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Frontrunning: September 26

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

  • Mystery Man Who Moves Japanese Markets Made More Than 1 Million Trades  (BBG)
  • Draghi’s Trillion-Euro Pump Finds Blockage in Spain: Euro Credit (BBG)
  • Apple plays defense on iPhone 6 bending, software concerns (Reuters)
  • U.S. to Shield Military From High-Interest Debt (WSJ)
  • U.S. Outgunned by Extremists on Social Media Battlefield (BBG)
  • Yen Weakens on Pension Fund Reform; Aussie Drops to 7-Month Low (BBG)
  • Secretive Russian oil giant has no fear of sanctions (Reuters)
  • Ride-Sharing Services Face Legal Threat From San Francisco, Los Angeles (WSJ)
  • Putin’s Sell-Treasuries-for-BRICS Bonds Plan Has Limits (BBG)
  •  US Homeland Security moves to tackle climate change risks (Reuters)
  • Air France Pilots Defend ‘Gourmet’ Contracts (WSJ)
  • Ukraine Pushes for NATO Membership as Gas Talks Commence (BBG)
  • North Korean TV acknowledges leader Kim Jong Un’s health problems (Reuters)
  • Draghi May Discover Weaker Euro Doesn’t Buy Enough Recovery (BBG)
  • Hackers exploit ‘Shellshock’ bug with worms in early attacks (Reuters)
  • Chernobyl Haven Lures War-Worn Ukrainians to Dictatorship (BBG)

 

Overnight Media Digest

WSJ

* Hedge funds and other money managers are flocking to small markets ranging from cocoa to coffee to cattle that have defied a broader plunge in raw-materials prices. These investors are betting on goods that are seeing demand soar as emerging-market countries become wealthier and their middle classes expand, increasing demand for products such as chocolate and hamburgers.(http://on.wsj.com/1vlJ9GU)

* Air France’s plans to conquer European skies with a budget carrier have run into severe turbulence as its pilots insist on what they regard as an inalienable right: a generous contract. As of late Thursday – and 11 days into a strike that has forced Air France to cancel more than half its flights and caused a daily operating loss of about $25.6 million – management and pilots were still at loggerheads. (http://on.wsj.com/1wN485H)

* U.S. and European policy makers have hit a snag in their postcrisis efforts to coordinate on international rules for derivatives, which played a central role in the 2008 meltdown. The two sides are at loggerheads over the regulation of clearinghouses – entities that are supposed to help prevent a market-wide collapse by ensuring either party in a derivatives transaction would get paid if the other side falters. (http://on.wsj.com/1uL9koM)

* A group of hedge funds that sued Argentina in the U.S. has agreed to support a request by a Citigroup Inc unit to allow the bank to make an interest payment due Tuesday to holders of restructured bonds governed by Argentine law, people familiar with the matter said Thursday. (http://on.wsj.com/1n6l8Dy)

* A federal judge Thursday ordered Texas entrepreneur Sam Wyly and the estate of his deceased brother, Charles Wyly, to pay an estimated $300 million to $400 million for their role in a fraudulent offshore scheme. In May, the Wyly brothers were found liable on civil fraud allegations for using a system of offshore trusts to hide stock sales, leading to $553 million in profits. (http://on.wsj.com/1v71kRx)

* Federal regulators fined U.S. Bancorp $9 million and required it to return $48 million to customers over what it called illegal billing practices related to the bank’s identity-theft products. U.S. Bancorp said “we regret that errors occurred” and that the problems were related to a vendor, Affinion Group. (http://on.wsj.com/1rxcder)

* Top-level discussions about the possible departure of Zhou Xiaochuan, the long-serving governor of the People’s Bank of China, come as the likelihood is rising that the world’s No. 2 economy may fall short of the government’s annual economic growth target, 7.5 pct for 2014, for the first time since the Asian financial crisis of 1998. Many economists say Beijing may have to resort to more big-bang measures – such as a blanket interest-rate cut that, according to central bank advisers, has been fended off by Zhou – to rev up economic activity. (http://on.wsj.com/1BeuU7z)

 

NYT

* Yahoo Inc has sold Alibaba Group Holding Ltd shares worth $6 billion after taxes, and its remaining stake is valued at $36 billion. Yet Yahoo’s shares have tumbled more than 8 percent since then, highlighting the peculiarly difficult crossroad that now confronts Yahoo and its chief executive, Marissa Mayer. (http://nyti.ms/1roQ2qs)

* Just a little more than a year after pulling back from South America, Sequoia Capital, the Silicon Valley venture capital firm, has led a new $13.8 million round in Nubank, a financial services start-up based in Sao Paulo. Its latest investment in Brazil comes despite recession and political uncertainty with presidential elections coming next month. (http://nyti.ms/YgIryW)

* The hedge fund seeking to replace Darden Restaurants Inc board, Starboard Value, received support from two leading proxy advisory firms, Institutional Shareholder Services and Glass Lewis, which both recommended that Darden shareholders vote for the fund’s proposed slate of directors at an upcoming meeting in October. (http://nyti.ms/Zftheg)

* Fairholme Capital Management, one of Sears Holding Corp’s largest shareholders, said on Thursday it was unable to reach an agreement with the real estate firm, St. Joe Co , to participate in the loan. Fairholme was in discussions with St. Joe to contribute up to $100 million, according to a filing on Sept. 18 with the Securities and Exchange Commission. (http://nyti.ms/1yts0Qm)

* Robert A. Eckert, former chairman and chief executive of Mattel Inc, has joined the middle-market private equity firm Friedman Fleischer & Lowe as an operating partner. (http://nyti.ms/1ytsdD8)

* The United States dollar, after one of its most prolonged weak spells ever, has now re-emerged as the preferred currency for global investors. Across trading desks in New York, London and elsewhere, analysts are rushing to raise their dollar forecasts based on the resurgence in the American economy.(http://nyti.ms/1sw09MM)

* Chrysler, a unit of Fiat SpA, said on Thursday that it would recall 349,442 vehicles worldwide for faulty ignition switches that could cause cars to suddenly turn off while driving, adding to the recent wave of automobile recalls related to ignition problems. (http://nyti.ms/1ytslT8)

 

Canada

THE GLOBE AND MAIL

** Just hours before Canada and the European Union release the long-awaited final text of a free trade pact, German officials visiting Ottawa delivered a blunt and unwelcome message: The deal must be changed. Senior German official Uwe Beckmeyer said sections of the deal allowing private companies to sue governments must be changed before Germany will support the Comprehensive Economic and Trade Agreement (http://bit.ly/YhdlHo)

** Ontario will slash the number of government agencies and end duplication in the public sector as it struggles to eliminate deficit in three years. These plans were laid out Thursday in Premier Kathleen Wynne’s mandate letter to Deputy Premier Deb Matthews, who is directing the government’s budget-cutting efforts. (http://bit.ly/1riT6Wl)

** Norway’s Statoil ASA has shelved a multibillion-dollar oil sands project, blaming rising construction costs and repeated delays in new export pipelines that would boost the value of Canadian heavy crude oil. Statoil said it halted plans for the steam-driven northern Alberta development, called Corner, for at least three years. About 70 jobs will be cut. (http://bit.ly/1qBrBky)

NATIONAL POST

** Any expansion of Canada’s role in the war against the Islamic State in Iraq and Al-Sham that would involve direct combat such as air strikes would be brought to Parliament for a vote, Foreign Affairs Minister John Baird said Thursday. (http://bit.ly/1ro3zgW)

** International free trade and capitalism offer a path to world peace, Prime Minister Stephen Harper said Thursday in his first address to the United Nation’s General Assembly since 2010. (http://bit.ly/1Bfh9Fz)

** Porter Airlines’ chief executive said the decision to sell the passenger terminal at Toronto’s city center airport was an alternative to going public as the company continued to hunt for new sources of capital more than four years after shelving plans for an initial public offering. (http://bit.ly/1uteTvO)

 

China

CHINA SECURITIES JOURNAL

- Boeing Co said on Thursday it had delivered the first 777-300ER airplane to China Eastern Airlines Co Ltd . China Eastern has previously ordered 20 of the plane models.

CHINA DAILY

- Beijing is on target to cut pollution levels by a quarter by 2017, according to a report from Tsinghua University and the Clean Air Alliance of China.

- China’s land watchdog will tighten control of land use for building new towns and cities because of a glut of projects lying empty, according to a notice from the Ministry of Land and Resources on Thursday.

- Bank of China Ltd said on Thursday it was cutting its annual GDP growth forecast for China to 7.4 percent from 7.5 percent as its research showed the country was unlikely to show a marked recovery in the fourth quarter.

SHANGHAI SECURITIES NEWS

- While China’s shadow banking sector does holds some “hidden risks”, it can benefit the overall economy as an alternative channel for raising funds, central bank deputy governor Hu Xiaolian said at a conference on Thursday.

SHANGHAI DAILY

- The train network serving Shanghai is expected to carry 3.4 million people over the week-long public holiday next week, the city’s railway authorities said.

 

FT

Singaporean sovereign wealth fund GIC has agreed to buy almost half of RAC’s stake from private equity firm Carlyle Group. The deal would value the company at about 2 billion pounds ($3.26 billion) including debt.

The European Union’s banking regulator is planning next month to clamp down on pay policies that are designed to sidestep the EU’s incoming bonus cap, according to sources familiar with the regulator’s draft recommendations.

Lloyds Banking Group is to sell an 11.5 percent stake in TSB Banking Group Plc, nabbing the expiry of a lock-up period and Scotland’s increased possibility to raise about 160 million pounds in future.

Anil Agarwal, the billionaire controller of Vedanta Resources Plc, plans to give 75 percent of his wealth to charity. It is unclear whether Agarwal would relinquish control over Vedanta.

Air France-KLM has shelved its plans to develop a low-cost airline across Europe as the Franco-Dutch group aims to end the 11-day pilots’ strike that has cost the company about 200 million euros ($255.04 million).

David Howard, chief executive officer of British stockbroker Charles Stanley Group Plc, is stepping down to comply with new regulations of the EU capital requirements directive for financial groups, which requires the company to separate the roles of chairman and CEO.

Airbus Group’s single-aisle passenger jet A320neo, which was upgraded to a more fuel efficient version, flew for its maiden flight above Toulouse in France on Thursday

 

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
Q2 GDP at 8:30--consensus up 4.6%
Q2 personal consumption at 8:30--consensus up 2.9%
Q2 core PCE at 8:30--consensus up 2.0%
University of Michigan consumer confidence final September reading at 9:55--consensus 84.8

ANALYST RESEARCH

Upgrades

Aixtron (AIXG) upgraded to Overweight from Equal Weight at Morgan Stanley
Chesapeake Utilities (CPK) upgraded to Buy from Hold at Brean Capital
Commercial Metals (CMC) upgraded to Buy from Neutral at Citigroup
Cross Country Healthcare (CCRN) upgraded to Buy from Neutral at UBS
LinkedIn (LNKD) upgraded to Outperform from Market Perform at Cowen
Mercury General (MCY) upgraded to Market Perform from Underperform at Keefe Bruyette
Nike (NKE) upgraded to Buy from Neutral at Janney Capital
Northrop Grumman (NOC) upgraded to Buy from Hold at Deutsche Bank
Philips (PHG) upgraded to Overweight from Equal Weight at Morgan Stanley
Textron (TXT) upgraded to Buy from Hold at Stifel
WABCO (WBC) upgraded to Buy from Hold at Stifel

Downgrades

Air France-KLM (AFLYY) downgraded to Underperform from Hold at Jefferies
Beacon Roofing (BECN) downgraded to Neutral from Buy at Longbow
China Unicom (CHU) downgraded to Hold from Buy at Deutsche Bank
Erickson (EAC) downgraded to Sell from Hold at Stifel
H.B. Fuller (FUL) downgraded to Neutral from Overweight at Piper Jaffray
Seadrill (SDRL) downgraded to Sell from Neutral at Goldman
Steel Dynamics (STLD) resumed with a Neutral from Buy at Citigroup

Initiations

AK Steel (AKS) resumed with a Sell at Citigroup
Celldex (CLDX) initiated with an Outperform at Cowen
VeriFone (PAY) initiated with a Hold at Stifel
Verint Systems (VRNT) initiated with a Buy at Goldman
Western Gas Equity (WGP) initiated with a Neutral at Mizuho
Western Gas Partners (WES) initiated with a to Buy  at Mizuho

COMPANY NEWS

Actavis (ACT) confirms generic Butrans patent challenge
Chiquita Brands (CQB), Fyffes announce revised transaction agreement
Intel (INTC) to invest up to $1.5B in semiconductor business under Tsinghua
Medidata (MDSO) Solutions subject of international wire transfer fraud
Repros Therapeutics (RPRX) reports Androxal met primary efficacy endpoints
S&P upgrades GM (GM), GM Financial to ‘BBB-’
Scientific Games (SGMS) receives three-year contract extension with Delaware Lottery
Susser Petroleum (SUSP) agrees to acquire Aloha Petroleum for $240M
Symantec (SYMC) names Michael Brown as CEO
Western Refining Logistics (WNRL) to acquire wholesale business from WNR for $360M

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Thor Industries (THO), Nike (NKE), Diamond Foods (DMND), Micron (MU)

Powell (POWL) lowers FY14 guidance after ‘start-up productivity issues’

NEWSPAPERS/WEBSITES

Carlyle Group (CG) to pay $115M in collusion suit settlement, Reuters says
Companies receive U.S. information requests on Comcast-TWC deal, Bloomberg says

SYNDICATE

ONEOK (OKE) files automatic mixed securities shelf


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