Frontrunning: November 15
- China to Ease One-Child Policy (WSJ), China announces major economic and social reforms (Reuters)
- Consumers line up for launch of PlayStation 4 (USAToday)
- Trust frays between Obama, Democrats (Politico)
- Yellen Stands by Fed Strategy (Hilsenrath)
- Hero to zero? Philippine president feels typhoon backlash (Reuters)
- Brussels warns Spain and Italy on budgets (FT)
- Moody’s Downgrades Four U.S. Banks on Federal Support Review (BBG)
- CIA's Financial Spying Bags Data on Americans (WSJ)
- Germany Digs In Against Risk Sharing in EU Bank-Failure Plan (BBG)
- Bill Gates wants Norway's $800 billion fund to spend more in Africa, Asia (RTRS)
- Japan in greenhouse gas emissions U-turn (FT)
- Buffett takes $3.7bn stake in ExxonMobil (FT)
- Jihadist teapartiers go down under: Australia’s Senate Rejects Raising Debt Ceiling to A$500 Billion (BBG)
- Jos. A. Bank Drops Bid for Men's Wearhouse (WSJ)
- U.S. official in July feared HealthCare.gov 'crash' (Reuters)
- The Popularity of Private Restaurants (WSJ)
- NSA Fallout: Tech Firms Feel a Chill Inside China (WSJ)
Overnight Media Digest
* The White House announced a plan to allow insurance companies to continue offering existing policies next year even if they fall short of standards set by the health law.
* Insurers expressed a range of worries after Obama moved to placate consumers who faced health-plan cancellations.
* Federal Reserve Vice Chairwoman Janet Yellen signaled Thursday that no big changes would come to the central bank under her leadership if she becomes its next chief.
* The Central Intelligence Agency is building a vast database of international money transfers that includes millions of Americans' financial and personal data, such as Social Security numbers, officials familiar with the program say.
* Big U.S. computer and software companies are reporting a sudden chill in sales to China, and some blame increased government hostility toward the U.S.
* Jefferson County, Alabama, is planning a $1.7 billion debt sale next week, challenging the market maxim that a bankruptcy filing leaves a permanent stain on municipal-bond issuers.
* Switzerland will vote next week on a proposal limiting executive pay to 12 times that of a company's lowest paid worker, the second time this year the country will use the ballot box in an attempt to rein in corporate compensation.
* Wal-Mart offered little reason for holiday cheer, reporting its third straight quarter of poor sales in the U.S. and painting a gloomy picture for the economic recovery.
* UBS AG says it has long since finished restructuring its investment-banking arm. Behind the scenes, though, the Swiss bank recently toyed with potentially far-reaching alternatives for the unit.
Warren Buffett's Berkshire Hathaway Inc on Thursday took a $3.45 billion stake in Exxon Mobil Corp, reflecting strong support for a the company which has underperformed compared to its smaller peers.
Leading a consortium of preferred shareholders who want to buy the mortgage guarantee businesses of Fannie Mae and Freddie Mac, Bruce Berkowitz's fund management group Fairholme said investors in the U.S. housing finance agencies could accept less than full value for their preferred shares in a mooted restructuring plan.
Google Inc on Thursday won a long-running lawsuit by authors who accused the Internet search company of scanning millions of books for an online library without permission, clearing the way over its right to display small extracts of text in response to search queries.
Google Inc's Motorola unit launched a new low-cost smartphone, Moto G, designed to appeal to cost-conscious consumers in both developed and developing markets offering most of the features found on much more expensive handsets.
Private equity investment firm Motion Equity Partners is in talks with HarbourVest Partners to secure capital to finance deals, after failing to raise new funds since the financial crisis, people with knowledge of the matter said.
Shares in Serco Group Plc fell 17 percent on Thursday after the embattled contractor, which accused of overbilling the British government, warned that the string of corporate embarrassments would hurt profits for the next two years.
* Eric Holder, the U.S. attorney general, says groups of traders from several major banks may have influenced currency benchmarks to benefit their employers.
* Janet Yellen, the president's nominee to lead the Federal Reserve, made investors confident that the central bank would stick with policies that have sent shares soaring.
* President Obama, bowing to pressure, said insurers could temporarily keep people on health plans that were to be canceled. But there is no guarantee that insurers will do so, or that the states will allow the renewals.
* SolarCity, a leading installer of solar-power systems in the United States, received a low investment-grade rating for the bonds, which will help finance its rapid expansion.
* Many insurers and state regulators fear that President Obama's policy reversal to delay the cancellation of policies for a year without penalties might damage the new insurance marketplace.
* Hedge fund billionaire David Tepper is giving his alma mater the largest donation in its history, bringing his total giving to Carnegie Mellon in the last decade to more than $125 million.
* Lawyers for the city of Chicago are investigating marketing claims by producers of narcotic painkillers as a prelude to a possible lawsuit against them, according to interviews and a court filing.
* Daniel Loeb, George Soros and John Paulson disclosed new positions in FedEx on Thursday.
* New York's financial services superintendent, Benjamin Lawsky, will conduct a hearing on the feasibility of methods making the virtual currency market more like that for more traditional money.
* Kimberly-Clark said on Thursday that it would pursue a potential spinoff its health care business, becoming the latest company to slim down its operations to help bolster its stock price.
THE GLOBE AND MAIL
* Unable to persuade Toronto's troubled mayor to leave office, councillors are taking unprecedented steps to peel away the office from Rob Ford by cutting his budget, staff and power - with some even refusing to call him by his title - all in an effort to control the damage they believe he is inflicting on the city.
* H.J. Heinz Co is closing its plant in Leamington, Ontario, a move that will cost 740 jobs and end more than a century of ketchup making in the Southern Ontario town.
Reports in the business section:
* Canadian Heritage Minister Shelley Glover is taking the first step toward forcing television service providers to let subscribers pay for only those channels they want.
* On Thursday, IKEA Canada announced the purchase of a 20-turbine wind farm near Pincher Creek, Alberta, that should produce 161-gigawatt hours of electricity each year - more than double the company's current electricity consumption in Canada.
* Justice Minister Peter MacKay is accusing Liberal leader Justin Trudeau of promoting recreational drug use "directly to children" after Trudeau discussed his party's plans to legalize marijuana while speaking to a Brandon, Manitoba public school.
* Arguments that the Senate can only be abolished with unanimous consent of the provinces, and that provincial input is needed to reform the red chamber, are "wishful thinking," a federal government lawyer told the Supreme Court of Canada Thursday.
* Pfizer Inc, the world's biggest drugmaker, will wean off of BlackBerry Ltd's phones, citing concerns that the mobile technology company might not be around in the future or may have service interrupted.
* Ottawa said Thursday it plans to crack down on companies hoarding access to the resources needed to deploy rural broadband. Industry Minister James Moore said the government will take a use-it-or-lose-it approach to ensure "Canadians living in rural areas benefit from greater access to high-speed internet services."
CHINA SECURITIES JOURNAL
- Everbright Securities Co Ltd announced on Thursday that it would be fined a total of 523 million yuan ($85.85 million) for insider trading during the "Aug 16 incident." The four people responsible will be fined 600,000 yuan each and prohibited from trading, while the chairman secretary will be fined 200,000 yuan.
A glitch in Everbright's computer system caused an unintended placement of buy orders worth 68.6 billion yuan ($11.2 billion) to the Shanghai stock exchange on Aug. 16 and led to a massive but short-lived jump in the country's main stock index.
SHANGHAI SECURITIES NEWS
- China's "third board" over-the-counter equity exchange platform is set to expand and roll out new policies to make listing, buying and selling stakes in companies on the platform as "convenient as stocks."
- Reform now faces unprecedented resistance in the "deepwater zone," where a combination of convoluted vested interests, such as local protectionism, departmentalism and special interest groups threaten to thwart all the major reforms society badly needs said a commentary in the paper.
- Long-anticipated natural gas shortages have already begun to impact Chinese manufacturers, with PetroChina Co Ltd moving to cut off supply to a chemical fertiliser company in Hunan proving to preserve supply for residential users for the upcoming winter. An official said cities where the "coal-to-gas" initiative had been implemented, intended to migrate consumers from polluting coal to cleaner gas, would be hardest hit by shortages.
- China should focus on creating a fairer and more just social environment, said a commentary in the paper that acts as the party's mouthpiece.
Fly On The Wall 7:00 AM Market Snapshot
Ball Corp. (BLL) upgraded to Buy from Neutral at BofA/Merrill
China Eastern Airlines (CEA) upgraded to Buy from Hold at Jefferies
Ligand (LGND) upgraded to Hold from Sell at Cantor
MSC Industrial (MSM) upgraded to Outperform from Market Perform at Raymond James
Pentair (PNR) upgraded to Buy from Hold at KeyBanc
SAP (SAP) upgraded to Overweight from Equal Weight at Barclays
Tetra Tech (TTEK) upgraded to Buy from Hold at Brean Capital
DISH (DISH) downgraded to Equal Weight from Overweight at Barclays
Gogo (GOGO) downgraded to Underweight from Equal Weight at Morgan Stanley
Kohl's (KSS) downgraded to Market Perform from Outperform at BMO Capital
NeoPhotonics (NPTN) downgraded to Buy from Strong Buy at Needham
Prudential (PRU) downgraded to Hold from Buy at Deutsche Bank
Silgan Holdings (SLGN) downgraded to Underperform from Neutral at BofA/Merrill
Abercrombie & Fitch (ANF) initiated with a Neutral at Mizuho
Aeropostale (ARO) initiated with a Neutral at Mizuho
AmeriGas (APU) initiated with a Buy at UBS
American Eagle (AEO) initiated with a Neutral at Mizuho
Ann Inc. (ANN) initiated with a Buy at Mizuho
Arena Pharmaceuticals (ARNA) initiated with a Buy at WallachBeth
Chico's FAS (CHS) initiated with a Neutral at Mizuho
Children's Place (PLCE) initiated with a Buy at Mizuho
Express (EXPR) initiated with a Buy at Mizuho
Francesca's (FRAN) initiated with a Neutral at Mizuho
Gap (GPS) initiated with a Buy at Mizuho
Guess (GES) initiated with a Neutral at Mizuho
L Brands (LTD) initiated with a Neutral at Mizuho
LinkedIn (LNKD) initiated with a Buy at Stifel
Marlin Midstream (FISH) initiated with a Buy at Wunderlich
Men's Wearhouse (MW) initiated with a Neutral at Mizuho
Newpark Resources (NR) initiated with a Buy at DA Davidson
Pacific Sunwear (PSUN) initiated with a Buy at BofA/Merrill
Synageva (GEVA) initiated with a Buy at Goldman
Tilly's (TLYS) initiated with a Neutral at Mizuho
Twitter (TWTR) initiated with a Neutral at UBS
Urban Outfitters (URBN) initiated with a Buy at Mizuho
VIVUS (VVUS) initiated with a Hold at WallachBeth
Yelp (YELP) initiated with a Buy at Stifel
Yelp (YELP) initiated with a Neutral at Janney Capital
Zumiez (ZUMZ) initiated with a Neutral at Mizuho
bebe stores (BEBE) initiated with a Neutral at Mizuho
lululemon (LULU) initiated with a Neutral at Mizuho
JoS. A. Bank (JOSB) ended acquisition proposal to purchase Men's Wearhouse (MW)
Kimberly Clark (KMB) pursuing spin-off of healthcare business
RLI Corp. (RLI) declared $3.00 per share special dividend, two-for-one stock split
Innotrac (INOC) to merge with Sterling Partners affiliate for $8.20 per share
Boeing (BA), Gol Linhas (GOL) collaborate to raise sustainable biofuel supply in Brazil
Broadridge (BR), Pitney Bowes (PBI) announced interactive digital communications exchange (AMZN)
WPX Energy (WPX) announced plan to form master limited partnership
Companies that beat consensus earnings expectations last night and today include:
American Apparel (APP), Youku Tudou (YOKU), Kythera (KYTH), Athersys (ATHX), Key Technology (KTEC), Agilent (A), Nordstrom (JWN), Applied Materials (AMAT)
Companies that missed consensus earnings expectations include:
Matthews (MATW), Bluebird Bio (BLUE), Reed's (REED), NuPathe (PATH), Conatus Pharmaceuticals (CNAT), China Cord Blood (CO), S&W Seed (SANW), Trovagene (TROV),
Companies that matched consensus earnings expectations include:
WidePoint (WYY), Lifeway Foods (LWAY)
- Big U.S. computer and software companies (CSCO, IBM, HPQ, MSFT) are reporting a sudden chill in sales to China, and some blame increased government hostility toward the U.S., the Wall Street Journal reports
- A downbeat outlook from Wal-Mart (WMT) was a reminder that even as U.S. stock prices climb to record heights, many Americans remain caught between high joblessness and hits to their paychecks that are limiting their ability to spend (KSS, M), putting a further drag on an already sluggish economy, the Wall Street Journal reports
- State economic officials have jumped at the chance to grab a piece of Boeing's (BA) newest jetliner program after a union vote stalled efforts to build the aircraft in Washington state. Amid a slow U.S. economic recovery and after decades of industrial outsourcing, the race for jobs is intensifying, Reuters reports
- Hedge funds took a liking to online music company Pandora Media (P) in Q3 but soured on Apple (AAPL), according to regulatory filings, Reuters reports
- Google’s (GOOG) victory in a copyright suit challenging its project to digitally copy millions of books may help cement its dominance of online searches, Bloomberg reports
- WPP (WPPGY) denied a U.K. newspaper’s report that the world’s largest advertising company may be preparing a $25 per share cash bid for Interpublic Group of Cos. (IPG), the second-biggest U.S. ad company, Bloomberg reports
8x8 Inc (EGHT) 12.5M share Secondary priced at $9.25
ADA-ES (ADES) files to sell common stock
Booz Allen (BAH) 11M share Secondary priced at $17.00
Fiesta Restaurant (FRGI) 2.7M share Secondary priced at $46.00
Lumos Networks (LMOS) 2.512M share Secondary priced at $20.00
Oragenics (OGEN) announces proposed offering of common stock
Relypsa (RLYP) 6.85M share IPO priced at $11.00
Streamline Health Solutions (STRM) files to sell 2.5M shares of common stock
T-Mobile (TMUS) 66.15M share Secondary priced at $25.00
Waterstone Financial (WSBF) files to sell 18.7M-25.3M shares of common stock
zulily (ZU) 11.5M share IPO priced at $22.00
QUARTERLY HEDGE FUND FILINGS
Appaloosa provides quarterly update on stakes
NEW STAKES: J.C. Penney (JCP), Freeport-McMoRan (FCX). INCREASED STAKES: JPMorgan (JPM), HCA Holdings (HCA), Celanese (CE). DECREASED STAKES: Bank of America (BAC), Ford (F), Goodyear Tire (GT). LIQUIDATED STAKES: Comcast (CMCSA), Microsoft (MSFT), Weatherford (WFT).
Berkshire Hathaway provides quarterly update on stakes
NEW STAKES: Exxon Mobil (XOM). INCREASED STAKES: DaVita HealthCare (DVA), Suncor Energy (SU) Verisign (VRSN). DECREASED STAKES: GlaxoSmithKline (GSK), ConocoPhillips (COP), Sanofi (SNY), DirecTV (DTV). LIQUIDATED STAKES: None.
Paulson & Co provides quarterly update on stakes
NEW STAKES: Mallinckrodt (MNK), Time Warner Cable (TWC), FedEx (FDX), WhiteWave (WWAV). INCREASED STAKES: Vodafone (VOD), Family Dollar (FDO), Kodiak Oil & Gas (KOG), Hartford Financial (HIG), Belo Corp. (BLC), AngloGold Ashanti (AU). DECREASED STAKES: MGM Resorts (MGM), Cobalt (CIE), Leap Wireless (LEAP), InterOil (IOC), Realogy (RLGY). LIQUIDATED STAKES: Mead Johnson (MJN), Elan (ELN).
Icahn provides quarterly update on stakes
NEW STAKES: Apple (AAPL), Talisman Energy (TLM). INCREASED STAKES: Federal-Mogul (FDML), Icahn Enterprises (IEP), Chesapeake Energy (CHK), Nuance Communications (NUAN), Navistar (NAV). DECREASED STAKES: None. LIQUIDATED STAKES: Dell (DELL), Hain Celestial (HAIN), WebMD (WBMD).
Third Point provides quarterly update on stakes
NEW STAKES: FedEx (FDX), Google (GOOG), EQT Corp (EQT), Intrexon (XON), Activision Blizzard (ATVI), Gilead Sciences (GILD). INCREASED STAKES: Sotheby's (BID), Coca-Cola Enterprises (CCE), Constellation Brands (STZ), Elan (ELN). DECREASED STAKES: Yahoo (YHOO), Cabot Oil & Gas (COG), 21st Century Fox (FOXA), Disney (DIS). LIQUIDATED STAKES: Tiffany (TIF), WESCO (WCC), Williams (WMB).
Greenlight Capital provides quarterly update on stakes
NEW STAKES: Intrexon (XON), Tempur Sealy (TPX), NVR, Inc. (NVR). INCREASED STAKES: WPX Energy (WPX), Oil States (OIS), Spirit AeroSystems (SPR). DECREASED STAKES: Aetna (AET), Aspen Insurance (AHL), Legg Mason (LM), NCR Corp (NCR), Cigna (CI). LIQUIDATED STAKES: Oaktree Capital (OAK), State Bank Financial (STBZ), Capital Bank (CBF).
Soros provides quarterly update on stakes
NEW STAKES: Facebook (FB), Avis Budget (CAR), Invesco (IVZ), Molycorp (MCP). INCREASED STAKES: CF Industries (CF), LSI Corp (LSI), J.C. Penney (JCP), Zoetis (ZTS). DECREASED STAKES: AIG (AIG), Brocade (BRCD), Constellation Brands (STZ), Yelp (YELP). LIQUIDATED STAKES: Delta Air Lines (DAL).