- Scuttled deals worth $580 billion put hedge funds on back foot (Reuters)
- Mounting Pressure on OPEC Spurs More Wagers on Oil Rally (BBG)
- It’s not just US real estate: Chinese Students at U.S. Universities Jump 75% in Three Years (BBG)
- Frankfurt Open for Yuan Clearing as Liquidity Rises (BBG)
- Obama defends healthcare law after adviser criticism (Reuters)
- Michael Hasenstab Bets Big in Controversial Places (WSJ)
- Facebook seeks foothold in your office (FT)
- Russia Seen as Greatest Threat in Poll as Oil Erodes Putin Power (BBG)
- Falling Oil Prices Test OPEC Unity (WSJ)
- Brent Crude Drops as Japanese Recession May Curb Demand (BBG)
- Shale Boom Helps North Dakota Bank Earn Returns Goldman Would Envy (WSJ)
- Hedge Funds Cut Gold Bets in Fastest Exit This Year (BBG)
- Keystone Pipe Vote Tackles Questions History Answered (BBG)
- Draghi Seen Bypassing QE Qualms to Hit Balance-Sheet Goal (BBG)
- How Michael Jackson Made $150 Million in 2014 (BBG)
- Actavis Said Near $62.5 Billion Deal for Allergan (BBG)
- London Homebuyers Vanish as Peak Prices Outpace Wages (BBG)
Overnight Media Digest
WSJ
* A sales tax increase pushed Japan’s economy into a recession in the third quarter, setting the stage for Prime Minister Shinzo Abe to postpone a second increase in the sales tax. (http://on.wsj.com/1tZeV8P)
* Bank of North Dakota, the United State’s state-owned bank which has one branch and no automated teller, is more profitable than Goldman Sachs Group Inc, has a better credit rating than JPMorgan Chase & Co and has not seen profit growth drop since 2003. The bank has been one of the biggest beneficiaries of the boom in Bakken shale-oil production from hydraulic fracturing. (http://on.wsj.com/1EP3J57)
* Sony Corp investors could get a look in the coming week at whether the hard-nosed approach of finance chief Kenichiro Yoshida is producing an impact on the company’s outlook. Sony Chief Executive Kazuo Hirai, Yoshida and other executives are expected to talk up plans to rebuild around Sony’s entertainment businesses, which include the videogame division and Hollywood studio arm. (http://on.wsj.com/1wLmqlG)
* Actavis Plc is nearing a deal to acquire Allergan Inc in a tie-up that would likely be the year’s largest and could help shield Botox maker Allergan from a hostile suitor Valeant Pharmaceuticals International Inc. The boards of Actavis and Allergan are expected to meet in coming days to review a cash-and-stock takeover, sources said. (http://on.wsj.com/11g3e6K)
* Mutual-fund manager Michael Hasenstab has piled up big returns and catapulted Franklin Resources Inc’s Templeton Global Bond Fund into the largest government-bond fund in the world from investments that sometimes align him with regimes criticized by the United States and Europe. (http://on.wsj.com/1xNiZz3)
* The Organization of the Petroleum Exporting Countries knows it must cut production to lift prices. A collective move to cut output could boost prices, but it would also rob OPEC members of revenue. It is unclear how long such vulnerable OPEC economies as Venezuela and Nigeria could afford to limit production without reopening the spigots. (http://on.wsj.com/1xcjoel)
* Prompted by the disappearance of Malaysia Airlines Flight 370, government and aviation-industry officials are set to announce global standards calling for airliners to automatically report their position at least every 15 minutes, sources said. (http://on.wsj.com/11u9IzZ)
* While economic growth in the eurozone is flattening, money managers are keeping the faith that the European Central Bank will succeed in propping up markets and eventually the economy. (http://on.wsj.com/1t18bHx)
* Standard Chartered Plc is paying the price for an aggressive push into lending to commodity-linked firms, as the bank’s soured loans have jumped. A combination of increased competition from local banks and slowing growth in its core markets forced Standard Chartered to make riskier loans to sustain its fast expansion, said Chirantan Barua, an analyst at Sanford Bernstein. (http://on.wsj.com/1BGYuIr)
* United States Federal investigators descended on the coastal city of La Porte, Texas to probe an accident at a E.I. DuPont de Nemours & Co chemical plant that left four workers dead. The plant suffered a leak of a poisonous gas called methyl mercaptan, DuPont said. (http://on.wsj.com/14xhuum)
* The decision to get the “Dumb and Dumber” gang back together helped the screwball buddy comedy opening in first place at the weekend box office with an estimated $38.1 million. That put the sequel distributed by Comcast Corp’s Universal Pictures, ahead of last week’s top films, “Big Hero 6” and “Interstellar”. (http://on.wsj.com/1vgFEF9)
* Nearing the one-year anniversary of Target Corp’s massive and costly data breach, the company is looking to show that it has moved on. The discounter will report its third-quarter earnings on Wednesday. The recent optimism has helped to lift Target shares to 2014 highs. (http://on.wsj.com/11usGXq)
* Republican control of Congress in 2015 could boost the Grand Old Party’s efforts to make the Federal Trade Commission operate more like the Justice Department when it comes to antitrust enforcement. (http://on.wsj.com/1qaPtmd)
* American Airlines Group Inc and its 15,000 pilots continued to negotiate terms for a new, five-year labor agreement, with the pilots asking for big raises to compensate for the profit-sharing deal enjoyed by pilots at Delta Air Lines Inc. (http://on.wsj.com/1ETxdkg)
* The partners at Morgan, Lewis & Bockius LLP voted to hire the majority of partners at Boston law firm Bingham McCutchen LLP. The deal is expected to close by the end of November, Morgan Lewis said. (http://on.wsj.com/1zuWnCK)
* About 100,000 people submitted applications for health insurance on the first day of the relaunch of Healthcare.gov, the online marketplace at the heart of the United States president’s health-care law, Health and Human Services Secretary Sylvia Mathews Burwell said. (http://on.wsj.com/1qNVobn)
* Apple Inc has struck a deal with China’s only domestic bank card provider UnionPay, making it easier for Chinese consumers to buy its apps. The iPhone maker has been facing questions of how it will expand into payment systems in China. Apple’s own payment system Apple Pay is not yet available there. (http://on.wsj.com/1xNwRJz)
FT
TalkTalk Telecom Group PLC has struck a mobile services deal with Telefonica UK to launch the services over its network as the group looks to grow the market for so-called “quad play” services bundling TV, broadband and fixed and mobile telecoms.
British Prime Minister David Cameron is expected to donate 650 million pounds ($1.02 billion) to a global “green climate fund” this week, that could risk criticism from some Conservative MPs and the UK Independence party.
David Cameron warned the risk of another global recession at the end of the G20 summit in Brisbane, saying the “red warning lights are once again flashing on the dashboard of the global economy”.
More bankers should be subjected to a tougher pay regime by the regulators, including bonus clawbacks, MPs who sat on the parliamentary commission on banking standards argued in a report published on Monday.
NYT
* Allergan Inc is near a deal to sell itself to Actavis Plc for more than $62.5 billion, people briefed on the matter said on Sunday, potentially ending one of the most bitter merger battles in recent memory. (http://nyti.ms/1xNqRk9)
* With a goal of fiber-optic lines reaching to every school and a Wi-Fi connection in every classroom, Tom Wheeler, chairman of the Federal Communications Commission, is expected on Monday to propose a 62 percent increase in the amount of money the agency spends annually to wire schools and libraries with high-speed Internet connections. (http://nyti.ms/1vkhRDv)
* When it comes to insider trading in the United States, government officials have built careers on successful prosecutions. Hedge funds have been shut down, and regulators have ensnared even low-level employees who traded on confidential tips. But in Brazil, no one has ever gone to jail for insider trading. On Tuesday, however, Eike Batista, once one of the Brazil’s richest and most flamboyant men, is scheduled to defend himself in court against accusations of insider trading and stock market manipulation. (http://nyti.ms/1qNTYO9)
* Hasbro Inc has ended talks with DreamWorks Animation, people briefed on the matter said on Friday, ending discussions that would have united the parent companies of the Transformers and Shrek. The breakup of the negotiations followed a sharp slide in Hasbro’s shares after reports of the talks emerged late Wednesday. The toy maker’s shares had fallen nearly 5 percent since then, closing on Friday at $54.02. The fall in Hasbro’s share price was notable because the company had weighed paying both stock and cash, people briefed on the matter have said. (http://nyti.ms/1t1g9jF)
* Vice Media, the news and entertainment group, is expected to announce Monday that it has hired Alyssa Mastromonaco, a former Obama administration official, as its chief operating officer. (http://nyti.ms/1qaSRgE)
Canada
THE GLOBE AND MAIL
** China’s state-controlled energy firms are struggling to turn a profit in Canada in part because of the federal government’s immigration laws, said Wang Xinping, China’s consul general based in Calgary. Xinping said his country’s energy companies want to bring in their own employees to reduce costs. But Ottawa has been stingy in issuing work permits. (http://bit.ly/1A6ybJS)
** Liberal Party’s David Bertschi has been told he won’t be allowed to seek the Liberal nomination in Ottawa-Orleans, clearing the path for Andrew Leslie, a retired general and adviser to Justin Trudeau on foreign policy. (http://bit.ly/1uDJGFq)
** Onex Corp, Canada’s largest buyout firm, is leading the bidding for Swiss juice-box maker SIG Combibloc Group AG in what would be one of its biggest European acquisitions, according to people familiar with the matter. Onex may reach an agreement to buy SIG for more than $4 bln as early as this week, the people said. (http://bit.ly/1uDKdXK)
NATIONAL POST
A baby born in Edmonton earlier this year touched off the latest in a string of emotional end-of-life court battles, dying after a judge said removing her from life support was the “kindest” option available, a just-released written ruling reveals. (http://bit.ly/1A6Enla)
** A packed late night Chinese restaurant in downtown Toronto became a scene of carnage just before 4 a.m. Sunday, when someone opened fire with a semi-automatic weapon, injuring two women and killing a man. (http://bit.ly/1A6HKbH)
China
SHANGHAI SECURITIES NEWS
– Bad loans at Chinese banks climbed to 766.9 billion yuan ($125.13 billion) by the end of September, an increase of 72.5 billion yuan from a quarter earlier, according to China’s banking regulator. Bad loan ratio stood at 1.16 percent, up 0.09 percentage point.
CHINA SECURITIES JOURNAL
– Shares of Everbright Securities Co Ltd have been suspended from trading starting Monday, pending announcement of plans for the private placement of shares.
SHANGHAI DAILY
– The first intellectual property (IP) bureau on China’s mainland, dealing with all legal issues concerning brands, patents and copyright, opened in the city. So far, these three areas have been handled by different organisations, resulting in complexity in handling IP disputes.
CHINA DAILY
– China will need to rely on capital exports and investment in innovation to drive growth as foreign trade and the domestic property sector, the main engines of the economy, are losing momentum, a leading economist said on Friday. The country is entering a phase where it will use capital exports to drive the overseas growth of its infrastructure-related products and services, such as railways, utilities and machineries.
PEOPLE’S DAILY
– China’s aviation industry has narrowed its gap with developed countries through persistent innovation, and should advance to new heights through cooperation.
Britain
Sunday Telegraph
WAITROSE BOSS SAYS SOME FOOD RETAILERS MAY CLOSE
Supermarkets in Britain could start to close as the industry copes with an unprecedented slide in sales and profits, according to Mark Price, managing director of Waitrose. Price said it was “incredibly hard to call” whether all of Britain’s food retailers would survive.
FACEBOOK PLANS FREE AFRICA INTERNET WITH AVANTI
Facebook is in advanced talks with satellite operator Avanti Communications over a project to provide free Internet access across swathes of Africa.
BT RULES OUT SALE OF IT OUTSOURCING ARM
BT Group has ruled out a spin-off or sale of its Global Services outsourcing arm in the face of pressure from several major shareholders to offload the business.
Sunday Times
QUINDELL SEEKS HEDGE FUND CASH INJECTION
Insurance services group Quindell has opened talks with hedge funds about a potential cash injection. The company is believed to have met at least two hedge funds in recent weeks. Quindell said it regularly held talks with financial institutions but insisted it had no need for additional cash.
FARROW & BALL IN TALKS TO BE BOUGHT BY ARES
Paint maker Farrow & Ball is in talks to be bought by Ares Management, the owner of upmarket U.S. department store Neiman Marcus, in a deal worth up to 300 million pounds ($470 million).
ISRAELI BILLIONAIRE WEIGHS CAMDEN MARKET FLOAT
Israeli gambling and technology billionaire Teddy Sagi is considering plans to float Camden Market, the north London tourist spot. Sagi has spent an estimated 500 million pounds buying up separate parts of the market.
Mail on Sunday
RBS FACES NEW PAY ROW AFTER FOREX SCANDAL
Royal Bank of Scotland faces a political row over a plan to give former chief executive Stephen Hester millions of pounds in share awards, despite its 400 million pounds fine for collusion in the foreign exchange market.
Fly On The Wall Pre-market Buzz
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
Empire State manufacturing survey for November at 8:30–consensus 10.3
Industrial production for October at 9:15–consensus up 0.2%
Capacity utilization rate for October at 9:15–consensus flat at 79.3%
ANALYST RESEARCH
Upgrades
Constellium (CSTM) upgraded to Outperform from Market Perform at Bernstein
CyrusOne (CONE) upgraded to Buy from Hold at Stifel
Hudson Valley (HVB) upgraded to Outperform from Market Perform at Keefe Bruyette
MGIC Investment (MTG) upgraded to Conviction Buy from Buy at Goldman
NuVasive (NUVA) upgraded to Outperform from Market Perform at Wells Fargo
Phillips 66 (PSX) upgraded to Outperform from Neutral at Credit Suisse
Pinnacle Foods (PF) upgraded to Buy from Hold at Deutsche Bank
Rayonier (RYN) upgraded to Outperform from Sector Perform at RBC Capital
Thoratec (THOR) upgraded to Outperform from Market Perform at Wells Fargo
Volcano (VOLC) upgraded to Outperform from Neutral at Credit Suisse
Downgrades
Allstate (ALL) downgraded to Market Perform from Outperform at Keefe Bruyette
Boise Cascade (BCC) downgraded to Market Perform from Outperform at BMO Capital
CarMax (KMX) downgraded to Equal Weight from Overweight at Morgan Stanley
Denbury Resources (DNR) downgraded to Neutral from Buy at Sterne Agee
Denbury Resources (DNR) downgraded to Neutral from Outperform at Credit Suisse
Hecla Mining (HL) downgraded to Neutral from Buy at Roth Capital
Hertz (HTZ) downgraded to Market Perform from Outperform at Wells Fargo
Imperva (IMPV) downgraded to Neutral from Overweight at JPMorgan
JG Wentworth (JGW) downgraded to Market Perform from Outperform at Keefe Bruyette
Joe’s Jeans (JOEZ) downgraded to Neutral from Buy at B. Riley
Marriott (MAR) downgraded to Neutral from Buy at UBS
Nokia (NOK) downgraded to Underperform from Market Perform at Raymond James
Office Depot (ODP) downgraded to Neutral from Buy at Goldman
Procter & Gamble (PG) downgraded to Hold from Buy at Canaccord
Starwood (HOT) downgraded to Neutral from Buy at UBS
TubeMogul (TUBE) downgraded to Neutral from Buy at Citigroup
Wet Seal (WTSL) downgraded to Neutral from Buy at B. Riley
Initiations
Akamai (AKAM) resumed with a Market Perform at JMP Securities
Boston Properties (BXP) initiated with a Buy at Mizuho
DBV Technologies (DBVT) initiated with a Buy at Citigroup
DBV Technologies (DBVT) initiated with an Outperform at Leerink
Eagle Point Credit (ECC) initiated with a Market Perform at Keefe Bruyette
Proteon Therapeutics (PRTO) initiated with a Buy at Stifel
Proteon Therapeutics (PRTO) initiated with an Outperform at JMP Securities
Proteon Therapeutics (PRTO) initiated with an Outperform at RW Baird
Sunoco Logistics (SXL) initiated with a Buy at Jefferies
Transocean Partners (RIGP) initiated with a Buy at Citigroup
COMPANY NEWS
Halliburton (HAL) to acquire Baker Hughes (BHI) for $78.62 per share in cash and stock deal, representing an equity value of $34.6B and enterprise value of $38B
Pfizer (PFE) formed strategic alliance with Merck KGaA (MKGAY) to jointly develop and commercialize MSB0010718C, an investigational anti-PD-L1
antibody currently in development by Merck KGaA as a potential treatment for multiple types of cancer
JPMorgan (JPM) reported October net credit losses 2.26% vs. 2.24% last month
Exterran (EXH) to spin off international, fabrication businesses
Inovio (INO), Roche (RHHBY) terminated collaboration for INO-5150
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
China Mobile Games (CMGE), Sinovac Biotech (SVA), Anthera Pharmaceuticals (ANTH)
Companies that missed consensus earnings expectations include:
JD.com (JD), ContraFact (CFRX), MAG Silver (MVG)
NEWSPAPERS/WEBSITES
Actavis (ACT) close to buying Allergan (AGN) for over $64B, Bloomberg reports (VRX)
Hasbro (HAS) ends DreamWorks (DWA) talks after stock decline, Deadline reports
Facebook (FB) working on ‘Facebook at Work’ website, FT reports (GOOG, LNKD, MSFT)
DuPont (DD) probed on Texas chemical plant accident that left four dead, WSJ reports
Third Point attempts ‘golden leash’ strategy in Dow Chemical (DOW) fight, WSJ reports
Ford (F) could rise 30% in a year, Barron’s says
Cummins (CMI) could rise over 15% in FY15, Barron’s says
Arista Networks (ANET) growth could slow, Barron’s says
SYNDICATE
Core Molding (CMT) files $50M mixed securities shelf
Dyax (DYAX) files automatic mixed securities shelf
Magellan Petroleum (MPET) files $100M mixed securities shelf
PICO Holdings (PICO) files to sell $400M mixed securities shelf
via Zero Hedge http://ift.tt/1qcxkUT Tyler Durden