- Thank you market Chief Risk Officer Bernanke/Yellen: Calpers to Exit Hedge Funds, Divest $4 Billion Stake (BBG)
- World stocks hit one-month low, caution ahead of Fed (Reuters)
- U.S. Efforts to Build Coalition Against Islamic State in Iraq, Syria Are Hampered by Sectarian Divide (WSJ)
- Wildfires rage in California drought, hundreds forced to flee (Reuters)
- Time to throw away some more good money: Sears Borrows $400 Million From Lampert’s ESL Investments (BBG)
- United Offers $100,000 Buyouts to Flight Attendants (BBG)
- Biggest Banks Said to Overhaul FX Trading After Scandals (BBG)
- You mean you have to pay? Administration threatens to cut off ObamaCare subsidies to 360,000 (The Hill)
- RBS Said to Dismiss Most of Team Overseeing Central Europe Debt (BBG) they will be hired by the ECB
- Boeing-Lockheed venture said teaming with Bezos on rocket engine (Reuters)
- German Investor Confidence Falls to Weakest Since 2012 (BBG)
- Blackstone Group seeks to raise $16 billion for its latest fund (WSJ)
- U.K. Inflation Slows to Match 5-Year Low on Food Prices (BBG)
- Ditching Monarchy Is Step Too Far for Scots Nationalists (BBG)
- European Stocks Fall to Two-Week Low Before Fed Meeting (BBG)
- How a Facebook Group Persuaded Coca-Cola to Rerelease Surge (BBG)
Overnight Media Digest
WSJ
* The U.S. military will deploy about 3,000 personnel to West Africa to coordinate international aid, build treatment centers and train health-care workers as part of President Barack Obama’s offensive against a rapidly worsening Ebola outbreak, a senior administration official said Monday. (http://on.wsj.com/1sdLCzh)
* Anheuser-Busch InBev NV is talking to banks about financing a potential megadeal, perhaps reaching 75 billion pounds ($121.67 billion), to buy global beer rival SABMiller Plc , according to a person familiar with the matter. (http://on.wsj.com/1m9VAon)
* Citigroup Inc released more details about what a severe recession might look like in coming years and how it could affect the firm, as large U.S. banks run themselves through tests to prepare for next year’s Federal Reserve checkup. (http://on.wsj.com/1wn0LlK)
* It’s no secret that many physicians hate the electronic-medical-records systems they use, saying they are cumbersome, poorly designed and detract from patient care. Amplifying those concerns, the American Medical Association on Tuesday is calling for a major overhaul of EMR systems to make usability and high-quality patient care a higher priority. (http://on.wsj.com/1tZAFTO)
* The largest U.S. public pension plan is getting out of hedge funds as part of an effort to simplify its assets and reduce costs, a retreat that could prompt other cities and states to consider similar moves. The California Public Employees’ Retirement System said Monday it would shed its entire $4 billion investment in hedge funds over the next year. (http://on.wsj.com/1DdcZ57)
* Microsoft Corp is hoping a cult videogame built around virtual blocks will help fix the company’s real-world problems, even if the brains behind the brand aren’t sticking around. The software giant’s $2.5 billion deal to buy Mojang AB, maker of the Minecraft videogame, gives Microsoft an entertainment property whose devoted fans dress up like game characters, pack YouTube with how-to guides and rush to sign up for Minecraft-themed summer camps. (http://on.wsj.com/1BHM1km)
* Sears Holdings Corp is borrowing $400 million from Chief Executive Edward Lampert’s hedge fund, giving the retailer an infusion for the holidays after it burned through cash over the summer. (http://on.wsj.com/1BHNIyc)
* Alibaba Group Holding Ltd <IPO-BABA.N>, which is in the middle of marketing what could be the world’s largest initial public offering, now thinks it could do a little better. The Chinese e-commerce firm has raised the deal’s price range to $66 to $68 per share, up from the current $60 to $66 a share. Alibaba didn’t increase the number of shares that can potentially be sold. (http://on.wsj.com/1uAhfrf)
FT
Alibaba Group Holding Ltd <IPO-BABA.N> has considerably boosted the amount it plans to raise in its listing on Friday to $66 to $68 after high investor demand in the Chinese e-commerce company.
The largest U.S public pension fund Calpers said it plans to terminate its hedge fund programme, due to a severe blow to a sector that has brought increasing scepticism over its returns. At a time when the future of North Sea oil has become a significant battleground on account of the debate on Scottish independence, ConocoPhillips, the U.S. energy group is looking to sell its stake in the United Kingdom’s largest oilfield. Berlin is pushing Google Inc to disclose the details of the search engine company’s secret formula that has allowed it to monopolise web search in Europe, in a move that is likely to be welcomed by competitors and firmly repelled by the U.S tech company.
Microsoft Corp Chief Executive Officer Satya Nadella’s plans to buy Swedish games company Minecraft for $2.5 billion, his first big acquisition, was probably not what the investors at Wall Street had in mind when they were looking for a statement about Nadella’s plans for his company.
NYT
* The California Public Employees’ Retirement System, United States’ largest pension fund, will eliminate all of its hedge fund investments over the next year on concerns that investments are too complicated and expensive. The pension fund, which oversees $300 billion, said on Monday that it would liquidate its positions in 24 hedge funds and six hedge fund-of-funds – investments that total $4 billion and more than 1 percent of its total investments under management. (http://nyti.ms/1tZbfpm)
* The Federal Communications Commission will hold a round-table discussion on Tuesday to examine whether proposed net neutrality rules should cover mobile broadband. The battle lines will probably be clear: the cellphone companies against nearly everyone else. (http://nyti.ms/1phqEh9)
* The death toll from General Motors Co faulty ignition switch is rising. From the time it began recalling cars for the defect over the winter, G.M. has never publicly revised its original assessment that 13 people died in accidents linked to the problem, saying only that the number could rise. But on Monday, the lawyer GM hired to develop a program to compensate victims raised the automaker’s tally by n
early 50 percent. (http://nyti.ms/1AQQKxD)
* With demand for the Alibaba Group Holding’s stock market debut proving even stronger than expected, the Chinese e-commerce giant has done the only logical thing: set its fund-raising sights even higher. The company raised the price range for its initial public offering to $66 to $68 for each American depositary share, up from $60 to $66, according to a regulatory filing on Monday, pushing up its potential haul from the stock sale to as much as $21.8 billion. (http://nyti.ms/1r1oHuI)
* New York State’s attorney general filed an antitrust lawsuit on Monday seeking to stop Actavis Plc from forcing patients with Alzheimer’s disease to switch to a new version of a widely used drug. The lawsuit contends that the switch is designed to blunt competition from low-priced generic versions of the medication. (http://nyti.ms/YN5QJ1)
* As the city announced a final settlement on Monday with Syncora Guarantee Inc, a creditor that had been one of its chief adversaries, other creditors pressed their opposition to Detroit’s plans to emerge from bankruptcy. (http://nyti.ms/ZnvoMZ)
* Miscues by university management and more tepid investment returns have pulled down Harvard’s results over the last decade, culminating in the June resignation of Jane Mendillo, the chief executive of the Harvard Management Company, who started just before the market collapse in July 2008. Medillo’s performance illustrates not only the vicissitudes of investing but also the revolving-door aspect of an operation like the Harvard endowment, where retaining top talent can be difficult because of the intense scrutiny and the availability of bigger paychecks elsewhere. (http://nyti.ms/ZnvyUu)
Canada
THE GLOBE AND MAIL
** Prime Minister Stephen Harper is promising tax cuts for Canadians in a matter of months, using an election-style rally to fire up conservative troops as Parliament returns and signalling the campaign to win in 2015 has begun in earnest. (bit.ly/XtYZmB)
** Canada is donating C$2.5 million worth of the specialized medical gear used to protect health-care workers who are treating Ebola patients in West Africa, the federal government announced late Monday. (bit.ly/1uCxELH)
** Wind Mobile is poised to announce a deal that will give it the financial backing it needs to become a viable fourth player in Canada’s wireless industry. The company’s Canadian founder is set to buy out Wind’s foreign owner and recapitalize the wireless carrier with the backing of several financial players. (bit.ly/1mamnkA)
NATIONAL POST
** Newly sworn-in Alberta Premier Jim Prentice has appointed a new but smaller cabinet, including two people who aren’t members of the legislature. The new cabinet has 16 ministers and three associate ministers, in addition to the premier, down from 19 ministers and 10 associate ministers under former premier Alison Redford. (bit.ly/1uF0477)
** John Tory announced on Monday he is pulling out of three mayoral debates this week, as his campaign re-calibrates with Doug Ford in the race. (bit.ly/1DdYIoP)
** Nathan Jacobson, the self-described “radioactive” businessman close to senior conservatives, cleared his name Monday in a San Diego courtroom. Justice Janis Sammartino accepted a deal reached between federal prosecutors and Jacobson’s lawyer allowing Jacobson to withdraw his 2008 guilty plea for money laundering in connection with an online pharmacy. (bit.ly/1nZGddT)
China
SECURITIES TIMES
– China’s securities regulator plans to allow asset management units of brokerages to sell products that channel money into private equity.
– Nine government-owned companies in Yunnan province, including Yuntianhua Group and Yunnan Coal Chemical Industry Group Co, have publicly solicited outside investment into 33 subsidiary projects, as part of China’s efforts to diversify the ownership structure of state-owned enterprises.
CBN
– Chinese film producer Huayi Brothers Media Corp said it would invest $130 million to set up a unit in the United States.
CHINA SECURITIES NEWS
– The China Securities Regulatory Commission has approved 11 companies to pursue initial public offerings.
SHANGHAI DAILY
– Officials from China’s government departments and state-owned firms have been withdrawing from executive MBA programmes after the government banned pricey training courses in July.
Britain
The Times
FRENCH TV FURY OVER ASSAULT BY NETFLIX France’s heavily regulated television industry was in uproar yesterday amid the launch of Netflix Inc, the American video streaming service. Critics say the service threatens to destroy France’s so-called cultural exception – the notion that it is resistant to Anglo-Saxon entertainment. (http://thetim.es/1BHdxhX)
MCDONALD’S EASES MCMUFFIN RULES AMID SALES DECLINE The world’s biggest fast-food chain, McDonald’s Corp is considering a new menu segment to lure customers during a time of day, between the breakfast rush and lunch hour, when its restaurants often are quiet. The idea has arisen after the company’s worst global same-store sales drop in 10 years, in which Britain provided a single glimmer of hope. (http://thetim.es/1wmFZ5B)
The Guardian
OECD SLASHES GROWTH FORECASTS FOR LEADING ECONOMIES
The global economy faces headwinds from a sluggish eurozone and rising political tensions, including the uncertain outcome of Scotland’s independence referendum, a leading thinktank has warned. The Organisation for Economic Co-operation and Development slashed its growth forecasts for advanced economies and called on the European Central Bank to use quantitative easing to shore up the eurozone. (http://bit.ly/1s41wSx)
COCA-COLA TO SPONSOR LONDON EYE The Coca-Cola Co is to become the new sponsor of the London Eye after signing a deal to replace France’s EDF Energy Plc. The capital’s giant ferris wheel has been a leading tourist attraction since it was introduced in 2000, when it was known as the Millennium Wheel. It was previously sponsored by British Airways before becoming the EDF Energy London Eye in 2011. (http://bit.ly/1q9iKXd)
The Telegraph SCOTTISH REFERENDUM: DAVID CAMERON BEGS SCOTS NOT TO LEAVE THE UK British Prime Minister David Cameron begged the people of Scotland not to leave the United Kingdom as he promised them that he “won’t be here forever.” In a final plea before Thursday’s referendum, the prime minister warned Scottish voters in a speech in Aberdeen that separation would be a “painful divorce.” (http://bit.ly/1uEheli)
ROW BETWEEN PHONES 4U AND VODAFONE OVER CAUSE OF COLLAPSE A bitter row over the collapse of Phones 4U broke out on Monday when Vodafone Group Plc strongly rejected claims it acted improperly in pulling out of the chain, pinning the blame instead on the decision by its private equity owners to load it with high-interest debt and collect a 200 million pounds ($324.54 million) windfall. (http://bit.ly/1m9phWx)
Sky News CBI DENIES GOVT PRESSURE ON SCOTLAND VOTE The president of the Confederation of British Industry,
Michael Rake, has insisted no pressure has been exerted on businesses by the government to speak out on the Scottish referendum debate. (http://bit.ly/1qEorT8)
ALIBABA FLOTATION ON COURSE FOR WORLD RECORD China’s biggest online retailer appears on course to break the record for the biggest share sale of all time this week. Expectations are growing that Alibaba Holding Group Ltd <IPO-BABA.N> will raise its price target above the planned $60 to $66 per-share range – with sources, said to be familiar with the deal, telling Reuters there was “overwhelming” demand for the stock. (http://bit.ly/1tYuC1S)
The Independent
MICROSOFT BUYS MINECRAFT STUDIO MOJANG FOR $2.5 BLN Microsoft Corp has announced that it has purchased Mojang, the Swedish studio behind the popular game Minecraft, for $2.5 billion (http://ind.pn/1AQQ6An)
SCOTTISH INDEPENDENCE: COMMERZBANK SAYS WORST CASE ECONOMIC SCENARIOS ‘EXAGGERATED’ Days after Deutsche Bank reignited the Scottish “no” campaign with terrifying fears that a vote for independence would plunge Scotland back into a 1930s style depression, a rival German financial company, Commerzbank AG, has said such speculation has been overdone. (http://ind.pn/1AQQdMq)
Fly On The Wall Pre-market Buzz
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
Producer Price Index for August at 8:30–consensus flat with prior month
ANALYST RESEARCH
Upgrades
21Vianet (VNET) upgraded to Outperform from Sector Perform at Pacific Crest
Anglo American (AAUKY) upgraded to Buy from Hold at Deutsche Bank
AngloGold (AU) upgraded to Overweight from Neutral at HSBC
Approach Resources (AREX) upgraded to Neutral from Underperform at Sterne Agee
Athlon Energy (ATHL) upgraded to Buy from Neutral at BofA/Merrill
BE Aerospace (BEAV) upgraded to Overweight from Neutral at JPMorgan
Duke Energy (DUK) upgraded to Outperform from Market Perform at Wells Fargo
Microsoft (MSFT) assumed with an Outperform from Sector Perform at RBC Capital
Pearson (PSO) upgraded to Overweight from Equal Weight at Morgan Stanley
SYNNEX (SNX) upgraded to Buy from Hold at Stifel
Tableau (DATA) upgraded to Outperform from Neutral at Credit Suisse
Terex (TEX) upgraded to Buy from Hold at Stifel
Downgrades
Adobe (ADBE) assumed with a Sector Perform from Outperform at RBC Capital
Analogic (ALOG) downgraded to Hold from Buy at Brean Capital
Bankrate (RATE) downgraded to Sell from Hold at Topeka
Con-way (CNW) downgraded to Neutral from Outperform at RW Baird
Cummins (CMI) downgraded to Market Perform from Outperform at Wells Fargo
Laredo Petroleum (LPI) downgraded to Neutral from Buy at BofA/Merrill
Occidental Petroleum (OXY) downgraded to Equal Weight from Overweight at Barclays
Initiations
ACI Worldwide (ACIW) initiated with a Neutral at Sterne Agee
Ardmore Shipping (ASC) initiated with a Buy at MLV & Co.
Benefitfocus (BNFT) initiated with an Outperform at RBC Capital
Boston Beer (SAM) initiated with an Outperform at Cowen
Brown Forman initiated with an Outperform at Cowen
Capital Product (CPLP) initiated with a Buy at Deutsche Bank
Coca-Cola (KO) initiated with a Market Perform at Cowen
Concur (CNQR) initiated with an Outperform at RBC Capital
Constellation Brands (STZ) initiated with a Market Perform at Cowen
Craft Brew (BREW) initiated with an Outperform at Cowen
Diana Shipping (DSX) initiated with a Buy at Deutsche Bank
Dr Pepper Snapple (DPS) initiated with a Market Perform at Cowen
DryShips (DRYS) initiated with a Buy at Deutsche Bank
Dynagas LNG (DLNG) initiated with a Buy at Deutsche Bank
Global Payments (GPN) initiated with a Neutral at Piper Jaffray
Heartland Payment (HPY) initiated with a Buy at Sterne Agee
Intuit (INTU) initiated with an Outperform at RBC Capital
Lionsgate (LGF) initiated with a Buy at ISI Group
MasterCard (MA) initiated with a Buy at Sterne Agee
MasterCard (MA) initiated with an Overweight at Piper Jaffray
Molson Coors (TAP) initiated with an Outperform at Cowen
Monster Beverage (MNST) initiated with a Market Perform at Cowen
Navios Acquisition (NNA) initiated with a Buy at Deutsche Bank
Net 1 UEPS (UEPS) initiated with a Buy at Sterne Agee
NetSuite (N) initiated with an Outperform at RBC Capital
Oracle (ORCL) assumed with a Sector Perform at RBC Capital
PepsiCo (PEP) initiated with an Outperform at Cowen
SAP (SAP) initiated with a Sector Perform at RBC Capital
SEI Investments (SEIC) initiated with a Buy at Sterne Agee
Scorpio Bulkers (SALT) initiated with a Buy at Deutsche Bank
Seaspan (SSW) initiated with a Buy at Deutsche Bank
StealthGas (GASS) initiated with a Buy at Deutsche Bank
Teekay Tankers (TNK) initiated with a Buy at Deutsche Bank
Tesla (TSLA) initiated with a Buy at ISI Group
Textainer (TGH) initiated with a Hold at Deutsche Bank
Total System (TSS) initiated with a Neutral at Sterne Agee
Tsakos Energy (TNP) initiated with a Buy at MLV & Co.
Ultimate Software (ULTI) initiated with an Outperform at RBC Capital
Ultratech (UTEK) initiated with an Outperform at Imperial Capital
Vantiv (VNTV) initiated with a Buy at Sterne Agee
Visa (V) initiated with a Buy at Sterne Agee
Visa (V) initiated with an Overweight at Piper Jaffray
WEX Inc. (WEX) initiated with a Buy at Sterne Agee
Western Union (WU) initiated with a Neutral at Sterne Agee
Workday (WDAY) initiated with an Outperform at RBC Capital
Yelp (YELP) initiated with a Neutral at RW Baird
zulily (ZU) initiated with an Outperform at RW Baird
COMPANY NEWS
Valeant (VRX), Pershing Square, Allergan (AGN) settled pending litigation before DE Court. Pursuant to the settlement, Allergan has agreed to unconditionally call and hold a special meeting of its shareholders on December 18
Humana (HUM) announced $2B share repurchase authorization
Airbus (EADSY) Defense, Space said it will sell some divisions, including Fairchild Controls, Rostock System-Technik, AvDef, ESG and Atlas Elektronik
In a severely adverse scenario Citigroup’s (C) total risked based capital ratio would be 10.9% through Q216; For projected stressed capital ratios, JPMorgan (JPM) reported that Tier 1 common ratio would be a minimum of 8.4%, Tier 1 leverage ratio would be a minimum of 6.4%, and Tier 1 risk-based capital ratio would be a minimum of 8.7%
AstraZeneca (AZN), Eli Lilly (LLY) to jointly develop, commercialize AZD3293
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Analogic (ALOG)
Companies that missed consensus earnings expectations include:
Full Circle Capital (FULL), Ixia (XXIA), Student Transportation (STB), Majesco (COOL)
Espey Mfg (ESP) reports Q4 EPS (31c) vs. $1.02 a year ago
Analogic (ALOG) sees FY15 revenue to grow mid single-digits , consensus $572.12M
NEWSPAPERS/WEBSITES
Actavis (ACT), Forest Labs subsidiary sued by NY attorney general, Reuters says
Google (GOOG) called on by Berlin to disclose search engine formula, FT reports
Boeing (BA), Lockheed (LMT) ally with Amazon (AMZN) CEO on rocket engine, Reuters says
Boeing (BA) may beat out SpaceX for NASA contract to ferry astronauts, WSJ reports
Qualcomm (QCOM) accused of bribing Chinese official, WantChinaTimes reports
ConocoPhillips (COP) auctioning 24% stake in the Clair oilfield, FT reports
Pratt & Whitney (UTX) close to engine supply deal with Pentagon, WSJ reports (LMT, NOC, BAESY)
iPhone 6/6 Plus may suffer similar iPhone 5s/5c inventory issu
es, DigiTimes says (AAPL)
SYNDICATE
Alcoa (AA) announces proposed offering of 25M depositary shares
Blueknight Energy Partners (BKEP) files to sell 8.5M shares
Gastar Exploration (GST) offers 17M shares of common stock
Lehigh Gas (LGP) files to sell 3.6M common units representing limited partners
Viper Energy (VNOM) 3.5M share Secondary priced at $28.50
via Zero Hedge http://ift.tt/1qb7bPd Tyler Durden