Frontrunning: December 16

  • Ruble Sinks to 80 a Dollar Defying Surprise Russia Rate Increase (BBG)
  • Oil slumps near $59 for first time since 2009 on oversupply (Reuters)
  • Oil sinks, Russian moves fail to quell nerves (Reuters)
  • Fed Seen Looking Past Low Inflation to Drop ‘Considerable Time (BBG)
  • At least Europe is “fixed” – Eurozone PMI picks up gingerly in December (FT)
  • Students Among Dead as Pakistan Gunmen Kill 126 at Army School (BBG)
  • Repsol to buy Talisman Energy for $13 billion (Reuters)
  • Indonesia’s Rupiah Erases Decline After Central Bank Intervenes (BBG)
  • Anti-Islam Rally Grows as Immigrant Backlash Hits Europe (BBG)
  • Saudi Arabia is playing chicken with its oil (Reuters)
  • China industrial activity shrinks in December, calls grow for more stimulus (Reuters)
  • Obama’s Surgeon General Pick May Defeat the Gun Lobby (BBG)
  • EU funds help Poland build ‘ghost’ airports (Reuters)
  • Billions in German Family Wealth Threatened by Tax Ruling (BBG)

 

Overnight Media Digest

WSJ

* Google Inc plans to push deeper into online commerce by enhancing its Google Shopping service with features that more directly challenge Amazon.com Inc. (http://on.wsj.com/1uPkFDX)

* NBC is launching a live stream of its broadcast network, part of a broader effort at parent NBCUniversal to make more of its content available online via computers and mobile devices. (http://on.wsj.com/1BRMcMr)

* Two tech startups, Hortonworks Inc and New Relic Inc, have proposed to sell shares to the public at a 25 percent to 50 percent discount to the roughly $1 billion valuations that some venture-capital firms and big mutual funds paid earlier this year. (http://on.wsj.com/1u7sqok)

* U.S. cattle exports have fallen by a third this year, hurting businesses from cattle haulers to the port in Wilmington, Delaware. (http://on.wsj.com/1BO72cJ)

* Repsol SA is preparing an US$8.3 billion bid for Talisman Energy Inc of Canada, a takeover that would roughly double the Spanish company’s oil output. (http://on.wsj.com/1GpQYAC)

* InterContinental Hotels Group Plc has agreed to buy Kimpton Hotels & Restaurants for $430 million in cash. (http://on.wsj.com/1BNmbLu)

* U.S. manufacturing output climbed past its prerecession peak this fall, suggesting the American economy is on solid footing despite growing signs of weakness abroad. (http://on.wsj.com/1Gp6tZq)

* Riverbed Technology Inc agreed to be acquired by private-equity firm Thoma Bravo LLC for about $3.6 billion, following more than a year of pressure from activist investor Elliott Management Corp. (http://on.wsj.com/16ofvcG)

* The South Korean government said it plans to impose penalties on Korean Air Lines Co Ltd in response to a recent incident involving an executive who delayed a flight to eject a crew member in a protest at the way she was served macadamia nuts. (http://on.wsj.com/1sxXsuF)

* Dalian Wanda Commercial Properties Co, which is controlled by Chinese billionaire Wang Jianlin, has raised US$3.7 billion in a Hong Kong initial public offering after pricing the deal near the high end of an indicative price range, according to people familiar with the situation. (http://on.wsj.com/1wAIh3x)

* GT Advanced Technologies Inc has won bankruptcy court approval of a settlement with Apple Inc that wards off the threat of litigation over a failed effort to produce large quantities of scratch-and shatter-resistant smartphone screen materials. (http://on.wsj.com/16oLvND)

* Cement companies Holcim Ltd and Lafarge SA cleared a major hurdle toward their planned $43 billion merger after antitrust authorities in Europe said the deal could go ahead, subject to significant asset sales across the region. (http://on.wsj.com/1wUO7P4)

 

FT

Youth-focused digital content company Vice Media will go ahead with a “deal spree” in 2015, and if market conditions remain favourable, it may also go ahead with an initial public offering, Chief Executive Shane Smith said.

European regulator Dutch Data Protection Agency may slap Google with a 15 million euro ($18.66 million) fine for usage and storage of personal data. The regulator demanded that the Mountain View headquartered-company ask for unambiguous consent for using users’ personal data between its services like Google Maps and YouTube.

UK-based company Audioboom has struck a deal with Audible, a subsidiary of Amazon, to offer audiobook snippets. Audioboom, which distributes audio content for media organisations like BBC and Reuters, will receive upfront payment for any new users registering with Audible through the platform and a percentage of the online retail sales.

Bank of Cyprus’ shares are set to resume trading, 22 months after the lender was rattled by a financial crisis that struck the mediterranean country.

 

NYT

* The gunman who seized hostages in downtown Sydney was known as a deeply troubled man with a pending case involving the murder of his former wife. (http://nyti.ms/1wCOhY7)

* Billionaire investor Steven A. Cohen, who managed to fend off a criminal insider trading investigation of himself, if not of his former hedge fund, is looking for a former prosecutor and several agents from the Federal Bureau of Investigation to join his new $10 billion investment firm, Point72 Asset Management, said several people briefed on the matter, who spoke on the condition of anonymity. (http://nyti.ms/1yU3UbZ)

* Risking his political standing, Iran’s president has stressed he was determined to clinch a nuclear deal and take on the conservative forces who would prefer not to see an agreement with the West, even if that means continued economic sanctions on Iran. (http://nyti.ms/1GK3YiQ)

* Russia’s government is in the middle of an all-out fight to preserve the value of the ruble in the face of plummeting oil prices and Western sanctions over the Ukraine crisis. In the boldest move yet to stanch the bleeding, the Central Bank of Russia has announced a stunning interest rate increase. (http://nyti.ms/13ssQ2l)

* The French government has announced that the company’
s lower-priced UberPop service would be banned on Jan. 1, the latest in a number of setbacks for Uber, which is facing bans in several cities worldwide. (http://nyti.ms/1wD7fhd)

* Activity in China’s factory sector contracted in December for the first time in seven months as new orders declined, a preliminary private survey has showed, fuelling expectations that more stimulus will be needed to avert a sharper economic slowdown. (http://nyti.ms/1305Hn3)

* British Telecom, the former telecommunications monopoly in Britain, which spun off its previous mobile carrier unit in 2001, has said that it had entered into exclusive talks to acquire EE, the British mobile phone business of Orange of France and Deutsche Telekom of Germany, for about 12.5 billion pounds ($19.56 billion). (http://nyti.ms/1yWPrkx)

 

Canada

THE GLOBE AND MAIL

** Export Development Canada is lending British telecom giant Vodafone Group PLC $850 million, the bulk of which will be used to finance the purchase of BlackBerry Ltd handsets and services. The financing package comes at an opportune time for BlackBerry, which is poised this week to unveil its latest smartphone. (http://bit.ly/1Gq7osL)

** Talisman Energy Inc has agreed to be acquired by Spain’s Repsol SA in an $8.3 billion deal that allows Respol to expand in Canada and internationally at a time of weak energy markets. (http://bit.ly/1xoeDzU)

** A report to be released on Tuesday by the Canadian Parks and Wilderness Society says the animals, which roam the northern forests that stretch from British Columbia to Alberta, continue to die off as their ranges are eroded by human activity. (http://bit.ly/1BSDJsv)

NATIONAL POST

** After a year and a half in which the Liberals led in the national polls by six to 10 points, the gap has narrowed appreciably in recent weeks. As of last month, an average of polls compiled by threehundredeight.com put the Grits ahead of the governing Conservatives by just three points, 35-32. The latest Ekos poll has them closer still, just a point apart: effectively, a tie. (http://bit.ly/1svVqFU)

** Canadian heavy crude traded below $40 a barrel for the first time in five years just as a surge of new projects are scheduled to start operation. A total of 14 new oilsands projects are scheduled to start next year, with a combined capacity of 266,240 barrels a day, according to data published by Oilsands Review. That’s 36 percent more than was started in 2014. (http://bit.ly/1zkILMd)

 

China

CHINA SECURITIES JOURNAL

– China is pushing forward with the development of the new free trade zone in Guangdong province, with a new trade and service agreement with neighbouring Hong Kong and Macau likely to be signed soon, the paper said.

SECURITIES TIMES

– China Securities Regulatory Commision (CSRC) fined Ping An Securities 37 million yuan ($5.98 million) for failing to perform due diligence when underwriting Shenzhen Hirisun Technology Inc’s IPO.

PEOPLE’S DAILY

– Reform, the country’s key task for economic work next year, is also crucial to promote healthy economic development and social harmony, the paper, which acts as a mouthpiece for the ruling Communist Party, said in a commentary.

 

Britain

The Times

BT IN EXCLUSIVE TALKS TO BUY EE FOR 12.5 BLN STG

The British mobile phone sector is set for its biggest shake-up since the turn of the century after BT Group Plc entered exclusive negotiations to acquire EE for 12.5 billion pounds. (http://thetim.es/1suKoAv)

The Guardian UK FACTORY ORDERS CLIMB TO FOUR-MONTH HIGH, SAYS CBI

Britain’s manufacturers have had a decent end to the year, but a tough global economy is making life difficult for UK exporters, the Confederation of British Industry (CBI) said. (http://bit.ly/1Af4WSi) ALISTAIR DARLING’S 5 AM PLEA TO PM IGNORED AFTER SCOTTISH NO VOTE

David Cameron ignored a 5 am plea from Alistair Darling in the immediate aftermath of the Scottish referendum to avoid throwing the Scottish National party a lifeline by announcing plans to restrict the voting rights of Scottish MPs. (http://bit.ly/1sxedpX)

The Telegraph

BGC BUYS BRITISH BROKER RP MARTIN BGC Partners plans to take over rival brokerage RP Martin’s British assets before buying out its European offices next year for an undisclosed sum. (http://bit.ly/1wbvnsR)

FINANCIAL FUND MANAGER WHO DODGED THOUSANDS IN TRAIN FARES BANNED FROM FINANCIAL INDUSTRY

The former BlackRock Inc fund manager who exploited a loophole to dodge thousands of pounds in train fares has been banned from working in financial services. The Financial Conduct Authority said Jonathan Burrows had been barred “from performing any function in relation to any regulated activities for not being fit and proper”. (http://bit.ly/1GJHluN)

Sky News

EX-JJB SPORTS CEO JAILED OVER 1 MLN STG FRAUD The former boss of JJB Sports Plc has been jailed for four years, after pocketing about 1 million pounds in what was described as a “very greedy fraud”. A court heard that Chris Ronnie owed more than 10 million pounds to an Icelandic bank when he diverted funds from suppliers going to the sportswear firm. (http://bit.ly/12YRTcE)

The Independent

ITV AND SATELLITE RIVALS BUTT HEADS OVER PAY-TV FEES FOR FREE CHANNELS

A war of words broke out between ITV and its cable and satellite rivals over the X Factor broadcaster’s demand that it receive fees from pay-TV platforms for airing its free channels. (http://ind.pn/1yTTdGv)

 

 

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Housing starts for November at 8:30–consensus up 3.1% to 1.04M rate
Housing permits for November at 8:30–consensus down 2.5% to 1.06M rate
Markit flash manufacturing PMI for December at 9:45–consensus 55.2

ANALYST RESEARCH

Upgrades

Apollo Global (APO) upgraded to Buy from Neutral at Citigroup
Camden Property (CPT) upgraded to Buy from Neutral at Citigroup
Cirrus Logic (CRUS) upgraded to Perform from Underperform at Oppenheimer
Equity Residential (EQR) upgraded to Buy from Neutral at Citigroup
Flagstar Bancorp (FBC) upgraded to Outperform from Market Perform at Keefe Bruyette
GrubHub (GRUB) upgraded to Buy from Neutral at Goldman
Parkway Properties (PKY) upgraded to Neutral from Sell at Citigroup
Plexus (PLXS) upgraded to Strong Buy from Buy at Needham
RCS Capital (RCAP) upgraded to Buy from Neutral at Citigroup
Range Resources (RRC) upgraded to Equal Weight from Underweight at Barclays
Rite Aid (RAD) upgraded to Buy from Neutral at UBS
SunPower (SPWR) upgraded to Overweight from Equal Weight at Morgan Stanley
Vulcan Materials (VMC) upgraded to Conviction Buy from N
eutral at Goldman

Downgrades

Abraxas Petroleum (AXAS) downgraded to Neutral from Outperform at RW Baird
American Eagle Energy (AMZG) downgraded to Hold from Buy at Wunderlich
Approach Resources (AREX) downgraded to Hold from Buy at Wunderlich
Autodesk (ADSK) downgraded to Underperform from Neutral at BofA/Merrill
Basic Energy (BAS) downgraded to Sell from Hold at Wunderlich
Canadian Oil Sands (COSWF) downgraded to Underweight from Equal Weight at Barclays
Dollar Tree (DLTR) downgraded to Hold from Buy at Deutsche Bank
Douglas Emmett (DEI) downgraded to Neutral from Buy at Citigroup
Eclipse Resources (ECR) downgraded to Equal Weight from Overweight at Barclays
Emerald Oil (EOX) downgraded to Sell from Hold at Wunderlich
Entravision (EVC) downgraded to Hold from Buy at Evercore ISI
Essent Group (ESNT) downgraded to Market Perform from Outperform at Keefe Bruyette
Fifth Street Senior (FSFR) downgraded to Market Perform at JMP Securities
First American (FAF) downgraded to Market Perform from Outperform at Keefe Bruyette
General Motors (GM) downgraded to Sector Perform from Outperform at RBC Capital
Genesee & Wyoming (GWR) downgraded to Neutral from Buy at BofA/Merrill
Jones Energy (JONE) downgraded to Equal Weight from Overweight at Barclays
MGIC Investment (MTG) downgraded to Market Perform from Outperform at Keefe Bruyette
Macerich (MAC) downgraded to Neutral from Buy at Citigroup
Martin Marietta (MLM) downgraded to Buy from Conviction Buy at Goldman
Microsemi (MSCC) downgraded to Perform from Outperform at Oppenheimer
Microsoft (MSFT) downgraded to Underperform from Neutral at BofA/Merrill
Northern Oil and Gas (NOG) downgraded to Hold from Buy at Wunderlich
Oasis Petroleum (OAS) downgraded to Hold from Buy at Wunderlich
Pioneer Energy (PES) downgraded to Hold from Buy at Wunderlich
Priceline (PCLN) downgraded to Buy from Conviction Buy at Goldman
Resolute Energy (REN) downgraded to Hold from Buy at Wunderlich
SandRidge Energy (SD) downgraded to Sell from Hold at Wunderlich
Shutterfly (SFLY) downgraded to Neutral from Buy at Goldman
Tanger Factory (SKT) downgraded to Neutral from Buy at Citigroup
Weingarten Realty (WRI) downgraded to Neutral from Buy at Citigroup

Initiations

Antero Resources (AR) initiated with an Outperform at Oppenheimer
BB&T (BBT) initiated with a Neutral at Guggenheim
Bank of America (BAC) initiated with a Buy at Guggenheim
CIT Group (CIT) initiated with a Buy at Guggenheim
Ciena (CIEN) initiated with a Neutral at Wedbush
Cimarex Energy (XEC) initiated with a Perform at Oppenheimer
Citigroup (C) initiated with a Neutral at Guggenheim
Cooper Companies (COO) initiated with a Perform at Oppenheimer
Coty (COTY) initiated with a Hold at KeyBanc
DURECT (DRRX) initiated with a Hold at Cantor
Escalade (ESCA) initiated with an Outperform at Imperial Capital
Extended Stay America (STAY) initiated with a Market Perform at JMP Securities
F.N.B. (FNB) Corp. initiated with a Neutral at JPMorgan
First Horizon (FHN) initiated with a Buy at Guggenheim
Goldman Sachs (GS) initiated with a Buy at Guggenheim
Green Plains (GPRE) initiated with a Neutral at Goldman
Infinera (INFN) initiated with a Neutral at Wedbush
JPMorgan (JPM) initiated with a Neutral at Guggenheim
Morgan Stanley (MS) initiated with a Buy at Guggenheim
Neff (NEFF) Corporation initiated with a Buy at Jefferies
Neff (NEFF) initiated with an Overweight at Piper Jaffray
Newfield Exploration (NFX) initiated with an Outperform at Oppenheimer
Nike (NKE) initiated with a Market Perform at Cowen
PNC Financial (PNC) initiated with a Neutral at Guggenheim
Peak Resorts (SKIS) initiated with an Outperform at FBR Capital
Peak Resorts (SKIS) initiated with an Outperform at Oppenheimer
Ralph Lauren (RL) initiated with an Outperform at Cowen
Regions Financial (RF) initiated with a Neutral at Guggenheim
Rexnord (RXN) initiated with a Buy at KeyBanc
Santander Consumer (SC) initiated with an Outperform at JMP Securities
ServiceNow (NOW) initiated with a Buy at Goldman
Standex (SXI) initiated with a Buy at Wunderlich
SunTrust (STI) initiated with a Neutral at Guggenheim
Surgical Care Affiliates (SCAI) initiated with a Hold at KeyBanc
U.S. Bancorp (USB) initiated with a Neutral at Guggenheim
Under Armour (UA) initiated with an Outperform at Cowen
Wells Fargo (WFC) initiated with a Neutral at Guggenheim
Whiting Petroleum (WLL) initiated with an Outperform at Oppenheimer

COMPANY NEWS

Repsol (REPYY) to acquire Talisman (TLM) for $8 per share in cash, for a total transaction value of approximately $13B, including debt
Archer Daniels (ADM) to sell global cocoa business to Olam (OLMIY) for $1.3B
Boeing (BA) raised its dividend 25%, authorized $12B share repurchase plan
Sony Pictures Entertainment confirmed a significant system disruption on Monday, November 24. The company believes names, addresses, social security numbers are among the personally identifiable information individuals provided to SPE that potentially may have been obtained by unauthorized individuals
Bank of England said seven of eight banks passed stress test. Royal Bank of Scotland (RBS), Lloyds (LYG) and Co-operative were found to be the most susceptible to a housing crash and spike in unemployment
Prothena (PRTA) received FDA fast track designation for NEOD001
Yamana Gold (AUY) reported new discoveries at Chapada, El Penon
Abraxas Petroleum (AXAS) forecast Q4 volumes 6,700-6,800 Boepd and FY15 production 7,200-7,300 Boepd

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Fifth Street Asset (FSAM), VeriFone (PAY)

Companies that missed consensus earnings expectations include:
Willbros Group (WG), Willbros Group (WG)

Companies that matched consensus earnings expectations include:
FuelCell (FCEL), PolyMet Mining (PLM)

Coca-Cola (KO) forecast FY14 comparable currency neutral EPS growth of 4%-5% and a currency headwind of 7%. The company sees Q4 comparable currency neutral EPS growth to be even to slightly positive, with a 9 point currency headwind on EPS. The company sees  FY15 comparable currency neutral EPS growth similar to FY14
Magellan Health (MGLN) reaffirms FY14 guidance, sees FY 15 adj. EPS $3.28-$3.73, consensus $2.67
3M Company (MMM) backs long-term EPS objective of up 9%-11% per year, sees FY15 EPS $8.00-$8.30, consensus $8.20
Whirlpool (WHR) sees FY14 ongoing EPS $10.90-$11.10, consensus $11.65, sees FY15 ongoing EPS $14.00-$15.00, consensus $14.50
VeriFone (PAY) sees Q1 EPS 40c, consensus 45c, sees FY15 EPS $1.85-$1.90, consensus $1.97

NEWSPAPERS/WEBSITES

Google (GOOG) to step up challenge to Amazon (AMZN) with new shopping features, WSJ reports
Sony (SNE) says film studio’s business remains strong, WSJ reports
Regulator finds deficiencies with Ocwen (OCN), NY Times reports
More companies signing up for Apple Pay (AAPL), NY Times reports
Google (GOOG) facing Dutch privacy fine of up to $19M, WSJ reports

SYNDICATE

Exact Sciences (EXAS) files to sell 4M shares of common stock
Millennial Media (MM) files to sell 30.73M shares for holders
Solar Power (SOPW) enters definitive agreements on up to $140M in private placement
bluebird bio (BLUE) files to sell $150M in common stock




via Zero Hedge http://ift.tt/1IX9YbL Tyler Durden

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