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Thursday, March 28, 2024

Frontrunning: October 2

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

  • As we warned in May 2013… Gross Exposes $42 Trillion Bond Market’s Key Flaw in Exit (BBG)…. hint: no liquidity
  • WTI Crude Slips Below $90 for First Time in 17 Months (BBG)
  • Traders Thank Fed for Once-in-Decade Surge in Profit (BBG)
  • Islamic State committing ‘staggering’ crimes in Iraq: U.N. report (Reuters)
  • Philippine Islamist militants threaten to behead German on October 17 (Reuters)
  • Draghi’s Buying Spree for the ECB Might Start Modestly (BBG)
  • Russian Officials Say No Plans for Capital Controls (WSJ)
  • Indians Join the Wave of Investors in Condos and Homes in the U.S. (NYT)
  • Leader of Mexican drugs cartel captured (FT)
  • Dallas Ebola patient vomited outside apartment on way to hospital (Reuters)
  • Goldman chat room a message to Wall St (FT)
  • Angry former workers: Angry Birds Maker Rovio to Cut up to 130 Jobs in Finland (WSJ)
  • Steven Cohen Urges Court to Dismiss Ex-Wife’s Fraud Suit (BBG)
  • As PIMCO bleeds assets, Gross shows risk of star culture (Reuters)
  • Caltech Leads World University Rankings for Fourth Year (BBG)
  • U.S. Apartment Vacancies Rise for First Time Since 2009 (BBG)
  • Commodity ETF Outflows Reach Highest This Year on Supply (BBG)
  • China backs Hong Kong leader CY Leung over tear gas (FT)

 

Overnight Media Digest

WSJ

* Secret Service Director Julia Pierson resigned after coming under intense pressure following an embarrassing breach of security at the White House two weeks ago. (http://on.wsj.com/10m0Iwa)

* Health authorities are monitoring for symptoms of Ebola in at least a dozen people who came into contact with a Liberian man before he was hospitalized in Dallas, a move to prevent the virus’s spread in the U.S. (http://on.wsj.com/1rGPsmT)

* American consumers are buying new cars and trucks at the strongest pace in years, offsetting car makers’ troubles elsewhere and leading the biggest U.S. auto maker to forecast fat profits ahead. (http://on.wsj.com/1sO9y28)

* The Coca-Cola Co, bowing to pressure from lead investor Warren Buffett, announced changes to its executive pay plan that will result in fewer stock awards. (http://on.wsj.com/1E2LU4W)

* Pacific Investment Management said investors pulled $23.5 billion from the Pimco Total Return fund in September, the firm’s largest-ever monthly outflow, with the largest amount on the day founder Bill Gross abruptly quit. (http://on.wsj.com/1sOcig7)

* Bank of America Corp’s board voted to make Brian Moynihan chairman as well as chief executive, capping a comeback for a banker who survived the regulatory scrutiny and huge losses that followed the financial crisis. (http://on.wsj.com/1rGPsn5)

 

FT

* Some of the world’s largest banks have stopped contributing to many of the financial benchmarks to avoid potential litigation, as a result of the Libor and foreign exchange rate rigging scandal.

* German ecommerce company Rocket Internet AG priced its shares at 42.50 euros ($53.6265). The share listing is expected to raise gross proceeds of 1.4 billion euros and give it a market value of 6.7 billion euros.

* France and Italy have increased their defiance of EU budget targets as the two countries go into talks relating to their public finances with their European partners in the coming weeks.

* UK Prime Minster David Cameron vowed to lower income taxes for 30 million people and keep a competitive corporate tax policy. These tax cuts will cost 7.2 billion pounds a year when fully implemented in 2020.

* Google Inc announced it would stop publishing snippets of German publisher Axel Springer’s articles in its search results. This action follows a dispute between both the groups over intellectual property rights. (1 US dollar = 0.7925 euro)

 

NYT

* Pimco’s flagship fund, once billed as the world’s biggest bond fund, is shrinking fast. In September, investors pulled $23.5 billion from the Pimco Total Return Fund, with the largest redemptions coming on Sept. 26, the day Bill Gross stunned Wall Street by resigning from the firm he co-founded more than 40 years ago. (http://nyti.ms/1rNUmjx)

* Coca-Cola Co, facing sharp shareholder criticism of its executive pay, on Wednesday announced changes to the compensation plan that set off the squall. (http://nyti.ms/10lZYXP)

* Federal and state authorities, a group that includes prosecutors in New York, Alabama and Texas, are zeroing in on the most powerful, and arguably the least regulated, rung of the subprime auto loan chain, used-car dealerships, according to people briefed on the investigations. Already, they have found hundreds of fraudulent loans that together total millions of dollars. (http://nyti.ms/1vz65mf)

* A federal bankruptcy judge on Wednesday upended the widely held belief that public workers’ pensions have a special status in California that makes them impossible to cut, further chipping away at the idea that pensions are sacrosanct in a municipal bankruptcy. (http://nyti.ms/1uf22vX)

* David Neil, senior Justice Department Prosecutor said he planned to depart the government at the end of the week, capping an eight-year Justice Department career. (http://nyti.ms/1ps2MIG)

* The proxy advisory firm Institutional Shareholder Services amplified calls for Allergan Inc’s board to hold off from making an all-cash acquisition that would scuttle an existing takeover offer from Valeant Pharmaceuticals International Inc and Pershing Square Capital Management. (http://nyti.ms/1oAB502)

* Bank of America Corp said on Wednesday that Brian Moynihan, its chief executive, would assume the additional role of chairman. (http://nyti.ms/1oCs5HM)

* Relational Investors, one of the most prominent activist investors, is planning to start a new fund that will give more day-to-day control to the firm’s younger executives, a person briefed on the matter said on Wednesday. (http://nyti.ms/1rxuRDT)

* The German technology company Rocket Internet priced its initial public offering at the top of its price range at 42.5 euros ($53.8) a share on Wednesday, valuing the company at 6.7 billion euros, or roughly $8.4 billion. (http://nyti.ms/1tj1QYh)

 

Canada

THE GLOBE AND MAIL

** A federal cyberbullying bill, C-13, that includes controversial new surveillance powers – and immunity for telecommunications companies that voluntarily hand over private data to police – has taken another step toward becoming law, despite a recent Supreme Court ruling that critics say is at odds with the bill. (http://bit.ly/1r0pYND)

** Canada’s largest school board is joining a handful of other academic institutions in taking steps to sever its ties to a language and culture program controlled by the Chinese government. A Toronto District School Board committee voted on Wednesday evening to terminate the Confucius Institute. All but one member on the planning and priorities committee voted in favour of terminating the accord. (http://bit.ly/1vzP5wd)

** Tough new federal anti-corruption rules risk disqualifying several key government suppliers, jeopardizing government plans to buy items ranging from ships and fighter jets to computer systems. At least five foreign multinationals – BAE Systems PLC, Siemens AG, Alcatel-Lucent SA, Tyco International Inc and Hewlett-Packard Co have been convicted of crimes overseas and consequently face possible 10-year bans from doing business with Ottawa. (http://bit.ly/1mU12w3)

NATIONAL POST

** The Stephen Harper government plans further changes to its oft-maligned veterans charter, hoping to take the political sting out of complaints by ex-soldiers promising to campaign against them in the next election. (http://bit.ly/1psCwOk)

** As the debate over the Scarborough subway rages in the Toronto mayoral race, Ontario’s transportation minister was forced on Wednesday to clarify again that the Liberal government is “moving forward” with the transit project, after the finance minister refused to commit to such a position. (http://bit.ly/1tjwmkL)

** The Bank of Canada will be forced to renew warnings of the possibility for higher interest rates in order to halt a “bubble” from forming in the housing market, according to Pacific Investment Management Co Managing Director Ed Devlin. (http://bit.ly/1thjewB)

 

Corporate Finance

* Colombian Natural Resources, owned by investment bank Goldman Sachs Group Inc, will re-start coal exports and re-establish mining operations after the government helped broker a deal for its use of Drummond’s Caribbean Sea port, according to government and industry sources.

* China Investment Corp and AVIC Capital Co Ltd have ended talks to acquire Avolon Holdings Ltd (IPO-AVOL.N), making it likely that the aircraft leasing company will pursue an initial public offering, according to people familiar with the matter.

* Amazon.com Inc’s India unit plans to sell packaged food and beverages, starting mid-October, according to a person with direct knowledge of the launch. (bit.ly/1BAIAtJ)

* Hochtief AG, the German building group controlled by Spain’s ACS, is close to the sale of its Formart real estate business, two sources familiar with the matter told Reuters on Wednesday.

 

 

Fly On The Wall Pre-market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Jobless claims for week of September 27 at 8:30–consensus 297K
Factory orders for August at 10:00–consensus down 9.3%

ANALYST RESEARCH

Upgrades

Autodesk (ADSK) upgraded to Neutral from Sell at Citigroup
Autodesk (ADSK) upgraded to Outperform from Market Perform at Cowen
Autodesk (ADSK) upgraded to Outperform from Neutral at Credit Suisse
Bank of America (BAC) upgraded to Buy from Neutral at UBS
Barrick Gold (ABX) upgraded to Hold from Sell at Canaccord
Electronics for Imaging (EFII) upgraded to Buy from Neutral at Citigroup
Encana (ECA) upgraded to Buy from Hold at Deutsche Bank
Equity One (EQY) upgraded to Neutral from Sell at Citigroup
Fossil (FOSL) upgraded to Buy from Hold at ISI Group
Gentex (GNTX) upgraded to Outperform from Market Perform at Wells Fargo
IntercontinentalExchange (ICE) upgraded to Buy from Hold at Deutsche Bank
Kinder Morgan (KMI) upgraded to Outperform from Market Perform at Wells Fargo
Mattel (MAT) upgraded to Market Perform from Underperform at BMO Capital
NASDAQ (NDAQ) upgraded to Buy from Hold at Deutsche Bank
Pandora (P) upgraded to Buy from Hold at Topeka
Preferred Bank (PFBC) upgraded to Outperform from Market Perform at Raymond James
PulteGroup (PHM) upgraded to Neutral from Sell at Goldman
Time Warner (TWX) upgraded to Hold from Sell at Topeka
Twitter (TWTR) upgraded to Overweight from Neutral at JPMorgan

Downgrades

A10 Networks (ATEN) downgraded to Neutral from Buy at Citigroup
Enphase Energy (ENPH) downgraded to Neutral from Buy at BofA/Merrill
Francesca’s (FRAN) downgraded to Hold from Buy at Canaccord
Intuit (INTU) downgraded to Underweight from Equal-Weight at Evercore
JPMorgan (JPM) downgraded to Neutral from Buy at UBS
Motorola Solutions (MSI) downgraded to Neutral from Buy at Citigroup
NVR (NVR) downgraded to Sell from Neutral at Goldman
ONEOK (OKE) downgraded to Neutral from Overweight at JPMorgan
PNC Financial (PNC) downgraded to Hold from Buy at Jefferies
Tower International (TOWR) downgraded to Market Perform from Outperform at Wells Fargo
U.S. Steel (X) downgraded to Hold from Buy at KeyBanc
WebMD (WBMD) downgraded to Hold from Buy at Stifel

Initiations

Delek US (DK) initiated with an Outperform at RBC Capital
Hanesbrands (HBI) initiated with an Outperform at Credit Suisse
HollyFrontier (HFC) initiated with a Sector Perform at RBC Capital
Insys Therapeutics (INSY) initiated with an Outperform at RBC Capital
Madison Square Garden (MSG) initiated with a Neutral at JPMorgan
Marathon Patent Group (MARA) initiated with a Buy at Ladenburg
Marathon Petroleum (MPC) initiated with a Top Pick at RBC Capital
Patent Properties (PPRO) initiated with a Buy at Ladenburg
Phillips 66 (PSX) initiated with a Sector Perform at RBC Capital
Ply Gem (PGEM) reinstated with a Neutral at Credit Suisse
Rightside Group (NAME) initiated with a Buy at B. Riley
Rubicon Project (RUBI) initiated with a Buy at B. Riley
Salesforce.com (CRM) initiated with a Neutral at DA Davidson
Splunk (SPLK) initiated with a Buy at Stifel
Stillwater Mining (SWC) initiated with a Neutral at Goldman
Tesoro (TSO) initiated with an Outperform at RBC Capital
Valero (VLO) initiated with an Outperform at RBC Capital
Varonis (VRNS) initiated with an Outperform at JMP Securities

COMPANY NEWS

BofA (BAC) CEO Moynihan elected Chairman of the Board of Directors
Starboard Value raises stake in RealD (RLD) to 9.9% from 9.1%, proposes $12 buyout
NFL, DirecTV (DTV) extend NFL Sunday Ticket in new multi-year deal
Arotech (ARTX) CEO Robert S. Ehrlich steps down replaced by Steven Esses
Dollar General (DG) extends tender offer to acquire Family Dollar to Oct. 31
EMC (EMC) names Zane Rowe CFO
Liquidity Services (LQDT) announces business realignment, new senior leadership
Netflix (NFLX) signs deal deal with Adam Sandler for four feature films
NewLink Genetics (NLNK) terminates CFO Gordon Link
Qihoo 360 (QIHU) announces $200M share repurchase plan
Tesla (TSLA) CEO says time to ‘unveil D, something else’

EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Global Payments (GPN), McCormick (MKC), National American University (NAUH)

Companies that missed consensus earnings expectations include:
Park Electrochemical (PKE)

Global Payments (GPN) ups FY15 cash EPS view to $4.65-$4.75, consensus $4.60
Darden (DRI) sees Q2 EPS in upper end of 26c-28c, consensus 26c
McCormick (MKC) raises FY14 adjusted EPS view to $3.30-$3.37, consensus $3.28
Agrium (AGU) sees Q3 EPS 45c-55c, consensus 68c
PTC Inc. (PTC) sees Q4 revenue at or above high end of $340M-$355M, consensus $349.03M

NEWSPAPERS/WEBSITES

Masimo (MASI) wins $466M verdict in patent suit with Philips, Bloomberg says 
Royal Bank of Canada (RY) prop desk spin-off plan shot down by regulators, WSJ says
Scripps Networks (SNI) reaches licensing deal with Netflix, WSJ reports
Verizon (VZ) withdraws target to throttle unlimited LTE data plans, Gigaom says
Vivendi looking for acquisitions in U.S. media space, NY Post reports

SYNDICATE

AAC Holdings (AAC) 5M share IPO priced at $15.00
Atento (ATTO) 10M share IPO priced at $15.00
Calithera Biosciences (CALA) 8M share IPO priced at $10.00
Digital Ally (dgly) files to sell 1.19M shares for holders
JP Energy (JPEP) 13.75M share IPO priced at $20.00
Memorial Resource (MRD) files to sell 27.8M shares for holders
Portola Pharmaceuticals (PTLA) files to sell 10M shares
Radius Health (RDUS) files to sell common stock
VWR Corp (VWR) 25.532M share IPO priced at $21.00
Wayfair (W) 11M share IPO priced at $29.00

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