Zero Hedge
All posts from Zero Hedge
Zero Hedge in Zero Hedge,

Frontrunning: February 3

  • RBA cuts interest rates to record low of 2.25% (SMH)
  • RBI keeps rates on hold (Reuters), India allows banks flexibility on big projects to reboot growth (Reuters)
  • BP slashes capital spending by 20% (FT)
  • Greek Retreat on Writedown May Move Fight to Spending (BBG)
  • Rosneft accounting move helps BP beat profit forecast (Reuters)
  • Amazon in Talks to Buy Some of RadioShack's Stores (BBG)
  • Behind Obama's budget proposals, a gloomy view of the future (Reuters)
  • How the Justice Department, S&P Came to Terms (WSJ)
  • Staples, Office Depot in Advanced Talks to Merge (WSJ)
  • Mac McQuown Is Reinventing the Corporate Bond (BBG)
  • Iran sweetens oil contracts to counter sanctions and price plunge (Reuters)
  • FCC to Propose Strong ‘Net Neutrality’ Rules (WSJ)
  • Offices Minus Tenants Rise Beyond Manhattan (BBG)
  • Cash-Starved Oil Producers Trade Treasured Pipelines for Money (BBG)
  • Google Is Developing Its Own Uber Competitor (BBG)
  • Chinese Banks in Talks to Take Part in Gold Fix Replacement (BBG)



Overnight Media Digest


* A record settlement expected Tuesday between the Justice Department and Standard & Poor's Ratings Services came together over two days in mid-January when the two sides agreed to move past a feud triggered by a surprise downgrade of U.S. debt, according to people familiar with the talks. (

* Staples Inc and Office Depot Inc are in advanced talks to combine, according to people familiar with the matter, in what would be a major step toward consolidating the retail market for pens, paper and other office supplies. (

* President Barack Obama called for sweeping tax increases Monday in a budget proposal that dropped any quest for fiscal grand bargains with Congress, but also laid out narrower domestic priorities that may appeal to Republicans. (

* Piracy off Somali has spawned floating armories to cache weapons for security companies and ferry their guns and guards to vessels needing protection. (

* The Federal Communications Commission is about to fundamentally change the way it oversees high-speed Internet service, proposing to regulate it as a public utility. (

* Investors are returning to emerging markets, upending predictions that investments in developing nations were headed for a fresh drubbing. (

* Verizon Communications Inc is close to selling a package of assets including cellphone towers and parts of its wireline business, a group of deals whose value could top $15 billion, people familiar with the matter said. (

* Exxon Mobil Corp said its fourth-quarter earnings dropped 21 percent, hurt by lower commodity prices, while the biggest U.S. energy company also unveiled plans to slash its buyback program. (

* Walt Disney Co's $5.5 billion theme park in Shanghai, previously set to open by the end of this year, will instead open in the first half of 2016, people close to the project said. (

* Some 720 oil-industry workers in Texas, including 330 in the oil and gas division of General Electric Co, are losing their jobs as U.S. crude prices languish below $50 a barrel. (

* Slower global growth is starting to weigh on demand for American-made goods, casting a cloud over the U.S. manufacturing sector. While the Institute for Supply Management's overall index shows slowing growth, the reading on exports is in contractionary territory. (

* Sysco Corp's talks with antitrust regulators over its planned acquisition of U.S. Foods have reached a standstill as the company announced an agreement to divest far more in assets than originally planned. (

* Tronox Ltd is nearing a deal to buy a soda-ash business from rival chemical company FMC Corp for more than $1.5 billion, people familiar with the matter said. (

* Alibaba Group Holding Ltd's wholesale marketplace is joining with U.S. peer-to-peer online lending company Lending Club to provide sales financing to small U.S. businesses buying from Chinese suppliers. (



U.S. Department of Justice has communicated to Rupert Murdoch-owned News Corp that it won't face prosecution in the country for phone hacking charges.

Super Bowl became the most watched television programme in U.S. history garnering more than 114.4 million viewers as people tuned in to watch the New England Patriots defeat Seattle Seahawks to seal their first win in a decade.

Peer-to-peer lender SoFi, which specialises in student loans, raised $200 million in a new funding round that values the four-year-old startup at $1.3 billion.

Royal Dutch Shell PLC on Tuesday will brief on plans to dismantle its multi-billion dollar project in the North Sea-Brent oilfield, that may lead to closure of other projects after the plunge in global crude prices.



* A research group says that by improving educational performance, the United States could increase its gross domestic product over the next 35 years. (

* No payment offers have been rejected so far in General Motors' effort to avoid the image-damaging litigation over defective ignition switches. (

* The chief executive of Ally Financial, the former lending arm of General Motors, has stepped down from his post. Michael Carpenter has headed Ally since 2009, not long after it was rescued by federal taxpayers as part of a broad bailout of the nation's ailing auto industry. (

* An overflow crowd of government regulators spent a day last month ticking off their demands before eventually negotiating a $1.37 billion settlement of an array of lawsuits against S&P. (

* Scores of debt-laden oil companies face struggles that could lead to layoffs and losses for banks and investors. At the same time, new fortunes stand to be made. (

* Stephen Schwarzman, the billionaire co-founder of the Blackstone Group, has a sobering message for any junior financiers hoping to emulate his success: Think twice. Schwarzman said the temptation to start a new financial firm could disguise the considerable risk of failure and the damaging consequences failure brings. (

* The chairman of the Federal Communications Commission this week is widely expected to propose regulating Internet service like a public utility, a move certain to unleash another round of intense debate and lobbying about how to ensure so-called net neutrality, or an open Internet. (

* The Justice Department will not prosecute Rupert Murdoch's News Corp or 21st Century Fox over voice mail interceptions and payments to public officials, actions done by their journalists in London, the companies said on Monday. (




** Toronto Mayor John Tory wants the city to be "meaningfully consulted" before any decisions are made about the sale of surplus schools by the Toronto District School Board. Tory says opinion appears to be split between those that never want a school sold, and those that want every property sold that does not meet provincial enrolment numbers. (

** Chorus Aviation Inc has placed an order for new planes after finalizing a contract with Air Canada that cuts costs and strengthens the partners' ability to compete with WestJet Encore. (

** The Ontario Teachers' Pension Plan bought PODS Inc, a portable moving and storage company, from Bahrain-based Arcapita Bank BSC for more than C$1 billion ($797.58 million). (


** Canada's drug-price regulator has taken the rare step of calling a hearing into what is considered the world's most expensive prescription medicine, accusing its manufacturer of exceeding the permissible price cap. The yearly cost per patient of as much as C$700,000 is even more than the manufacturer, Alexion Pharmaceutical, charges in the United States, which typically has the steepest prices globally, says the Patented Medicines Price Review Board. (

** Liquidation sales at Target's Canadian stores could begin as early as Thursday. Target Canada will seek court approval on Wednesday to allow a group of liquidation companies to start to sell off the contents of its Canadian stores. (

** Nearly one-in-five Canadian oil and gas companies says it may have to cut staff as commodity prices slide, according to a survey published Monday by Mercer LLC, a human resource consultancy. One-in-four said they won't be "buying" as much new talent from outside their organization, while one in six plans to freeze or cut compensation. A third of the companies said it was "too early to tell" whether the price decline will impact their operations. (




- Plagiarism in WeChat would kill innovation and destroy the mobile, text and voice messaging communication service developed by Tencent, People's Daily said in an editorial.


- China will soon launch three new free trade zones, in Tianjin, Fujian and Guangdong, and expand the Shanghai free trade zone, the newspaper said, citing unidentified sources.

- Analysts expect China's listed banks to post net profit growth of around 8 percent, with bad loan ratios trending higher.

- BYD Co Ltd has obtained regulatory approval to set up an auto finance unit, the company said.


- Shanghai has raised the bar for buyers of new energy vehicles to obtain free car plates, requiring that applicants must own fixed parking lots and charging poles, according to dealers.


- Of the 145 central government-owned companies in China that have so far published preliminary earnings statements, more than 30 are expected to make a loss in 2014, the newspaper said, citing data it compiled.



The Times


Greece's finance minister has insisted that Athens expects the European Central Bank to maintain a funding lifeline while the week-old Syriza government negotiates new bailout terms. (

The Guardian


George Osborne, has warned that the standoff between Greece and the eurozone over the country's debt is "the greatest risk to the global economy" after meeting the new Greek finance minister Yanis Varoufakis. "We had a constructive discussion, and it is clear that the standoff between Greece and the eurozone is the greatest risk to the global economy," Osborne said. "I urge the Greek finance minister to act responsibly but it's also important that the eurozone has a better plan for jobs and growth. (


British military experts were asked to draw up guidance at the height of the Ebola outbreak in west Africa late last year on the feasibility and potential impact of terrorists "weaponising" the virus. (


British Airways' parent company International Airlines Group has stepped up its pursuit of Aer Lingus Group Plc by offering to make legally binding commitments to preserve the Irish carrier's brand and presence at Heathrow, hoping to assuage government fears in Dublin. IAG last week made an improved 1.1 billion pound ($1.65 billion) bid for Aer Lingus but the Irish government, which owns a 25 percent stake, had been resisting a sale without guarantees over future connectivity. (

The Telegraph


Google Inc is looking to take on Uber in the car-sharing market by launching a service using its driverless vehicles, according to reports. Executives at Uber, which allows customers to book taxis via its app, have seen screenshots of a similar Google program that the U.S. search giant's employees are using, Bloomberg reported. (


Private-equity backed advisory firm Towry Finance has agreed a 97 million pound takeover of wealth manager Ashcourt Rowan. The two companies said that the deal will create a private wealth firm with 11 billion pounds of assets under management and revenues of 138 million pound. (

Sky News


Santander UK will this week provide fresh evidence that the banking sector's biggest mis-selling scandal is failing to abate when it makes a further provision for consumer compensation. The bank, which is the UK's fifth-biggest high street lender, is expected to say alongside its full-year results on Tuesday that it is taking a charge in the low tens of millions of pounds for PPI mis-selling. (


Allan Leighton is in talks to become the first independent chairman of the Co-operative Group Ltd in a move that would herald a crucial stage in the mutual's efforts to reinvent itself after two years of crisis. (

The Independent


Music-streaming service Spotify has cancelled its launch in Russia - amid continuing unrest in the country. According to the RBC news agency, Alexander Kubaneishvili, a former Google executive who was to lead Spotify's Russian division, is leaving the Swedish company. "I regret to inform you that Spotify refused to launch in Russia in the foreseeable future. There are several reasons - the economic crisis, the political situation, the new laws governing the internet," Kubaneishvili said. (

Fly On The Wall Pre-market Buzz


Domestic economic reports scheduled for today include:
ISM New York for January at 9:45--prior 70.8
Factory orders for December at 10:00--consensus down 2.4%



Advent (ADVS) upgraded to Market Perform from Underperform at Raymond James
Anadarko (APC) upgraded to Buy from Hold at Stifel
Bank of Ireland (IRE) upgraded to Buy from Hold at Deutsche Bank
Blackhawk (HAWK) upgraded to Outperform from Market Perform at BMO Capital
CRH (CRH) upgraded to Buy from Hold at Societe Generale
Concho Resources (CXO) upgraded to Buy from Hold at Stifel
Cytec Industries (CYT) upgraded to Buy from Hold at Jefferies
EMC (EMC) upgraded to Outperform from Neutral at Macquarie
EOG Resources (EOG) upgraded to Buy from Hold at Stifel
Intuitive Surgical (ISRG) upgraded to Fair Value from Sell at CRT Capital
Limelight Networks (LLNW) upgraded to Outperform from Neutral at Macquarie
Manpower (MAN) upgraded to Overweight from Equal Weight at Barclays
Matador (MTDR) upgraded to Buy from Hold at Stifel
Noble Energy (NBL) upgraded to Buy from Hold at Stifel
PDC Energy (PDCE) upgraded to Buy from Hold at Stifel
SM Energy (SM) upgraded to Buy from Hold at Stifel
SS&C (SSNC) upgraded to Overweight from Neutral at JPMorgan
Synergy Resources (SYRG) upgraded to Buy from Hold at Stifel
Sysco (SYY) upgraded to Buy from Hold at Deutsche Bank
Tenet (THC) upgraded to Outperform from Market Perform at BMO Capital
Theravance Biopharma (TBPH) upgraded to Neutral from Underperform at RW Baird
Whiting Petroleum (WLL) upgraded to Buy from Hold at Stifel


CenterPoint Energy (CNP) downgraded to Underperform from Outperform at Credit Suisse
DuPont Fabros (DFT) downgraded to Hold from Buy at Evercore ISI
Ecopetrol (EC) downgraded to Underweight from Neutral at JPMorgan
Freeport McMoRan (FCX) downgraded to Neutral from Buy at BofA/Merrill
GeoPark (GPRK) downgraded to Neutral from Overweight at JPMorgan
Gran Tierra (GTE) downgraded to Neutral from Overweight at JPMorgan
GulfMark Offshore (GLF) downgraded to Neutral from Outperform at Credit Suisse
Hornbeck Offshore (HOS) downgraded to Neutral from Outperform at Credit Suisse
Michael Kors (KORS) downgraded to Hold from Buy at Canaccord
Nordic American Offshore (NAO) downgraded to Underperform at Credit Suisse
Royal Dutch Shell (RDS.A) downgraded to Neutral from Overweight at JPMorgan
Stratasys (SSYS) downgraded to Hold from Buy at Brean Capital
Stratasys (SSYS) downgraded to Neutral from Overweight at Piper Jaffray
Validus (VR) downgraded to Sell from Neutral at Goldman
Waste Management (WM) downgraded to In-Line from Outperform at Imperial Capital
Xilinx (XLNX) downgraded to Neutral from Buy at Nomura


A.O. Smith (AOS) initiated with a Buy at KeyBanc
Aaon (aaon) initiated with a Neutral at DA Davidson
Albemarle (ALB) initiated with a Market Perform at Cowen
Chemtura  (CHMT) initiated with a Market Perform at Cowen
Chimerix (CMRX) initiated with an Overweight at JPMorgan
DSP Group (DSPG) initiated with a Buy at Wunderlich
FMC Corporation (FMC) initiated with a Market Perform at Cowen
Global Partners (GLP) initiated with a Hold at MLV & Co.
Tesoro Logistics (TLLP) initiated with a Buy at MLV & Co.
Transmontaigne Partners (TLP) initiated with a Hold at MLV & Co.
TriVascular (TRIV) initiated with a Buy at BTIG
Unum Group (UNM) initiated with a Buy at Jefferies
W.R. Grace (GRA) initiated with an Outperform at Cowen (WIX) initiated with an Outperform at Raymond James


21st Century (FOXA) said DOJ declines to prosecute in 'hacking' investigation
SS&C (SSNC) to acquire Advent Software (ADVS) for $44.25 per share, or $2.7B in cash
Stratasys (SSYS) still sees annual organic revenue growth of at least 25%
RadioShack (RSH) disclosed in a filing that on January 27, the company received a notice of default from the SCP Agent asserting that an event of default has occurred and is continuing under the SCP Credit Agreement because the company has not deposited all proceeds that it has received from the applicable residual accounts into the Residual Account Deposit Account
United Technologies (UTX) raised its quarterly dividend 8.5% to 64c from 59c per share
BGC Partners (BGCP): Holders should disregard GFI Group (GFIG) claim to explore alternatives (CME)


Companies that beat consensus earnings expectations last night and today include:

Eaton (ETN), Santander Consumer (SC), Independent Bank (IBTX), Sensata (ST), Centene (CNC), Headwaters (HW), American Financial Group (AFG), Cliffs Natural (CLF), Heritage Oaks (HEOP), Reinsurance Group (RGA), Fabrinet (FN), Advanced Energy (AEIS), Hartford Financial (HIG), Integrated Device (IDTI), Luminex (LMNX), Nanometrics (NANO), XL Group (XL), M/A-COM (MTSI), Rudolph Technologies (RTEC), MTS Systems (MTSC), Limelight Networks (LLNW)

Companies that missed consensus earnings expectations include:

Hill-Rom (HRC), Nordic American Offshore (NAO), Hi-Crush Partners (HCLP), BP (BP), Quotient (QTNT), MDU Resources (MDU), Black Hills (BKH), Rent-A-Center (RCII), Artisan Partners (APAM), Anadarko (APC)

Companies that matched consensus earnings expectations include:

Wendy's (WEN), Aetna (AET), Advent (ADVS), Owens-Illinois (OI), Torchmark (TMK)

Stratasys (SSYS) sees FY14 EPS $1.97-$2.03, consensus $2.25, sees FY14 revenue $748M-$750M, consensus $763.63M. Sees FY15 EPS $2.07-$2.24, consensus $2.91, sees FY15 revenue $940M-$960M, consensus $1.01B
Aetna (AET) raises FY15 EPS to at least $7.00 from $6.90, consensus $7.16
Hill-Rom (HRC) sees Q2 adjusted EPS 57c-60c, consensus 62c, sees FY15 adjusted EPS $2.44-$2.50, consensus $2.49
Eaton (ETN) sees Q1 EPS 95c-$1.05, consensus $1.10, sees FY15 EPS $4.75-$5.05, consensus $4.97


Google (GOOG) prepares Uber-like service, Bloomberg reports
Staples (SPLS) in “advanced talks” to merge with Office Depot (ODP), WSJ reports
NYSE to suspend trading in RadioShack (RSH) immediately, begin delisting, DJ says
Amazon (AMZN) considers buying some RadioShack (RSH) retail stores, Bloomberg reports (S)
Shell (RDS.A) to dismantle North Sea Brent oil field, Financial Times reports
Apple iPhone (AAPL) shipments to top 50M units in Q1, DigiTimes reports


BioTime (BTX) files $100M mixed securities shelf
Bonanza Creek (BCEI) files to sell 4M shares of common stock
Booz Allen (BAH) files to sell 12M shares of Class A common stock for holders
Dave & Busters (PLAY) files to sell 6M shares of common stock for holders
India Globalization Capital (IGC) files $20M mixed securities shelf
M/A-COM (MTSI) files to sell 6.5M shares of common stock
Marine Harvest (MHG) files automatic mixed securities shelf
PBF Energy (PBF) files to sell 3.8M shares of common stock for holders
Palatin Tech (PTN) files to sell 27.67M shares of common stock for holders
Pattern Energy (PEGI) files to sell $350M of Class A common stock
Sabre (SABR) files to sell 20M shares of common stock for holders
ServiceMaster (SERV) files to sell 25M shares for stockholders
Ziopharm (ZIOP) files to sell $75M of common stock