Morning @ Cantor
Morning
@ Cantor 9/8 Today’s
Stories From Cantor Fitzgerald Sal
Catrini (908) 517-5067 CONTENTS: All
Headings Are Functioning Links
Sector News: Energy, Industrials, Transports, TMT, Materials, Autos, Fins, Real Estate, Consumer, Gaming/Lodging, HC, Other
Stories, Europe Trading Wrap, Asia Trading Wrap
Investment Banking Wrap: M&A, Money Raising
o US
Stock Futures
o
S&P Futures up
3, near highs
o
Europe
stocks rally to highs…up 0.3% at 7am et.... off lows as
pessimistic views regarding peripherals got louder… peripherals spreads under
pressure again
o
Strong
yen weigh on japans stocks again..blasts exporters
o
EU banks remain lower at 7am et however..
o
Peripheral
situation continues to be the focus of market sentiment ahead of Portugal
auction.. Data weighed too in EU on German export data
§
Peripheral markets led declines as worries
over Irish banks continued and news that National Bank of Greece (ETE.GA)
will raise approx €2.8B in capital
o
USD near lows at 7am et….DXY dn 0.2 to
82.7 area
o
EUR
now firming vs dollar and yen as risk off trade subsides post 6amet
o
Treasury’s
flattish at 7m et…
10-Year Notes Decline as $21 Billion Auction Looms
o
Japan's
finance minister made it clear the government will intervene to tame the yen's
rises if deemed necessary, but investors ignored the warning and
pushed the yen to a 15-year high – WSJ
o
China
ramped purchases of Japanese government bonds in July, adding
to speculation that the growing money flow could be contributing to the strong yen.
– WSJ
o
The
dollar will remain the world's dominant currency for a long time, and
the yuan will only gradually emerge as an alternative, Chinese Commerce
Minister Chen Deming said on Wednesday -
from Reuters
o
Gold up $1..off highs – but near record
o
Crude dn small today
o
Tech shares up led by Ericson in EU..decent
ALTR update
o
Whitney
says 80000 banks jobs to go – BBG
o
President Obama will argue personally
Wednesday against extending the
Bush-era income tax cuts for the nation's wealthiest families even for a year
or two, White House officials said Tuesday - a message aimed at wavering
Democrats - WP
o
Congress is unlikely to quickly pass Obama's latest
proposals to jump-start the economy, reflecting the
president's weakened political position – WSJ
o
S&P REPORT SAYS U.S. CREDIT OTLK CONTINUES TO STABILIZE
o
Greek
banks dn
6% wed cross the board on default fears…BBG
o
Greek
banks: NBG’s
Greek debt warning
§
The most denied cash call of recent times has
finally happened. Late on Tuesday night National Bank of Greece announced a
€2.8bn ‘Comprehensive Capital Strengthening Plan:
§
But what does that mean? Could it be that NBG is raising the money to cover a Greek
government bond haircut? Very possibly.
FT
§
http://ftalphaville.ft.com/blog/2010/09/08/336896/nbgs-greek-debt-warning/
o Greek Second-Quarter Growth Revised Lower
o
Greece's statistics service released
provisional figures for second quarter 2010 gross domestic product, revising
previous flash estimates lower
o Yuan
Trading Against Ruble Said to Start Within Weeks - BBG
o Overseas
Action
o
Europe markets:
§ Europe
stocks rally to highs…up 0.3% at 7am et....
o Asian
Markets:
§ Nikkei
(2.18%); Hang Seng (1.46%); Shanghai Composite (0.11%)
§ China,
financials slumped, and property stocks – worries the government may launch a new round of
measures to cool the property market.
§ China
Commerce Min Chen: Expect a "small" trade surplus this year; trade
surplus has been larger than expected because of declining commodity prices –
Xinhua
§ Australia
largest banks are forecasted to independently raise key mortgage rates by up to
20 bps out of cycle with the RBA – WSJ
§ Japan
Fin Min Noda: Decisive steps to include forex intervention; To closely
cooperate with other nations on currency; Concerned uptrend in Yen has become
deep-rooted – TTN
o Data:
§ US
MBA Refinance Index -3.1% At 4,926.5; Last Week 5,085.3
·
US MBA Purchase Index +6.3% At 184.5; Last
Week 173.6
·
US MBA Market Index -1.5% At 880.0; Last Week
893.8
§ ABC
Consumer Comfort (43) in 5-Sep week vs (45) in prior week
§ Japan’s
July core machinery orders were better than expected.
§ German exports fell 1.5 per cent in July in
the latest sign that growth in Europe’s largest economy is slowing
§ Aug Halifax Prices M/M: +0.2% v -0.5%e;
§ U.K.
manufacturing in line..but rose for a third month in July and posted the
biggest annual gain since 1994 in a sign the economic recovery is persisting -
BBG
o
Global rates:
o
Bank
of Korea May Raise Interest Rate to Damp Prices – BBG
o
Bank of Canada
Governor Mark Carney will probably raise borrowing costs today for a third and
final time this year before pausing to gauge the strength of the economic
recovery - BBG
o
China
debt yields edge higher ahead of August data
§
China's bill and bond yields edged higher on
Wednesday as cautious investors trimmed their holdings ahead of the release of
a slew of Chinese economic data for August starting later this week
o Economics today:
o MBA Mortgage Purchase Applications at 07:00
ET
o ICSC-Goldman Chain Store at 07:45 ET
o Redbook Chain Store at 08:55 ET
o Fed Beige Book at 14:00 ET
o Jul Consumer Credit at 15:00 ET
o *
U.S. sells $21b ten-year notes, 1 p.m.
- Earnings
/ company events today :
o
Ciena (CIEN), 7 a.m., $(0.32)
o
Smithfield Foods (SFD), 7 a.m., $0.46
o
United Natural Foods (UNFI) 7:30 a.m., $0.41
o
Talbots (TLB), 7:30 a.m., 7:30 a.m., $0.05
o
Transcontinental (TCL/A), 10:42 a.m., C$0.37
o
Evertz Technologies (ET CN), 4 p.m., $0.25
o
Men’s Wearhouse (MW), 4 p.m., $0.78
o
Shuffle Master (SHFL), 4:05 p.m., $0.12
o
Aerovironment (AVAV) 4:05 p.m., $(0.23)
o
Forest City (FCE/A) 4:10 p.m., $0.01
o Navistar (NAV), 4:30 p.m. $1.50
o
Citi Global Technology Conference: IBM, MSFT,
XRX, ADI, NTAP, MOT, TLAB, DELL, GOOG,
HPQ, ARM, TXN, LXK
o
Barclays Back-To-School Consumer Conference:
TAP, DF, DLM, PEP, PM, KO, PG, SJM,
HNZ
o
Keefe, Bruyette & Woods Insurance
Conference: BRO, PFG, ALTE, PRA, FNF,
GNW, FAF, TRV
o
Credit
Suisse Automotive & Transportation Conference: DAN, RA, CNW, UNP, CP
o
Gabelli Aircraft Supplier Conference: BA, PH,
HON, GR, HWK, HXL
o
Dahlman Rose Global Transportation
Conference: CSX, RA, LSTR, CNW, KSU
o
Jefferies Global Shipping and Logistics
Conference: BALT, KEX, OSG, GMR, SFL
o
Analyst Day: ATR, DHR
o
roadshow: ADVS, SON
o
Business Update Call: HAS
o WSH Willis Group names Martin Sullivan deputy
chairman
§ Conference call: 08:30 ET (13:30 BST),
866-803-2143 (US), +1-210-795-1098 (international), 0800-279-3953 (UK), or
+44-20-7108-6248 (international), passcode Joe Plumeri.
o BP to admit partial blame for Deepwater oil
spill - guardian.co.uk
§ BP is due to
publish its own report into the spill at noon today. This follows an internal
investigation into the events leading up to the explosion on 20 April that
killed 11 workers and began a devastating oil leak that spewed oil into the
Gulf of Mexico for almost three months
o slew
of Chinese economic data for August starting later this week
o U.S. and global bank regulators could reach a deal as
soon as this weekend on new capital requirements for the world's largest banks –
WSJ
o Warren call gets warmer from NY Post – anncmt within days?
§ Harvard professor Elizabeth Warren could be tapped by
President Obama to lead a consumer new financial protection agency ---an idea
she is credited with hatching -- within
days. White House Press Secretary Robert Gibbs told reporters of the
possibility at a press briefing yesterday
o
SEC's Schapiro: "Flash crash"
report expected by month end
o
Top M&A
o BMY: Bristol-Myers
Squibb said Tuesday it had agreed to acquire ZymoGenetics, the maker of a
hepatitis C drug the companies were jointly developing, for $885 million
o
ZGEN
+84.9% (to be acquired by BMY)
o
CPII
-7.9% (merger with CMTL terminated)
o Vodafone
is selling its 3.2 percent stake in China Mobile for about $6.6 billion
o
The
state-owned Chinese group has asked Singapore’s state investment agency to join
a consortium to mount a counterbid to BHP’s $39bn offer for Canada’s
PotashCorp, but Temasek has made no decision – FT
o
Foster's knocks back $2.5 billion
offer for wine – Reuters link
o
Facing leaner times, defense firms
hunt for M&A – Reuters link
o
Potash CEO reiterates that another bid for
company will be made, calls BHP Billiton (BLT.LN)'s $130/share offer
"non-starter" - Globe and Mail
o
Top $ Raising
o Credit
Markets Home
Depot, Dell Drive Issuance to 7-Month
High
o
Companies sold $15.4 billion of the debt as
yields fell to 3.83 percent yesterday and reached as low as 3.74 percent on
Aug. 24
o
In Europe, banks sold 8.5 billion euros
($10.8 billion) of bonds as lenders rushed to refinance almost a
quarter-trillion euros of debt due this year
o
The Muni Bond Crisis Is Officially Here:
Harrisburg Drops $3.3 Million in Muni Payments from zero hedge
o
This is just the beginning. Collectively US
states continue to face massive budget short-falls in spite of massive Federal
Aid. According to the Center on Budget and Policy Priorities, US states are expected to run deficits
of $144 billion and $119 billion in FYs 2011 and 2012 respectively,
unless they can cut spending further or raise taxes dramatically to close these
gaps
o California Property Tax Rolls Shrink 1.8% in ‘Historic’
Slump - BBG
o
California property values fell 1.8 percent
for the current fiscal year, only the second drop since the most-populous U.S.
state began collecting the data in 1933.
o Global Bond Funds Post
Biggest Inflow in Four Months – BBG
o
Investors added the most cash to global bond
funds since May and withdrew from equity funds last week amid concern economic
growth around the world is weakening
o
The bond funds took in a net $3.83 billion in
the week ended Sept. 1, according to research firm EPFR Global. Stock funds
lost $6.87 billion, the most in 14 weeks. Those buying debt and equities in
emerging markets extended their streak of inflows to 14 weeks.
o
Deflation
as unlikely as high inflation: ECB's Quaden from Business Spectator
o No
brutal austerity needed, except in Greece.
o
ECB's
Weber commented in a speech that
he had no fears of a possible double-dip recession nor deflation but added one
must resist temptation to declare crisis from being over. Weber cautioned that
one cannot rule out setback in financial markets but did concede that the
financial markets were calmer but uncertainty did prevail. The effects from the
crisis would be felt for years. Economy had developed better than expected
compared to forecasts made at beginning of 2010 and that the planned economic
reforms would not hurt economy – TTN
o
A
staff shortage in managing stimulus programs is keeping money appropriated by
Congress from flowing into the U.S. economy, government auditors said. The
problem has been building for years but has reached a breaking point, said
Recovery Board Chairman Earl Devaney. The Energy Department has spent only 8.4%
of $3.2 billion appropriated for energy-efficiency projects because it doesn't
have enough grant officers. USA TODAY
(08 Sep.)
o
Macro negatives stories
pile up:
o
Western governments are bankrupt and central banks' quantitative easing policies will
only make matters worse, Ruth Richardson, the former New Zealand Finance
Minister whose anti-welfare message and austerity cuts were dubbed
"Ruthanasia," warned in a CNBC interview
§ http://www.cnbc.com/id/39054360
o
Divided by a Two-Track Economy from WSJ.com
§ For American business, it's a two track economy, with
global players getting big boosts from fast-growing foreign markets, while
companies focused on the U.S. are hemmed in by recession-scarred consumers
o
Temp Hiring Trend Doesn’t Bode Well from NYT
§ Temporary help services may have had some of the
strongest job growth of any industry in August, but the employment increase
still pales in comparison to job growth in the sector earlier this year.
o
Rise in global food prices expected to continue from The Independent
·
The global spike in food prices is already
feeding through to the shops, according to the British Retail Consortium (BRC),
a taste of higher inflation to come.
o
Fears Grow over the Fate of Irish Economy, Banks from CNBC
·
The Irish economy is back in focus for
investors across the world, after the former Celtic Tiger extended guarantees
to its banking industry and depositors.
o
Japan PM candidate Ozawa: may need more debt issue from Reuters
·
Japanese ruling party powerbroker Ichiro
Ozawa, who is challenging Prime Minister Naoto Kan, said on Wednesday the government
may need to issue more debt to fund economic steps if conditions worsen.
o High frequency traders do ‘risk’ better from FT Alphaville
·
Perhaps it’s not too astounding a finding…
·
But a Federal Reserve staff working paper by
Dobrislav P. Dobrev and Pawel J. Szerszen has found that using historical high
frequency data to forecast equity returns is far more effective than using
general daily or monthly data
o Wall Street
Firms to Cut 80,000 Jobs in 18 Months, Whitney
Says (BBG citing 8/31 report)
o
Securities firms around the world will cut as
many as 80,000 jobs in the next 18 months as revenue growth begins to slow,
said Meredith Whitney
o
The reductions, about 10 percent of current
levels, will come after 2010 compensation payments, Whitney, said in a report
dated Aug. 31
o The industry’s payouts will be “down dramatically,”
o While regulatory reform, including higher capital
requirements, will force some of these shifts, there will be a “deeper secular
change” due to declining revenue in businesses such as securitization
o
New Global-Bank Rules Could Require Bigger Cushions
o
U.S. and global bank regulators could reach a
deal as soon as this weekend on new capital requirements for the world's
largest banks
o
Such an agreement would have a direct impact
on the world's largest financial companies, including Barclays PLC, Deutsche
Bank AG, HSBC Holdings, J.P. Morgan Chase & Co., and Bank of America Corp.
In addition to tougher regulatory standards, these companies and others could
face new limits on their ability to pay dividends
o ALTR +3.5% (guidance)
o
ALTR ups Q3 rev guidance. The company now sees
revs up 10-14% sequentially from 4-8% previously. “Growth continues to be
broad,” the chip company said. “It is likely that all four of the company’s
vertical markets will show sequential growth
o UBS slashed its outlook for stalwarts INTC,
HPQ, Hynix, and much of the EU semiconductor sector
o FLOW +2.9% (earnings)
o FLOW:
Better Q on higher revs and better GMs, but higher revs
are still needed to reach the break-even point. The company also guided
Q2 higher. The companies commitment on its ERP roll-out looks to be costing
more than expected and could hurt the bottom line in the near term.
o NAV Navistar reports – looks better first blush – guidance
mixed
o Watchmaker and jeweler Compagnie Financiere
Richemont SA on Wednesday raised its forecast for the current year
after trumping expectations with a strong rise in interim sales
o For-Profit Education Lobbying War Begins:
Greenberg – CNBC link
o Samsung
Electronics (005930.KS) declined 2% in South Korea when an
executive warned there may be an oversupply of DRAM chips next year
o HMOs etc….Aetna., some BlueCross BlueShield plans and other smaller
carriers have asked for premium increases of between 1% and 9% to pay for extra
benefits
o
Insurers Pin Rate Hikes on Health Law – WSJ link
o
Insurers plan to raise premiums on some
Americans as a direct result of the health overhaul as soon as next month,
complicating Democrats' efforts to trumpet their signature achievement ahead of
elections.
o
China vs west..cooling dn??
o China-U.S. ties improving, Hu tells White
House team from Reuters
·
China and the United States said on Wednesday
that their sometimes rocky relationship is sounder after talks in Beijing, with
both putting an optimistic face on ties that have been jolted by economic and
security tensions.
o
Dollar to maintain its dominance: China
minister from Reuters
·
The dollar will remain the world's dominant
currency for a long time, and the yuan will only gradually emerge as an
alternative, Chinese Commerce Minister Chen Deming said on Wednesday.
o
Beijing protests as Japan arrests China boat
captain from Reuters
·
TOKYO/BEIJING (Reuters) - Japan has arrested
the captain of a Chinese fishing boat that collided with two Japanese coast
guard boats near disputed islets in the East China Sea, causing anger in
Beijing and reigniting territorial tensions.
o
Political Stories:
o
President Obama will argue personally
Wednesday against extending the
Bush-era income tax cuts for the nation's wealthiest families even for a year
or two, White House officials said Tuesday - a message aimed at wavering
Democrats – WP
o
Obama
Business Deduction Invites Gaming Tax System, Experts Say –
BBG
§
will encourage companies to game the system
just to get the tax benefits
o
Zandi Says Obama Proposals Helpful If Passed Quickly: BBG
§ Mark Zandi, chief economist at Moody's Analytics Inc.,
talks about President Barack Obama's initiatives to boost growth and create
jobs, and the outlook for the U.S. economy
o
Kudlow:
Obama Gets It Right on Tax Writeoffs – CNBC link
o
Obama
Picks for Key Economic Posts Seen Soon – CNBC link
o
Obama's Proposals Unlikely to Pass Soon from WSJ.com
§ Congress is unlikely to quickly pass Obama's latest
proposals to jump-start the economy, reflecting the president's weakened
political position – WSJ
o
Businesses like Obama tax write-off plan but want to keep
Bush tax cuts too from
Los Angeles Times
§ The
business community likes President Obama's proposal to accelerate tax
write-offs for companies buying equipment and other big-ticket items. But it is
clamoring for more — extension of all of the soon-expiring Bush-era tax cuts
o
Republicans
Slip From Unprecedented Lead to a Tie in Gallup Survey from Roll Call
§ Democrats and Republicans are now tied in Gallup's weekly
tracking of voter preferences, just a week after Republicans took an
unprecedented l0-point lead
o
Top
Democrats Throw Cold Water on Obama's Jobs Plan from Roll Call
§ House Democratic leaders are already writing off
President Barack Obama's $50 billion infrastructure proposal, saying that GOP
opposition will likely doom any major bills on tap before the November
elections.
o
Mayor Daley's decision could shake up White House from Los Angeles Times
§ Richard M. Daley's announcement that he won't seek
reelection creates an opening for a
post long sought by White House Chief of Staff Rahm Emanuel. For now,
Emanuel is not discussing his plans.
§ Chicago Mayor Richard M. Daley's decision to leave City
Hall, announced Tuesday, set in motion a chain of events that could ultimately
lead to a leadership shuffle at the White House.
o U.S. WON'T PASS LAWS IMPOSING CARBON PRICE THIS YEAR,
REID SAYS - BBG
o
Senator Reid sees "mopping up" lame-duck
session from
Reuters
§ LAS VEGAS (Reuters) - Senate Majority Leader Harry Reid
said on Tuesday the Senate would return for a "mopping-up" session
after the November congressional elections and that he hoped to find support for a national renewable energy standard by
year-end.
o
Can Boehner and Obama get along? from POLITICO
§ Relationship described as non-existant, both sides say
§ The White House has made it crystal clear that President
Barack Obama’s trip to Cleveland Wednesday is a direct rebuttal to House
Minority Leader John Boehner, part of a growing effort by Democrats to
discredit the Ohio Republican who could becoe speaker of the House
o
Mexican media cowed by drug violence: committee from Reuters
§ In January, gunmen kidnapped, tortured and shot dead
Mexican reporter Valetin Valdes before dumping his body outside a motel, an
apparent reprisal for having identified a drug lord in his newspaper.
o
U.S. team to discuss North Korea in Seoul, Tokyo, Beijing
from Reuters
§ A U.S. government team will travel to Seoul, Tokyo and
Beijing next week to discuss North Korea but has no plans to visit the poor,
isolated state or meet its officials, the State Department said Tuesday.
o
Police beat customers at crisis-hit Afghan
bank from
Reuters
o
Report: Justin Bieber is 3 percent of Twitter from CNET
§ A tweet by designer Dustin Curtis suggests that a Twitter
employee has confirmed to him that, at any given moment, teen phenomenon Justin
Bieber uses 3 percent of Twitter's infrastructure
o
Electrodes translate brain waves into words from Los Angeles Times
§ The Utah study reported in the Journal of
Neuroengineering shows promise for helping severely paralyzed patients
communicate. A grid of microelectrodes was placed directly on a patient's
brain.
§ In a first step toward helping severely paralyzed people
communicate more easily, Utah researchers have shown that it is possible to
translate recorded brain waves into words, using a grid of electrodes placed
directly on the brain.
o Fund Stories
o
Hedge Funds See $2.9 Billion In Outflows In July, Broadly
Underperform S&P YTD; Redemption Requests Imminent - from zero hedge
§
First mutual funds, then ETFs, now Hedge
Funds. Bloomberg reports that the smartest of the smart money have posted an
outflow of $2.9 billion in July, or 0.2% of total assets: the most since
January, based on TrimTabs research. "July's number follows an outflow of
$2.7 billion in June. The industry has dropped 4 percent since April 2010,
according to Trimtabs, which attributed the decline mostly to negative returns
in May and June
o Equity
Recap
o Overseas
had us lower coming in this moment and there wasn’t much we could do to turn it
around. Economically there was nothing available to help prop us up and
overseas news was less than desirable with ongoing concerns over the state of the
European banking sector and weak German factory orders weighing on sentiment
and as nice as the M&A action has been it’s not enough reason to give
investors a reason to open the wallets and start buying. BAC and
C were both lower – down almost 2% on concerns in Europe, COP and CVX were down
over 1% with crude sliding, ORCL rallied 5.8% after naming Mark Hurd as
president, heard some new takeover chatter on SI for CREE (SA), MT for X (SA), and NOK for CIEN (SA), – also DRIV Digital River
acquiring Journey Education Marketing, BA.LN BAE Systems buys OASYS Technology (private) for up to $55M. Internally
volume was very light (though it seemed to be the case all over the street),
buyers were pricey and we continue to see the new money staying by the
sidelines, shorts and long sellers have been running the ball the majority of
the time as of late with the exception of the short squeezes we see from time
to time. It’s been hedgies and value types that look to be involved if anyone decides
to add onto a position - most growth guys have been staying under the radar.
Sell names here were 2 -1 over buyers and the breadth of the market had 2 ¾
declining issues for every 1 advancing. Technically if we move higher 100dma at
1105, if we get a big bounce 1115 is 50% retracement b/t ytd intra-day hi/low
(1220/1011) - it's also the 200dma, after that we have key resistance at 1130
(that’s like the holy grail of resistance levels - june and aug intra-day price
high). On the support side1090 gap is first level - also coincides with 61.8%
retracement of ytd intra-day hi/low then 1082 50dma
o
Today marked a flight from risk to the safety
of Gold and the Yen, sparked by renewed worries concerning weak European
sovereign credits. Gold managed an all time (nominal) closing high ($1259.30),
while the Yen rose to a 15 year high against the US Dollar (83.52). S&P
futures opened lower and worked lower in extremely quiet trade. Cash S&P
closed off 1.2%. All 10 S&P groups closed lower on the day, with Financials,
off 2.4%, faring worst. Best performing groups: the defensive Telecoms and
Consumer Staples, each off only 0.3%. Of the financials, European banks fared
poorly with BCS off 5.7%, STD off 3.8%, RBS off 3.6% and DB off 3.2%. Elsewhere
in the financials, we saw Insurers HIG and LNC tumble 4.5% and 4%,
respectively, as the US Treasury announced plans to auction TARP warrants in
the two companies. Tech saw more drama as Mark Hurd will join ORCL, only to be
sued by his ex-employer, HPQ. Tech M&A speculation continued, with one blog
(The Silicon Valley Watcher) going so far as to postulate whether an ORCL
takeover of HPQ made sense. Barclays downgraded a few chip equipment names,
putting pressure on the sector (BRKS fell 13.2%, while VRGY declined 7.4%). Gold
miners NEM and HMY were each up about 2%; going the other way, Aussie
miners BHP and RTP fell by a like amount as Australia’s Labor party secured a
one seat majority in Parliament (making their mining tax more likely to pass).
o
Busy names on the desk today: 1.5mm TSM, 915k
UNCA, 589k CAT, 571k AEC, 500k CEMJQ, 426k PAET, 406k CASY, 350k CRBC, 330k
MOT, 220k ACF, 202k AIV and 200k CMZPF.
o
Billy Clark and Team
o
Investment grade Recap
o Salemo
– Industrials/Energy/Utes
o It
goes without saying that today was all about new issues. Surprisingly
secondary spreads held in well, better in some spots (BHI, YUM,...) and only
marginally softer in others. Despite equities down and IG14 wider, IG
spreads remained well bid and the market absorbed an avalanche of
issuance. $18MM PEP 4.50 20 were in for the bid post-4pm and traded
~59/10yr, the market remains firm and little in the way of economic numbers
this week to derail that and we seem to be looking the other way when it comes
to Europe.
o Breakdown
by trader of the new issues that came today - $17+BN
o Salemo
- $3.45BN in issuance
§
AGN 20 +80 came
aggressive, went out +81-77 ($650MM)
§
DRINK 15 +80 came at
a good level, went nowhere, went out +80-76 ($425MM)
§
DRINK 20 +100 seemed
attractive, went out +100-96 ($525MM)
§
HSP 40 +195 came cheap,
went out +188-183, we were active ($500MM)
§
PH 22 +100 came at a good
level, went out +97-93 ($300MM)
§
MHS 15 +135 tightened in
20bps from talk ($500MM)
§
MHS 20 +155 tightened in
20bps from talk ($500MM)
o Duncan
- $4BN
§
BNI 20 +100 $250MM
§
BNI 41 +140 $500MM
§
DELL 13 +70 $500MM
§
DELL 15 +90 $700MM
§
DELL 40 +175 $300MM
§
FRTEL 15 +82 $750MM
§
HD 20 +135 $500MM
§
HD 40 +175 $500MM
o Jordan
- $6BN
§
AON 15 +220 $600MM
§
AON 20 +245 $600MM
§
AON 40 +265 $300MM
§
CIBC 13 +75 $1.5BN
§
LLOYD 20 +400 $2BN
§
SOCGEN 13 +150 $1BN
§
SOCGEN 15 +170 $1BN
o Orlando
Cherenek - ITALY, EIB ($2BN in a 10yr), Ontario
§
Rick Zuck - HR ($450MM in a 7yr)
§
EM - Odebrecht ($500MM in a perp), Lithuania
($750MM in a 7yr)
o
Matt Duncan – Industrials/TMT
§
All about new issues today with 4 real deals
totaling $4Bn in my space alone. HD and BNI did 10s and 30s, FRTEL
did a 5yr and
§
Dell did 3s, 5s and 30s. Everything
closing wrapped around pricing except FRTEL and Dell 3yrs. We did not see
much selling vs. new issues and secondary volumes were light. We'll see
if that trend can continue.
o
Jordan Goodman – Bank/Finance
§
LIGHT FLOWS TODAY POST HOLIDAY WEEKEND. NEW
DEALS TAKING ATTENTION AWAY FROM SECONDARY TRADING. WE CONTINUE TO BELIEVE
LLOYDS LT2 10YR PRICED CHEAP +400 10YR. SR LLYODS 5.80 20 W/O 280-270.
SPREADS OVERALL A FEW BETTER IN THE FACE OF NEW DEALS AND STOCKS DOWN
OVER 100. AON CAME TO MARKET WITH 3 PART DEAL 5YR 10YR 30YR
§
+220 +245 AND +265 RESPECTIVELY IN FROM
INITIAL TALK OF 237.5, 262.5, AND 287.5. LOTS OF $ ON THE SIDELINES READY
TO BUY NAMES AS THEY COME. HAVE GOOD
NIGHT.
o
Jon Schneider – Hybrids
§
Despite the sell off in the equity markets,
we were unchanged to slightly better in the space. Volumes were extremely
light,
§
as most accounts were focusing on the massive
new issue calendar. We are expecting the new issue trend to remain
§
strong for the remander of the month.
The bellweather issues in the space (BAC 8, JPM 7.90, C 8.30, etc.) were all
1/4 higher
§
on the day. We continue to see buyers
of discount trups, as name like STI, FITB and RF are becoming
harder to source. We
§
are also seeing continued support for RBS and
LLOYDS non paying T1s. At the moment, we think this is the most
interesting trade
§
in the space. Make sure everyone
is reading Joe Labs' reports. "A Senior Moment with Joe Labs."
o
Convertible Wrap
§
Trading volumes remain light because we are
in desperate need of new issuance. Investors are hesitant to sell paper because
they can’t replace it with something comparable. Recent Tenders, Takeovers,
Puts and Maturities combined with a lack of new issuance is providing a good
backdrop for a firm bid in our product. The safe bet has been in the short end
but we are even seeing names like Trinity Industries (TRN) with a 7 year
maturity getting bid higher as well. Yield names performing better than
volatility names so far. The first deal in weeks was announced today for GT
Solar International Inc. The largest shareholder will be selling and no
proceeds are going to the company. UBS will buy 15MM shares and issue a
$131.7MM Mandatory Exchangeable Note at $25 par. This will be done concurrent
with a sale of $10MM shares of common by the same shareholder. The Mandatory is
expected to price on Thursday, 9/9 for trade date Friday, 9/10.
§
Tom Fazio: ADCT 3.5%-17, BGC 0.875%-13,
CIEN 0.25%-15, GILD 1-14, HOLX 2-13, SNDK 1%-13,
§ Thomas Fazio
o
Rates Commentary
§
The
Treasury market opened up the New York session well bid across the curve with
renewed fears around European sovereign debt one again taking center stage. The
Treasury market was extremely quiet throughout the morning session with no
economic data, the dollar/yen stabilizing and European/US equity market trading
range bound slightly weaker on the day. This weeks coupon supply started this
week with the Treasury auctioning $33Bln 3 year notes. The auction was well
received as it came .3bps through its 1PM levels at .790% a new record low
yield for a 3 year, 3.21 bid to cover, 42.4% allotted to indirects and 11.7% to
directs.
§
The
Treasury market was extremely well bid after the auction with rate lock unwinds
after the extremely large issuance calendar today totaling around $18Bln and
the down tick in equities (US indices finished down around 1%). The bid in the
afternoon was a grinded high with the market closing the day near or at their
session highs. Benchmarks were ~2.4-11.3bps lower in yields with the long end
outperforming.
§
The
Fed conducted another purchase today in the 8/14-7/16 sector. The Fed purchased
$2.708Bln out of $15.646Bln submitted. Their next operation is scheduled for
Thursday in the 2/13-7/14 sector.
o With the economic calendar extremely light
focus will turn to any developments out Europe with the renewed sovereign debt
concerns, the continued large corporate issuance calendar and remainder of this
weeks Treasury supply: $21Bln 10 year notes and $13Bln 30 year bonds. The Fed's
Beige Book will also be released tomorrow at 2PM
o
Primary Dealer
SECTOR NEWS WITH MACRO IMPLICATIONS
o BP to admit partial blame for Deepwater oil spill - guardian.co.uk
§ BP is due to
publish its own report into the spill at 7am et
today. This follows an internal investigation into the events leading up
to the explosion on 20 April that killed 11 workers and began a devastating oil
leak that spewed oil into the Gulf of Mexico for almost three months
o BP – fitch upgrades
o Opponents of a federal ban on deepwater oil drilling
asked a judge today to rule that new moratorium is illegal, according to court
papers. BBG
o U.S. WON'T PASS LAWS IMPOSING CARBON PRICE THIS YEAR,
REID SAYS - BBG
o
renewable
energy standards: Senator Reid sees "mopping up" lame-duck
session from
Reuters
§ LAS VEGAS (Reuters) - Senate Majority Leader Harry Reid
said on Tuesday the Senate would return for a "mopping-up" session
after the November congressional elections and that he hoped to find support for a national renewable energy standard by
year-end.
o
Enel aims to start the IPO offering for its
Green Power unit by Oct. 18, daily Il Sole 24 Ore reported
o
China Supplants U.S. at Top of Ernst &
Young Renewables Index - BBG
§ China overtook of the U.S. to lead a quarterly index of
the most attractive countries for renewable energy projects for the first time,
according to the global accounting firm Ernst & Young, which compiles the
list.
o
Dana Launches Defense Against Takeover - WSJ link
o
EXXI
Energy XXI reports Q4 EPS
o
LINE Linn
Energy LLC says its pro forma proved reserves will be appx 2.4 Tcfe, including
previously announced acquisitions
o
EXLP
Exterran Partners, LP announces 4.6M unit offering for holder
o
NEP
China North East Petroleum Holdings downgraded to market perform from market
outperform at Rodman & Renshaw
o
EPM
Evolution Petroleum files $50M mixed shelf
o
CHKM
Chesapeake Midstream Partners reports Q2 net income of 37.0M vs Q1 net income of
$34.9M
o
MIND
Mitcham Industries reports Q2 EPS
o
JASO JA Solar announces more than 500MW of
2011 solar cell supply agreements
o
HDY Hyperdynamics announces results of
independent resource evaluatin of oil and gas concession offshore Guinea
o
PRIM Primoris
Services to repurchase $2M of common stock purchase
o
NRGY
-3.6% (8.5M unit offering)
o
EXLP
-4.8% (holder EXLP MLP LP LLC to offer 4.6M units)
o
To
Wash Hands of Palm Oil Unilever Embraces Algae - WSJ
§
Consumer-Goods Maker Invests in California's
Solazyme to Avoid Environmental Concerns Associated with Palm Oil
§
http://online.wsj.com/article/SB10001424052748703720004575477531661393258.html?mod=ITP_marketplace_0
UTILITIES
o
CPN
Barron's Weekday Trader is positive on Calpine
o
MY
China Ming Yang Wind Power files $400M ADS IPO through Morgan Stanley, Credit
Suisse and
o
NI
NiSource announces $400M common stock offering through Credit Suisse, Barclays,
Citi and JPMorgan
o NAV Navistar
reports – looks better first blush – guidance mixed
§
Reaffirms full year EPS
guidance of $2.75-3.25 vs Reuters $2.96; guides revenues to $12B vs Reuters
$12.43B.
§ North
American traditional industry demand is expected between 190,000 to 195,000
units for Navistar's fiscal year ending 31-Oct-10, an increase of between 9%
and 12% from fiscal 2009
o FLOW:
Better Q on higher revs and better GMs, but higher revs
are still needed to reach the break-even point. The company also guided
Q2 higher. The companies commitment on its ERP roll-out looks to be costing
more than expected and could hurt the bottom line in the near term.
o
Rise in global food prices expected to continue from The Independent
§ The global spike in food prices is already feeding
through to the shops, according to the British Retail Consortium (BRC), a taste
of higher inflation to come.
o Weekly
USDA crop report says 69% of corn in good to excellent condition; compares to
70% in the prior week.
o Facing leaner times, defense firms
hunt for M&A – Reuters link
o MSA Mine Safety acquires General Monitors;
transaction valued at $280M
o
CVV CVD
Equipment Corp announces order
o
NCS NCI Building
Systems reports Q3 EPS
o
ARM ArvinMeritor removed from Conviction
Buy List at Goldman Sachs
o
Saab faces Sept. 20 debt payment deadline from Automotive News
§
Sweden's Vastra Gotaland region said Saab,
owned by Dutch group Spyker, must pay its $15 million bill from the government
by Sept. 20 or it will ask the public debt collector to enforce payment.
o
Visteon poised to exit Chapter 11, re-enter a recovering
market from
Automotive News
§ As the dust settles on nearly 15 months in U.S.
Bankruptcy Court, supplier Visteon Corp
o
Volkswagen AG’s supervisory board plans to
extend Chief Executive Officer Martin Winterkorn’s contract, said Bernd
Osterloh, head of the carmaker’s works council.
BBG
o
General Motors Co.’s OnStar in-car
communications unit may offer some free services next year to rival Ford Motor
Co.’s Sync music and information system – BBG
o
Nissan Motor Co., Japan’s third- largest
automaker, and its partner in China plan to introduce a new passenger-car brand
for the Chinese market – BBG
o
TM: May cut domestic
output by 20% in October; Honda may also cut output by 15% as eco-friendly
subsidies expire - Nikkei
o
China August retail car
sales rise 59% y/y to 977,300 units – Reuters
§ According to figures from the China Automotive Technology
& Research Center:
§ Toyota (7203.JP) 77,000, +16% y/y
§ Honda (7267.JP) 48,399, +6% y/y
§ General Motors 181,625, +19% y/y
§ Ford (F) 44,047, +24% y/y
o
PAC
Pacific Airport Group reports Aug Traffic +3.6%; Domestic passenger traffic
increased 2.3; International passenger traffic increased 6.6%
o
BALT
Baltic Trading vessel runs aground
o
Ryanair Holdings may buy up to 300 aircraft -
FT
o
o
China iron ore prices slip as mills cut output from Business Spectator
§ Analysts doubtful curb will ease oversupply in domestic
sector.
o
Agrium
Risk Rises as It Considers Potash Assets
§ The cost to protect Agrium Inc.bonds from default surged
on concern that the fertilizer maker may take on more debt to finance the
purchase of assets from Potash Corp. of Saskatchewan - BBG
o A white knight is on the way: says POT Potash CEO-
Globe & Mail
o Potash Corp. of
Saskatchewan insists another suitor will come forward to rival BHP Billiton’s
$38.6-billion (U.S.) hostile offer, playing up the prospects for a bidding war
that would lead to a higher price for its world-renowned fertilizer assets.
o Potash Corp. chief
executive officer Bill Doyle took to the Internet Tuesday to insist that BHP
“will not be the only bidder,” as talks intensified behind the scenes to create
a competing offer, likely led by Chinese state-owned chemical conglomerate
Sinochem
o Sinochem approaches Temasek on POT Potash bid-
Reuters
o The move follows an order
by Chinese officials for state companies to meet investment bankers to explore
ways to block BHP Billiton's $39 billion hostile bid for Potash Corp.
o China, which typically
buys about 7% of the output of Potash Corp, fears a BHP takeover might
jeopardize supplies it will require to feed its huge population in coming
years.
o http://www.reuters.com/article/idUSN0723494620100908
o
Agrium Risk Rises as It Considers Potash
Assets
§ The cost to protect Agrium Inc.bonds from default surged
on concern that the fertilizer maker may take on more debt to finance the
purchase of assets from Potash Corp. of Saskatchewan - BBG
o
Rio Tinto to cut iron-ore price
for Japanese steelmakers 13% seq for October-December quarter – Nikkei
o
Tata Steel looks to sell South
African unit - Economic Times
o
Red tape may hold up Vedanta
Resources (VED.LN)'s bid for Cairn India - Economic Times
o
Rio Tinto representatives in
Russia to visit Uralkali (URKA.RU), says Vedomosti – Reuters
o
Vista Gold Corporation announces
mineral resouce estimate for Quigleys deposit at Mt Todd gold project in
Northern Territory, Australia
o
UBS
slashed its outlook for stalwarts INTC, HPQ, Hynix, and much of the EU
semiconductor sector
o
VRNT Verint Systems reports, guides in line
to better
o
TEL Tyco
Electronics reaffirms Q4 EPS guidance
o
LM Ericsson will enjoy a robust 2H10 --
Credit Suisse says following meetings in Asia
o
French president may review Vivendi's tax
regime -- La Tribune
o NOK,
AAPL, GOOG: Nokia to Showcase N8 in Bid to Close Gap With
Apple, Android
§
The Finnish company is likely to focus
attention at Nokia World in London on its high-end Symbian smartphone line,
including the touchscreen N8, its latest effort to take on Android and iPhone
handsets
o
HPQ, ORCL: HP’s Bid to Block
Hurd’s Oracle Move Is Long Shot, Lawyers Say- BBG
§
Hewlett-Packard Co.’s lawsuit seeking to
block former Chief Executive Officer Mark Hurd from working at Oracle Corp. may
be hard to win because California’s courts favor letting employees move freely,
legal experts said
o
HPQ, ORCL: Irreconcilable
Differences? Oracle’s Ellison Rips HP On Hurd Suit- Barron’s
§
http://feedproxy.google.com/~r/barrons/techtraderdaily/feed/~3/yo7Fk__qELo/
o
VOD Vodafone sells China Mobile stake for
$6.6 bln- Reuters
o
RIMM buys Documents To Go
maker DataViz, details undisclosed- reuters
o
CMTL, CPII: Comtech
scraps plan to buy CPI International- Reuters
o
Swisscom to Launch Takeover Offer
for Minority Shares In FastWeb- BBG
o
Privacy: Judges have the right
to require warrants before police get cell phone records that could suggest a
customer's likely location, a U.S. appeals court ruled in a novel electronic
privacy case- AP
o
ALTR ups Q3 rev guidance. The company now sees
revs up 10-14% sequentially from 4-8% previously. “Growth continues to be
broad,” the chip company said. “It is likely that all four of the company’s
vertical markets will show sequential growth
o
GOOG, Acer: Acer inclined to adopt
Android for tablet PCs, says company executive- Digitimes
o
NAND, DRAM: Samsung
exec sees DRAM glut, stabilizing NAND flash prices- Digitimes
o
DRAM: Taiwan DRAM makers
hampered by immersion scanner shortage- Digitimes
o
Panel Makers: AU
Optronics (AUO) has reported a 12% sequential growth in August revenues, while
fellow makers Chunghwa Picture Tubes (CPT) and HannStar Display saw sequential
drops of 3.3% and 13.54%, respectively- Digitimes
o
GOOG: Google TV on Track for Fall, Schmidt Says-
eWeek
o
EMC says 2010 is performing in-line with
expectations - Citi Tech Conf.
o TEL: reaffirms
Q4 guidance. Mgmt said they expect to close the ADC acquisition soon. Mgmt also
noted it will divest its mechatronics business.
o
Mobile-TV: NTT DoCoMo consortium
favored to be chosen to build mobile-TV infrastructure- Nikkei
o
NSN: Global Mobile to buy 1K WiMAX base
stations from Nokia Siemens Networks - DigiTimes
o Telecom
Equip: Telecom equipment vendors set to collect $3B in orders
within 30 days in first wave of 3G rollout in India- Economic Times
o
Towers: GigaOm
discusses tower concerns
o MSFT,
AAPL: Silicon Valley Insider says Microsoft needs to make
office apps for the iPad
§
http://www.businessinsider.com/heres-why-microsoft-needs-to-make-office-apps-for-the-ipad-2010-9
o
o
For-Profit
Education Lobbying War Begins: Greenberg – CNBC link
o Goldman
Sachs upgrades COST, SPLS; downgrades DKS
o
SLE SC Johnson's buy of Sara Lee's
insecticides business to be reviewed by EU Commission -- Reuters
o
Watchmaker
and jeweler Compagnie Financiere Richemont SA on Wednesday raised
its forecast for the current year after trumping expectations with a strong
rise in interim sales
o
Rise in global food prices expected to continue from The Independent
§ The global spike in food prices is already feeding
through to the shops, according to the British Retail Consortium (BRC), a taste
of higher inflation to come.
o
Debenhams cuts prices by 25pc to woo wary shoppers from Telegraph
§ Debenhams, the department store retailer, has launched a
'25pc off' sale in a bid to woo wary shoppers.
o
After Cadbury deal, what's next for food giants? from MarketWatch.com
§ European food giants have been sitting pretty for a
while, but the need to bulk up to drive savings means a pickup in M&A
activity is now firmly on the agenda.
o
Yen Pumps Up Luxury Prices - WSJ link
o the
cozy system may be cracking, thanks in part to a surging yen—it hit a fresh
15-year-high against the dollar Tuesday—that's encouraging third-party websites
to jump in with deep discounts.
o
GMCR
Green Mountain Coffee Roasters announces price increase
o
GLOI
GlobalOptions Group's board adopted a Stockholder Rights Plan
o
GLDD
Great Lakes Dredge & Doc President and CEO Douglas Mackie to resign and
become Chairman Emeritus and Senior Advisor to the company
o
NAV
Navistar Defense receives second delivery order valued at $56M from the U.K.
Ministry of Defense
o
WTSLA Wet
Seal's board has authorized a repurchase program for up to $25M of Class A
common stock
o
NAVR
Navarre shareholder Becker Drapkin Mgmt discloses discussions regarding board
membership in 13D filing
o
DMND
Diamond Foods disclosed long-term targets at today's Barclays Conference
o
PBY Pep
Boys reports Q2 EPS
o
CPA Copa
Holdings reports August traffic +12.2%; Capacity +13.5%; Load factor +0.9% to
75%
o
DENN
Denny's provides update
o
PVH
Phillips-Van Heusen reports Q2 EPS
o
NRGY
Inergy LP announces 8.5M unit secondary offering through Barclays, JPMorgan,
Morgan Stanley, and Wells Fargo
o
CCSC
Country Style Cooking Restaurant Chain files for $100M ADS IPO through BofA and
Credit Suisse
o
CMRO
Comarco reports Q2 EPS
o DLIA dELiA*s holder Prentice Capital reports holdings of 6.79% in initial 13D
filing
o
To
Wash Hands of Palm Oil Unilever Embraces Algae - WSJ
§
Consumer-Goods Maker Invests in California's
Solazyme to Avoid Environmental Concerns Associated with Palm Oil
§
http://online.wsj.com/article/SB10001424052748703720004575477531661393258.html?mod=ITP_marketplace_0
o
To
Wash Hands of Palm Oil Unilever Embraces Algae - WSJ
§
Consumer-Goods Maker Invests in California's
Solazyme to Avoid Environmental Concerns Associated with Palm Oil
§
http://online.wsj.com/article/SB10001424052748703720004575477531661393258.html?mod=ITP_marketplace_0
o
Hotels back to pre-slump levels, says Whitbread from The Independent
§ The leisure group Whitbread has said that revenues at its
budget hotel chain Premier Inn have surged beyond pre-recession levels and
dismissed any fears over a double dip in the economy.
o
SIX Six
Flags names John Duffey as CFO, effective immediately
o
Wall
Street Firms to Cut 80,000 Jobs in 18 Months, Whitney
Says (BBG citing 8/31 report)
o
Securities firms around the world will cut as
many as 80,000 jobs in the next 18 months as revenue growth begins to slow,
said Meredith Whitney
o
The reductions, about 10 percent of current
levels, will come after 2010 compensation payments, Whitney, said in a report
dated Aug. 31
o The industry’s payouts will be “down dramatically,”
o While regulatory reform, including higher capital
requirements, will force some of these shifts, there will be a “deeper secular
change” due to declining revenue in businesses such as securitization
o New Global-Bank Rules Could Require Bigger
Cushions
o
U.S. and global bank regulators could reach a
deal as soon as this weekend on new capital requirements for the world's
largest banks
o
Such an agreement would have a direct impact
on the world's largest financial companies, including Barclays PLC, Deutsche
Bank AG, HSBC Holdings, J.P. Morgan Chase & Co., and Bank of America Corp.
In addition to tougher regulatory standards, these companies and others could
face new limits on their ability to pay dividends
o
BofA, JPMorgan Can Only Watch as U.S.
Bancorp, PNC Seek Targets
o
U.S. Bancorp and PNC Financial Services Group
Inc. may lead the biggest boom in bank takeovers since 2007, and this time, the
largest lenders can only sit and watch - BBG
o
Outrage over Diamond promotion – FT
o
Barclays’ unexpectedly swift promotion of one
of the world’s best-paid investment bankers coupled with the abrupt resignation
of Stephen Green, HSBC executive chairman, has stoked the political row about whether Britain’s big banks should
be broken up
o
http://link.ft.com/r/CTBPCC/TPARFG/VBCYC/EW1KR3/40581B/36/h?a1=2010&a2=9&a3=8
o
U.K. Says Diamond Promotion Raises ‘Policy Question’ - BBG
o
The appointment of Robert Diamond as Barclays
Plc’s chief executive officer raises policy questions about the safety of U.K.
banks, Business Secretary Vince Cable told the British Broadcasting Corp.
o
“It isn’t government’s job to appoint the
head of a private bank, but what this appointment illustrates is the wider
policy question about how our banks can be made safe,” Cable told the BBC’s
Today Programme following yesterday’s decision to give Diamond the CEO post
next year.
o
“We are worried about this combination of
casinos and traditional banking and the banking commission will be coming up
with some strong conclusions on that,” Cable said.
o
Britain Backs New E.U. Oversight Plan from DealBook
o
Britain's chancellor of the Exchequer, George
Osborne, on Tuesday endorsed a variety of new watchdog agencies to supervise
financial activities across the European Union.
o
U.S. to Auction Insurers' Tarp Warrants from American Banker
o
The Treasury Department said it intends to
sell warrants in Hartford Financial Services Group and Lincoln National that it
got as part of a bailout of the two insurers
o
Wilbur Ross: Alone in Muni Bonds from BusinessWeek –
o
Ousted AIG chief lands role at Willis Group from Financial Times
o
Martin Sullivan, who was ousted as AIG chief
executive just three months before the world’s largest insurer was rescued by
the US government, has returned to the industry with a leading executive role
at Willis Group
o
SEC Looking at 'Quote Stuffing' from WSJ.com
o
SEC Chairman Mary Schapiro said the agency is
looking at a practice others have called "quote stuffing" to assess
whether it violates "existing rules against fraudulent or other improper
behavior."
o
A Fair Share of Detractors for FASB
Fair-Value Proposal from American Banker
o
No surprise, bankers are almost uniformly
opposed to a proposal to expand the use of fair-value accounting. But the plan
was never meant to appeal to bankers.
o
Singapore's GIC Looks to Buy Stake in Brazil Bank - WSJ link
o
Washington Mutual Inc.’s
bankruptcy examiner won a judge’s approval to take more time to investigate the
biggest U.S. bank failure after saying he needs to interview witnesses and
collect documents from regulators. BBG
o WSH Willis Group names Martin Sullivan deputy
chairman
o Conference call: 08:30 ET (13:30 BST),
866-803-2143 (US), +1-210-795-1098 (international), 0800-279-3953 (UK), or
+44-20-7108-6248 (international), passcode Joe Plumeri.
o GS Goldman Sachs to sell municipal bonds to
retail investors – WSJ
o V
Visa downgraded to underperform
from neutral at Bank of America Merrill Lynch
o Irish banks: J.C. Flowers, Other EBS Bidders Said to Weigh More
Irish Buys- BBG
o J.C. Flowers & Co.
and three other bidders for Ireland’s EBS Building Society may buy and merge
several lenders to create a new competitor to the country’s biggest banks
o J.C. Flowers., the U.S.
buyout firm, Dublin-based Cardinal Asset Management, backed by U.S. private
equity firm Carlyle Group, and Doughty Hanson & Co. are vying with Irish
Life & Permanent Plc to take control of EBS
o US
MBA Refinance Index -3.1% At 4,926.5; Last Week 5,085.3
·
US MBA Purchase Index +6.3% At 184.5; Last
Week 173.6
·
US MBA Market Index -1.5% At 880.0; Last Week
893.8
o
The Bears and the State
of Housing – NYT
o
Of all the uncertainties in our halting
economic recovery, the housing market may be the most confusing of all.
o
http://www.nytimes.com/2010/09/08/business/economy/08leonhardt.html?_r=1&ref=business&pagewanted=all
o
Home Buyer Tax Credit Price Tag: $22 Billion - WSJ link
o
Barratt Developments (BDEV.LN) reports
FY EPS (£0.15) ex-items vs year-ago (£0.89).
o Cancellation rates have remained low at an
average of 11.0% (2009: 12.3%) for the year to date.
o Net private reservations up 4.2% for the full
year at 0.50 per active site per week.
o Total completions, including joint ventures,
were 11,377 (2009: 13,277)
o Average selling price (excluding joint
ventures) up by 10.9% for the full year to £174,300 (2009: £157,200) and by
17.8% in the second half on the prior year equivalent period mainly due to
changes in mix
o
o
Ross Seeks Aid to Avoid ‘Negative-Equity Rat Hole’ – BBG
o
Wilbur Ross, the billionaire who invested in
a residential mortgage servicer and bond guarantor, said the U.S. government should revive a homebuyers’ tax credit to
prevent the economy from contracting.
o
Stuyvesant Town: 'Stuy' in Bill's eye from NY Post
o
Hedge fund honcho Bill Ackman can't be
pleased to hear creditors are moving forward with a planned foreclosure sale of
Stuyvesant Town-Peter Cooper Village. On Saturday, banks representing holders
of the $3 billion first mortgage scheduled a foreclosure sale for Oct. 4.
Ackman wants to foreclose on a key...
o
House prices unexpectedly rise for second month in a row,
says Halifax from
Telegraph
o
UK house prices edged up 0.2pc in August,
confounding expectations of a fall as a strengthening economic recovery helped
support demand, Halifax said.
o
World Trade Center Construction May Be Done
by 2014 – BBG
o
Four office towers, a transit center designed
by Santiago Calatrava, a memorial and museum at the downtown Manhattan site of
the World Trade Center may be complete by 2014, according to city and state
officials.
o
GBE
Grubb & Ellis Healthcare Reit II acquires Joplin Long-Term Acute Care
Hospital in Missouri
o
AVB
Avalon Bay acquired a 2.64 acre property in Tysons Corner, Virginia for $13.3M
o
EXL
Excel Trust has acquired two properties for $54.6M
o
PLD
ProLogis announces it generated $264M in gross proceeds in Q3
o
CCP
Callahan Capital Properties withdraws IPO registration
o
UDR UDR
Inc provides update on acquisitions with aggregate purchase price of $445.1M
o
UDR UDR
announces 13.5M share secondary offering through BofA Merrill, Wells Fargo
o TOL: Toll Sails
Against Some Headwinds - WSJ
o Luxury-Home Builder Plans Tony Development On
Intercoastal Waterway
o http://online.wsj.com/article/SB10001424052748703720004575478041197052602.html
o
California Property Tax Rolls Shrink 1.8% in ‘Historic’
Slump - BBG
o
California property values fell 1.8 percent
for the current fiscal year, only the second drop since the most-populous U.S.
state began collecting the data in 1933.
o
homebuilders Revive Stalled U.S. Projects as Banks Unload
Lots - BBG
o
Construction crews are returning to the
Cascades of Groveland, a gated 55-and-older community west of Orlando, Florida,
almost three years after its bankrupt developer left owners of the existing 238
houses surrounded by empty lots, partially built homes, and an unfinished
clubhouse.
o
o
HMOs etc….Aetna., some
BlueCross BlueShield plans and other smaller carriers have asked for premium
increases of between 1% and 9% to pay for extra benefits
o
Insurers Pin Rate Hikes on Health Law – WSJ link
o
Insurers plan to raise premiums on some
Americans as a direct result of the health overhaul as soon as next month,
complicating Democrats' efforts to trumpet their signature achievement ahead of
elections.
o
CPII
-7.9% (merger with CMTL terminated)
o
CPII,
CMTL CPI International and Comtech announce termination of
merger; CPII halted
o
ROSG
Rosetta Genomics reports Q2 non-GAAP EPS
o
SKH Skilled Healthcare Group announces
agreement to settle Humboldt County class-action suit
o
AGN,
ALXN, INCY, VRUS, ITMN, LXRX, AMLN, MRX, ARTX Morgan Stanley
initiates; Allergan (AGN) initiated overweight; Alexion Pharmaceuticals (ALXN)
initiated overweight; Incyte (INCY) initiated overweight; Pharmasset (VRUS)
initiated overweight; InterMune (ITMN) initiated equal-weight; Lexicon
Pharmaceuticals (LXRX) initiated equal-weight; Amylin Pharmaceuticals (AMLN)
initiated underweight; Medicis (MRX) initiated underweight; Vertex
Pharmaceuticals (VRTX) initiated underweight.
o
ZGEN
Bristol-Myers agrees to acquire Zymogenetics for $9.75/share in cash
o
ANGO
AngioDynamics guides Q1 EPS
o
FRX
Forest Labs issues press release regarding FDA panel backing of ceftaroline for
CABP and cSSSI
o
INO
Inovio Pharmaceuticals enters $25M equity distribution agreement with Roth
Capital
o
PPDI PPD
establishes network of sites for conducting phase 1 trials
o
IART,
STXS, SYK, WMGI, ZMH Oppenheimer initiates; Integra (IART)
initiated outperform with $44 target; Stereotaxis (STXS) initiated outperform
with $5 target; Stryker (SYK) initiated outperform with $57 target; Wright
Medical (WMGI) initiated perform; Zimmer Holdings (ZMH) initiated perform.
o
ITMN
InterMune initiated equal-weight at Morgan Stanley; target is $10.
o
VRTX
Vertex reports data from phase 3 REALIZE Study
o
WPI
Watson's generic Yasmin receives FDA approval
o
RTIX RTI
Biologics and Zimmer Dental enter distribution agreement for global dental
biologic implants
o
Judge Refuses to Stay Stem-Cell Ruling – WSJ link
o ONXX Onyx Pharmaceuticals announces carfilzomib development
and commercialization agreement with Ono Pharmaceutical (4528.JP) for Japan
o
FT summarizes letter from Elan
Corp CEO Kelly Martin to shareholders
o
http://www.ft.com/cms/s/0/815a33f8-bab6-11df-b73d-00144feab49a.html
o
Stocks mentioned on CNBC's Mad Money with Jim
Cramer - TheStreet.com
+ PVH, CREE, WM, AAPL, PNRA and
NTAP
- SNDK
o
Oils
o
Dana Petroleum (-0.1%). Dana reject the £18 bid from KNOC,
saying the company has been independently valued at £22.10 a share. Also, Dana
acquire PCUK North Sea assets for £240m.
o
Utilities
o
EdF (-0.2%). EdFs board have approved the sale of their UK
electricity distribution networks to Cheung Kong Infrastructure Holdings in a
deal that will reduce EdFs debt by €6.8bn. The deal remains subject to Cheungs
shareholder and French finance ministry approval.
o
Centrica (+1.5%). Nomura raise Centricas price target
by 10% to 410p a share.
o
Chemicals
o
Akzo Nobel (-0.2%). Akzo acquire Changzhou Prime
Automotive Paint for an undisclosed sum.
o
Helathcare
o
CFR
VX trading statement 5m sales +37%/ sees economic environment improving
o
BDEV
LN final loss 118.4m vs 468m loss prior/ fwd sales 27%/ sees modest increase in
avg selling price
o
BKG
LN trading statement - demand good/ confident of achieving 10% EPS growth
o
LG
PA rated BUY @ Nomura
o
DGE
LN XD 26.11g
o
MPI
LN XD 3.2g
o
SGRO
LN XD 5.222g
§ Japan
•
NKY-2.18%, TPX -1.67%
•
NKY fell after the yen rose to a new 15-year
high. Nomura cut its 2011 sales growth and profit estimates for Japanese
companies citing the stronger yen. Turnover on the TPX fell to 1.00 trillion
yen from 1.04 trillion yen yesterday
•
Stocks fell across most sectors led by tech,
industrials, financials, materials and consumer
•
Exporters fell on a strong yen: autos -2.15%,
CE -2.19%, precision -2.63%
•
Banks -1.72% after Nikkei reported minimum
capital ratio could top 7% under new banking rules and Japan bank lending fell YoY
for a 9th consecutive mth in August:
•
Tech -2.17% tracking its US peers
•
Traders -1.77% on lower metal and oil prices
•
Iron & steel -1.95% after yesterday’s
rally
•
Best performing sectors on the TPX: airline
0.00%, food -0.13%, oil & coal -0.27%; underperforming sectors: other
financing 3.54%, securities -3.09%, glass & ceramics -2.89%
§ Hong
Kong
•
HSI -1.51%; HSCEI -1.50%
•
Banks fell as investors focused on report
that CBRC is drafting a plan to require banks to maintain reserves of 2.5% of
total loans. Morgan Stanley said the stricter rule will be negative for
mid-sized banks due to a combination of lower loan loss reserves as % of total
loans and lower profitability on pre-provision operating lines
•
Mainland properties fell after report China
may introduce a 2nd round of property tightening after house prices in 1st tier
cities rose
•
HK retailers rose ahead of mid-autumn
festival holiday and Golden Week:
•
Coal names after report benchmark coal prices
at China’s Qinhuangdao port fell 1.4% WoW:
§ China
•
SHCOMP -0.11%; SZCOMP +0.75%
•
SHCOMP weighed down by the financials as
investors focused on tighter reserve requirement rules and following report of
2nd round of property tightening. Turnover on the SHCOMP fell to
121.97B yuan from 157.70 B yuan yesterday
•
Stocks were mixed. Health care, materials,
consumer, industrials and tech rose while financials, telecom, oil & gas
and utilities fell
•
Banks -1.37%. CBRC is drafting a plan to
require banks to maintain reserves of 2.5% of total loans. Market expects the
new rules if implemented will impact small & mid-sized banks more
restricting loan growth and reducing profitability
•
Real estate -1.12% after report China may
introduce a second-round of measures to curb the property market
•
Investors continued to chase health care names
+1.26%
•
Aluminum +2.36%. CICC said China’s plan to
cut energy consumption may benefit aluminum makers as the government is likely
to limit production to meet energy-saving goals. Restrictions on aluminum
production will support prices of the light metal amid the economic slowdown
•
Nonferrous metals +4.58%. Producers of
antimony, tungsten and rare earth must sign an agreement to keep within a
production quota, the China Land Resources network said
•
Household goods +1.02% after report China
sold 17.1B yuan of home appliances in August under the country’s rural
appliances stimulus program, +126% YoY
INVESTMENT
BANKING
o Facing leaner times, defense firms hunt for
M&A- Reuters
o The defense world is
bracing for a whirlwind of dealmaking as tighter budgets and new security
threats prompt the Pentagon's large contractors to move resources from
traditional weapons to cybersecurity and unmanned defense
o More defense assets are
also expected to come up for sale as the Pentagon's cost-cutting drive
pressures companies in the industry to make their organizations leaner and sell
off units to generate shareholder value
o http://www.reuters.com/article/idUSTRE6865FC20100907
o M&A Firmly On The Agenda For Food Companies- DJ
o European food giants have
been sitting pretty for a while, but the need to bulk up to drive savings means
a pickup in merger and acquisition activity is now firmly on the agenda.
o The good news is that
financing such deals should not be an issue. Citigroup analysts point out that
the balance sheets of food giants are under-utilized, as there has been no
large-scale deals in Europe since Danone's purchase of Dutch rival Numico in 2007.
o M&A deals worth $13 bn aborted this year- DJ
o In a year that mergers
and acquisitions (M&A) in India have hit a record, aborted deals are also
fast catching up.
o Differences over
valuation, the inability of merger partners to arrange funds and regulatory
issues have scuppered 27 inbound deals worth about $9.5 billion plus five
outbound M&A transactions valued at $3.5 billion.
o VOD Vodafone sells China Mobile stake for $6.6 bln-
Reuters
o Vodafone, world's largest
telecommunications operator by revenue, said on Tuesday it sold its 3.2 percent
stake in China Mobile for $6.6 billion.
o The sale was part of
Vodafone's new strategy to exit non-strategic minority investments, which
analysts and investors believe have weighed on the company's overall value in
recent years
o http://www.reuters.com/article/idUSTOE68608020100907
o SNY Sanofi CEO meets GENZ Genzyme holders, mulls
next move- Reuters
o Sanofi-Aventis SA Chief
Executive Chris Viehbacher has stepped up his campaign to win Genzyme Corp by
meeting shareholders of the U.S. biotech company face to face
o But Viehbacher has made
it clear he would rather get his opposite number, Henri Termeer, to the
negotiating table and is keen to sound out investors before making his next
move.
o http://www.reuters.com/article/idUSLDE6862AH20100907
o BMY Bristol to acquire ZGEN ZymoGenetics for $885
million- Reuters
o Bristol said it will pay
$9.75 per share in cash, for a total cost of about $735 million after taking
into account cash held by the smaller company, a premium of about 84 percent to
Tuesday's closing share price.
o http://www.reuters.com/article/idUSN0725383420100907
o SC Johnson's buy of SLE Sara Lee's insecticides
business to be reviewed by EU Commission- Reuters
o
Agrium
Risk Rises as It Considers Potash Assets
§ The cost to protect Agrium Inc.bonds from default surged
on concern that the fertilizer maker may take on more debt to finance the
purchase of assets from Potash Corp. of Saskatchewan - BBG
o A white knight is on the way: says POT Potash CEO-
Globe & Mail
o Potash Corp. of
Saskatchewan insists another suitor will come forward to rival BHP Billiton’s
$38.6-billion (U.S.) hostile offer, playing up the prospects for a bidding war
that would lead to a higher price for its world-renowned fertilizer assets.
o Potash Corp. chief
executive officer Bill Doyle took to the Internet Tuesday to insist that BHP
“will not be the only bidder,” as talks intensified behind the scenes to create
a competing offer, likely led by Chinese state-owned chemical conglomerate
Sinochem
o Sinochem approaches Temasek on POT Potash bid-
Reuters
o The move follows an order
by Chinese officials for state companies to meet investment bankers to explore
ways to block BHP Billiton's $39 billion hostile bid for Potash Corp.
o China, which typically
buys about 7% of the output of Potash Corp, fears a BHP takeover might
jeopardize supplies it will require to feed its huge population in coming
years.
o http://www.reuters.com/article/idUSN0723494620100908
o Singapore's GIC Looks to Buy Stake in Brazil's BTG-
WSJ
o Government of Singapore
Investment Corp. is in advanced talks to buy a roughly 15% stake in Banco BTG
Pactual, one of Brazil's top investment banks, for about $2.4 billion
o GIC, Singapore's
sovereign welath fund, is negotiating with Brazilian magnate Andre Esteves who
controls the bank, the person said
o http://online.wsj.com/article/SB10001424052748704358904575478793055571932.html
o Rio Tinto in Russia to meet Uralkali- Vedomosti
o Representatives of Rio
Tinto have come to Russia to visit potash producer Uralkali which is seen as a
potential acquisition target for the mining giant
o Rio Tinto, along with
Potash Corp, could buy into Uralkali as Russia seeks a full overhaul of the
fertilisers industry adding that talks were at an early stage.
o LNC Lincoln National CFO Sees Deals in Future-
TheStreet.com
o Crawford said the company
may acquire companies in the 403B, defined contribution and Group spaces. He
said the company has enough capital to make strategic acquisitions and is
seeking opportunities
o http://www.thestreet.com/story/10854294/1/lincoln-national-cfo-sees-deals-in-future.html
o JPM JPMorgan, Samsung to manage $6 bln Woori sale-
Reuters
o Samsung Securities and
Daewoo Securities have been picked along with JPMorgan to manage the sale of
the 57 percent stake in South Korea's third biggest banking group by market
value
o Investment bankers have
said fees for the deal were not expected to exceed 4 percent of the sale's
total value
o http://www.reuters.com/article/idUSTOE68700V20100908
o BA Boeing not ruling out merger with rival- Reuters
o Boeing is
"actively" looking at potential acquisition opportunities in response
to a changing security environment and will not rule out a merger with another
large defense contractor
o Asked if Boeing would
consider a large-scale merger with a major defense contractor, Muilenburg said:
"I'm not going to rule out or rule in any options."
o http://www.reuters.com/article/idUSTRE6863YY20100907
o Dana pitch for higher KNOC offer falters- FT
o Dana Petroleum has made a
last-ditch attempt to convince a group of its largest shareholders to demand
Korea National Oil Corp raise its $1.87bn hostile offer
o Dana, which is due to
issue its official defence document on Wednesday, has approached a collection
of institutional investors and hedge funds to marshal support for a higher
offer.
o Dana said it is worth 18%
more before Suncor Asset bid
o http://www.ft.com/cms/s/0/98d08dc0-bab6-11df-b73d-00144feab49a.html
o Vedanta-Cairn deal stuck in red tape- Economic
Times
o Cairn Plc needs at least
10 separate clearances from the petroleum ministry before Vedanta Resources’
planned purchase of a controlling stake in oil & gas explorer Cairn India
sails through, potentially delaying the deal closure beyond October.
o Eldorado withdraws bid for Andean Resources-
Reuters
o Eldorado Gold Corp said
on Tuesday it would abandon its proposal to acquire Argentina-focused Andean
Resources in light of Goldcorp's higher offer worth C$3.6b ($3.43b).
o Goldcorp and Eldorado
were both vying for Andean's 100 percent owned Cerro Negro Gold project in the
southern province of Santa Cruz in Argentina.
o http://www.reuters.com/article/idUSN0724154620100907
o Foster's knocks back $2.5 bln offer for wine-
Reuters
o Foster's Group,
Australia's largest brewer, knocked back an offer worth up to $2.5b for its
wine business as too cheap, but the approach could flush out offers for the
entire group.
o The bid by an
unidentified private equity company for the world's second-largest wine business
pushed Foster's shares up 6 percent on hopes of better offers
o http://www.reuters.com/article/idUSSGE6860KK20100908
o Terra Firma and C Citi trade blows over EMI- FT
o Private equity group
Terra Firma has traded verbal blows with US lender Citigroup after mediation
talks collapsed, setting the stage for an acrimonious battle over who is to
blame for the £4bn ($6.1bn) takeover of music group EMI.
o http://www.ft.com/cms/s/0/b4924258-bab9-11df-b73d-00144feab49a.html
o Balance sheet talks in India market for M&A
advice- Reuters
o Appetite to lend to
India's ambitious acquirers may become even more important as big controlling
shareholders, known as promoters, make larger overseas deals and have plenty of
power to drive terms in a market crowded by an influx of investment banks