- Yellen’s first test (Reuters)
- Let weak banks die, says eurozone super-regulator (FT)
- Yellen, Carney Face Explaining Policy as Benchmarks Near (BBG)
- Commerzbank Said Seeking Debt Buyers in $6.8 Billion Spain Exit (BBG)
- Junk Yield Premiums Soar on China’s Looming First Default (BBG)
- Millions Trapped in Health-Law Coverage Gap (WSJ)
- Mandel Tops Best-Earning Hedge Funds for Clients in 2013 (BBG)
- Swiss Brace for Sour EU Relations After Immigration Vote (BBG)
- Detroit Bankruptcy Talks to Resume (WSJ)
- Olympic Diva Shrugs Off Hotel Gripes to Sing Sochi’s Praises (BBG)
- Toyota to stop making cars in Australia from 2017 (Reuters)
- Alwaleed’s Kingdom Beats Buffett on Hidden Treasures (BBG)
- Traders Crying Over Losses Missing HSBC’s Bargains (BBG)
- How to save France (FT)
Overnight Media Digest
* Since certain states declined to expand Medicaid, 4.8 million people had fallen into a coverage gap — they earn too little to qualify for health-law subsidies to buy private insurance and yet aren’t eligible for benefits under existing state programs.
* PG&E Corp said it will build opaque fences around critical transmission substations, including at the Metcalf subsidiary that was heavily damaged by gunmen firing from outside a chain-link fence last year.
* University of Missouri defensive lineman Michael Sam, the Southeastern Conference’s reigning defensive player of the year, revealed he is gay to multiple media outlets Sunday and could be the first openly homosexual NFL player if he is drafted in May.
* Influential proxy-advisory firm Institutional Shareholder Services Inc recommended that Apple Inc shareholders reject activist investor Carl Icahn’s proposal that the iPhone maker buy back $50 billion of its stock.
* Federal and state officials are pushing emergency measures to get propane to people who need the gas to heat their homes beset by persistent frigid temperatures. The measures, which include extending working hours for truckers and ordering a pipeline company to prioritize shipments to areas with tight supplies, are meant to alleviate a propane crunch that has sent prices of the fuel to record highs.
* A Food and Drug Administration panel could soon help determine the fate of billions of dollars in pain drugs such as Advil and Aleve over the question of which ones pose a greater cardiac risk.
* Barclays Plc and the UK banking regulator have launched investigations into allegations that information about thousands of the bank’s customers was stolen and sold to brokers.
* AOL Inc Chief Executive Tim Armstrong said on Saturday that the company would reverse a recent change to its 401(k) retirement plan and apologized for remarks used to explain the initial change.
* DreamWorks Animation SKG Inc is diversifying into children’s books, creating a publishing unit that this year will issue titles based on such DreamWorks movies as “Kung Fu Panda” and “Madagascar.”
* Sprint Corp officials are regrouping to decide whether trying to acquire smaller rival T-Mobile US Inc makes sense after antitrust officials expressed strong sentiments against a deal publicly, people familiar with the matter said.
* Canadian base-metal producer HudBay Minerals Inc Sunday announced a hostile bid to acquire the 84 percent stake of Augusta Resource Corp it doesn’t already own, for about $325.6 million in stock to gain access to additional copper reserves.
* Airlines in the Asia-Pacific region will need 12,820 new airplanes valued at $1.9 trillion over the next 20 years, a forecast by Boeing Co showed. The region will account for 36 percent of global aircraft deliveries over the next two decades, with three-fourths of the new planes aimed at boosting capacity, said Randy Tinseth, Boeing’s vice president for marketing.
* Canada’s International Forest Products Ltd agreed Sunday to acquire Tolleson Ilim Lumber Co from Russia’s Ilim Timber Continental SA for $180 million, in a deal that would make it one of the five largest lumber producers in North America based on production capacity.
* As Argentina struggles to stave off a second debt default in 13 years, two U.S. hedge funds, Gramercy Funds Management LLC and Elliott Management Corp, are playing central but opposing roles in the country’s efforts to untangle itself from the previous crisis.
* Most private-equity firms are having to raise funds by sending executives around the world to drum up interest from investors after the Volcker rule forced private-equity firms out from under the wing of banks that once provided them with funding.
* Hybrid Tech Holdings LLC, one of the bidders for control of failed luxury car maker Fisker Automotive Inc, has hired a former top Ford Motor Co executive to orchestrate the restart of operations if it wins. The Chinese company said it retained Martin Leach to bring Fisker out of mothballed status.
Billionaire investor George Soros’s Quantum Endowment hedge fund had its second-best year on record in dollar terms in 2013, when it picked up $5.5 billion.
Daniele Nouy, the euro zone’s new chief banking regulator after taking over the Single Supervisory Mechanism, has warned that some of the bloc’s lenders have no future and should be allowed to die.
Barclays and Britain’s Financial Conduct Authority have launched an investigation into the alleged theft of confidential information about 27,000 of the lender’s customers.
Britain’s Energy Secretary Ed Davey has written a letter to regulators saying profit margins of big energy companies’ gas supply units are too high, and suggesting that dominant player British Gas may need to be broken up.
Russia is planning to crack down on Bitcoin, having warned that those who use “cryptocurrencies” are breaking the law, making good on its promise of new measures to curb the virtual currency.
* A confidential email has revealed that a top Chinese regulator directly asked Jamie Dimon, JPMorgan Chase’s chief executive, for a “favor” to hire a young job applicant. The applicant, a family friend of the regulator, now works at JPMorgan.
* The telecommunications, media and Internet industries will be watching to see how Tom Wheeler, chairman of the Federal Communications Commission (FCC), responds to last month’s federal appeals court decision that invalidated the rules created by the FCC in 2011 to maintain an open Internet.
* Bill Keller, a columnist at the New York Times and its former executive editor, will leave the paper to become editor in chief of The Marshall Project, a nonprofit journalism start-up focused on the American criminal justice system.
* Tim Armstrong, Chief Executive of AOL Inc, did an about-face on Saturday, reversing an unpopular change in the media company’s employee benefits program and apologizing for publicly singling out two families’ health care issues as a cause of those changes.
* Barclays Plc and British regulators are looking into the possible theft of personal data concerning at least 2,000 clients after a British newspaper report.
* Proxy advisory firm Institutional Shareholder Services told clients on Sunday that they should vote against Carl Icahn’s proposal calling for a $50 billion Apple Inc stock buyback, giving the iPhone maker a notable new ally in its attempts to beat back.
* Startups and much larger companies are taking increasing advantage of a 2012 law that allows them to file for public offerings while slowing the release of financial information.
* Morgan Stanley does not often appoint new members to its operating committee, which made up of the top echelon of the firm’s leadership. On Friday, it added four new executives to its most senior group of managers.
THE GLOBE AND MAIL
* Canadian Finance Minister Jim Flaherty is set to unveil on Tuesday a final phase of belt-tightening in a budget that is a prologue to balancing the books just ahead of an expected 2015 federal election, a feat the Tories hope will generate sufficient surplus cash to offer tax cuts and other inducements to voters.
* Wages are set to take center stage in a tough bargaining climate this year, as unionized workers push for better compensation after seeing pay increases ebb to a 16-year low.
Reports in the business section:
* After years of costly mistakes, Barrick Gold Corp and Kinross Gold Corp have ushered in an era of austerity in the gold sector, to be seen when Canadian miners report earnings this week. Investors are expecting gold producers to reduce their bullion reserves, write down more assets and record lower profits.
* An Ontario university allowed a non-Muslim to enroll in the Huron College course, The Muslim Voice: Islamic Preaching, Public Speaking and Worship, but then kicked him out because they said they didn’t want to open the course to auditors.
* A Canadian businessman who served two and a half years of a nine-year prison sentence in Cuba on charges of bribery, tax evasion and “activities damaging to the economy” has abruptly returned to Canada. Sarkis Yacoubian, president of Tri-Star Caribbean import company, was expelled from Cuba and so, is not subject to transfer conditions that would require him to serve the rest of his sentence in Canada.
* Most of the big North American gold miners report year-end results this week, and, thanks in part to the reserve issue, they could be a huge mess.
* Law firm Heenan Blaikie’s sudden demise is a much-needed wake-up call for Canadian law firms, which are chasing too little high-dollar business.
SHANGHAI SECURITIES NEWS
– The People’s Bank of China has signalled that it will take a more active approach to supplying liquidity to the interbank market in its latest policy statement published on Saturday. The central bank confounded the market twice last June and December when it allowed dramatic rises in money rates, roiling global financial markets.
– China CEFC Energy Co Ltd, a private Chinese oil trade firm, and its Shanghai unit have bought a combined stake of more than 5 percent stake in state-owned giant Sinochem International Corp – a major move by a private company to enter China’s state manipulated energy sector.
CHINA SECURITIES JOURNAL
– China’s market for eco-friendly cars should see fresh momentum in 2014 after the government announced policy measures to support the sector, analysts say.
– Local governments should try to ensure that China’s latest urbanisation drive does not translate into further rises for the country’s already sky-high property prices, this major official financial newspaper said in a commentary.
– Top listed housing firm China Vanke Co Ltd saw its January sales climb 45 percent to 27.65 billion yuan ($4.6 billion), a further sign of a robust property market.
– China was likely to have become the world’s largest trader in goods for the first time last year, overtaking the United States. The milestone underscores the country’s steady expansion in foreign trade, particularly since the 2008 global financial crisis.
– Just hours after the official China Central Television (CCTV) accused police of doing nothing about the rampant sex trade in Dongguan, known as China’s “sex city”, 67 people were detained and 12 entertainment venues shut down late on Sunday.
– The recent visit to Russia by China’s President Xi Jinping have laid solid foundations for the two countries to further develop their bilateral relations in 2014, a commentary by this mouthpiece of the ruling Communist Party of China said.
VODAFONE IN 5.8 BLN STG BID FOR SPAIN’S ONO
Vodafone has moved a step closer to acquiring Spanish cable company Ono after tabling a 7 billion euro ($9.53 billion) takeover bid as it attempts to revive its ailing European business.
NEW BANKING WATCHDOG TO BE HEADED BY OUTSIDER
Richard Lambert, the former head of the Confederation of British Industry, is expected to call on Tuesday for the new professional standards body to be led by a chairman from outside the banking fraternity.
BARCLAYS BLASTED OVER ‘CATASTROPHIC’ THEFT OF THOUSANDS OF CUSTOMER FILES
Barclays is under scrutiny by regulators and could face a hefty fine after thousands of confidential customer files were stolen in a data breach described as catastrophic by an adviser to Britain’s business secretary, Vince Cable.
CITY BONUS ROW REIGNITES WITH BARCLAYS TO ADMIT £2BN IN PAYMENTS
Controversy over bonuses will be re-ignited this week when Barclays admits it paid its staff more than last year, fuelling predictions that the amount of bonuses paid out across the Square Mile since the 2008 crisis could soon hit 80 billion pounds.
ED DAVEY LEADS ATTACK ON GAS AND ELECTRICITY PROVIDERS
Ed Davey, Britain’s Energy Secretary, has accused the Big Six gas suppliers of boasting an average profit margin three times higher than that of electricity companies, reserving particular ire for the market dominance of British Gas.
CROSSRAIL SEEKS BETTER RETURN ON PROPERTY
The company building the east-west rail line across London is seeking to cash in on the capital’s rising property market in an attempt to make up a potential funding shortfall.
Fly On The Wall 7:00 AM Market Snapshot
No domestic economic reports of note are scheduled.
AkzoNobel (AKZOY) upgraded to Buy from Neutral at Citigroup
American Express (AXP) upgraded to Overweight from Equal Weight at Morgan Stanley
Bloomin’ Brands (BLMN) upgraded to Strong Buy from Outperform at Raymond James
Bristol-Myers (BMY) upgraded to Outperform from Market Perform at BMO Capital
Bristow Group (BRS) upgraded to Outperform from Market Perform at William Blair
Casella Waste (CWST) upgraded to Buy from Hold at KeyBanc
Cheniere Energy (LNG) upgraded to Outperform from Neutral at Credit Suisse
Cinemark (CNK) upgraded to Overweight from Neutral at JPMorgan
CommVault (CVLT) upgraded to Outperform from Market Perform at JMP Securities
Diamond Offshore (DO) upgraded to Market Perform from Underperform at FBR Capital
DineEquity (DIN) upgraded to Strong Buy from Outperform at Raymond James
FMC Technologies (FTI) upgraded to Outperform from Market Perform at Raymond James
Fifth Third Bancorp (FITB) upgraded to Positive from Neutral at Susquehanna
Ingram Micro (IM) upgraded to Buy from Hold at Brean Capital
JPMorgan (JPM) upgraded to Buy from Hold at Societe Generale
LabCorp (LH) upgraded to Buy from Hold at Deutsche Bank
Legg Mason (LM) upgraded to Outperform from Market Perform at Keefe Bruyette
Liquidity Services (LDDT) upgraded to Outperform from Sector Perform at RBC Capital
Mead Johnson (MJN) upgraded to Outperform from Market Perform at Wells Fargo
Meredith (MDP) upgraded to Buy from Neutral at Citigroup
Progressive Waste (BIN) upgraded to Buy from Hold at Canaccord
Red Robin (RRGB) upgraded to Buy from Underperform at BofA/Merrill
Red Robin (RRGB) upgraded to Strong Buy from Outperform at Raymond James
St. Jude Medical (STJ) upgraded to Buy from Hold at Stifel
St. Jude Medical (STJ) upgraded to Outperform from Market Perform at William Blair
Statoil (STO) upgraded to Overweight from Equal Weight at Morgan Stanley
Sun Hydraulics (SNHY) upgraded to Outperform from Neutral at RW Baird
Synageva (GEVA) upgraded to Overweight from Neutral at JPMorgan
T-Mobile (TMUS) upgraded to Overweight from Equal Weight at Barclays
Urban Outfitters (URBN) upgraded to Buy from Hold at Brean Capital
ArcelorMittal (MT) downgraded to Neutral from Buy at BofA/Merrill
Bally Technologies (BYI) downgraded to Neutral from Buy at Janney Capital
FMC Technologies (FTI) downgraded to Market Perform from Outperform at William Blair
Fairway Group (FWM) downgraded to Underperform from Neutral at BofA/Merrill
M.D.C. Holdings (MDC) downgraded to Neutral from Outperform at Credit Suisse
Monster Worldwide (MWW) downgraded to Market Perform from Outperform at FBR Capital
National Fuel (NFG) downgraded to Market Perform from Outperform at BMO Capital
American Capital Senior Floating (ACSF) initiated with a Buy at Deutsche Bank
American Capital Senior Floating (ACSF) initiated with a Neutral at Citigroup
American Capital Senior Floating (ACSF) initiated with an Outperform at Keefe Bruyette
Aratana Therapeutics (PETX) initiated with an Overweight at Barclays
Cypress Energy (CELP) initiated with a Buy at Stifel
FireEye (FEYE) initiated with an Outperform at Wells Fargo
Rocket Fuel (FUEL) initiated with a Buy at Goldman
Toyota (TM) to end production in Australia by the end of 2017
James River Coal (JRCC) to explore strategic alternatives
Barclays (BCS) acknowledged security breach reported by Mail on Sunday
Duke Energy (DUK) pledged to take care of Dan River, surrounding areas, continues to address coal ash release in Eden, NC
Boeing (BA) sees $1.9T 20-year market for new airplanes in Asia Pacific
LinkedIn (LNKD) killing Intro app, Slidecast
Deutsche Telekom (DTEGY) acquired remaining shares of T-Mobile Czech Republic
Hasbro’s (HAS) cost savings initiative targets $100M in annual savings by 2015
Companies that beat consensus earnings expectations last night and today include:
SouFun (SFUN), Sohu.com (SOHU), Changyou.com (CYOU)
Companies that missed consensus earnings expectations include:
Hasbro (HAS), CNA Financial (CNA), Boardwalk Pipeline (BWP)
Companies that matched consensus earnings expectations include:
ISS recommends Apple (AAPL) shareholders reject Icahn (IEP) proposal, NYT reports
Sprint (S) rethinks bid for T-Mobile (TMUS) amidst regulatory opposition, WSJ reports
Sony’s (SNE) troubles could lead to breakup suggested by Loeb, Bloomberg reports
Bebe Stores (BEBE) exploring sale, Reuters reports
Toyota (TM) near $1B deal to end U.S. criminal probe, WSJ reports
AOL (AOL) CEO apologizes and reinstates former benefits policy, WSJ reports
Nestle (NSRGY) said to explore reducing its $30B L’Oreal (LRLCY) stake, Bloomberg reports
Canadian PM Harper: Keystone XL pipeline approval ‘inevitable,’ Bloomberg reports
NBCUniversal (CMCSA), WWE (WWE) considering separation, NY Post reports
Nielsen (NLSN) shares could rise over 40
AmTrust Financial (AFSI) book value merits scrutiny
Capital Federal (CFFN) could produce 15% returns this year
Wendy’s (WEN) could reduce store ownership to 10%
Twitter (TWTR) could continue to fall
Texas Industries (TXI) holders can stay with Martin Marietta (MLM)
AT&T (T) Skechers (SKX) look undervalued
Tecogen (TGEN) files to sell $5M of common stock
eOn Communications (EONC) files to sell 606,140 shares of common for holders