- Obama Signs Bill Enacting Budget Deal to Avert Most Tax Hikes (BBG)
- GOP Leaders Take Political Risk With Deal (WSJ)
- Basel Becomes Babel as Conflicting Rules Undermine Safety (BBG)
- Portugal Faces Divisions Over Austerity Measures (WSJ)
- The Fiscal Cliff Deal and the Damage Done (BBG)
- Cliff deal threatens second term agenda (FT)
- Deposits stable in euro zone periphery in November (Reuters)
- Fresh Budget Fights Brewing (WSJ)
- China Poised for 2013 Rebound as Debt Risks Rise for Xi (BBG)
- Who’s Afraid of Italian Elections? (WSJ)
- China services growth adds to economic revival hopes (Reuters)
- Asian Economies Show Signs of Strength (WSJ)
- Japan’s Aso Targets Myanmar Markets Amid China Rivalry (Bloomberg)
Overnight Media Digest
* The completion of a tax deal between the White House and Congress sent stocks soaring Wednesday, but the sense of relief belied the fact that more tax-and-spending brinkmanship is expected as soon as February.
* A federal judge dismissed a portion of Apple Inc’s suit against Amazon.com Inc over the name for its digital marketplace of applications for mobile devices.
* The Federal Trade Commission could make a final decision in its long-running antitrust probe of Google Inc this week, before one of the agency’s five commissioners leaves office, according to people familiar with the investigation.
* Microsoft Corp has acquired a small home-entertainment technology startup to beef up its Xbox unit, according to people familiar with the matter.
* Goldman Sachs Group Inc handed insiders including Chief Executive Lloyd Blankfein and his top lieutenants a total of $65 million in restricted stock just hours before this year’s higher tax rates took effect.
* Royal Dutch Shell Plc and emergency responders are preparing to send a salvage crew to an oil rig that ran aground this week off the southern coast of Alaska.
* Venture-capital investors in car-sharing service Zipcar Inc will likely make a profit from Avis Budget Group Inc’s buyout for about $500 million.
* Gap Inc is buying women’s fashion boutique Intermix Inc for $130 million, a deal that will give the mostly casual-clothes retailer an opening to the all-important luxury market.
* News network al-Jazeera agreed to purchase Current TV, the current affairs channel partly owned by Al Gore, seeking to boost its presence in American television.
* The co-founder of Quiksilver Inc will step down this month as CEO, as the surfing outfitter makes its first change at the top in more than two decades.
* Hyundai Motor Co forecast its slowest global sales growth in a decade for this year, citing the sluggish global economy, capacity constraints and an expected recovery by Japanese auto makers.
* Starbucks Corp outlined the details of its planned move into Vietnam’s bustling coffee market, saying it will open its first cafe there early next month, a bit later than its originally projected timeline of 2012.
* Al Jazeera, announced a deal to take over Current TV, the low-rated cable channel that was founded by Al Gore, a former vice president, and his business partners seven years ago.
* On Wednesday, Avis Budget Group Inc, the car rental conglomerate, announced that it was buying Zipcar for about $500 million.
* An advertising watchdog group says it told the distributor of the top-selling energy “shot,” 5-Hour Energy years ago that a claim that the drink did not cause a letdown once the effects wore off was unfounded.
* K2 Intelligence, the investigative company started by Jules Kroll and Jeremy Kroll, has acquired the corporate intelligence firm Thacher Associates in a deal that highlights the growing and lucrative business of internal investigations and corporate monitoring.
* Even though Congress’s last-minute deal means higher taxes for almost all Americans, businesses and consumers are relieved that some of the uncertainty about what they will owe the government this year is gone.
* With the resolution of the year-end fiscal crisis just hours old, the next political confrontation is already taking shape as this city braces for a fight in February over raising the nation’s borrowing limit. But it is a debate President Obama says he will have nothing more to do with.
* The state’s Health Department found in an analysis it prepared early last year that the much-debated drilling technology known as hydrofracking could be conducted safely in New York, according to a copy obtained by The New York Times from an expert who did not believe it should be kept secret.
* A clash of privacy rights and safety concerns is coming to a head as one of Alberta’s largest oil sands employers attempts to force thousands of its workers to submit to new random drug and alcohol tests. Arguments on the matter are now being heard in a labour arbitration hearing in Calgary.
* Parents should brace for more labour disruptions at Ontario’s schools in 2013 after an open letter from the premier has the unions preparing for the education minister to impose new contracts.
The letter from Dalton McGuinty, which says the uncertainty in education cannot continue and points to a need to balance the budget, comes on the eve of an announcement by education minister Laurel Broten on the government’s next steps scheduled for Thursday morning.
Reports in the business section:
* Residential real estate sales across Canada fell 12 percent on a year-over-year basis in November, and prices dipped almost 1 percent. Vancouver sales were down 29 percent and Toronto sales fell 16 percent.
* As Alberta continues to feel the pinch of a deeply discounted bitumen price, it is perhaps no surprise the provincial government and oil companies are looking for an alternative to politically contentious pipelines to get crude to market.
The provincial government said on Monday that it is considering spending $10-million to study building a new railway to deliver landlocked oil to an Alaska port.
* Federal environment officials in Canada and the United States have cracked an alleged smuggling operation that saw scores of narwhal tusks from the Canadian Arctic illegally shipped across the New Brunswick-Maine border in the secret compartment of a trailer.
* New-York based Rosen Law Firm P.A has launched a class-action suit against Silvercorp Metals Inc and three of its senior executives, including Chief Executive Rui Feng.
They are accused of overstating financial results from the company’s flagship Ying mine, causing investors to buy the stock at “artificially inflated and distorted” prices.
* The financial positions of Canadian pension plans improved at the close of 2012, but pension consultancy firm Mercer suggests it is too early to pop the champagne corks.
“After a devastating 2011, 2012 was not the bounce back year that pension plan sponsors had hoped for,” said Manuel Monteiro, a partner in Mercer’s Financial Strategy Group, adding that Mercer estimates only about one in 20 pension plans are fully funded.
SOUTH CHINA MORNING POST
– The market for initial public offerings in Hong Kong is expected to rebound in the second half of this year as the impact of Beijing’s pro-growth policies begins to turn around the mainland’s tepid economic growth, according to PricewaterhouseCoopers.
– Dell Inc’s president Steve Felice plans to steadily increase investments on the mainland, without elaborating on how high the spending would rise. The total spending by mainland businesses and the government on information-technology hardware, software and services would grow 11 percent this year to 733 billion yuan ($117.65 billion), according to Market analyst firm Forrester Research.
HONG KONG ECONOMIC TIMES
– Chinese Estates Holdings Ltd posted gains of HK$266.5 million ($34.38 million) from profitable sales of stocks and bonds in a bullish market in the year of 2012.
– China Railway Group Ltd has been criticised by the Shanxi provincial government for covering up details of a Christmas Day explosion in which at least eight workers reportedly died and five were injured.
– Hong Kong Exchanges and Clearing Ltd has a preliminary plan to spin off its settlement business into an independent department, as well as to set up a department of public offering supervision, market sources said.
TA KUNG PAO
– Property developer China Overseas Land & Investment Ltd has acquired about 10 pieces of land in the mainland in December last year for a total of nearly 15 billion yuan.
Fly On The Wall 7:00 AM Market Snapshot
Acorda Therapeutics (ACOR) upgraded to Buy from Neutral at Citigroup
Alcatel-Lucent (ALU) upgraded to Neutral from Underperform at Credit Suisse
Bank of America (BAC) upgraded to Market Perform from Underperform at JMP Securities
Brooks Automation (BRKS) upgraded to Equal Weight from Underweight at Barclays
Cisco (CSCO) upgraded to Outperform from Sector Perform at RBC Capital
Citigroup (C) upgraded to Buy from Neutral at Sterne Agee
Citigroup (C) upgraded to Market Perform from Underperform at JMP Securities
Evercore Partners (EVR) upgraded to Outperform from Market Perform at JMP Securities
Goldman Sachs (GS) upgraded to Market Perform from Underperform at JMP Securities
Greenhill & Co. (GHL) upgraded to Outperform from Market Perform at JMP Securities
Health Net (HNT) upgraded to Hold from Sell at Deutsche Bank
Huntsman (HUN) upgraded to Buy from Neutral at Citigroup
JPMorgan (JPM) upgraded to Buy from Neutral at Sterne Agee
JPMorgan (JPM) upgraded to Market Perform from Underperform at JMP Securities
KLA-Tencor (KLAC) upgraded to Overweight from Equal Weight at Barclays
Lazard (LAZ) upgraded to Outperform from Market Perform at JMP Securities
MKS Instruments (MKSI) upgraded to Equal Weight from Underweight at Barclays
Medtronic (MDT) upgraded to Buy from Neutral at Mizuho
Morgan Stanley (MS) upgraded to Market Perform from Underperform at JMP Securities
Piper Jaffray (PJC) upgraded to Outperform from Market Perform at JMP Securities
Popular (BPOP) upgraded to Buy from Neutral at Sterne Agee
priceline.com (PCLN) upgraded to Buy from Neutral at BofA/Merrill
A.O. Smith (AOS) downgraded to Neutral from Buy at Janney Capital
AMD (AMD) downgraded to Underweight from Equal Weight at Barclays
Altera (ALTR) downgraded to Equal Weight from Overweight at Barclays
American Tower (AMT) downgraded to Neutral from Outperform at Macquarie
Biogen (BIIB) downgraded to Neutral from Overweight at Piper Jaffray
Cypress Semiconductor (CY) downgraded to Equal Weight from Overweight at Barclays
Kronos Worldwide (KRO) downgraded to Perform from Outperform at Oppenheimer
LSI Corp. (LSI) downgraded to Equal Weight from Overweight at Barclays
Lam Research (LRCX) downgraded to Equal Weight from Overweight at Barclays
LyondellBasell (LYB) downgraded to Neutral from Buy at Citigroup
Morgan Stanley (MS) downgraded to Reduce from Neutral at SunTrust
Provident Financial (PFS) downgraded to Neutral from Buy at Sterne Agee
SBA Communications (SBAC) downgraded to Neutral from Outperform at Macquarie
Synageva (GEVA) downgraded to Neutral from Overweight at Piper Jaffray
UnitedHealth (UNH) downgraded to Hold from Buy at Deutsche Bank
Volterra (VLTR) downgraded to Equal Weight from Overweight at Barclays
Wellpoint (WLP) downgraded to Hold from Buy at Deutsche Bank
Akamai (AKAM) initiated with a Neutral at Macquarie
Cerner (CERN) initiated with an Overweight at JPMorgan
Greenway Medical (GWAY) initiated with an Overweight at JPMorgan
Idera Pharmaceuticals (IDRA) initiated with an Overweight at Piper Jaffray
Limelight Networks (LLNW) initiated with a Neutral at Macquarie
Quality Systems (QSII) initiated with an Underweight at JPMorgan
STAG Industrial (STAG) initiated with a Market Perform at Wells Fargo
Western Gas Equity (WGP) initiated with a Buy at Citigroup
Winthrop Realty (FUR) initiated with a Market Perform at JMP Securities
Pershing Square no longer thinks General Growth (GGP, SPG, BAM) should consider sale
Microsoft (MSFT): Still seeking resolution to search competition issues
Flagstar Bancorp (FBC) sold Northeast-based commercial loans to CIT Group (CIT)
S&P revised Oshkosh (OSK) outlook to positive, affirmed ‘BB’ rating
California AG sued Phillips 66 (PSX), ConocoPhillips (COP) for environmental violations
Covanta (CVA), Clean Energy (CLNE) partner to build natural gas stations
Companies that beat consensus earnings expectations last night and today include:
E2open (EOPN), Landec (LNDC)
While the Dow Jones Industrial Average surged 308.41 points, to 13412.55, its best-ever start to a year. In percentage terms, the 2.35% gain was the best opening since 2009. But an undercurrent of caution remained as corporate executives and investors expressed disappointment about the reduced scope of the deal, which props open the door for further budget wrangling in coming months, the Wall Street Journal reports
As Americans use more gadgets,TVs and air conditioners than ever before, their electricity use is barely growing, posing a major challenge for the nation’s utilities (NU, ED, NGG, UTL) the Wall Street Journal reports
Pentagon officials and weapons makers (LMT, NOC, GD, BA) warned that a longer-term fiscal solution is urgently needed to lift the uncertainty hanging over the U.S. defense sector, Reuters reports
France’s antitrust watchdog opposed a proposal by Iliad and Vivendi (VIVHY) to merge their mobile telecoms units, according to BFM radio, Reuters reports
Employment-services companies (RHI, MAN) are attracting investors who are betting the U.S. labor market will keep up its steady pace of job creation, Bloomberg reports
Warren Buffett and Carl Icahn are reaping the benefits of growing demand for railroad tank cars to haul shale oil from beyond the reach of existing pipelines. Buffett’s (BRK.A) Union Tank Car Co. is working at full capacity and Icahn’s American Railcar Industries (ARII) has a backlog through 2014, Bloomberg reports
Pershing Square no longer thinks General Growth (GGP) should consider sale, changes stake in company to passive from activist
Carl Icahn lowers stake in Commercial Metals (CMC) to 6.17% from 7.49%
Gabelli reports 5.08% stake in Ralcorp (RAH)
SAC Capital Advisors reports 5.0% passive stake in Buffalo Wild Wings (BWLD)
Steelhead Partners reports 5.8% passive stake in Enzon (ENZN)
Steelhead Partners reports 6.4% passive stake in Phototronics (PLAB)
Tang Capital reports 7.0% passive stake in Cyclacel Pharmaceuticals (CYCC)
[VIA Zero Hedge]