Cantor Morning News | Morning @ Cantor

§ The Bank of Japan is expected to hold off on easing monetary policy next week but is gearing up for further action in October as the strong yen threatens to derail its forecast of a moderate economic recovery – Reuters

§ Strong Yen Helps to Fuel Germany’s Export Boom – CNBC

§ Japan's Ministry of Finance said intervention in currencies is not likely unless the Yen moves are particularly severe, sending USD/JPY and Nikkei225 lower - TTN

§ Japan Bonds Head for Biggest Weekly Loss in 20 Months on Ozawa

§ Japan May Raise GDP Estimate as Spending Drop Eased – BBG… Gross domestic product expanded 1.5 percent on an annualized basis last quarter, compared with a preliminary reading of 0.4 percent

§ Japan Said to View U.S. as Yen Intervention Obstacle – BBG

· Japan views probable U.S. opposition to currency intervention as an obstacle to selling the yen, according to three Japanese government officials

o Data:

§ European PMI data mixed

§ Spain Aug Services PMI: 49.2 v 51.3 prior; First sub 50 reading since Feb '10

§ Germany Aug Final PMI Services: 57.2 v 58.5e

§ CHINA AUG HSBC SERVICES PMI: 57.6 V 56.3 PRIOR (4-month high)

§ CHINA AUG NON-MANUFACTURING PMI: 60.1 V 60.1 PRIOR

§ Indonesia Central Bank raised the Primary Reserve Requirement to 8.0% from 5.0% prior (Not Expected);

§ JAPAN Q2 CAPITAL SPENDING: -1.7% V -6.5%E (smallest decline since Q3 of 2007)

§ RUSSIA AUG SERVICES PMI: 47.0 V 54.2 PRIOR (15-month low, first reading below 50 since Aug 2009)

o Economics today:

o Aug Nonfarm Payrolls at 08:30 ET

o Aug Unemployment Rate at 08:30 ET

o Aug Hourly Earnings at 08:30 ET

o Aug Average Weekly Hours at 08:30 ET

o Aug Private Nonfarm Payrolls at 08:30 ET

o Aug ISM Non-Manufacturing Index at 10:00 ET

o 10:00 (US) Fed's Lockhart speech on economy

o Fed’s Evans speaks at symposium on OTC derivatives clearing at Chicago Fed., 8:45 a.m.

o Earnings:

o Companies reporting before market open include: CPB

o Baker Hughes Rig Count, Sept. 3

TODAY’S BIG STORIES

o Top M&A

o China Investors Approach Canadian Fund on Potash Bid – CNBC link

§ Thursday's disclosure by Alberta Investment Management Corp, which manages some C$70 billion ($67 billion) in public sector pension funds, is one of the first pieces of hard evidence to back suspicions that China is looking for a way to derail a takeover of Potash

o POT: Credit Suisse said BHP may have to raise its bid to about $155/share from $130; any deal could face regulatory delays in the US

o Canada’s Goldcorp has launched a C$3.6bn (US$3.4bn) cash-and-stock takeover offer for Andean Resources, trumping a C$3.4bn bid made public only hours earlier by Eldorado Gold, another Canadian miner.

§ Conference call: 10:30 ET, 866-223-7781 (North America), +1-416-340-8018 (international), or 800-6578-9898 (Australia).

o Arcsight (ARST) didn’t mention sale in 1Q earnings after WSJ last week reported co. is on the auction block – BBG

o Muni’s:

o Ratings on $55bn muni debt face cut – FT

§ Credit ratings on almost 900 municipal bonds, or $50bn to $55bn of debt, could be cut by up to three notches by Moody’s Investors Service

§ http://link.ft.com/r/S4XZQQ/TPAXVU/X82E2/IYH4OH/GKJ2PW/GX/h?a1=2010&a2=9&a3=3

o New York Pension Lowers Outlook, Raises Contributions

§ Bloomberg) -- New York’s $124.8 billion pension fund, the nation’s third-largest, reduced the assumed rate of return on its investments to 7.5 percent from 8 percent as it recovers from market losses, Comptroller Thomas DiNapoli said.

§ DiNapoli, the sole trustee of the pension fund, said state and local government employers’ payments to the fund will increase to about 16.3 percent of payroll in February 2012, from

§ 11.9 percent due in February 2011. The fund covers 1 million current and retired government workers.

o Stimulus ……or not?

o Obama's economic team considering new stimulus package – WP

§ With the recovery faltering less than two months before the November congressional elections, President Obama's economic team is considering another big dose of stimulus in the form of tax breaks for businesses -- potentially worth hundreds of billions of dollars, according to two people familiar with the talks. Among the options are a temporary payroll tax holiday and a permanent extension of the research and development tax credit, say people familiar with the talks.

§ http://link.email.washingtonpost.com/r/ZTVJ68/FXXGUE/4741JF/VMCYK2/NGQ5Z/HK/h

o White House: No second stimulus being considered from Reuters

§ The White House stressed on Thursday that no second economic stimulus package is being considered as part of new measures under review by President Barack Obama's team.

o Stimulus Vote Has Feingold on the Run - businessweek

§ Wisconsin Democrat Russell Feingold's possible Senate seat foe says the high-speed rail line being financed by stimulus funds is a waste of money

§ You know Democrats are in danger of losing control of Congress when Russell Feingold is fighting for survival

§ http://www.businessweek.com/magazine/content/10_37/b4194024955499.htm?campaign_id=rss_topStories

o Money flows: AMG data reports equity fund outflows of ($5B) in w/e 1-Sep vs outflows of ($4.6B) in w/e 25-Aug

o Fed watch: Fed reports balance sheet assets of $2.31T on Wednesday, +$965M w/w and +$218.6B y/y; Holdings of US Treasury securities were $786.3B on 1-Sep, +$1.8B w/w and +$33.4B y/y.

o EU Macro stories:

o ECB Dismisses Double Dip - WSJ link

o Austerity Equals Confidence: Trichet CNBClink

o EU Finance Ministers Face Tough Agenda This Fall

§ When the ministers assemble for their first meeting Tuesday in Brussels, an unpleasant reality will be on the agenda: Despite €110 billion (about $140 billion) in promised loans to Greece and a €750 billion backstop for the whole euro zone, yields on the bonds of Europe's wobbliest countries have spent their vacation rising.

§ Investors now want nine percentage points more in interest for a 10-year Greek bond than they'll take on a German security. That's about the level in May

§ http://online.wsj.com/article/SB10001424052748704206804575467770592600194.html?mod=WSJ_hpp_sections_business

o Companies Shunning Banks on Stress Tests Doubts – CNBC, FT link

§ Leading UK and continental European companies are increasingly shunning banks from Spain, Italy and even Germany because they do not believe the Europe-wide stress testing of banks gave a true picture of their financial health.

o Murdoch says global economy still uncertain from Business Spectator

o News Corp chief says consumer behaviour will be "unpredictable".

o More than 400 US Banks Will Fail: Roubini, cautious on US

o More than half of the 800-plus US banks on the "critical list" are likely to go bust, according to renowned economist Nouriel Roubini of Roubini Global Economics.

o The second half of the year will remain weak as tailwinds become headwinds, Roubini told CNBC

o "In the second half, fiscal policy becomes a headwind, no more cash for clunkers,"

o http://www.cnbc.com/id/38986777

o Global banking regulators are expected to reach an agreement sometime next week related to the Basel III capital requirements. The agreement may allow reforms to receive a final endorsement at the G20 meeting in November. As a reminder, the Basel Committee is seeking to limit the role of hybrid capital in its new core capital requirements. TTN

o Roubini Says Dollar, Franc May Beat Gold in Any New Recession - BBG

o Fears grow over global food supply - FT

o Russia announced a 12-month extension of its grain export ban on Thursday, raising fears about a return to the food shortages and riots of 2007-08 which spread through developing countries dependent on imports

o UN’s Food and Agriculture Organisation called an emergency meeting to discuss the wheat shortage, and riots in Mozambique left seven dead

o http://www.ft.com/cms/s/0/5f6f94ac-b6bc-11df-b3dd-00144feabdc0.html

o FAO Calls ‘Extraordinary’ Meeting Amid Fears of Wheat Shortage - BBG

o The United Nations’ Food and Agriculture Organization called a special meeting of policy makers to discuss the global cereal markets as Russia extended a grain-export ban, stoking concern there may be wheat shortages.

o Macro positive: U.S. Trucking Shipments Signals Growth Intact: BBG

o Shipments are rising again at U.S. trucking companies, such as San Mateo, California-based Con-Way Inc., a signal the economic recovery remains intact.

o the Cass Shipments Index, developed by trucker payment service company Cass Information Systems Inc., rose 8.3 percent from the prior month. At 1.0950 the August measure is the second-highest reading in two years.

o Employers Raise Workers' Share of Health CostsA6 - – WSJ link

o Employers passed health-insurance costs onto employees at a sharply higher rate this year, and businesses' premiums grew more slowly than they have in a decade, according to an annual survey.

o China vs West:

· China Offers Rare Glimpse Into Forex Reserves – CNBC link

§ China on Friday offered a rare glimpse into its foreign exchange reserves, confirming that they are overwhelmingly allocated in dollars, while a central banker said the mountain of cash could face depreciation risks

§ 65 percent in dollars, 26 percent in euros, 5 percent in pounds and 3 percent in yen.

§ a vice governor with the People's Bank of China, warned on Dollar..reiterated China's long-standing discomfort with a global financial system dominated by a single currency in the dollar.

· European firms say they're denied equal access to Chinese markets

§ The EU Chamber of Commerce in China said in a 650-page position paper that the country's regulatory reform is backsliding and that foreign companies are being denied a level playing field when they compete with local firms. European investors in China face heavy restrictions in areas including telecommunications, construction, insurance and the auto industry, the group said. China is the EU's biggest source of imports and second-largest trading partner. The Irish Times (Dublin) (03 Sep.)

· U.S. Officials Head to BeijingA13 – WSJ link

o U.S. National Economic Council Director Lawrence Summers and Deputy National Security Adviser Thomas Donilon will travel to Beijing this weekend for high-level talks as the U.S. and China work to iron out tensions on issues ranging from currency policy to military ties to Iran.

· Japan Warns China on Business RulesA13 – WSJ link

o Japanese Foreign Minister Katsuya Okada said China risks losing foreign investments unless it introduces more transparency and consistency into its business rules.

o Political Stories:

o In a Shift, Fewer Young Voters See Themselves as Democrats - New York Times

o Obama to hold press conference next Friday – Reuters link

o President Barack Obama will hold a press conference on Friday, September 10, the White House said on Thursday.

o It also said in a statement that he would make two trips next week to talk about the economy, visiting Milwaukee, Wisconsin, on Monday and Cleveland, Ohio on Wednesday

o Authorities Loosen Curbs on Gulf Fishing, Shrimping – WSJ link

§ Fishing and shrimping can resume in federal waters in the northern Gulf of Mexico stretching from Louisiana's far eastern shore into Florida's Panhandle, authorities said Thursday.

o Why Women Are Fleeing Wall Street – WSJ link

§ Economists are struggling to explain an exodus of women from Wall Street, but one is not the least bit surprised by the data: Sylvia Ann Hewlett, founding president and chairman of the Center for Work-Life Policy, a nonprofit think tank based in New York.

o New Yorkers Want Islamic Center Moved, Poll Finds - NYT

§ Two-thirds of New York City residents want a planned Muslim community center and mosque to be relocated to a less controversial site farther away from ground zero in Lower Manhattan, including many who describe themselves as supporters of the project, according to a New York Times poll.

o Probe Circles Globe to Find Dirty Money – WSJ link

§ A slim lead helped spark an inquiry that found some of Europe's banks actively evaded U.S. law in aiding sanctioned countries to move $2 billion undetected.

o Mideast: Obama moved to speed the Mideast peace process. Netanyahu and Abbas agreed to convene a second round of direct talks on Sept. 14 and 15 and then meet every two weeks thereafter. A new diplomatic road map that would initially aim to forge a "framework agreement" between the Israelis and Palestinians focused on settling all the outstanding disputes dividing the combatants – WSJ link

o Mideast: Hamas claimed responsibility for another West Bank shooting attack and vowed more were to come – WSJ

o Muslim cleric calls for beheading of Dutch politician from Reuters

§ A well-known Australian Muslim cleric has called for the beheading of Dutch anti-Islamic politician Geert Wilders, a newspaper said on Friday.

o Iran's Karroubi Attacked, Son SaysA11 – WSJ link

§ Iranian opposition leader Mehdi Karroubi was attacked on Thursday night when a group of militiamen broke into his residential building and fired on his bodyguards, according to his family.

o Karzai Kin Asks U.S. to Bolster His Bank – WSJ link

o Drug shootout with army kills 25 in Mexico – Reuters link

o Many Americans Don't Even Know They're Fat from BusinessWeek

o End birthright citizenship (Rep. Phil Gingrey) – The Hill oped, By Rep. Phil Gingrey (R-Ga.)

§ Controversy surrounding illegal immigration has been topping recent news headlines, as thousands of people continue to pour across our borders unlawfully each year. This is of particular concern to me, as Georgia is home to more illegals – nearly 450,000 – than the state of Arizona. One aspect of the immigration debate on which lawmakers can all agree is that our current system is broken and in dire need of reform. But surprisingly, the latest disconnect centers around what should be a very simple question – does being born in the United States automatically constitute citizenship? For decades, the statue defining citizenship has been a point of contention. It is long past time to clear up the ambiguity.

o Fund Stories

o TrimTabs Reports Percentage Of Hedge Funds Expecting To Raise Leverage In September Surges

§ http://www.zerohedge.com/article/trimtabs-reports-percentage-hedge-funds-expecting-raise-leverage-september-surges

o More Evidence of How Hard It Is to Beat the Market

§ The WSJ's monthly review of investing in funds has a few interesting articles on just how difficult it is to beat the market

§ A review of the record on quantitative funds (much the rage over the last decade or more) finds that quantitative managers have discovered that they need to supplement their computer models with the "human touch"

§ A second article in the section reviews the dismal performance of 130/30 funds, a hot product which was to combine long and short positions leverage purportedly to provide higher return without increased risk.

§ http://seekingalpha.com/article/223687-more-evidence-of-how-hard-it-is-to-beat-the-market?source=feed

CANTOR TRADING RECAP

o Equity Recap

o They had another decent day with the 50 day moving average being taken out on the sp 500 at 1,080. The economic data was better as was the retail sales for the most part and the m&a continued with HPQ having deeper pockets then dell, while all other small cap tech stocks trended higher with them being thought as the next morsel for them as acquirers and BKC being bought at a fat premium from a group that has 50million and got zero down financing(can you say relating the bubble). Breadth to the market had advancing issues outnumbering declining issues by 2-1 while internally here, we had sell names outnumber buy names 1 ½-1 albeit quiet. Volume once again was way under a billion with anyone who had any ammo waiting for tomorrow’s payroll number which I don’t understand anyway with the previous month’s being revised 120,000 lower and no one wanting to focus on the true 16% unemployment rate(long game only, enjoy the green while it’s here). In my opinion, there was still some participation amongst folks going long but not a lot, the more seasoned guys were selling, had some quant’s covering shorts and others covering shorts as well

o Most of our action was in financials(25%) while Consumers was 6%, Healthcare 5%, utes 5%, retail 9% , energy and materials 9% and balance we’ll call etc. could have used some action in papers which act like champs with recent price hikes

o S&P’s were off only a couple of points in the early going (understandable in light of yesterday’s 3% surge). The 8:30 data on Labor (Unemployment Claims, Productivity and Unit Labor Costs) came in as expected. Futures moved into positive territory, but then faded back to slightly negative at the cash opening. At 10:00, we got Pending Home Sales data, which surprised to the upside (up 5.2% vs. an expected 1% decline). S&P’s moved up a quick 4 points, but then faded back to even in quiet trade. Most of the rest of the day was spent in a narrow range; at the bell we got a little rally which allowed stocks to close near their highs, up nearly 10 points, or 1% at 1090.10.

o M&A was center stage today, as Burger King agreed to be bought for $24 a share; BKC closed up $4.73, or 25%, at 23.59. This follows a 14% rise yesterday as reports began to circulate regarding a possible bid. In other merger news, DELL conceded to HPQ by saying that they would drop out of the bidding for PAR after HPQ raised their bid to $33 a share. Focus now shifts to the question of which company will be the next tech buyout (CML up 18.9%, CVLT up 5.2% and CRUS up 3.1%, were all mentioned). Elsewhere in the market, the homebuilders had a good day with BZH moving up 6.9% (also rumored as a possible takeover candidate), while HOV rose 5.4%. Retailers reported same store sales today. Notable gainers included: SKS up 10.8%, WTSLA up 8.2%, JWN up 8.1%, BKE up 7.4% and LTD up 6.1%.

o Billy Clark and Team

o CMBS recap

o Decent amount of activity today for the end of summer. We saw $320mm in BWICs with a little bit of everything for sale. 1/4 of the selling from insurance cos. Spreads were unchanged to 5bps tighter on the day under performing IG and HY CDS. GG10s closed in 5bps (+318/$103-24)

o AM/AJ mkt continues to be active with $53mm in BWICs. Like bonds similar to the GECMC 05-C3 AJs that we traded today- no AM class. We still have buyers of clean '05/'06 AMs. Despite the high delinquencies, like BACM 05-3 AMs in the low $90s. Same price as a clean AJ.

o In floater land, saw Kerzner rake legs trade in line with guidance with KERBs mid $80s. We sold 1/2 our BALL 05-MIB1 Cs 90-08/91-24 mkt.

o GEORDIE WALKER

o Convertible Wrap

o The equity market was up for a second day and most convertible names moved up with the common on a dollar neutral basis. Volumes were muted with many participants out for a long holiday weekend. Most activity is driven by news events of some sort. GAP converts were up on news that the company may sell the Food Emporium chain. Sandisk stock and Converts traded higher on takeover speculation also. Yield names still have a decent bid as investors are looking for the takeout or tender.

o Tom Fazio: ADCT 3.5%-17, BGC 0.875%-13, CIEN 0.25%-15, DOLE 7% pfd, SNDK 1%-13,

o Thomas Fazio

o Options Activity Wrap

o ARNA (6.74 +0.17) Options are becoming more active ahead of the scheduled FDA Panel review of the company's obesity drug on Sep 16. One investor bought 5,000 Sep 5/11 risk reversals for 0.70/spread (bought Sep 5 Put and sold Sep 11 call.) This is either an outright bearish trade or strategy intended to hedge a long stock position.

o ME (22.75 -0.60) Puts traded over 50k contracts after an explosion was reported on one of the company's Gulf rigs. Sep 20 Puts were the most active, trading as high as 4.30 before settling back down to .30 (We should note that puts traded only as high as 1.75 on any significant volume.)

o VIX (23.19 -0.70) Puts traded > 170,000 contracts today, mostly due to a customer buying the October 25 puts and selling the September 25 Puts 50,000x, most likely rolling a long put position from Sept to Oct (perhaps betting on the market to rally and the VIX to therefore drop in value.)

o GT (10.13 +0.60) Bullish option activity after the company announced an increase in prices on consumer tires of 6% to offset rising raw material costs. The Sep 10 Calls and Oct 12.5 Calls were the most active and traded >5,000 contracts each, driven by buyers.

o TIN (18.86+1.69) Bullsh: Calls traded more than 7400 contracts, or 11x average daily volume, as one investor bought 5,000 Oct 19 Calls for 70 cents. No apparent news.

o DFS (15.54 +0.38) CNBC reported that "JPM Chase has not ruled out the possibility of buying the Discover Financial…" One trader bought more than 5,000 Oct 15 Puts at .70, in a delta-neutral transaction, where the customer also bought 40% as much stock at 15.30.

o Michael Khouw

o Risk arb Wrap

o PAR/HPQ

o Conversation with HPQ IR

o The HPQ IR said the Hart–Scott–Rodino (HSR) has been filed and meetings with the DOJ have taken place. Expects HSR to expire 9/14. She said that they were not anticipating filing in Ukraine and Austria; however, when asked why Dell had to file in Ukraine/Austria and HPQ does not, she did not have a reason. A definitive agreement has not been signed yet.

o Scott Schefrin

o Rates Commentary

o The Treasury market continued its selloff overnight mainly during the European trading session with the market led down by the 7y note. The curve violently shifted throughout the morning as the long end as the case was yesterday began to significantly lag the short and intermediate sectors with large curve steepening trades taking place and some auction setups ahead of next weeks supply and pressure on German bunds. Treasuries settled down in the late morning ahead of today's 10 year TIPS reopening. The auction came at 1.019% a 1.1bp tail, 46.6% to indirects. The quiet pre payrolls/pre Labor day tone was felt throughout the remainder of the session with Treasuries trading an extremely tight range into the close. At 3PM benchmarks were mixed with the 2y slightly better bid on the day while the rest of the curve lower in price with yields 0.5-6.7bps higher. The 30 year was the worst performer, 10/30s once again approached 110bps closing the day at 109.4.

o Today's early data was relatively close to expectations, nonfarm productive down 1.8% expectations for down 1.9%, initial claims 472K versus 475K expected and continuing 4456K versus expected 4450K while the late morning data had a surprising 5.2% gain in pending home sales and .1% factor orders which was slightly below expectations.

o The Treasury as expected announced $33Bln 3y notes, $21Bln 10y notes and $13Bln 30y bonds, these auctions will take place next Tuesday through Thursday.

o Primary Dealer

SECTOR NEWS WITH MACRO IMPLICATIONS

ENERGY

o Gulf Rig Fire Out; Coast Guard Backpedals on Oil Sheen – CNBC link

o Blaze in Gulf Shakes Oil Industry – WSJ link

o The fire that engulfed an oil and gas platform in the Gulf of Mexico heightened pressure on the energy industry, which is battling greater regulation and a deep-water drilling ban

o BP warns barring it from drilling would put spill payments at risk

o BP has told Congress that it might be unable to pay for all of the damage caused by its oil spill in the Gulf of Mexico if the company is banned from offshore drilling in the U.S. Work on restoring the Gulf states, for which BP has been asked for voluntary financial support, also would be in doubt, the company said. BP has signaled reluctance to pay more than required if it is shut out of the Gulf, which accounts for 11% of its worldwide production. The New York Times (free registration) (02 Sep.) , The Sun Herald (Biloxi-Gulfport, Miss.) (02 Sep.) , St. Tammany News (La.) (03 Sep.)

o WLT Walter Energy guides 2010 coking coal sales to 7.2M-7.5M tons vs prior 7.7M-7.9M tons

o ME Coast Guard now says that there is no oil sheen associated with Mariner Energy platform – AP

o PTEN Patterson-UTI reports drilling activity for Aug

o BP Says Spill Costs Have Hit $8 Billion – WSJ link

o Oil explorer Kosmos considers IPO - FT

o Oil exploration and production company Kosmos, the operator of Ghana's Jubilee oil field, is considering an initial public offering, the Financial Times reported on Friday.

o Blackstone Group LP (BX) and Warburg Pincus L.P., the private equity owners of Kosmos Energy LLC, are considering taking the oil company public as an alternative to a sale of the company, the Financial Times reported Thursday. A potential public offering of Texas-based Kosmos in either the U.S. or U.K. could value the company at about $5 billion

UTILITIES

o SRE California Public Utilities Commission approves 100 MW solar-power initiative from San Diego Gas & Electric

INDUSTRIALS

o Fears grow over global food supply – FT

§ Russia announced a 12-month extension of its grain export ban on Thursday, raising fears about a return to the food shortages and riots of 2007-08 which spread through developing countries dependent on imports

§ UN’s Food and Agriculture Organisation called an emergency meeting to discuss the wheat shortage, and riots in Mozambique left seven dead

§ http://www.ft.com/cms/s/0/5f6f94ac-b6bc-11df-b3dd-00144feabdc0.html

o SLI SL Industries names Louis Belardi CFO; effective 30-Aug

o COIN Converted Organics discloses issuance of 1.16M common shares and warrants for 1.16M shares to Atlas Advisors

o CASC Cascade reports Q2 EPS

o ESL Esterline Technologies reports Q3 EPS

o GRO Agria Corp announces resignation of COO Zhao Yue

AUTOS

o U.S. Frets Over Foreign GM Investors – WSJ link

o US Treasury mulls over foreign investors in GM IPO-WSJ from Reuters

§ The U.S. Treasury is concerned about how many foreign investors it should allow to buy big stakes in General Motors Co's [GM.UL] proposed initial public offering, the Wall Street Journal said.

o Under the hood from NY Post

§ President Obama didn't think much of Detroit before bailing out Chrysler and GM, his former car czar claims in a new tell-all that rolls over the White House.

§ According to Steve Rattner, the president's former point man on the auto task force, Obama was frustrated with the US car companies from the get-go. At one point, the president asked, "Why can't they make a Corolla?"

TRANSPORTS

o ALK Alaska Air reports August traffic +10.0%; Capacity +7.1%; Load factor +2.2 points to 86.5%

o LCC US Airways Group reports August PRASM +15.0% vs consensus +15.2%

o Air France-KLM considering a low cost offer to counter Easy Jet (EZJ.LN) competition -- Les Echos

o Macro positive: U.S. Trucking Shipments Signals Growth Intact: BBG

§ Shipments are rising again at U.S. trucking companies, such as San Mateo, California-based Con-Way Inc., a signal the economic recovery remains intact.

§ the Cass Shipments Index, developed by trucker payment service company Cass Information Systems Inc., rose 8.3 percent from the prior month. At 1.0950 the August measure is the second-highest reading in two years.

MATERIALS

o DOW Dow AgroSciences announces agreement to acquire assets of Grand Valley Hybrids

o South Africa miners reported Q2 gold production to 49 444,5 kg a decline 2% y/y v +14.5% q/q - Chamber of Mines – TTN

o FRD Friedman Industries increases quarterly dividend by 100.0% to $0.08 from $0.04

o China Investors Approach Canadian Fund on Potash Bid – CNBC link

o POT: Credit Suisse said BHP may have to raise its bid to about $155/share from $130; any deal could face regulatory delays in the US

o BHP Pledge on Potash Jobs Would Get Deal Approved, Lawyers Say - BBG

§ BHP Billiton Ltd. would get Canadian approval for its $40 billion hostile bid for Potash Corp. of Saskatchewan Inc. by pledging to preserve head-office jobs and support a fertilizer-marketing company, said lawyers specializing in foreign investment and a former minister.

§ In the past 25 years, Canada has only formally rejected one takeover offer, Alliant Techsystems Inc.’s bid for MacDonald Dettwiler & Associates Ltd.’s space business in 2008, according to John Manley, who was federal industry minister from 1993 to 2000. Prime Minister Stephen Harper has made increased foreign investment one of his Conservative government’s priorities

o Canada’s Goldcorp has launched a C$3.6bn (US$3.4bn) cash-and-stock takeover offer for Andean Resources, trumping a C$3.4bn bid made public only hours earlier by Eldorado Gold, another Canadian miner.

§ Conference call: 10:30 ET, 866-223-7781 (North America), +1-416-340-8018 (international), or 800-6578-9898 (Australia).

o Xstrata to build $4bn copper mine in Peru from Telegraph Finance

§ Switzerland-based miner Xstrata has signed a deal with Peru giving it permission to start building the $4.2bn (£2.7bn) Las Bambas copper mine. The investment is equivalent to 3pc of the country's GDP.

o EU extends decision deadline for Syngenta/Monsanto deal from Reuters

o EU regulators have extended their deadline by a month to Nov. 25 to decide whether to clear a $160 million bid by Syngenta for Monsanto's global hybrid sunflower seeds business.

TECH/MEDIA/TELECOM

o Tech pos: NVLS mid Q update - mostly in line. Tightened Guidance to the High-End (may not be enough for the bulls)

o TTWO up 10% after hrs..good for e-gamers today ) Take-Two Tops Estimates on ‘Red Dead,’ Boosts Outlook

o Mediatek up 7% today – BBG

o INTC – WSJ negative: Apple's TV Model Uses Cheaper Chip

o Lower pricing is one of the most noticeable features of Apple Inc.'s latest gadget for delivering Internet video to televisions. Some of the savings appear to come at the expense of Intel Corp

o Intel, Acer and Asustek as well as other electronic distributors have jointly lowered their prices on some PCs to help reduce inventory and boost back to school sales – TTN

o RIMM Add Indonesia to list of countries concerned about Research In Motion – FT

o Google hopes to launch music service by Christmas - Reuters

o ARST ArcSight declined to comment on takeover speculation during its conference call

o PRO PROS Holdings updates guidance to reflect settlement

o MCZ Mad Catz Interactive says CFO Stewart Halpern has resigned his position to pursue other interests

o PAR, HPQ 3PAR and H-P confirm definitive merger agreement

o DIS Disney/ABC, ESPN and Time Warner Cable reach long-term agreement

o LORL Space Systems/Loral files $100M IPO through Credit Suisse and JPMorgan

o SQI SciQuest amends S1; to offer 6M shares though Stifel Nicolaus

o ZIXI Zix Corp CFO Susan Conner left the company, effective 31-Aug

o VPRT Vistaprint initiated buy at Kaufman Bros; Target is $50.

o SNPS, VIRL Synopsys completes acquisition to Virage Logic; expects impact on GAAP and non-GAAP EPS to be approx. neutral in Q4

o TNDM Court overseeing Neutral Tandem patent litigation issued order granting Peerless Network’s motion for summary judgment

o FNSR Finisar reports Q1 EPS

o TTWO Take-Two reports Q3 EPS

o Samsung raises 2010 smartphone sales target: report from Reuters

o Samsung Electronics Co Ltd , the world's No.2 handset maker, expects to sell up to 25 million smartphones this year, exceeding its earlier target, and aims to double shipments next year, media reports said on Friday.

o SAP Sees ‘Limitless’ Potential in China, Co-CEO Says - BBG

o SAP AG，the world’s biggest maker of business-management software, aims to make China “a second home” due to the market’s “limitless potential” co-Chief Executive Officer Bill McDermott said today.

o “The potential here is just thrilling, so we want to treat China as if it’s a second home,” McDermott said in an

o interview in Beijing.

o Google, AOL Widen Alliance – WSJ link

o Baidu Unveils App Store – WSJ link

o Blockbuster nears edge from NY Post

o Teetering Blockbuster said it missed another interest payment on its bonds, this time to holders of the company's junior notes. The movie rental chain said last month it might have to liquidate if it cannot restructure its $1 billion debt...

o Toshiba to Launch New Tablet Computer – WSJ link

o Toshiba said that it will release by year-end a tablet computer that runs on Google's Android operating system as the company aims to compete with Apple's iPad.

o Samsung Unveils Tablet to Compete With iPad – WSJ link

o Galaxy Tab Has Smaller Screen, Similar Features to Apple's Device; Likely Cost Is $200-$300

o A New Digital Battlefield – WSJ link

o Amazon, Apple Rivalry Moves Beyond Music and E-Books Into TV Shows

o Intel Wants to Be Inside Everything from BusinessWeek

o DRAM makers Powerchip and ProMOS August revenues up on month from DIGITIMES

o Powerchip Technology and ProMOS Technologies have both posted sequential revenue gains in August 2010, despite recent reductions in DRAM prices. Powerchip's revenues were up 3.2% from July to NT$8.89 billion (US$277.68 million), while ProMOS saw August revenues grow 9.8% on month to NT$2.41 billion.

o LinkedIn's Overseas Route to an IPO from BusinessWeek

o Wintek has announced consolidated revenues of NT$6.17 billion (US$192.87 million) for August, up 17% sequentially and 150% on year. Consolidated revenues for January-August totaled NT$32.14 billion, up 96% on year. DIGITIMES

o The DRAM spot market saw some traders dumping more inventory to channels during the week (August 30-September 3), resulting in sharper price drops in the white-brand DDR3 segment, according to inSpectrum. DIGITIMES

o MU, SMIC: Semiconductor Manufacturing International Corporation (SMIC) is in talks with Micron Technology about taking over the operation of a 12-inch fab in Wuhan, China, according to a Commercial Times report citing local equipment makers.

o Time Warner Cable, Disney Reach Fee Agreement for ESPN, ABC – BBG

o Arcsight (ARST) didn’t mention sale in 1Q earnings after WSJ last week reported co. is on the auction block - BBG

CONSUMER

o General Tobacco Plans to Shut Down – WSJ

o General Tobacco, a maker of low-priced cigarettes that became the sixth-largest U.S. tobacco company during the last decade, plans to shut down after failing to make payments it owed to states under a massive industry settlement.

o http://online.wsj.com/article/SB10001424052748704206804575467822400704134.html?mod=ITP_marketplace_1

o Fears grow over global food supply – FT

o UN’s Food and Agriculture Organisation called an emergency meeting to discuss the wheat shortage, and riots in Mozambique left seven dead

o http://www.ft.com/cms/s/0/5f6f94ac-b6bc-11df-b3dd-00144feabdc0.html

o Burkle to Appeal Barnes & Noble Poison Pill Ruling from DealBook

o Ron Burkle, the billionaire investor, plans to appeal a Delaware court ruling that upheld an anti-takeover "poison pill" put in place by bookseller Barnes & Noble.

o SHOO Steven Madden purchases $48.75M Betsy Johnson LLC loan from lenders for ~$27.6M on 27-Aug -- 8K

o HOTT Hot Topic holder Becker Drapkin discloses a 5.1% stake in a 13D filing

o GCA Global Cash Access names Mary Higgins CFO effective 14-Sep

o ZQK Quiksilver reports Q3 EPS

o Fast Retailing (9983.JP) fell 1% after Uniqlo comps dropped 9.3% in August

o Esprit Holdings (330.HK) dropped 5% on weak earnings and a disappointing forecast.

o BKC: Shareholders in Burger King Get a Whopper – WSJ

o Thanks to leverage and dividends, a TPG Capital-led consortium already has made a multiple of its 2002 investment in the chain

o http://online.wsj.com/article/SB10001424052748704206804575467893796186632.html?mod=ITP_moneyandinvesting_11

o JD Wetherspoon (JDW.LN) chairman threatens to boycott Diageo, calling company "bunch of morons" - Morning Advertiser

GAMING, LODGING, & LEISURE

FINANCIALS

o HRB up 8%

o HRB reports better than street expected

o Banks admit better disclosure on bonuses needed – Reuters link

o Warren schedule change stirs talk on consumer job – Reuters link

o More than 400 US Banks Will Fail: Roubini, cautious on US

§ More than half of the 800-plus US banks on the "critical list" are likely to go bust, according to renowned economist Nouriel Roubini of Roubini Global Economics.

§ The second half of the year will remain weak as tailwinds become headwinds, Roubini told CNBC

§ "In the second half, fiscal policy becomes a headwind, no more cash for clunkers,"

§ http://www.cnbc.com/id/38986777

o FSNM First State Banc says subsidiary First Community Bank is in discussions with potential investors about a direct investment

o FIBK First Interstate BancSystem names Robert Cerkovnik Chief Credit Officer

o TPG Sells Ping An Stake for $1.16 Billion – WSJ link

o BB&T's Acquisition of Colonial Is Starting to Pay Off – American banker

o Sporting stronger margins and other tangible benefits, BB&T Corp. has quieted the murmurs heard a year ago when it took over the failed Colonial Bank.

o AIG: AIA Group Ltd., the main Asia unit of American International Group Inc., submitted preliminary documents to the Hong Kong Stock Exchange for an initial public offering, BBG

o ECB to create 'super regulators' for banks from Telegraph Finance

o The European Union last night took its first major step towards the creation of three super regulators that could eventually take direct responsibility for the oversight of individual member states' financial systems.

o Companies Shunning Banks on Stress Tests Doubts – CNBC, FT link

o Leading UK and continental European companies are increasingly shunning banks from Spain, Italy and even Germany because they do not believe the Europe-wide stress testing of banks gave a true picture of their financial health.

o Banks are cutting use of bonuses to recruit from Financial Times

o Guaranteed bonuses accounted for about 5% of the bonuses paid out for 2009 at 37 leading financial companies surveyed by the Institute of International Finance

o In the Battle of the Big Brokers, Merrill Is Winning from BusinessWeek

o HSBC warns UK of 'break up' exodus from Telegraph Finance

o HSBC, which received no state bailout to survive the global financial crisis, warned that big British banks would move abroad if the Commission on Banking decides that they should be broken up

REAL ESTATE

o Value of California's properties falls 1.8% to $4.4 trillion from Los Angeles Times

o Forty-eight of California's 58 counties saw totals fall this year — nine by more than 5%, the state Board of Equalization reported. The total value fell 2.4% in 2009.

o The Golden State's real estate market lost a bit more of its luster as the total value of California's properties fell for the second year in a row — and for the second time since records were first kept in 1933 at the depths of the Great Depression.

o Stuytown stall from NY Post

o A New York judge will rule later this month on whether to let hedge fund honcho Bill Ackman go through with a plan that will put him in control of landmark Manhattan apartment complex Stuyvesant Town-Peter Cooper Village. Until then, New York Supreme Court Judge Richard Lowe is blocking both...

o Goodman sells CMBS notes to Challenger from Business Spectator

o Offer is the second CMBS issue this year.

o Deutsche Bank Seeks to Foreclose on Moinian NYC Tower – BBG

o A unit of Deutsche Bank AG sued to foreclose on the Manhattan office tower that formerly housed Newsweek magazine, claiming that developer Joseph Moinian failed to repay a $250 million mortgage.

o KW Kennedy-Wilson, RECP/Urban and Capri Capital announce acquisition of Serenade apartment community from California Urban Investment Partners for $81.5M

o BlackRock Chosen by Insurance Regulators to Weigh CMBS Risks – BBG

o BlackRock Inc., the world’s biggest money manager, was hired by state insurance regulators to assess the industry’s potential losses from holding commercial mortgage-backed securities.

o BlackRock will review more than 7,000 securities by year- end, the National Association of Insurance Commissioners said yesterday in a statement released on its website. The New York- based firm will calculate loss expectations for the holdings, which will determine how much capital insurers must hold to cushion potential declines, NAIC said.

HEALTHCARE

o Roche Sets Cost-Costing Plan – WSJ link

o Roche said it has launched a cost-cutting and efficiency plan in the wake of increased price pressures and a series of drug-development setbacks.

o Roche (ROG.VX) confirms full year outlook and launches initiative to adapt cost structures and accelerate productivity improvements

o UNH, WLP Barron's Weekday Trader is positive on UnitedHealth and WellPoint

o OMPI Obagi Medical Products exercised its right to terminate its 2006 agreement with Dr. Zein Obagi

o COO Cooper Companies reports Q3 EPS

OTHER STORIES

EUROPE TRADING WRAP

o Oils

o Soco (-8.6%). Results from an exploration well in the Congo disappoint.

o BP (+0.2%). Company has spent $8bn so far on the Gulf oil spill and also expect to resume drilling of its relief well shortly.

o Miners

o Xstrata (+0.6%). Xstrata have won copper mining concession contracts in Peru.

o Vedanta (-1.5%). Underperforming peers after the Indian environment ministry issued a show-cause notice over alleged expansions at it's Orissa plants.

o TMT

o Telefonica decided not to present a bid for a stake in Columbia’s Empresa de Telecomunicaciones de Bogata

o Antena 3 raised @ goldmans

o Financials

o Goldman cuts some Greek bank price targets

o Dexia Studies New Round of Cost Cuts: De Standaard

ASIA TRADING WRAP

o Japan

• NKY+0.57%, TPX +0.52%

• NKY rose after US pending homes sales rose unexpectedly easing concerns over economic slowdown, but trading was thin as investors remained wary of US nonfarm payroll to be released later today. Turnover on the TPX fell to 1.14 trillion yen from 1.18 trillion yen yesterday

• Stocks rose across most sectors led by tech, materials, oil & gas and industrials. Utilities, F&B and retail fell

• Exporters gained: autos +0.87%, CE +1.28%, precision +0.14

• Oil & gas +0.97%, mining +2.07%, traders +0.62% after metal and oil prices Rose

• Best performing sectors on the TPX: mining +2.07%, nonferrous metals +1.65%, glass & ceramics +1.38%; worst performing sectors: airlines -1.89%, pulp & paper -0.99%, food -0.83%

o Hong Kong

• HSI +0.49%; HSCEI +0.67%

• Stocks rose after ahead of key US jobs data. Turnover on the HSI rose to HK $23.93B from HK$17.63B yesterday

• Autos extended gains after China car sales accelerated in August:

o China

• SHCOMP -0.01%; SZCOMP +0.50%

• SHCOMP closed flat after a lacklustre session with key resistance level providing a strong barrier after investo. Turnover on the SHCOMP rose to 140.38B yuan from 135.73B yuan yesterday

• Stocks were mixed. Consumer, tech, industrials and health care rose while oil & gas, financials, telecom, materials and utilities fell

• Autos extended gains rising 1.40% after car sales accelerated in August

• Banks -0.45%, real estate -0.77% after BNP Paribas said home prices will decline from this month

• Farming & fishing stocks +1.16% after NDRC reported pork prices jumped 9.3% MoM in August while egg prices rose 11.8% and vegetables prices rose 5%

INVESTMENT BANKING

M&A

o EU extends decision deadline for Syngenta/Monsanto deal from Reuters

o EU regulators have extended their deadline by a month to Nov. 25 to decide whether to clear a $160 million bid by Syngenta for Monsanto's global hybrid sunflower seeds business.

o Time to put money into the ATM? (Reuters) –

o A $15 billion private equity bid for payments processor Fidelity National Information may have come unstuck in May, but it did enough to whet the appetite for other potential deals in a financial technology industry slowly emerging from its worst-ever crisis.

o Analysis: Conundrum: M&A/credit binge vs double-dip fear – Reuters link

o - A new conundrum faces financial markets -- why, if the global economy is heading back into trouble, are companies on an M&A binge and big investors snapping up so much corporate debt?

o Arcsight (ARST) didn’t mention sale in 1Q earnings after WSJ last week reported co. is on the auction block – BBG

o China Investors Approach Canadian Fund on Potash Bid – CNBC link

o Thursday's disclosure by Alberta Investment Management Corp, which manages some C$70 billion ($67 billion) in public sector pension funds, is one of the first pieces of hard evidence to back suspicions that China is looking for a way to derail a takeover of Potash

o POT: Credit Suisse said BHP may have to raise its bid to about $155/share from $130; any deal could face regulatory delays in the US

o Canada’s Goldcorp has launched a C$3.6bn (US$3.4bn) cash-and-stock takeover offer for Andean Resources, trumping a C$3.4bn bid made public only hours earlier by Eldorado Gold, another Canadian miner.

o Pension Funds Looking at Potash Bid? ZH

o The head of a major Canadian pension fund says a Chinese sovereign wealth fund is interested in making a joint-bid with a Canadian pension fund for fertilizer-maker Potash Corp. of Saskatchewan Inc. Other pension funds, and PE funds, are also looking to possibly strike a deal...

o TPG Sells Ping An Stake for $1.16 Billion – WSJ link

o Burkle to Appeal Barnes & Noble Poison Pill Ruling from DealBook

o Ron Burkle, the billionaire investor, plans to appeal a Delaware court ruling that upheld an anti-takeover "poison pill" put in place by bookseller Barnes & Noble.

o Tomkins sets Sept. 8 bank meeting to launch $1.6B buyout loan, S&P reported

o Yell Group PLC (YELL LN): Yell Group might be about to make a disposal, a Daily Telegraph market report said. The report said proceeds from the disposal would be put toward paying down Yell's debt. Separately, the article also mentioned renewed speculation of a 30p per share takeover bid for Yell, mentioning Google as a possible bidder.

o Deutsche Bank (DBK LN)/ Deutsche Postbank AG (DPB GR) Deutsche Bank may move ahead with a takeover of Postbank in the coming week, Sueddeutsche Zeitung reported. The daily cited commentary from Merrill Lynch analysts, saying that Deutsche Bank could launch a purchase of outstanding shares in Postbank next week.

o HOTT Hot Topic holder Becker Drapkin discloses a 5.1% stake in a 13D filing

o BKC: Shareholders in Burger King Get a Whopper – WSJ

o Thanks to leverage and dividends, a TPG Capital-led consortium already has made a multiple of its 2002 investment in the chain

o http://online.wsj.com/article/SB10001424052748704206804575467893796186632.html?mod=ITP_moneyandinvesting_11

o Aviva (AV.LN) waits for a better takeover offer for Spice – FT

o FSNM First State Banc says subsidiary First Community Bank is in discussions with potential investors about a direct investment

$ RAISING

o ESCT Bruker Energy & Supercon Technologies files $100M IPO through Jefferies and UBS

o Company is a subsidiary, and presently a separate reporting segment, of Bruker Corporation (BRKR). Bruker Energy & Supercon Technologies is a provider of superconducting technology and enabling tools company. Primary competitors include Sumitomo, Alpha Magnetics, Zenergy Power, Nexans (NEX.FP), Siemens (SI), American Superconductor (AMSC), SuperPower, and Fujikura. Proposed symbol on the NASDAQ Global Market is ESCT.

o US Treasury mulls over foreign investors in GM IPO-WSJ from Reuters

o Sept 3 (Reuters) - The U.S. Treasury is concerned about how many foreign investors it should allow to buy big stakes in General Motors Co's [GM.UL] proposed initial public offering, the Wall Street Journal said.

o LinkedIn's Overseas Route to an IPO from BusinessWeek

o The road to an IPO for LinkedIn may go through the U.K., India, Australia, the Netherlands and Canada. The chairman, Reid Hoffman, has talked about the likelihood of an eventual IPO, must now prove it has a global business, not just a worldwide user base, Bloomberg Businessweek reports in its Sept. 6 issue.

o Oil explorer Kosmos considers IPO - FT

o Oil exploration and production company Kosmos, the operator of Ghana's Jubilee oil field, is considering an initial public offering, the Financial Times reported on Friday.

o CD&R to buy Univar stake from CVC from FT Alphaville

o Clayton Dubilier & Rice is to buy a 42.5% stake in Univar, the chemicals distribution group, in a deal valuing the company at $4.2bn, reports the FT. The US buy-out group is

o AIA Group, the main Asia unit of AIG, submitted preliminary documents to the Hong Kong Stock Exchange for an initial public offering, according to two people familiar with the filing, Bloomberg reported. The filing means that AIG may aim to hold the IPO in late October or early November. Once a company submits a formal A1 filing to the Hong Kong stock exchange, the bourse holds a hearing in the following weeks to approve the listing. The company then begins pre-marketing and a roadshow if the listing is approved.

o SciQuest Gives IPO Terms, Will Sell Shares At $9.50-$11.50 - DJ

o SciQuest Inc. unveiled terms of its previously announced initial public offering, saying it will sell up to 6.9 million shares of stock in an expected price range of $9.50 to $11.50 apiece.

o China Online Real-Estate Company SouFun Plans IPO In US

***All eco data from Bloomberg and DJ

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