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Friday, March 29, 2024

Frontrunning: August 29

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

  • Obama Cools Talk of Strikes Against Islamic State in Iraq or Syria (WSJ)
  • Separatists say will allow ‘trapped’ Ukrainian forces to withdraw (Reuters)
  • Ukraine Fighting Surges as Russian-Backed Forces Gain (BBG)
  • Missouri police sued for $40 million over actions in Ferguson protests (Reuters)
  • BTFDividend stocks? Tesco Slumps as Retailer Slashes Dividend 75% on Forecast (BBG)
  • In town halls, U.S. lawmakers hear voter anger over illegal migrants (Reuters)
  • Obamacare’s Latest Threat Nears Turning Point in Court (BBG)
  • Untangling the Mess of Austrian Bank Hypo (WSJ)
  • The billion-dollar fall of the house of Espirito Santo (Reuters)
  • Manhattan Condo Resale Prices Reach Record High (BBG)
  • California Drought Squeezes Wells: State Considers Regulating Groundwater Use for First Time (WSJ)
  • Hedge Funds Hunting Clues in Treasury Tax-Inversion Limit (BBG)
  • Tragedy-hit Malaysia Airlines to lose 6,000 jobs in bold revamp (Reuters)
  • Jet Fuel Crunch Strikes New York Airports Before Holiday (BBG)
  • Volcano Erupts in Papua New Guinea (WSJ)
  • Google tests airborne drones to deliver goods (Reuters)
  • Corn Heists Turning Grain Port Into Argentina’s Chicago (BBG)
  • Syrian refugees top 3 million, half of all Syrians displaced: U.N. (Reuters)
  • IBM launches Watson system for research, hopes for breakthroughs (Reuters)

 

Overnight Media Digest

WSJ

* President Barack Obama signaled the U.S. has no immediate plans to escalate military operations against Islamic State extremists in Iraq or Syria, stressing the need to counter the group’s advance while formulating a broader strategy to protect U.S. interests and allies. (http://on.wsj.com/1tQuYsK)

* Google Inc’s advanced-research lab Google X said on Thursday it was developing a system of drones to deliver goods. Google said a 5-foot-wide single-wing prototype from its Project Wing carried supplies including candy bars, dog treats, cattle vaccines, water and radios to two farmers in Queensland, Australia, earlier this month. (http://on.wsj.com/VU8ytR)

* Some of the nation’s largest banks distanced themselves from a cyberattack that hit J.P. Morgan Chase & Co, saying they had no indication they had been the victims of a similar incident. Their comments came as law-enforcement officials pursued investigations of potential breaches at J.P. Morgan and a handful of other financial institutions that haven’t been identified. (http://on.wsj.com/1orM2j8)

* Vivendi SA in a swift decision on Thursday favored an offer worth nearly $10 billion for its Brazilian telecommunications business from Spanish telecom giant Telefónica SA over a bid from rival Telecom Italia SpA , ending a surprise bidding war between two of Europe’s largest telecom companies.(http://on.wsj.com/1tg8wvn)

* A PG&E Corp electrical substation for Silicon Valley was breached for a second time, despite the utility’s efforts to bulk up security following an armed attack last year. The Metcalf substation is a critical piece of Silicon Valley’s grid, flowing power to America’s technology hub. (http://on.wsj.com/1ljAvaJ)

* Government-bond yields touched new lows in the U.S. and Germany, as investors piled anew into ultrasafe debt amid growing concern about the pace of European growth. The gains underscore the dynamics that have made government bonds a surprise star performer this year – a winning streak many analysts now expect will continue. (http://on.wsj.com/1vTHPKY)

* Bankers have been using code names to keep reporters, traders and even rival companies from sniffing out deal news before formal announcements are made. But deal-making powerhouse Goldman Sachs Group Inc is putting an end to the name game, opting instead to automate the process to avoid the pitfalls that go with the territory. (http://on.wsj.com/1vTIWKK)

* Twitter Inc plans to open an office in populous Indonesia in the next three to six months, an executive said, highlighting the importance of fast-growing emerging markets as the company seeks future growth. (http://on.wsj.com/1qm13qY)

 

FT

President Barack Obama said on Thursday that he has not yet developed a broad strategy for confronting Islamic State, dampening expectations of imminent US military action against Islamist radicals in Syria.

Moscow faced more backlash over growing evidence of its direct military involvement in eastern Ukraine after Nato warned on Thursday that Russia has well over 1000 troops operating inside the country.

Ahead of next month’s independence referendum, British Prime Minister David Cameron issued a passionate defence of the UK and its economic benefits at a dinner of Scottish members of the CBI business lobby on Thursday night.

British Prime Minister David Cameron suffered a setback on Thursday when a lawmaker from his ruling Conservative party unexpectedly resigned and defected to the anti-EU UKIP party.

Royal Dutch Shell Plc has sought permission from the U.S. government to drill in the Arctic Ocean and is keeping open the possibility that it could drill there next summer

Deutsche Bank, Germany’s largest lender has been fined 4.7 million pounds ($7.79 million)by Britain’s financial watchdog after it failed to report correctly all its transactions of a certain type of equity derivative in a six-year period between 2007 and 2013 to the regulator.

 

NYT

* Royal Dutch Shell Plc submitted a plan to the federal government on Thursday to try once again to explore for oil in the Alaskan Arctic, following years of legal and logistical setbacks as well as dogged opposition from environmentalists. (nyti.ms/1sM2jDh)

* Barclays Capital Plc has agreed to provide $275 million to finance Detroit’s operations as it comes out of bankruptcy, according to documents filed in bankruptcy court.(nyti.ms/1tQtA9y)

* The French conglomerate Vivendi SA is saying goodbye to the telecom sector. The company, whose holdings include the Universal Music Group and the French pay-television operator Canal Plus, said on Thursday that it was in exclusive talks to sell its Brazilian telecommunications unit to the Spanish carrier Telecom Italia SpA for about $9.8 billion. (nyti.ms/1vTHbNJ)

* A British regulator fined the German lender Deutsche Bank AG 4.7 million pounds($7.79 million) on Thursday for having failed to properly report certain swaps transactions over a period of almost six years. (nyti.ms/1zKyqps)

* Huarong Asset Management, China’s biggest manager of bad debt, said on Thursday that it had attracted about $2.4 billion from eight investors, including Goldman Sachs Group and Warburg Pincus, before an expected initial public offering here. (nyti.ms/1AZk0Ep)

* Private bank Lombard Odier unveiled its financial results publicly for the first time in its 218-year history on Thursday, reporting a profit and becoming the latest Swiss financial institution to pull back the curtain on what has been a traditionally secretive banking culture. (nyti.ms/YY8xr9)

 

Canada

THE GLOBE AND MAIL

* While federal public health authorities have assured Canadians that there is very little risk of an Ebola outbreak, hospitals across the country are training staff and reinforcing protocols should an infected patient walk through their doors. (http://bit.ly/1C80ffj)

* The apparent presence of Russian troops in Eastern Ukraine amounts to an “active invasion,” Canadian Foreign Affairs Minister John Baird said, calling Russia’s advance an “absolutely reckless” and “shamelessly dishonest” provocation leading up to a National Atlantic Treaty Organization summit next week. (http://bit.ly/1qmzCgv)

Reports in the business section:

* First, Germany expressed reservations about parts of the Canada-Europe free trade deal. Now, European Union lawmakers are threatening to block the agreement outright. The Greens and other left-wing parties are objecting to any trade deal that contains Investor State Dispute Settlement provisions. It allows companies to sue governments when they believe their trade rights have been violated. But critics say the system gives multinationals too much power – a concern that would magnify if the Canadian agreement becomes a model for the European Union-United States free trade agreement, which is also being negotiated. (http://bit.ly/1pPhNIj)

NATIONAL POST

* As many as 1,000 Canadian troops at a time are expected to soon be constantly rotating through Europe. It will be the first time that Canada has so many troops across the pond since it closed two bases in Germany’s Black Forest when the Cold War ended. With virtually no domestic political discussion about what Canadian Forces might end up having to do in eastern Europe, the Stephen Harper government as well as allies such as Britain have provided NATO with a template for how future deployments will try to assist NATO’s easternmost allies. (http://bit.ly/XXOJE4)

* Canada’s premiers have agreed at their annual meeting that they need more money from Ottawa to pay for healthcare and infrastructure – a familiar refrain at these gatherings – but there was no consensus on Thursday on how much cash they want to deal with crumbling roads and an aging population. (http://bit.ly/1lzxdk3)

FINANCIAL POST

* Repsol SA has dropped a plan to buy all of Talisman Energy Inc, and is instead weighing the purchase of some of the Canadian company’s shale assets, people with knowledge of the matter said. (http://bit.ly/1poNQiU)

* Air Canada has a vision of turning Toronto’s Pearson International Airport into a global aviation hub to rival Chicago’s O’Hare – but the airline’s Chief Executive Calin Rovinescu says that it could all be undone by the Ontario Liberal government’s determination to dramatically increase jet fuel taxes and drive away air traffic. (http://bit.ly/1qN9RDt)

 

China

SHANGHAI SECURITIES NEWS

– The 84 fund firms who have already reported their first-half results recorded a combined profit of 9.6 billion yuan ($1.6 billion), according to earnings data. Commodities-related funds performed the best.

– China’s pharmaceutical sector could see a pick-up in growth over the next few months after a fierce crackdown on corruption and drug pricing dragged on the sector, the official financial paper said, citing private-equity investors.

– Shanghai plans to invest up to 8 billion yuan ($1.3 billion) every year to support the elderly care industry, according to an official at the Community Health Alliance.

CHINA SECURITIES JOURNAL

– Net profits of 2,380 Shanghai- and Shenzhen-listed companies rose 9.4 percent in the first half of the year, according to calculations by the financial newspaper.

SECURITIES TIMES

– Chinese cities of Hangzhou and Xi’an have withdrawn any limitations on purchasing property because of high numbers of unsold properties.

SHANGHAI DAILY

– The trial of former Shanghai health official Huang Fengping began on Thursday, according to the Shanghai No. 1 Intermediated People’s Court. Huang is charged with corruption after authorities said he failed to account for over 15 million yuan of cash and property.

CHINA DAILY

– Chinese President Xi Jinping on Wednesday called for closer cooperation with Russia and other Central Asian countries to combat terrorism.

PEOPLE’S DAILY

– The United States must understand that China will not turn a blind eye to any outsiders trying to “peep in the window”, the paper, which acts as a mouthpiece for the Party, said in a commentary. The two countries are sparring over a recent near-collision between a Chinese and a U.S. jet.

 

Britain

The Times

CAMERON BRACED FOR MORE UKIP DEFECTIONS

David Cameron has been warned to brace himself for more defections in the coming months after a leading Conservative MP stunned Westminster by quitting his seat and switching to Ukip.

BIG HITTERS CLASH IN BATTLE FOR SCOTLAND

There are just three weeks to go before Scotland votes on independence – and the trickle of business leaders prepared to declare their hand has suddenly become a flood.

The Guardian

SMEs FEELING THE PINCH AS FUNDING FOR LENDING FAILS TO PICK UP

Business lending remains in the doldrums despite the economic recovery after the Bank of England’s Funding for Lending Scheme (FLS) recorded another poor performance in the second quarter.

DOUGLAS CARSWELL’S DEFECTION TO UKIP PUTS PRESSURE ON DAVID CAMERON

David Cameron was forced to interrupt a pre-referendum trip to Scotland on Thursday as the Conservative leadership scrambled to deal with the surprise defection of a hardline Eurosceptic MP to Ukip, triggering an early byelection.

The Telegraph

SCOTTISH INDEPENDENCE: CBI CHAIRMAN WARNS OF ‘ENORMOUS’ RISKS WITH A YES VOTE Sir Mike Rake, president of the Confederation of British Industry, says Scottish secession will endanger the recoveries on both sides of the border.

SHELL COULD RESURRECT CONTROVERSIAL ARCTIC OIL DRILLING PLAN

Royal Dutch Shell could resurrect its controversial plan to drill for oil in the Alaskan Arctic after filing new plans with the U.S. government.

Sky News

BUSINESS LEADERS BACK SCOTTISH INDEPENDENCE

A letter by more than 200 business figures supporting Scottish independence has been published, just 24 hours after opponents made a similar pitch.

 

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Personal income for July at 8:30–consensus up 0.3%
Consumer spending for July at 8:30–consensus up 0.2%
Chicago PMI business barometer for August at 9:45–consensus is 56.4
Consumer sentiment index for August at 9:55–consensus 80.5

ANALYST RESEARCH

Upgrades

AGCO (AGCO) upgraded to Neutral from Underweight at JPMorgan
OmniVision (OVTI) upgraded to Market Perform from Underperform at Raymond James

Downgrades

Mobile TeleSystems (MBT) downgraded to Hold from Buy at Deutsche Bank
Sunesis (SNSS) downgraded to Neutral from Outperform at Wedbush

Initiations

3D Systems (DDD) initiated with a Buy at Stifel
Athlon Energy (ATHL) initiated with an Overweight at Barclays
ExOne (XONE) initiated with a Hold at Stifel
Federated National (FNHC) initiated with an Outperform at William Blair
Liberty TripAdvisor (LTRPA) initiated with an Outperform at FBR Capital
Stratasys (SSYS) initiated with a Buy at Stifel

COMPANY NEWS

Fiat (FIATY) said Chrysler merger on schedule to go ahead as intended
Microchip Technology (MCHP) confirmed preliminary discussions with CSR plc (CSRE)
Tyson Foods (TSN), Hillshire complete merger, see FY15 synergy savings of $225M
Fred’s (FRED) announced operational restructuring, closing of 60 stores
Big Lots (BIG) announced new $250M share repurchase program

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Big Lots (BIG), Ocular Therapeutix (OCUL), Bona Film (BONA), Amira Nature Foods (ANFI), OmniVision (OVTI), Rally Software (RALY), Zoe’s Kitchen (ZOES), China Cord Blood (co), Splunk (SPLK), Avago (AVGO), Veeva (VEEV)

Companies that missed consensus earnings expectations include:
Fred’s (FRED)

Companies that matched consensus earnings expectations include:
American Software (AMSWA), Pacific Sunwear (PSUN)

NEWSPAPERS/WEBSITES

JPMorgan (JPM) hack said to occur over months, Bloomberg reports
Google (GOOG) has been developing delivery drones for two years, The Atlantic reports (AMZN)
Royal Dutch Shell (RDS.A) submits new Arctic drilling plan, NY Times says
McDonald’s (MCD) said 12 restaurants in Russia temporarily shut, Bloomberg reports
J&J (JNJ) begins sales process for its medical device unit Cordis, WSJ says
Google’s (GOOG) Smith said to be top candidate for U.S. CTO job, Bloomberg reports

SYNDICATE

Authentidate (ADAT) files registered direct offering of approximately $2.47M
Brookfield (BAM) files $3B mixed securities shelf
Carrizo Oil & Gas (CRZO) files automatic mixed securities shelf
NanoString (NSTG) files $100M mixed securities shelf
Quantum (QTWW) files $75M mixed securities shelf

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