- Hilsenrising interest rates Business Feels Pinch of Swift Rate Rise (WSJ)
- Yellen Betting Defies 100-Year Jinx of Fed No. 2 Never Elevated (BBG)
- Back to the Future 2 is finally coming: Honda Sees ‘Flying Sports Car’ Making Profit by Decade’s End (BBG)
- Europe’s Richest Person Kamprad to Move Back to Sweden (BBG)
- No sign of cyber leaker Snowden on flight to Cuba (Reuters)
- Li’s Shock Treatment to China Lenders Evokes Ex-Reformer (BBG)
- In India, Gold-Related Shares Melt Down (WSJ)
- Citigroup Opens in Iraq to Tap $1 Trillion of Oil Spending (BBG)
- France warned on budget deficit (FT)
Overnight Media Digest
* The U.S. Supreme Court dramatically advanced gay rights in rulings that direct the federal government to provide equal treatment to same-sex spouses and allow the resumption of gay marriages in California.
* Sharp increases in long-term interest rates, triggered by Federal Reserve statements last week, threaten sales of homes, cars and other big-ticket items that have helped drive the U.S. economic recovery.
* The recent market turbulence threatens to disrupt private-equity firms’ plans to sell stakes in their companies and possibly to put the brakes on a blistering pace of big paydays for their top executives and investors.
* Securities and Exchange Commission enforcement chiefs have drawn up a hit list of impending cases where officials intend to test their new policy of requiring admissions of wrongdoing when settling civil charges.
* Even as Chinese officials indicate a softening of their tight grip on cash, some businesses are reporting liquidity is increasingly hard to find in some places and that customers are turning to alternatives.
* U.S. insurance companies could see increased volatility in their earnings under a proposed overhaul of accounting rules expected to be unveiled Thursday.
* Research In Motion Ltd will give investors Friday their first real insight into how the company’s all-or-nothing bet on a new breed of BlackBerry devices is faring.
* The Obama administration’s climate-action plan boosts the prospects for nuclear power, natural gas and renewable energy, while dimming the future of coal-fired power plants.
* The domestic coal industry is teaming up with other business groups to blunt the impact of President Obama’s climate-change agenda, while also shifting its business focus to exports.
Finance Minister George Osborne’s pledge of pumping in billions to overhaul Britain’s infrastructure was undercut on Wednesday after the budget for the high-speed rail line project jumped by 8 billion pounds.
Wal-Mart Stores Inc, grappling with allegations of wrongdoing and investment restrictions in the promising but restrictive India market, said on Wednesday its country head, Raj Jain, had left the company.
British Airways launched a $927 million asset-backed bond on Wednesday, the first from a UK airline using new planes as collateral, to finance the purchase of 14 new aircraft, including six Boeing Dreamliners.
The board of Spanish oil major Repsol said it unanimously rejected a non-cash compensation offer worth $5 billion from Argentina over the expropriation of its majority stake in energy firm YPF, raising prospects worsening relations between its management and some of its biggest investors.
Billionaire Marc Rich, who founded international commodities conglomerate Glencore and was pardoned by President Bill Clinton over tax evasion, racketeering and busting sanctions with Iran, died on Wednesday in Switzerland aged 78.
BP has been accused of using “hollow intimidation tactics” by lawyers representing claimants seeking compensation for the 2010 Deepwater Horizon disaster.
* Investigators have uncovered thousands of schemes involving counterfeit or adulterated food, raising fresh questions about regulatory oversight as criminals offer bargain-hunting shoppers cheap versions of everyday products, including counterfeit chocolate and adulterated olive oil, Jacob’s Creek wine and even Bollinger Champagne.
* Interest rates have been inching up everywhere, sending America’s vast market for municipal bonds, a crucial source of financing for roads, bridges, schools and more, into its steepest decline since the dark days of the financial crisis in 2008.
* Many companies providing support services are cutting employees as work vanishes after federal spending was trimmed by $85 billion on March 1. Contractors say they are trying to make do by picking up other projects where they can, but private sector and state and local government demand has also been weak in recent years.
* Big European banks may be required to raise billions of euros in new capital, making them less risky but potentially putting them at a disadvantage to their American rivals, under guidelines issued Wednesday by an organization that coordinates global bank regulation.
* European Union finance ministers reached a plan early on Thursday that laid out the order in which shareholders, creditors and others would cover losses suffered when banks collapse.
* Sony, hoping to use smartphones to turn around its business, is facing the demands of Japan’s cellphone carriers for constant model updates. Its Xperia Z smartphone, which went on sale in February and has not yet hit the U.S. market, is already a has-been in Japan.
* The New York State Court of Appeals issued an advisory opinion on Wednesday that shift supervisors at Starbucks , but not assistant managers with significant authority over other employees, may share in the baristas’ tip pool.
* HD Supply and Tremor Video have public offerings planned, but recent jolts in the stock and bond markets have reintroduced some caution into Wall Street.
* As the Supreme Court struck down the Defense of Marriage Act, married gay couples in states that recognize their unions will gain access to more than 1,000 federal benefits like Social Security and family leave rights, but how couples in other states will fare is less clear.
* The Financial Accounting Standards Board on Thursday will propose new rules for insurance accounting that seem likely to increase volatility in reported profits for many insurers and lower reported revenue for rapidly growing companies.
* The former chief executive of the American International Group, Maurice R. Greenberg, can pursue a lawsuit against the United States government over the financial crisis bailout of the insurer, though in narrower form, a judge ruled on Wednesday.
* Canadian and United States representatives have averted a potential border dispute by reaching an agreement after months of heated argument over the future of the Peace Bridge, the second-busiest crossing between the U.S. and Canada. ()
* Federal officials have pledged to support cleanup efforts in flood-ravaged Alberta, but the government’s track record suggests that years will pass before it cuts a cheque. ()
* The face of working Canada is increasingly to be found in Hudson’s Bay, Target and Loblaws stores across the country. New data show the most common occupation in Canada, for both men and women, is retail salesperson. ()
Reports in the business section:
* The bond market rout is sending shock waves through the corporate credit market, but mining companies are taking a particularly hard beating as commodity prices tumble. ()
* Verizon Communications Inc is poised to become a disruptive force in Canada’s C$19 billion ($18 billion) wireless market, should it ultimately proceed with a northern expansion plan. The U.S. communications giant is weighing a three-pronged strategy to capitalize on relaxed foreign investment rules that allow international players to fully own small telecoms with a market share of 10 per cent or less. ()
* Major pipeline companies will need to have a minimum of $1 billion on hand to tackle spill cleanups in Canada, under plans announced by the federal Conservative government. ()
* Prime Minister Stephen Harper’s office has issued a stern warning to Conservative senators who helped gut a controversial bill that would force unions to publicly disclose details of their spending. On Wednesday, 16 Tory senators bucked the government’s wishes and joined their Liberal counterparts in approving a number of amendments to bill C-377, while another four abstained.
* As Southern Alberta cleans up after the devastating floods that swept through the province last week, details have emerged of two of the people killed – an 83-year-old woman from Calgary and “fiery little angel,” 35, who drowned at High River. Meanwhile, Calgary has extended its state of emergency Wednesday for seven more days as the Bow River is filled with the equivalent of raw sewage.
* Swiss authorities investigating SNC Lavalin Group Inc’s activities in Libya and Tunisia stumbled upon something unexpected when they tapped the phone of a senior company executive. “There are things to pay in Canada, for the hospital,” Riadh Ben Aissa, then executive vice-president construction with SNC Lavalin, was overheard saying, according to a police affidavit used to obtain search warrants last September in Montreal.
* Alberta’s outgoing king of talk radio, Dave Rutherford, was unceremoniously booted from the airwaves Tuesday after criticizing his station’s inadequate coverage of the flood crisis in Southern Alberta.
* Gold and silver miners are beginning to shut down money-losing mines. And if prices do not recover soon, many more are poised to close in the months ahead, in Canada and elsewhere.
* Before heading into orbit later this year, UrtheCast lands on the Toronto Stock Exchange on Thursday. The Vancouver-based company (official name Earth Video Camera Inc) that plans to install a pair of cameras, including one that shoots video, on the International Space Station later this year, will be listed on the Toronto Stock Exchange.
* A plan is afoot to turn Canada’s largest city into the next yuan trading centre. According to Chinese media reports, authorities from the Department of Finance, the Bank of Canada and several big Canadian banks recently met with representatives of major Chinese banks to discuss ways to promote Toronto as the first North American hub for offshore yuan trading.
CHINA SECURITIES JOURNAL
- China’s new food and drug administrative organisation structure will be completed by the year end, making the previous regulatory process more integrated, its deputy head said.
SHANGHAI SECURITIES NEWS
- China’s urbanisation rate has reached 52.6 percent in 2012, but the overall quality of urbanisation is still low, according to a report by the National Development and Reform Commission.
- China plans to build new housing for 10 million families living in slums within five years and 3 million of them will get new housing by the end of the year, said a statement published after a State Council meeting.
- China’s National Bureau of Statistics said it will increase checks on data reported by companies, in a bid to increase the quality and reliability of economic indicators.
- China’s future economic development does not necessarily depend on massive investment, easy money policy or high liquidity, but on the dividend reforms, the potential of domestic demand and innovation, the newspaper said in an editorial.
Fly On The Wall 7:00 AM Market Snapshot
Alexandria Real Estate (ARE) upgraded to Outperform from Neutral at RW Baird
Apollo Global (APO) upgraded to Buy from Neutral at BofA/Merrill
Autoliv (ALV) upgraded to Buy from Hold at KeyBanc
GT Advanced (GTAT) upgraded to Buy from Speculative Buy at Canaccord
Gerdau SA (GGB) upgraded to Buy from Neutral at Goldman
Informatica (INFA) upgraded to Outperform from Neutral at Wedbush
OceanFirst Financial (OCFC) upgraded to Buy from Neutral at Sterne Agee
Pinnacle (PNK) upgraded to Outperform from Sector Perform at RBC Capital
Seagate (STX) upgraded to Buy from Neutral at Longbow
Sohu.com (SOHU) upgraded to Neutral from Underweight at HSBC
Western Digital (WDC) upgraded to Buy from Neutral at Longbow
BASF (BASFY) downgraded to Underweight from Neutral at JPMorgan
Rogers Communications (RCI) downgraded to Sector Perform at RBC Capital
TELUS (TU) downgraded to Sector Perform from Outperform at RBC Capital
Approach Resources (AREX) initiated with a Neutral at SunTrust
Centene (CNC) initiated with a Buy at Lazard Capital
Epizyme (EPZM) initiated with an Outperform at Wedbush
Fluidigm (FLDM) initiated with a Buy at Maxim
Humana (HUM) initiated with a Neutral at Lazard Capital
Macy’s (M) initiated with a Buy at Stifel
Prothena (PRTA) initiated with an Outperform at Wedbush
Regal Entertainment (RGC) initiated with a Buy at Ascendiant
DISH (DISH) withdrew Clearwire (CLWR) tender offer
Hartford Financial (HIG) to sell U.K. subsidiary to Berkshire Hathaway (BRK.A) for $285M
Oracle (ORCL), NetSuite (N) announced strategic alliance for cloud services
Lufkin (LUF, GE) said investigation did not reveal breach of duties
Precision Castparts (PCP) acquired Permaswage for $600M in cash
Australian Competition and Consumer Commission won’t oppose Archer Daniels (ADM) acquisition of GrainCorp (GRCLF)
S&P revised BlackRock (BLK) outlook to positive from stable; affirmed ratings
Fitch affirmed CA Technologies (CA) Issuer Default Rating ‘BBB+’, outlook stable
Highwoods Properties’ (HIW) senior debt rating raised by Moody’s to Baa2, from Baa3, outlook stable
Barnes & Noble (BKS) filed to delay Form 10-K
Men’s Wearhouse’s (MW) Zimmer urged board to consider strategic alternatives
Companies that beat consensus earnings expectations last night and today include:
Progress Software (PRGS), Herman Miller (MLHR)
Companies that missed consensus earnings expectations include:
H.B. Fuller (FUL), EXFO Inc. (EXFO), Paychex (PAYX)
Companies that matched consensus earnings expectations include:
Bed Bath & Beyond (BBBY)
- Sharp increases in long-term interest rates, triggered by Fed statements last week, threaten sales of homes, cars and other big-ticket items that have helped drive the U.S. economic recovery. Rate increases arrived just as the economy’s lagging growth had showed welcome signs of improvement, raising concerns among consumers and company executives, the Wall Street Journal reports
- The Obama administration’s climate-action plan will create winners and losers in the electricity industry, boosting the prospects for nuclear power, natural gas and renewable energy while dimming the future of many coal-fired power plants (AEP, DTE, NRG, DYN, PPL, FE, EIX, EIC, ETR, D), the Wall Street Journal reports
- Argentine energy company YPF (YPF) said the government never made an official offer to compensate Repsol (REPYY) for last year’s state seizure of YPF. Repsol’s board had said it rejected a $5B noncash compensation offer from Argentina, Reuters reports
- Rolls-Royce (RYCEY) repeatedly failed to identify a defect that caused one of its engines to explode on a Qantas Airways (QUBSF) aircraft carrying more than 400 people over Indonesia three years ago, an Australian safety regulator found, Reuters reports
- GE Capital Real Estate (GE) is increasing lending this year as deals accelerate and the cost of borrowing jumps in the commercial mortgage-backed securities market. The GE unit plans to make about $7B of new loans on North American real estate, up 40% from 2012, Bloomberg reports
CDW Corporation (CDW) 23.25M share IPO priced at $17.00
Capital Product (CPLP) files to sell 8.48M common units for limited partners
HD Supply Holdings (HDS) 53.191M share IPO priced at $18.00
Regulus Therapeutics (RGLS) registers $57.5M of common stock for offering
Select Income REIT (SIR) files to sell 8M shares of common stock
Tremor Video (TRMR) 7.5M share IPO priced at $10.00
[VIA Zero Hedge]