- Detroit ‘Gut Kick’ Poses New Test for Long Suffering City (BBG)
- Florida lawmakers urge overhaul of ‘Stand Your Ground’ law (Reuters)
- Investors pour huge sums into US equity funds (FT)
- Snowden Standoff Threatens Obama-Putin Moscow Summit (BBG)
- China, U. (Read more…)S. companies’ great hope, now a drag (Reuters)
- Divine intervention? Angel Gabriel ‘spotted’ at pro-Mursi protest (Al Arabiya)
- Morgan Stanley stock traders rebuild burned bridges (Reuters)
- Huawei spied for China, claims ex-CIA head Michael Hayden (FT)
- Gorilla Flipping Homes as Rebound Revives Rapid Trades (BBG)
- BRICS joint action at G20 summit may be wishful thinking (Reuters)
- Honda’s Fujino Readies ‘Flying Acura’ to Challenge Cessna (BBG)
- ‘Desperate’ Cuba voyage is latest scrape for North Korean fleet (Reuters)
Overnight Media Digest
* Detroit filed for federal bankruptcy protection, making the automobile capital and one-time music powerhouse the country’s largest-ever municipal bankruptcy case.
* Detroit’s bankruptcy filing will unleash a fierce fight among more than 100,000 creditors over who will get paid-and how much.
* Dell is scrambling to save a proposed $24.4 billion buyout, launching an aggressive push to win over investors who have been cool to the deal ahead of a rescheduled vote on July 24.
* Microsoft took a $900 million charge on its high-profile Surface RT tablet, contributing to fourth-quarter results that sharply missed revenue and profit expectations.
* Google Inc’s profit and sales continued to climb, but deceleration in the growth of its main business of selling search ads reignited concerns about the impact of mobile devices.
* Morgan Stanley on Thursday posted better-than-expected second-quarter earnings despite a steep rise in interest rates, and surprised investors with a plan to repurchase company shares for the first time since the financial crisis.
* Activist investor Nelson Peltz thinks PepsiCo’s salty snacks go better with the sweet snacks at Mondelez than soda and Gatorade. Wall Street has its doubts.
* British investigators recommended temporarily disabling emergency transmitters on Boeing 787 Dreamliners and launching a broad safety review of such devices, after a fire erupted last Friday on an Ethiopian Airlines jet.
* Samsung is close to signing deals for its devices with two U.S. government agencies, signs that the South Korean company’s push into the government sector traditionally dominated by BlackBerry is gaining some traction.
* Exxon Mobil Corp has agreed to pay a $100,000 penalty and take steps that could cost $20 million to prevent spills of wastewater from gas-drilling operations, settling allegations it violated the Clean Water Act, the Justice Department and Environmental Protection Agency said.
The Abu Dhabi sheikh who threw lender Barclays a lifeline at the height of the financial crisis through a 3.5 billion pound ($5.32 billion) capital injection has sold his stake in the bank.
Microsoft’s earnings and revenue in the latest quarter were hit by slow personal computer sales and a $900 million charge resulting from poor demand for its Surface tablet.
Google Inc’s earnings and revenue missed Wall Street forecasts as prices for the company’s ads came under renewed pressure.
Rupert Murdoch has written to British lawmakers saying that the police probe into phone hacking and other abuses committed by journalists at News Corp’s UK newspapers had “gone on too long.”
Japanese telecoms group SoftBank Corp had offered to pay $8.5 billion to acquire Universal Music from Vivendi about three months ago, but the French media and entertainment group turned down the proposal.
Stansted owner Manchester Airports Group is expected to say that the airport could be the most cost effective location for a four-runway hub if an independent inquiry concludes that a new hub is needed away from Heathrow.
British investigators have called for an emergency beacon to be turned off on all Boeing 787 Dreamliner aircraft to avoid a repetition of the fire onboard an Ethiopian Airlines plane parked at Heathrow.
Hitachi Rail Europe has been awarded a 1.2 billion pound order by Britain’s Department of Transport to build trains for the UK’s East Coast main line.
Bumi Plc has agreed to sell its 29.2 percent stake in Jakarta-listed Bumi Resources to Indonesia’s Bakrie family for $501 million.
* Wall Street’s big banks are still opposing aspects of the Dodd-Frank financial reform law and do not like a proposal to set aside more capital to cover future losses.
* Detroit, the cradle of America’s automobile industry and once the nation’s fourth-most populous, filed for bankruptcy on Thursday, the largest American city ever to take such a course.
* American aviation officials said they would review recommendations by British authorities to disconnect batteries in the emergency transmitters on all Boeing 787s.
* China will impose tariffs that could exceed 50 percent on materials imported from the United States and South Korea used to build solar panels.
* While the Federal Energy Regulatory Commission and JPMorgan are negotiating a settlement, Blythe Masters, a top bank executive, is not expected to face a separate action.
* Dell Inc bought itself six more days to win backing for its proposed $24.4 billion sale to its founder, but the fight for additional support remained tough.
* Morgan Stanley shares rose more than 4 percent on Thursday after the firm announced it planned to buy back a chunk of its own stock.
* BlackRock Inc said on Thursday that it booked record profits and revenues in the second quarter at a time when rising interest rates caused big losses for many bond investors.
* The SEC used Jonathan Egol’s appearance as an opportunity to introduce emails and documents that could damage Fabrice Tourre’s defense.
* The Apache Corp agreed to sell its business in the Gulf of Mexico’s shelf for about $3.75 billion to a company owned by the private equity firm Riverstone Holdings.
THE GLOBE AND MAIL
* Federal officials probing the Lac-Mégantic disaster are testing the chemical composition of crude oil carried by the runaway train as they seek to answer the crucial question of what triggered the unusual and devastating explosion after the derailment.
* When the Supreme Court of Canada returns from its summer hiatus, it will go underground – convening for an unprecedented bunker-style session.
Reports in the business section:
* Canadians love to hate the country’s big phone companies, a reality that Telus Corp chief executive Darren Entwistle needs to change in short order as he ramps up a campaign for what he calls a “level playing field” in a looming battle with U.S. giant Verizon Communications Inc for wireless customers.
* TransCanada Corp is seeking to bolster its case with U.S. President Barack Obama for the long-delayed Keystone XL oil pipeline, firing off a laundry list of reasons the company says the contentious project will have minimal influence on rising North American greenhouse gas emissions.
* Brad Wall’s government is set to introduce a constitutional amendment into the Saskatchewan legislature this October calling for the abolition of the Senate.
* One of the senior staffers in the prime minister’s office alleged to have knowledge of a C$90,000 ($86,600) secret payment to Sen. Mike Duffy has left the PMO.
* Senior bureaucrats in two federal departments considered paying C$15,000 ($14,400) for professional dumpster divers as part of efforts to find a missing USB key containing sensitive, personal information of more than 5,000 Canadians.
* Chief executive of Telus Corp, Darren Entwistle, warned that the sector faces a “bloodbath” unless rules that could give a U.S. giant preferential treatment in the upcoming spectrum auction are changed in the next two months.
* The workforce at Shoppers Drug Mart Corp responded with enthusiasm to a proposed C$12.4 billion ($11.93 billion) takeover offer from grocery giant Loblaw Companies Ltd, the pharmacy chain’s executives said Thursday, despite voicing some concerns that the company’s business model would change.
* Canada’s largest distributors of natural gas are digging their heels in against TransCanada Corp’s plan to send Alberta crude to the East Coast, warning the scheme could result in higher costs for their customers in Ontario and Quebec.
CHINA SECURITIES JOURNAL
- China’s banks hold deposits of 9.85 trillion yuan ($1.60 trillion), which is sufficient to handle any liquidity issues, Xiu Yan, a department director in the China Banking Regulatory Commission (CBRC), said at a forum on Thursday.
- According to official second-quarter figures, 1,532 Chinese mutual funds held by 72 companies lost a total of 49.035 billion yuan, in stark contrast to the 69.695 billion yuan profit made in the first quarter.
SHANGHAI SECURITIES NEWS
- Chinese elevator and escalator company SJEC Corp announced plans to repurchase 29.41 million of its shares for up to 8.5 yuan per share, accounting for about 7.06 percent of its total share capital. The company is aiming to spend no more than 250 million yuan.
- The authority to register international non-governmental organizations has been devolved to provincial civil affairs authorities from the Ministry of Civil Affairs as part of the efforts to make NGO operations in China easier.
- China will allow foresters and forestry production managers to use commercial forestry contracts to secure bank loans for foresting purposes, according to new rules released by the CBRC and the State Forestry Administration on Thursday.
Fly On The Wall 7:00 AM Market Snapshot
Archer Daniels (ADM) upgraded to Neutral from Underweight at JPMorgan
BioCryst (BCRX) upgraded to Outperform from Market Perform at JMP Securities
BreitBurn Energy (BBEP) upgraded to Outperform from Market Perform at Raymond James
Cablevision (CVC) upgraded to Neutral from Underweight at JPMorgan
Cepheid (CPHD) upgraded to Overweight from Neutral at Piper Jaffray
Diageo (DEO) upgraded to Overweight from Neutral at JPMorgan
Extra Space Storage (EXR) upgraded to Hold from Sell at Cantor
Fred’s (FRED) upgraded to Hold from Sell at Deutsche Bank
Netflix (NFLX) upgraded to Market Perform from Underperform at Northland Securities
STAG Industrial (STAG) upgraded to Outperform from Sector Perform at RBC Capital
Seagate (STX) upgraded to Neutral from Sell at Citigroup
Skyworks (SWKS) upgraded to Buy from Hold at Needham
Western Digital (WDC) upgraded to Neutral from Sell at Citigroup
AMD (AMD) downgraded to Underperform from Neutral at Credit Suisse
AMD (AMD) downgraded to Underweight from Equal Weight at Morgan Stanley
Alliance Fiber Optic (AFOP) downgraded to Neutral from Buy at B. Riley
Alliance Holdings (AHGP) downgraded to Market Perform from Outperform at Raymond James
Associated Banc-Corp (ASBC) downgraded to Sector Perform at RBC Capital
CVB Financial (CVBF) downgraded to Market Perform from Outperform at Raymond James
Genuine Parts (GPC) downgraded to Hold from Buy at BB&T
ICU Medical (ICUI) downgraded to Neutral from Buy at Roth Capital
ICU Medical (ICUI) downgraded to Neutral from Overweight at Piper Jaffray
Intuitive Surgical (ISRG) downgraded to Underperform at JMP Securities
Omnicom (OMC) downgraded to Sector Perform from Outperform at RBC Capital
Premiere Global (PGI) downgraded to Outperform from Strong Buy at Raymond James
SAP (SAP) downgraded to Neutral from Overweight at JPMorgan
SCBT Financial (SCBT) downgraded to Hold from Buy at BB&T
Stamps.com (STMP) downgraded to Neutral from Buy at Roth Capital
Stryker (SYK) downgraded to Hold from Buy at Wunderlich
Abercrombie & Fitch (ANF) initiated with a Neutral at SunTrust
Aeropostale (ARO) initiated with a Neutral at SunTrust
American Eagle (AEO) initiated with a Neutral at SunTrust
Anadarko (APC) initiated with a Buy at Mizuho
Apache (APA) initiated with a Neutral at Mizuho
Armstrong World (AWI) initiated with a Buy at Deutsche Bank
Astex Pharmaceuticals (ASTX) initiated with a Buy at Brean Capital
Big Lots (BIG) initiated with a Market Perform at FBR Capital
Body Central (BODY) initiated with a Neutral at SunTrust
Chico’s FAS (CHS) initiated with a Buy at SunTrust
Citi Trends (CTRN) initiated with a Neutral at SunTrust
Family Dollar (FDO) initiated with a Market Perform at FBR Capital
Fifth & Pacific (FNP) initiated with a Neutral at SunTrust
Francesca’s (FRAN) initiated with a Buy at SunTrust
Gap (GPS) initiated with a Neutral at SunTrust
Hess Corp. (HES) initiated with a Buy at Mizuho
Kindred Healthcare (KND) initiated with an Overweight at Barclays
Mallinckrodt (MNK) initiated with an Outperform at BMO Capital
Marathon Oil (MRO) initiated with a Buy at Mizuho
New York & Co. (NWY) initiated with a Neutral at SunTrust
Noble Energy (NBL) initiated with a Neutral at Mizuho
Ross Stores (ROST) initiated with a Buy at SunTrust
Sprint (S) coverage resumed with a Sell at Goldman
TJX (TJX) initiated with a Neutral at SunTrust
Tilly’s (TLYS) initiated with a Buy at SunTrust
TripAdvisor (TRIP) initiated with a Buy at Ascendiant
Under Armour (UA) initiated with a Buy at SunTrust
Urban Outfitters (URBN) initiated with a Buy at SunTrust
Waters (WAT) initiated with a Market Perform at William Blair
Zumiez (ZUMZ) initiated with a Neutral at SunTrust
lululemon (LULU) initiated with a Buy at SunTrust
Apache (APA) to sell Gulf of Mexico shelf assets for $3.75B to Fieldwood Energy
VIVUS (VVUS), First Manhattan have settlement agreement, CEO transition, board expansion
Synovus (SNV) to redeem $967.87M of TARP preferred stock
S&P affirmed HCC Insurance (HCC) FSR ratings ‘AA’
Baker Hughes (BHI) began reducing costs in Latin America operations
Publicis (PUBGY), AOL (AOL) to form strategic partnership
Chipotle (CMG) sees low to mid single digit comparable restaurant sales growth in 2013
ResMed (RMD) won patent dispute against APEX
Meson Capital Partners interested in purchasing InfuSystem (INFU)
Companies that beat consensus earnings expectations last night and today include:
SunTrust (STI), Schlumberger (SLB), Western Alliance (WAL), AMD (AMD), Rambus (RMBS), Chemed (CHE), Align Technology (ALGN), Cubist (CBST), Capital One (COF), Chipotle (CMG)
Companies that missed consensus earnings expectations include:
Whirlpool (WHR), Reinsurance Group (RGA), Celanese (CE), Badger Meter (BMI), athenahealth (ATHN), Microsoft (MSFT), Acacia Research (ACTG), B&G Foods (BGS), Google (GOOG)
Companies that matched consensus earnings expectations include:
General Electric (GE), Matthews (MATW), Premiere Global (PGI), Stryker (SYK)
- Some people familiar with the enforcement operations of the Federal Energy Regulatory Commission think it’s just getting started as it scrutinizes the once obscure world of electricity trading, and it’s sending shock waves through Wall Street (BCS, JPM), the Wall Street Journal reports
- The Financial Industry Regulatory Authority is focusing on the complex computer systems deployed by high-frequency trading firms, with an eye on whether the systems have adequate safeguards against chaotic trading that can destabilize markets and harm investor confidence, the Wall Street Journal reports
- BlackRock (BLK) said it’s against Nelson Peltz’s proposal that PepsiCo (PEP) buy Mondelez International (MDLZ) and shed its beverage business, signaling that the activist investor’s proposal could fall flat with fellow investors, Reuters reports
- U.S. refiners (VLO) are in the midst of an unprecedented summer surge in exports of gasoline, diesel and other fuels, as the combination of cheaper shale crude and record-high biofuel credit costs open up new markets overseas, Reuters reports
- AIG (AIG) and Allianz (AZSEY) are among insurers deemed systemically important by global financial rule makers, meaning they may face tougher capital standards and tighter regulation, Bloomberg reports
- UBS (UBS) took the lead among share-sale underwriters in Southeast Asia for the first time in six years, capitalizing on its relationships with wealthy families and a surge in equity offerings in countries including the Philippines, Bloomberg reports
Diamond Resorts (DRII) 15.5M share IPO priced at $14.00
RetailMeNot (SALE) 9.091M share IPO priced at $21.00
Rexford Industrial (REXR) 16M share IPO priced at $14.00
Synovus (SNV) files to sell $185M in common stock
Transmontaigne Partners (TLP) files to sell 1.45M shares of common stock
pSivida (PSDV) files to sell common stock
xG Technology (XGTI) 1.338M share Spot Secondary priced at $5.50
[VIA Zero Hedge]