- Fall of the Bond King: How Gross Lost Empire as Pimco Cracked (BBG)
- Hong Kong ‘Occupy’ leaders surrender as pro-democracy protests appear to wither (Reuters)
- Ashton Carter, Ex-Pentagon No. 2, Emerges as Obama Favorite for Defense Secretary (WSJ)
- Oil, the Ruble and Putin Are All Headed for 63. A Russian Joke — for the Moment (BBG)
- New U.S. oil and gas well November permits tumble nearly 40 percent (Reuters)
- Swedish government on brink of collapse (AJ)
- China says Britain has no moral responsibility for Hong Kong (Reuters)
- Indian Labs Deleted Test Results for U.S. Drugs, Documents Show (BBG)
- Norway’s sovereign wealth fund sticking with oil (FT)
- European Shares Rise With Italian Bonds as Euro Declines (BBG)
- London Streets Paved With Platinum in $6 Billion Push by Veolia (BBG)
- Post-Gross Pimco Suffers $9.5 Billion Blow (BBG)
- Budget Plan Pitched to House Republicans (WSJ)
- China Stock Boom Has Morgan Stanley Ready for ‘Ultra-Bull’ (BBG)
- Australian growth slows to 2.7% (FT)
- Israel Sets Date for New Elections (WSJ)
Overnight Media Digest
WSJ
* Heightened tensions between Russia and the United States are hampering their cooperation in space, adding to the problems of an American space industry reeling from the crashes of two commercial spacecraft this fall. (http://on.wsj.com/1vgqj0R)
* House GOP leaders worked to build support among Republicans for a plan to avoid a government shutdown, seeking to deliver on their promise to step away from entrenched budget brinkmanship. (http://on.wsj.com/1yfCUn0)
* A Food and Drug Administration advisory panel Tuesday helped pave the way for the federal government to reverse its policy banning gay men from donating blood, a rule initially aimed at preventing transmission of HIV. (http://on.wsj.com/1FMshOx)
* Old emails may be coming back to haunt Credit Suisse over real-estate deals done before the financial crisis. The emails, which were turned over to firms suing the bank but haven’t been made public, include discussions of an appraisal method Credit Suisse used to value a dozen luxury properties such as golf communities and ski resorts during the mid-2000s. (http://on.wsj.com/1vIUgvh)
* Chief Executive Steven Murphy is stepping down from Christie’s, less than a month after the art auction house posted record fall sales and less than two weeks after rival Sotheby’s announced it would oust its boss. (http://on.wsj.com/1yHx8xc)
* Bank of New York Mellon gave Nelson Peltz’s Trian fund a seat on its board, joining a raft of companies that have recently opened the door to activists and headed off bruising public fights. (http://on.wsj.com/1vMB0M5)
* The chairman of San Francisco’s pension fund is proposing a smaller mix of hedge funds than previously discussed, the latest retirement system to rethink its approach to those investments in the wake of a retreat by the largest public pension in the United States. (http://on.wsj.com/12lUoVH)
* Takata Corp, the Japanese supplier at the center of a global air-bag recall affecting millions of vehicles, said it would form an independent review panel to investigate the company’s handling of a safety defect linked to five deaths. (http://on.wsj.com/1CDGOOr)
* Singapore Exchange Ltd on Wednesday delayed the start of trading in its securities market by over three hours to give brokerages a chance to correct any errors on behalf of clients caused by a software glitch two days earlier. (http://on.wsj.com/1wolh8S)
FT
* Steven Murphy, the chief executive of Christie’s, will step down at the end of this year, the London-based auction house said on Tuesday, following a record run of sales.
* British insurer Aviva Plc agreed terms on Tuesday for a 5.2 billion pound ($8.13 billion) all-share takeover of rival Friends Life, the largest deal between UK companies in more than six years.
* Lloyds Banking Group has sold a 1.6-billion-pound ($2.50 billion) portfolio of Irish mortgages to Goldman Sachs and CarVal, a private equity group, the Financial Times newspaper reported.
* Sanofi has entered exclusive talks to transfer its Toulouse research and development site to German rival Evotec, the French drugmaker said on Tuesday. Sanofi will pay Evotec a minimum of 250 million euros ($309.73 million) over the next five years.
NYT
* Income inequality in Chile and other parts of Latin America is narrowing, but the reason for the decline, yet to be determined, could be good news or bad. According to data from the World Bank, the richest 10 percent of Chileans capture $42 out of every $100 worth of disposable income, far in excess of the industrial countries Chile would like to see as its peers (http://nyti.ms/1zO74zR)
* As another round of fiscal brinkmanship looms with Republican control of Congress, the impact on tax policy, government programs and the overall economy could be severe. Republican leaders moved Tuesday to finesse their way around another government shutdown next week, but the fiscal gantlet extends well beyond Dec. 11, when the current stopgap spending law that funds much of the federal government expires. (http://nyti.ms/1FMzeiH)
* Just as Sony Pictures Entertainment appeared to be recovering from a crippling online attack last month, the studio found itself confronting new perils on Tuesday. The Federal Bureau of Investigation warned United States businesses of a similar threat, and additional Sony secrets were leaked online. (http://nyti.ms/1ydWS6H)
* Facing a midnight deadline to expand a recall of defective airbags, Takata Corp, the Japanese auto supplier, had not taken any action Tuesday night on the demand by United States regulators. But in a statement released Tuesday morning, Takata’s chief executive, Shigehisa Takada, offered no indication that the company would make such a move.(http://nyti.ms/1zgSEs0)
* Law firms are again paying big annual bonuses to lawyers who have put in years of working long hours on corporate deal documents, litigation papers and complex contracts. Associates working at a large law firm in New York are taking home, on average, from $15,000 to $100,000 in bonus payments, depending on their tenure. (http://nyti.ms/12lWghc)
* The early results of Black Friday sales may have been a disappointment for the nation’s retailers, but not for the automakers. Car companies on Tuesday reported the industry’s best November sales pace in years, as buyers took advantage of low interest rates and holiday promotions on new vehicles. (http://nyti.ms/1zgTlBq)
* Jimmy Iovine, the record executive who joined Apple Inc this year as part of its $3 billion purchase of Beats, has joined the board of Live Nation Entertainment, the company announced on Tuesday. (http://nyti.ms/15OoJyz)
* When the European Banking Authority, the European Union banking regulator, recently released an opinion indicating that a number of global banks had wrongly classified some of their complex new bonus structures, perhaps in violation of European law, many of the banks immediately scrambled to reach another regulator – a few blocks away. (http://nyti.ms/1FLle6S)
China
– Bank of China predicts the central bank would cut bank reserve requirement ratios (RRR) once or twice in 2015, the bank said in a report on Tuesday.
– The ministries of commerce and customs, and the State Administration of Taxation, would continue to implement a taxation deduction policy for the cultural industry, the newspaper said, citing the Ministry of Commerce.
21ST CENTURY BUSINESS HERALD
– China’s top trainmakers, China CNR and CSR Corp , have submitted the first draft of their merger plan that will see CSR issuing shares to absorb CNR, the newspaper said, citing sources.
CHINA DAILY
– Real estate developer Dalian Wanda Commercial Properties may reduce the size of its planned IPO due to disappointment over share pricing.
SHANGHAI DAILY
– Foreign funds have started withdrawing from China-focused ETFs, taking profits from a mainland stock rally.
PEOPLE’S DAILY
– China’s development cannot be isolated from the rest of the world and vice versa. The tight cooperation brings broad prospects to China’s foreign affairs, the paper which acts as a mouthpiece for the ruling Communist Party, said in a commentary.
Britain
The Times
FOOD PRICES SLIDE AMID DISCOUNTING WARS
The price of food in the shops has fallen for the first time in eight years as supermarkets wage a bitter discounting war and the cost of everyday ingredients plunges on the commodity markets. Food prices were down 0.2 percent in November compared with the same month a year ago, according to an index compiled by the British Retail Consortium and Nielsen. (http://thetim.es/12lvhCm)
KIER BECOMES LATEST SUITOR FOR MOUCHEL
Mouchel, the outsourcing company that manages a third of Britain’s roads, has received a 400 million pound ($626 million) takeover approach from Kier Group Plc, the builder. Kier, which maintains 35,000 kilometre of roads, confirmed that it had made an approach. (http://thetim.es/1tBiJ11)
The Guardian
AVIVA’S 5.6 BILLION POUND TAKEOVER OF FRIENDS LIFE CREATES UK’S LARGEST INSURER.
Aviva has agreed to take over Friends Life Group in a 5.6 billion pound deal that will create the UK’s biggest insurance, savings and asset management company. The combined company, retaining the name Aviva, will serve 16 million customers, or one in four households in the United Kingdom. (http://bit.ly/1zfGWhe)
JOHN LEWIS BREAKS ITS ALL-TIME SALES RECORD IN BLACK FRIDAY WEEK
John Lewis said it had sold an average of one tablet computer every second and a flatscreen 40-inch voice-command TV every minute from the moment 24 hours of promotions began at midnight last Thursday. (http://bit.ly/1zdb3pr)
The Telegraph
GEORGE OSBORNE TO DELIVER NEAR 1 BLN POUNDS PACKAGE FOR SMALL BUSINESS
George Osborne is to deliver a near 1 billion pound boost to Britain’s small and medium-sized businesses in a bid to spur the engine of the UK economy. Osborne is expected to unveil an additional 400 million pounds for the British Business Bank, as well as further funding for the Enterprise Finance Guarantee scheme. (http://bit.ly/1ydWsbv)
VICTORY FOR UK MICRO FIRMS AS HMRC TWEAKS EU VAT MOSS RULE
The government has agreed to change a controversial VAT rule that thousands of UK business owners claimed was putting their companies at risk. New EU regulation due to be introduced on Jan. 1, 2015, would have forced UK firms selling digital services in Europe to register for VAT in every country. (http://bit.ly/1ydgOq8)
Sky News
UNION SECURES JAGUAR LAND ROVER PAY DEAL
UK workers at Jaguar Land Rover, owned by Indian firm Tata Motors Ltd since 2008, are to be balloted on a new pay offer. Staff affiliated to the union Unite had reportedly demanded a bonus and a salary increase of more than 3 percent over the next three years, arguing they deserved a better reward for their contribution to the firm’s turnaround. (http://bit.ly/1Bb4nwj)
DUBAI PLOTS SALE OF UK ENGINEER DONCASTERS
One of Britain’s most advanced privately owned engineering groups is about to be put up for sale more than eight years after being acquired by Dubai’s ruling family. Investment bankers will be appointed in the coming weeks to advise on the sale of Doncasters, a Burton-upon-Trent-based company which manufactures precision components for aircraft engines and industrial gas turbines. (http://bit.ly/1yG3Izm)
The Independent
THE LEGO MOVIE BRINGS IN BIG BUCKS FOR MERLIN ENTERTAINMENT
Merlin Entertainment, the firm behind Madame Tussauds and Legoland has revealed the huge success of “The Lego Movie” had buoyed profits but it is struggling in Thailand due to the latest round of civil unrest to hit the country. (http://ind.pn/1pPSGXH)
FOUR SCANDAL-LINKED TESCO DIRECTORS LEAVE
Four of the eight directors suspended by Tesco are leaving the group in the biggest shake-up by new Chief Executive Officer Dave Lewis since the uncovering of a 263 million pound accountancy scandal. UK Managing Director Chris Bush, seen as a protege of the former chief executive, Phil Clarke, was the most high-profile dismissal, although the company refused to reveal whether he resigned or was sacked. (http://ind.pn/1ydkKHp)
Fly On The Wall Pre-market Buzz
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
ADP employment report for November at 8:15–consensus 225,000
Nonfarm productivity for Q3 at 8:30–consensus up 2.4%
Unit labor costs for Q3 at 8:30–consensus down 0.1%
Markit services PMI for November at 9:45–consensus 56.5
ISM non-manufacturing composite for November at 10:00–consensus 57.3
ANALYST RESEARCH
Upgrades
BP (BP) upgraded to Overweight from Equal Weight at Barclays
Boardwalk Pipeline (BWP) upgraded to Buy from Neutral at UBS
Brandywine Realty (BDN) upgraded to Buy from Neutral at BofA/Merrill
CGG SA (CGG) upgraded to Neutral from Underweight at JPMorgan
Crestwood Equity (CEQP) upgraded to Buy from Neutral at UBS
El Pollo Loco (LOCO) upgraded to Equal Weight from Underweight at Morgan Stanley
First Industrial Realty (FR) upgraded to Hold from Sell at Stifel
NTELOS (NTLS) upgraded to Market Perform from Underperform at FBR Capital
Nielsen (NLSN) upgraded to Buy from Hold at Needham
Spectra Energy Partners (SEP) upgraded to Buy from Neutral at UBS
Superior Energy (SPN) upgraded to Outperform from In-Line at Imperial Capital
TJX (TJX) upgraded to Conviction Buy from Neutral at Goldman
Telefonica (TEF) upgraded to Neutral from Reduce at Nomura
TreeHouse (THS) upgraded to Outperform from Market Perform at BMO Capital
Vale (VALE) upgraded to Buy from Hold at Canaccord
Downgrades
Avanir (AVNR) downgraded to Neutral from Buy at Mizuho
BPZ Resources (BPZ) downgraded to Sell from Buy at Wunderlich
Bob Evans (BOBE) downgraded to Underweight from Hold at KeyBanc
Burlington Stores (BURL) downgraded to Neutral from Buy at Goldman
CBOE Holdings (CBOE) downgraded to Sell from Neutral at Citigroup
Cousins Properties (CUZ) downgraded to Hold from Buy at Stifel
Cousins Properties (CUZ) downgraded to Neutral from Buy at BofA/Merrill
DISH (DISH) downgraded to Sell from Hold at Wunderlich
EastGroup Properties (EGP) downgraded to Neutral from Buy at BofA/Merrill
EastGroup Properties (EGP) downgraded to Sell from Hold at Stifel
Eclipse Resources (ECR) downgraded to Equal Weight from Overweight at Morgan Stanley
Enerplus (ERF) downgraded to Sector Perform from Outperform at Scotia Capital
J.C. Penney (JCP) downgraded to Sell from Neutral at Goldman
OmniVision (OVTI) downgraded to Market Perform from Outperform at Northland
Parkway Properties (PKY) downgraded to Hold from Buy at Stifel
Parkway Properties (PKY) downgraded to Neutral from Buy at BofA/Merrill
Paycom (PAYC) downgraded to Equal Weight from Overweight at Barclays
Penn West (PWE) downgraded to Sector Perform from Outperform at Scotia Capital
Ross Stores (ROST) downgraded to Buy from Conviction Buy at Goldman
Statoil (STO) downgraded to Equal Weight from Overweight at Barclays
TASER (TASR) downgraded to Neutral from Overweight at JPMorgan
Texas Roadhouse (TXRH) downgraded to Sector Perform from Outperform at RBC Capital
Initiations
Aldeyra (ALDX) initiated with a Buy at Ascendiant
Baker Hughes (BHI) initiated with a Perform at Oppenheimer
Belmond Ltd (BEL) initiated with an Outperform at JMP Securities
ClubCorp (MYCC) initiated with a Buy at KeyBanc
Halliburton (HAL) initiated with an Outperform at Oppenheimer
SanDisk (SNDK) initiated with a Buy, $125 target at Citigroup
Schlumberger (SLB) initiated with an Outperform at Oppenheimer
W.P. Carey (WPC) initiated with a Neutral at Citigroup
WNS Holdings (WNS) initiated with a Buy at Maxim
Weatherford (WFT) initiated with an Outperform at Oppenheimer
COMPANY NEWS
Acacia (ACTG) subsidiaries enter into settlement, patent license agreement with HTC
Accenture (ACN) to acquire Reactive Media Pty Ltd, terms not disclosed
American Tower (AMT) raises quarterly distribution to 38c from 36c per share
BPZ Resources (BPZ) hires advisors to evaluate strategic alternatives
CME Group (CME), GFI Group announce revised offer to GFI Group stockholders
Callaway Golf (ELY) announces retirement of CFO Bradley Holiday in 2015
Cliffs Natural (CLF) to sell Logan County Coal to Coronado Coal for $175M
CytRx (CYTR) receives written notice regarding partial clinical hold for aldoxorubicin
HP (HPQ), Telecom Italia announce commercial agreement
Illumina (ILMN) and Sequenom end patent dispute with partnership in prenatal testing
Point72 Asset Management reports 5.1% passive stake in Catalyst Pharmaceutical (CPRX)
Puma Biotechnology (PBYI) delays timeline for filing PB272 NDA
TASER (TASR) CEO says every major city in U.S choosing company
Target (TGT) announces partnership with Google
Toyota (TM) Australia to reduce workforce to 1,300 from 3,900
j2 Global (JCOM) offers to buy Carbonite (CARB) for $15 per share in cash
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Leidos (LDOS), OmniVision (OVTI), Powell (POWL), Guidewire (GWRE), Ascena Retail (ASNA), Bazaarvoice (BV), Bob Evans (BOBE), Nevro (NVRO)
Companies that missed consensus earnings expectations include:
Universal Technical (UTI)
NEWSPAPERS/WEBSITES
Analysts cynical of BP (BP), Shell merger rumor, CNBC reports
Biogen (BIIB) looks like a buy, Barron’s says
Boeing (BA), Lockheed to lose if U.S. bans Russian rockets, WSJ reports
Canada set to approve Burger King (BKW), Tim Hortons deal, NY Post reports
Euro zone’s retail sales rebounded in October, Reuters reports
Potash (POT) conducting review of $4.5B of equity investments, Bloomberg says
Takata shows no sign of complying with U.S. deadline, NY Times says
U.S., Russia tensions impacting space alliance, WSJ reports
SYNDICATE
CDW Corporation (CDW) 15M share Spot Secondary priced at $33.28
City Office REIT (CIO) announces offering of 2.6M shares of common stock
MPLX (MPLX) files to sell 3M common units representing limited partner interests
via Zero Hedge //feedproxy.google.com/~r/zerohedge/feed/~3/zgQAbphFvBk/story01.htm Tyler Durden