- EU finalises Russian sanctions as BP warns of impact on business (FT)
- Geopolitical Risk Rises for Global Investors (BBG)
- Jaded Argentines brace for looming debt default (Reuters)
- In Argentina, Mix of Money and Politics Stirs Intrigue Around Kirchner (WSJ)
- Mom ‘Trusting God’ for Ebola-Infected U.S. Doctor’s Life (BBG)
- Thanks NSA: Tech Companies Reel as NSA’s Spying Tarnishes Reputations (BBG)
- Goldman unit eyes foray into China amid metals financing scandal (Reuters)
- Cash out time: London’s Gherkin Tower Offered for Sale by Its Lenders (BBG)
- Apenomics strikes again: McDonald’s Japan axes profit guidance amid food safety scandal (FT)
- Do you see what happens Larry when you are the only USDJPY bid? Nomura Profit Falls More Than Estimated on Broking Slump (BBG)
- UBS, Deutsche drawn into ‘dark pool’ probes (FT)
- Morgan Stanley Said to Boost Junior Banker Salaries 25% (BBG)
- Ban gold, diamonds? Gold, diamonds feed Central African religious violence (Reuters)
- Italian police seize €104m from Nomura after fraud probe (FT)
- Deutsche Bank Reports Rise in Pretax Profit (WSJ)
Overnight Media Digest
WSJ
* Israel’s leaders said they were escalating the military campaign in Gaza and told the country to prepare for a prolonged operation, defying international demands for an immediate cease-fire. (http://on.wsj.com/1rLLcop)
* Pro-Russia rebels in eastern Ukraine saw some of their worst battlefield setbacks in weeks Monday as the West agreed on tougher sanctions aimed at forcing Moscow to cut support for the militias-posing fresh challenges on two fronts for Russian President Vladimir Putin. (http://on.wsj.com/UHNOF3)
* The battle for America’s poorest consumers intensified on Monday with Dollar Tree Inc’s agreement to buy rival Family Dollar Stores Inc for about $8.5 billion. (http://on.wsj.com/X3tX58)
* Negotiations between Bank of America Corp and the Justice Department have hit a snag over whether the firm should pay a cash penalty for the dealings of Countrywide Financial Corp and Merrill Lynch & Co Inc. (http://on.wsj.com/1rzefYR)
* Money-laundering allegations against Argentine businessman Lázaro Báez are focusing attention on the wealth of Argentine President Cristina Kirchner and her late husband Néstor Kirchner. (http://on.wsj.com/1tV7Cl8)
* A Chinese government anticorruption investigation that already has swept aside dozens of officials is now stretching into Canada. A shake-up has hit state-run China National Petroleum Corp.’s Canadian operations and a billion-dollar oil-sands project is now in limbo. (http://on.wsj.com/WL2fu2)
* Zillow Inc and Trulia Inc, the two online real-estate giants that announced plans to merge, have a message for real-estate agents that have grown increasingly concerned about their market clout: We’re partners, not competitors. (http://on.wsj.com/1o6txQV)
* Hundreds of small and regional banks are clinging to a practice that can cause consumers to incur multiple overdraft fees in the same day, even as the biggest lenders are backing away. (http://on.wsj.com/1l8XwHW)
* Oracle Corp cut its yearly stock-option grants to Chief Executive Larry Ellison and other top executives nearly a year after a wave of shareholder opposition to compensation paid to the chief. (http://on.wsj.com/1l8VvM1)
FT
Officials from China’s State Administration for Industry and Commerce conducted unannounced visits on Monday to some of Microsoft Corp’s local offices, making it the latest U.S. company to be targeted by an antitrust investigation in China.
Bank of Cyprus has raised 1 billion euros ($1.34 billion) from selling shares to investors including U.S. private equity specialist Wilbur Ross and the European Bank for Reconstruction and Development.
Aberdeen Asset Management Chief Executive Officer Martin Gilbert shrugged off the investment group’s fifth successive quarter of outflows as its exposure to emerging markets proved costly.
Dollar Tree has said it will buy Family Dollar for $8.5 billion, marrying two of the United States’ largest discount stores at a time when changing consumer habits are piling pressure on retailers across the country.
China’s Baidu, a search engine that has mimicked U.S. technology group Google Inc’s biggest innovations, is now experimenting with its own version of a “highly autonomous” self-driving car.
NYT
* An international court has awarded the shareholders of the defunct Yukos oil company more than $50 billion, ruling that the Russian government wrongly seized the company from one of the country’s most powerful oligarchs. (http://nyti.ms/1tUR50D)
* China has named Microsoft among the foreign technology companies likely to come under tighter government checks for security risks after the revelations by Edward Snowden about the U.S. government surveillance. Officials from the State Administration for Industry and Commerce visited Microsoft offices in Beijing, Shanghai, Guangzhou and Chengdu, Joanna Li. (http://nyti.ms/1nBlXCs)
* The United States and Europe agreed to sharply escalate economic sanctions against Russia amid worries that Moscow is stepping up its intervention in Ukraine and may be setting the stage for an outright invasion. The two sides settled on measures that would target Russia’s financial, energy and military sectors. (http://nyti.ms/1qcc2l1)
* Dollar Tree Inc proposed an $8.5 billion takeover of Family Dollar Stores Inc that will form a new giant of the dollar-discount industry. By buying Family Dollar, Dollar Tree will expand markedly, to 13,000 stores in 48 states and in Canada, as well as to $18 billion in annual revenue. (http://nyti.ms/1rZLeGN)
* Wall Street investment banks, led by JPMorgan Chase & Co and Goldman Sachs Group Inc, are estimated to have collected, or will soon collect, nearly $1 billion in fees over the last three years advising and persuading American companies to move the address of their headquarters abroad. (http://nyti.ms/1Asfmzz)
* Clarence Otis, chairman and CEO of Darden Restaurants Inc, will step down when the board chooses his successor, or by the year end. The move came on the day that Darden completed the sale of the Red Lobster, the seafood chain that gave rise to the restaurant’s empire, in a transaction that was hotly opposed by the activist investors. (http://nyti.ms/1tl8Yba)
* Morgan Stanley plans to increase base salaries for junior and mid level bankers by as much as 25 percent. The change will apply to associates and vice presidents in investment banking and capital markets. The bump in base salary is intended to provide the bankers with more cash in the near term, since bonuses are often deferred into the future. (http://nyti.ms/1nPCkwl)
* The Lloyds Banking Group agreed to pay more than $380 million to British and United States authorities to resolve investigations into the manipulation of rates, including one used to determine fees paid by Lloyds for taxpayer-backed funding during the financial crisis. (http://nyti.ms/1rz3GoL)
* The Federal Aviation Administration said on Monday it planned to fine Southwest Airlines $12 million for repair violations on some of its Boeing 737 jets, citing some faulty repairs the airlines made since 2006. Southwest has 30 days to respond to the complaint and can negotiate to reduce the fine. (http://nyti.ms/1tlcO4c)
* Governor Andrew Cuomo delivered a feisty and unrepentant defense of his handling of an anti-corruption panel he created and then abruptly shut down, after five days in seclusion during which he encountered some of the harshest criticism he has faced as governor. (http://nyti.ms/X7yDqG)
* Virgin America, the sleek low-cost American airline partly owned by Richard Branson, filed for an initial public offering on Monday after posting its first annual profit. The airline gave a placeholder fund-raising target of $115 million, a figure used only to determine filing fees. (http://nyti.ms/1oE8Ctq)
* A judge issued a sweeping victory Monday for Rochelle Sterling, ruling that she had the authority to sell the Los Angeles Clippers to the businessman Steve Ballmer, who has agreed to pay a record $2 billion for the franchise. (http://nyti.ms/1AstfO0)
Canada
THE GLOBE AND MAIL
* Things became chaotic even before a Toronto mayoral election debate began on Monday as Mayor Rob Ford and his team drew police intervention during a dispute with organizers.(http://bit.ly/1lQP7J6)
* A dispute between Toronto’s city council and Ontario’s alcohol licensing board has left many new restaurants in the city facing months-long delays in obtaining a liquor licence, which they say may prevent them from opening at all. (http://bit.ly/1nCc7Ar)
Reports in the business section:
* Ottawa will auction a prime chunk of the public airwaves in March next year, raising at least C$162-million for federal coffers and it hopes to prompt more competition in Canada’s mobile phone market. (http://bit.ly/1l9c8XJ)
NATIONAL POST
* Toronto Deputy Mayor Norm Kelly says it is “not unreasonable” to call on integrity commissioner Janet Leiper to complete an investigation into allegations of misconduct by Toronto Mayor Rob Ford and Councillor Doug Ford in time for the October provincial election. (http://bit.ly/1nCtuAW)
* The Canadian Department of Foreign Affairs, Trade and Developments wants to operate a shuttle service for employees between its three main buildings, two of which are only a three-minute walk apart. The department outlined the plan for the dedicated shuttle service in a tender posted earlier this month on a government website. (http://bit.ly/1k5eT1f)
FINANCIAL POST
* Merger and acquisition activity is on the rise globally, and some 40 percent of Canadian firms expect to grow through deals over the next three years, a survey by Grant Thornton LLP said.(http://bit.ly/1AsCtdh)
* The Canada-based energy firm Athabasca Oil Corp’s shares fell more than 7 percent on Monday as the company sought to reassure investors over receipt of a cash payment from Chinese energy giant, PetroChina Co Ltd. (http://bit.ly/1rMuIwk)
Hong Kong
SOUTH CHINA MORNING POST
— The head of Hong Kong’s de facto central bank has rejected calls from some lawmakers to use part of the city’s HK$3 trillion Exchange Fund to pay for infrastructure projects or for social welfare. Norman Chan Tak-lam, the chief executive of the Monetary Authority, said the fund needs every penny to cope with unexpected financial crises. (http://bit.ly/1uBAoev)
— One in five diabetics in Hong Kong is under the age of 40 and the number is expected to double by 2030. A Chinese University of Hong Kong study has found that diabetes is being diagnosed in Hongkongers at a younger age, with the median age now 50, down from 57 in 1990. The youngest person with diabetes in the study was just 3 years old. (http://bit.ly/1k4Pgxr)
— The five leading business chambers in Hong Kong formed a united front to oppose Occupy Central, warning that the pro-democracy civil disobedience movement might damage the city’s economy like that caused by the political protests in Thailand. (http://bit.ly/1l8uo3D)
THE STANDARD
— Singapore is expected to return to Hong Kong an 11-year-old boy who was found wandering along Marina Promenade in the city state last week after he was allegedly dumped by his father. The father has been questioned by Hong Kong police and is out on bail. (http://bit.ly/1zomo6Z)
— Chun Wo Development will explore overseas business through joint ventures and may introduce strategic shareholders, Chairman Dominic Pang Yat-ting said. (http://bit.ly/1zon24o)
HONG KONG ECONOMIC JOURNAL
— Investment fund Pacific Alliance Asia Opportunity Fund plans to sell 250 million shares, or 3.3 percent of the issued share capital, of China South City Holdings Ltd raising up to HK$1.025 billion ($132.3 million), according to a share-sale document.
HONG KONG ECONOMIC TIMES
— The retail portion of the initial public offering of China’s pork company WH Group Ltd is seen eight times oversubscribed in Hong Kong, according to market sources.
APPLE DAILY
— Some 77 percent of 1,249 Hong Kong people interviewed in the past two days said they will not visit McDonald’s restaurants in the city in the short term after the latest food scandal, according to a survey conducted by Apple Daily.
Britain
The Times
MYSTERY ABERDEEN CLIENT PULLS OUT 4.2 BLN STG
Fears of a renewed emerging markets sell-off by investors have been fuelled after it was revealed that an anonymous client withdrew 4.2 billion pounds ($7.13 billion) from Aberdeen Asset Management, Europe’s largest fund manager. (http://thetim.es/1qHXzCd)
ASTRA ENLISTS RIVALS IN PLAN TO DEVELOP CANCER TESTS
AstraZeneca has signed up Swiss and Dutch rivals to create blood tests to help identify patients that will benefit from its lung cancer drugs. (http://thetim.es/1rZi4HS)
SKY’S THE LIMIT AS GHERKIN SALE LOOMS
Agents have been appointed to sell the “Gherkin” skyscraper in what will be one of the most closely watched property sales in the Square Mile for years. (http://thetim.es/1mWvv60)
The Guardian
LLOYDS SUSPENDS SEVEN PEOPLE AFTER 226 MLN STG BILL FOR RIGGING INTEREST RATES
Lloyds Banking Group have suspended seven employees after it was hit with a 226 million pound bill from regulators on both sides of the Atlantic for rigging crucial interest rates. (http://bit.ly/1uAusSY)
RECKITT BENCKISER SET TO FLOAT U.S. ARM RB PHARMACEUTICALS
Reckitt Benckiser, the consumer goods giant that makes Nurofen and Dettol, plans to spin off its U.S.-based pharmaceutical business. (http://bit.ly/1o7UnIi)
The Telegraph
SHOULD BANKERS HAVE TO SWEAR AN OATH? SIR RICHARD LAMBERT SEEMS TO THINK SO
The head of the review into standards in the British banking industry is this week expected to reignite the question of whether an oath for bankers is needed despite rejecting the idea when producing his original report. (http://bit.ly/X6BnVc)
VIRGIN AMERICA FILES FOR U.S. IPO
Billionaire entrepreneur Richard Branson could be in line for a $220 million windfall, after a bold gamble to launch Virgin America, his low-cost U.S. airline, in the teeth of the biggest crisis the industry had ever seen. (http://bit.ly/1ArCXAp)
Sky News
EX-TESCO CHIEF TO CHAIR STRUGGLING MORRISONS
Andrew Higginson, a former finance director of Tesco , is to become the next chairman of Wm Morrison, the UK’s fourth-biggest grocer, as it combats falling sales amid competition from lower-priced rivals. (http://bit.ly/X559tx)
Fly On The Wall Pre-Market Buzz
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
Case-Shiller 20-city home price index for May at 9:00–consensus up 9.9% from last year
Consumer confidence for July at 10:00–consensus 85.5
ANALYST RESEARCH
Upgrades
Albemarle (ALB) upgraded to Buy from Hold at Topeka
Costco (COST) upgraded to Conviction Buy from Neutral at Goldman
Family Dollar (FDO) upgraded to Neutral from Underweight at Piper Jaffray
Ferrellgas Partners LP (FGP) upgraded to Neutral from Sell at Citigroup
Higher One (ONE) upgraded to Overweight from Underweight at Piper Jaffray
MarkWest Energy (MWE) upgraded to Buy from Hold at Wunderlich
Matador (MTDR) upgraded to Outperform from Market Perform at BMO Capital
MicroStrategy (MSTR) upgraded to Outperform from Market Perform at JMP Securities
Sally Beauty (SBH) upgraded to Buy from Neutral at Citigroup
Zions Bancorp (ZION) upgraded to Market Perform from Underperform at Bernstein
Downgrades
AcelRx (ACRX) downgraded to Neutral from Overweight at Piper Jaffray
Alliance Fiber Optic (AFOP) downgraded to Neutral from Buy at B. Riley
Allstate (ALL) downgraded to Market Perform from Outperform at William Blair
Avery Dennison (AVY) downgraded to Hold from Buy at Topeka
Barnes Group (B) downgraded to Hold from Buy at Deutsche Bank
Black Diamond (BDE) downgraded to Neutral from Overweight at Piper Jaffray
BreitBurn Energy (BBEP) downgraded to Neutral from Buy at Citigroup
CoreLogic (CLGX) downgraded to Market Perform from Outperform at Keefe Bruyette
Dollar Tree (DLTR) downgraded to Market Perform from Outperform at BMO Capital
First Potomac (FPO) downgraded to Market Perform from Outperform at Raymond James
Golar LNG Partners (GMLP) downgraded to Neutral from Buy at Citigroup
Horizon Pharma (HZNP) downgraded to Neutral from Overweight at Piper Jaffray
Legacy Reserves (LGCY) downgraded to Neutral from Buy at Citigroup
RBC Bearings (ROLL) downgraded to Neutral from Buy at Goldman
Regal Entertainment (RGC) downgraded to Hold from Buy at Ascendiant
Thoratec (THOR) downgraded to Market Perform from Outperform at Wells Fargo
Trulia (TRLA) downgraded to Hold from Buy at Needham
Vanguard Natural (VNR) downgraded to Neutral from Buy at Citigroup
Wal-Mart (WMT) downgraded to Neutral from Buy at Goldman
Initiations
Abengoa Yield (ABY) initiated with a Neutral at HSBC
Boston Scientific (BSX) initiated with a Neutral at Sterne Agee
St. Jude Medical (STJ) initiated with a Neutral at Sterne Agee
COMPANY NEWS
Darden (DRI) Chairman and CEO Clarence Otis to step down, board to separate roles. The company appointed lead independent director Charles Ledsinger, Jr., as independent non-executive chairman
Darden (DRI) completed sale of Red Lobster to Golden Gate Capital
UBS (UBS) said ‘responding to inquiries’ on dark pools
Airbus (EADSY) terminated purchase order with Skymark Airlines for A380s
Carlyle Group (CG) to purchase full ownership stake of Acosta from Thomas H. Lee firm
Arrowhead Research (ARWR) CEo Christopher Anzalone told CNBC he is optimistic on Hep B trial data out in Q3 and that the company has enough cash through Phase 3
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Aetna (AET), BP (BP), United Therapeutics (UTHR), M.D.C. Holdings (MDC), Spirit Airlines (SAVE), ExlService (EXLS), Headwaters (HW), Portland General Electric (POR), PGT, Inc. (PGTI), Great Southern Bancorp (GSBC), Silicon Motion (SIMO), Anthera Pharmaceuticals (ANTH), Eastman Chemical (EMN), German American Bancorp (GABC), American Financial Group (AFG), Masco (MAS), Seacoast Banking (SBCF), HealthSouth (HLS), Park National (PRK), Advent Software (ADVS), Denny’s (DENN), Mavenir Systems (MVNR), Luminex (LMNX), Cognex (CGNX), Innophos Holdings (IPHS), Alliance Fiber Optic (AFOP), Intevac (IVAC), GigOptix (GIG), Ducommun (DCO), Bank of Hawaii (BOH), Integrated Device (IDTI), W. R. Berkley (WRB), XL Group (XL), Plum Creek Timber (PCL), Greenhill & Co. (GHL), Norwegian Cruise Line (NCLH), Heartland Financial (HTLF), J & J Snack Foods (JJSF)
Companies that missed consensus earnings expectations include:
Herbalife (HLF), Medidata Solutions (MDSO), Universal American (UAM), Talisman Energy (TLM), AudioCodes (AUDC), Jacobs Engineering (JEC), HomeStreet (HMST), Crane (CR), Seaspan (SSW), PRGX Global (PRGX), Owens & Minor (OMI), Range Resources (RRC), TriCo Bancshares (TCBK), National Interstate (NATL), PartnerRe (PRE), MicroStrategy (MSTR), CNO Financial (CNO), Peregrine (PSMI), Montpelier Re (MRH), Danaos (DAC), Meru Networks (MERU), Tile Shop (TTS), PDF Solutions (PDFS)
Companies that matched consensus earnings expectations include:
Harris (HRS), Sensata (ST), Stock Building Supply (STCK), Heritage Oaks (HEOP), Harmonic (HLIT), Exactech (EXAC), MiMedx (MDXG)
NEWSPAPERS/WEBSITES
Bank of America (BAC), DOJ talks hit snag, WSJ reports
Toyota (TM) should recall older Camry hybrids, Consumer Reports says
AECOM Technology (ACM) said to acquire Hunt Construction, WSJ reports
Dollar General (DG) rejected chance to bid on Family Dollar (FDO), Bloomberg reports (DLTR)
McDonald’s (MCD) China will have to obtain meat from local suppliers, McDonald’s Japan to shift to Thailand suppliers, China Daily reports
eBay (eBAY) executives Carges, Doerger sold over $2M in stock, Barron’s says
SYNDICATE
Brandywine Realty (BDN) files to sell 18M shares of common stock
Meridian Interstate Bancorp (EBSB) 32.5M share Secondary priced at $10.00
Spark Energy (SPKE) 3M share IPO priced at $18.00
TCP Capital (TCPC) files to sell 5.4M shares of common stock
Zoe’s Kitchen (ZOES) files to sell 4.6M shares for holders
via Zero Hedge http://ift.tt/1oFA35W Tyler Durden