Frontrunning: December 19
- Traders Seek an Edge With High-Tech Snooping (WSJ)
- Gold Drops Below $1,200 an Ounce for First Time Since June (Bloomberg)
- SAC Manager Guilty as Insider Focus Turns to Martoma (Bloomberg)
- Why Ukraine spurned the EU and embraced Russia (Reuters)
- Target confirms major card data theft during Thanksgiving (Reuters)
- Zuckerberg is no suckerberg: Company to Sell 27 Million Class A Shares While CEO Will Offer 41.4 Million (WSJ)
- Facebook, Zuckerberg, banks must face IPO lawsuit (Reuters)
- Swiss Christmas Trees Feel Chill as Franc Helps Rivals (BBG)
- Iran, six powers to resume nuclear talks after snag (Reuters)
- Dolphins Suffering From Lung Disease Due to Gulf Oil Spill, Study Says (WSJ)
- White House review panel proposes curbs on some NSA programs (Reuters) - the self-supervision program?
- TEPCO decides permanent shutdown of 2 surviving Fukushima reactors (Kyodo)
Fly On The Wall 7:00 AM Market Snapshot
* Ben Bernanke gave the U.S. economy a nod of approval just a month before he leaves the Federal Reserve, moving the central bank to begin winding down a bond buying program meant to boost growth with the recovery on firmer footing.
* A growing industry uses surveillance and data crunching technology to supply traders with non-public information about oil supplies, electric power production, retail traffic and crop yields.
* A jury found a senior employee of SAC Capital Advisors LP guilty of insider trading, a verdict that deals another blow to the giant hedge fund and its billionaire founder, Steven A. Cohen.
* Target was hit by an extensive theft of its customers' credit-card data over the Black Friday weekend in what appears to be a breach of a major retailer's information security. The Secret Service is investigating.
* Bristol-Myers Squibb is nearing a deal to sell its stake in a diabetes partnership with AstraZeneca for more than $3 billion.
* Tokyo Governor Naoki Inose said he will resign following calls for him to step down over a loan he received from a scandal-hit hospital-chain operator.
* U.S. banking regulators are considering issuing guidance to address concerns about the Volcker rule's impact on some small and midsize banks, according to people familiar with the matter.
* U.S. commodity regulators are stumbling at one of their primary goals: bringing transparency to the multitrillion-dollar swaps market.
* The value of one bitcoin plunged as much as 38 percent against the dollar Wednesday, highlighting the risks for investors in the virtual currency and merchants who accept it as payment.
* General Electric Co Chief Executive Jeff Immelt pledged to cut costs and boost sales at the conglomerate's industrial businesses, as the company tries to improve profits despite a smaller contribution from its giant lending arm.
Michael Steinberg, a former top portfolio manager at hedge fund SAC Capital, was found guilty on Wednesday of insider trading, the latest victory for federal prosecutors in New York in their four-year crackdown on Wall Street.
Brazil awarded Sweden's Saab a $4.5 billion contract to supply its next generation fighter jet, handing the small Scandinavian defence company one of the country's biggest defence deals in the wake of revelations about U.S. spying on Brazilians.
General Electric expects the strengthening U.S. economy to boost revenue growth next year, as the manufacturing and financial conglomerate forecast double-digit earnings growth from its industrial units.
Former BP engineer Kurt Mix faces a maximum prison sentence of 20 years after being found guilty on one count of obstruction of justice, based on his deletion of a text exchange with his BP supervisor. Mix is the first person from the energy company to be convicted for an offence related to the 2010 Deepwater Horizon disaster.
Citigroup has agreed to a multibillion-dollar distribution deal with the AIA Group, that will allow the Asian life insurer's products to be sold through the U.S. bank's network across the region, sources said.
* Insurance companies, worried about potential chaos next month as people begin seeking coverage under the federal health care law without completing the necessary paperwork, have agreed to give consumers an extra 10 days to pay their first-month premiums, according to a statement from the companies' trade group.
* In a disappointment for Boeing, Brazilian defense officials said on Wednesday that they had picked the aircraft maker Saab for a $4.5 billion contract to build 36 fighter jets over the next 10 years.
* European Union finance officials agreed late Wednesday on a system for winding down failed banks, an important step toward introducing a banking union.
* Nearly four years after the Gulf of Mexico oil rig explosion that left 11 dead, a former low-level engineer, Kurt Mix, at BP was found guilty on Wednesday of obstruction of justice for deleting messages during a federal investigation into how much oil leaked.
* Target is investigating a security breach involving stolen credit card and debit card information for millions of its customers, according to one person involved in the investigation.
* Together, Whole Foods and Chobani have become two of the biggest success stories in the food business in the last decade, but now they are parting ways. Whole Foods said on Wednesday that as of early next year its stores would no longer stock Chobani, primarily because the explosion of Greek yogurt brands has made it more selective in how it allocates its prized refrigerated shelf space.
* The Federal Communications Commission on Wednesday proposed repealing its blackout rule, which for decades has been the bane of sports fans whose ability to watch their favorite team's home games on television has depended on whether enough of their fellow fans bought tickets to see it in person.
* To promote its Galaxy mobile devices, Samsung Electronics is taking, fittingly, a galactic approach, with an international marketing campaign that blends science fiction with soccer fandom. Central to the campaign is a series of videos, shot in a moody, otherworldly style reminiscent of "The Matrix."
THE GLOBE AND MAIL
* Canada Post's top executive says ending home delivery and shifting millions of Canadians to community mailboxes offers at least one unintended upside - more exercise for seniors.
* Quebec Liberal leader Philippe Couillard is proposing "concrete actions" against religious fundamentalists and extremists, saying "they are not welcome in Quebec."
Reports in the business section:
* China Investment Corp has no plans to close its Toronto office, people close to the fund said, despite reports the giant investment fund is considering moving its North American headquarters to New York.
* The federal government has quietly closed a loophole that had allowed Pizza Pizza Ltd and other restaurant chains to import growing quantities of low-cost U.S. mozzarella, skirting the high tariff wall that shields Canada's dairy industry.
* BlackBerry Ltd said on Wednesday that it hired two more senior executives who previously worked with its new Chief Executive John Chen, bolstering a newly assembled team charged with putting the stumbling smartphone maker back in stride.
* The Ontario Court of Appeal has upheld the conviction and 18-month prison sentence handed to a refugee judge, Stevan Ellis, who was caught on videotape offering to approve a 25-year-old South Korean woman's asylum claim if she became his girlfriend.
* Toronto politicians took a key step on Wednesday toward building the city's first gay-focused sports and recreation center. Only two members of council - Mayor Rob Ford and Councillor James Pasternak - voted against the proposed development by the 519 Church Street Community Center, expected to cost about $100 million, one-third of which would be funded by the three levels of government.
* Megan Vickell is a new brand of condominium owner that people predicting a market crash may have forgotten to factor in. A report from Canada Mortgage and Housing Corp shows women are a growing powerhouse in the Canadian condominium market. Among people who live alone, women made up 65 percent of owner occupants in 2011.
* While Canada's telecommunications regulator ramps up its investigation into domestic roaming rates, the federal government said on Wednesday that it too was planning measures to crack down on practices it said were impeding competition in the cellphone industry.
* Unifor, Canada's largest private sector union, will hold an organization vote at Toyota Motor Manufacturing Canada Inc early in 2014, President Jerry Dias said on Wednesday.
The unionization drive at the Japanese automaker for more than 7,000 employees in Canada has become the priority for the recently amalgamated Unifor.
CHINA SECURITIES JOURNAL
- Due to tight liquidity in the banking system, yields on bank wealth management products (WMP) with maturities extending across the Chinese New Year are surpassing 6 percent and approaching 7 percent, according to an investigation by the paper.
XINHUA NEWS AGENCY
- China has set stricter standards for petrol in an effort to reduce car pollution, China's Standardization Administration said on Wednesday. The new standard, to come into effect from Jan. 1, reduces the sulphur content for gasoline to 10 parts per million (ppm), from 50 ppm.
SHANGHAI SECURITIES NEWS
- China plans to implement a number of major engineering projects designed to protect the environment, the State Council announced in a Wednesday meeting. Projects include an ecological reserve in the northwestern province of Qinghai, covering three rivers and the construction of a pilot protected area in Gansu province, also in the country's northwest.
- The China Banking Regulatory Commission plans to issue new rules regulating banks' off-balance-sheet business and to further expand credit asset securitisation, among other priorities for 2014, deputy head of the commission's policy research bureau, Zhang Xiaopu, told the paper in an interview.
- The true purpose of China's urbanization drive is to better integrate rural workers into the cities in which they work, not to fuel urban construction, said Xiao Jincheng, a director at a think-tank affiliated with the National Development and Reform Commission, in an op-ed.
- China should stick to scientific development of the economy, so that the country can develop in an efficient, fair and sustainable way, said a commentary in the paper that acts as the party's mouthpiece.
HMRC ACCUSED OF BEING SOFT ON BIG BUSINESS
Britain's HM Revenue and Customs has been accused of failing to collect enough tax from big business and not using the powers at its disposal to do so by an influential committee of MPs.
INVESCO-BACKED MANUFACTURER EYES £278 MLN FLOTATION
A manufacturing company whose board members include former Diageo chief Paul Walsh and ex-Marks & Spencer boss Stuart Rose, has unveiled plans for a 278 million pound ($455.7 million) stock market listing, topping the biggest AIM market flotation this year.
BP MAKES FIRST MAJOR GULF OF MEXICO OIL DISCOVERY SINCE DEEPWATER HORIZON
BP has reported a "significant oil discovery" in the Gulf of Mexico, its first major find since the deadly rig explosion that triggered the worst environmental disaster in U.S. history.
EU MINISTERS SEAL BANKING AGREEMENT ON EVE OF BRUSSELS SUMMIT
EU finance ministers announced late on Wednesday night that they had reached agreement on a new system for dealing with eurozone banks, under intense pressure to seal the accord on their new flagship policy in advance of a two-day Brussels summit opening on Thursday.
BUPA BUYS STAKE IN AMERICAN TRAVEL INSURER HIGHWAY TO HEALTH
Bupa has bought a minority stake in American travel insurance specialist Highway to Health in a rare step across the Atlantic for the private healthcare network.
EU TOBACCO DEAL COULD INCLUDE BAN ON REFILLABLE E-CIGARETTES
Despite intensive lobbying from the burgeoning e-cigarette industry, an EU-wide ban could be imposed if at least three member states prohibit refillable e-cigarettes.
UK UNEMPLOYMENT DROPS TO 7.4 PCT, LOWEST SINCE 2009
Britain's unemployment rate fell to its lowest in four-and-a-half years in the three months to October, the Office for National Statistics said.
PLASTIC BANKNOTES: BANK OF ENGLAND SWITCHES TO PLASTIC WITH NEW WINSTON CHURCHILL NOTE
The Bank of England is set to issue plastic banknotes for the first time featuring Sir Winston Churchill in a five-pound note starting 2016.
Fly On The Wall 7:00 AM Market Snapshot
BNC Bancorp (BNCN) upgraded to Outperform from Market Perform at Keefe Bruyette
CGG SA (CGG) upgraded to Neutral from Sell at Goldman
Callaway Golf (ELY) upgraded to Strong Buy from Outperform at Raymond James
Cubic (CUB) upgraded to Overweight from Neutral at JPMorgan
Forest Labs (FRX) upgraded to Overweight from Neutral at Piper Jaffray
LinnCo (LNCO) upgraded to Strong Buy from Outperform at Raymond James
Omnicom (OMC) upgraded to Buy from Neutral at Goldman
Puma Biotechnology (PBYI) upgraded to Buy from Hold at Stifel
Thomson Reuters (TRI) upgraded to Outperform from Neutral at Credit Suisse
Valassis (VCI) upgraded to Market Perform from Underperform at BMO Capital
AbbVie (ABBV) downgraded to Equal Weight from Overweight at Morgan Stanley
Canon (CAJ) downgraded to Neutral from Buy at Citigroup
JPMorgan (JPM) downgraded to Neutral from Buy at SunTrust
QEP Midstream Partners (QEPM) downgraded to Neutral from Overweight at JPMorgan
Semtech (SMTC) downgraded to Perform from Outperform at Oppenheimer
Alaska Air (ALK) initiated with a Buy at UBS
American Airlines (AAL) initiated with a Neutral at UBS
American Express (AXP) initiated with a Buy at SunTrust
American Tower (AMT) initiated with a Buy at Jefferies
Barracuda Networks (CUDA) initiated with an Outperform at BMO Capital
Calumet Specialty Products (CLMT) initiated with a Neutral at Goldman
Check Point (CHKP) initiated with a Market Perform at BMO Capital
Crown Castle (CCI) initiated with a Buy at Jefferies
Delta Air Lines (DAL) initiated with a Buy at UBS
Demandware (DWRE) initiated with an Overweight at Barclays
Diamondback Energy (FANG) initiated with a Buy at Roth Capital
Discover (DFS) initiated with a Neutral at SunTrust
Dorman Products (DORM) initiated with an Outperform at William Blair
GameStop (GME) initiated with a Hold at Benchmark Co.
IMAX (IMAX) initiated with a Buy at Roth Capital
Imperva (IMPV) initiated with an Outperform at BMO Capital
Monotype Imaging (TYPE) initiated with a Buy at B. Riley
Monro Muffler (MNRO) initiated with a Buy at KeyBanc
Navigators (NAVG) initiated with an Outperform at William Blair
PVH Corp. (PVH) initiated with a Buy at Janney Capital
Pacific Premier (PPBI) initiated with an Outperform at Keefe Bruyette
QTS Realty Trust (QTS) initiated with an Overweight at Morgan Stanley
Qualys (QLYS) initiated with a Market Perform at BMO Capital
Ralph Lauren (RL) initiated with a Buy at Janney Capital
SBA Communications (SBAC) initiated with a Buy at Jefferies
Southwest (LUV) initiated with a Buy at UBS
Symantec (SYMC) initiated with a Market Perform at BMO Capital
Synergy Resources (SYRG) initiated with a Buy at Roth Capital
Tableau Software (DATA) initiated with a Buy at Cantor
United Continental (UAL) initiated with a Neutral at UBS
Bristol-Myers (BMY) to sell global diabetes business to AstraZeneca (AZN) for $2.7B
Target (TGT) confirmed unauthorized access to payment card data in U.S. stores
Bayer (BAYRY) to acquire Norwegian pharmaceutical company Algeta
UBS (UBS) to sell CEFS International business to Montagu Private Equity
MasterCard (MA), eServGlobal and BICS created remittance joint venture
Two Harbors (TWO) to acquire mortgage servicing rights from Flagstar Bancorp (FBC)
Duke Energy (DUK) CEO Good told Bloomberg TV that coal has been 'under attack'
Patriot Coal (PCXCQ) emerged from Chapter 11 bankruptcy
Peabody (BTU) confirmed settlement effective after Patriot Coal (PCXCQ) emerged from bankruptcy
AutoZone (AZO) authorized additional $750M share repurchase plan
Hershey (HSY) to acquire majority share of Shanghai Golden Monkey
Companies that beat consensus earnings expectations last night and today include:
Biodel (BIOD), Oracle (ORCL), Herman Miller (MLHR), Paychex (PAYX)
Companies that missed consensus earnings expectations include:
Pier 1 Imports (PIR), Apogee Enterprises (APOG)
- LaserShip, OnTrac or Eastern Connection Operating and other small regional shippers are expanding their networks across the U.S., creating a "super regional" threat to UPS (UPS) and FedEx (FDX), which are under pressure to build their own ground-delivery businesses in the face of weak demand for express air delivery, the Wall Street Journal reports
- Cloud application vendor NetSuite (N) is accelerating its construction of data centers in Europe as a result of the NSA’s eavesdropping activities, as prospective customers have grown more concerned about whether the U.S. government could access proprietary information stored in data centers around the world, the Wall Street Journal reports
- Machinists rallied near Boeing's (BA) main aircraft factory in Everett, WA, demanding the chance to vote on a labor contract that union leaders rejected last week. The rally and counter-protest illustrates the sharp rift that divides the union over the contract, which pits job security against the company pension, Reuters reports
- Carlyle Group (CG) hired Credit Suisse (CS) to explore a sale of specialty chemical company PQ Corp., which it is hoping to sell for as much as $3B, sources say, Reuters reports
- U.S. banking industry groups are pressing regulators to clarify accounting for certain securities under the Volcker Rule after lenders complained the Dodd-Frank Act measure may force them to take writedowns, Bloomberg reports
- Toyota Motor’s (TM) Camry, the best-selling car in the U.S., returned to Consumer Reports’ recommended list after showing improvement on an insurance-industry crash test, Bloomberg reports
CEL-SCI (CVM) files automatic common stock, warrant offering
Carlyle Group (CG) files to sell 2.19M common units representing limited partners
Facebook (FB) files to sell 70M Class A common stock, Zuckerberg selling 41.35M
GigOptix (GIG) files automatic common stock offering
Lee Enterprises (LEE) files $750M mixed securities shelf
SuperCom (SPCB) 3M share Secondary priced at $4.00