Frontrunning: November 1
- US admits surveillance on foreign governments ‘reached too far’ (FT)
- He must be so proud: Obama halted NSA spying on IMF and World Bank headquarters (RTRS)
- Obamacare website gets new tech experts; oversight pressure grows (Reuters)
- R.B.S. to Split Off $61 Billion in Loans Into Internal ‘Bad Bank’ (NYT)
- Draghi’s Deflation Risk Complicates Recovery (BBG)
- Abenomics: Nissan slashes full-year profit forecast 15% (FT)
- Credit Suisse Dismisses London Trader Over 'Unusual Trading' Losses (WSJ)
- RBS avoids break-up with 38 billion pounds 'internal bad bank' (Reuters)
- Twitter Said to Attract More Than Enough Interest for IPO (BBG)
- Canceled U.S. health plans are disruptive part of reform -Cigna CEO (Reuters)
- J.P. Morgan, Regulators Wage War of Wording (WSJ)
- Brooks, Coulson Oversaw Hacking in ’Secret’ Relationship (BBG)
- Islamist Rebels Take Fight to Suburbs of Syrian Capital (WSJ)
Overnight Media Digest
* Before JPMorgan acquired the banking operations of Washington Mutual, the bank's lawyers tangled with regulators over the wording of the agreement. Five years later, JPMorgan and the Federal Deposit Insurance Corp are still fighting over the meaning of those words. The question of who bears responsibility for Washington Mutual's legal liabilities is taking on increasing urgency as J.P. Morgan negotiates a pact with the Justice Department that would end probes of soured mortgage bonds issued by J.P. Morgan and Washington Mutual during the housing boom.
* By the year-end, most airline passengers will be able to use their tablets, e-readers and other gadgets during all stages of flight. The Federal Aviation Administration's decision, its first big shift on electronic devices since it restricted their use in flight in 1966, caps years of debate over whether electronic emissions from devices can interfere with cockpit instrument.
* The CFTC is so cash starved that it is being forced to delay cases, shelve certain probes and decided not to file charges against two men in the "London whale" trading mess, a top official said.
* Euro-zone inflation fell to its lowest in almost four years, raising pressure on the ECB to ease money supply and support the recovery.
* Germany described as "incomprehensible" U.S. criticism of its export-led economic policies, saying the country's domestic economy is the main pillar of its growth.
* Goldman Sachs Group Inc scored some points with regulators with a loan to a New York City bicycle-sharing program named after rival Citigroup Inc. The $41 million loan to the Citigroup bike program was part of $2 billion in loans and investments made by the Wall Street bank from October 2010 until December 2012 to comply with U.S. rules designed to ensure financial services reach low- and middle-income neighborhoods, according to a recent regulatory review of the bank's adherence to the Community Reinvestment Act.
* The way things are going, the term "cable TV" may have to be replaced by "phone TV." Nearly a decade after Verizon Communications Inc and AT&T Inc began building pipelines to carry TV service to U.S. homes, they are nearing the market share of cable operators in areas where they operate, according to third-quarter results released by cable and phone companies in recent days.
* In the wake of a major immigration-law violation case involving Indian outsourcing giant Infosys Ltd, federal agents are investigating other companies for possible similar alleged misdeeds, according to an official with the Department of Homeland Security.
* Fannie Mae sued nine of the world's largest banks over alleged manipulation of interest rates, joining the legal battles in the rate-rigging scandal. The lawsuit, filed Thursday in U.S. District Court in Manhattan, said that the mortgage-finance giant sustained an estimated $800 million in damages from banks that allegedly manipulated the London interbank offered rate and other financial benchmarks. Fannie also sued the British Bankers' Association, a private association of large British banks.
The Royal Bank of Scotland has suspended two traders in its foreign exchange division amid global investigations into the possible manipulation of the $5.3 trillion-a-day forex market, sources said.
Wells Fargo, the fourth-largest U.S. bank, has settled claims with the U.S. Federal Housing Finance Agency over bad mortgages the bank sold ahead of the financial crisis, according to sources.
Insurer American International Group said it had completed its first share buyback since its $182 billion government bailout during the financial crisis.
Japanese consumer electronics company Sony on Friday morning slashed its full-year profit forecast by 26 percent, hit by weakness in its struggling TV operation.
* Google has spent months and millions of dollars encrypting email, search queries and other information flowing among its data centers worldwide. Facebook's chief executive said at a conference this fall that the government "blew it." And though it has not been announced publicly, Twitter plans to set up new types of encryption to protect messages from snoops.
* In an announcement at the company's office on Thursday, Google showed off an updated version of its Android mobile operating system, called "KitKat 4.4," that can search for information both on the web and some smartphone apps.
* Now that new insurance marketplaces are opening under the Affordable Care Act, insurance companies are canceling millions of individual plans that fail to meet minimum standards.
* Time Warner Cable lost 306,000 television subscribers in the third quarter, hurt by a contract dispute that resulted in a blackout of CBS programming.
* Rebuffing a strategy of diversification, the venture capital firm XPV Capital believes it can find success by developing expertise in one area.
* Riding a surge in demand for new fuel-efficient planes, Boeing said on Thursday that it would increase production of its top-selling 737 jets to 47 a month by 2017, from 38 now.
* The Container Store has raised $225 million in its initial public offering, after demand from potential shareholders prompted the company to seek even more in its market debut.
* A majority of Oracle shareholders demonstrated their opposition to the compensation of chief executive Lawrence Ellison on Thursday, voting against a non-binding resolution on the company's pay practices.
* Citigroup's financial strategy and solutions group takes stock of the growing wave of shareholder activism, and concludes that what was once primarily an American phenomenon is spreading abroad.
* Fannie Mae sued nine of the world's largest banks on Thursday, accusing them of colluding to manipulate interest rates and seeking more than $800 million of damages. In a complaint filed in Federal District Court in Manhattan, Fannie Mae, the government-controlled mortgage company, accused the banks of conspiring for many years to suppress the Libor, including during the 2008 financial crisis.
THE GLOBE AND MAIL
* A new environmental study into Taseko Mines Ltd's billion-dollar New Prosperity mine proposal in British Columbia says it would pose "several significant adverse environmental effects."
* Singing superstar Shania Twain and the late Saskatchewan curler Sandra Schmirler are among the notable Canadians who will be celebrated with postage stamps in 2014.
Reports in the business section:
* Barrick Gold Corp is moving aggressively to slash costs and deal with a debt hangover, halting construction at its expensive Pascua Lama mine and raising billions in one of Canada's biggest stock sales.
* Some of the world's largest energy companies have unleashed a torrent of oil sands spending, despite industry concerns about access to export markets, soaring costs and volatile Canadian heavy crude prices.
* Toronto Police Chief Bill Blair announced on Thursday that investigators have found a video of Toronto Mayor Rob Ford that allegedly depicts him smoking a crack pipe and charged his friend with extortion, leading a defiant mayor to insist he has "no reason to resign."
* If there were any doubts about the oil sands industry's resolve to expand amid growing protests, escalating costs and volatile oil prices, they were put to rest Thursday by mega announcements by Canadian and global oil companies that they are pushing forward with a new generation of projects.
* Two years after losing out on a bid to buy rival Prime Restaurants, Cara Operations has reached a deal with Fairfax Financial Holdings Ltd to merge the two food service giants.
* The Toronto stock market ended October trading sharply lower Thursday, amid major announcements from the oilpatch, earnings disappointments and uncertainty about the Federal Reserve's next move.
SHANGHAI SECURITIES NEWS
- The management committee of the pilot Free Trade Zone in Shanghai plans to implement 19 of the 23 measures designed to expand the service industry by the end of this year.
- The Ministry of Public Security released a circular on Thursday directing police departments across the country to crack down on crimes targeting medical workers, following a spate of incidences leading to the death or injury of hospital staff.
- A policeman was detained for allegedly shooting and killing a pregnant woman in Guangxi Zhuang in the south of China, according to authorities. The case is the fourth incident in two years of a police officer killing innocents with an issued firearm.
- Leading government officials in China need to put themselves in the position of the masses to understand what people want, where there is public distress and hardship, said a commentary in the paper that acts as the government's mouthpiece.
- China will extend its European polysilicon anti-dumping investigation by half a year, delaying the imposition of tariffs on imports, the Ministry of Commerce said on Thursday, without elaborating on the reasons for the extension.
Fly On The Wall 7:00 AM Market Snapshot
Alpha Natural (ANR) upgraded to Market Perform from Underperform at Raymond James
General Growth (GGP) upgraded to Buy from Neutral at BofA/Merrill
Green Dot (GDOT) upgraded to Overweight from Neutral at JPMorgan
Greenbrier (GBX) upgraded to Buy from Underperform at BofA/Merrill
ITT Corp. (ITT) upgraded to Outperform from Neutral at RW Baird
Netflix (NFLX) upgraded to Outperform from Neutral at RW Baird
PACCAR (PCAR) upgraded to Hold from Sell at McAdams Wright
Penn Virginia (PVA) upgraded to Outperform from Neutral at Credit Suisse
Quintiles (Q) upgraded to Outperform from Neutral at RW Baird
Siliconware Precision (SPIL) upgraded to Buy from Sell at UBS
Valero Energy (VLO) upgraded to Outperform from Market Perform at Cowen
ARIAD (ARIA) downgraded to Hold from Buy at Jefferies
ARIAD (ARIA) downgraded to Market Perform from Outperform at Leerink
Advance Auto Parts (AAP) downgraded to Hold from Buy at Deutsche Bank
Alamos Gold (AGI) downgraded to Market Perform from Outperform at Raymond James
Alamos Gold (AGI) downgraded to Sector Perform from Outperform at RBC Capital
Avon Products (AVP) downgraded to Market Perform from Outperform at BMO Capital
bebe stores (BEBE) downgraded to Neutral from Buy at Janney Capital
Chart Industries (GTLS) downgraded to Neutral from Overweight at Piper Jaffray
Craft Brew (BREW) downgraded to Neutral from Buy at Citigroup
Education Management (EDMC) downgraded to Underperform at BMO Capital
Hornbeck Offshore (HOS) downgraded to Hold from Buy at Wunderlich
Monotype Imaging (TYPE) downgraded to Neutral from Overweight at JPMorgan
PetSmart (PETM) downgraded to Neutral from Buy at BofA/Merrill
Provident Financial (PROV) downgraded to Market Perform at Raymond James
Royal Dutch Shell (RDS.A) downgraded to Hold from Buy at Societe Generale
Royal Dutch Shell (RDS.A) downgraded to Neutral from Outperform at Macquarie
Santander Mexico (BSMX) downgraded to Hold from Buy at Deutsche Bank
Solar Capital (SLRC) downgraded to Market Perform from Outperform at Wells Fargo
Sony (SNE) downgraded to Hold from Buy at Jefferies
Strayer Education (STRA) downgraded to Underweight from Equal Weight at Morgan Stanley
Taubman Centers (TCO) downgraded to Neutral from Buy at BofA/Merrill
TeleTech (TTEC) downgraded to Equal Weight from Overweight at First Analysis
Vertex (VRTX) downgraded to Market Perform from Outperform at Bernstein
Volcano (VOLC) downgraded to Market Perform from Outperform at BMO Capital
Weight Watchers (WTW) downgraded to Equal Weight from Overweight at Barclays
Wal-Mart (WMT), Green Dot (GDOT) expanded debit card pact
Republic Services (RSG) authorized additional $650M for stock repurchases
Fluor (FLR) sees FY14 revenues 'flattish' at consolidated level with improving margins
Starwood Property (STWD) to spin-off single-family residential business
Companies that beat consensus earnings expectations last night and today include:
Orient-Express (OEH), Minerals Technologies (MTX), MasTec (MTZ), Amerisafe (AMSF), Southwestern Energy (SWN), Republic Services (RSG), Newmont Mining (NEM), American Vanguard (AVD), Kemper (KMPR), Trimble Navigation (TRMB), Standard Pacific (SPF), AMN Healthcare (AHS), Fluor (FLR), Callidus Software (CALD), Green Dot (GDOT), AIG (AIG)
Companies that missed consensus earnings expectations include:
Genesee & Wyoming (GWR), Portland General Electric (POR), Hutchinson Technology (HTCH), Tellabs (TLAB), LRR Energy (LRE), Bill Barrett (BBG), Ellie Mae (ELLI), CEC Entertainment (CEC), MRC Global (MRC)
Companies that matched consensus earnings expectations include:
Dresser-Rand (DRC), Spansion (CODE), Chef's Warehouse (CHEF), Clovis (CLVS)
- Verizon (VZ) and AT&T (T) are nearing the market share of cable operators in areas where they operate. Both phone companies have shown a greater willingness than their cable rivals, such as Comcast (CMCSA) and Time Warner Cable (TWC), to experiment with delivering movies and TV programming over the Internet outside the traditional pay-TV bundle, the Wall Street Journal reports
- After years of grooming customers to expect a few thousand dollars off sticker prices on even its latest models, GM (GM) said it is changing course and promising to shun lavish discounts when it comes to selling its newest pickup trucks, the Wall Street Journal reports
- As U.S. retailers face the shortest holiday season in years, they’re preparing to assail customers with deals and promotions this week. Wal-Mart Stores (WMT) is kicking off its online deals today, underscoring concerns that intense discounting aimed at luring budget-conscious shoppers could result in the most tepid holiday spending rise in four years, Reuters reports
- Hilton Worldwide, owned by Blackstone Group (BX), is aiming to launch its IPO the week of December 2, sources say, Reuters reports
- Shares of U.S. homebuilding companies (LEN, KBH, DHI) have fallen over 20% since May, even as home-improvement retailers rose to a record high, a sign some investors are too pessimistic that higher mortgage rates could derail new construction, Bloomberg reports
- Tesla Motors (TSLA) suffered its biggest one-month loss of market value in October, a 17% decline, amid concern among some investors that a fivefold stock-price surge outpaced the growth prospects for the electric-car company, Bloomberg reports
Artisan Partners (APAM) 4.8M share Secondary priced at $56.00
Barrick Gold (ABX) 163.5M share Spot Secondary priced at $18.35
Container Store (TCS) 12.5M share IPO priced at $18.00
Ikanos Communications (IKAN) files to sell 22.5M shares of common stock
Intermountain Community Bancorp (IMCB) files $377.68M mixed securities shelf
LyondellBasell (LYB) to sell 15M shares for holders
Pebblebrook Hotel (PEB) files to sell 2.2M shares of common stock
Streamline Health Solutions (STRM) files $37.5M mixed securities shelf
Tower International (TOWR) files to sell 2.58M shares of common stock for holders
Western Digital (WDC) 10.87M share Secondary priced at $67.00