- Emerging market sell-off raises specter of contagion (Reuters)
- China Bank Regulator Said to Issue Alert on Coal Mine Loans (BBG)
- Argentina to Ease FX Controls After Peso Devaluation (BBG)
- Pimco’s Gross problem: who can succeed the ‘Bond King’? (Reuters)
- Ukraine protesters seize building, put up more barricades (Reuters)
- Mideast Turmoil Dominates Gathering of Business Elite (WSJ)
- Central Banks Withdraw Dollar Funding (WSJ) – oh really?
- Samsung warns of weak earnings growth this quarter (FT)
- Three explosions rock Cairo, killing 5 (USA Today)
- Vitol to Trafigura Chasing U.S. NGLs as Traders Cash In (BBG)
- EBay reliance on PayPal for growth lowers chances of spinoff (Reuters)
- Pentagon report faults F-35 on software, reliability (Reuters)
Overnight Media Digest
* Carl Icahn says he’s prepared for a proxy fight to win two seats on the board of eBay Inc and push the company to calve off its PayPal unit.
* Investors dumped currencies in emerging markets, underscoring growing anxiety about the ability of developing nations to prop up their economies as they face uneven growth.
* The turmoil of the Middle East descended on this Swiss Alpine town of Davos, where Iranian, Israeli and American leaders laid out often competing visions of the region’s future during a conference for the world’s business elite.
* Some former securities brokers who lost their licenses have found a creative way to keep selling investments to their clients: by using insurance licenses.
* Hedge fund managers are roiling the clubby art market -seeking ‘distressed’ artists, paying record sums and dumping those who don’t pay off.
* The U.S. Food and Drug Administration took another action against India’s Ranbaxy Laboratories Ltd on Thursday, prohibiting it from making or selling drug ingredients from its Toansa, India, plant for the U.S. market.
* Google Inc has been working hard to change its profile as an ally of the Democratic Party, courting Republicans and building alliances with conservatives at a time when regulators and Congress are considering issues affecting its business interests.
* Microsoft Corp, in the midst of major change, said its fiscal second-quarter profit climbed 2.8 percent, bolstered by strong demand for the company’s new Xbox videogame console.
* Microsoft Corp’s foray into making smartphones was dealt a setback as Nokia Corp said sales of its Lumia Windows line posted a sales decline for the fourth quarter.
* International Business Machines Corp has agreed to sell its low-end server business to Chinese computer maker Lenovo Group Ltd after talks broke down last spring. Now the companies face a new challenge: convincing U.S. security agencies to bless the transaction.
* Facing competition from rivals offering smartphones with bigger screens, Apple Inc is planning larger displays on a pair of iPhones due for release this year, people familiar with the situation said.
* General Motors Co newly appointed Chief Executive Mary Barra said she intends to accelerate the auto maker’s ongoing push to expand profit margins in North America while increasing its global market share.
* Starbucks Corp reported slightly lower-than-expected revenue and same-store sales growth in its fiscal first quarter due, in part, to consumers’ shift to online shopping during the holidays.
* Under a new policy being formulated, Goldman Sachs Group Inc won’t allow communication over third-party instant-messaging services created by Bloomberg, Yahoo and others in a bid to protect proprietary information.
* The software behind the attack at Neiman Marcus Group lurked in the luxury retailer’s payment system undetected for months, scraping data from as many as 1.1 million accounts and ending its mission before it was discovered.
* The U.S. energy boom is curtailing the country’s demand for imported oil, and Mexico’s Pemex is being forced to look farther afield.
* Samsung Electronics Co forecast a weak first half after releasing fourth-quarter earnings that showed growth slowed sharply.
* Target Corp’s massive data breach piles another weight on Chief Executive Gregg Steinhafel, who is already under pressure to stem losses from the chain’s venture into Canada and to keep local-store shoppers from defecting to online rivals.
* Online lender Western Sky Financial LLC has agreed to pay a $1.5 million fine and refund interest payments to borrowers under an agreement reached with New York Attorney General Eric Schneiderman.
* Jana Partners LLC owns a big stake in Juniper Networks Inc making it the second major shareholder activist to invest in the networking-gear company recently.
* The Obama administration is set to complete a critical phase of its Keystone XL pipeline review next month, setting the stage for President Barack Obama to make a call on the politically charged decision in the thick of the midterm campaign season.
* The National Transportation Safety Board has issued recommendations to the Department of Transportation asking for a series of actions to address the risks of transporting crude by rail.
Bank of England Governor Mark Carney said in an interview to the BBC on Thursday that there was no immediate need to raise interest rates, and that decisions over its unemployment threshold were a matter for the Monetary Policy Committee.
A Goldman Sachs official said about 25 London-listed initial public offerings are expected in the second half of 2014. Alasdair Warren, Goldman Sach’s head of financial sponsors coverage in Europe, said “the desire to increase exposure to equities is accelerating”.
Business Secretary Vince Cable will investigate Labour party’s allegations of unnecessary selling of personal accident insurance to workers by six recruitment firms, namely Blue Arrow, Staffline, Acorn, Taskmaster, Randstad and Meridian.
British department store chain House of Fraser is pushing ahead with a return to the stock market after talks about a sale to its French counterpart Galeries Lafayette ended, according to sources.
Cambridge Satchel Company, which makes leather bags and has 10 stores across the UK, raised $21 million from private equity group Index Ventures.
* In her first extended public comments since taking over General Motors Co, Mary T. Barra vowed to quicken the company’s comeback from bankruptcy with improved products, better brands and consistently profitable operations around the world.
* Whistle-blower lawsuits claim Health Management Associates Inc tried to inflate its Medicare and Medicaid payments by admitting more patients.
* The theft of consumer data from luxury retailer Neiman Marcus Group LLC appears to have involved 1.1 million credit and debit cards.
* Coca-Cola and other corporations are starting to see global warming as an economically disruptive force affecting commodity costs and supply chains.
* Attorney General Eric H. Holder Jr. said that lawful marijuana businesses should have access to the American banking system and that the government would soon offer rules to help them gain it.
* Senator Edward J. Markey asked regulators to look into Herbalife Ltd, the company that has been in the cross hairs of hedge fund manager William A. Ackman.
* Sidney Gilman, the prosecution’s top witness in Mathew Martoma’s insider trial, said F.B.I. agents told him that the government’s true target was Steven A. Cohen, SAC’s billionaire founder.
* William S Simon, chief executive of Walmart for the United States, said on Thursday at the United States Conference of Mayors that the company was providing a $10 million fund to promote manufacturing in a public push to sell more American-made products.
* A year after an embarrassing trading blowup led to millions of dollars being docked from Jamie Dimon’s paycheck, the chairman and chief executive of JPMorgan Chase is getting a raise.
THE GLOBE AND MAIL
* Canadian Prime Minister Stephen Harper arrived at a massive refugee camp in Jordan just a day after enjoying the comforts of a presidential palace. Harper, on the final day of his visit to Israel and Jordan, was touring the Za’atari refugee camp in Jordan, just 12 kilometres from the Syrian border.
* A horrific fire that ripped through a seniors’ home in rural Quebec has left a tiny community reeling from what is feared to be the worst tragedy of its kind in decades. The blaze broke out in the bitter-cold early hours of Thursday in L’Isle-Verte, a Lower St. Lawrence village 230 kilometres downriver from Quebec City. Wind gusts spread it quickly through the 52-unit home. At least five people were killed and as many as 30 are unaccounted for.
Reports in the business section:
* Corporate Canada is beginning to feel the effects of a plunging Canadian dollar, with some businesses raising prices – or making plans to do so – to account for the higher cost of U.S. goods.
* Barrick Gold Corp warned it plans to cut gold reserves, take another impairment charge on its troubled Pascua Lama mine and produce less precious metal this year.
* The first case of a deadly pig virus that has killed millions of baby pigs in the U.S. has been confirmed in Canada, but authorities say there is no risk to human health or food safety. However, there are fears that it could drive up the price of pork.
* When a coalition of Arab nations convinced UNESCO to abruptly quash an exhibition on Jewish history in the Middle East this month, it was Canadian diplomats who led the campaign to have the decision overturned, the Simon Wiesenthal Center revealed this week.
* The Canadian dollar has been a target of debate, and much angst, since it was last above parity with the U.S. currency 11 months ago. Ever since, the Bank of Canada has been under the gun to bring it even closer to Earth to help fire up the economy.
* The deputy chairman at Rogers Communications Inc , Edward Rogers, warned that opening up the telecommunications market fully to foreign ownership could leave Canada as nothing more than a “branch plant” when it comes to investment in innovation and rural coverage.
SHANGHAI SECURITIES NEWS
– China’s retail sales are expected to grow around 13 percent this year, according to Fang Aiqing, vice-head of the commerce ministry.
– China’s state assets watchdog has urged state-owned companies to step up the fight against corruption.
China Securities Journal
– U.S. luxury electric car maker Tesla plans to set up a network of power charging stations in China.
CHINA BUSINESS NEWS
– China’s top five state-owned banks have all set their deposit rates to the maximum allowed by regulators to compete for deposits, according to unidentified sources.
MARK CARNEY: NO NEED FOR AN IMMEDIATE RATE RISE
Bank of England Governor Mark Carney has pledged there will be no “immediate” increase in interest rates as unemployment nudges closer to the 7 percent threshold in an apparent softening of his forward guidance policy.
BANKERS IN DRIVE TO BOOST SME LOAN APPLICATIONS
If all businesses that required finance went ahead with their applications, based on the current approval rates, there would be a significant economic uplift, said the BBA.
“Businesses are more likely to get finance than they think,” said BBA chief executive Anthony Browne.
OUTGOING LLOYDS CHAIRMAN TO HEAD UK ACCOUNTING REGULATOR
The retiring chairman of state-backed Lloyds, Sir Win Bischoff, has been named as the next head of Britain’s accounting regulator, days after being drawn into controversy over the bank’s handling of the proposed sale of more than 600 branches to the Co-op.
INTEREST RATE RISE WOULD UNDERMINE RECOVERY, WARNS MPC MEMBER
A leading Bank of England policymaker, Paul Fisher, a member of the central bank’s monetary policy committee, warned on Thursday that a rise in interest rates risked undermining the recovery and the cost of credit should remain low until living standards begin to rise.
FALLON SET TO HAND OVER THE DEEDS TO THE LAND REGISTRY
Land Registry, which holds the titles to most of the land in England and Wales could be sold or part-privatised in the latest move by the Government to raise billions from state assets. Michael Fallon, the Business Minister, laid out the options for the Land Registry yesterday as he kick-started a consultation on the 150-year-old organisation.
TEMPERATURES SOAR AS ‘CONCERNED’ SSE PREDICTS PROFITS RISE
SSE has been accused of hypocrisy after claiming that bill-payers are “at the heart of the debate” about energy, while it is forecasting a near-9 per cent rise in profits. On Thursday, the company forecast pre-tax profits for the year to the end of March of more than 1.5 billion pounds, an 8.8 per cent rise on the previous year’s profit of 1.4 billion pounds, and will boost the dividend by 3 per cent.
HIGH STREET CHAIN BATHSTORE GROOMED FOR SALE
Sky News understands that Endless, the investment fund that acquired Bathstore in May 2012, has decided to explore a sale of the company, which operates more than 150 shops across the country. Rothschild, the investment bank, has been appointed to sound out interest from potential buyers.
ENERGY BOSS ATTACKS PRICE COMPARISON WEBSITES
The boss of Co-operative Energy has accused price comparison websites of misleading customers and pushing up energy bills. Group General Manager Ramsay Dunning has called on the likes of uSwitch, MoneySupermarket.com and Energy Helpline to disclose how much they charged in commission each time a business or household moves supplier.
Fly On The Wall 7:00 AM Market Snapshot
Domestic economic reports scheduled for today include weekly export sales of various commodities, due at 8:30 am ET.
Alumina (AWC) upgraded to Neutral from Underperform at BofA/Merrill
Angie’s List (ANGI) upgraded to Buy from Neutral at B. Riley
BancorpSouth (BXS) upgraded to Buy from Hold at Wunderlich
Harman (HAR) upgraded to Overweight from Equal Weight at Barclays
Jacobs Engineering (JEC) upgraded to Buy from Hold at Jefferies
Juniper (JNPR) upgraded to Outperform from Market Perform at William Blair
Juniper (JNPR) upgraded to Overweight from Equal Weight at Barclays
Nokia (NOK) upgraded to Buy from Hold at Societe Generale
SVB Financial (SIVB) upgraded to Overweight from Equal Weight at Evercore
Arctic Cat (ACAT) downgraded to Market Perform from Outperform at Raymond James
Autoliv (ALV) downgraded to Underweight from Equal Weight at Barclays
Citigroup (C) downgraded to Neutral from Overweight at Atlantic Equities
Cleveland BioLabs (CBLI) downgraded to Hold from Buy at Cantor
Cleveland BioLabs (CBLI) downgraded to Perform from Outperform at Oppenheimer
Coach (COH) downgraded to Hold from Buy at Cantor
Fairchild Semiconductor (FCS) downgraded to Underperform from Neutral at BofA/Merrill
FireEye (FEYE) downgraded to Equal Weight from Overweight at Barclays
Mellanox (MLNX) downgraded to Underweight from Equal Weight at Barclays
TRW Automotive (TRW) downgraded to Equal Weight from Overweight at Barclays
Walter Energy (WLT) downgraded to Market Perform from Outperform at Wells Fargo
CBS (CBS) initiated with a Buy at Topeka
ChannelAdvisor (ECOM) initiated with a Market Perform at BMO Capital
Chipotle (CMG) initiated with an Outperform at Oppenheimer
Commercial Metals (CMC) initiated with a Neutral at Credit Suisse
Corrections Corp. (CXW) initiated with a Fair Value at CRT Capital
Demandware (DWRE) initiated with a Market Perform at BMO Capital
Diana Shipping (DSX) initiated with an Equal Weight at Evercore
Discovery Communications (DISCK) initiated with a Buy at Topeka
Discovery (DISCA) initiated with a Buy at Topeka
Disney (DIS) initiated with a Hold at Topeka
Geo Group (GEO) initiated with a Buy at CRT Capital
Jive Software (JIVE) initiated with a Market Perform at BMO Capital
Navios Maritime Partners (NMM) initiated with an Equal Weight at Evercore
NetSuite (N) initiated with a Market Perform at BMO Capital
Pandora (P) initiated with an Outperform at Oppenheimer
Safe Bulkers (SB) initiated with an Overweight at Evercore
Scorpio Bulkers (SALT) initiated with an Overweight at Evercore
Tangoe (TNGO) initiated with an Outperform at BMO Capital
Tempur Sealy (TPX) initiated with a Buy at BofA/Merrill
Time Warner Cable (TWC) initiated with a Hold at Topeka
Viacom (VIAB) initiated with a Hold at Topeka
Viasystems (VIAS) initiated with a Buy at Canaccord
Qualcomm (QCOM) acquired patent portfolio from Hewlett-Packard (HPQ)
McKesson (MCK) to acquire Celesio for EUR 23.50 per share
Microsoft (MSFT) expects Nokia (NOK) deal to close this quarter
GlaxoSmithKline (GSK) received positive CHMP opinion for diabetes drug
Juniper (JNPR) CEO says to announce new operational plan within weeks
Williams (WMB) expects to boost FY dividend by 20% in 2014, 2015
Stanley Black & Decker (SWK) committed to returning $1.5B-$2B to stakeholders over two years
Companies that beat consensus earnings expectations last night and today include:
Covidien (COV), Stanley Black & Decker (SWK), Western Alliance (WAL), Celanese (CE), Compuware (CPWR), KLA-Tencor (KLAC), E-Trade (ETFC), Dolby (DLB), ShoreTel (SHOR), Leggett & Platt (LEG), Juniper (JNPR), Intuitive Surgical (ISRG), Discover (DFS), Microsoft (MSFT), Starbucks (SBUX)
Companies that missed consensus earnings expectations include:
Matthews (MATW), ResMed (RMD), Delta Apparel (DLA), Synaptics (SYNA), Digi International (DGII), International Game (IGT), TESSCO (TESS)
Companies that matched consensus earnings expectations include:
Cathay General (CATY), Applied Micro Circuits (AMCC), Open Text (OTEX), Hexcel (HXL), Covisint (COVS)
CNN (TWX) says some social media accounts compromised, Bloomberg reports
FBI to retailers: More credit card breaches (TGT) will happen, Reuters reports
Boeing (BA): Dreamliner reliability improving but not satisfactory, Reuters reports
Boeing (BA), General Dynamics (GD) reach $400M settlement with U.S. Navy, Reuters reports
T. Rowe Price (TROW) encourages Time Warner Cable (TWC) to talk to Charter (CHTR), FT reports
Liberty Global (LBTYA), Ziggo talks continue, WSJ reports
Goldman (GS) to limit traders’ use of chat services, WSJ reports
Chrysler (FIATY) plans to expand global Jeep sales, Detroit News reports
American Midstream Partners (AMID) 3.4M share Secondary priced at $26.75
Ashford Hospitality Prime (AHP) 8M share Secondary priced at $16.50
Atossa Genetics (ATOS) files to sell common stock and warrants, no amount given
Care.com (CRCM) 5.35M share IPO priced at $17.00
Derma Sciences (DSCI) files to sell common stock
E2open (EOPN) 4.661M share Secondary priced at $25.0030
Independence Realty Trust (IRT) 7M share Secondary priced at $8.30
Kips Bay Medical (KIPS) 5.25M share Secondary priced at $.70
NanoString (NSTG) 2.88M share Secondary priced at $18.50
Progenics (PGNX) files $150M mixed securities shelf
Rice Energy (RICE) 44M share IPO priced at $21.00
Tonix Pharmaceuticals (TNXP) files to sell common stock
XenoPort (XNPT) 10M share Secondary priced at $6.00