- DAX’s ‘Brilliant’ Run Sends Red Flag as German Index Tops Record (BBG)
- U.S. military warned of possible Islamic State attacks at home: report (Reuters)
- Russia Faces First Recession Since 2009 as Banks Add to Oil Pain (BBG)
- Dodgy Home Appraisals Are Making a Comeback (WSJ)
- U.S. Corporate Bond Sales Pass $1.5 Trillion for Annual Record (BBG)
- Basic Costs Squeeze Families (WSJ)
- China Orders Stricter Checks on Local Debt as Sales Surge (BBG)
- Draghi Powerless on ECB Path Toward QE Without Reforms (BBG)
- FTW: Fischer, Dudley See Oil Slump Spurring U.S. Consumers to Spend (BBG)
- European Banks Seen Afflicted by $82 Billion Capital Gap (BBG)
- China’s fourth-richest man seeks expansion with $6 billion IPO of Dalian Wanda property unit (Reuters)
- Lebanon detains wife of Islamic State leader (Reuters)
- Medtronic Sells $17 Billion of Bonds for Covidien Deal, biggest offering of 2014 (BBG)
- U.S. to discuss possible new Russia sanctions with European allies (Reuters)
- Design flaws led to 2013 lithium-ion battery fire in Boeing 787: U.S. NTSB (BBG)
- Pound Drops Against Dollar as Construction Adds to Slowdown Sign (BBG)
Overnight Media Digest
WSJ
* The Supreme Court appears to be searching for a compromise approach for evaluating when threats made in the age of social media rise to the level of criminal conduct. The Supreme Court on Monday waded into the question of when a social-media posting rises to the level of a criminal threat, in a case examining a Pennsylvania man’s conviction following comments he made to his estranged wife and others on Facebook. (http://on.wsj.com/1A9OIds)
* Home appraisers are inflating the value of some properties they assess, often at the behest of loan officers and real-estate agents, in what industry executives say is a return to practices seen before the financial crisis. (http://on.wsj.com/1ybmYXT)
* General Electric Co is a surprising experimenter with new media, Instagraming pictures of its machinery, pinning photos on Pinterest, blogging on Tumblr and posting six-second videos on Vine, among other things. (http://on.wsj.com/1B7ID4h)
* The American middle class has absorbed a steep increase in the cost of health care and other necessities as incomes have stagnated, forcing families to cut back spending on things from like clothing and restaurants. (http://on.wsj.com/1yFcajk)
* Investors and the German government cheered E.ON’s plan to split into two, betting that gains at the business focusing on green energy will offset problems at the spinoff focused on traditional energy sources. (http://on.wsj.com/1wgqnE4)
* A group of cyber thieves may be attempting to gain an edge on Wall Street by targeting chief financial officers, advisory firms and others involved in mergers, acquisitions and other market-moving events, according to computer security firm FireEye. (http://on.wsj.com/1zbA70i)
* Medical-device maker Medtronic Inc on Monday offered to sell $17 billion in corporate bonds to finance its acquisition of Ireland’s Covidien Plc. (http://on.wsj.com/1HTAMZZ)
* Hewlett-Packard Co, as it prepares to split in two, is unveiling on Tuesday a plan to help retain important customers by allowing them to leave behind a processor technology that has found few takers besides HP. (http://on.wsj.com/1txPhsO)
FT
* Sky Plc has hired investment bank Lazard to evaluate options for taking part in the wider consolidation in the UK telecommunications sector. Sky has hired advisers to identify potential deals as talks between its rival BT Group Plc and mobile operators EE and O2 began.
* Chinese conglomerate Fosun International Ltd on Monday sweetened its bid for Club Mediterranee SA. The 23.50 euros ($29) per share offer is 0.50 euro higher than Italian entrepreneur Andrea Bonomi’s and values the group at 897 million euros.
* Tesco Plc, the British grocer, announced a new management structure that will see new group Chief Executive Dave Lewis take over the day to day leadership of its main UK operation.
* Britain’s financial regulator has imposed stricter rules on companies that help people to find a loan, saying some credit brokers were treating customers in a “blatantly unfair” way and causing serious harm.
NYT
* Flaws in manufacturing, insufficient testing and a poor understanding of an innovative battery all contributed to the grounding of Boeing Co’s 787 fleet last year after a fire in a jet at Boston’s airport and another incident in Japan, according to a report released Monday by regulators. (http://nyti.ms/11MbMmq)
* In the new topsy-turvy law school world, students are increasingly in control as nearly all of the 204 accredited law schools battle for the students with the best academic credentials. Gone are the days when legal educators bestowed admittance and college graduates gratefully accepted, certain that they were on the path to a highly paid, respectable career. (http://nyti.ms/12j5Baq)
* A report released Monday morning by FireEye Inc, a Silicon Valley security company, shed light on a new breed of criminals intent on using their hacking skills to gain a market edge in the pharmaceutical industry, where news of clinical trials, regulatory decisions or safety or legal issues can significantly affect a company’s stock price. (http://nyti.ms/1txL7kG)
* President Vladimir Putin of Russia said South Stream, a major project to deliver natural gas to Europe, would be redirected through Turkey after pressure from the European Union. (http://nyti.ms/1tGlI7s)
* Lending Club shot to prominence nearly eight years ago by helping borrowers and lenders avoid big banks and find each other directly through the Internet. Now, the lending platform is hoping that Wall Street investors will flock to buy into its forthcoming initial public offering. (http://nyti.ms/1vDScVv)
* As the Supreme Court on Monday tried to puzzle out what threats may be prosecuted as crimes, Chief Justice John Roberts Jr. cited an unlikely source: the rapper Eminem. Treading gingerly, the chief justice quoted vivid lyrics from ” ’97 Bonnie and Clyde,” in which Eminem seems to threaten to drown his wife. (http://nyti.ms/1tGmcum)
* Microsoft Corp said it had acquired Acompli, a young start-up that makes an email application for iOS and Android mobile devices. Microsoft is paying around $200 million for the company, according to someone briefed on the deal, who asked for anonymity because terms of the agreement were private. (http://nyti.ms/12kmXmp)
Canada
THE GLOBE AND MAIL
** Many Canadian companies are unprepared to deal with cybersecurity attacks against new and expanding computer technologies such as cloud-based computing, a new study says. The poll, sponsored by computer technology firm Cisco Canada and released Tuesday, found that only 40 percent of about 500 firms surveyed had security strategies that take into account new technology such as the “Internet of things,” where a wide range of everyday objects are connected together in networks. (http://bit.ly/1zcHEvJ)
** The Central Bank of Russia waded into currency markets Monday as the ruble plunged to levels not seen since the 1998 financial crisis that triggered a devaluation and government debt default. Like the Canadian dollar and the Norwegian krone, the Russian currency has been under extreme pressure amid the collapse in oil prices. (http://bit.ly/1vaD39e)
** For years, business luncheons in the oilsands have been scenes of unbridled exuberance. Yet at the Sawridge Inn off Highway 63 on Monday, Fort McMurray’s businessmen and women had something unpalatable to chew over with their roast pork and lasagna – oil selling at less than $70, and dropping fast. (http://bit.ly/1FJecPW)
NATIONAL POST
** Low oil prices and tight capital markets are making it difficult for oilsands producer Connacher Oil and Gas Ltd to survive, as analysts say the struggling bitumen player won’t make enough money to cover its debt payments next year. On Monday, heavily indebted Connacher became the latest in a line of smaller oilsands companies to launch a review of its costs, capital and liquidity options in recent months. (http://bit.ly/12kERX2)
** TransCanada Corp is facing mounting challenges to its C$12 billion ($10.57 billion) Energy East project in Quebec as growing concerns over its impact on beluga whales in the St. Lawrence threaten to derail its proposed export terminal there. The Calgary-based pipeline company said Monday that it is suspending operations at the Cacouna, Quebec site while it assesses a scientific report that recommends the belugas be declared an endangered species with full protection of its habitat. (http://bit.ly/1yBbFpE)
** With the launch of a new video-on-demand service dubbed Cravetv, Bell Media hopes to take on Internet streaming giants while still keeping one foot firmly planted on the side of its traditional television business. The media division of BCE Inc will host an event in Toronto on Wednesday to unveil the features of the new service that will launch by the end of the year. (http://bit.ly/1y9TdSr)
China
CHINA SECURITIES JOURNAL
– China is expected to move toward a looser monetary stance next year as the government may revise down its GDP growth forecast at the upcoming annual Central Economic Work Conference this month, said Li Huiyong, an economist at Shenyin and Wanguo Securities.
– The government is considering eight major reform areas as well as 34 other supporting measures to improve the management at state-owned enterprises, according to unidentified government sources.
SHANGHAI SECURITIES NEWS
– The relevant authorities are still looking into the Shenzhen and Hong Kong stock connect plan and there are no concrete measures yet, said Li Xiaojia, Chief Executive of Hong Kong Stock Exchange.
CHINA DAILY
– There is growing public concern over the quality of water in China, with more than 75 percent of urban residents now saying they are willing to pay more for safe water, according to a report published on Monday.
SHANGHAI DAILY
– New home purchases in Shanghai remained above 1 million square metres for the second straight month in November as home seekers took advantage of an interest rate cut by China’s central bank.
Britain
The Times
PPP sale could spell break-up for Balfour
Britain’s biggest construction company could be broken up after receiving a 1 billion pound ($1.57 billion) offer for its public private partnerships investment division. Balfour Beatty Plc confirmed that John Laing Infrastructure Fund had tabled an offer. (http://thetim.es/1yy0e1Q)
EY wins right to offer legal services
Ernst & Young LLP has won the right to set up shop in Britain’s legal services market after the “big four” auditor was granted a licence to operate. EY said it had recruited three legal partners and planned to recruit a further 30 people to build a law practice in England and Wales in the next six months. (http://thetim.es/1ybcQyg)
The Guardian
Bank of England investigating risk of ‘carbon bubble’
The Bank of England is to conduct an enquiry into the risk of fossil fuel companies causing a major economic crash if future climate change rules render their coal, oil and gas assets worthless. The concept of a “carbon bubble” is being taken increasingly seriously by some major financial companies including Citi, HSBC and Moody’s Corp, but the Bank’s enquiry is the most significant endorsement yet from a regulator. (http://bit.ly/1rPdikl)
Northern Ireland corporation tax cut announcement expected on Wednesday
The chancellor of the Exchequer, George Osborne, is expected in Wednesday’s autumn statement to allow Stormont to cut the corporate tax rate to 12.5 percent in an attempt to compete with Dublin for inward investment. As Stormont politicians await word, a think tank has warned the move could cost the region 400 million pounds in public spending cuts. (http://bit.ly/1HT2BBN)
The Telegraph
Suspended Tesco executive to return as Dave Lewis overhauls team
Dave Lewis has put himself in charge of Tesco Plc struggling UK business after four of the executives suspended due to an accounting scandal left the company. Lewis, the chief executive of Tesco, has overhauled the senior management of Britain’s biggest retailer in one of his first major strategic moves. (http://bit.ly/1yxQPHR)
Vodafone ‘could beat competition concerns’ to seal 80 bln pounds Liberty Global deal
Vodafone could overcome stringent German competition rules to complete an 80 billion pounds-plus takeover of Liberty Global, the cable group that owns Virgin Media, according to senior City legal sources. (http://bit.ly/1ybaWxA)
Sky News
UK’s new warships will be built in Scotland
The UK’s new warships will be built on the Clyde, it has been confirmed, after fears were raised over the possibility of the contract going abroad. Defence Secretary Michael Fallon said there should be “no confusion” over where the new generation of Type 26 frigates will be constructed. (http://bit.ly/1v7gZvX)
Watchdog to deliver fresh blow to Royal Mail
Regulators will say on Tuesday that they disagree with Royal Mail Plc’s view of competition in the postal sector. Sky News said Ofcom made the conclusion following an assessment that Royal Mail’s ability to meet its universal service obligation is not being impeded by competition in the end-to-end delivery market. (http://bit.ly/1yaXcDf)
The Independent
BG scraps new boss Helge Lund controversial remuneration package amid investor fury
Energy giant BG Group Plc has bowed to shareholder pressure and slashed a controversial “golden hello” planned for incoming boss Helge Lund. Lund, who will join BG in March, previously worked at Norway’s Statoil, where he is credited with turning around its fortunes. (http://ind.pn/1zJCffF)
Starbucks completes 20 million pound tax payment as coffee chain seeks to put scandal behind
Starbucks Corp has made its final 5 million pounds payment to the taxman after it was exposed for paying virtually no corporate tax in the United Kingdom since its launch 16 years ago. The coffee chain said it wants to put the scandal behind it and will turn a profit in the UK within three years and start paying taxes regularly. (http://ind.pn/1tFr9np)
Fly On The Wall Pre-Market Buzz
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
ISM New York for November at 9:45–consensus 55.0
Construction spending for October at 10:00–consensus up 0.5%
ANALYST RESEARCH
Upgrades
Cypress Semiconductor (CY) upgraded to Buy from Hold at Topeka
Dycom (DY) upgraded to Outperform from Market Perform at Wells Fargo
HD Supply (HDS) upgraded to Buy from Sell at Goldman
ITT Corp. (ITT) upgraded to Buy from Neutral at Goldman
Mellanox (MLNX) upgraded to Overweight from Equal Weight at Barclays
Nanometrics (NANO) upgraded to Buy from Hold at Stifel
SVB Financial (SIVB) upgraded to Buy from Hold at Jefferies
Xcel Energy (XEL) upgraded to Neutral from Underweight at JPMorgan
Downgrades
Agios Pharmaceuticals (AGIO) downgraded to Neutral from Overweight at JPMorgan
American Tower (AMT) downgraded to Outperform from Strong Buy at Raymond James
Apache (APA) downgraded to Neutral from Buy at Mizuho
Bellatrix downgraded to Market Perform from Outperform at BMO Capital
Bill Barrett (BBG) downgraded to Neutral from Buy at Mizuho
Covanta (CVA) downgraded to Equal Weight from Overweight at Barclays
Crown Castle (CCI) downgraded to Market Perform from Outperform at Raymond James
Cubic (CUB) downgraded to Neutral from Overweight at JPMorgan
Dover (DOV) downgraded to Neutral from Buy at Global Hunter
Dover (DOV) downgraded to Sell from Neutral at Goldman
Kennametal (KMT) downgraded to Accumulate from Buy at Global Hunter
Laredo Petroleum (LPI) downgraded to Neutral from Buy at Mizuho
MRC Global (MRC) downgraded to Accumulate from Buy at Global Hunter
Parker-Hannifin (PH) downgraded to Neutral from Buy at Goldman
PerkinElmer (PKI) downgraded to Neutral from Conviction Buy at Goldman
Priceline (PCLN) downgraded to Market Perform from Outperform at FBR Capital
Initiations
Callon Petroleum (CPE) initiated with a Buy at Roth Capital
Clayton Williams (CWEI) initiated with a Buy at Roth Capital
Coherus Biosciences (CHRS) initiated with an Overweight at JPMorgan
comScore (SCOR) initiated with a Buy at SunTrust
Diamondback Energy (FANG) coverage transferred with a Buy at Roth Capital
Dyax (DYAX) coverage assumed with an Outperform at Wedbush
FS Investment (FSIC) initiated with a Neutral at JPMorgan
Freshpet (FRPT) initiated with a Buy at Canaccord
Freshpet (FRPT) initiated with a Buy at Goldman
Freshpet (FRPT) initiated with a Buy at Stifel
Freshpet (FRPT) initiated with a Buy at Stifel
Freshpet (FRPT) initiated with an Outperform at RW Baird
HubSpot (HUBS) assumed with a Neutral at JPMorgan
Hyperion Therapeutics (HPTX) initiated with an Outperform at Wedbush
INC Research (INCR) initiated with a Buy at Goldman
Marketo (MKTO) initiated with an Overweight at JPMorgan
Microsoft (MSFT) initiated with an Overweight at JPMorgan
NetSuite (N) initiated with an Overweight at JPMorgan
Norwegian Cruise Line (NCLH) reinstated with an Overweight at Barclays
PS Business Parks (PSB) initiated with a Market Perform at Wells Fargo
Paycom (PAYC) assumed with an Overweight at JPMorgan
RSP Permian (RSPP) initiated with a Buy at Roth Capital
Ring Energy (REI) initiated with a Buy at Roth Capital
Salesforce.com (CRM) initiated with an Overweight at JPMorgan
Splunk (SPLK) initiated with a Neutral at JPMorgan
Tableau (DATA) initiated with an Overweight at Barclays
Tableau (DATA) initiated with an Overweight at JPMorgan
Theravance Biopharma (TBPH) initiated with an Outperform at Leerink
Triumph Bancorp (TBK) initiated with a Market Perform at Keefe Bruyette
Ultimate Software (ULTI) initiated with an Overweight at JPMorgan
VMware (VMW) initiated with a Neutral at JPMorgan
COMPANY NEWS
Cypress (CY), Spansion (CODE) to merge in $4B all-stock deal. The merger is expected to achieve more than $135M in cost synergies on an annualized
basis within three years and to be accretive to non-GAAP earnings within the first full year after the transaction closes
NTELOS (NTLS) decided to focus its business operations exclusively in its Western Markets and exit Eastern Markets. The company expects to incur
costs of $55M to complete the wind-down process
Royal Caribbean (RCL) to replace Bemis (BMS) in S&P 500 as of 12/4 close
Wal-Mart (WMT) said Cyber Monday was the biggest online day in history for orders
Avanir (AVNR) said it will be acquired by Otsuka Pharmaceutical for $3.5B
Blackstone announced that funds affiliated with Blackstone Real Estate Partners VI & VII agreed to sell their wholly-owned U.S. industrial platform, IndCor Properties, to affiliates of GIC, Singapore’s sovereign wealth fund, for $8.1B
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Vince Holding (VNCE), Shoe Carnival (SCVL)
Companies that missed consensus earnings expectations include:
Qunar (QUNR), Thor Industries (THO)
UnitedHealth (UNH) sees FY15 EPS $6.00-$6.25, consensus $6.13
UnitedHealth (UNH) backs FY14 EPS view $5.60-$5.65, consensus $5.64
Envivio (ENVI) reports Q3 adjusted EPS (15c), one estimate (8c)
Mattress Firm (MFRM) backs FY14 EPS view of $2.03-$2.13, consensus $2.10
Shoe Carnival (SCVL) sees Q4 EPS 6c-10c, consensus 9c
Vince Holding (VNCE) sees FY14 adjusted EPS 90c-94c, consensus 94c
NEWSPAPERS/WEBSITES
Wal-Mart (WMT) planning 250 job cuts in China division, WSJ reports
Samsung to sell fibre optics operations to Corning, Reuters reports
Vale (VALE) considers IPO for part of base metals business, Reuters reports
New York Times (NYT) may cut jobs after falling short of buyout goals, NY Post reports
GM (GM) recalls 316K vehicles for faulty low-beam headlights, Reuters reports
DreamWorks Animation (DWA) looks expensive, Barron’s says
SYNDICATE
Advanced Drainage (WMS) files to sell 10M shares for holders
AerCap (AER) files to sell 14.92M ordinary shares for holders
National Health Investors (NHI) files to sell 3.5M shares of common stock
Strategic Hotels (BEE) files to sell 20M shares of common stock
via Zero Hedge http://ift.tt/1yC2mWt Tyler Durden