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Frontrunning: February 25

  • Invade Syria already, we know you will: Islamic State in Syria abducts at least 150 Christians (Reuters)
  • Greece Struggles to Get Citizens to Pay Their Taxes (WSJ)
  • Doubts Shadow Deal to Extend Greek Bailout (WSJ)
  • In surprise result, Chicago's Mayor Emanuel faces election run-off (Reuters)
  • Obama vetoes Keystone pipeline bill (Reuters)
  • Another sign of the top: Cushman & Wakefield Going Up for Sale (WSJ)
  • Elizabeth Warren's Next Target Is The Fed's Top Lawyer (HuffPo)
  • Lure of Wall Street Cash Said to Skew Credit Ratings (BBG) ... and threat of DOJ lawsuits also
  • Oil rises to $59 as Saudis say demand growing (Reuters)
  • China Said to Prepare Steps to Counter Housing Market Slump (BBG)
  • World stocks near all-time highs after Fed signals (Reuters)
  • What Clever Robots Mean for Jobs (WSJ)
  • RBS Said to Plan Cutting Footprint to 13 Nations in Revamp (BBG)
  • Eliminate Phantom Liquidity in Currency Markets, BlackRock Says (BBG)
  • Buffett sets sights on German companies (Reuters)
  • AmEx Said to Increase Rates for More Than 1 Million Cardholders (BBG)


Overnight Media Digest


* Federal Reserve Chairwoman Janet Yellen, sounding upbeat about the economy, started laying the groundwork for interest-rate increases later this year. (

* A jury on Tuesday convicted Eddie Ray Routh of killing the former U.S. Navy sharpshooter whose autobiography became the movie "American Sniper." Routh, a 27-year-old Marine, was found guilty of killing former Navy SEAL Chris Kyle and Kyle's friend Chad Littlefield at a Texas shooting range in 2013. (

* Chad's army has been on the offensive in Nigeria, swinging momentum in a conflict that has cost tens of thousands of lives, displaced more than a million people and seen Boko Haram abduct perhaps thousands of adolescents. (

* The Italian family that controls Cushman & Wakefield, one of the world's largest real-estate services firms, is putting the company up for sale as rising property prices push up the value of rivals. (

* Several oil companies have turned on Enterprise Products Partners LP, complaining it is trying to dominate the lucrative oil-export business and muscle out competitors. (

* Capital One Financial said the U.S. Justice and Treasury departments are looking into possible money-laundering violations. (

* JPMorgan is aiming to reduce certain deposits by up to $100 billion by the end of the year and is preparing to charge large institutional customers for some deposits thanks to new rules that make holding money for the clients too costly. (

* Health insurer Anthem Inc said the database that was penetrated in a previously-disclosed hacker attack included personal information for 78.8 million people. (

* Regulators are scrutinizing acquisitions by one of Canada's largest banks after finding fault with its risk management, according to people familiar with the matter, even as a new CEO looks for businesses to buy in the U.S. (

* Sycamore Partners has abandoned its attempt to buy women's clothing retailer Chico's FAS Inc after failing to line up financing for the deal on acceptable terms, according to a person familiar with the matter. (



British Prime Minister David Cameron announced plans to send military trainers to Ukraine, marking a significant escalation of Britain's involvement in the country's fight with Russian backed rebels.

UK's Labour will announce plans on Wednesday to extend the reach of its bank bonus tax, amid anxiety in Downing Street that pay awards this week by state-controlled Royal Bank of Scotland and Lloyds Banking Group will stoke further public anger.

HSBC Holdings Plc group Chairman Douglas Flint and Chief Executive Stuart Gulliver have been hastily summoned before a parliamentary committee amid a scandal over alleged tax-dodging by clients of the company's Swiss private banking arm.

Royal Bank of Scotland Plc will appoint Rory Cullinan as the new head for its struggling investment bank as the UK government-controlled lender steps up efforts to shrink the loss-making unit back to its domestic roots.



* Senior Republicans conceded on Tuesday that the grueling fight with President Obama over the regulation of Internet service appears over, with the president and an army of Internet activists victorious.(

* Janet Yellen, the Federal Reserve chairwoman, told Congress on Tuesday that the central bank is pleased with recent economic growth but convinced there is room for improvement and still pondering when to start raising interest rates.(

* Home price appreciation in general is slowing, with the Standard & Poor's/Case-Shiller index report on Tuesday showing a pace of growth in the single digits. In this environment, builders are turning to the wealthy as the most reliable market on which to place their bets.(

* J.P. Morgan Chase & Co on Tuesday went on the offensive against growing questions from analysts and investors on whether the company needs to be broken up. (

* Charles Ergen, the billionaire who controls the satellite-TV provider Dish Network Corp, and his company are about to make a cool $3.25 billion, courtesy of the American taxpayer.(

* The insider-trading trial of the troubled Brazilian businessman Eike Batista could be thrown into disarray after the judge in charge of his case was found to have been driving one of Batista's seized cars.(




** As promised, U.S. President Barack Obama vetoed Keystone XL approval legislation Tuesday, escalating the confrontation with Congress over the controversial Canadian project to ship Alberta oil sands crude cross the United States to the Texas Gulf Coast. (

** Canadian special-forces soldiers providing counterterrorism training in Niger have been forced to pack up from a border region and relocate to another part of the African country in order to stay out of the way of fighting between Boko Haram extremists and government troops. (

** An Alberta online bank is believed to be the first Canadian financial institution to deny service to Americans, citing the burden of complying with strict new U.S. tax rules. Canadian Direct Financial, a subsidiary of Edmonton-based Canadian Western Bank, is refusing to open new Internet accounts for U.S. citizens, even to those living in Canada. (

** Turquoise Hill Resources has reached a deal to sell its remaining stake in SouthGobi Resources Ltd, a coal mining business in Mongolia. It says a private Chinese company, Novel Sunrise Investments, has agreed to buy 48.7 million shares in SouthGobi for 35 cents per share in cash. (


** Canadian National Railway Co has agreed to pay into a union action fund as part of the 11th-hour deal reached with Unifor on Monday night - but not the same fund it had opposed on principle earlier in the negotiations. (

** The Florida health department has fined the head of an alternative health clinic for practicing medicine without a licence, citing his "unproven and possibly dangerous" treatment of two cancer-stricken Ontario girls. (

** Tim Hortons is the newest corporate sponsor to help keep a batch of outdoor ice rinks open in Toronto after a private trash collector pulled its initial $100,000 offer in what the mayor called a "small hiccup". (


Hong Kong

HONG KONG, Feb 25 (Reuters) - These are some of the leading stories in Hong Kong newspapers on Wednesday. Reuters has not verified these stories and does not vouch for their accuracy.


-- Hong Kong Chief Executive Leung Chun-ying said he would raise the possibility of limiting the number of mainlanders visiting Hong Kong when he meets central government officials in Beijing next month. (

-- The concentration of ozone in Hong Kong's air has increased by a third in the last 15 years, highlighting yet again the severity in regional air pollution, preliminary government data has shown. Ozone concentrations at general stations were up 7 percent from 2013 to 46 micrograms per cubic metre of air last year. (


-- The Chinese University of Hong Kong plans to start construction on a HK$6 billion ($773.54 million) private hospital in the first quarter of next year, with a completion target of 2019. (

-- Financial Secretary John Tsang Chun-wah will announce record-high government spending of HK$440 billion ($56.73 billion) and hand out more than HK$20 billion in sweeteners in the budget, sources said. Spending is up 11 percent, while the surplus will be more than the HK$20.3 billion this year. (

-- Hang Seng Bank has no intention yet of selling its remaining 5.87 percent stake in Industrial Bank or its holdings in Shandong-based Yantai Bank, vice chairman and chief executive Rose Lee Wai-mun said. (


-- Steel products trader Novo Group Ltd said it has received enquiries from independent third parties for investing in the company and discussions are at a preliminary stage but have not reached any agreement.


-- Macau's Secretary for Social Affairs and Culture Alexis Tam said in a radio talk show that the government would hold talks with mainland authorities to review policy and the city's capability in dealing with the increasing number of mainland visitors, and may consider restricting the number arrivals from Chinese cities.



The Times


After Greece secured a four-month bailout by abandoning key policy promises on which the ruling party Syriza swept to power, there were reports of backlash among supporters and a stormy cabinet as ministers learnt of the compromises. (


The Financial Conduct Authority fined Aviva Investors 17.6 million pounds ($27.23 million) yesterday for failing to control conflicts of interest that meant that its fund managers had incentives to direct investments to customers that paid top-notch performance fees. This has cost Aviva's investment business almost 150 million pounds in fines and compensation. (

The Guardian


The Chartered Institute of Housing, which represents the property industry, said exempting rural communities from right-to-buy and cracking down on fraudulent purchases are among measures that should be considered by the government to stem the loss of social housing. (


Controversial lender Wonga said it is slashing 325 jobs in the United Kingdom and Ireland - about a third of its workforce - to cut costs as it responds to a wider clampdown on unfair practices in the payday lending market. (

The Telegraph


The "Troika" of the European Commission, European Central Bank and International Monetary Fund have warned that the Greek government reforms are not enough to unlock the vital funding needed to keep the country afloat. (


WM Morrison Supermarkets Plc is set to appoint former Tesco Corp director David Potts as its new chief executive as early as Wednesday. Potts will take over from Dalton Philips, who was ousted last month. (

Sky News


Gulf Keystone Petroleum Ltd, one of London's most controversial listed companies, is poised to say that its board is considering a sale or merger amid protracted talks with the Kurdistan Regional Government (KRG) over delayed payments for oil exports, Sky News learns. (


Sky News has learned that Rory Tapner, chief executive of Royal Bank of Scotland's wealth arm is to step down. Tapner, one of the City's most senior bankers, is to leave Coutts, which counts Her Majesty The Queen among its clients, in the coming months. (

The Independent


Uli Burchardt, the mayor of Constance in Germany, which borders Switzerland to the northeast, told the Wall Street Journal that German vans have been stopped by Swiss customs officials after they were found to be delivering up to 60 pizzas at a time. Following the decision to lift the 1.20 euros ($1) cap in January, the Swiss have been crossing the border to do their weekly shopping, visit the dentist etc., getting more for their money. (


George Osborne, the British Chancellor, will use his final major policy statement before the May election to fine banks, accountants and companies that help people evade tax. The fines will be announced in next month's budget following the scandal at HSBC's Swiss division. (

Fly On The Wall Pre-Market Buzz

Domestic economic reports scheduled for today include:
New home sales for January at 10:00--consensus down 2.3% to 471K rate
DOE petroleum inventory reports for week of Feb. 20 at 10:30



Axiall (AXLL) upgraded to Sector Perform from Underperform at RBC Capital
Daimler AG (DDAIF) upgraded to Outperform from Neutral at Credit Suisse
IAMGOLD (IAG) upgraded to Overweight from Neutral at HSBC
Omega Healthcare (OHI) upgraded to Buy from Hold at Stifel
Smith Micro (SMSI) upgraded to Buy from Hold at Needham


Boston Beer (SAM) downgraded to Market Perform from Outperform at Cowen
Coeur Mining (CDE) downgraded to Underweight from Neutral at JPMorgan
Crestwood Midstream (CMLP) downgraded to Hold from Buy at Stifel
EPR Properties (EPR) downgraded to Market Perform from Outperform at FBR Capital
Inergy Midstream (NRGM) downgraded to Hold from Buy at Stifel
Marvell (MRVL) downgraded to Hold from Buy at Stifel
ONEOK (OKE) downgraded to Hold from Buy at Evercore ISI
ONEOK (OKE) downgraded to Neutral from Buy at Goldman
QEP Resources (QEP) downgraded to Market Perform from Outperform at BMO Capital
Rosetta Resources (ROSE) downgraded to Hold from Buy at Wunderlich (yesterday)
Ross Stores (ROST) downgraded to Neutral from Buy at MKM Partners
Societe Generale (SCGLY) downgraded to Neutral from Overweight at HSBC
Trex Company (TREX) downgraded to Hold from Buy at Stifel
Vitamin Shoppe (VSI) downgraded to Equal Weight from Overweight at Barclays


Catalyst Pharmaceutical (CPRX) initiated with a Buy at SunTrust
Earthstone Energy (ESTE) initiated with a Buy at Canaccord
Limoneira (LMNR) initiated with a Buy at Janney Capital
Memorial Resource (MRD) initiated with a Buy at SunTrust


HP (HPQ) lowered FY15 free cash flow view to $3.5B-$4B from prior view $6.5B-$7B 
Benefitfocus (BNFT) said Mercer, a subsidiary of Marsh & McLennan (MMC), bought 2.8M shares of Benefitfocus for $26.50 per share
Community Bank System (CBU) and Oneida Financial (ONFC) announced the signing of a definitive agreement pursuant to which Community Bank System will acquire Oneida Financial, parent company of Oneida Savings Bank in Oneida, NY, for approximately $142M in Community Bank System stock and cash, or $20 per share
Google (GOOG) acquired Toro, terms not disclosed
JPMorgan (JPM) said in a filing that it is in talks with the DOJ over auto loan pricing


Companies that beat consensus earnings expectations last night and today include:
HP (HPQ), Lowe's (LOW), R.R. Donnelley (RRD), Royal Bank of Canada (RY), Memorial Production (MEMP), ICON plc (ICLR), JAKKS Pacific (JAKK), Sapiens (SPNS), Magna (MGA), Republic Airways (RJET), Kraton Performance (KRA), Papa John's (PZZA), TPG Specialty Lending (TSLX), Imprivata (IMPR), Nektar (NKTR), Hackett Group (HCKT), Benefitfocus (BNFT), Fleetmatics (FLTX), Greatbatch (GB), GenMark (GNMK), AAC Holdings (AAC), American Water (AWK), Ixia (XXIA), Nordson (NDSN), Stone Energy (SGY), Huron (HURN), Dycom (DY), Tandem Diabetes (TNDM), Boston Beer (SAM), Range Resources (RRC), Alleghany (Y), Verisk Analytics (VRSK), Continental Resources (CLR), La Quinta (LQ), Bravo Brio Restaurant (BBRG), Matson (MATX), Textura (TXTR), ProAssurance (PRA), NuVasive (NUVA), Jazz Pharmaceuticals (JAZZ), Merit Medical (MMSI), Kona Grill (KONA), First Solar (FSLR), Chicago Bridge & Iron (CBI), Rubicon Project (RUBI), WebMD (WBMD), Infinity Pharmaceuticals (INFI), Edison International (EIX), Foundation Medicine (FMI), Healthways (HWAY)

Companies that missed consensus earnings expectations include:
Orexigen (OREX), Encana (ECA), Ormat Technologies (ORA), American Capital (ACAS), SM Energy (SM), HEICO (HEI), Masonite (DOOR), DCP Midstream (DPM), CoreLogic (CLGX), Gladstone Land (LAND), National Interstate (NATL), Safety Insurance (SAFT), ARC Document (ARC), EXCO Resources (XCO), QEP Resources (QEP), Hortonworks (HDP), Annaly Capital (NLY), DreamWorks Animation (DWA), Amyris (AMRS), Tornier (TRNX), HomeAway (AWAY), Big 5 Sporting (BGFV), Century Aluminum (CENX)

Companies that matched consensus earnings expectations include:
Copart (CPRT), Exelixis (EXEL), MannKind (MNKD), NanoString (NSTG), Smith Micro (SMSI), LendingClub (LC), Curis (CRIS), VIVUS (VVUS)


Anthem (ANTM) states hack compromised data on 78.8M people, WSJ reports
Sycamore cancels attempt to buy Chico's (CHS), WSJ reports
JPMorgan (JPM) to close 300 bank branches over two years, AP reports
BNY Mellon (BK) said to be in FX settlement talks with U.S. DOJ, NY AG, Reuters reports
American Express (AXP) raising rates on credit cards for over 1M holders, Bloomberg reports
Amazon (AMZN) said to reduce tablet orders to Compal, Quanta by 30%, DigiTimes says


AMAG Pharmaceuticals (AMAG) files to sell $125M in common stock
Armstrong World (AWI) files automatic mixed securities shelf
CVSL Inc. (CVSL) files automatic common stock shelf
Celldex (CLDX) files to sell 7.25M shares of common stock
Curis (CRIS) files to sell common stock, no amount given
Guidance Software (GUID) files $30M mixed securities shelf
Macquarie Infrastructure (MIC) announces 4.375M share offering
QTS Realty Trust (QTS) 9.35M share Secondary priced at $34.75
Relypsa (RLYP) files to sell $130M in common stock
Royal Caribbean (RCL) files automatic mixed securities shelf
Spirit Airlines (SAVE) files automatic mixed securities shelf
Spirit Airlines (SAVE) requests withdrawal of registration statement
Strategic Hotels (BEE) files automatic mixed securities shelf
Tandem Diabetes (TNDM) files to sell $60M in common stock
Ultra Petroleum (UPL) files automatic mixed securities shelf
Xencor (XNCR) 5.5M share Secondary priced at $14.25
Zayo Group (ZAYO) files to offer $500M of common stock