Frontrunning: October 29
- U.S. spy chiefs face Congress amid spying rift with Europe (Reuters)
- Deutsche Bank income hit by €1.2bn of legal provisions (FT)
- China's second tapering attempt fails: China central bank seeks to reassure money markets after rate spike (Reuters)
- UBS Takes Action Against Staff in Foreign-Exchange Probe (WSJ)
- Saudi Arabia frees man jailed for Mohammad tweets (Reuters)
- Tax Revolts Hit Hollande as Farmers, Soccer Clubs Protest (BBG)
- German parliament to meet over U.S. spying scandal (Reuters)
- Google Nears Smartwatch Launch (WSJ)
- How to end gridlock in DC? Pork projects (Reuters)
- UBS ordered to increase capital reserves (FT)
- U.K. Mortgage Approvals Rise to Highest in 5 1/2 Years (BBG)
- NSA Spying Allegations Put Google on Hot Seat in Brazil (BBG)
- Judge blocks part of Texas law restricting abortion (Reuters)
- Man Making Ireland Tax Avoidance Hub Proves Local Hero (BBG)
Overnight Media Digest
* The chairwoman of the Senate Intelligence Committee, Dianne Feinstein, promised a total review of all U.S. spying programs for the first time in decades, and said she expected that the White House would end all spying on leaders of allied countries.
* Bond dealer Cantor Fitzgerald has sought to make Nevada's legal sports books more like a financial platform but found the old ills of gambling hard to escape.
* Central banks in Russia and elsewhere are cutting purchase of gold, further weighing on prices of the metal. Prices are down 19 percent year to date. The last time gold prices posted an annual loss was 2000.
* Apple reported a third consecutive quarter of declining profits, but showed signs that both prices and profit margins are stabilizing despite heightened competition for its iPhone and iPad.
* After buying back its own shares from investors this year for the first time since the financial crisis in 2008, Morgan Stanley is considering asking the Federal Reserve for permission to purchase more stock next year.
* Consol Energy agreed to sell five Appalachian coal mines to Murray Energy, in a deal valued at $3.5 billion, its biggest step yet in shifting the focus of its business toward natural gas and away from coal.
* Higher mortgage rates and rising home prices scared off prospective home buyers in September, sparking the fourth straight monthly drop in a key measure of home sales.
* Aereo Inc's upstart TV streaming service has provoked a legal onslaught from broadcast networks. But even if it wins that fight, it still has to overcome more-pedestrian issues, like making sure it can pay for the electricity it needs.
* Goldman Sachs said it has spent the past year working to improve the work-life balance of most-junior employees, known on Wall Street as analysts, by reducing their hours and other measures.
* The federal government is set to slap Infosys Ltd with the largest immigration fine ever, claiming the Indian outsourcing giant illegally placed workers on visitor, rather than work, visas at big corporate clients across the U.S.
The government is expected to announce Wednesday it will fine Infosys about $35 million, according to people close to the matter.
Britain's Chancellor of the Exchequer, George Osborne, is set to announce the country's plans to issue the first Islamic bond outside the Muslim world, hoping that the 200 million pound ($322.62 million) bond will act as a catalyst for London to become a leading player in the sharia-compliant finance market.
Swiss prosecutors have begun a criminal investigation into Formula One Chief Executive Bernie Ecclestone for bribing a German banker to smooth the sale of a stake in the motor racing business to private equity firm CVC in 2006.
G4S, the world's largest security services firm, denied allegations of its involvement in the abuse - including electric shock treatment and forced injections - of inmates at its Mangaung prison in South Africa.
Germany's Deutsche Boerse said it had received an offer from the United States to settle a probe into the exchange operator's alleged breach of U.S. sanctions against Iran for $152 million.
European aerospace group EADS is planning to axe jobs and cut costs in a bid to restructure its defence business, which has been languished due to Europe's long-term decline in military spending.
* President Obama was poised to order a ban on spying on heads of allied states in response to a deepening diplomatic crisis over reports that the National Security Agency had for years targeted the cellphone of Chancellor Angela Merkel of Germany.
* Microloans, born of anti-poverty efforts in developing countries, is attracting American clients who do not qualify for credit cards or traditional bank loans.
* Consol Energy Inc, the largest coal producer in the eastern United States, said on Monday that it was selling five highly automated mines - about half of its production capacity - to focus instead on natural gas and on mines that produce coal for export.
* Apple Inc now has more product offerings. And Apple now sells its products in more places. But for the third consecutive quarter, Apple does not have more profit.
* New ways to monitor students around the clock raise questions about whether educators can or should legally discipline children for online outbursts.
* In a shift away from robots made to perform in factories, designers are putting the "human" into humanoids so that they can safely interact in public.
* Governor Rick Snyder of Michigan, in testimony on Monday, forcefully defended Detroit's bankruptcy filing as a last-ditch effort to stem the city's decades-long financial decline.
* Marilyn Tavenner, who runs the Centers for Medicare and Medicaid Services, will testify on Tuesday before a House panel on the problems with the health care website.
* A federal judge on Monday sentenced former Representative Rick Renzi to three years in prison for convictions on public corruption, money laundering and other charges, capping a corruption case prosecutors said began more than a decade ago.
* The autobiography of the pop star Morrissey, which has become a quick sensation in Britain, has found an American publisher. G.P. Putnam's Sons, an imprint of Penguin Random House, acquired the memoir, two people involved in the negotiations said on Monday.
THE GLOBE AND MAIL
* Canadian Senator Mike Duffy says staff in the office of Prime Minister Stephen Harper arranged for a Conservative Party lawyer to cover his legal fees - a payment that was in addition to the cheque for C$90,000 that Harper's former chief of staff wrote to foot the bill for Duffy's improperly claimed expenses.
* The world's first Bitcoin ATM goes live on Tuesday - and it will be installed inside a downtown Vancouver coffee shop. Mitchell Demeter, co-founder of the Vancouver-based store Bitcoiniacs, is the man behind the automated teller machine's arrival.
Reports in the business section:
* Private-sector economists are pressing Canadian Finance Minister Jim Flaherty to keep a closer eye on Canada's housing market in light of persistently low interest rates.
* The head of Canada's wireless lobby group, Bernard Lord, says unneeded regulation and a lack of available spectrum is jeopardizing the country's status as a place with the fastest networks in the world.
* Another increase in median wait times for medical treatment despite fast-growing public healthcare spending means Canada should look abroad for alternative ways of delivering universal healthcare with private options, say the authors of a new report.
* A 71-year-old Iranian-born man with a legally altered name faces three criminal charges in connection with an alleged attempt to bring explosive material onto an airplane. He was charged on Monday over the incident, which paralyzed Montreal's main airport on Sunday for several hours and caused a neighborhood to be shut down for a police search.
* The Canadian government has no plans for now to clamp down on the housing market even though prices are rising again, Finance Minister Jim Flaherty said on Monday, but he pledged to investigate whether the price uptick looks to be more than temporary.
* Canada's oil and gas industry is "losing the war" against anti-hydrocarbon activism as the balance of power tilts in favor of project opponents, says the head of Quebec's Oil and Gas Association.
CHINA SECURITIES JOURNAL
-- China may launch a pilot scheme in some cities as early as next year to promote standardisation and energy saving in the property development market.
SHANGHAI SECURITIES NEWS
-- Internet firm Baidu raised 1 billion yuan ($164.33 million) in just two hours for its first wealth management product.
-- Healthcare for the elderly is set to be a long-term hot spot for China. By 2020, the country's health service sector will be worth over 8 trillion yuan ($1.31 trillion), according to the State Council. This has prompted the country to spend 2.2 billion yuan ($361.52 million) to spur development in the sector.
-- China may introduce a series of reform measures in the Shanghai Free Trade Zone, including raising the ceiling on yuan deposit rates and allowing foreign companies registered in the zone to trade Chinese stocks and futures.
-- Taobao, an online marketplace owned by Alibaba, will soon be granted a licence to distribute mutual fund products.
-- Reform should be aimed at eliminating special interest within the Communist Party, the official mouthpiece paper said in an editorial. It added that the source of the Party's power is the interest of the public.
-- Close to 80 percent of doctors say they do not want their children to pursue a career in medicine, according to a survey by the Chinese Medical Doctor Association. This is up from around 60 percent in 2009, with doctors citing poor salaries and growing tension with patients.
-- A merger between Jiefang Daily Group and Wenhui-Xinmin United Press group has created the country's biggest newspaper company, with total assets of 20.87 billion yuan. The publisher of the new Shanghai United Media Group, Qiu Xin, said the move will help "promote Shanghai's media influence".
Fly On The Wall 7:00 AM Market Snapshot
Advanced Energy (AEIS) upgraded to Buy from Hold at Needham
Apple (AAPL) upgraded to Outperform from Neutral at RW Baird
Arcos Dorados (ARCO) upgraded to Overweight from Neutral at JPMorgan
Altra Holdings (AIMC) upgraded to Buy from Underperform at BofA/Merrill
Costamare (CMRE) upgraded to Overweight from Neutral at JPMorgan
Green Dot (GDOT) upgraded to Overweight from Neutral at Piper Jaffray
Marketo (MKTO) upgraded to Buy from Neutral at Goldman
Onconova Therapeutics (ONTX) upgraded to Buy from Neutral at Citigroup
Yahoo (YHOO) upgraded to Outperform from Market Perform at Bernstein
American Capital Agency (AGNC) downgraded to Neutral from Buy at BofA/Merrill
Banco Bilbao (BBVA) downgraded to Neutral from Outperform at Credit Suisse
Banco Bilbao (BBVA) downgraded to Underperform from Neutral at BofA/Merrill
CAI International (CAP) downgraded to Market Perform from Outperform at Cowen
Changyou.com (CYOU) downgraded to Hold from Buy at Brean Capital
Coca-Cola HBC (OCCH) downgraded to Reduce from Neutral at Nomura
Donaldson (DCI) downgraded to Neutral from Buy at BofA/Merrill
Eagle Rock Energy (EROC) downgraded to Neutral from Buy at BofA/Merrill
Goldcorp (GG) downgraded to Neutral from Overweight at HSBC
Innophos Holdings (IPHS) downgraded to Hold from Buy at KeyBanc
Key Energy (KEG) downgraded to Sell from Hold at Wunderlich
Komatsu (KMTUY) downgraded to Hold from Buy at Jefferies
Michael Kors (KORS) downgraded to Market Perform from Outperform at Wells Fargo
Sunstone Hotel (SHO) downgraded to Neutral from Buy at ISI Group
TAL International (TAL) downgraded to Market Perform from Outperform at Cowen
Textainer (TGH) downgraded to Market Perform from Outperform at Cowen
UIL Holdings (UIL) downgraded to Sector Perform from Outperform at RBC Capital
Volcano (VOLC) downgraded to Hold from Buy at Canaccord
Volcano (VOLC) downgraded to Neutral from Outperform at Credit Suisse
Volcano (VOLC) downgraded to Neutral from Overweight at JPMorgan
Wausau Paper (WPP) downgraded to Hold from Buy at Deutsche Bank
A.P. Pharma (APPA) initiated with a Buy at Brean Capital
AmerisourceBergen (ABC) initiated with a Market Perform at FBR Capital
Bill Barrett (BBG) initiated with a Buy at KeyBanc
CBS (CBS) initiated with an Outperform at FBR Capital
Cardinal Health (CAH) initiated with an Outperform at FBR Capital
Cherry Hill Mortgage (CHMI) initiated with a Buy at Citigroup
Cherry Hill Mortgage (CHMI) initiated with an Overweight at Barclays
Dollar General (DG) initiated with a Positive at Susquehanna
GameStop (GME) initiated with a Buy at Stifel
Interpublic Group (IPG) initiated with a Market Perform at FBR Capital
McGraw Hill Financial (MHFI) initiated with an Outperform at FBR Capital
McKesson (MCK) initiated with an Outperform at FBR Capital
Moody's (MCO) initiated with an Outperform at FBR Capital
Multi-Color (LABL) initiated with an Outperform at BMO Capital
NL Industries (NL) initiated with an Outperform at Credit Suisse
OCI Partners (OCIP) initiated with a Buy at BofA/Merrill
OCI Partners (OCIP) initiated with a Neutral at Citigroup
Omnicom (OMC) initiated with an Outperform at FBR Capital
Potbelly (PBPB) initiated with a Neutral at Goldman
Potbelly (PBPB) initiated with an Overweight at Piper Jaffray
Sears Holdings (SHLD) evaluating separating Lands' End business and Sears Auto Center, announced sale of five Canadian store leases for C$400M
UBS (UBS) said received requests from various authorities relating to their foreign exchange businesses, said FINMA order could delay return on equity target
Lloyds Banking (LYG) said talks with regulators commenced on dividends
Apple (AAPL) to announce any changes to current capital plan in first part of 2014
Plum Creek Timber (PCL) to acquire $1.1B in acres from MeadWestvaco (MWV); MWV to return $665M of PCL transaction to holders
NTT (NTT) to acquire Virtela for $525M
Electronic Arts (EA) said Tiger Woods no longer associated with golf title
Companies that beat consensus earnings expectations last night and today include:
M.D.C. Holdings (MDC), Regal-Beloit (RBC), U.S. Steel (X), Reinsurance Group (RGA), Olin Corp. (OLN), CTS Corporation (CTS), HealthSouth (HLS), Apple (AAPL), PartnerRe (PRE), Jones Lang LaSalle (JLL), Hartford Financial (HIG), Kaman (KAMN), Intevac (IVAC), CNO Financial (CNO), Plum Creek Timber (PCL), Nutrisystem (NTRI), Integrated Device (IDTI)
Companies that missed consensus earnings expectations include:
Aetna (AET), NewMarket (NEU), LINN Energy (LINE), Compass Minerals (CMP), Invesco Mortgage (IVR), ARMOUR Residential (ARR), Herbalife (HLF), Celadon Group (CGI), Seagate (STX), Wausau Paper (WPP)
Companies that matched consensus earnings expectations include:
Air Products (APD), Huntsman (HUN), Sensata (ST), Denny's (DENN)
- The end could be near for cookies that marketers deploy on Web browsers to track people's online movements, serve targeted advertising and amass valuable user profiles. Microsoft (MSFT), Google (GOOG) and Facebook (FB) have said they are developing systems to plug into and control this data in ways that bypass the more than a thousand software companies that place cookies on websites, the Wall Street Journal reports
- After buying back its own shares from investors this year for the first time since the financial crisis, Morgan Stanley (MS) is considering asking the Fed for permission to purchase more stock next year, a move aimed at boosting its middling returns on equity, the Wall Street Journal reports
- Agnico Eagle Mines (AEM) is considering selling a minority stake in its Meliadine gold project in the Canadian sub Arctic, sources say, Reuters reports
- Apple’s (AAPL) forecast for the slowest holiday sales growth in a half decade reflects how iPhones and iPads aren’t providing the growth surges they once did as competition accelerates in the saturated mobile market, Bloomberg reports
- Twitter (TWTR) kicked off the road show for its IPO with a low-key affair compared with Facebook’s (FB), reflecting Twitter’s quieter approach to the process, underscored by its decisions to file confidentially and limit private trading of its shares, Bloomberg reports
- The debut of Brixmor Property Group (BRX) is adding fuel to what is already the biggest year for U.S. real estate IPOs in about a decade. The shopping-center landlord, owned by Blackstone (BX), is set to raise as much as $905.6M including extra shares for underwriters, Bloomberg reports
Artisan Partners (APAM) files to sell 4.8M shares of common stock
BankUnited (BKU) 9M share Secondary priced at $30.75
Colony Financial (CLNY) files to sell 10M shares of common stock
F.N.B. Corp. (FNB) to offer up to $50M worth of common stock
Plum Creek Timber (PCL) files to sell 14M shares of common stock
SL Green Realty (SLG) files to sell 2.6M shares of common stock
Sunstone Hotel (SHO) files to sell 20M shares of common stock
Tableau Software (DATA) files to sell common stock for holders