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News

� BA, EADS..tanker contact in focus today

o EADS submits bid for US Air Force tanker contract � NYT

� Financial reform:� Grassley Airs Concerns As Vote Nears on Financial Bill

� Iowa Republican Sen. Charles Grassley is "very concerned" about a provision in the financial overhaul bill designed to pay for the legislation, an aide said Thursday, potentially complicating White House efforts to build a filibuster-proof majority to back the measure.

� If Mr. Grassley decides to vote against the bill, Democrats would be left with little margin for error when they bring the bill to the Senate floor, which could happen as soon as next week. Mr. Grassley was one of four Republicans to support an earlier version of the bill when it narrowly passed the Senate in May

� http://online.wsj.com/article/SB10001424052748703609004575355273372451944.html?mod=WSJ_hps_LEFTWhatsNews

� Tech busy today:� TSM:� Taiwan Semiconductor announces June consolidated sales of NT$36.33B, +37.0% y/y � looks OK

o TSMC 2Q10 revenues top guidance and expectations. Consolidated Sales hit an all time high for the third straight month. TSMC will hold an investors event on July 29 to review its performance during the second quarter, and guidance for Q3.

o SCSC- up 8% pre-announced better Q4. SCSC expects sales to hit an all time high that is above both estimates and prior guidance. SCSC was calling for product shortages in the Q, and this beat could be driven by shortages being lower than expected.

o LWSN- up 4% Solid Q on the back of better licensing revs and a fairly robust maintenance renewal cycle in North America. Guidance disappointed, but mgmt did offer FY guidance for the first time since 08. LWSN also is known to guide conservatively.

� GOOGLE SAYS CHINA RENEWED ITS INTERNET LICENSE� - BBG��

� China�s Car Demand Grows at Slowest Pace in 15 Months

o Sales of cars, sport-utility vehicles and multipurpose vehicles in the world�s largest auto market rose 19 percent from a year earlier to 1.04 million last month, the China Association of Automobile Manufacturers said in an e-mailed statement today.

o It was the smallest increase since March 2009.

� MSG WSJ negative on Madison Square Garden

o No Fast Fix for Lingering MSG Headaches

o That's even more true given LeBron James's decision Thursday to pass up the New York Knicks in favor of the Miami Heat

o http://online.wsj.com/article/SB10001424052748704111704575355301240376306.html?mod=djemheard_t

Consumer :�� COSI +14.2% (Q2 comps)

� Consumer :�� RGS Regis reports Q4 consolidated comps (2.7%) vs Street around� (1%)

� Consumer :� Li & Fung Ltd., the biggest supplier to retailers including Wal-Mart Stores Inc., rose the most in five months in Hong Kong after announcing acquisitions and agreements that may generate $1 billion in sales next year.�� Li & Fung rose 7.4 percent

� Bovis Homes Group H1 trading update

o Homebuilders lost ground in British share trading on Friday, after Bovis Homes painted a lackluster picture of the housing market in the first six months of the year.

� Bodycote up 8.5% after seeing big earnings beat � MW

� Michael Page up 3.8% after trading update � MW

� Music:� concerts

o The concert business, a lone bright spot in the struggling music industry, is in trouble this summer. A tale of bad backs, canceled acts and angry fans

o Compared to last year, average ticket prices for the top 100 tours are down 6%, with tickets sold down 12%, and gross ticket revenues down 17%

o http://online.wsj.com/article/SB10001424052748703636404575353351111409566.html

� Fed Watch: Fed reports balance sheet assets of $2.34T on Wednesday, +$1.16B w/w and +$340.9B y/y

o Holdings of US Treasury securities were $776.9B on 7-Jul, +$8M w/w and +$103.5B y/y.

o Holdings of mortgage-backed securities were $1.1T on 7-Jul, +$163M w/w and +$655.8B y/y.

o Holdings of federal agency debt securities were $164.8B on 7-Jul, unch. w/w and +$66.9B y/y.

� Fed Watch:� QE2 or lower for longer?

o Goldman wants it, Krugman would welcome it, but what about the Fed? Is it ready to set the printing press running again and start buying assets?

o According to a seemingly well-informed article in the Washington Post the answer is no � unless things get much worse.

o http://ftalphaville.ft.com/blog/2010/07/09/282416/qe2-or-lower-for-longer/

� Money Flows:�

o AMG data reports equity fund outflows of ($11.6B) in w/e 7-Jul vs outflows of ($6B) in w/e 30-Jun

o Double dip fears sends investors to cash: EPFR - from Reuters

� Equity funds worldwide suffered more than $11 billion of net outflows in the first week of July, while money market funds saw the biggest inflows in 18 months amid fears of a double-dip recession, EPFR Global said on Friday

o Retail Investors Complacent on Corporate Bonds. Corporate Bond Funds Get 0.3% of Assets in Past Two Weeks Despite Sizeable Losses.� TRIMTABS'

� Retail investors turned away from corporate bonds in May and early June as sovereign debt fears hammered the prices of riskier assets. Yet sentiment has shifted significantly. The Corporate bond funds we track daily took in 0.1% of assets in the past week and 0.2% of assets in the past two weeks even though they dropped 0.9% in the past fortnight.

� From a contrarian perspective, the lack of selling after sizeable losses suggests corporate bond yields will rise over the near term.

� Exit strategies, central bankers:�

o Korea: To raise rates right now �takes guts� - from FT Alphaville

� After all those lectures about stimulus measures and well-meant (for the most part) advice from western central bankers about exit strategies, Asia appears to be leading the way...

� U.S. Decision on China Yuan �Wacky,� ISI�s Straszheim Says � per BBG

o The U.S. Treasury�s decision to stop short of branding China a currency manipulator has made it harder for the label to be imposed in the future, International Strategy & Investment Group�s Donald Straszheim said

o China took a �significant step� last month when it began to allow markets to drive the currency higher, the Treasury Department said in a report to Congress released yesterday. The report said the yuan �remains undervalued.�

o �The Treasury secretary basically certified that China is innocent through the second quarter of this year,� Straszheim, senior managing director for China research at ISI, said in a Bloomberg Television interview. �This is Washington raising the bar on its own behavior. It�s completely wacky.�

� Mexican Truck Dispute Hints at Trade Battle � WSJ link

� As President Barack Obama renews his focus on trade in a quest for job growth, an ongoing dispute with Mexico suggests the political battles ahead

� Over the past several weeks Mr. Obama has vowed to push for passage of pending free-trade agreements with Korea, Panama and Colombia, and seek other trade opportunities. Yet shortly after taking office, Mr. Obama signed a bill with a provision that effectively bans Mexican trucks from operating inside the U.S. The ban violates the North American Free Trade Act, and prompted Mexico to impose punitive tariffs last year on $2.4 billion in American products�from Christmas trees and potatoes to wine.

� Mr. Obama could reverse the ban without the approval of Congress, but that would infuriate many Democrats and trucking and other unions that are critical supporters in a tough election year

� Australia PM Gillard considering options for new climate change reform which may be announced as early as next week - Australian Financial Review

� Japan's Prime Minister Kan says he will stay on regardless of July 11th Upper House election results

� For Democrats, Politics Is Local Again � WSJ link

o Democrats defending House and Senate seats amid the stiffest anti-incumbent mood in two decades are trying to focus attention on local factors that might persuade voters to return their lawmaker to office.

o Washwire: Obama in Full Campaign Mode

� U.S., Russia Agree to Trade Agents � WSJ link

o �the final chapter of a saga worthy of a spy novel, the U.S. and Russia agreed to one of the biggest prisoner swaps between the two countries since the Cold War

� Russia Spy-Swap Handling Showcases Improved Ties, U.S. Says

� HIV, AIDS breakthrough:� Advance in Quest for HIV Vaccine � WSJ

o In the latest development, U.S. government scientists say they have discovered three powerful antibodies, the strongest of which neutralizes 91% of HIV strains, more than any AIDS antibody yet discovered

o http://online.wsj.com/article/SB10001424052748703609004575355072271264394.html?mod=ITP_pageone_0

� The Obamacare Maze, Now Online from BusinessWeek

� An American being held in North Korea has attempted suicide out of frustration and guilt, the reclusive country's state media said on Friday.� Reuters

� Ex-SEC Lawyer Says He�s LeBron James� Father, Seeks $4 Million - BBG

CANTOR TRADING RECAP

� Equity Recap

o Asian and European markets rose on the back of yesterday�s strong US equity performance (except for Shanghai, which was slightly lower). With the 8:30 release of Jobless Claims (Initial, 6k better at 454k, and Continuing 187k better at 4413k), S&P futures jumped 12 points to 1068; this would prove to be the day�s high. With the cash open, sellers emerged to take profits, driving stocks back to session lows. After a tepid rally back to even on the day, the bears again tried to push stocks lower. They succeeded only for a moment as a new intraday low was made; prices then reversed and moved all the way back across the day�s range (only 13 points) to close near the session highs, up just shy of 1%. Today marked the first 3 day winning streak for stocks since April.All 10 S&P Industry groups rose today, led by Materials and Consumer Staples, each up 1.5%. Tech lagged, rising only 0.5%. Drilling down to sectors, Retail was a laggard, off 0.2% (ranking 23rd of 24 total sectors). Same Store Sales came in mixed, with beats and misses being close to equal. Individual stock performance varied also: ANF rose 7.8%, while GAP fell 7.6%. Other big moves: after the close ACE rallied $3 on news that it will replace MIL in the S&P 500, while CPTS fell 25%, as it cut its earnings forecast.

o Billy Clark and Team

� Treasury�s recap

o Treasury market continued to come under pressure with real money selling, weak Bunds and pre auction selling the main factors. The psychological 3.00% level came and went on 10s with not much support at the level but decent two way flow (traded back to 3.05). Data once again remained light with claims today slightly better than expected with continuing almost 200k better, and worse than expected consumer credit. Today's $12Bln 10 year TIPs had varying views considering how much breakevens are in over the past few months (got out to almost 250) yet real yields are still extremly low, ultimately the auction came 3bps through at 1.295% 51.9% indirects, 2.88 bid to cover (TIPS performed very well thereafter with B/E out 4-9 across the curve). The market remained relatively quiet throughout the afternoon improving off its morning lows. At 3PM Treasuries mostly lower in price with the long end the worst performing sector.

o The Treasury announced next weeks auction sizes, all as expected: $35Bln 3 year notes, $21Bln 10 year notes, $13Bln 30 year bonds.

o Primary Dealer

o Appeals court blocks the U.S. from enforcing a deep-water drilling ban

� The U.S. Court of Appeals for the 5th Circuit voted 2-1 to reject the government's request to impose a moratorium on deep-water oil drilling. The decision leaves in place a district judge's ruling that the ban is illegal, barring the government from enforcing it. The appeals court's three-judge panel is expected to make a final decision next week on the legality of the moratorium. The Times-Picayune (New Orleans) (08 Jul.) , Pensacola News Journal (Fla.) (08 Jul.) , St. Petersburg Times (Fla.) (09 Jul.)

o BP stock up for 5 days in a row�

o US Appeals Court refuses government request for stay, allows deepwater drilling to continue

o BP denial over early target for well plug, to bill partners who may not pay

� The man spearheading BP's response to its Gulf of Mexico oil spill sparked confusion after saying the leak could be staunched earlier than thought, only for the company to backtrack

� BP is to issue its two well partners - Anadarko and Mitsui - a new combined bill of �490m for their share of the �2bn clean-up costs.

� BP will seek around �355m from 25pc partner Anadarko and �132m from Mitsui, which held 10pc, for their share of costs since the end of May.

� Anadarko has already refused to pay �178m for costs to May 31, while Mitsui has not said whether it will pay �66m. Both bills are due on Monday

� Read more: http://www.dailymail.co.uk/money/article-1293248/BP-denial-early-target-plug.html#ixzz0tAnjDuSv

o BP (BP/ LN)/ Royal Dutch Shell (RDSA LN) Royal Dutch Shell could be interested in acquiring some assets of BP, Shell Oil President Marvin Odum told CNBC. He said there are some assets of BP which would make sense for Shell's portfolio. Any talks or potential deals would happen later because of BP issues from the oil spill in the Gulf of Mexico.

o BP is thought to be considering selling additional assets to raise up to an additional USD 5bn, The company is thinking about increasing the amount of asset sales from USD 10bn to up to USD 15bn. It is thought that BP is already discussing the possible sale of its shareholding in Pan-American, the Argentina-based oil company, to the Chinese government-owned CNOOC. The Pan-American stake could fetch up to USD 9bn.

o Santos in talks on potential LNG sales � WSJ

� Santos (STO.AU) jumped 10% in Australia on saying it is in talks with a number of parties to sell a stake in its Gladstone LNG project

o KKR plans shale gas exploration - Bloomberg

� U.S. private equity firm Kohlberg Kravis Roberts & Co [KKR.UL] is planning to start up a natural gas exploration company focusing on shale and coal-bed gas, Bloomberg said, citing a person familiar briefed on the plan.

o SSN Samson Oil & Gas to accept only 75% of the amounts tendered by shareholders, or ~$6.2M

o US Appeals Court refuses government request for stay, allows deepwater drilling to continue - Reuters�

o PRIM Primoris Services completes acquisition of 50% interest in WesPac Energy

o GGR GeoGlobal Resources files $40M equity securities shelf registration

o LUFK Lufkin Industries to construct new manufacturing facility near Ploiesti, Romania

o ZN Zion Oil & Gas announces management restructuring and board appointment; appoints Kent S. Siegel as CFO

INDUSTRIALS

o BA, EADS..tanker contact in focus today

o GE Finds Rougher Sledding in China � WSJ link

� Well before General Electric chief Jeffrey Immelt criticized China at a private dinner last week, the company was facing greater headwinds there.

o MLM Information Services on the block - WSJ�

o BEZ Baldor Electric initiated neutral at Sterne, Agee; target is $38.

o RBC Regal Beloit initiated neutral at Sterne, Agee; target is $60.

o CCF Chase Corporation reports Q3 EPS

o NUHC Nu Horizons Electronics reports Q1 EPS

o SI Siemens to invest approx �200M in Africa over the next two years -- Reuters citing CEO Loescher

o GE General Electric may try to sell Turkiye Garanti Bankasi holding in parts - Sabah

o BA, �EADS submits bid for US Air Force tanker contract - NYT

TRANSPORTS

o CL Pinnacle Airlines reports June traffic (7.3%)

o UAUA UAL Corp reports June PRASM +30.5-31.5%

o HTZ Hertz acquires California studio equipment company

o LFL Lan Airlines reports June traffic +15.5%

o Mexican Truck Dispute Hints at Trade Battle � WSJ link

� As President Barack Obama renews his focus on trade in a quest for job growth, an ongoing dispute with Mexico suggests the political battles ahead

� Mr. Obama could reverse the ban without the approval of Congress, but that would infuriate many Democrats and trucking

o British Airways (BAY LN)/ Iberia (IBLA SM) British Airways chief executive Willie Walsh said further acquisitions could follow quickly after its merger with Iberia is completed, The Times reported. International Airlines (IAGC), the holding company for the merged group, has been set up with further acquisitions in mind. IAGC will seek further acquisitions within a year of the completion of the BA/Iberia merger. TAP, the Portuguese airline; LOT, its Polish counterpart; Finnair, of Finland and the Brazilian airline TAM are seen as potential bid targets for IAGC.

TECH/MEDIA/TELECOM

o Search Market: Bing�s U.S. Search Market Share Jumps In June- Barron�s

� MSFT Bing had 9.85% of the U.S. market in June, up from 9.23% in May.

� GOOG had 71.65% share, down from 72.17% in May.

� YHOO had 14.37% of the market, down a hair from 14.43% in May.

� IACI had 2.19% of the market, up a hair from 2.14%.

o Smartphones: Android grows US smartphone market share as all others decline- Comscore

� From the 3 month period ending May 2010

� RIMM share 41.7% down from 42.1% In period ending Feb

� AAPL share 24.4% down from 25.4% In period ending Feb

� MSFT 13.2% down from 15.1% In period ending Feb

� GOOG 13% up from 9% In period ending Feb

� PALM 5.4% down from 4.8% In period ending Feb

� Top Mobile OEMS

� Samsung share 22.4% up from 21.4%

� LG 21.5% down slightly from 21.7%

� MOT 21.2% down from 22.3%

� RIMM 8.7% up from 8.2%

� NOK 8.1% down from 8.7%

o GOOG: Says China renewed its internet license- BBG

o GOOG: Says its Web Search Partially Blocked in China- BBG

o BT Agrees 39-Month Pay Deal, Ending Strike Threat- BBG

� BT and the CWU agreed to a revised pay package of an annual 3 percent increase in pay from April 2010 to March 2013. The pay rise will be backdated to January, BT said today in a statement. The CWU will recommend the deal to its members

� http://www.bloomberg.com/news/2010-07-09/bt-group-agrees-to-39-month-pay-deal-with-union-; ending-threat-of-strike.html

o AAPL: Apple TV to stream 99 cent TV show rentals- AppleInsider

o SNE, Foxconn: Foxconn denies plans to acquire Sony LCD TV factory in Spain- Digitimes

o Foundries: iSuppli issues more upbeat outlook on foundry business in 2010

o DIS reaches agreement in principle to sell Miramax to Ron Tutor-led group- LATimes

o INTC, Infineon: Close to Deal on Mobile-Chip Unit- Die Welt

o SNWL Sets July 23 Meeting to Approve Deal- Dealbook

o CYBS Announces Early Termination of HSR Waiting Period in V Visa deal- PR

o Lextar to hire 1,300 employees in 2H10- Digitimes

o DRAM contract price continues losing strength in 2H July- inSpectrum

o Fujitsu Devises New CPU For Advanced Supercomputer- Nikkei

o Huawei has launched a push to secure its first big US deal in the face of strong security concerns in Washington that the company is closely tied to the Chinese military.- FT

� Huawei was bidding to sell equipment needed for the expansion of the wireless broadband network of Sprint Nextel

� http://www.ft.com/cms/s/0/ab71d820-8aba-11df-8e17-00144feab49a.html

o CCMP Cabot Micro patents upheld in patent enforcement action against Dupont Air Products Nanomaterials

o EXPE Expedia removed from Americas Conviction Buy List at Goldman Sachs; stock remains buy-rated; target is $24.

o SHEN Shenandoah Telecommunications amends agreement with Sprint Nextel to offer prepaid wireless

o NETL Netlogic Microsystems initiated buy at Sterne, Agee; target is $36.

o NANO Nanometrics reaffirms positive business outlook for 2010 and 2011

o NTP sues smartphone makers for using its technology in federal court - NYT

o WSJ looks at ticket prices for concerts

� http://online.wsj.com/article/SB10001424052748703636404575353351111409566.html

o YHOO Yahoo! announces partnership with Zillow

o AAPL NYT notes difficulties Apple faces in China

o Hulu looks to go global - FT

MATERIALS

o Australia may offer mine-exploration incentive � MW link

o Rio Says Mining �Nationalism� May Spread, Curb Supply (BBG)

� Rio Tinto Group Chief Executive Officer Tom Albanese said �resource nationalism� may spread as governments around the world seek to boost their share of mining profits, potentially constraining supply.

� ��They will want to increase their revenue share,�

o Goldman downgrades gold miners Randgold, Anglogold� � MW link

o VALE Ontario nickel workers approve Vale contract - Globe and Mail

o Lynas Corp announces China's Ministry of Commerce reduces H2 quota for rare earth exports "significantly"

o CCJ Cameco Corporation says ~260 unionized employees at conversion facility in Port Hope, Ontario have voted to accept new collective agreement

o TRXAQ Tronox files Plan of Reorganization

o CX CEMEX reaches agreement to sell non-core aggregates and concrete block assets in Kentucky

o ARG, APD Air Products increases offer for Airgas to $63.50/share from original $60/shr bid

AUTOS

o China�s Car Demand Grows at Slowest Pace in 15 Months

� Sales of cars, sport-utility vehicles and multipurpose vehicles in the world�s largest auto market rose 19 percent from a year earlier to 1.04 million last month, the China Association of Automobile Manufacturers said in an e-mailed statement today.

� It was the smallest increase since March 2009.

o Used-vehicle prices slip for first time in 6 months �Automotive News

� After six consecutive months of increases, used-vehicle prices in June declined when compared with the previous month, according to the Manheim Used Vehicle Value Index. But they increased year over year. The index stood at 120.

o Tesla recruits Apple store exec for retail plan� Automotive News

� Tesla Motors is looking for inspiration from The Gap and Apple retail stores to create new auto dealerships as it expands its market footprint worldwide. The Palo Alto, Calif.

o Chrysler foots bill from NY Post

� Chrysler said it will make the first two months' payments on most new vehicles bought this month in a bid to boost sales after a weak June. Chrysler will pay up to $500 per month for a total of $1,000 on most vehicles. Customers also get the option of...

o German Minister Rejects Ford's Aid Request: Report CNBC

o Why GM May Be Worth More Than Ford from BusinessWeek

o Peugeot Citroen and Changan (200625.CH) to sign JV deal -- Reuters

FINANCIALS

o ACE, MIL ACE Limited to replace Millipore in the S&P 500 index after the close July 14

o WFC Wells Fargo turned away by AIG in bid for Consumer Finance Unit- NYPOST

� Wells Fargo tried and failed to beef up its consumer-finance business just weeks before it decided to shutter the unit

� As a condition of the deal, Wells wanted government-owned AIG to give it a financial guarantee, meaning AIG would step in if the unit suffered a certain amount of losses, sources said. The financial "backstop" was too much for AIG.

� http://www.nypost.com/p/news/business/wells_th_hour_effort_9yTRgxliH3UJGXwJthV0GI#ixzz0tBDJ4Urh

o IBCP Independent Bank Corp files $110M secondary offering through Stifel and FBR

o FFCH First Financial Holdings to report a net loss for Q3 of $11M-$13M

o TD Toronto-Dominion Bank buys Ross Smith Sousa Advisors - Globe and Mail

o CISG CNinsure 4.6M-ADS secondary priced at $25/share through Morgan Stanley, BofA

o Financial reform:� Grassley Airs Concerns As Vote Nears on Financial Bill

� http://online.wsj.com/article/SB10001424052748703609004575355273372451944.html?mod=WSJ_hps_LEFTWhatsNews

o New 'Volcker Rule' may not be as tough as it looks � MW link

� Bank reform legislation appears to set some pretty harsh restrictions on big banks. That said, it could be watered down over time, experts say.

o Three stress-test scenarios for EU banks: report �� MW link

o FT reports that reforms are set to be passed today to allow Spanish cajas to sell 50% of their equity to private investors

o Sumitomo Mitsui Might Invest up to $5 Billion in U.S. Bank from DealBook

� Sumitomo Mitsui Financial Group, Japan's second-largest bank by market value, may spend as much as $5 billion buying a stake in a U.S. commercial lender in the next three years, a top executive told Bloomberg News

REAL ESTATE

o White House is expected to address Fannie and Freddie

� Republican lawmakers have criticized Democrats for not addressing Fannie Mae and Freddie Mac, government-sponsored entities that have cost taxpayers more than $145 billion, in legislation to overhaul financial regulation in the U.S. The Senate is poised to pass the bill and send it to President Barack Obama for his signature, and the White House is expected to turn its attention to Fannie and Freddie. Bloomberg Businessweek (08 Jul.)

o 30-year mortgage rates edge down to new low from L.A. Times

� Freddie Mac says lenders are offering 30-year loans at an average of 4.57%, down from 4.58% last week, the lowest rate in the 39-year history of the mortgage giant's weekly survey.
The average cost for a 30-year fixed-rate loan edged down to a fresh record low this week, Freddie Mac reported Thursday.

o Homebuilders decline in British share trading� � MW link

� Homebuilders lost ground in British share trading on Friday, after Bovis Homes painted a lackluster picture of the housing market in the first six months of the year.

o Walking Away From Million-Dollar Mortgages �- NYT link

� The well-to-do have stopped paying their home loans in greater numbers, and apparently with less guilt.

o Time to Rethink Fannie and Freddie from BusinessWeek --

o
HCN Health Care REIT announces gross investments of $292.9M for Q2

o CSE CapitalSource completes deconsolidation of $1.1B real estate trust

o BRE BRE Properties announces resignation of COO Edward Lange Jr.

o BC Partners, Silver Lake Partners to buy MultiPlan from Carlyle Group - WSJ�

CONSUMER

o Retail Caution After Tepid June Sales � WSJ link

� Retailers reported tepid results for June, raising the specter that stores will be stuck with piles of unsold goods later this year if inventories get out of line.

o �RGS Regis reports Q4 consolidated comps (2.7%) vs Street around� (1%)

o AEA Advance America to cease operations in its 47 centers in Arizona

o LOPE Grand Canyon Education notified by DOE of program review

o WFMI Whole Foods initiated sell at Hapoalim Securities; target is $30.

o NDN 99 Cents Only reports Q1 revenue $346.5M vs Reuters $346.4M

o BGFV Big 5 Sports reports Q2 Comps comps (0.5%) vs. +0.3% y/y; guides Q2 EPS

o BSET Bassett Furniture reports Q2

o COSI Cosi reports Q2 total system comps +3.1%

o KMB � NYT article� With Kleenex, the Package Is Part of the Product

� http://www.nytimes.com/glogin?URI=http://www.nytimes.com/2010/07/09/business/media/09adco.html&OQ=_rQ3D1Q26partnerQ3DrssQ26emcQ3Drss&OP=19747bfQ2FDeAQ3DDj_Q7Dp0__g8D8WnWDW.DWbDQ3DQ5BphQ5DAppDsAjhQ5EDWbQ5EjQ7D_t)gs,

o Billionaire Ron Burkle testifies as trial begins in Barnes & Noble poison pill case from L.A. Times

� Los Angeles billionaire Ron Burkle testified Thursday that he didn't want to buy Barnes & Noble Inc. and was shocked when the bookseller adopted a poison pill plan after he increased his stake in it

o Consumer :� Li & Fung Ltd., the biggest supplier to retailers including Wal-Mart Stores Inc., rose the most in five months in Hong Kong after announcing acquisitions and agreements that may generate $1 billion in sales next year.�� Li & Fung rose 7.4 percent

o McDonald's Holdings Co (Japan) June comps down (1.4%) y/y - Nikkei

GAMING, LODGING, & LEISURE

o PRXI Premier Exhibitions reports Q1 EPS

o MSG WSJ negative on Madison Square Garden

� No Fast Fix for Lingering MSG Headaches

� That's even more true given LeBron James's decision Thursday to pass up the New York Knicks in favor of the Miami Heat

� http://online.wsj.com/article/SB10001424052748704111704575355301240376306.html?mod=djemheard_t

HEALTHCARE

o US private equity groups BC Partners and Silver Lake Partners have agreed to purchase health-care business MultiPlan in one of the year�s largest leveraged buyouts, valuing the company at $3.1bn, reports the WSJ. Carlyle Group and Welsh, Carson, Anderson & Stowe are selling MultiPlan. People close to the transaction say Carlyle will make more than three times its investment in MultiPlan, which it acquired in 2006, added the Journal

o HIV, AIDS breakthrough:� Advance in Quest for HIV Vaccine � WSJ

� In the latest development, U.S. government scientists say they have discovered three powerful antibodies, the strongest of which neutralizes 91% of HIV strains, more than any AIDS antibody yet discovered

� http://online.wsj.com/article/SB10001424052748703609004575355072271264394.html?mod=ITP_pageone_0

o J&J Discloses Payments to Doctors � WSJ link

o JNJ Johnson & Johnson pain-reliever sales plunging � AP says company announced an eighth recall this afternoon

o Wal-Mart Fights OSHA on Crowd-Control Fine� WSJ link

� http://online.wsj.com/article/SB10001424052748703609004575355342376667452.html?mod=WSJ_newsreel_business

o CELG, HGSI Celgene, Human Genome added to Top Picks Live at Citi�

o GSK Preview of upcoming FDA advisory committee on GlaxoSmithKline's Avandia; 13-14 July

o HAE Haemonetics settles German patent suit

CPTS -25.2% (guidance)�� CPTS Conceptus trading lower post resumption

o ENZN Enzon announces resignation of CFO Craig Tooman effective 23-Jul

o RHHBY Roche Holding receives FDA clearance for LightCycler MRSA advanced test

o SMTS Somanetics shareholder Gabelli discloses 6.86% stake in 13D filing

o CPTS Conceptus guides Q2 EPS

o BHRT

o Bioheart appoints Catherine Sulawske-Guck as COO

o GSK EU's CHMP starts review of Rosiglitazone-containing medicines after new studies question cardiovascular safety of anti-diabetes medicines��

OTHER

EUROPE TRADING WRAP

� Oils

� Royal Dutch Shell (Unch; 'B's London). Shell and Santos are in discussion over the possible purchase of a stake in Santos' LNG plant in Australia, could be worth A$2bn.

� Miners

� Rio Tinto (+2.7%). Rio Tintos chairman say they remain cautiously upbeat for the remainder of 2010 and are keen to restart their Australian projects after the resolution of the Super-tax debate.

ASIA TRADING WRAP

Japan

� NKY +0.52%, TPX +0.02%

� NKY opened to buying, lifted by an overnight rise on Wall Street. The index briefly lost momentum in mid-morning, as investors took to the sidelines ahead of July 11 upper house election, but a weaker yen and strong performances on other Asian bourses helped the index gain momentum in the afternoon. Turnover on the TPX rose to 1.16 trillion yen from 1.12 trillion yen yesterday

� Stocks were mixed. Industrials, tech and telecom rose while oil & gas, utilities, financials, consumer, materials and health care fell

� Exporters were mixed: autos -0.38%, CE +0.34%, precision +0.12%. Canon (7751) +1.02% after Nikkei reported the company likely posted a group operating profit of ~182B yen for Jan-Jun half, up 180% YoY helped by better-than expected sales of digital SLR cameras and laser printers

� Banks were soft falling 0.93% ahead of share sale by Mizuho (8411). SMFG (8316) -2.16% may spend as much as US$5B buying a stake in a U.S. commercial lender in the next 3 years

� Machinery +1.13% on speculation China will ease tightening measures

Nikkei today

� BoJ will likely raise its economic growth outlook for this FY, while not sharply revising its CPI projection, at the upcoming Policy Board meeting July 14-15

� The ruling DPJ is on course to win ~50 seats in Sunday�s upper house election, an outcome that would deny the governing coalition a majority in that chamber, according to the latest Nikkei poll

Hong Kong

� HSI +1.64%; HSCEI +2.16%

� Stocks rose after better-than-expected US jobless claims lifted sentiments and mainland developers gained on speculation China will wind back tightening measures. Defensives such as telecom and utilities underperformed as investors took profit. Turnover on the HSI rose to HK$15.09B from HK$14.27B yesterday

� Li & Fung (494 HK) +7.39% after announcing acquisitions and agreements that may generate US$1B in sales next year

� Mainland developers rose after the Oriental Morning Post reported some Shanghai-based commercial banks have resumed providing loans for third-home purchases and have eased lending policies for second-home purchases: China Overseas (688 HK) +3.08%, China Resources Land (1109 HK) +4.44%, Guangzhou R&F (2777 HK) +6.53%, Shimao (813 HK) +4.43%, Agile (3383 HK) +5.29%

� Mainland banks rose: CCB (939 HK) +1.93%, ICBC (1398 HK) +1.78%, BoC (3988HK) +2.51%, BoComm (3328 HK) +2.44%. ICBC (1398 HK), CCB (939 HK) and BoC (3988HK) denied the report. Spokespeople for the three banks said in interviews they are complying with a government order to freeze lending for third homes

� Airlines rose after China Business News reported China Eastern�s (670 HK) passenger numbers rose 70% YoY in June: China Eastern (670 HK) +3.98%, China South (1055 HK) +1.88%, Air China (753 HK) +2.82%

Headlines:

� Oriental Morning Post reported some Shanghai-based commercial banks have resumed providing loans for third-home purchases and have eased lending policies for second-home purchases. Separately, ICBC (1398 HK), CCB (939 HK) and BoC (3988 HK) denied that they resumed third-home mortgages in Shanghai �

Bloomberg

� Agricultural Bank of China (1288 HK) has had its A1/Prime-1 long- and short-term foreign currency deposit ratings affirmed by Moody�s Investors Service. The rating agency also raised its bank financial strength rating on the company to D-minus from E-plus with a stable outlook � Bloomberg

China

� SHCOMP +2.31%; SZCOMP +2.93%

� Stocks rose with the benchmark index capping its biggest weekly gain this year on speculation the government will wind back tightening measures. Turnover on the SHCOMP fell to 49.86B yuan from 52.16B yuan yesterday

� Stocks rose across most sectors led by materials, consumer, tech, telecom and health care

� Real estate +2.73% after the Oriental Morning Post reported some Shanghai-based commercial banks have resumed providing loans for third-home purchases and have eased lending policies for second-home purchases

� Banks +2.20%. ICBC (601398 CH), CCB (601939 CH) and BoC (601988 CH) denied the report. Spokespeople for the three banks said in interviews they are complying with a government order to freeze lending for third homes

� Airlines +4.18% led by China Eastern Air (600115 CH) after China Business News reported the carrier�s passenger numbers increased 70% YoY last mth

INVESTMENT BANKING

INVESTMENT BANKING WRAP

M&A

o WFC Wells Fargo turned away by AIG in bid for Consumer Finance Unit- NYPOST

� Wells Fargo tried and failed to beef up its consumer-finance business just weeks before it decided to shutter the unit

� http://www.nypost.com/p/news/business/wells_th_hour_effort_9yTRgxliH3UJGXwJthV0GI#ixzz0tBDJ4Urh

o DIS Disney reaches agreement in principle to sell Miramax to Ron Tutor-led group- LATimes

� Walt Disney Co. has reached an agreement in principle to sell Miramax Films and its 611-film library to construction executive Ron Tutor for about $650 million

� Tutor and a group of investors, including Colony Capital, will invest $300m in equity, with additional financing coming from minority partners including James Robinson, chairman of Morgan Creek Productions, and an unidentified investor group from the Middle East

� http://latimesblogs.latimes.com/entertainmentnewsbuzz/2010/07/disney-reaches-agreement-in-principal-to-sell-miramax-to-ron-tutor.html

o APD Air Products boosts ARG Airgas bid 5.8 percent- Reuters

� Gas and chemicals company Air Products and Chemicals raised on Thursday its hostile bid for rival Airgas by 5.8 percent to $5.3 billion, but the offer remained slightly below the company's current market value

� Airgas said its board will review the bid and advised shareholders not to take any action pending that review

� http://www.reuters.com/article/idUSN0823179620100708

o ARG Airgas Says Board Will Review Air Products Revised Offer- BBG

� Airgas said that its board will review a revised offer from Air Products & Chemicals Inc. to acquire Airgas for $63.50 per share in cash

� The Airgas board previously considered and rejected prior proposals from Air Products of $62 and $60 per share

o SMFG May Spend Up to $5 Billion on Stake in U.S. Bank- BBG

� Sumitomo Mitsui Financial Group may spend as much as $5 billion buying a stake in a U.S. commercial lender in the next three years

� �We can�t overlook the U.S. market in terms of stable returns and size,� said SMFG. �We need to push forward with investments, including acquisitions, that allow us to capture a large volume of assets.�

� http://dealbook.blogs.nytimes.com/2010/07/09/sumitomo-mitsui-might-invest-up-to-5-billion-in-u-s-bank/

o Suitors Sought for MLM- WSJ

� MLM Information Services LLC, a privately owned provider of corporate-tax software, is on the auction block and could fetch more than $500 million

� http://online.wsj.com/article/SB10001424052748703609004575355540954914102.html?mod=wsjcrmain

o Skadden Arps Holds Lead as Mergers, Acquisitions Legal Adviser- BBG

� Skadden, Arps, Slate, Meagher & Flom kept the top spot among U.S. legal advisers on global mergers and acquisitions in the first half of this year, as deal-making sputtered after a brief recovery

� The New York-based firm, second-highest grossing in the U.S., was No. 1 last year and stayed there for the first six months of this year

� http://www.businessweek.com/news/2010-07-09/skadden-arps-holds-lead-as-mergers-acquisitions-legal-adviser.html

o GE considers selling Garanti stake in parts- Reuters

� General Electric is looking at selling its 20.85% stake in Turkish lender Garanti Bank in parts, after an unsuccessful attempt at a block sale

� Analysts speculated that the size of the stake, valued at around $3.8 billion but not giving control of the bank, had limited interest in the sale

� http://www.reuters.com/article/idUSLDE66805T20100709

o Burkle attacks BKS Barnes & Noble at poison pill trial- Reuters

� Billionaire investor Ron Burkle sought to persuade a Delaware judge to void a Barnes & Noble anti-takeover defense that makes it harder for the bookseller to be sold.

� Testimony began in Delaware Chancery Court in an expected four-day, nonjury trial over whether to invalidate a Barnes & Noble "poison pill" that Burkle said entrenches the founding Riggio family as controlling shareholders

� http://www.reuters.com/article/idUSN0822807120100708

o BP May Dispose of as Much as $15 Billion of Assets- The Times

� �If opportunities come up to dispose of other parts of the business then those will be considered,�

� BP�s board will meet in two weeks to consider the future direction of the company

� http://noir.bloomberg.com/apps/news?pid=newsarchive&sid=aOi2C02wbjEI

o RDS Shell chief sees some attractive BP assets � CNBC- Reuters

� "If BP decided to sell assets clearly there are some things that would make sense for our portfolio. But that's a later decision because of what's happening now," Shell Oil Co President Marvin Odum said.

� http://www.reuters.com/article/idUSN0823574620100708

o Infineon, INTC Intel Close to Deal on Mobile-Chip Unit- Die Welt

� Infineon Technologies AG is close to selling its mobile-chip unit to Intel Corp. for as much as $1.4 billion

� The two sides have met several times in the past few weeks, though a contract has not yet been signed

� http://www.businessweek.com/news/2010-07-09/infineon-intel-close-to-deal-on-mobile-chip-unit-welt-says.html

o Carlyle Group to sell MultiPlan Inc for $3.1 bln � WSJ

� Private equity firms BC Partners and Silver Lake Partners have agreed to purchase MultiPlan from Carlyle

� The deal would be the largest secondary buyout in 2010, in which a company is passed from one private equity firm to another

� http://www.reuters.com/article/idUSSGE66804220100709

o FT discusses Glencore�s Future

� Privately held Swiss commodities trader Glencore International AG is considering a partial float in Europe or possibly a merger with London-listed Xstrata Plc

� The transaction could be arranged as early as next year

� http://www.ft.com/cms/s/0/70b00eb2-8ac1-11df-8e17-00144feab49a.html

o BC, Silver Lake to pay $3.1 bln for MultiPlan- Reuters

� Buyout firms BC Partners and Silver Lake are set to buy healthcare services firm Multiplan for $3.1 billion in the largest secondary buyout of the year so far

� http://www.reuters.com/article/idUSWLA801520100709

o Santos In Discussions On Sale Of Gladstone LNG Product, Equity- WSJ

� Discussions are underway with a number of parties over transactions to do with the Gladstone Liquified Natural Gas project, Santos said Friday

� The Australian Financial Review reported that Sinopec and Korea Gas were being viewed as purchasers for GLNG's product with Shell examining a 30%-35% stake in the project, while The Australian said all three companies were examining a 9%-20% stake

� http://online.wsj.com/article/BT-CO-20100708-714476.html

o Walsh says British Airways must spread its wings beyond Iberia merger- Australian

� BRITISH Airways is looking to do a deal with another airline within a year of BA completing the its merger with Iberia.

� BA is also pursuing a strategic alliance with American Airlines. This will give it a dominant position in the North Atlantic market and in the South Atlantic via Iberia. The final regulatory approval for these deals is expected imminently

� http://www.theaustralian.com.au/business/news/willie-walsh-says-ba-must-spread-its-wings-beyond-iberia-merger/story-e6frg90o-1225889643374

o UniCredit wins AS Roma in debt deal- FT

� UniCredit is looking for a new owner to acquire AS Roma, one of Italy�s top Serie A football clubs, following an agreement reached on Thursday night with Rosella Sensi to settle debts owed to the bank by Italpetroli

� UniCredit, Europe�s third-largest bank by market value, is expected to appoint Rothschild as adviser to look for a buyer for the capital�s biggest club.

� http://www.ft.com/cms/s/0/b909a9b4-8ad7-11df-bead-00144feab49a.html

o SNWL SonicWall Sets July 23 Meeting to Approve Deal- Dealbook

� Network security technology provider SonicWall sent a letter to shareholders Thursday, ahead of a special meeting later this month, asking them to approve a takeover by an investor group

� SonicWall recommends in the letter that shareholders approve a $636 million bid from a group of investors led by private equity firm Thoma Bravo. Under the deal, announced last month and already approved by the company�s board, SonicWall shareholders will get $11.50 per share in cash.

� �http://dealbook.blogs.nytimes.com/2010/07/09/sonicwall-sets-july-23-meeting-to-approve-deal/

o Electric carmaker ZAP plans JV with China's Jonway- Reuters

� Money-losing U.S. electric vehicle company ZAP said it planned to take a majority stake in Zhejiang Jonway Automobile and focus on China's commercial and government fleet market

� ZAP said it would pay $29 million cash for a 51 percent stake in Jonway Automobile and create a joint venture with the Jonway Group unit

� http://www.reuters.com/article/idUSN0816440620100708

o Manila's San Miguel says Pure Foods bids due July 15- Reuters

� Philippine food-to-power conglomerate San Miguel will receive bids from interested buyers of its food unit San Miguel Pure Foods Co Inc next week

� Sources previously said private equity firms Carlyle Group and CVC and Philippine food firm Universal Robinaare among the bidders for Pure Foods, which has a total value of around $2 billion

� http://www.reuters.com/article/idUSSGE66804D20100709

o TD plans to expand Ross Smith Sousa, focus on big deals- Globe & Investor

� TD Securities is getting into the game of playing real-estate agent to energy companies with the purchase of Calgary-based boutique Ross Smith Sousa.

� The focus will be "big strategic stuff," such as mandates from Shell and EnCana, and for the moment the plan is to be smaller than Scotia Waterous or Macquarie Tristone

� http://www.theglobeandmail.com/globe-investor/markets/streetwise/td-plans-to-expand-ross-smith-sousa-focus-on-big-deals/article1633364/

o Crombie plans to buy 11 retail properties from Sobeys- Reuters

� Crombie Real Estate Investment Trust said it planned to acquire 11 retail properties worth C$102m from Sobeys to boost its presence in Western Canada and Ontario.

� The company expects to partly fund the acquisition by raising C$29.5 million through a bought deal, by offering 2.67 units at C$11.05 each.

� http://www.reuters.com/article/idUSSGE6670J220100708

o HSBC hires new head of Canada M&A advisory business- Reuters

� HSBC said it hired John Walker, a lawyer and a former managing director of M&A at Canadian Imperial Bank of Commerce (CM.TO), to oversee its team of about 25 investment banking and corporate banking talent in Calgary, Montreal and Toronto

� http://www.reuters.com/article/idUSN0823540020100708

o KKR plans shale gas exploration � Bloomberg

� U.S. private equity firm Kohlberg Kravis Roberts & Co is planning to start up a natural gas exploration company focusing on shale and coal-bed gas

� KKR will mostly use equity to fund the exploration business, which will focus on parts of Appalachia and Texas

� http://www.reuters.com/article/idUSSGE66806Z20100709

o CYBS CyberSource Announces Early Termination of HSR Waiting Period- PR

� CYBS announced today that the U.S. Department of Justice and Federal Trade Commission granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, in regards to the V Visa deal

� The closing of the transaction still remains subject to other conditions in the Agreement and Plan of Merger by and among Visa, CyberSource and Market St. Corp

� http://www.prnewswire.com/news-releases/cybersource-announces-early-termination-of-hsr-waiting-period-98061469.html

o Australia's Centennial says backs Banpu offer- Reuters

� Australia's Centennial Coal Co on Friday told shareholders its board had recommended a $2 billion takeover offer from Thailand's Banpu Public

� http://in.reuters.com/article/idINSGE66809B20100709

o AlpInvest owners seek to sell firm- Het Financieele Dagblad

� Dutch asset managers APG and PGGM want to sell AlpInvest, one of the world's largest private equity investors with up to 46b euros at its disposal

� APG and PGGM each own 50% of AlpInvest, which has recently floated or made plans to float media company Nielsen Holdings, fund manager Jupiter and chip maker NXP, among others.

� http://www.reuters.com/article/idUSLDE66803420100709

$ RAISING

IPOs

o Wide investor audience awaits KKR- Reuters

� Kohlberg Kravis Roberts & Co's long-awaited listing on the Big Board brings a wide investor audience to the iconic private equity firm and could be a bellwether for rivals looking to follow suit

� some see the listing as a yawn, arguing that investors wanting exposure to private equity could have bought Blackstone's stock

� http://www.reuters.com/article/idUSN0815785220100709

o PE Firms Drum Up Secondary Buyouts- WSJ

� SKS Microfinance moved a step closer to bringing Wall Street to the slums of India. But that also will bring more criticism from microfinance experts who say profits and initial public offerings have no place in the industry.

� "The only place you can get the amount of money that is needed to help the poor is in the capital markets," Vikram Akula, founder and chairman of SKS, said in an interview. "That's why we are doing this IPO."

� http://online.wsj.com/article/SB10001424052748703609004575355460120599280.html?mod=WSJ_hps_LEFTWhatsNews

o Agricultural Bank of China officially sets H-share IPO price at 3.2 HKD- Xinhua (Confirmed the report earlier in the week)

� Agricultural Bank of China announced here Friday it has set its H-share initial public offering (IPO) price at 3.2 HK dollars (42 U.S. cents) per share, which was in the middle level of its IPO price range

� http://news.xinhuanet.com/english2010/business/2010-07/09/c_13391505.htm

o Rothschild�s Vallar I.P.O. Beats Target, Raises $1.1 Billion- Dealbook

� Vallar, Nathaniel Rothschild�s investment vehicle, raised 707.2 million pounds ($1.07 billion) in an initial public offering in London, beating a target announced last month

� Vallar placed 68.7 million ordinary shares at 1,000 pence apiece, the company said in a statement. So-called conditional dealing will begin today and unconditional dealing on July 14 on the London Stock Exchange

� http://dealbook.blogs.nytimes.com/2010/07/09/rothschilds-vallar-i-p-o-beats-target-raises-1-1-billion/

PRICINGS

o Initial Offerings

o FBBC Fortune Bank 40M share IPO expected to price 7/08 via KBW: Price Talk $8-10

o Secondary Offerings

o FFCO FedFirst Financial 2.5 million shares expected to price Thursday via Stifel Nicolaus

o CISG CNinsure 4.6M-ADS secondary priced at $25/share through Morgan Stanley, BofA

NEWS

o Consortium cuts debt load in Abertis buy- Reuters

� The consortium preparing to buy infrastructure operator Abertis will take on a third less debt after some banks left its lending syndicate

� Six out of an original 21 banks in a lending syndicate that had been planning to provide 8 billion euros for the acquisition have left the deal, scaling back the debt to close to 5 billion euros

� http://www.reuters.com/article/idUSN0811423120100708

o Iberdrola signs 2 bln euro 5-yr syndicated loan- Reuters

� Spain's Iberdrola said on Friday it had signed a 2 billion euro ($2.54 billion) 5-year revolving syndicated loan. The loan is priced at Euribor plus 75 basis points, and is adjustable, according to the company's credit rating

� The facility has an option for additional syndication up to 500 million euros, the electricity company said

� http://article.wn.com/view/2010/07/09/Iberdrola_signs_2_bln_euro_5yr_syndicated_loan/

o Expiry of the subscription period in the rights issue- istockanalyst

� The subscription period in the rights issue of Norsk Hydro ASA (OOTC:NHYDY) expires at 17:30 (Oslo time) today, July 9, 2010.

� http://www.istockanalyst.com/article/viewiStockNews/articleid/4292643

o Energy: GGR GeoGlobal Resources files $40M equity securities shelf registration

o Financials: IBCP Independent Bank Corp(MI) files $110M secondary offering through Stifel and FBR

TODAY�S EVENTS

Conferences

o Friday July 9:

� Environmental Finance Investing in Renewable Energy Infrastructure Conference - Jul 09, 2010

Company Meetings/Other Daily Events

o Friday July 9:

� Shareholder Meetings

� CLSP, IMRX, SIGM

� Argentina, Brazil markets close

� The nation's governors huddle in Boston to discuss economic conditions- Barron�s

� The U.S. Air Force is due to award its aerial-tanker contract to Boeing or EADS by the end of the week

Economics

o Friday July 9:

� 1000 Wholesale Invetories

Earnings

o Materials

� Friday July 9: MASC NTIC

o Industrials/Homebuilders

� Friday July 9: CCF, GRIF

o Consumer/Retail/Education

� Friday July 9: BSET, PSMT, RMCF

o Financials

� Friday July 9: LPHI, NHTB, PGR

o Tech/Telecom

� TSM Sales and Revenue release

o Healthcare

� Friday July 9: BSDM

o Media

� Friday July 9: XSEL

o Energy

� Friday July 9: MNLU

o Utilities

� Friday July 9: PCYO

***All eco data from Bloomberg and DJ

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