with paying out compensation to people affected by the 2010 Gulf of Mexico oil spill.
Aston Martin has hired senior Nissan executive Andy Palmer as its new boss, as the company tries to bridge the gap with its competitors.
Danone said that Chairman and Chief Executive Franck Riboud would split his role after 18 years at the helm of the French yoghurt maker.
A Frankfurt court has issued a temporary injunction against U.S. car service Uber, saying the company could no longer offer its phone apps to connect drivers with passengers.
NYT
* The European Central Bank’s negative rates strategy has not worked as planned, which is why it is under increasing pressure to try something else when it meets on Thursday. The central bank’s so-called negative deposit rate has rippled through European markets, reinforced by fear that the eurozone economy is in decline and by nervousness about war, not only in Ukraine but also in the Middle East. (nyti.ms/W8Auub)
* Halliburton Co, the company contracted by BP Plc to cement the ill-fated Macondo oil well in the Gulf of Mexico, has reached a $1.1 billion settlement with thousands of businesses, individuals and local governments that suffered losses from the 2010 Deepwater Horizon oil rig explosion, the company and plaintiffs announced on Tuesday. (nyti.ms/1q9xuKF)
* Dollar General Corp is willing to pay more to win the bidding war over Family Dollar Stores Inc. And its takeover effort could go hostile if Family Dollar does not begin sale negotiations. Dollar General offered on Tuesday to raise its bid for Family Dollar to $9.1 billion after the rejection of an earlier offer that would have beaten a rival $8.5 billion deal with Dollar Tree, agreed to in late July. (nyti.ms/1pGpH7Q)
* Online fantasy sports site FanDuel, one of the biggest homes for amateur general managers, disclosed on Tuesday that it had raised $70 million from investors led by Shamrock Capital Advisors, NBC Sports Ventures and Kohlberg Kravis Roberts & Co . Existing investors like Comcast Ventures, Pentech Ventures and Bullpen Capital also participated. (nyti.ms/1rj6yrJ)
* Compuware Corp has agreed to sell itself to the private equity firm Thoma Bravo for about $2.5 billion, finally bowing out after years under pressure from the activist hedge fund Elliott Management. (nyti.ms/1qZv4KL)
* Norwegian Cruise Line Holdings Ltd agreed on Tuesday to buy the privately held Prestige Cruises International for $3 billion in cash and stock, including the assumption of debt, to add higher-end trips to its fleet of offerings. (nyti.ms/1vLl0Me)
* Home Depot Inc said on Tuesday that it was investigating a report that customer credit and debit card data was stolen from its systems and put up for sale online. The retailer issued a statement after Brian Krebs, an independent security reporter, said that multiple banks had pointed to Home Depot as the potential source of a large data breach. The company said it was working with law enforcement authorities and banks on the matter. (nyti.ms/1vLmkyU)
* IEX Group Inc, the stock trading platform created to temper high-frequency traders’ advantages and profiled in Michael Lewis’s book “Flash Boys” has raised $75 million in a new round of financing. That money will help the start-up become a full-fledged stock market. (nyti.ms/1vLrAT1)
Canada
THE GLOBE AND MAIL
* A new report is questioning the merits of the Canada Pension Plan Investment Board’s increasing use of “active” investments to boost returns. In a Fraser Institute report to be released Wednesday, former Statistics Canada chief economic analyst Philip Cross and Fraser Institute fellow Joel Emes express concern that these new investments come with much higher costs that should be more clearly explained. (bit.ly/1ul5OCD)
* Canada has reached a compromise with North Atlantic Treaty Organization allies in which member states will commit to trying to increase defence spending to 2 percent of their annual economic output, rather than embracing a hard target for boosting military expenditures. (bit.ly/1lyAY9d)
Reports in the business section:
* Allen Chan, the Hong Kong-based businessman at the centre of the Ontario Securities Commission’s (OSC) fraud allegations against Sino-Forest Corp, maintains he has done nothing dishonest, his lawyer told a packed hearing room on Tuesday. Chan – the company’s former chairman and chief executive – along with four other former Sino-Forest executives, face OSC allegations they committed fraud and misled investors in the company, which once had a market capitalization of C$6 billion and a listing on the Toronto Stock Exchange. (bit.ly/1qnD4J3)
NATIONAL POST
* With a 42 percent share of the voting public, John Tory has emerged as the clear front-runner in the Toronto mayoral race as Olivia Chow languishes in third place, according to the results of a new poll. The Nanos Research poll shows Chow has the support of only 26 percent of the electorate, just behind the 28 percent held by sitting Mayor Rob Ford. (bit.ly/1qatedN)
* Toronto mayoral candidate Olivia Chow will raise money for more student nutrition programs and bus service by increasing the land transfer tax for houses over C$2-million – a scheme she said is aimed at making taxes more progressive. (bit.ly/1Cp96cO)
FINANCIAL POST
* Propel Capital Corp, which brought eight funds to markets, raising about C$400 million from mostly retail clients, was acquired by Montreal-based Fiera Capital Corp. The publicly listed buyer will pay about C$12 million for the right to manage the funds. At C$12 million the purchase price – which will be paid mostly in cash but also in stock, works out to be about 3 percent of assets under management. (bit.ly/1sZ4FyS)
* Canada’s broadcast regulator has approved an application for a broadcast license by an extreme sports specialty channel, EDGEsport headed by the former chief executive of media conglomerate CanWest Global Communications. (bit.ly/1nVCZrn)
China
SHANGHAI SECURITIES NEWS
– Shanghai plans to consolidate the city’s media sector by merging Bestv New Media Co Ltd and Shanghai Oriental Pearl Group Ltd, while injecting other unlisted media assets into the combined, listed company.
– Sohu.Com Inc has forayed into Internet financing by setting up a platform that facilitates lending between individuals and small- and medium-sized companies.
– China Securities Regulatory Commission spokesman Deng Ke said the recent strength in the country’s stockmarket reflects improvements in the environment, including a stabilising economy, ample liquidity, effects of capital market reforms and lowering financing costs.
SECURITIES TIMES
– China’s anti-monopoly watchdog slapped fines worth 110 million yuan ($17.8 million) on 23 property insurers over price-fixing. The National Development and Reform Commission said 23 insurers in China’s eastern Zhejiang province were found to have colluded on discounts on car insurance premiums during multiple meetings organised by the Zhejiang insurance association.
Britain
The Times
CITY LAWYERS FACE ARREST IN CRACKDOWN ON LAUNDERING
Britain’s elite criminal agency is planning a crackdown on money laundering in the City of London that is expected to lead to the arrest of lawyers linked to the movement and washing of billions of pounds of criminal proceeds. (http://thetim.es/1nSdIyj)
FINANCIAL OMBUDSMAN DEALS WITH 5,000 PPI COMPLAINTS A WEEK
Complaints about payment protection insurance remained the biggest problem the Financial Ombudsman Service dealt with this year as it revealed it waded through 5,000 grievances a week. (http://thetim.es/1BahiMx)
The Guardian
SKILLS SHORTAGE FEARS TEMPER SURGE IN UK CONSTRUCTION
Britain’s builders enjoyed the strongest growth for seven months in August but the surge in activity put further strain on already tight supplies of materials and skilled workers. (http://bit.ly/1tXktEM)
BETFAIR ATTACKS PIRC’S QUESTIONING OF ACCOUNTS
A row has broken out between the corporate governance adviser Pirc and the online betting company Betfair Group Plc , with the bookmaker accusing the former of “materially misrepresenting” facts. (http://bit.ly/1vKOObU)
The Telegraph
INDEPENDENT SCOTLAND COULD NOT KEEP POUND AND JOIN EU
Scotland must choose between independence and keeping the pound if it wants to be part of the European Union, Olli Rehn, a top European official has warned. (http://bit.ly/1nTVexu)
EMERGENCY MEASURES TO PREVENT BLACKOUTS THIS WINTER AS POWER CRUNCH WORSENS
Emergency measures to fire up mothballed power stations could be used to keep the lights on this winter, after a series of power plant fires and closures left Britain more vulnerable to blackouts. (http://bit.ly/1qxnauG)
Sky News
CBI CAMPAIGN AIMS TO RESTORE TRUST IN UK PLC
Britain’s biggest employers’ lobbying group is mounting an attempt to rebuild public confidence in business just months before a general election campaign that is likely to include pledges to tackle private sector misconduct. (http://bit.ly/W6d1K3)
UBER TAXIS BANNED FROM OPERATING IN GERMANY
The Uber ridesharing service has been banned from operating in Germany pending a court hearing on whether it meets transport safety laws. (http://bit.ly/1x7BKiu)
The Independent
COMPANIES FACE PROSECUTION IF THEY FAIL TO STOP ECONOMIC CRIME
Firms will face huge fines for failure to report economic crime, under measures being considered by the government, the coalition’s top legal officer said today. (http://ind.pn/1w2vlRf)
ROYAL MAIL TO TRIAL SUNDAY DELIVERIES THIS WEEKEND
The Royal Mail Plc is to implement a pilot scheme of Sunday deliveries and office openings this weekend with customers in London and surrounding towns set to receive packages through their doors. (http://ind.pn/1pkNN1O)
Fly On The Wall Pre-Market Buzz
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
ISM New York PMI for August at 9:45
Factory orders for July at 10:00–consensus up 10.9%
Beige Book to be released at 14:00
ANALYST RESEARCH
Upgrades
ABB (ABB) upgraded to Buy from Neutral at BofA/Merrill
Aviat Networks (AVNW) upgraded to Buy from Hold at Needham
Boulder Brands (BDBD) upgraded to Buy from Neutral at Longbow
CRH Plc. (CRH) upgraded to Neutral from Underweight at HSBC
Cinemark (CNK) upgraded to Buy from Hold at Stifel
PharMerica (PMC) upgraded to Outperform from Market Perform at Cowen
Quest Diagnostics (DGX) upgraded to Conviction Buy from Buy at Goldman
Downgrades
ASM International (ASMI) downgraded to Neutral from Overweight at JPMorgan
Alere (ALR) downgraded to Sell from Neutral at Goldman
American Tower (AMT) downgraded to Equal Weight from Overweight at Morgan Stanley
C.H. Robinson (CHRW) downgraded to Hold from Buy at Stifel
Concur (CNQR) downgraded to Neutral from Outperform at RW Baird
Echo Global (ECHO) downgraded to Sell from Hold at Stifel
Frontier downgraded to Underweight from Equal Weight at Morgan Stanley
Stericycle (SRCL) downgraded to Neutral from Buy at Goldman
Initiations
Advanced Drainage (WMS) initiated with a Buy at Deutsche Bank
Advanced Drainage (WMS) initiated with an Outperform at RBC Capital
Advanced Drainage (WMS) initiated with an Overweight at Barclays
Ally Financial (ALLY) initiated with a Buy at Drexel Hamilton
AmSurg (AMSG) initiated with a Neutral at Goldman
Ambarella (AMBA) initiated with an Outperform at Imperial Capital
Genco Shipping (GSKNF) initiated with a Buy at Jefferies
Hersha Hospitality (HT) initiated with a Sector Perform at RBC Capital
Knightsbridge Tankers (VLCCF) initiated with a Buy at Jefferies
Mood Media (FDMCF) initiated with an Outperform at Imperial Capital
Orion Engineered Carbons (OEC) initiated with a Buy at KeyBanc
Scorpio Bulkers (SALT) initiated with a Buy at Jefferies
Square 1 Financial (SQBK) initiated with a Buy at SunTrust
Star Bulk Carriers (SBLK) initiated with a Buy at Jefferies
COMPANY NEWS
Apple (AAPL) said no breach in iCloud or Find my iPhone. The company said “Certain celebrity accounts were compromised by a very targeted attack on user names, passwords and security questions, a practice that has become all too common on the Internet. None of the cases we have investigated has resulted from any breach in any of Apple’s systems including iCloud or Find my iPhone”
Netflix (NFLX) announced that Gotham to be released exclusively on Netflix
CVS (CVS) to change name to CVS Health, end tobacco sales early
Wet Seal (WTSL) said CEO John Goodman leaves company, Edmond Thomas named as CEO
KKR (KKR) sold its stake in Versatel to United Internet for EUR 1.25B
Tetraphase (TTPH) announced positive data from lead-in portion of its IGNITE 2 clinical trial
Flextronics (FLEX) received shareholder approval to purchase up to 20% of its outstanding shares
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Toll Brothers (TOL), Guidewire (GWRE), eGain (EGAN), Vince Holding (VNCE), Box Ships (TEU)
Companies that missed consensus earnings expectations include:
Paragon Shipping (PRGN), Aviat Networks (AVNW)
Office Depot (ODP) backs FY14 sales to be lower than FY13 combined pro forma sales
Guidewire (GWRE) sees Q1 non-GAAP EPS 1c-5c, consensus 0c, sees FY15 EPS 35c-45c, consensus 55c. Sees Q1 revenue $71.5M-$ 78.5M, consensus $74.8M, sees FY15 revenue $364.2M-$381.9M, consensus $386.2M
PepsiCo (PEP) backs FY14 constant currency EPS growth guidance of 8%
NEWSPAPERS/WEBSITES
Concur (CNQR) explores sale, talks to SAP (SAP) and Oracle (ORCL), Bloomberg says
FBI hasn’t found evidence JPMorgan (JPM) hack hit other big banks, WSJ reports
JPMorgan (JPM) in talks to sell oil-supply agreement to Bank of America (BAC), WSJ says
EBay (EBAY) hiring settlement with DOJ approved by judge, Reuters reports
Time Warner’s (TWX) Warner Bros. studio said to plan buyout offers to boost profit, Bloomberg reports
Novartis (NVS) heart drug LCZ696 could drive shares to new highs, Barron’s says
SYNDICATE
AerCap (AER) files to sell 29.85M ordinary shares for holders
CDW (CDW) commences public offering of 15M shares for holders
Capital Product (CPLP) announces offering of 15M common units
Ellington Financial (EFC) announces public offering of 8M common shares
GrubHub (GRUB) announces proposed follow-on offering of 10.03M shares
Martin Midstream Partners (MMLP) files to sell 6.26M common units for holders
Voya Financial (VOYA) announces secondary offering of 30M shares by ING
via Zero Hedge http://ift.tt/1vN1z5I Tyler Durden