Frontrunning: February 19
- Ukraine leader denounces coup bid, West weighs sanctions (Reuters)
- Time to buy Imodium calls: Kuroda Easing Doomed as Yen Seen Missing 120 Level (BBG)
- Teens Disappear From U.S. Workforce (BBG)
- Fed Sets Rules for Foreign Banks (WSJ)
- Quant Funds Feel Investor Bite After Underperforming (BBG)
- China Probes Qualcomm, InterDigital Over Monopoly Concerns (WSJ)
- Capital One says it can show up at cardholders' homes, workplaces (LATimes)
- SEC Gains Power to Take Profit Made From Insider Trading (BBG)
- China Unveils New Bank Liquidity Rules After Repeated Cash Squeezes (WSJ)
- California pension rate hikes loom after Calpers vote (Reuters)
- How a CEO Reacts When Robert Redford Pegs Him a Villain (BBG)
Overnight Media Digest
* General Motors Co is accelerating efforts to field a largely aluminum-bodied pickup truck by late 2018, under pressure from federal fuel efficiency standards and archrival Ford Motor Co, according to people familiar with the matter.
* Coca-Cola Co, the world's largest beverage firm, missed its yearly growth goals and warned that weaker foreign currencies will lower its operating profit 7 percent this year.
* The New York attorney general plans to announce a settlement with U.S. units of Ranbaxy and Teva Pharmaceutical Industries Ltd over allegations the generic drug makers made an unlawful agreement to restrict competition.
* President Barack Obama on Tuesday ordered his administration to develop and implement new fuel-efficiency standards for medium and heavy-duty commercial trucks by March 2016.
* Americans are beginning to take advantage of easier lending conditions after years of shedding debt, fueling a rise in borrowing that could prop up a shaky economic recovery. ()
* The Arkansas House failed to pass legislation to continue a state program that used Medicaid dollars to enroll low-income residents in private health insurance, throwing the future of the nationally watched program into doubt.
* Seven years after a Supreme Court ruling cleared the way for federal regulation of greenhouse gases, justices will consider whether the agency has stretched its powers too far in applying new emissions rules.
* AT&T Inc received requests on national security grounds for detailed information for at least 35,000 customer accounts in the first six months of 2013, the company disclosed.
* Raising the federal minimum wage to $10.10 per hour would cost the U.S. economy about 500,000 jobs by late 2016, but the increase would lift 900,000 Americans out of poverty at the same time, according to a new study.
Private equity companies look to gain from Europe's road to recovery as the initial public offerings market starts the year with listings worth $8.3 billion, making 2014 the busiest beginning of the year since the financial crisis.
Diageo Plc, the world's biggest spirits company has warned against Britain leaving the European Union, crediting the bloc's global trade deals for the company's whisky exports success.
MetLife said it would sell its bulk annuity unit, MetLife Assurance, to Goldman Sach's-backed Rothesay Life. The sale is expected to be completed in the second quarter of 2014.
Essar Energy's plans to delist shares may have been triggered by a drastic share price fall since their listing and meetings with disappointed long-term investors before Christmas, people involved in the matter said.
U.S.-based activist hedge fund SpringOwl said on Tuesday that it has agreed in principle to buy about 6.1 percent in Bwin.Party, a move that could lead to a break up of the online gaming party.
* Homeowners who are trying to avert foreclosure are confronting problems on a new front as the mortgage industry undergoes a shift.
* King Digital Entertainment, the maker of the addictive puzzle game Candy Crush Saga, filed on Tuesday to list its shares on the New York Stock Exchange.
* A popular Democratic proposal to raise the minimum wage to $10.10 an hour, championed by President Obama, could reduce total employment by 500,000 workers by the second half of 2016.
* Senator Charles Schumer, Democrat of New York, has recused himself from reviewing Comcast Corp's agreement to buy Time Warner Cable after the revelation that his brother, the lawyer Robert Schumer, worked on the merger.
* David Einhorn has filed a lawsuit seeking to unmask the identity of an anonymous financial blogger who, he says, disclosed that Einhorn's hedge fund was buying shares in a technology company.
* Foreign banks with a major presence on Wall Street will no longer be allowed to avoid many of the tougher rules that the United States introduced after the financial crisis to prevent banking failures and bailouts.
* Corporations should expect an onslaught of enforcement proceedings from investigations into overseas bribery, manipulation of financial benchmark rates and the issuance of toxic mortgage securities. The question is how much money the government will demand as part of the inevitable settlements, a figure that is difficult to calculate.
THE GLOBE AND MAIL
* The head of Canadian Pacific Railway Ltd, Hunter Harrison, called for an immediate ban of the type of older rail cars that exploded in the Lac-Megantic disaster and suggested that trains will become more attractive targets for terrorists if rail companies are forced to tell the public what dangerous goods they are carrying.
* BlackBerry Ltd says it's "outraged" by a T-Mobile U.S. Inc offer aimed at luring some of its customers to the rival Apple Inc iPhone. BlackBerry's new chief executive officer John Chen, was referring to T-Mobile's attempt to get some of its users to switch smartphones, a move that backfired and sent the wireless carrier scrambling to make good.
Reports in the business section:
* The fizz has gone out of the soft-drink business, forcing producers to search for alternative sources of revenue - but even some of those are showing limited growth potential. From Coca-Cola Co to PepsiCo Inc to private-label Cott Corp, soda makers are struggling with declining North American demand for their core carbonated drinks and counting more on other products to diversify and draw back customers.
* The British Columbia government unveiled its tax regime for liquefied natural gas exports, providing an industry framework the province hopes will lead to an avalanche of new revenue.
* Unrepentant and unafraid of new controversy, Toronto Mayor Rob Ford used a series of YouTube videos Tuesday to declare "war" on nearly half of Toronto's city council and said he could see "no reason" for the city to fly the Pride flag during the Sochi Olympics.
* Yoga-wear retailer Lululemon Athletica Inc has apologized and revised its policy after some customers were banned from its online store after reselling products over the Internet.
* The explosion of transportation of oil by rail has gone a long way to alleviate pipeline bottlenecks, but Canadian Pacific Railway boss Hunter Harrison is not convinced it has been a boon for his own industry.
* As the newspaper industry considers the merits of cutting certain unprofitable print publication dates, the owner of Quebec's La Presse has struck a revised printing deal that gives it the option to publish less often.
SHANGHAI SECURITIES NEWS
- The PBOC drained 48 billion yuan through forward repurchase agreements for the first time in eight months on Tuesday, suggesting a tightening bias after a surge in liquidity following the Spring Festival, according to Liu Yihui, chief economist of Guangfa Securities.
- Wang Chuanfu, chairman of BYD Co Ltd, said demand for new energy cars will rise in 2014 thanks to supportive government policies, including subsidies and efforts to tackle air pollution.
CHINA SECURITIES JOURNAL
- China may soon issue banking licenses to three to five private companies ahead of the National People's Congress in early March, sources said. Policymakers have expressed support for the formation of privately-owned banks and sources said large and established companies are likely to get their licenses first.
21st CENTURY BUSINESS HERALD
- Deposits of the four major state-owned banks increased by 38 billion yuan ($6.26 billion) as of Feb. 16, regulations toward internet financial services to be expected.
- The Shanghai Free Trade zone will have more financial reforms rolled out before the National People's Congress in early March. Upcoming policies are expected to provide more flexibility in interest rates and reducing control over foreign exchange, said Jian Danian, vice-chairman of the zone administration. The government is also considering proposals to lower the tax rate for companies registered in the zone to 15 percent.
- The China (Shanghai) Free Trade Pilot Zone launched cross-border yuan payment services on Tuesday under the guidance of the People's Bank of China. Five third-party payment service providers have received approval to handle renminbi-denominated cross-border payments in the zone, the PBOC's Shanghai office said.
- Comprehensive reforms need to be conducted to achieve a better institutional system of socialism and to fulfill the demands of modern governing, and editorial said.
- More than 1200 people close to a realgar mine in Hunan Province have fallen victims to decades-long arsenic refining, with at least 500 mine workers dying from cancer, according to local authorities.
SCOTLAND CAN ISSUE BONDS - BUT THEY WILL COST MORE
The Government has granted Scotland permission to issue its own bonds - but with a warning that it is "unlikely to be a cost effective form of borrowing".
COMPENSATE US IF YOU FREEZE THE CARBON TAX, SAYS POWER GIANT DRAX
Power giant Drax Group wants compensation if the Treasury freezes the carbon tax, arguing it would lose out on expected earnings from burning biomass.
BUY TO LET SPECIALIST PARAGON GETS BANKING LICENCE TO FINANCE CAR SALES
Solihull-based buy to let mortgage specialist Paragon has been given a banking licence as part of its drive to offer finance in Britain's booming car market.
MORE FERRARIS SOLD IN THE UK THAN ANYWHERE ELSE IN EUROPE
Despite rising prices in 2013 as Ferrari cut production, record numbers of the tailor-made vehicles were sold in Britain last year.
DOOSAN BABCOCK NUCLEAR DEAL TO CREATE 1,000 JOBS
Doosan Babcock has won a 1 billion pounds contract to extend the lives of EDF Energy's ageing nuclear reactors and help to keep the lights on in the UK.
FUND BOSSES TO LOOK AT INVESTOR CONCERNS OVER ESSAR PROPOSAL
The Association of British Insurers' investment committee is poised to discuss investor concerns about the contentious bid proposal for Essar Energy from its largest shareholder.
RBS BOARD BEGINS PLANNING FOR HAMPTON EXIT
Directors of Royal Bank of Scotland have begun discussions about the appointment of a new chairman as Sir Philip Hampton prepares to step down from the taxpayer-backed lender.
'INSIDE MAN HELPED 1 MILLION POUND BARCLAYS BANK FRAUD'
Fraudsters stole more than 1 million pounds from a Barclays bank branch after fitting a remote control gadget to a worker's computer, a court has heard.
Fly On The Wall 7:00 AM Market Snapshot
Domestic economic reports scheduled for today include:
Producer Price Index for January at 8:30--consensus up 0.2%
Housing starts for January at 8:30--consensus rate 950K
Housing permits January at 8:30--consensus rate 975K
Actavis (ACT) upgraded to Buy from Neutral at Goldman
Ashford Hospitality (AHT) upgraded to Outperform from Neutral at RW Baird
CEMEX (CX) upgraded to Buy from Neutral at Sterne Agee
Capstone Turbine (CPST) upgraded to Outperform from Market Perform at FBR Capital
Genpact (G) upgraded to Buy from Neutral at Citigroup
Gogo (GOGO) upgraded to Overweight from Equal Weight at Evercore
J.B. Hunt (JBHT) upgraded to Buy from Hold at Wunderlich
M&T Bank (MTB) upgraded to Buy from Neutral at SunTrust
Saia, Inc. (SAIA) upgraded to Buy from Hold at Wunderlich
Atlas Pipeline Partners (APL) downgraded to Equal Weight from Overweight at Barclays
Calpine (CPN) downgraded to Neutral from Buy at UBS
Cape Bancorp (CBNJ) downgraded to Neutral from Buy at Sterne Agee
Con-way (CNW) downgraded to Hold from Buy at Wunderlich
Dresser-Rand (DRC) downgraded to Equal Weight from Overweight at Morgan Stanley
Dresser-Rand (DRC) downgraded to Market Perform from Outperform at Raymond James
Essex Property Trust (ESS) downgraded to Hold from Buy at Cantor
Knight Transportation (KNX) downgraded to Hold from Buy at Wunderlich
NPS Pharmaceuticals (NPSP) downgraded to Hold from Buy at Jefferies
Parkway Properties (PKY) downgraded to Market Perform from Outperform at BMO Capital
SM Energy (SM) downgraded to Hold from Buy at KeyBanc
SolarCity (SCTY) downgraded to Neutral from Outperform at RW Baird
Valspar (VAL) downgraded to Equal Weight from Overweight at First Analysis
A.O. Smith (AOS) initiated with an Outperform at FBR Capital
American Eagle Energy (AMZG) initiated with a Buy at SunTrust
Canadian Solar (CSIQ) initiated with a Market Perform at FBR Capital
Dillard's (DDS) initiated with a Neutral at Citigroup
First Solar (FSLR) initiated with a Market Perform at FBR Capital
Genesco (GCO) initiated with a Sell at Goldman
Hannon Armstrong (HASI) initiated with an Outperform at FBR Capital
J.C. Penney (JCP) initiated with a Neutral at Citigroup
Johnson Controls (JCI) initiated with an Outperform at FBR Capital
Kohl's (KSS) initiated with a Neutral at Citigroup
Lennox (LII) initiated with an Outperform at FBR Capital
MSA (MSA) initiated with a Hold at Stifel
Macy's (M) initiated with a Buy at Citigroup
Nordstrom (JWN) initiated with a Neutral at Citigroup
Oshkosh (OSK) initiated with a Buy at Stifel
Polypore (PPO) initiated with a Market Perform at FBR Capital
Power Solutions (PSIX) initiated with an Outperform at FBR Capital
SunEdison (SUNE) initiated with an Outperform at FBR Capital
SunPower (SPWR) initiated with a Market Perform at FBR Capital
Tesla (TSLA) initiated with a Market Perform at FBR Capital
United Rentals (URI) initiated with a Buy at Stifel
Vocera (VCRA) initiated with a Buy at B. Riley
Westport Innovations (WPRT) initiated with an Outperform at FBR Capital
Canadian Natural (CNQ) acquired certain assets of Devon Canada (DVN) for $3.13B
Bombardier (BDRBF) signed contract with Transport for London valued at $2.1B
Chelsea Therapeutics' (CHTP) Northera was granted accelerated approval from the FDA for the treatment of symptomatic neurogenic orthostatic hypotension
Crossroads (CRDS) filed patent infringement suits against Cisco (CSCO), NetApp (NTAP), Quantum (QTM)
Verizon (VZ) expects to issue 1.27B common shares to Vodafone (VOD) shareholders as part of its acquisition of Vodafone's 45% stake in Verizon Wireless
Mattress Firm (MFRM) said it expects Q4 profit and sales to come in below expectations
Analog Devices (ADI) approved increase to share repurchase program to $1B
Energy Transfer Partners (ETP) announced long term agreement with XTO Energy (XTO, XOM)
Companies that beat consensus earnings expectations last night and today include:
Terex (TEX), Oceaneering (OII), Neenah Paper (NP), CF Industries (CF), NPS Pharmaceuticals (NPSP), Panera Bread (PNRA), Herbalife (HLF), Potbelly (PBPB), Flowserve (FLS), Fluor (FLR), Nabors Industries (NBR), Columbia Sportswear (COLM)
Companies that missed consensus earnings expectations include:
NorthWestern (NWE), FreightCar America (RAIL), Yamana Gold (AUY), Phototronics (PLAB), InnerWorkings (INWK), La-Z-Boy (LZB), Greenlight Capital Re (GLRE), DryShips (DRYS), Sykes Enterprises (SYKE)
GE (GE) sued IRS to recover $658M in taxes and interest, WSJ reports
China investigating Qualcomm (QCOM), InterDigital (IDCC) over monopoly concerns, WSJ reports
John Malone (DISCA, LBTYA) starts succession planning, FT reports
BlackBerry (BBRY) CEO blasts T-Mobile (TMUS) for pushing change to iPhones (AAPL), Bloomberg reports
AIG (AIG) accused of holding BofA (BAC) $8.5B settlement 'hostage,' Reuters reports
Novartis (NVS) Tokyo unit raided by prosecutors, Reuters reports
Target (TGT) CEO Steinhafel faces cybertheft aftermath, WSJ reports
Prosecutors alleged GPB1.25M stolen from Barclays (BCS) in one day, FT reports
Actavis (ACT) expected to seek more deals, WSJ reports
General Mills (GIS) seeks deals in fast growing emerging markets, Reuters reports
Advaxis (ADXS) to sell up to $50M in common stock
Arrowhead Research (ARWR) files to sell common stock
Five Oaks (OAKS) files to sell 3M in common stock
Kinder Morgan Energy (KMP) files to sell 6.9M common units
MarkWest Energy (MWE) files to sell $1.2B of common units representing limited partner
Verizon (VZ) to issue 1.27B common shares to Vodafone