Cantor Morning News | Morning @ Cantor

§ Airgas Inc., the packaged-gas maker fighting a $5.4 billion hostile takeover bid, promised shareholders a chance to replace most of the board by June if they don’t force the company to hold such a vote in January.

§ Airgas will put some directors up for re-election at a special meeting June 21, as long as shareholders vote next month against holding a January meeting proposed by hostile bidder Air Products & Chemicals Inc. Radnor, Pennsylvania-based Airgas disclosed its proposal today to shareholders in a letter, which was obtained by Bloomberg News.

o Posco takes controlling stake in Daewoo – BBG

o Posco (005490.KS) considering buying Elkem - Reuters, citing Posco CEO

o Zodiac Aerospace (ZC FP) leads gains on reports Safran (SAF FP) is preparing another bid for the airplane seat maker. BBG

o EBAY: CSCO : TechCrunch reports that Cisco may be offering to buy Skype

o Top $ Raising

o No definite IPOs or secondaries on the calendar this week so far

o Credit market stories:

o High-Grade Bonds Whip Junk – BBG

§ Returns on U.S. investment-grade corporate bonds are pulling ahead of junk-rated debt as credit investors turn to borrowers likely to weather a slowing economy. Led by Wal-Mart Stores Inc., Oracle Corp. and Merck & Co., company bonds deemed safest by ratings firms have gained 1.36 percent this month, compared with 0.08 percent for speculative- grade debentures

o Barron's Interview: Harch Capital's President Michael Lewitt sees slightly-below investment grade corporate bonds as an attractive place to be in the current environment. - Barron's

o US states/ Muni’s:

· Muni’s: Thirty-day visible supply fell 31 percent to $4.6 billion on Aug. 27, almost $6 billion below the daily average in 2010, according to data compiled by Bloomberg. Scheduled issuance this week is the lowest for a full trading week since the $1.7 billion sold in the period ended Dec. 19, 2008, Bloomberg data show.

· State Tax Revenue Gains – WSJ link

o State tax revenue rose in the second quarter, as higher taxes and the slowly improving economy led to an increase in collections.

· Governments Ditching Public Hospitals Faced with mounting debt and looming costs from the new federal health-care law, many local governments are leaving the hospital business, shedding public facilities that can be the caregiver of last resort. WSJ

· Moody’s Ask Municipalities for Indemnity on Ratings

§ Moody’s Investors Service is asking local governments to indemnify the bond-rating company and its executives from legal action connected to its ratings except for instances of fraud or willful misconduct.

· Central Bankers Say Global Recovery Likely to Stay on Track – WSJ…From Jackson Hole, JON HILSENRATH

o Current and former central bankers from around the world said an uneven global economic recovery was likely to stay on track despite worries about the vitality of the U.S. economy.

o At an annual Federal Reserve retreat, angst, not panic, was the order of the day among officials and economists chastened by a deep recession and a disappointing rebound. "We'll slog our way through this," said Thomas Hoenig, president of the Federal Reserve Bank of Kansas City

o Several foreign central bankers said they were struck by the unusual degree of pessimism they had witnessed in the U.S., a contrast to typical American optimism

§ http://online.wsj.com/article/SB10001424052748703618504575459680236831538.html?mod=WSJ_hpp_LEFTWhatsNewsCollection

· Central bankers and economists debate asset-price bubbles

o At the U.S. Federal Reserve's symposium late last week, central bankers from around the world and economists clashed over the best way to keep asset-price bubbles from developing. Some said regulatory tools are the most efficient way to deflate a boom without hindering the economy. Others said such tools are "unproven" and might shift central bankers' focus away from adjusting interest rates properly. The debate is an example of challenges faced by central bankers. Participants also said the global economic recovery might be uneven, but it likely will remain on track. While optimism reigned, some officials were struck by pessimism about the U.S. economic recovery. Bloomberg (29 Aug.) , The Wall Street Journal (30 Aug.)

BoJ ramps up monetary stimulus as the economy falters
- The Bank of Japan will bolster the amount of funds in a bank-loan program by 10 trillion yen, as it boosts monetary stimulus for the first time in months. The decision was made at an emergency meeting of the central bank, which was under pressure from the government to act. The focus is turning to the government's plan to spur growth as economic ministers meet to discuss stimulus efforts. Bloomberg Businessweek (30 Aug.)

· There's no "magic bullet" for the U.S. economy, Obama says

o U.S. President Barack Obama said there is no "magic bullet" that will fix the economy, but there are measures awaiting congressional action that could move it in the right direction. "We should be passing legislation that helps small businesses get credit, that eliminates capital gains taxes so that they have more incentive to invest right now," Obama said. "There are a whole host of measures we could take, no single element of which is a magic bullet." Reuters (29 Aug.)

Small business gets a larger portion of U.S. contracts
- Small businesses received 21.89% of the U.S. government's spending for contracts in 2009, an improvement compared with the previous year but still short of a 23% target established by Congress, according to the Small Business Administration. Spending on procurement from small business totaled $96.8 billion, with $33.5 billion going to companies classified as disadvantaged. Los Angeles Times (30 Aug.)
US Must Stop Printing Money, Copy Europe: Rogers – CNBC link

· Wall street analysts cautious : For the first time since at least 1997, fewer than 29 percent of ratings for stocks covered by brokerages worldwide are “buys,” according to 159,919 recommendations compiled by Bloomberg.

o Analysts are turning more pessimistic even as they push up estimates for profit growth among Standard & Poor’s 500 Index companies to 36 percent, the highest since 1988

Stocks looking better vs bonds …ROGER LOWENSTEIN in NYT….
- Now investors are flocking to bond funds; they are paying to avoid uncertainty — to avoid the prospect of financial Armageddon. Americans whose attitudes toward investing were shaped by bibles like “Stocks for the Long Run” seem to have undergone a fundamental rewiring. Perhaps when you are out of a job, the long run doesn’t matter. “People would rather overpay for bonds than underpay for stocks,” says David Kelly, a strategist for J. P. Morgan Funds. “It’s a function of years of very miserable stock returns. And just a general fog of gloom over the country right now.”

o http://www.nytimes.com/2010/08/29/magazine/29fob-wwln-t.html?ref=magazine

o The Decline of the P/E Ratio – WSJ

o As investors fixate on the global forces whipsawing the markets, one fundamental measure of stock-market value, the price/earnings ratio, is shrinking in size and importance.

o And the diminution might not stop for a while

o http://online.wsj.com/article/SB10001424052748703618504575459583913373278.html?mod=WSJ_hpp_sections_markets

o Jobs, WSJ oped….Robert Barro: The Folly of Subsidizing Unemployment – WSJ link

o My calculations suggest the jobless rate could be as low as 6.8%, instead of 9.5%, if jobless benefits hadn't been extended to 99 weeks.

o Most Executives Don’t See Recession Ending Until 2011 – CNBC

o The Business Optimism Index, a quarterly survey conducted by accounting firm Grant Thornton, dropped to 58.4 in August from a record 67.6 in May. Just 34 percent of the more than 350 senior executives surveyed said they expect the economy to improve in the next six months, a major drop from the 63 percent who said the same thing in May.

o http://www.cnbc.com/id/38883316

o Barron's Up and Down Wall Street: Article questions Friday's post-Bernanke rally and says there was nothing in the speech to spur enthusiasm. - Barron's

o Barron's The Striking Price discusses recent trader speculation that some investors are preparing for sharp market declines in September and October and ties the action into a mini-discussion of the Black Swan School of thinking. - Barron's

o Barron's The Trader discusses the recently range-bound market: says that some level of bad news is already priced in but that the job market disappointment could prove too much; does not believe that Congress will be much help between now and the mid-terms- Barron's

o deflation : Barron's Economic Beat takes the other side of the deflation-is-bad debate, questions whether fear of deflation is always appropriate and points toward a recent study that shows deflation occurring more often in times of economic growth than contraction. - Barron's

o deflation : Playing The Yield On Stocks

o The deflationistas are winning the debate. With the consensus shifting towards a sustained period of low inflation and low growth - or worse – for the developed world, there is a reason why the yield on five-year government bonds is well below that available on stocks in many European countries and in the U.S.

o Adrian Cattley at Citigroup has identified 37 European companies, where dividends are currently greater than their five-year bond yields

o Many are high quality companies with stable earnings. Pharmaceutical giant AstraZeneca's (AZN) dividend yield is 4.72% against its five-year bond yield of 4.3%. At German utility E.ON (EOAN.XE) they are 6.49% and 3.8% respectively. At U.S. telecom operator Verizon Communications (VZ), 6.4% and 4.6%. And at food producer Unilever (UL), 4.15% and 3.6%.

o http://online.wsj.com/article/SB10001424052748704147804575455470850955574.html?mod=WSJ_Heard_LeadStory

o Bernanke's speech on Friday and says that the lack of additional QE seemed to provide some modest comfort to those most worried about the economy. - Current Yield column Barron's

o Investment advisors are increasingly looking at shorter-term, tactical ideas for large clients. - Barron's

o Why We Need a Second Stimulus – oped in NYT

o by LAURA TYSON, She is a member of President Obama’s Economic Recovery Advisory Board.

o http://www.nytimes.com/2010/08/29/opinion/29tyson.html?_r=1&ref=opinion

o Full Recovery Could Take Decade or More: Economist – NYT

o The American economy could experience painfully slow growth and stubbornly high unemployment for a decade or longer as a result of the 2007 collapse of the housing market and the economic turmoil that followed, according to an authority on the history of financial crises.

o That finding, contained in a new paper by Carmen M. Reinhart, an economist at the University of Maryland, generated considerable debate during an annual policy symposium in Jackson Hole

o Ms. Reinhart’s paper drew upon research she conducted with the Harvard economist Kenneth S. Rogoff

o Policy Options Dwindle as Economic Fears Grow – NYT

o THE American economy is once again tilting toward danger. Despite an aggressive regimen of treatments from the conventional to the exotic — more than $800 billion in federal spending, and trillions of dollars worth of credit from the Federal Reserve — fears of a second recession are growing, along with worries that the country may face several more years of lean prospects.

o http://www.nytimes.com/2010/08/29/weekinreview/29goodman.html?_r=1&hp

o Was The Flash Crash Rigged? Barron's(8/30)

o ERIC Scott Hunsader, a self-taught programmer who became an expert on market data, argues that rogue traders using high-speed computers deliberately slow the stock market's consolidated tape every trading day, to create fleeting price mismatches among the dozen exchanges handling NYSE-listed shares and to profit from the momentary differences.

o Hunsader has given federal regulators an intriguing analysis that suggests that such market manipulation preceded the May 6 Flash Crash and contributed to the violence of the selloff that saw the Dow Jones Industrial Average fall more than 700 points in about 15 minutes, its worse one-day plunge ever.

o Charges Bring SEC Hopes for New Weapon – WSJ link

o Three days after suspicious trading in the options market earlier this month, the U.S. Securities and Exchange Commission moved swiftly to charge two foreign suspects who had executed the deals and get a court to keep $1.1 million of their assets from leaving the country.

o But the SEC didn't see the suspicious trading activity itself. It received tips from the Chicago offices of the men's brokerage firm, Interactive Brokers LLC, and the surveillance group at the Chicago Board Options Exchange where the trades took place. The reason: The SEC doesn't have access to the same real-time information as the exchanges

o Taxes:

o Shaky economy alters tax-cut dynamic in Congress – WP

§ some senior Democrats are having second thoughts about raising taxes on the nation's wealthiest families and are pressing party leaders to consider extending the full array of Bush administration tax cuts, at least through next year

§ http://www.washingtonpost.com/wp-dyn/content/article/2010/08/26/AR2010082606788.html

o President Barack Obama's economic advisory board says any attempts to simplify the complicated federal tax code will produce lower taxes for some people and higher payments for others.

§ The board, led by former Federal Reserve chairman Paul Volcker, says some of those impacted could be middle-class families Obama has promised to shield from tax increases.

§ Obama tasked the panel to review the pros and cons of three tax issues: simplifying the tax code, getting people to pay up and overhauling the corporate tax structure.

§ The report does not recommend any options over others. Volcker says the goal is to set out as clearly as possible all the competing considerations and hope that the administration and Congress will draft legislation or put in place practices that can help make navigating the tax system easier.

§ http://www.witn.com/nationalworld/headlines/101713393.html

o BP – official report due in next 9 days - BBG

o BP Said to Fault Own Engineers for Misinterpreting Well Data - BBG

o BP spends $1m per week on advertising over spill - pressandjournal

o President critical of campaign as us committee to see £644,000 bill

· China vs West: New Glass Label: Made in China – WSJ link

o For years, the West focused on the threat from China's low-tech exporters. An even more potent challenge has arrived: sophisticated, capital-intensive businesses that boast high-tech expertise.

· China vs West: U.S. Likely to Find China Subsidized Aluminum – WSJ

o The U.S. Commerce Department is expected Tuesday to find that $550 million in imported Chinese aluminum was illegally subsidized by the Chinese government, people familiar with the situation said, potentially leading to higher import duties as early as next week

o The preliminary decision could boost costs for some U.S. manufacturers, pitting some U.S. aluminum companies against their American manufacturing customers

o http://online.wsj.com/article/SB10001424052748703418004575456073467088164.html?mod=WSJ_hpp_sections_news

o China vs West: China Fortifies State Businesses to Fuel Growth – NYT

o During its decades of rapid growth, China thrived by allowing once-suppressed private entrepreneurs to prosper, often at the expense of the old, inefficient state sector of the economy.

o Now, whether in the coal-rich regions of Shanxi Province, the steel mills of the northern industrial heartland, or the airlines flying overhead, it is often China’s state-run companies that are on the march.

o http://www.cnbc.com/id/38910346

Germany grows uneasy about its profitable alliance with China
- More than most industrialized nations, Germany has tied its future to the growth of China's economy. At the same time, the government and major German companies are worried about what might happen next, with China clearly determined to build a high-tech economy, according to German magazine Der Spiegel. German Chancellor Angela Merkel said Chinese companies routinely siphon off technical skills and intellectual property from their German partners. Der Spiegel (Germany) (English online version) (27 Aug.)

o Political Stories:

o It’s a bit too early for House Republican leader John Boehner to measure the drapes and pick out new wallpaper. But the Intrade pay-to-play prediction markets are now showing a 76 percent chance of a GOP House takeover in November, along with a 60 percent probability that Republicans will capture at least seven new Senate seats.

§ http://www.cnbc.com/id/38885281

o Beck Says Rally Illustrated Unhappiness With State of Nation

§ The “Restoring Honor” rally was billed as a “nonpolitical” celebration of the military, patriotism and American heritage. Beck, 46, shied away from the partisan commentary that has made him famous during the rally, focusing instead on religious themes.

§ “There’s nothing we can do that will solve the problems that we have and keep the peace unless we solve it through God,” Beck said in the Fox interview.

o Good turnout for Beck rally this weekend – per BBG

o Financier’s Largess Shows G.O.P.’s Wall St. Support

§ At a black-tie dinner in April, a politically influential hedge fund manager named Paul Singer offered a blistering critique of the “terrible path” he said Washington politicians were charting on economic issues.

§ http://www.nytimes.com/2010/08/28/us/politics/28singer.html?_r=1&hp

o Australia faces hung parliament

§ Official election results as of 05:09 ET show that, with 84.84% of the vote counted, seats are divided thusly: Labor: 71 (loss of 12 from the last election)

§ Labor: 71 (loss of 12 from the last election)

§ Liberal/National coalition: 73 (gain of 8)

§ Green 1: (gain of 1)

§ Independent: 4 (gain of 2)

§ Seats in doubt: 1

o The state of Alaska will start counting the absentee ballots in the Senate race this week that could derail incumbent Republican Sen. Lisa Murkowski out of business, in favor of the Tea Party-backed Joe Miller

o U.S. Considers Possibility of Engaging North Korea – NYT

o Such an overture would come “several moves down the chessboard,” a senior official said, and would be preceded by additional pressure tactics. But it suggests that the administration has concluded that pressure alone will not be enough to move North Korea’s ailing, reclusive dictator

o http://www.nytimes.com/2010/08/28/world/asia/28diplo.html?hp

CANTOR TRADING RECAP

o Equity Recap

o So they ended Friday taking back 1-2% of the sell-off from the earlier part of the week, the indexes were +1-2% across the board with high beta outperforming, which left the Indexes -1% or so for the week. The Dow -.006%, S&P 500 -.006% , Nasdaq -1.2% and the Russell bucking the trend was +1%. We knew the market was set up for a short term squeeze going into this gdp number which had beat the much lowered expectations. You had Bernanke continue to acknowledge our issues and pretty much say what he was supposed to, INTC basically take back the rosey guidance they offered 3 weeks ago when they reported their “best” quarter(either things have really scared them over the last few weeks or their chip production was used to plug bp’s well), TIF and JCG in retail both offered tepid outlooks, GS a bunch of things had them down,talk of the sec reopening it’s investigations(felt cheated from settlement less then tiger), Dodd/barney crimping them, BX also claw back would read negative for them and Canadian banks results were ugly this week), but look at the price hpq is paying for PAR, topping DELL for now 30 dollars, the first salvo was thrown out at 16, shows us how the cheap money is fueling these deals, although in this case, some are calling this action by hpq a lack of discipline and they need something for growth because, they can’t grow it internally at the moment). The trend is still your friend, from what we saw this was a bout of short covering with somewhat of a seller’s strike. I still think the next 10% is lower and that most of the money has been spent and still I continue to say, the only ones with conviction and money are those looking for s&p 870(right shoulder). Breadth to the market had advancing issues outnumber declining issues by 6-1 while internally here, buy and sell names were equal, albeit fairly quiet with a few noticeable blocks to be proud of.

o The breakdown of our action today was 25% communications, 13% electronic tech, 10% health, 13 % finance, 4%, 5% retail and balance miscellaneous

o Billy Clark and Team

o Investment grade Recap -

o Mixed spread activity in lighter volume this week as spreads opened unchanged to a touch weaker and are going out marginally tighter on the day. I was out visiting accounts for the past day and a half and spreads all in all are tighter from then, off their wides for the week by 10bps in some cases. Still better buyers although much of that remains of the higher quality inside of 10yr paper. Long paper, even the higher quality is out 10-20bps in the past two weeks although issuance remains strong in the sector – SRE came at +88, EIX at +100, and NSC came with a 100yr re-opening this week (see Matt Duncan on the name). Lower quality names were able to come and with minimal concessions as well – AET with a 10yr at +160 (marginally tighter) and YUM with a 10yr (marginally wider).

o It seems like despite what happens in the macro economy, there continues to remain a strong appetite for investment grade corporates, the issuance alone goes to show that (three times we have tied the record for lowest coupon in the long end in August – 4.50% by JNJ, SRE, and EIX). Not sure if it is apathy or complacency but the lack of movement in spreads is astounding with negative housing numbers all month along with a “good” reading today on GDP that we are growing at 1.6%, anyway you slice it that number is still down from the 2.4% prior level and not enough to put people back to work. Bernanke seems to want it both ways stating that he expects the U.S. economy to continue growing in 2011 and beyond yet at the same time the Fed is ready to act if needed to bolster the economy and to avoid a deflation. What this all say about IG spreads is that cash continues to pour into money managers, insurance companies and others and that despite low absolute yields better buyers remain, albeit selective where they can be.

o Michael Salemo

o Weekly Credit Market Update

o Much more subdued tone on the primary front last week, in line with late summer seasonal activity, after the huge calendar over the last 6 weeks. Market participants were focused on Federal Reserve Chairman Bernake's comments made at the annual Jackson Hole event and on M&A with contested bidding in the technology (HWP and Dell bidding for 3Par) and mining sectors. Despite only one deal priced this week (see below), the month of August set a new record for high issuance of $23.5bn, more than doubling $11bn priced in August 2006.

o Interesting article in Friday's FT highlighted the heavy issuance by US corporates vs European corporates. The US market saw its busiest summer in history of $57bn as US companies took advantage of historically low all-in yield levels despite renewed investor concerns about slowing economic growth.

o In loans, one new deal announced for the $230mm LBO of Aspen Dental split between term and revolver via Jeffco/UBS. Loan issues closed included:

o $300mm Parametric Technology revolver L+200 for working capital via Key+

o $500mm Axis Capital Financial revolver for refinancing via BofA+

o $700mm ToysRUs term L+450 pxd @$98.5 via BofA+. This is in addition to its recently priced high yield transaction.

o $275mm Mueller Water ABL L+300 via. JPM+ Also in addition to recent HY deal.

o $40mm Oriental Trading DIP financing

o HY primary managed only one transaction this week, printed out of Europe on Thursday for Interoil Exploration and Production ASA. Unrated transaction via locals SEB/Pareto of NOK310mm priced @ 15% (!).

o Secondary market activity muted, with the HY14 index down 1/2 point on the week @ 96.75-97. In distressed, Blockbuster bonds unchanged ahead of its imminently expected pre-packaged bankruptcy and GM weaker post formal annoucement and details of its IPO and renewed concerns about sales outlook. Much of the activity that did take place over the week was in the "crossover" space focused on Motorola, Anadarko, Capital One Financial, Meadwestvaco and Masco due to interest from both investment grade and high yield investors.

o Marty Teevan

o CMBS recap

o FRIDAY: Not much to say except another slow summer Friday with $164mm in BWICs including $60mm AM/AJ paper. GG10s are 5bps tighter finishing +320/$103-11

o WEEK: AMs- Sums it up. Week got off to a slow start with light activity early before things got rolling on Wed and Thur. Saw $2.3bn in lists with an increase in selling from buy and hold accounts

o The duper basis was tame on the week trading in a very tight range (GG10s +320s)except for the widening Tuesday afternoon (GG10s +340) as the weak housing number sunk in. In '07 lcfs GG10s have out performed and ended the week 5bps tighter. They are trading very technically. We are seeing very limited demand for '07 dupers. Have seen interest in '05 and '06 lcfs with '05s unchanged and '06s in 5bps.

o AMs put in a huge week despite the heavy selling on Thursday. Saw $510mm in AM/AJ selling with the vast majority in AMs. The buying we have seen has been primarily from money managers shooting for yield and rating hurdles. Will be interesting to see if weaker AMs and the AJ sector get dragged along for the ride. I think they continue to under perform especially weaker names. Over the past two weeks '05 AMs are up 3+pts and clean '06s are up over $4pts while GG10 A4s are up $3/4pt. The duper/AM risk premium continues to drop and is approaching those levels we saw in mid April. '05 premium of +170bps and low +200s for clean '06 deals. Keep in mind that premium was in the +230s and +300s for '05 and clean '06s respectively during the wides of May

o Have seen the AM/AJ premium increase over the past couple weeks. Early '06 and '05 AM/AJ premiums have increased to $10-$11pts from about $8-$9pts a few weeks ago. MSC 06-IQ11 traded with what I thought was a high AM/AJ premium of over $16.5pts based on the covers. IQ11 AJ does have a low sub level of 11.9% but a clean deal.

o NEWS:

o 1. MarketWatch: Boston Properties to buy NYC 510 Madison: This article states $801 ft but WSJ has ~$1,000 ft when you take into account closing costs and junior debt. New Class A office property in an A location.

o Yes vacant but we assume they have a tenant lined up. Only 320k sq ft so a boutique property. Regardless, another example of prime real esate still trades well.

o 2. (BMP) Moody's: Maturing five-year loans in CMBS show mixed performance: Nearly 63% of 5ys that matured between 1/10 and 7/10 paid off in full. Better than I would have thought. '06 and '07 deals will not be so lucky over the next two years.

o 3. With same stores sales down 30% between 2008 and 2009, Ab and Fitch plans to close 110 US Stores by the end of 2011

o GEORDIE WALKER

o Rates Commentary

o Needless to say today was quite the reversal from the recent trend in Treasuries: a powerful and vicious move to higher rates.

o Treasury market opened up in New York mixed with much of the curve slightly lower with the exception of the long end. Treasuries staged a small selloff after the better than expected GDP at 1.6% versus an expected 1.4% but this selloff quickly dissipated with many awaiting Chairman Bernanke's speech at 10AM. Chairman Bernanke’s speech in Jackson Hole did not contain much information that wasn't anticipated, headlines included : FOMC prepared to provide more accommodation if needed, preconditions for growth pickup in 2011 are in place, painfully slow recovering in the labor market and growth has been too slow, unemployment too high. Much of the speech was centered around any signs of a larger quantitative easing program with the Fed expanding its balance sheet, however all that Bernanke said was long term buying would be effective.The initial reaction was equities selling off and Treasuries firmly bid. However within minutes this quickly reversed with Treasuries tumbling, a trend that continued throughout the session. Today's selloff was one of the largest of 2010. As expected given the current structure of the curve the long end led the selloff by a significant amount. At 3PM Treasuries were lower across the curve with yields ~4-17bps higher in yield. 2/10s steeper by 11.1bps 2/30s by 12.1bps.

o We view today's selloff as a much needed correction, but overall look for the Treasury market to recover and hold/ trade to lower rates. Eyes next week will be on consumer confidence, minutes of the FOMC meeting and employment reports Wednesday and Friday. Next week is also the week before labor day so moves can be exasperated given the expectations many desks will be lightly staffed.

o On the calendar next week is 10 year TIPS, the Treasury announcement for the follow weeks including 3s, 10s and 30s and two purchases: Tuesday across the TIPS curve and Thursday 2012-2013

o Primary Dealer

SECTOR NEWS WITH MACRO IMPLICATIONS

ENERGY

o Coal play IPO: RNO Rhino Resources files amended S-1; to offer 3.2M units in range of $19-21 per unit through Raymond James, RBC and Stifel

o Gas Prices Down More Than 7 Cents in Two Weeks – CNBC link

o FSLR: SMA Solar Technology AG (S92 GR): SMA Solar is rumoured to be a takeover target for First Solar, Neue Zuercher Zeitung reported. The report, citing stock market sources, added that First Solar intends to offer EUR 110 for per SMA Solar share. SMA Chief and co-founder Guenther Cramer denied planning to sell his 20% stake in the company around one month ago

o BP – official report due in next 9 days - BBG

o BP Said to Fault Own Engineers for Misinterpreting Well Data - BBG

o BP Plc’s internal investigation of the Deepwater Horizon rig disaster pins some of the blame on the company for mistakes made when finishing the oil well, including misreading pressure data that indicated a blowout was imminent

o BP managers aboard the Transocean Ltd.-owned rig misinterpreted a test of the Macondo well’s stability on April 20, deciding the test confirmed the well was in good shape, said the person, who spoke on condition of anonymity because the report’s findings haven’t been publicly released.

o BP spends $1m per week on advertising over spill - pressandjournal

o President critical of campaign as us committee to see £644,000 bill

o Risk-Taking Rises as Oil Rigs in Gulf Drill Deeper

o http://www.nytimes.com/2010/08/30/business/energy-environment/30deep.html?ref=business&pagewanted=all

o Spill Hearings Preview Legal Strategies – WSJ lnk

o The hearings of a U.S. fact-finding panel into the Deepwater Horizon disaster previewed the legal battles to come as lawyers for companies involved sought to establish who was at fault.

o SSN Samson Oil & Gas provides update on Goshen County sale

o FTO Frontier Oil restarts Cheyenne Refinery crude unit

o SLB, SII Schlumberger completes merger with Smith International

o KWK Quicksilver Resources holder SPO Partners discloses it has had and currently intends to continue to have in the future, discussions with management

o Commodities Corner discusses the impacts the weak economy and limited visibility on climate are having on distillate prices. Believes a further rally could create a lot of downside potential due to high inventories and uncertain demand. - Barron's

o Dana Petroleum (DNX LN): Dana Petroleum is rumoured to have been discussing the purchase of additional assets from Suncor Energy, the Mail on Sunday reported. The report said Tom Cross, chief executive of Dana, declined to comment on the unattributed rumours, stating only that a lot is currently happening in the business

o Full-scale oil exploration in Cuba set to proceed – FT

UTILITIES

INDUSTRIALS

o Airgas Offers Investors June Vote as It Fends Off Hostile Bid – BBG

o BA Boeing replaces manager of 747-8 program – WSJ

o Zodiac Aerospace (ZC.FP) is trading higher after La Tribune reported that Safran (SAF.FP) is prepared to offer a 35% premium

o ECOL US Ecology to purchase waste treatment and storage facility

o RBA Ritchie Bros sells $9M of cranes in unreserved Houston auction

o K+S AG (SDF GY): K+S doesn't feel threatened by a possible takeover of Potash Corp, while K+S continues to be on the lookout for attractive takeover targets itself, K+S Chief Financial Officer Jan Peter Nonnenkamp told Boersen-Zeitung. "If you are looking at current evaluations for listed potash players, then these are moderate in comparison with what we saw two years ago," Nonnenkamp said. "I wouldn't exclude that we would be seizing opportunities [for a takeover], given today's more moderate valuations." Nonnenkamp said the reduction in debt, the successful capital increase and a strong first half of the year have given K+S "the financial flexibility to act when we deem it right to do so." Asked about the hostile bid for Potash Corp. by BHP Billiton, Nonnenkamp played down any potential impact on K+S. "We are monitoring the current development very closely, but calmly." A change in ownership of Potash Corp. wouldn't result in higher capacities on the potash markets, and thus "the global potash market will continue to offer adequate room for K+S." Nonnenkamp said K+S hasn't received any takeover offers itself. "If somebody voices interest for us and makes an offer, we will look at it." But currently "there's nothing new on this front."

AUTOS

o Chrysler Dealers to Hear Fiat Pitch – WSJ link

o Valeo SA expects a sharp slowdown in demand at the end of this year as car-scrapping incentives are halted, La Lettre de L’Expansion reported, without citing anyone. The slump may lead to layoffs at all the company’s French plants, the weekly newsletter said. Valeo expects 2010 revenue to exceed that of 2009, La Lettre said.

TRANSPORTS

o Airlines: Southwest Is Sweetheart Of United-Continental Deal- WSJ

§ One of the biggest beneficiaries of the merger of United Corp. (UAUA) and Continental Airlines Inc. (CAL): Southwest Airlines Co. (LUV).

§ The discount airline picked up 36 slots at Newark Liberty International Airport, in New Jersey, as part of United-Continental's efforts to diffuse some of its concentration there. United-Continental will lease the slots to Southwest as a condition of Department of Justice approval of its merger.

o Airlines: Feds sign off on United-Continental merger

§ Houston carrier has to sacrifice bit of its Newark dominance to seal deal

§ http://www.chron.com/disp/story.mpl/business/7174880.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+houstonchronicle%2Fbusiness+%28chron.com+-+Business%29

o China Eastern Airlines Corp., the nation’s second-largest carrier by passenger numbers, gained the most in more than two weeks in Hong Kong trading after reporting a 79 percent jump in first-half profit.

o LUV Southwest Air and Continental Airlines enter into slot lease at Newark Liberty Airport

o GOOG: WSJ(8/28) Regulators Ask Google For ITA Data

§ Google Inc. said Friday it had received a second request for information from U.S. regulators looking at its proposed $700 million acquisition of flight information software company ITA Software Inc. The Internet search giant said in a blog post it remained "confident" the Department of Justice will conclude that the online travel market will remain competitive after the deal closes.

MATERIALS

o Rio Approves $1 Billion Spending on Hope Downs Mine - BBG

o Steel glut to hit iron ore price - FT

§ The price of steelmaking commodities iron ore and coking coal will drop next quarter for the first time in a year as lower steel production forces global miners Vale of Brazil and UK-listed Rio Tinto and BHP Billiton, to offer discounts on their supply contracts.

§ http://www.ft.com/cms/s/0/ba300e68-b396-11df-81aa-00144feabdc0.html?ftcamp=rss

o China vs West: U.S. Likely to Find China Subsidized Aluminum – WSJ

§ The U.S. Commerce Department is expected Tuesday to find that $550 million in imported Chinese aluminum was illegally subsidized by the Chinese government, people familiar with the situation said, potentially leading to higher import duties as early as next week

§ The preliminary decision could boost costs for some U.S. manufacturers, pitting some U.S. aluminum companies against their American manufacturing customers

§ http://online.wsj.com/article/SB10001424052748703418004575456073467088164.html?mod=WSJ_hpp_sections_news

o UUU.CN Uranium One receives Kazakh MINT approval for the ARMZ transaction

o Commodities Corner discusses the impacts the weak economy and limited visibility on climate are having on distillate prices. Believes a further rally could create a lot of downside potential due to high inventories and uncertain demand. - Barron's

o AVD American Vanguard files for relief from EPA stop sale order on Fungicide product line

o CEMJQ Chemtura files amended S1; will distribute non-transferable rights for 7.4M shares to eligible holders

o KGC Kinross Gold completes previously announced acquisition of high-grade Dvoinoye deposit

o Posco takes controlling stake in Daewoo – BBG

o Posco to Buy 68% of Daewoo International – WSJ link

§ Daewoo International Corp.'s creditors have agreed to sell their 68% stake in the company to steelmaker Posco for about $2.83 billion.

o Anglo American to sell some Scaw Metals assets

§ MarketWatch) -- Anglo American PLC (AAL.LN) has put the $1 billion international assets of Scaw Metals up for sale as part of its reorganization program, The Independent reports Sunday citing a banking source.

§ Advisers Goldman Sachs Group and UBS have set the deadline for fist round bids on the steel maker's international operation for early next month

§ http://www.marketwatch.com/story/anglo-american-to-sell-some-scaw-metals-assets-2010-08-29

TECH/MEDIA/TELECOM

o PAR, HPQ, DELL: said Sunday it was pondering making another offer – AP, TheStreet, reuters

o Dell has three business days to match HP's offer under its merger agreement with 3PAR

o 3Par late Friday said it had accepted suitor Hewlett-Packard's latest bid, for $30 a share. But Dell, HP's rival in the takeover battle for the storage tech company, reportedly said Saturday it was pondering making another offer.

o DELL said on Sunday it was assessing its bid for 3PAR

o In a news release, 3Par characterized the $1.88 billion offer made Friday as a "superior proposal" to the latest one from rival Dell

o 3Par also said it had notified Dell that it intended to terminate their merger agreement after a three-business-day period specified in the agreement.

o DELL can return with another offer during that period, however, and a Dell representative Saturday said the company was considering doing so, the AP reported.

o The bidding war drove up shares of 3Par nearly 80% last week. They closed Friday at $32.46, up $6.43 on the session.

o http://news.yahoo.com/s/nm/20100829/tc_nm/us3par_hp;_ylt=Anu3eTUkEcB8YU86nIBvWVtT.3QA;_ylu=X3oDMTJmcWtlMTZwBGFzc2V0A25tLzIwMTAwODI5L3VzM3Bhcl9ocARwb3MDMQRzZWMDeW5fcGFnaW5hdGVfc3VtbWFyeV9saXN0BHNsawNkZWxsc2F5c2Fzc2U-

o Tech Offerings Lead The Way – WSJ

o This year has been a mash of mostly mediocre debuts of initial public offerings of stock, but one sector has been doing a bit better than the norm: technology.

o New tech stocks have delivered, on average, a 7.2% gain on their first day as public companies, compared with 6% from all IPOs in the U.S., according to data from Ipreo.

o From semiconductor firm MaxLinear Inc. to software maker Qlik Technologies Inc., about half of all the IPOs that made double-digit gains on their first days of trading were technology businesses. At this point last year, the average first-day pop for IPOs was 15%.

o So it should come as no surprise that technology has been the most active sector producing IPOs this year; 21 deals have made it to market valued at a total of $2.48 billion, well ahead of the runner-up category of financial companies, which generated 12, Ipreo says.

o HPQ new CEO??: : Hewlett-Packard's point man in the escalating battle to buy 3PAR is making his play to replace disgraced CEO Mark Hurd, a source told The Post

o Executive Vice President David Donatelli came from rival EMC Corp. in 2009 after running EMC's largest division, storage, and is leading the charge to beat out Dell to win the Fremont, Calif., data-storage company.

o At the time he joined HP there was speculation he would be Hurd's eventual successor.

o Global Chip Sales Rise 1.2% to $25.2 Billion in July, SIA Says

o CTXS Citrix Systems to buy VMLogix; terms undisclosed

o EBAY: CSCO : TechCrunch reports that Cisco may be offering to buy Skype

o EBay officially announced plans to spin Skype off via IPO in early 2010

o http://www.ucstrategies.com/unified-communications-expert-views/the-case-to-buy-skype.aspx

o Apple's iPad order shipping times improve to 24 hours - appleinsider

o After struggling to meet consumer demand for the iPad since it launched in April, estimated shipping times for new online orders have improved to within 24 hours, suggesting any production problems have been resolved.

o http://www.appleinsider.com/

o FLEX Flextronics to stay focused on China for production despite higher labor costs - South China Morning Post

o TSEM TowerJazz offers 7.3M shares to YA Global pursuant to previously announced Standby Equity Purchase Agreement

o Comcast Gets Static on Net TV – WSJ link

o The Justice Department is looking at how Comcast's bid for NBC Universal could affect the emerging Internet video market and potentially stunt its growth.

o GOOG Google plans pay-per-view movies – FT

o http://www.ft.com/cms/s/0/e638714e-b396-11df-81aa-00144feabdc0.html

o HPQ EVP David Donatelli angling for CEO position, says NY Post

o AAPL Technology Trader discusses Apple's (AAPL) upcoming product event (1-Sep) and rehashes recent media and industry speculation about what is expected to be announce: iPod refresh, iTunes moving online and renting TV episodes and an update to its TV set-top box. - Barron's

o PAR, DELL, HPQ, MFE Plugged In uses the PAR/DELL/HPQ saga as a platform to expound on the virtues of cloud computing/advanced storage and highlight how the corporate world continues to move in this direction. Also has a snippet that suggests McAfee (MFE) CEO Dave DeWalt, likely soon to be out of a job due to Intel (INTC) acquisition, could be a potential candidate for the CEO job at Hewlett-Packard (HPQ). - Barron's

o GOOG Google acquires Angstro - L.A. Times

o GOOG: WSJ(8/28) Regulators Ask Google For ITA Data

o Google Inc. said Friday it had received a second request for information from U.S. regulators looking at its proposed $700 million acquisition of flight information software company ITA Software Inc. The Internet search giant said in a blog post it remained "confident" the Department of Justice will conclude that the online travel market will remain competitive after the deal closes.

o SIFY Sify Technologies proposes to issue up to $86M of unlisted Indian equity shares to promoters group

o CLWR: Clearwire plans pay-as-you go service

o Reuters) - Clearwire Corp said on Friday that it is planning a pay-as-you-go service, representing a new customer segment for the high-speed wireless service provider

o INXI INX Inc CFO Brian Fontana has resigned effective 27-Aug

o XETA Xeta Technologies discloses terms of recently announced Data-com acquisition - 8K

o UNCA Unica holder Gamco discloses a 8.16% stake in a 13D filing

o KUTV Ku6 Media reports Q2 EPS from continuing ops

o Microsoft Founder Unleashes Patent War – WSJ

o Microsoft co-founder Paul Allen sues Google, Apple, Facebook, eight others over patents

o AOL, Netflix, Office Depot, OfficeMax, and Staples are the other companies accused of violating four patents said cover fundamental web technologies first developed at Interval Research in the 1990s.

o http://perspicacious.co.uk/uncategorized/microsoft-co-founder-paul-allen-sues-google-apple-facebook-eight-others-over-patents/30983/

o Disney, Time Warner Cable Near Agreement

o Media Companies Make 'Significant Progress' Amid Marathon Negotiations Over Programming Fees

o AMT: American Tower eyes changing into REIT

o American Tower Corp., a fast-growing player in the mundane world of telecommunications infrastructure, is in the early stages of radically changing its corporate structure to better shield itself from income taxes and potentially return hundreds of millions of dollars in cash and stock to its shareholders annually.

o 'Last Exorcism' Edges out 'Takers' at Box Office – CNBC link

o China Mobile (941.HK) lost 1% on concerns that Vodafone (VOD.LN) may sell its stake – SA

o Nokia (NOK1V.FH), Siemens (SIE.GR) consider accepting private-equity investment in Nokia Siemens Networks – FT

o Nokia, Siemens confirm NSN investment talks: report – reuters link

o Quattrone rises as tech bidding war escalates – reuters link

o Websense CEO says open to takeover bid – reuters link

o Signal, security firms next targets in defense M&A – reuters link

o DGIT DG FastChannel guides down… Q3 revenue to $51M-$53M vs Reuters $61.5M, approves share repurchase program

1. Guides full year revenue to $230M-$234M vs Reuters $246.2M; EBITDA to $105-$107M

2. DG FastChannel has approved a $30M stock repurchase program

o CSGS CSG Systems upgraded to outperform from perform at Oppenheimer

o TXN Texas Instruments downgraded to neutral from positive at Susquehanna

o RIMM: India Said to Decide Fate of RIM’s BlackBerry Service

o India is set to decide whether to ban BlackBerry instant messenger or accept Research In Motion Ltd.’s limited monitoring of the service, three officials with direct knowledge of the matter said.

o The home ministry and intelligence agencies will meet today to review the proposals offered by RIM in the past week, the officials said, declining to be identified in line with government policy. RIM said on Aug. 26 any solution will need to ensure its clients’ communications are secure, a selling point that’s helped it attract users including President Barack Obama. BBG

o Level 3 Communications (LVLT) CEO James Crowe sold 2m shares of the network operator to certain board members for $1.05 each – BBG

o Unica (UNCA): Mario Gabelli’s Gamco Investors Inc. reported an 8.2% stake as of June 30.

CONSUMER

o Luxury booms while bargain retail suffers – FT

o Personal spending in the US is diverging into two distinct categories as strong growth at high-end stores contrasts with continuing difficulties for mass-market, low-price retailers.

o Nearly a year after the US economy returned to growth, corporate earnings reports in recent months have provided consistent evidence of the differing fortunes. At high-end stores such as Neiman Marcus and Tiffany, shoppers are demonstrating confidence and spending with vigour. At the other end of the retail spectrum, consumers are cautious amid economic uncertainties, denting the earnings of groups such as Walmart.

o http://www.ft.com/cms/s/0/78e785dc-b3b2-11df-81aa-00144feabdc0.html

o US Consumers Split into Two Camps: Spend and Save – FT

o Consumer spending in the US has turned into a tale of two cities in 2010, with an entire segment of consumers splurging confidently on the finer things in life, while another segment, concerned about unemployment and with little or no discretionary income, spends only on bare necessities.

o http://www.cnbc.com/id/38913627

o GMCR - Barron's cautious…Unlike the rest of the market, Green Mountain Coffee Roasters (ticker GMCR) is enjoying a splendid summer. Shares rallied this month to an all-time high above 33, up more than 1,000% in less than four years, and even an 8% pullback since mid-August is quickly billed as a buying opportunity. These staggering numbers, however, mask risks that increase with the stock price

o Anheuser-Busch InBev positive : Barron's(8/30) Big Gains Brewing At Anheuser-Busch InBev

o everyone is raising a glass to InBev, investors included, as management shrewdly integrates its prize. The combined company is realizing cost synergies faster than expected, and recently posted better-than-expected second-quarter results.

o Cigarette Machines Help Evade Tax – WSJ link

o Roll-Your-Own Cigarette Machines Help Evade Steep Tax

o PZZA Papa John's targeting growth in UK, possibly at expense of Domino's (DOM.LN) - Telegraph

GAMING, LODGING, & LEISURE

o Summer Vacations Strain Trimmed Staffs – WSJ link

o For companies with already lean staffs, summer vacations are creating big headaches this year.

o Atlantic City casinos face cloudy future

o Boardwalk view bleaker for analysts after games thrive in Pennsylvania

o Table games, which were operational for just part of July at Pennsylvania's nine casinos, brought in more than $17.5 million in gaming revenue during the month.

o The initial results led gaming analysts to believe that dire days await Atlantic City, where the city's 11 casinos are in direct competition with full-fledged gaming in a neighboring state.

o http://www.lvrj.com/business/atlantic-city-casinos-face-cloudy-future-101710103.html?ref=103

o Vacation Travel Recovers, but Frugality Is Focus - NYT

o http://www.nytimes.com/2010/08/28/business/28travel.html?src=busln

o Bankruptcy Judge OKs Station Casinos Chapter 11 Exit Plan

FINANCIALS

o On Wall Street, a Jump on Bonuses – WSJ link

o With the specter of higher taxes looming in 2011 and banks still reeling from last year's U.K. bonus tax, executives at some financial-services companies are considering whether to pay year-end bonuses, traditionally doled out starting in January, sooner.

o Managing directors at Credit Suisse Group in London learned last Wednesday that they would receive a late-summer reward that will restore at least some of the money they sacrificed last year when the bank cut payouts in response to the one-time U.K. bonus tax.

o ECB Likely to Extend Emergency Banking Industry Aid, FT Says

o The European Central Bank is likely to extend emergency aid for the region’s banking industry into next year even though growth in the 16 countries using the euro has exceeded forecasts, the Financial Times reported, without saying where it obtained the information

o AIG Ex-Taiwanese diplomat setting up $2.5B bid for Nan Shan – Reuters

o http://www.reuters.com/article/idUSTRE67T06V20100830

o AIG WSJA(8/30) Timing Looks Difficult For AIA Offering

o Those involved in taking the main Asian life-insurance unit of American International Group Inc. public are firm as a back brace on the timetable for their Hong Kong listing. Sometime in October, they say, AIA will go public, raising a sum as yet undetermined, though the likely target lies somewhere north of $15 billion. The percentage of the company that would be sold also is uncertain. An official filing to the Hong Kong stock exchange is expected in the first half of September.

o Barron's Cover story: Annual list of the top 100 independent financial advisors. - Barron's

o US banks: WSJ(8/28) S&P On U.S. Banks: The Worst Seems Over

o Standard & Poor's Ratings Services said the worst appears to be over for the U.S. banking industry, though a sluggish economy and continuing real-estate issues -- combined with regulatory uncertainty -- mean the sector isn't likely to see a quick rebound.

o US banks: Whitney: banks not ready for double dip

o Banks will need more capital to withstand the continuing decline in the housing market, according to analyst Meredith Whitney.

o Banks aren't prepared for a "double dip" in housing, which "it looks like we are having," Whitney said Friday.

o KFS Kingsway Financials board has called a special meeting of shareholders to be held on 28-Oct

o auto loans -Spain's Banco Santander SA (STD) late Friday said it has reached an agreement to buy HSBC Holdings PLC's (HBC) portfolio of auto loans for about $4 billion. DJ

o CME: The Commodity Futures Trading Commission has spoken with the Justice Department about the futures regulator's antitrust inquiry into CME Group Inc.'s conduct in its Treasury-futures business, WSJ

o Lincoln National. (LNC) shares jumped more than 8% Friday on takeover speculation. Rumors that Toronto-based insurer Manulife Financial Corp. (MFC) offered to acquire Lincoln National for $32 a share fueled a rally in the stock, DJ

o Direct Line, the British insurer owned by Royal Bank of Scotland has reportedly attracted interest from many prospective buyers. The Sunday Times reported that RBS is thinking about selling lossmaking Direct Line at a bargain price; plans for a flotation are believed to have been shelved because of losses. The interested parties include Warren Buffett's Berkshire Hathaway vehicle and Allstate. It added that any buyer is expected to pay significantly less than GBP 4.5bn; the price offered for Direct Line two years ago by CVC. RBS is weighing its options and during the past few days has been interviewing advisers to act on the sale of Direct Line

o More Go Without Life Insurance – WSJ link

o Nearly a third of U.S. households have no life-insurance policies, due to a combination of the financial pressures, the high cost of some policies and the hardball tactics used by some agents.

o Agricultural Bank of China (1288.HK) down 2% after it reported H1 results in line with expectations

o Moody’s Ask Municipalities for Indemnity on Ratings

REAL ESTATE

o White House plans new housing push – CNN

o Housing and Urban Development Secretary Shaun Donovan revealed to CNN Friday that the Obama administration plans this week to unveil two new initiatives to deal with the crumbling housing market, and he left the door open to also reviving the expired $8,000 tax credit for first-time home buyers that had been propping up the industry

o http://politicalticker.blogs.cnn.com/2010/08/27/white-house-plans-new-housing-push/?hpt=T2

o No Decision on Home Tax Credit, Other Aid Coming

o http://www.cnbc.com/id/38902875

o Foreclosure Relief: Good for Banks, Not So For Borrowers

o Criticized both by those who argue for more aid and those who think the lackluster program only delays a needed bank reckoning, HAMP stumbles along, more often simply prolonging the pain of foreclosure than providing a solution

o http://www.cnbc.com/id/38893311

o FNMA, FMCC Fannie Mae and Freddie Mac need to be smaller though getting there may prove difficult. Recent economic data suggests that additional capital will likely be required. - Barron's

o IVR Invesco Mortgage Capital files $1B mixed securities shelf registration

o AMT: American Tower eyes changing into REIT - - Boston Business Journal

HEALTHCARE

o J&J Chief Tends Corporate Wounds – WSJ link

o At a recent town-hall meeting, Johnson & Johnson Chief Executive William Weldon sketched out for employees his plans for fixing the manufacturing problems that have prompted a string of recalls and triggered a criminal investigation.

o Now, he faces the more difficult task of executing those plans and convincing the public that J&J has put its problems behind it. His success—or failure—may be among the most important legacies he leaves the company near the end of a four-decade career there.

o JNJ Johnson & Johnson CEO William Weldon unlikely to be dismissed over recalls – WSJ

o QCOR Questcor Chief Medical Officer Jason Zielonka has resigned

o WCRX: Quirky Gap on Dividends At Chilcott

o Warner Chilcott is heading into the tax equivalent of the Bermuda Triangle for 10 days. Investors should beware they don't lose their bearings.

o http://online.wsj.com/article/SB10001424052748703618504575459790216175802.html?mod=djemheard_t

o Novartis (NOVN VX) up 1.2% as it plans to start phase 3 trials of elinogrel blood thinner

o Sanofi trade dn 1% Monday

o Sanofi Unveils Genzyme 'Bear Hug' – WSJ link

§ French pharmaceutical company Sanofi-Aventis on Sunday went public with its $18.5 billion all cash bid for Genzyme, ratcheting up the pressure on the biotechnology firm.

§ WSJ: Parties Still Far Apart on Price

o Sanofi-aventis Announces Non-Binding Offer to Acquire Genzyme for $69.00 in cash.

o Call Monday, August 30, 2010 at 8:30 a.m. ET: US: +1-866-907-59-23

o AZN AstraZeneca announces that genetic substudy shows fewer major CV events with Brilinta

o SNY Sanofi's Multaq first-line option in new 2010 ESC guidelines for the management of atrial fibrillation

o SKH Skilled Healthcare Group announces that Humboldt County Court denies its motion for mistrial

o JAZZ Jazz Pharmaceuticals enters into settlement with Anchen

o INO Inovio Pharmaceuticals enters into $25M equity distribution agreement with Roth Capital

o Roche says no decision on job cuts this week

o Company says management to meet but won't be jobs decision

o Newspaper reports Roche set to slash jobs in pharma unit

o http://www.reuters.com/article/idUSLDE67S0AP20100829?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FUShealthcareNews+%28News+%2F+US+%2F+Healthcare+News%29

OTHER STORIES

o Barron's summary

o Cover story: Annual list of the top 100 independent financial advisors. - Barron's

o Interview: Harch Capital's President Michael Lewitt sees slightly-below investment grade corporate bonds as an attractive place to be in the current environment. - Barron's

o Anheuser-Busch InBev (ABI.BB) could be undervalued if a hoped-for rebound in US sales materializes to supplement the progress made on the expense front. - Barron's

o GMCR - Barron's cautious…Unlike the rest of the market, Green Mountain Coffee Roasters (ticker GMCR) is enjoying a splendid summer. Shares rallied this month to an all-time high above 33, up more than 1,000% in less than four years, and even an 8% pullback since mid-August is quickly billed as a buying opportunity. These staggering numbers, however, mask risks that increase with the stock price

o Investment advisors are increasingly looking at shorter-term, tactical ideas for large clients. - Barron's

o Investing in reverse-merged, US-listed Chinese firms has proven to be a challenging and often unprofitable way to gain exposure to China's economic growth. - Barron's

o FNMA, FMCC Fannie Mae and Freddie Mac need to be smaller though getting there may prove difficult. Recent economic data suggests that additional capital will likely be required. - Barron's

o Profile: Yan Swiderski, head of emerging markets investment firm Finisterre, is currently slightly net short though he believes the view that emerging markets are more risky than developed ones is a misperception. His fund is currently "slightly net short" with long bets in Argentina, Kazakhstan, Russia, Korea and Malaysia offset by short positions in Poland, Brazil, Turkey, Mexico and Indonesia. - Barron's

o Up and Down Wall Street: Article questions Friday's post-Bernanke rally and says there was nothing in the speech to spur enthusiasm. - Barron's

o Streetwise discusses recently heightened fears in the market and the return to prominence of some ominous (though not necessarily accurate) market signals- Barron's

o AAPL Technology Trader discusses Apple's (AAPL) upcoming product event (1-Sep) and rehashes recent media and industry speculation about what is expected to be announce: iPod refresh, iTunes moving online and renting TV episodes and an update to its TV set-top box. - Barron's

o The Striking Price discusses recent trader speculation that some investors are preparing for sharp market declines in September and October and ties the action into a mini-discussion of the Black Swan School of thinking. - Barron's

o The Trader discusses the recently range-bound market: says that some level of bad news is already priced in but that the job market disappointment could prove too much; does not believe that Congress will be much help between now and the mid-terms- Barron's

o Economic Beat takes the other side of the deflation-is-bad debate, questions whether fear of deflation is always appropriate and points toward a recent study that shows deflation occurring more often in times of economic growth than contraction. - Barron's

o Current Yield discusses Bernanke's speech on Friday and says that the lack of additional QE seemed to provide some modest comfort to those most worried about the economy. - Barron's

o Asian Trader believes Asian utilities are worth a look given their defensive characteristics combined with a solid growth profile. - Barron's

o European Trader discusses a trend over the past few years that has seen Americans increasing their shorting activity in European names while Europeans have done just the opposite. - Barron's

EUROPE TRADING WRAP

ASIA TRADING WRAP

o Japan

• NKY+1.76%, TPX +1.17%

• NKY pared gains after rising more than 3% with investors disappointed by a BoJ decision that many believe would do little to weaken the strong yen. Turnover on the TPX rose to 1.18 trillion yen from 1.03 trillion yen yesterday

• Stocks rose across most sectors led by tech, industrials, telecom, materials and health care. Oil & gas fell

• Exporters held onto their gains, but were off their earlier highs: autos +0.44%, CE +1.18%, precision +1.68%

• Traders +1.55% after metal prices rose

• Best performing sectors on the TPX: insurance +2.72%, airline +2.66%, glass & ceramics +2.21%; worst performing sectors: oil & coal -1.08%, banks +0.08%, electric power & gas +0.26%

o Hong Kong

• HSI +0.68%; HSCEI +1.20%

• Stocks rose after the Fed chairman vowed to safeguard the US recovery temporarily lifted sentiments. Turnover on the HIS fell to HK$16.83B from HK $17.11B last Friday

o China

• SHCOMP +1.61%; SZCOMP +2.63%

• Stocks rose led by health care and consumer stocks after the Fed chairman vowed to safeguard the US recovery temporarily lifted sentiments. Turnover on the SHCOMP fell to 74.01B yuan from 80.17B yuan last Friday

• Stocks rose across all sectors led by health care, consumer, materials, tech and industrials

• Metals +3.00%, mining +2.69% after metal prices rose

• F&B +3.83% as investors chased inflation plays

INVESTMENT BANKING

M&A

o PAR, HPQ, DELL: reportedly said Saturday it was pondering making another offer – AP, TheStreet

o 3Par late Friday said it had accepted suitor Hewlett-Packard's ) latest bid, for $30 a share.But Dell), HP's rival in the takeover battle for the storage tech company, reportedly said Saturday it was pondering making another offer.

o In a news release, 3Par characterized the $1.88 billion offer made Friday as a "superior proposal" to the latest one from rival Dell (Symbol : DELL

o 3Par also said it had notified Dell (Symbol : DELL that it intended to terminate their merger agreement after a three-business-day period specified in the agreement.

o DELL can return with another offer during that period, however, and a Dell representative Saturday said the company was considering doing so, the AP reported.

o The bidding war drove up shares of 3Par nearly 80% last week. They closed Friday at $32.46, up $6.43 on the session.

o Airgas Offers Investors June Vote as It Fends Off Hostile Bid – BBG

o EBAY: CSCO : TechCrunch reports that Cisco may be offering to buy Skype

o EBay officially announced plans to spin Skype off via IPO in early 2010

o http://www.ucstrategies.com/unified-communications-expert-views/the-case-to-buy-skype.aspx

o Airlines: Southwest Is Sweetheart Of United-Continental Deal- WSJ

o One of the biggest beneficiaries of the merger of United Corp. (UAUA) and Continental Airlines Inc. (CAL): Southwest Airlines Co. (LUV).

o The discount airline picked up 36 slots at Newark Liberty International Airport, in New Jersey, as part of United-Continental's efforts to diffuse some of its concentration there. United-Continental will lease the slots to Southwest as a condition of Department of Justice approval of its merger.

o Airlines: Feds sign off on United-Continental merger

o Houston carrier has to sacrifice bit of its Newark dominance to seal deal

o http://www.chron.com/disp/story.mpl/business/7174880.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+houstonchronicle%2Fbusiness+%28chron.com+-+Business%29

o BHP will consider selling off nitrogen and phosphate if it wins Potash Corp.

o Secondary assets could be divested, but Australian mining company not expected to decide until after a deal goes through

o http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/bhp-will-consider-selloffs-if-it-wins-potash-corp/article1689587/

o Saskatchewan Considering ‘All Options’ to BHP’s Bid for Potash - BBG

o Saskatchewan is considering changes in legislation, regulations or permitting in response to BHP Billiton Ltd.’s $40 billion bid for Potash Corp. of Saskatchewan Inc., Energy and Resources Minister Bill Boyd said.

o “As a province, we are going to work to ensure that we are ready should something further develop,” Boyd said today in a telephone interview. “We’ll be looking at all options that are available to us as a government, which may or may not include legislation, regulation, permitting and various other tools.”

o Boyd, who declined to elaborate further on what his government may do, said he will announce the terms of a review within days.

o BHP takeover could cut Saskatchewan's potash take – CNBC

o Depending on how BHP applies a Saskatchewan tax credit to develop its own new mine, the western Canadian province could also see lower revenues from existing Potash Corp mines, and it is seeking outside analysis of the takeover's impact.

o http://www.cnbc.com/id/38898296?__source=RSS*tag*&par=RSS

o BHP Billiton (BLT.LN) may sell off Potash's nitrogen, phosphate operations - Globe and Mail

o http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/bhp-will-consider-selling-off-nitrogen-and-phosphate-if-it-wins-potash-corp/article1689587/

o Agrium Would Look at Potash Corp. Fertilizer Assets - BBG

o Agrium Inc. said it will consider buying some of Potash Corp. of Saskatchewan Inc.’s assets should BHP Billiton Ltd. seek to sell some following any successful takeover of the Canadian fertilizer company.

o “If those assets come out at a value that makes sense for Agrium, of course we would look at them,” Chief Executive Officer Mike Wilson said today in an interview. The company is interested in agricultural assets and businesses “in any part of the world,” he said.

o “We would be interested in nitrogen, we would be interested in phosphate and we would even love their potash if they wanted to spin some out,”

o Agrium, North America’s third-largest fertilizer producer by market value, is awaiting approvals to complete a A$1.2 billion ($1.1 billion) bid for AWB Ltd., Australia’s largest wheat exporter and No. 2 rural services company. The Calgary, Alberta-based company has the funds to pursue more acquisitions

o Agrium Receives Buyer Interest in AWB Grain Trading Operations - BBG

o Agrium Inc., bidding A$1.2 billion ($1.1 billion) for wheat exporter and rural services supplier AWB Ltd., has received interest from potential buyers of the Australian company’s grain-trading operations

o Agrium got approaches from companies operating inside and outside Australia, Mike Wilson, chief executive officer of North America’s third-biggest fertilizer producer, said today in an interview in Melbourne. He didn’t identify the companies.

o Brazil's Vale mulls fertiliser acquisitions – report

o Brazilian mining giant Vale, which has sought to raise its presence in the fertiliser sector in recent months, could be seeking further acquisitions, a local newspaper said on Saturday.

o The company is expected to boost its budget and could seek acquisitions as part of its ambitious plans for the fertilizer sector, the report in O Estado de S. Paulo said

o The comments come only days after Vale denied market talk it was planning a bid for Canada's Potash Corp, as Potash seeks to fend off a $39-billion takeover offer from Australia's BHP Billiton.

o Potash is the world's largest fertilizer supplier and Vale is one of two companies considered big enough to mount a rival bid on its own.

o Analysts have consistently expressed doubt Vale would jump into the bidding for Potash, citing heavy political pressure to invest in Brazil and its existing $10-billion portfolio of fertiliser investments.

o http://www.miningweekly.com/article/brazils-vale-mulls-fertiliser-acquisitions-report-2010-08-30

o Comcast Gets Static on Net TV – WSJ link

o The Justice Department is looking at how Comcast's bid for NBC Universal could affect the emerging Internet video market and potentially stunt its growth.

o GOOG: WSJ(8/28) Regulators Ask Google For ITA Data

o Sanofi trade dn 1% Monday

o Sanofi-aventis Announces Non-Binding Offer to Acquire Genzyme for $69.00 in cash.

o Call Monday, August 30, 2010 at 8:30 a.m. ET: US: +1-866-907-59-23

o IFX dn `% - on potential sale of wireless biz- BBG

o INTC FT reports that Intel will pay about $1.4B for Infineon's wireless chip business

o SLB, SII Schlumberger completes merger with Smith International

o Posco takes controlling stake in Daewoo – BBG

o RBS: Direct Line, the British insurer owned by Royal Bank of Scotland has reportedly attracted interest from many prospective buyers. The Sunday Times reported that RBS is thinking about selling lossmaking Direct Line at a bargain price; plans for a flotation are believed to have been shelved because of losses. The interested parties include Warren Buffett's Berkshire Hathaway vehicle and Allstate. It added that any buyer is expected to pay significantly less than GBP 4.5bn; the price offered for Direct Line two years ago by CVC. RBS is weighing its options and during the past few days has been interviewing advisers to act on the sale of Direct Line

o EnCore Oil PLC (EO/ LN): Encore Oil could attract takeover interest as the group has made a significant discovery at its Cladhan field off Scotland, the Sunday Times reported. The report said industry sources believe the field will yield 100m-200m barrels of oil; an announcement is expected from Encore and its partner Wintershall this week, adding that it is thought probable Encore shares will rocket as a result. City sources believe Wintershall is the most likely prospective bidder for Encore.

o Air Berlin PLC (AB1 GR): Air Berlin is believed to be a potential acquisition target for British Airways, according to transport bankers cited in the Sunday Times. Air Berlin may be the next company to be targeted by BA. BA's Chief Executive, Willie Walsh, has stated that he expects the company to continue making acquisitions.

o Minerva (MNR LN): Nathan Kirsh, the rebel shareholder battling for control of Minerva would consider splitting the company in two and turning one of those into a real-estate investment trust, reports The Sunday Telegraph

o Anglo American to sell some Scaw Metals assets

§ Advisers Goldman Sachs Group and UBS have set the deadline for fist round bids on the steel maker's international operation for early next month

§ http://www.marketwatch.com/story/anglo-american-to-sell-some-scaw-metals-assets-2010-08-29

o China Mobile (941.HK) lost 1% on concerns that Vodafone (VOD.LN) may sell its stake – SA

o Zodiac Aerospace (ZC.FP) is trading higher after La Tribune reported that Safran (SAF.FP) is prepared to offer a 35% premium

o AIG Ex-Taiwanese diplomat setting up $2.5B bid for Nan Shan – Reuters

o http://www.reuters.com/article/idUSTRE67T06V20100830

o AIG WSJA(8/30) Timing Looks Difficult For AIA Offering

o GS: largest shareholder Axa cuts Goldman stake by half

o http://www.ft.com/cms/s/0/d762b99e-b3a1-11df-81aa-00144feabdc0.html

o The sell-off reduced Axa’s holdings from about 5 per cent to 2.1 per cent, according to Bloomberg data

o Goldman Sachs’ largest investor slashed its stake by more than half in the last quarter as the bank contended with civil fraud charges by US securities regulators and brutal market conditions that crimped its results.

o Nokia (NOK1V.FH), Siemens (SIE.GR) consider accepting private-equity investment in Nokia Siemens Networks - FT

o GOOG (Reuters) - Google Inc has acquired Angstro, a startup that sorts news and information across social networks like Facebook, a spokesman for the leading Web search provider said on Sunday

o Nokia, Siemens confirm NSN investment talks: report – reuters link

o Quattrone rises as tech bidding war escalates – reuters link

o Websense CEO says open to takeover bid – reuters link

o Signal, security firms next targets in defense M&A – reuters link

$ RAISING

o Tech Offerings Lead The Way – WSJ

o This year has been a mash of mostly mediocre debuts of initial public offerings of stock, but one sector has been doing a bit better than the norm: technology.

o New tech stocks have delivered, on average, a 7.2% gain on their first day as public companies, compared with 6% from all IPOs in the U.S., according to data from Ipreo.

o RNO Rhino Resources files amended S-1; to offer 3.2M units in range of $19-21 per unit through Raymond James, RBC and Stifel

o IT consultant Presidio could go public in 18 months – reuters link

o TSEM TowerJazz offers 7.3M shares to YA Global pursuant to previously announced Standby Equity Purchase Agreement

o British health and fitness chain Virgin Active (UK) Virgin Active is believed to have decided not to proceed with the flotation it was considering, the Sunday Times reported. The report said insiders signalled plans for a sale to the private-equity sector which were also being considered by the group have also been shelved. However, some observers think a sale might still be revived. The mooted IPO was expected to be worth GBP 1bn.

o http://uk.reuters.com/article/idUKLDE67S0A120100829?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FUKConsumerProducts+%28News+%2F+UK+%2F+Consumer+Products+%26+Retail%29

o OpTier looks to Nasdaq IPO in 2011

o The company has met with Morgan Stanley and with another large US underwriter.

o The primary market on Wall Street for technology companies is showing signs of recovery

o http://www.globes.co.il/serveen/globes/docview.asp?did=1000584990&fid=1725

o GOVX GeoVax Labs files amended S-1; to offer between $5M - $10M of units on a best efforts basis through Global Hunter and Gilford Securities ($2.10)

o New information is the size of the offering and the addtion of Gilford Securities. An offering was originally filed on 31-Mar in the amount of $40M.

PRICINGS

o Initial Offerings

o No definite IPOs or secondaries on the calendar this week so far

o Secondary Offerings

o No definite IPOs or secondaries on the calendar this week so far

***All eco data from Bloomberg and DJ

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