- Apple Bonds Stick Buyers With $280.6 Million Loss as Rates Climb (BBG)
- Iceland Freezes EU Plans as New Government Shuns Euro Crisis (BBG)
- “Transparent Fed” – Ben Bernanke meets privately with Darrell Issa (Politico)
- Bank of Japan vows market steps to curb bond turbulence (Reuters) holds policy (FT)
- Stockholm riots spread in third night of unrest (FT)
- Dudley Says Decision on Taper Will Require 3-4 Months (BBG)
- Senate panel passes immigration bill; Obama praises move (Reuters)
- Italy to outline youth jobs plan as government struggles (Reuters)
- Apple CEO Tim Cook, Lawmakers Square Off Over Taxes (WSJ)
- Google Joins Apple Avoiding Taxes With Stateless Income (BBG)
- Sony Board Discussing Loeb’s Entertainment IPO Proposal (BBG)
- Vote Strengthens Dimon’s Grip (WSJ), Dimon performance well choreographed (FT)
Overnight Media Digest
* Federal investigators apparently accessed records of calls to and from a phone number at Fox News Channel in their leak investigation of a former state department contractor, according to a court document.
* Insecticide sales are surging after years of decline, as American farmers plant more corn and a genetic modification designed to protect the crop from pests has started to lose its effectiveness.
* Starwood Capital Group is in talks to buy seven U.S. shopping malls from Westfield Group for more than $1 billion, a deal that would mark the latest in a flurry of big ticket acquisitions of retail property. Starwood’s talks with Westfield aren’t yet in the final stages and still could collapse, according to people familiar with the matter.
* A lawsuit brought by auto dealers has put a chill on the potential sale of R.L. Polk & Co, owner of the used-car shopping tool Carfax, according to people familiar with the matter. Polk, which provides car companies and consumers with data on autos, attracted interest from some potential corporate buyers as well as a host of private equity firms, including buyout giants Carlyle Group LP and KKR & CO LP, the people said.
Apple Inc Chief Executive Tim Cook defended the technology company’s tax practices, saying Apple did not depend on “tax gimmicks” as U.S. senators grilled him over charges that the company avoided billions of dollars in taxes on international profits.
A majority of JPMorgan Chase & Co shareholders voted to let Jamie Dimon keep his chairman title, handing him a decisive victory over shareholder activists who wanted to strip him of the role.
BP has stepped up appeals against what it says are unjustified compensation payments under the settlement it reached with those affected by the 2010 Gulf of Mexico oil spill.
Europe’s banking regulator has broadened its bonus cap rules to bring in far more bankers within the scope of the regulation.
G4S Chief Executive Nick Buckles has stepped down with a 16 million pound package following a series of embarrassments, raising shareholder fears over the future direction of the company.
Some of Royal Dutch Shell’s shareholders called for a rethink of the company’s Alaska plans amid questions over the company’s troubled drilling programme there.
* Other countries have long been annoyed by Irish tax laws, but the benefit to the struggling country’s economy means the rules are unlikely to change.
* Tim Cook came to Capitol Hill prepared to face down senators furious over evidence that Apple Inc had avoided paying billions in taxes, but he left having won many of them over.
* James Bullard, a member of the Federal Reserve’s policy committee, warned Europe of becoming trapped in the economic stasis from which Japan is only now emerging.
* Microsoft’s new Xbox game console also serves as a home entertainment hub, a response to the rising popularity of mobile devices for playing games.
* A lawyer argued that Rajat Gupta, found guilty of leaking boardroom discussions, should be granted a new trial because a judge erroneously admitted wiretapped conversations.
THE GLOBE AND MAIL
* Civic leaders are adding to a chorus of calls on Toronto Mayor Rob Ford to clear the air about allegations of drug use amid growing concern that the scandal has derailed council’s business of governing.
* Without more support for industry investment in research and development, Canada will be hard-pressed to keep up with international competitors and will risk an erosion of its economic wellbeing, a report on the state of the nation’s science and technology landscape by the Science, Technology and Innovation Council has revealed.
Reports in the business section:
* The damage to the ground immediately surrounding an oil car that derailed on Tuesday and spilled some of its contents in rural Saskatchewan is apparently contained. On Tuesday morning, five tank cars carrying crude oil and operated by Canadian Pacific Railway Ltd derailed outside the town of Jansen, Saskatchewan.
* Federal NDP Leader Tom Mulcair says he was contacted by the provincial police anti-corruption squad in Quebec to discuss a suspected 17-year-old bribe offered to him. Mulcair says he never reached out to the police himself because he had no proof a bribe was actually being offered at a 1994 meeting with the now controversial ex-mayor of Laval, Quebec, Gilles Vaillancourt.
* Canada is investigating allegations that Eritrea’s diplomatic mission in Toronto has continued soliciting money for the East African regime’s military despite being warned by the Department of Foreign Affairs to stop.
* Gold mining stocks have been decimated in recent months, but Jamie Sokalsky does not think investors should expect any corresponding uptick in merger and acquisition activity. Speaking at the Bloomberg Canada Economic Summit, the chief executive of Barrick Gold Corp said there is a general “anti-M&A” mood in the gold space right now, and that investors don’t even ask him about it much anymore.
* Concerns are being raised that efforts to improve efficiency at Canadian Pacific Railway are contributing to a series of accidents at the railroad in recent months, including two more this week.
CHINA SECURITIES JOURNAL
– The China Securities Regulatory Commission should focus on its key duties of regulating the market and delegate unnecessary duties to other departments gradually, its Chairman Xiao Gang said on Tuesday.
SHANGHAI SECURITIES NEWS
– A major gold deposit with estimated reserves of 53 tonnes was discovered in Yili Valley of China’s northwestern Xinjiang province, government data showed. Total gold resources at the field are expected to exceed 100 tonnes, with a potential value of about 20 billion yuan ($3.26 billion).
– Local government officials said Dongguan in Guangzhou province remains a top destination for processing trade businesses, despite recent closures in the city being blamed on the continued strength of the yuan.
– The Shanghai government plans to allow cold-processed poultry meat to return to the market by the end of May as there have been no new confirmed cases of the H7N9 virus in China for more than a week, giving the poultry industry a chance to recover.
– Cosco Pacific Ltd, the container-terminal arm of China’s biggest shipping group, agreed to sell its stake in the world’s largest shipping-container manufacturer to its parent for $1.22 billion, according to a Hong Kong Stock Exchange filing.
– Three rice mills in central China’s Hunan province are being investigated after cadmium was found in their rice last week, local authorities said last week. The mills were ordered to recall their products and suspend business operations, according to a statement released by the county government.
* Australia’s Westfield Group is in talks to sell seven U.S. shopping malls to private real estate investment company Starwood Capital Group for more than $1 billion, a source said on Wednesday.
* Roche Holding AG teamed up with Sigma-Aldrich Corp to make an unsuccessful bid for Life Technologies Corp earlier this year, people familiar with the matter said.
* U.S. prosecutors are considering charging Steven Cohen’s SAC Capital Advisors as a criminal enterprise engaged in a long pattern of insider trading in stocks, according to a person familiar with the matter.
* Telecom Italia SpA is mulling spinning off its mobile unit along with its fixed-line network to bring new investors on board, three people, including a senior political source, told Reuters on Tuesday.
* Singapore state investor Temasek Holdings Pte Ltd has paid $500 million for a stake of around 10 percent stake in financial data provider Markit Group, a person familiar with the transaction said.
* Britvic Plc’s new chief executive is set to lay out plans for the soft drinks maker to continue as a standalone company, casting further doubt on its proposed merger with A.G. Barr Plc, Sky News reported, citing people close to Britvic.
* A boutique carmaker led by former General Motors Co executive Bob Lutz and China’s largest auto parts supplier made an offer this month to buy cash-strapped “green” car company Fisker Automotive, people familiar with the matter said.
* Chevron Corp is in advanced talks to sell most of its downstream assets in Egypt and Pakistan, three sources said, with the planned disposals seen raising around $300 million for the U.S. oil major.
* Finnish paper firm Ahlstrom Oyj is set to secure European Union approval for the merger of its label unit with Munksjo to form the world No. 1 speciality paper maker after agreeing to sell a German business, a person familiar with the matter said on Tuesday.
Fly On The Wall 7:00 AM Market Snapshot
Bristol-Myers (BMY) upgraded to Buy from Neutral at Citigroup
CVR Energy (CVI) upgraded to Neutral from Underperform at Macquarie
Cree (CREE) upgraded to Buy from Neutral at Sterne Agee
Roche (RHHBY) upgraded to Buy from Neutral at Citigroup
Terex (TEX) upgraded to Overweight from Equal Weight at Barclays
Volcano (VOLC) upgraded to Overweight from Equal Weight at First Analysis
Caesar’s Entertainment (CZR) downgraded to Neutral from Outperform at Credit Suisse
Carnival (CCL) downgraded to Neutral from Overweight at HSBC
Chart Industries (GTLS) downgraded to Hold from Buy at BB&T
Dick’s Sporting (DKS) downgraded to Market Perform from Outperform at BMO Capital
EPIQ Systems (EPIQ) downgraded to Market Perform from Outperform at William Blair
EQT Corporation (EQT) downgraded to Hold from Buy at Societe Generale
InterXion (INXN) downgraded to Neutral from Buy at Goldman
Joy Global (JOY) downgraded to Equal Weight from Overweight at Barclays
Newcastle (NCT) downgraded to Market Perform from Outperform at Keefe Bruyette
Rosetta Resources (ROSE) downgraded to Neutral from Outperform at Cowen
SodaStream (SODA) downgraded to Neutral from Overweight at JPMorgan
UBS (UBS) downgraded to Underperform from Market Perform at Keefe Bruyette
Warner Chilcott (WCRX) downgraded to Market Perform from Outperform at Leerink
Chart Industries (GTLS) initiated with an Outperform at Raymond James
Coca-Cola (KO) initiated with a Market Perform at BMO Capital
Cott Corp. (COT) initiated with a Market Perform at BMO Capital
Dr Pepper Snapple (DPS) initiated with a Market Perform at BMO Capital
Galena Biopharma (GALE) initiated with an Outperform at JMP Securities
Monster Beverage (MNST) initiated with an Outperform at BMO Capital
PepsiCo (PEP) initiated with an Outperform at BMO Capital
Popular (BPOP) initiated with an Outperform at Wells Fargo
Saks (SKS) rallied after NY Post reported Goldman Sachs (GS) hired for possible sale
Merck (MRK) announced $5B share repurchase
Moody’s placed Carnival’s (CCL) A3 rating on review for possible downgrade
Ford (F) raised North American capacity by 200,000 units, reduced summer shutdown, added jobs
NetApp (NTAP) reducing workforce by 900, expects $50M-$60M charge
BNY Mellon (BK) plans to increase Wealth Management sales force by 50%
Companies that beat consensus earnings expectations last night and today include:
Toll Brothers (TOL), Dycom (DY), NetApp (NTAP), Intuit (INTU)
Companies that missed consensus earnings expectations include:
Companies that matched consensus earnings expectations include:
Compuware (CPWR), Analog Devices (ADI)
- Since the financial crisis, bonds backed by a single loan have been less common than securities made up of a group of unrelated loans. But the market for loans on commercial properties has changed in recent months and is booming again–$12.1B so far this year–the Wall Street Journal reports
- Big phone companies (SAP, T, TEF, VZ, VOD, CCO) have begun to sell the vast amounts of data they gather about their subscribers’ locations, travels and Web-browsing habits. The information provides a powerful tool for marketers but raises new privacy concerns, the Wall Street Journal reports
- Apple’s (AAPL) ability to shelter billions of dollars of income from tax has depended on an unusual loophole in the Irish tax code that helps the country compete with other countries for investment and jobs. Apple channeled profits into Irish-incorporated subsidiaries that had no declared tax residency anywhere in the world, Reuters reports
- The dollar languished well below last week’s 4 1/2-year high against the yen today, ahead of testimony from the Fed Chairman Bernanke after two regional Fed presidents hinted that the central bank will continue its bond-buying scheme, Reuters reports
- Samsung (SSNLF) and LG Electronics are reworking their strategies for high-end TVs after spending billions of dollars on a new display technology that’s behind schedule and costs nearly $10,000 a set. The misstep has created an opening for Sony (SNE), Sharp (SHCAY) and Chinese maker Skyworth Digital, Bloomberg reports
- Apple’s (AAPL) bonds have lost $280.6M of market value since buyers snapped up $17B of the iPhone maker’s debt last month, declining as yields climb from record lows, Bloomberg reports
Aeterna Zentaris (AEZS) may sell up to 2.5M common shares for up to $4.6M
Alcobra (ADHD) 3.125M share IPO priced at $8.00
Baltic Trading (BALT) files to sell common stock
CVR Partners (UAN) files to sell 12M shares for CVR Energy interests
Cadiz (CDZI) files to sell 9.69M shares of common stock for holders
Ironwood (IRWD) 10.5M share Secondary priced at $13.00
M/A-COM (MTSI) files to sell 9.24M shares of common stock for holders
NPS Pharmaceuticals (NPSP) 6M share Secondary priced at $14.53
PGT (PGTI) 11M share Secondary priced at $7.75
Portola Pharmaceuticals (PTLA) 8.423M share IPO priced at $14.50
Sensata (ST) announces 12.5M common share offering by selling holders