- U.S. Wants Criminal Charges for RBS (WSJ)
- Bernanke Seen Buying $1.14 Trillion in Assets in 2014 (BBG)
- Irish banks at mercy of international paymasters (Reuters)
- Do badly, and we will let you do even worse: Rehn Signals EU May Ease Spain Budget Goal in Austerity Retreat (BBG)
- Too Soon to Celebrate for Europe’s Banks (WSJ)
- Army says political strife taking Egypt to brink (Reuters)
- Media Firms Probed on Data Release (WSJ) – No Criminal Charges Seen
- Japan’s Government Proposes First Spending Cut in 7 Years (BBG)
- Nazi Goebbels’ Step-Grandchildren Are Hidden Billionaires (BBG)
- Goldman seeks to reduce China exposure (FT)
- More than 70% of Chinese airports generate losses (People’s Daily)
- Niger gives green light to U.S. drone deployment (Reuters)
- Bucknell University Inflated SAT Scores Over Seven Years (BBG)
Overnight Media Digest
* U.S. authorities are pushing for a settlement of interest-rate-rigging allegations with Royal Bank of Scotland that would result in a unit of the big British bank pleading guilty to criminal charges in addition to paying a penalty.
* The United States signed an agreement Monday with the West African country of Niger that clears the way for a stepped-up American military presence on the edges of the conflict in neighboring Mali.
* Toyota Motor Corp reclaimed the title of world’s largest automaker in 2012 from General Motors rebounding from an earthquake that damaged its factories and embarrassing recalls that dinged its reputation.
* Trian Fund Management LP, founded by activist investor Nelson Peltz, has partially sold its stake in State Street Corp , according to people familiar with the decision.
* Warren Buffett’s Berkshire Hathaway Inc participated in discussions to purchase NYSE Euronext, owner of the Big Board, according to people familiar with the talks. Ultimately, the two sides didn’t agree on price, one of the people said.
* The U.S. Treasury failed to rein in pay at companies that received federal bailout funds, a watchdog said Monday, in a report that highlights continued friction over the government’s oversight of executive pay at companies such as General Motors Co and Ally Financial Inc.
* Law-enforcement authorities have conducted a wide-ranging investigation into whether media companies facilitated insider trading on Wall Street by prematurely releasing market-moving government data, according to people familiar with the probe.
* Caterpillar Inc Chief Executive Doug Oberhelman on Monday blamed a $580 million write-down in the value of a Chinese company acquired last year on accounting “misconduct” by several former senior managers there who “fabricated documentation to cover their tracks.”
* In the first case of its type, U.S. authorities have arrested a former senior trader at Jefferies & Co Inc, accusing him of defrauding investors in the mortgage-backed securities market, which had come to a standstill during the financial crisis.
RBS TIPS UK BACK INTO BONUS DEBATE: State-controlled RBS is preparing to pay as much as 250 million pounds in bonuses to staff at an investment banking division heavily implicated in the Libor-rigging scandal.
DRAGHI MEETS MINISTER OVER MPS: The President of the European Central Bank Mario Draghi met Italy’s finance minister to discuss the mounting problems at the country’s Monte dei Paschi di Siena bank, according to an unnamed government official.
EURO PERIPHERY DRAWS BACK 100 BILLION EUROS: Private funds totalling almost 100 billion euros flowed back into Eurozone periphery nations last year according to Dutch bank, ING
TOYOTA RECLAIMS GLOBAL TOP SPOT: The Japanese car manufacturer Toyota took back its position as the world’s biggest carmaker selling 9.75 million vehicles around the world in 2012.
CARNEY CAUTIOUS ON FAILING BANKS: Mark Carney, head of the Financial Stability Board and governor-designate of the Bank of England, said regulators around the world still need to make more progress on how to cope with the failure of a giant bank.
AMAZON OPENS NEW ADVERTISING FRONT: Online retailer Amazon will make greater inroads into the digital advertising market, unsettling established businesses such as Google , Yahoo and Facebook.
STOCK BENCHMARKS HOVER NEAR HIGHS: A jump in Chinese corporate profits and a strong US durable goods report have helped push global stocks to near recent highs.
WARNER BROTHERS ENDS CHIEF EXECUTIVE SAGA: The film and television studio has appointed Kevin Tsujihara as chief executive, beating Television President Bruce Rosenblum and Warner Bros. Pictures President Jeff Robinov to the role.
* Yahoo reported a good quarter, increasing revenue for the first time in four years and beating Wall Street expectations by 30 percent. Marissa Mayer’s first months as chief executive have impressed investors, and the company’s stock, recently at a four-year high, rose after hours.
* Investigators say that they have spotted no overt quality-control problems, but that the cause of the recent malfunctions that have grounded Boeing’s 787 fleet is still unknown.
* Toyota Motor Corp sold a record 9.75 million vehicles last year, the company said on Monday, moving past General Motors and Volkswagen to reclaim its title as the world’s top-selling automaker in 2012.
* Antigua and Barbuda has threatened to strip copyright protections from American movies and music if a dispute over online gambling isn’t resolved.
* U.S. federal prosecutors charged a former senior trader at the Jefferies Group on Monday with defrauding his clients – and the government – while selling them mortgage-backed securities after the financial crisis.
* Hostess Brands forged ahead with its dismantling plan on Monday, officially picking the maker of Little Debbie snacks as the lead bidder for its Drake’s brand.
* Kevin Tsujihara will succeed Barry Meyer as chief executive of Warner Brothers, the studio said, ending a disruptive and lingering competition for one of the biggest jobs in Hollywood. But, with two senior Warner executives publicly passed over, disorder at the studio could continue.
SHANGHAI SECURITIES NEWS
–The parent company of Chinese distiller Kweichow Moutai Co Ltd cut its sales forecast for 2013 to 41.6 billion yuan ($6.69 billion) from 50 billion yuan earlier.
–Twenty-two Chinese B-share listed companies are likely to migrate to H shares, including China Merchants Property Development Co Ltd and Shanghai Jinqiao Export Processing Zone Development Co Ltd, according to a research report from Guotai Junan International.
21st CENTURY BUSINESS HERALD
–Combined investment and consumption as a result of China’s urbanization could reach 25 trillion yuan, which could add 3.5-6.8 percentage points to economic growth over the next 10 years, said Ma Xiaohe, vice-president of Macroeconomics Research Institute of the National Development and Reform Commission.
CHINA DAILY (www.chinadaily.com.cn)
–Big increases in spending are unlikely in the future, with the 2013 procurement budget seen around 20 billion yuan, similar to the last year’s level, Wang Lida, director of the Central Government Procurement Center, said.
Fly On The Wall 7:00 am Market Snapshot
Abercrombie & Fitch (ANF) upgraded to Outperform from Market Perform at BMO Capital
BRE Properties (BRE) upgraded to Neutral from Sell at Goldman
CGG Veritas (CGV) upgraded to Overweight from Neutral at JPMorgan
Caterpillar (CAT) upgraded to Outperform from Market Perform at BMO Capital
Ericsson (ERIC) upgraded to Buy from Hold at Deutsche Bank
Fifth Third Bancorp (FITB) upgraded to Outperform from Market Perform at Wells Fargo
Genuine Parts (GPC) upgraded to Buy from Hold at BB&T
Lennar (LEN) upgraded to Buy from Neutral at Compass Point
PLX Technology (PLXT) upgraded to Buy from Hold at Wunderlich
Sierra Wireless (SWIR) upgraded to Outperform from Sector Perform at RBC Capital
Standard Pacific (SPF) upgraded to Buy from Neutral at Compass Point
Tyson Foods (TSN) upgraded to Buy from Underperform at BofA/Merrill
Digital Realty (DLR) downgraded to Neutral from Buy at BofA/Merrill
Equinix (EQIX) downgraded to Neutral from Buy at Citigroup
Fortinet (FTNT) downgraded to Hold from Buy at Wunderlich
Illumina (ILMN) downgraded to Equal Weight from Overweight at First Analysis
InterXion (INXN) downgraded to Neutral from Buy at Citigroup
MGM Resorts (MGM) downgraded to Hold from Buy at Deutsche Bank
NCR Corp. (NCR) downgraded to Neutral from Buy at Compass Point
NYSE Euronext (NYX) downgraded to Underweight from Neutral at HSBC
Netgear (NTGR) downgraded to Sector Perform from Outperform at RBC Capital
PNC Financial (PNC) downgraded to Market Perform from Outperform at Wells Fargo
Ruby Tuesday (RT) downgraded to Neutral from Outperform at Credit Suisse
Seagate (STX) downgraded to Equal Weight from Overweight at Evercore
Unilever (UN) downgraded to Hold from Buy at Jefferies
VMware (VMW) downgraded to Buy from Conviction Buy at Goldman
VMware (VMW) downgraded to Equal Weight from Overweight at Morgan Stanley
VMware (VMW) downgraded to Hold from Buy at Wunderlich
VMware (VMW) downgraded to Neutral from Buy at Sterne Agee
AXIS Capital (AXS) initiated with a Market Perform at Raymond James
Clean Harbors (CLH) initiated with a Buy at BB&T
LabCorp (LH) initiated with a Perform at Oppenheimer
Norwegian Cruise Line (NCLH) initiated with a Buy at Stifel Nicolaus
PRGX Global (PRGX) initiated with an Outperform at RW Baird
Quest Diagnostics (DGX) initiated with an Underperform at Oppenheimer
Vanguard Natural (VNR) initiated with an Outperform at Raymond James
General Growth (GGP) purchased warrants held by Blackstone (BX) and Fairholme Funds for about $633M.
VMware (VMW) cutting 900 jobs, sees total restructuring charges $90M-$110M
Sees stronger bookings 2H13 compared to 1H
Yahoo (YHOO) seeing early positive trends in key focus areas, products
“Confident” in ability to achieve at or above market revenue growth
Said investment in ad technology is key strategy in 2013, said search a key area of investment
Legg Mason (LM) board may pick CEO today. Interim CEO Sullivan may be the favorite
Celanese (CE) sees 2013 earnings growth of about 12%-14%
Seagate (STX) sees maintaining gross margins at lower end of long-term range 27%-32%
Optimistic about 2H13 and beyond
Potlatch (PCH) provided positive outlook for FY13
Sierra Wireless (SWIR) to sell assets of AirCard business to Netgear (NTGR)
Companies that beat consensus earnings expectations last night and today include:
Tyco (TYC), Danaher (DHR), CIT Group (CIT), Olin Corp. (OLN), Celanese (CE), Plum Creek Timber (PCL), Illumina (ILMN), Yahoo (YHOO), Beazer Homes (BZH), Seagate (STX), VMware (VMW), J & J Snack Foods (JJSF)
Companies that missed consensus earnings expectations include:
Headwaters (HW), Crane (CR), Rent-A-Center (RCII), Park National (PRK), Zions Bancorp (ZION), BMC Software (BMC)
Companies that matched consensus earnings expectations include:
Radware (RDWR), Gladstone Investment (GAIN), Werner (WERN), Integrated Device (IDTI)
- U.S. authorities want a settlement of interest-rate-rigging allegations with Royal Bank of Scotland (RBS) that would result in a unit of the bank pleading guilty to criminal charges in addition to paying a penalty, sources say. RBS executives are resisting any guilty plea, fearful that it could lead clients to cut off activity with the bank and that it could increase exposure to costly litigation, the sources add, the Wall Street Journal reports
- Federal law-enforcement authorities conducted a wide-ranging investigation into whether media companies facilitated insider trading on Wall Street by prematurely releasing market-moving government data, sources say. Among the media companies investigated were Bloomberg LP, Thomson Reuters (TRI) and the Dow Jones & Co. unit of News Corp. (NWSA), the Wall Street Journal reports
- Bugs in widely used networking technology expose tens of millions of personal computers, printers and storage drives to attack by hackers over the regular Internet, according to security software maker Rapid7. The list of devices includes products from manufacturers including Belkin, D-Link, Cisco Systems’ (CSCO) Linksys division and Netgear (NTGR), Reuters reports
- Google (GOOG) will lobby Washington this year to make it harder for law enforcement authorities to gain access to emails and other digital messages, Reuters reports
- Fed Chairman Bernanke’s latest round of bond buying will reach $1.14T before he ends the program in the first quarter of 2014, according to median estimates in a Bloomberg survey of economists. He’ll continue with purchases of $40B a month of mortgage bonds and $45B a month of Treasuries, according to the survey of 44 economists, Bloomberg reports
- The Mexican unit of Wal-Mart Stores (WMT) used a current state governor to facilitate $156,000 in bribes meant to help open stores, an ex-lawyer for the retailer told company officials in 2005, according to documents released by members of the U.S. Congress, Bloomberg reports
Bonanza Creek (BCEI) files to sell 10M shares of common stock
Gladstone Land (LAND) 3.33M share IPO priced at $15.00
Piedmont Natural Gas (PNY) files to sell 4M shares of common stock
Stemline Therapeutics (STML) 3.317M share IPO priced at $10.00
Sunstone Hotel (SHO) files to sell 17.25M shares of common stock
[VIA Zero Hedge]