- Must be an early winter: Housing Falters as Forecasters See U.S. Sales Dropping (BBG)
- China Property Failures Seen as $33 Billion in Trusts Due (BBG)
- Iraqi forces ready push after Obama offers advisers (Reuters)
- Priorities: U.S. cuts aid to Uganda, cancels military exercise over anti-gay law (Reuters)
- Kurds’ Takeover of Iraqi City of Kirkuk Strengthens Their Hand (WSJ)
- U.S. says government lab workers possibly exposed to anthrax (Reuters)
- Netflix Up 21% With Tesla: The best U.S. stocks this month are ones that just a few months ago were the biggest losers (BBG)
- Architects of Iraq Invasion Return to Blame Obama (BBG)
- Nato claims Moscow funding anti-fracking groups (FT)
- Lawmakers Skeptical GM Bosses Were Unaware of Defect (WSJ)
- Corinthian Colleges Warns of Possible Shutdown (WSJ)
- Taiwan’s Quanta to start mass production of Apple’s smartwatch in July (Reuters)
- China Miners’ Loss Is BHP’s Gain as Iron Prices Slump 44% (BBG)
- Icahn Urges Family Dollar CEO to Seek Sale ‘Immediately’ (BBG)
- ValueAct’s Ubben Has a New Target: His Hedge-Fund Peers (WSJ)
- Sex Workers Protest as Soho Swaps Sleaze for Champagne (BBG)
- Regulatory Scrutiny Transforms Washington’s Political-Intelligence Business (WSJ)
Overnight Media Digest
WSJ
* Washington’s political-intelligence business is going through a wrenching transformation in the face of heightened legal and regulatory scrutiny, including insider-trading probes. In recent months, a number of lobbyists have left the political-intelligence business, and several lobbying and law firms have created new internal procedures and protocols to guard against violating insider-trading rules. (http://on.wsj.com/1kTAuDs)
* Corinthian Colleges Inc, one of the country’s largest for-profit education companies, warned Thursday that it may have to shut down after the Obama administration moved to restrict the company’s access to federal funding. (http://on.wsj.com/1lFjoxN)
* General Motors Co’s pinning of a decade-long failure to recall defective cars on a lone engineer is running into skepticism from lawmakers who say GM documents show dozens of people were alerted to ignition-switch defects during the past decade. (http://on.wsj.com/1ss73Ch)
* Two years after a bruising battle with unions, Fiat Chrysler Automobiles Chief Executive Sergio Marchionne on Thursday canceled plans to shift 500 furloughed workers from a mostly idle Fiat plant in Turin to a nearby Maserati factory, according to a person familiar with the situation. Fiat has also shelved plans to use overtime at the same Maserati factory to meet booming demand for the luxury brand, the person said. (http://on.wsj.com/1l9qoTL)
* Harley-Davidson Inc, known for gasoline-powered motorcycles thundering with machismo, is testing a battery-powered model that it hopes will appeal to younger people concerned about the environment. (http://on.wsj.com/1iMqpIN)
* An Apple Inc “kill switch” to disable stolen iPhones appears to be reducing thefts, law-enforcement officials in New York and California said. Google Inc and Microsoft Corp are following Apple’s lead, planning to put similar technology into devices using their software. (http://on.wsj.com/1jC5yrM)
FT
A stronger than expected demand from investors has led the Lloyds Banking Group to increase the amount of shares it is selling in its newly created TSB offshoot by about 40 percent.
The United States will be sending up to 300 “military advisers” to Iraq to help its embattled government fight back against Sunni insurgents who have pushed the country to the brink of a sectarian civil war.
The head of NATO has claimed Russian intelligence agencies are covertly funding and working with European environmental groups to campaign against fracking and maintain EU dependence on Russian gas.
British cabinet ministers have told the Prime Minister that “shambolic” IT provision by smaller firms has brought their departments to a virtual standstill in recent weeks.
NYT
* General Electric Co announced on Thursday a revised $13.5 billion bid for the energy business of the French conglomerate Alstom SA aimed at easing concerns of the Socialist government of President Francois Hollande. (http://nyti.ms/USFCCZ)
* Shares in Tianhe Chemicals Group rose on Friday in their trading debut in Hong Kong after the company raised about $650 million last week in an initial public offering. (http://nyti.ms/1ss7Z9F)
* Federal prosecutors and financial regulators have subpoenaed Congress in an investigation that could test the limits of federal insider trading laws. The investigation focuses on a Washington research company, Height Securities. Last year, it correctly predicted a change in government health care policy, prompting a surge in the stock prices of health insurance companies. (http://nyti.ms/1jC63lE)
* Microsoft Corp and Google Inc said Thursday that phones using their operating systems – including handsets produced by big names like Samsung, Nokia and Motorola – will have a so-called kill switch that can render the devices unusable after they have been reported stolen. Apple’s iPhone has had a kill switch, called Activation Lock, since September. (http://nyti.ms/UklVU9)
* Computer security experts say hedge funds, with their vast pools of money and opaque nature, have become perfect targets for sophisticated cyber criminals. Over the past two years, experts say, hedge funds have fallen victim to targeted attacks. What makes them such ripe targets is that even as hedge funds expend millions in moving their trading operations online, they have not made the same investment in security. (http://nyti.ms/1ss8u3K)
Canada
THE GLOBE AND MAIL
* The Conservative government will cap the number of low-wage temporary foreign workers that employers can bring to Canada as part of sweeping policy reforms that will be announced on Friday. The government will limit the number of foreign workers that companies, such as restaurants, can have at any location based on a percentage of their work force. The measure is expected to cut in half the number of people brought into the country each year for low-wage positions, which was 31,000 last year. (http://bit.ly/1w1LlDC)
* Changes to the way federal transfers to provinces are calculated since the Stephen Harper government took power appear to have made Ontario a big loser under equalization programs and Alberta the big winner, according to Canada’s budget watchdog. (http://bit.ly/1lE8nhD)
* Conservatives – including the Speaker of the House of Commons – have been feting Nigel Wright as Stephen Harper’s former chief of staff leaves behind Ottawa and a brutal year to return to the private sector. Wright resigned his post a little over a year ago following the revelation he had secretly paid $90,000 of Senator Mike Duffy’s contested expenses. The prime minister repudiated Wright publicly, calling him responsible for the “deception” and saying he was dismissed. (http://bit.ly/1nnhfDT)
Reports in the business section:
* The chief executive of Canada’s best-known technology company was afforded a rare chance to boast on Thursday, as BlackBerry Ltd reported better-than-expected quarterly results. Although the smartphone maker still lost money in its fiscal first quarter on an adjusted basis, the loss was far less severe than most analysts expected. (http://bit.ly/Ulqde0)
* Approaching July 1 when the first aspects of the anti-spam law come into effect, companies have been taking advantage of their last days in which unsolicited emails are permitted to ask customers, prospective customers, recipients of newsletters, and others for consent to contact them in the future. (http://bit.ly/1ql5B0t)
* Most of Canada’s largest public companies have done little to improve their disclosure to shareholders about their gender diversity practices, despite facing pending new regulations on the issue. A review of companies in the S&P/TSX 60 index show few are improving their diversity disclosure practices in advance of new disclosure rules expected to be finalized later this year by the Ontario Securities Commission, according to Sylvia Groves, president of Calgary-based consulting firm Governance Studio. (http://bit.ly/1jCvS5c)
* British Columbia Investment Management Corp, which manages money for public sector pension plans and public trusts in British Columbia, said its assets climbed to $114 billion as of March 31 from $102.8 billion a year earlier, due to strong 14.7 percent returns that outpaced passive benchmarks. BCIMC is Canada’s fourth-largest pension fund manager. (http://bit.ly/1qxAYHr)
NATIONAL POST
* Some labor leaders so feared a Progressive Conservative victory in the June 12 election they “sold their souls” to back the Liberals, the president of the Ontario Public Service Employees Union said on Thursday. “The labor movement was so afraid of Tim Hudak being elected that they sold their souls to the Liberals,” said OPSEU president Smokey Thomas. (http://bit.ly/1lFa9NT)
* The Council of Canadians and the Canadian Federation of Students announced on Thursday they would challenge the Stephen Harper government’s new election bill, hours before Governor General David Johnston was to grant royal assent, making it law. The two groups intend to challenge voter-ID provisions that critics say will make it harder for students, aboriginals and seniors to vote, and changes that limit the mandate of the chief electoral officer to promote voting. (http://bit.ly/1nnj17X)
FINANCIAL POST
* The Petronas-sponsored Pacific Northwest liquefied natural gas project is seeking debt-financing, reportedly for as much as $10 billion-$15 billion, for its LNG project on the West Coast. It would be the biggest debt financing deal in Canada. (http://bit.ly/1pqwFM4)
* BlackBerry Ltd Chief Executive John Chen recognizes the turnaround is still a work in progress. “Whether we get back to an iconic state, I don’t know, but we certainly will try. Certainly there are a lot of opportunities and assets in the company,” Chen said. (http://bit.ly/TdbP6s)
* Statistics Canada said on Thursday that private non-financial corporations increased their cash holdings to $630 billion in the first quarter of this year – up from $621 billion at the end of 2013. Corporations have been singled out by the Bank of Canada for not contributing more to the economic recovery, which has relied heavily on consumer spending for growth since the 2008-09 recession. (http://bit.ly/1lEeSkC)
China
CHINA SECURITIES JOURNAL
– SAIC Motor Corporation Limited will invest more funds to develop vehicles carrying its own brand, said Chairman Chen Hong.
SHANGHAI DAILY
– The prolonged effects of the slowdown in China’s property market could hurt economic growth, but reforms to balance the economy will offset the negative impact, Moody’s Investors Service said in Shanghai.
– Polluters face harsher penalties under a draft amendment to an air pollution prevention law reviewed by the Shanghai legislative body. Anyone found guilty of discharging major air pollutants without a licence faces a fine of up to 500,000 yuan ($80,645) compared to the current 100,000 yuan.
CHINA DAILY
– Two provincial-level officials from China’s northern Shanxi province, Ling Zhengce and Du Shanxue, are under investigation for suspected serious discipline and law violations – an euphemism for corruption – China’s anti-graft authority said on Thursday.
– China should consider flexible grain imports from international markets and take steps to ensure sustained growth in domestic output of staple grains for long-term food security, government officials and foreign exporters said on Thursday.
PEOPLE’S DAILY
– Mainland China and Hong Kong should strive hard towards implementing the “one country, two systems” policy and work together for prosperity, the newspaper said in its commentary.
Britain
The Telegraph
LLOYDS SELLS LARGER CHUNK OF TSB
Lloyds Banking Group will sell a significantly bigger percentage of TSB than it had intended, after strong demand for shares in the challenger bank.
STERLING RISE COULD THREATEN EXPORTS, SAYS CBI
Demand for UK manufacturing strengthened in June, amid concerns that the strengthening of sterling could put exports in jeopardy.
The Guardian
BE READY FOR INTEREST RATE RISES, BANK OF ENGLAND INSIDER WARNS MORTGAGE PAYERS
Britain’s 10 million mortgage payers have been warned to ready themselves for dearer borrowing costs after a Bank of England policymaker said stronger-than-expected growth meant the era of ultra-cheap money was drawing to a close.
WEST COAST MAINLINE: VIRGIN TRAINS AND STAGECOACH ARE EXPECTED TO TRIPLE PROFITS
Sir Richard Branson’s cumulative dividends from Virgin Trains are set to pass 300 million pounds after the government gave the firm a revised deal to run the west coast main line until 2017, with a probable one-year extension.
The Times
STRONG POUND THREAT TO EXPORTERS’ HOPES
A recovery in manufacturing on the back of rising exports could be in jeopardy after the pound broke the key $1.70 barrier for the first time in almost six years.
GOVERNMENT RAKES IN 1 BLN STG FROM HOUSING BOOM
Soaring house prices have earned the government nearly 1 billion pounds in extra stamp duty payments every year, research suggests.
The Independent
AMERICAN APPAREL FIRES FOUNDER DOV CHARNEY AFTER ‘MISCONDUCT’ INQUIRY
Board votes unanimously to remove founder Dov Charney and says company is ‘larger than any one individual’
ROLLS-ROYCE ACTS TO APPEASE INVESTORS WITH 1 BLN STG BUYBACK
Rolls-Royce, the troubled aero-engine manufacturer, has moved to win back the support of investors with a 1 billion sweetener as it shelved plans for major acquisitions.
Fly On The Wall 7:00 AM Market Snapshot
ECONOMIC REPORTS
No major domestic economic reports scheduled today.
ANALYST RESEARCH
Upgrades
Autonation (AN) upgraded to Buy from Neutral at Goldman
Domtar (UFS) upgraded to Neutral from Sell at Citigroup
Entegris (ENTG) upgraded to Overweight from Equal Weight at First Analysis
Esterline (ESL) upgraded to Buy from Hold at Canaccord
Kinder Morgan Energy (KMP) upgraded to Buy from Neutral at UBS
Kroger (KR) upgraded to Neutral from Sell at Goldman
Molson Coors (TAP) upgraded to Equal Weight from Underweight at Morgan Stanley
Penske Automotive (PAG) upgraded to Neutral from Sell at Goldman
Downgrades
Cleco (CNL) downgraded to Hold from Buy at KeyBanc
Coach (COH) downgraded to Market Perform from Outperform at BMO Capital
Coach (COH) downgraded to Market Perform from Outperform at William Blair
Coach (COH) downgraded to Neutral from Overweight at HSBC
FXCM (FXCM) downgraded to Neutral from Buy at Citigroup
Idenix (IDIX) downgraded to Neutral from Buy at UBS
Oracle (ORCL) downgraded to Neutral from Buy at Citigroup
PS Business Parks (PSB) downgraded to Neutral from Overweight at JPMorgan
PetSmart (PETM) downgraded to Neutral from Outperform at Wedbush
Pier 1 Imports (PIR) downgraded to Hold from Buy at Deutsche Bank
Sonic Automotive (SAH) downgraded to Sell from Neutral at Goldman
Targa Resources Partners (NGLS) downgraded to Hold from Buy at Wunderlich
Initiations
Carter’s (CRI) initiated with a Market Perform at Wells Fargo
Deckers Outdoor (DECK) initiated with an Outperform at Wells Fargo
International Flavors (IFF) initiated with a Neutral at UBS
Kinder Morgan (KMI) initiated with a Buy at UBS
Spectra Energy Partners (SEP) initiated with a Neutral at UBS
Spectra Energy (SE) initiated with a Neutral at UBS
Trulia (TRLA) initiated with a Perform at Oppenheimer
Veracyte (VCYT) initiated with an Overweight at Piper Jaffray
Zillow (Z) initiated with a Perform at Oppenheimer
COMPANY NEWS
Shire (SHPG) confirmed rejection of ‘highly conditional’ AbbVie (ABBV) proposal
Carl Icahn sent letter to Family Dollar CEO Howard Levine urging an ‘immediate sale’ of the company
Family Dollar (FDO) said board of directors and management team ‘committed to acting in the best interests of the company and our shareholders’
Corinthian Colleges (COCO) warned on its ability to continue as going concern
Targa (TRGP), Targa Resources Partners (NGLS) terminated talks with Energy Transfer Equity (ETE)
Siemens (SIEGY), Mitsubishi raised cash portion of Alstom (ALSMY) offer to EUR8.2B (GE)
Nike (NKE) named eBay (EBAY) CEO John Donahoe to its board
Cubist (CBST) said the FDA accepted its NDA for its investigational antibiotic ceftolozane/tazobactam with Priority Review
Merrimack Pharmaceuticals (MACK) regained worldwide rights to commercialize MM-121
Molycorp (MCP) downgraded to Caa2 from Caa1 by Moody’s, outlook stable
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Smith & Wesson (SWHC)
Companies that missed consensus earnings expectations include:
Oracle (ORCL)
Companies that matched consensus earnings expectations include:
TIBCO (TIBX)
Oracle (ORCL) sees Q1 adjusted EPS 62c-66c, consensus 64c
Oracle (ORCL) sees Q1 software license, cloud revenue up 6%-8% in U.S. dollars
TIBCO (TIBX) sees Q3 adjusted EPS 15c-19c, consensus 24c
NEWSPAPERS/WEBSITES
Apple (AAPL) targeting 50M ‘iWatch’ shipments in first year, Reuters says
Apple (AAPL) planning multiple designs for iWatch, WSJ reports
GKN (SKNLY) likely buyer for Spirit (SPR) Oklahoma plants, The Deal reports
Twitter sales leader Bain to take over business development, Re/code says
Judge says Justice Dept effort against Bank of America (BAC) to move forward, WSJ reports
Celgene (CELG) looks like a buy, Barron’s says
Carlyle (CG), TPG aiming for $2.4B Healthscope IPO, Reuters reports
SYNDICATE
CyrusOne (CONE) 13.9M share Secondary priced at $23.25
Eclipse Resources (ECR) 30.3M share IPO priced at $27.00
Emerge Energy (EMES) files to sell 3.52M common units for holders
Excel Trust (EXL) files to sell 10M shares of common stock
Kindred Healthcare (KND) 9M share Secondary priced at $23.75
Kite Pharma (KITE) 7.5M share IPO priced at $17.00
Performance Sports Group (PSG) 7.097M share Secondary priced at $15.50
StoneMor Partners (STON) files to sell 1M common units for holders
Sunstone Hotel (SHO) files to sell 18M shares of common stock
Teekay Tankers (TNK) files to sell $200M in common stock
via Zero Hedge http://ift.tt/1plzAns Tyler Durden