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Frontrunning: March 13

  • Again as first reported here: Record U.S. Oil Glut May Fill Storage, Cut Prices (BBG)
  • IEA sees renewed pressure on oil prices as glut worsens (Reuters)
  • No EU unanimity on renewing Russia economic sanctions (Reuters)
  • Nikkei 225 Closes Above 19,000 for First Time Since April 2000 (BBG)
  • Tsipras says Greece doing its part in euro zone deal (Reuters)
  • ECB Set to Buy Fewer Bonds as Price Gains Ease Crunch (BBG)
  • These Americans Are Getting Rich Trading Derivatives Banned in the U.S. (BBG)
  • U.S. 2015 profits forecast to grow 1.7 percent; oil, dollar are concerns (Reuters) - in a month this will say "decline"
  • Manhunt for shooting suspects grinds on in Ferguson, Missouri (Reuters)
  • Ukraine to Trim Main Rate Once Hryvnia Steadies, Gontareva Says (BBG)
  • UK construction slides as house building falls (FT)
  • Prosecutors Interview People Tied to Ackman in Probe of Potential Herbalife Manipulation (WSJ)
  • Major nations hold talks on ending U.N. sanctions on Iran (Reuters)
  • Boeing Helped Craft Own Loan Rule (WSJ)

 

Overnight Media Digest

WSJ

* Federal prosecutors and the FBI are probing potential manipulation of Herbalife Ltd stock and have interviewed people hired by hedge-fund billionaire William Ackman, who has led a long-running campaign against company. (http://on.wsj.com/1Gy3YDp)

* Hillary Clinton appears to be an outlier among administration colleagues in the way she used email, according to a Wall Street Journal survey. A look back at practices during President Barack Obama's first term, when Clinton was secretary of state, shows no clear pattern in how administration officials used email. (http://on.wsj.com/1Bz0hxC)

* The tumbling euro and easy-money policies are boosting optimism in corporate Europe that the long-struggling region might finally begin a sturdy recovery. But Europe's good fortune is a headache for U.S. corporate competitors that face a squeeze on overseas sales from the rising dollar. (http://on.wsj.com/1Gy45Pa)

* In bidding wars like the one that has developed over Salix Pharmaceuticals, whoever offers the most usually wins. Determining who's the high bidder in this case - Endo International or Valeant Pharmaceuticals - may be harder than it seems. (http://on.wsj.com/1b6Redo)

* Intel Corp cut its revenue outlook for the current quarter by nearly a billion dollars, saying it has seen weaker-than-expected demand for business desktop computers. (http://on.wsj.com/1Gy5WUj)

* The UK government has applied to join an infrastructure investment bank led by Beijing aimed at promoting development in Asia, China's finance ministry said. China, which has been the main backer of the regional bank, welcomes UK's decision and will seek opinions from existing founding members, according to a ministry of finance statement published on its website. * Federal prosecutors and the FBI are probing potential manipulation of Herbalife Ltd stock and have interviewed people hired by hedge-fund billionaire William Ackman, who has led a long-running campaign against company. (http://on.wsj.com/1Gy3YDp)

* Hillary Clinton appears to be an outlier among administration colleagues in the way she used email, according to a Wall Street Journal survey. A look back at practices during President Barack Obama's first term, when Clinton was secretary of state, shows no clear pattern in how administration officials used email. (http://on.wsj.com/1Bz0hxC)

* The tumbling euro and easy-money policies are boosting optimism in corporate Europe that the long-struggling region might finally begin a sturdy recovery. But Europe's good fortune is a headache for U.S. corporate competitors that face a squeeze on overseas sales from the rising dollar. (http://on.wsj.com/1Gy45Pa)

* In bidding wars like the one that has developed over Salix Pharmaceuticals, whoever offers the most usually wins. Determining who's the high bidder in this case - Endo International or Valeant Pharmaceuticals - may be harder than it seems. (http://on.wsj.com/1b6Redo)

* Intel Corp cut its revenue outlook for the current quarter by nearly a billion dollars, saying it has seen weaker-than-expected demand for business desktop computers. (http://on.wsj.com/1Gy5WUj)

* The UK government has applied to join an infrastructure investment bank led by Beijing aimed at promoting development in Asia, China's finance ministry said. China, which has been the main backer of the regional bank, welcomes UK's decision and will seek opinions from existing founding members, according to a ministry of finance statement published on its website.

 

FT

The European Union has backed Euratom's decision to block Hungary's 12 billion euro nuclear deal with Russia, a move that will hold Hungary's plans to import fuel exclusively from Russia.

British retailer Philip Green said on Thursday his struggling department store chain BHS had been acquired by buyout firm Retail Acquisitions.

German lender Commerzbank AG has agreed to pay $1.45 billion to settle allegations it committed sanctions violations and failed to detect and report potential money laundering activities.

GlaxoSmithKline Plc said it plans to sell its stake in Aspen Pharmacare and expects to raise about $900 million.

 

NYT

* The Federal Communications Commission on Thursday released extensive details of how it would regulate broadband Internet providers as a public utility, producing official wording that almost certainly sets the stage for extended legal fights. (http://nyti.ms/1C979lN)

* Commerzbank AG of Germany agreed to pay nearly $1.5 billion and dismiss some of its employees to resolve an array of charges in the United States. One strand of the case focused on the bank's dealings with Iranian companies blacklisted by the United States. (http://nyti.ms/1Gy74av)

* Walt Disney Co on Thursday used its annual shareholder meeting to make several movie announcements, the biggest being about a big-screen follow-up to "Frozen," the animated musical that took in more than $1.3 billion globally in 2013. (http://nyti.ms/1GxvBws)

* Mary Jo White, chairwoman of the Securities and Exchange Commission, shot back at criticism that the nation's biggest banks enjoy special treatment in Washington, delivering a sweeping defense of the government while also rebuking the financial industry's "repeated and disturbing violations of law". (http://nyti.ms/1DdkECv)

 

Canada

THE GLOBE AND MAIL

** Canada's broadcast regulator, Canadian Radio-television and Telecommunications Commission is proposing new rules that would offer the owners of CraveTV and Shomi the prospect of looser regulation if they make their services available to all Canadians directly online with no television or Internet subscription required. (http://bit.ly/1GJwllt)

** The personal sacrifices made by tens of thousands of patients, along with billions of dollars invested in drug development, are effectively being wasted because the results of failed experiments are so rarely made available to other scientists. (http://bit.ly/1MxG3YB)

** A benefit proposed by the government to prevent disabled veterans from spending their retirement years in poverty could disadvantage those injured in older conflicts such as Korea and the Second World War by clawing back their lifetime payments for pain and suffering, veterans advocates say. (http://bit.ly/1BcJlYV)

NATIONAL POST

** A proposed transfer of unused spectrum between two of Canada's small wireless carriers was recently rejected by Ottawa, marking the latest transaction in the telecommunications sector that failed to win Industry Canada's blessing. The deal would have seen Saskatchewan Telecommunications Holding Corp purchase two 10-year licences to wireless airwaves in Regina and Saskatoon from Toronto-based Wind Mobile Corp. (http://bit.ly/1MxFpdF)

** Members of Parliament are in line for a 2.3 percent pay raise, about five times the increase the Conservative government is offering public-service employees. (http://bit.ly/1Fi0dnr)

** Highgate Public School in Toronto barred its doors on Thursday in response to an international online threat that also affected schools with the same name in England. The threat reads in part: "Today is the day. In 25 minutes the bells will ring at Highgate school. I will kill as many children as I can for the countless children you have killed. Allahu Akbar my brothers and sisters." (http://bit.ly/1wDhMfU)

 

China

CHINA SECURITIES JOURNAL

- China will extend the tenure of banks' merger and acquisition loans to seven years from five, the China Bank Regulatory Commission (CBRC) said. A CBRC official said the commission would continue to support M&As in the manufacturing industry and in industries with excess capacity.

- Eight insurance companies were expected to invest more than 30 billion yuan ($4.79 billion) to build 18 nursing homes, said Huang Hong, vice chairman of the China Insurance Regulatory Commission (CIRC).

SHANGHAI SECURITIES NEWS

- The average amount of investment in the stock market by retail investors was 521,000 yuan in 2014, up 5.5 percent from a year earlier, the Shenzhen Stock Exchange said in a report.

GLOBAL TIMES

- The Dalai Lama shows no restraint in abusing his religious influence for political purposes and should know that any attempt to mess with reincarnation will make him a 'double betrayer' of both his motherland and his religion, the newspaper said in an editorial. History has proven that political struggles disguised by religion will ruin the reputation of a religion, it said.

CHINA DAILY

- Violence against mainland visitors in Hong Kong and so-called 'parallel traders' has triggered widespread concern among academics and even the most radical faction in the opposition camp.

PLA DAILY

- China's President, Xi Jinping, on Thursday called to strengthen China's national defence and the combativeness of the armed forces through greater civil-military integration, saying efforts must be made to ensure "coordinated, balanced and compatible development" of the country's economic and national defence capabilities.

 

Britain

The Times

SPAIN'S SABADELL MAKES 1.7 BLN POUND PLAY FOR TSB

TSB Banking Group Plc has confirmed it has received a takeover offer from Spanish bank Banco de Sabadell SA , valuing the challenger bank at 1.7 billion pounds($2.53 billion). (http://thetim.es/1Baw6aY)

GREEN SELLS LOSS-MAKING BHS FOR 'NOMINAL SUM'

Sir Philip Green has sold off BHS to a group of investors, ending a long-running attempt to dispose of the loss-making business. The high street department store has been bought by Retail Acquisitions Limited, a company set up to purchase BHS in November last year. Neither party has confirmed the fee paid but it is reported to have been nominal, perhaps as low as 1 pound. (http://thetim.es/1EEhFTY)

The Guardian

JOHN LEWIS CUTS STAFF BONUS TO 12-YEAR LOW AFTER WAITROSE PROFITS TUMBLE

John Lewis Partnership Plc employees will receive their lowest bonus for 12 years after the partnership cut the annual payout for its 93,800 staff to 11 percent of salary. (http://bit.ly/1EEiv32)

GERMANY-GREECE ROW HEATS UP AS SCHÄUBLE DENIES INSULTING VAROUFAKIS

German Finance Minister Wolfgang Schauble has described as "nonsense" accusations that he insulted his Greek counterpart Yanis Varoufakis with comments that he was "foolishly naive". (http://bit.ly/1EEiSLe)

The Telegraph

BRITAIN'S PLAN TO JOIN CHINA'S 'WORLD BANK' ANGERS WASHINGTON

Britain has announced plans to become the first major Western country to join a Chinese-led development bank, drawing a concerned response from the United States. The $50 billion Asian Infrastructure Investment Bank has been feted by Beijing as a way of financing regional development, and is seen as a potential rival to U.S.-based institutions such as the World Bank. (http://bit.ly/1GxwViT)

APPLE'S TIM COOK 'OFFERED HIS LIVER TO DYING STEVE JOBS'

Apple Inc Chief Executive Tim Cook offered to give Steve Jobs part of his liver while the company's co-founder lay dying in bed waiting for a transplant, according to a new book. (http://bit.ly/1CanJSh)

Sky News

EX-THOMAS COOK BOSS SNUBS NEW OWNER'S BHS JOB

The former chief executive of Thomas Cook has turned down the chance to take the helm of high street chain BHS following a deal which removed the chain from the ownership of one of Britain's richest tycoons. (http://bit.ly/1EElrg6)

The Independent

PASSPORTS FOR CASH: THE COUNTRIES SELLING CITIZENSHIP TO TAX HAVENS

Citizenship has been turned into a commodity by countries including Cyprus, Grenada, Antigua, Malta and St. Kitts in the Caribbean, which is now the most popular place in the world to buy a passport - for as little as $250,000. (http://ind.pn/1EEmdd8)

 

Fly On The Wall Pre-market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Producer Price Index for February at 8:30--consensus up 0.3%
U. of Michigan consumer sentiment index for March at 10:00--consensus 95.5
Baker Hughes U.S. rig count for week of March 13 at 13:00--prior 1192

ANALYST RESEARCH

Upgrades

eHealth (EHTH) upgraded to Outperform from Market Perform at FBR Capital
Flextronics (FLEX) upgraded to Neutral from Sell at Goldman
Intel (INTC) upgraded to Buy from Hold at Canaccord
Mobileye (MBLY) upgraded to Buy from Neutral at Goldman
Rockwell Collins (COL) upgraded to Buy from Hold at Canaccord
Sanmina (SANM) upgraded to Buy from Neutral at Goldman
Steel Dynamics (STLD) upgraded to Buy from Neutral at Citigroup
Redwood Trust (RWT) upgraded to Outperform from Market Perform at Keefe Bruyette

Downgrades

Aramark (ARMK) downgraded to Neutral from Outperform at RW Baird
Children's Place (PLCE) downgraded to Neutral from Buy at Citigroup
Diageo (DEO) downgraded to Underperform from Neutral at Credit Suisse
Genesco (GCO) downgraded to Neutral from Buy at Sterne Agee
InspireMD (NSPR) downgraded to Perform from Outperform at Oppenheimer
InterXion (INXN) downgraded to Market Perform from Outperform at Raymond James
QIWI (QIWI) downgraded to Neutral from Positive at Susquehanna
Royal Dutch Shell (RDS.A) downgraded to Sector Perform from Outperform at RBC Capital

Initiations

Aspen Aerogels (ASPN) initiated with a Buy at Citigroup
Bill Barrett (BBG) initiated with a Market Perform at Cowen
Blueknight Energy Partners (BKEP) initiated with an Outperform at RBC Capital
Bonanza Creek (BCEI) initiated with a Market Perform at Cowen
Cameron (CAM) initiated with a Neutral at Citigroup
Easterly Government Properties (DEA) initiated with an Outperform at Raymond James
Enable Midstream (ENBL) initiated with a Sector Perform at RBC Capital
Ensco (ESV) initiated with a Neutral at Susquehanna
Knowles (KN) initiated with a Buy at Topeka
Madison Square Garden (MSG) initiated with a Buy at BTIG
NXP Semiconductors (NXPI) initiated with a Strong Buy at Needham
PDC Energy (PDCE) initiated with an Outperform at Cowen
Vitesse (VTSS) initiated with a Buy at Topeka

COMPANY NEWS

Alan Hoffman, executive VP, global corporate affairs, for Herbalife (HLF) said "[Bill] Ackman has a $1B bet against Herbalife and a direct financial interest in hurting our company. For more than two years, he has spent over $75M orchestrating a false and fabricated attack against Herbalife, all in an effort to enrich himself. We are confident in the strong fundamentals of our business model"
BP (BP) to sell Australian bitumen business to Puma Energy
Apple (AAPL) CEO Tim Cook told CNBC's Jim Cramer that 11,000 people have signed up to study using ResearchKit
Gran Tierra (GTE) to reduce full-time staff by 20% among other cost reductions
Ulta Salon (ULTA) boosted share repurchase program by $100M

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Hibbett Sports (HIBB), Civeo Corp. (CVEO), FutureFuel (FF), Kronos Worldwide (KRO), Aratana Therapeutics (PETX), Kronos Worldwide (KRO), Ignite Restaurant (IRG), Information Services (III), Trovagene (TROV), Jamba (JMBA), Athersys (ATHX), FXCM (FXCM), QAD Inc. (QADA), InspireMD (NSPR), BioAmber (BIOA), Ulta Salon (ULTA), Fate Therapeutics (FATE), Silvercrest Asset (SAMG), Anacor (ANAC), Aeropostale (ARO), Kratos Defense (KTOS), Kindred Biosciences (KIN), El Pollo Loco (LOCO), ChipMOS (IMOS)

Companies that missed consensus earnings expectations include:
Nexvet Biopharma (NVET), Fortuna Silver Mines (fsm), Quantum (QTWW), Hill International (HIL), Medifast (MED), Avinger (avgr), FTD Companies (FTD), eMagin (EMAN), Gastar Exploration (GST), TearLab (TEAR), OncoMed (OMED), Diversified Restaurant (BAGR), Gaiam (GAIA), CTI BioPharma (CTIC), Towerstream (TWER), Charles & Colvard (CTHR)

Companies that matched consensus earnings expectations include:
Cytori Therapeutics (CYTX), ChemoCentryx (CCXI), RE/MAX Holdings (RMAX), Peregrine (PPHM), Dicerna (DRNA)

NEWSPAPERS/WEBSITES

Feds investigating potential Herbalife (HLF) stock manipulation, WSJ reports
IBM (IBM) considering adopting bitcoin technology for major currencies, Reuters reports
Spansion (CODE), Cypress (CY) begin laying off 1,600 after merger, Mercury News says
Harley-Davidson (HOG) laying off 169 Kansas City employees, Journal Sentinel reports
Report: MacBook (AAPL) unlikely to exceed 450K in 1H15 sales, DigiTimes says

SYNDICATE

ADMA Biologics (ADMA) files to sell common stock
CareFusion (CFN) files to sell $100M of common stock for holders
Continental Building (CBPX) files to sell 5M shares for holders
Dicerna (DRNA) files to sell 10M shares of common stock
First Republic Bank (FRC) files to sell 3.5M shares of common stock
Galena (GALE) announces public offering of common stock and warrants
Habit Restaurants (HABT) files to sell 5.75M shares of Class A common stock for holders
HubSpot (HUBS) amends S-1, raises offering to 4.1M shares from 3.7M shares
Imperva (IMPV) 3M share Secondary priced at $39.00
Marcus & Millichap (MMI) 4M share Secondary priced at $33.50
West Corp. (WSTC) 11M share Secondary priced at $30.75
Western Gas Partners (WES) files to sell $500M common units for partners