Frontrunning: August 21


  • Obamacare, tepid U.S. growth fuel part-time hiring (Reuters)

  • Cameron was behind UK attempt to halt Snowden reports (Reuters), Britain defends detention of journalist's partner (Reuters)

  • Goldman Options Error Shows Peril Persists One Year After Knight (BBG)

  • China expresses 'shock' as Japan's nuclear crisis deepens  (Reuters)

  • Inquiry into China insurance firm rattles industry (Caixin)

  • Cheaper rivals eat into Apple’s China tablet share (FT)

  • Exporting fast food: Subway Targets Europe With as Many as 1,000 New Outlets in 2014 (BBG)

  • Reserve Bank of India boosts liquidity to ease pressure on banks (FT)

  • Justice Department Plans New Crisis-Related Cases (WSJ) - Holder doing his cutest attempt to pretend the TBTProsecute aren't

  • Syrian Opposition Alleges Gas Attack, Which Government Denies (WSJ)

  • NYSE Said to Choose JPMorgan, SocGen for Euronext IPO (BBG)

  • Ferrari Plans Hybrids to Follow $1.34 Million LaFerrari (BBG)


Overnight Media Digest


WSJ


* Insurers and the Obama administration are racing to sign Hispanics up for coverage under the federal health overhaul, eager to reach a segment of the U.S. population that offers huge opportunity but also presents many challenges.


* Mary Jo White is the Securities and Exchange Commission's third boss in nine months. In barely the past year, four of the agency's five divisional chiefs have stepped down, including the top SEC officials for trading and markets, corporation finance and enforcement, along with four of the 11 regional directors in offices scattered across the United States.


* Goldman Sachs Group Inc sent waves of erroneous orders into the stock-options market on Tuesday morning, the latest technical glitch to roil market prices and bedevil traders and regulators.


* Aubrey McClendon, one of America's best known wildcatters, is betting again on striking it big in Ohio as he builds a new oil and gas exploration company. McClendon is close to completing an agreement to get more than $500 million from the Energy & Minerals Group, a Houston firm run by John Raymond, son of former Exxon Mobil Corp Chief Executive Lee Raymond, according to people close to the deal.


* The National Security Agency, which possesses only limited legal authority to spy on U.S. citizens, has built a surveillance network that covers more Americans' Internet communications than officials have publicly disclosed, current and former officials say.


* Attorney General Eric Holder said the Justice Department is nearing decisions on a number of probes involving large financial firms and that he plans to announce new cases stemming from the economic meltdown in the coming months.


FT


Diversified trader and miner Glencore Xstrata's chief defended the deal that created the commodities group even though the company took a $7.7 billion hit on its assets.


JPMorgan Chase has hired a venerable New York law firm to carry out an internal investigation into whether the Wall Street investment bank hired the children of powerful Chinese officials to help it win business in China.


Linda Hudson, chief executive of BAE Systems Inc, will retire in March, leaving a gap in the critically important autonomous U.S. division of Europe's biggest defence company.


Dawn Airey, former chairman and chief executive of UK commercial TV broadcaster Five, will run Yahoo's operations in Europe.


The death of a 21-year-old intern at Bank of America has triggered calls for banks in the City of London to overhaul their working culture for younger staff.


Some of the biggest investment banks including Nomura, Citigroup and Bank of America have begun hiring dealmakers and traders in Europe in a sign that hiring is gathering pace following a two-year cull that saw thousands of bankers lose their jobs.


NYT


* Premiums for employer-provided health insurance have increased by relatively modest amounts this year, according to a new survey, a further sign that once-torrid health care inflation has abated for now.


* The SEC is examining whether JPMorgan Chase & Co tried to win business in China by hiring the children of two senior Chinese officials, in possible violation of American anti-corruption statutes.


* Lawmakers and central bankers in India, Indonesia, Turkey and several emerging market economies are scrambling to contain the damage from falling currencies and to keep foreign investors from heading for the exits. Money has poured out of those economies over the last few weeks, pushing down the prices of a wide array of assets, including stocks, bonds and currencies.


* As New York City continues to promote the rise of Silicon Alley start-ups, the state comptroller's office is doing its part for the cause. On Tuesday, the office of Thomas DiNapoli plans to promote its investments in two technology companies, RebelMouse and CoopKanics, as part of its initiative to invest in New York businesses.


* Premiums for employer-provided health insurance have increased by relatively modest amounts this year, according to a new survey, a further sign that once-torrid health care inflation has abated for now.


* Barnes & Noble Inc's founder and chairman, Leonard Riggio, disclosed on Tuesday that he had shelved his plan to buy the company's bookstores, as the embattled chain grapples with an uncertain future. His disclosure accompanied the retailer's latest results, which included a loss that more than doubled from the same time last year.


Canada


THE GLOBE AND MAIL


* Quebec is heading into another fierce debate over the future of religious freedom in the province. A news report suggested that the minority government wants to prohibit public employees from wearing items such as hijabs, turbans and kippa in a broad ban that could extend from elementary and university teachers to nurses and child-care workers.


* A new survey commissioned by Bell and Telus suggests Canadians don't want Ottawa to give special treatment to foreign competitors. The Nanos Research telephone survey of 2,000 Canadians found that 81 per cent of Canadians preferred that neither foreign, nor Canadian-owned telecommunications companies are favoured when Ottawa conducts an auction of highly-coveted wireless spectrum in January.


Reports in the business section:


* U.S. ice cream company Cold Stone Creamery has been acquired by a group of Canadian entrepreneurs with ambitious plans to double the number of locations with partner Tim Hortons Inc.


* Loblaw Cos Ltd, which is offering $61.54 a share to buy Shoppers Drug Mart Corp, initially bid much less - $45 a share - for the drugstore chain in early 2011. The secret takeover talks might have contributed to the delay in Shoppers' process of finding a new CEO, which dragged on that year.


NATIONAL POST


* A family friend who kidnapped a 16-year-old girl had a 20-hour jump on authorities, who discovered he used a timer to set fire to his rural home where the girl's mother and younger brother were found dead, a San Diego County Sheriff's Department spokeswoman said Tuesday.


FINANCIAL POST


* The federal government did not court Verizon Communications Inc and Ottawa's policy on the wireless market does not live or die by the U.S. carrier's decision about whether to enter the market, according to Canada's industry minister James Moore. ()


China


CHINA SECURITIES JOURNAL


- China Merchants Securities Co Ltd said it made a profit of 1.05 billion yuan ($171.44 million) in the first half of this year, a 10.37 percent year-on-year increase.


SHANGHAI SECURITIES NEWS


- Everbright Securities Co Ltd has suspended Yang Jian Bo, the manager of its strategic investment department, to cooperate with the probe into its trading systems, the company told the paper on Tuesday.


SHANGHAI DAILY


- China's state-owned enterprises made a profit of 1.3 trillion yuan ($212.26 billion) in the first seven months of this year, according to data released by the Ministry of Finance on Tuesday.


CHINA DAILY


- China plans to buoy the shipping industry by offering favourable tax policies and technical assistance to shipyards for the development of greener ocean vessels, regeneration of old ships and support for public vessels for domestic needs, said Chen Bin, director-general of the National Development and Reform Commission.


PEOPLE'S DAILY


- China should take note of General Secretary Xi Jinping's plans to strengthen party ideology as expressed in his speech on Tuesday, said an editorial. The country should advance the struggle to promote the cause of socialism with Chinese characteristics, it said.


Fly On The Wall 7:00 AM Market Snapshot


ANALYST RESEARCH


Upgrades


Garmin (GRMN) upgraded to Neutral from Sell at Goldman
National Retail Properties (NNN) upgraded to Outperform at FBR Capital
Questcor (QCOR) upgraded to Buy from Neutral at BofA/Merrill
Royal Caribbean (RCL) upgraded to Overweight from Equal Weight at Morgan Stanley
Xueda Education (XUE) upgraded to Neutral from Sell at Goldman


Downgrades


Agrium (AGU) downgraded to Neutral from Overweight at HSBC
Chesapeake (CHK) downgraded to Neutral from Positive at Susquehanna
Harmony Gold (HMY) downgraded to Sell from Neutral at UBS
Mosaic (MOS) downgraded to Underweight from Neutral at HSBC
Potash (POT) downgraded to Underweight from Overweight at HSBC
Tupperware Brands (TUP) downgraded to Market Perform from Outperform at BMO Capital


Initiations


First Busey (BUSE) initiated with a Market Perform at FBR Capital
Investors Bancorp (ISBC) initiated with a Hold at Deutsche Bank
Navistar (NAV) initiated with a Neutral at Susquehanna
PACCAR (PCAR) initiated with a Neutral at Susquehanna
WCI Communities (WCIC) initiated with a Neutral at JPMorgan
WCI Communities (WCIC) initiated with an Outperform at FBR Capital
WesBanco (WSBC) initiated with a Market Perform at FBR Capital


HOT STOCKS


Facebook (FB) CEO Zuckerberg announced internet.org, a global partnership (QCOM, ERIC, NOK, SSNLF) to make Internet access available to 5B people
MICROS (MCRS), PayPal (EBAY) to collaborate on point of sale platform
Quest Diagnostics (DGX) raised share repurchase authorization by $1B
Equal Energy (EQU) rejected offer from Montclair Energy
Lowe's (LOW) received approval for acquisition of assets from Orchard Supply Hardware
La-Z-Boy (LZB) aggressively pursuing store expansion program
Sony (SNE) announced PlayStation 4 to launch November 15 in U.S., Canada
LKQ Corp. (LKQ) formed a JV with insurer Suncorp Group to develop an alternative auto parts business in Australia and New Zealand
Court confirmed Eastman Kodak (EKDKQ) reorganization plan


EARNINGS


Companies that beat consensus earnings expectations last night and today include:
Citi Trends (CTRN), Lowe's (LOW), Globe Specialty Metals (GSM), La-Z-Boy (LZB), Energy XXI (EXXI), Analog Devices (ADI), Bottomline Technologies (EPAY)


Companies that missed consensus earnings expectations include:
Staples (SPLS), Velti (VELT), 21Vianet (VNET), Tuesday Morning (TUES)


Companies that matched consensus earnings expectations include:
Toll Brothers (TOL), China Distance Education (DL), Intuit (INTU)


NEWSPAPERS/WEBSITES



  • Al Jazeera sued AT&T (T) in Delaware Chancery Court for dropping the Qatari-backed broadcaster's new U.S. channel on the eve of its launch, the Wall Street Journal reports

  • Aubrey McClendon, former Chesapeake Energy (CHK) CEO, is betting again on striking it big in Ohio as he builds a new oil and gas exploration company. He has lined up about $1.2B in equity and debt financing for deals there, much of it coming from two energy-focused private-equity firms, sources say, the Wall Street Journal reports

  • A senior Chinese official put pressure on some 30 foreign firms including General Electric (GE) and Siemens (SI) at a recent meeting to confess to any antitrust violations and warned them against using external lawyers to fight accusations from regulators, sources say, Reuters reports

  • NYSE Euronext (NYX) selected JPMorgan Chase (JPM) and Societe Generale (SCGLY) to help arrange the IPO of its European equity operations, sources say, Bloomberg reports

  • Visa (V) and MasterCard (MA) will pursue a multibillion-dollar antitrust settlement with U.S. merchants over credit card fees even though opposition to the deal reached a level that would have allowed the card firms to walk away, Bloomberg reports

  • Medtronic (MDT) is looking beyond medical devices, seeking to expand within hospitals and connect directly with patients as it moves into a health-services industry projected to grow as Obamacare expands coverage, Bloomberg reports

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