Grand jury expected to resume Ferguson police shooting deliberations (Reuters) PBOC Bounce Seen Short Lived as History Defies Bulls (BBG) Home prices dropped in September for the first time since January (HousingWire) UPS Teaches Holiday Recruits to Fend Off Dogs, Dodge NYC Taxis (BBG) US oil imports from Opec at 30-year low (FT) Hedge Funds Bet on Coal-Mining Failures (WSJ) Putin Woos Pakistan as Cold War Friend India Buys U.S. Arms (BBG) How the EU Plans to Turn $26 Billion Into $390 Billion (BBG) The $31 Billion Bet Against Brazil’s New Finance Minister (BBG) Flooding could follow heavy snow in western New York (Reuters) LendingClub’s IPO Looms Large Over Alternative-Lending Market (BBG) Year-Old Yik Yak Draws Hundred Millions of Dollars in Valuation (WSJ) Bad News Mounts for Chinese Banks. Funds Grow More Bullish (BBG) China building South China Sea island big enough for airstrip (Reuters) The $400 Billion Bond Mismatch Keeping Bears at Bay Endures (BBG) Swiss Museum to Accept Art Trove, Return Nazi-Looted Work (BBG) Obama to Republican critics on immigration: 'Pass a bill' (Reuters) AIG Case May Turn on Nonstar Witnesses (WSJ) Germany to drop probe into US spying on Merkel (AFP) Abe’s ‘risky’ election gambit may backfire, U.S. expert claims (Japan Times)
Overnight Media Digest
WSJ
* Hedge funds are betting that some of the largest U.S. coal companies are heading for the financial slag heap. Walter Energy is a particular favorite of distressed-debt investors, including Apollo Global Management LLC, Brigade Capital Management LP, Caspian Capital Management and Knighthead Capital Management LLC, people familiar with the matter said. (http://on.wsj.com/1AElIxm)
* Samsung Electronics Co is considering a major leadership shake-up, according to people familiar with the matter, part of an attempt to revive its fortunes after a difficult year that has hurt its profitability, market share and stock price. (http://on.wsj.com/1yJO9Wz)
* Yik Yak, the controversial anonymous-messaging app that has spread rapidly across college campuses, is proof that it can take as little as a year these days to go from zero to a valuation of hundreds of millions of dollars. Sequoia Capital has led a $62 million investment in Yik Yak in the Atlanta-based startup's third funding round this year, according to people familiar with the deal. (http://on.wsj.com/1uuicx2)
* A faith-based shareholder group is asking Bank of America Corp to separate the jobs of chairman and CEO, laying the groundwork for a potential showdown between the bank and some investors this spring. (http://on.wsj.com/1HCOIrn)
* Highly anticipated federal rules on commercial drones are expected to require operators to have a license and limit flights to daylight hours, below 400 feet and within sight of the person at the controls, according to people familiar with the rule-making process. (http://on.wsj.com/1y64yq3)
* American Airlines Group Inc and the union that represents its 15,000 pilots said they would continue to negotiate terms of a combined labor agreement, putting off a plan to reach a deal through arbitration. The new goal is to resolve the impasse by mid-December, the two sides said. (http://on.wsj.com/1FhVGzO)
* The headlines in the long-running trial over the bailout of American International Group Inc have been dominated by three heavy hitters who testified-and one who did not. But as testimony likely wraps up Monday after eight weeks, legal observers said two low-profile witnesses from early in the proceedings addressed what may be the key question: whether the government correctly interpreted a 1930s-era section of the Federal Reserve Act to allow it to acquire a sizable equity stake in AIG to help compensate taxpayers. (http://on.wsj.com/1xq59Pw)
* A gusher of U.S. initial public offerings of energy-focused master limited partnerships has some money managers urging caution. Investors, drawn by the reputation of MLPs for stable, high payouts and a central role in the U.S. energy boom, have poured money into newly minted stocks from these companies, which mainly own and operate oil and natural-gas pipelines and storage facilities. (http://on.wsj.com/1vDmOrp)
FT
Italy's retail bank Intesa SanPaolo is looking at a possible bid for Coutts International, the wealth management arm of Royal Bank of Scotland.
London-based private equity firm Terra Firma has appointed Blackstone Group LP as an adviser for Four Seasons Health Care. Blackstone will look at various financial and strategic options for the health care firm.
The British Bankers Association and French Banking Federation have sent a joint letter to Frans Timmermans, the first vice president of the European commission, arguing that Brussles' initiative to overhaul the structure of big banks is outdated, harmful to capital markets and complicates the implementation of existing national laws.
DPD, the rival express delivery company of Royal Mail will increase its full time UK staff headcount from 9,000 to 11,000 by 2016, after winning the contracts for John Lewis and Marks and Spencer Group PLC
Royal Bank of Scotland apologised for incorrect evidence given by its executives to MPs over allegations its restructuring group profited from distressed companies it was meant to help.
NYT
* The cost of providing electricity from wind and solar power plants has plummeted over the last five years in the United States, so much so that in some markets renewable generation is now cheaper than coal or natural gas. (http://nyti.ms/1vDI1By)
* In an effort to increase holiday sales, which have fallen for the last two seasons, Barnes & Noble Inc is hoping to lure customers into stores this Black Friday with something book lovers cannot download: signed copies.(http://nyti.ms/1vgph9O)
* "The Business of Being Born," the 2008 film by former talk show host Ricki Lake questioning the American medical system's approach to childbirth and presenting the benefits of home birth, will be rereleased digitally in late January, becoming available globally for the first time. (http://nyti.ms/1qXSqqw)
* Paul Taubman, Morgan Stanley's former global head of mergers and acquisitions and global head of investment banking, most recently hired Don Cornwell, a managing director who specializes in sports team deals, according to a person briefed on the matter. (http://nyti.ms/1y3Ke7x)
* Mathew Martoma has started his nine-year prison term for insider trading at a "low security" federal prison in Miami at a time that most of the former hedge fund traders and analysts also convicted in the federal government's long-running investigation have paid their debt to society. (http://nyti.ms/1xCLTlz)
* Aviva Plc announced that it was in advanced talks to acquire the Friends Life Group Ltd for 5.6 billion pounds, or $8.8 billion, in stock, a deal that would create an insurance, savings and asset-management giant in Britain. (http://nyti.ms/1uR1yNs)
* Bain Capital raised a fresh fund for private equity buyouts in Europe. The private equity firm attracted the equivalent of $4.3 billion from investors for the fund, according to a regulatory filing on Thursday. (http://nyti.ms/1yK4wSY)
* The Royal Bank of Scotland Group Plc said it overstated its capital ratio in a recent European-wide stress test to examine its ability to survive a potential financial crisis or severe economic downturn. The bank said it did not properly recognize certain tax credits on theoretical losses. (http://nyti.ms/1rgBi9V)
* The Federal Reserve is preparing to unveil new restrictions aimed at making it harder for Wall Street banks to make big bets in the commodities markets, according to Fed governor Daniel Tarullo. (http://nyti.ms/1xbsNz5)
* Dow Chemical said it had reached a settlement with Loeb's firm, Third Point LLC, agreeing to add four new independent directors to its board. (http://nyti.ms/1pdMkky)
* Streaming television start-up Aereo said it had filed for bankruptcy protection. Chet Kanojia, the company's chief executive, said in a blog post that Aereo's legal and regulatory challenges ultimately proved too difficult to overcome. (http://nyti.ms/11PqSZa)
* Brazil's JBS Foods, the world's largest meatpacker and owner of Pilgrim's Pride in the United States, has agreed to pay A$1.45 billion, or $1.25 billion, to buy Primo Smallgoods, the largest ham, bacon, and sausage producer in Australia and New Zealand. (http://nyti.ms/1zhMyXW)
* The Swiss private banking arm of HSBC Holdings Plc is facing more potential trouble over wealthy clients and their taxes. The bank confirmed that the unit, HSBC Private Bank (Suisse), had been placed under formal investigation by French magistrates examining whether the bank assisted wealthy clients to avoid French tax reporting requirements from 2006 to 2007. (http://nyti.ms/1vgYFoY)
Canada
THE GLOBE AND MAIL
** Quebec Premier Philippe Couillard says he will consider the recommendations of a report laying out C$2.3 billion ($2.05 billion) in spending cuts, but it will be up to his government to make the final call. Lucienne Robillard, a long-time Liberal politician leading the review, says the province is living beyond its means and needs to find a way to deliver services at a lower cost. (http://bit.ly/1uvkTys)
** It was one of a clutch of spending programs rolled out in the Conservative government's austerity budget of 2013 - C$200 million to spark innovation in Ontario's hard-hit manufacturing sector. But 18 months later Ottawa has yet to approve a single project from its Advanced Manufacturing Fund, even as the government continues to credit its investments in manufacturing for creating jobs and growth in Ontario. (http://bit.ly/1tpB1kX)
** Canada's telecom regulator begins a hearing on Monday that is expected to shape the landscape of the country's Internet market and determine whether small players gain access to the latest generation of high-speed services. (http://bit.ly/1yKZiq4)
NATIONAL POST
** The number of recalls and alerts for defective prescription drugs in Canada has soared over the last nine years, often highlighting problems that could put patients in significant danger, a new, British-led study reports. The annual volume of faulty medicines disclosed by Health Canada more than tripled to 143 last year from 42 in 2005, according to the research, just published in the journal BMJ Open. (http://bit.ly/1yL0xWc)
** Two more former NDP staffers who say they were unfairly dismissed have accused the party of trying to convince them not to file a complaint against the elected members who employed them. Bouchra Taibi, who was working for New Democrat MP Helene Leblanc, and Melanie Bellemare, who was working for MP Francois Choquette, both accuse the party of wrongful dismissal. Taibi filed a lawsuit in the summer while Bellemare is expected to do so by Dec. 31. (http://bit.ly/1telXHL)
** At least a dozen protesters including an 11-year-old girl were taken into custody on Sunday on a mountain near Vancouver as demonstrations continued against a controversial pipeline project. RCMP began enforcing a court injunction on Thursday ordering protesters to clear a pair of work sites on Burnaby Mountain, where Kinder Morgan Energy Partners LP is conducting drilling and survey work related to the proposed expansion of its Trans Mountain pipeline. (http://bit.ly/15cJdRo)
China
SOUTH CHINA MORNING POST
- The mainland's surprise move to reduce interest rates for the first time in more than two years has fired up expectations of further cuts aimed at shoring up an economy that is on track to record its weakest annual growth since 1990. (http://bit.ly/1FhmrCt)
- The three co-founders of Occupy Central plan to turn themselves into police next week but vowed to continue supporting protesters under a "two-stage" surrender plan. (http://bit.ly/1zQ2vWa)
- Bad debts in China are well underestimated because authorities persist in propping up weak companies and bailing out local investors, according to DAC Management. (http://bit.ly/1pdc0hh)
THE STANDARD
- The Occupy Central movement has set political development back by 10 years, an academic noted. Hong Kong University of Science and Technology economist Francis Lui Ting- ming said he believes some pan-democrats do not want to see the implementation of universal suffrage because it may affect their own interests. (http://bit.ly/1uQMwY7)
- An employer who had three labour charges withdrawn against her has accused her former domestic helper of falsely claiming that she was assaulted and forced to work 21 hours a day for nine months. (http://bit.ly/1tpghKf)
- Hong Kong will experience infrastructure spending cuts of more than HK$20 billion annually starting in two years if the non-cooperation movement and filibusters continue at the Legislative Council, the development chief warned. (http://bit.ly/1y3hvQv)
Britain
The Times
AVIVA'S BID FOR FRIENDS LIFE THREATENS 2,000 JOBS
An estimated 2,000 insurance jobs are likely to be axed as Aviva PLC tries to placate scepticism about its bid for Friends Life. (http://thetim.es/1zPWx7W) RBS FACING £30M LAWSUIT OVER ITS ROLE IN LIBOR-RIGGING
Royal Bank of Scotland is facing its first UK lawsuit over its role in the Libor-rigging scandal as part of a 30 million pound(46.95 million US dollar) claim from a Manchester-based property developer. (http://thetim.es/1C2jNnZ)
The Guardian
BRITISH COMPANIES STRUGGLE TO FIND DOMESTIC WORKERS WITH RIGHT SKILLS - BCC
British Chambers of Commerce says that businesses continue to rely on migrant workers 'because they can't find enough suitable talent locally'. (http://bit.ly/1rfnywb)
FINANCIAL CONDUCT AUTHORITY HOPES 1.5 BLN POUNDS IN FINES WILL CHANGE BEHAVIOUR
The City watchdog has hit financial firms with nearly 1.5 billion stg of penalties so far this year - more than three times the record level of fines it levied in 2013. (http://bit.ly/1xIZeJf)
The Telegraph
GAIL'S BAKERY BREAKS OFF FLOTATION TALKS
GAIL's Artisan Bakery, the London-based chain of upmarket cake and pastry shops, has put off plans for a stock market float until the New Year. (http://bit.ly/1tdKzAt)
KERRY FOODS FREEZES OUT FROZEN FOODS
Kerry Foods, the maker of ready-meals for supermarkets including Marks and Spencer, is looking to sell its frozen foods business as it gears towards the more profitable ingredients division. (http://bit.ly/1yJfQPe)
Sky News
TAXI APPS PRICE WAR SEES FARES SLASHED
A price war has broken out among taxi booking apps, forcing firms to slash fares in half in the run-up to Christmas. (http://bit.ly/1tpfhpq)
AVIVA AGREES 5 BILLION POUNDS DEAL TO BUY FRIENDS LIFE
Aviva PLC has agreed to buy Friends Life Group in a 5 billion stg-plus deal that will create a pensions provider with 16 million UK customers. (http://bit.ly/1ukflH3)
The Independent
SKY SHAREHOLDERS IN REVOLT OVER SECRETIVE AND 'EXCESSIVE' BONUSES
The pay-TV giant Sky has been hit by a revolt over pay as 55 per cent of independent shareholders failed to back the remuneration report. (http://ind.pn/1Fhr2GF)
HSBC TAX FEARS DEEPEN WITH FRENCH INQUIRY
HSBC's tax troubles have intensified after French magistrates formally placed its Swiss private banking arm under investigation amid allegations that it helped French citizens to dodge tax. (http://ind.pn/1y3f8x5)
Fly On The Wall Pre-market Buzz
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
Chicago Fed national activity index for October at 8:30--consensus 0.5
Markit flash services PMI for November at 9:45--consensus 57.8
ANALYST RESEARCH
Upgrades
Aruba Networks (ARUN) upgraded to Outperform from Market Perform at Raymond James
Berry Plastics (BERY) upgraded to Outperform from Market Perform at BMO Capital
Denny's (DENN) upgraded to Buy from Neutral at Janney Capital
Hess Corp. (HES) upgraded to Outperform from Market Perform at Raymond James
Infoblox (BLOX) upgraded to Buy from Hold at Needham
Kate Spade (KATE) upgraded to Buy from Neutral at BofA/Merrill
Lumber Liquidators (LL) upgraded to Overweight from Equal Weight at Morgan Stanley
Occidental Petroleum (OXY) upgraded to Strong Buy from Outperform at Raymond James
Toro Company (TTC) upgraded to Buy from Neutral at Longbow
Downgrades
Cash America (CSH) downgraded to Market Perform from Outperform at JMP Securities
Chevron (CVX) downgraded to Outperform from Strong Buy at Raymond James
Chicago Bridge & Iron (CBI) downgraded to Sell from Neutral at Goldman
Costco (COST) downgraded to Buy from Conviction Buy at Goldman
Datawatch (DWCH) downgraded to Market Perform from Outperform at William Blair
EVERTEC (EVTC) downgraded to Hold from Buy at Stifel
Exxon Mobil (XOM) downgraded to Market Perform from Outperform at Raymond James
Jacobs Engineering (JEC) downgraded to Sell from Neutral at Goldman
Kennametal (KMT) downgraded to Sell from Neutral at Goldman
Ring Energy (REI) downgraded to Hold from Buy at Canaccord
Tyco (TYC) downgraded to Market Perform from Outperform at FBR Capital
Ulta Salon (ULTA) downgraded to Neutral from Buy at Goldman
Verizon (VZ) downgraded to Neutral from Buy at Citigroup
Wesco Aircraft (WAIR) downgraded to Underperform from Buy at BofA/Merrill
Initiations
AMC Entertainment (AMC) initiated with a Buy at Goldman
Alamo Group (ALG) initiated with an Overweight at Piper Jaffray
Boot Barn (BOOT) initiated with a Buy at Jefferies
Boot Barn (BOOT) initiated with an Outperform at RW Baird
Boot Barn (BOOT) initiated with an Outperform at Wells Fargo
Boot Barn (BOOT) initiated with an Overweight at JPMorgan
Boot Barn (BOOT) initiated with an Overweight at Piper Jaffray
Fifth Street Asset (FSAM) initiated with a Neutral at Goldman
Fifth Street Asset (FSAM) initiated with an Outperform at Credit Suisse
Fifth Street Asset (FSAM) initiated with an Overweight at JPMorgan
Hain Celestial (HAIN) initiated with a Buy at Longbow
Keurig Green Mountain (GMCR) initiated with a Neutral at Longbow
Monster Beverage (MNST) initiated with a Neutral at Longbow
Regulus Therapeutics (RGLS) initiated with a Buy at Deutsche Bank
Shell Midstream (SHLX) initiated with a Buy at Citigroup
Shell Midstream (SHLX) initiated with an Equal Weight at Morgan Stanley
Shell Midstream (SHLX) initiated with an Overweight at Barclays
Sientra (SIEN) initiated with a Buy at Stifel
Sientra (SIEN) initiated with an Outperform at Leerink
Sientra (SIEN) initiated with an Overweight at Piper Jaffray
Simmons First National (SFNC) initiated with a Buy at Sterne Agee
The Fresh Market (TFM) initiated with an Underperform at Longbow
Tsakos Energy (TNP) reinstated with a Neutral at Credit Suisse
Whole Foods (WFM) initiated with an Underperform at Longbow
Zayo Group (ZAYO) initiated with a Neutral at Macquarie
COMPANY NEWS
BioMarin (BMRN) agreed to purchase all shares of Prosensa (RNA) for $17.75 per share, for a total up front consideration of approximately $680M
RenaissanceRe (RNR) agreed to acquire Platinum Underwriters (PTP) for $76.00 per share in stock and cash, or approximately $1.9B
Jacobs Engineering (JEC) announced retirement of CEO Craig Martin, effective December 26, for health reasons. The board of directors has appointed Noel G. Watson to serve as Executive Chairman until a new CEO is appointed
BHP Billiton (BHP) said targeting $4B of annualized productivity gains by 2017 end, said on track to complete demerger in 1H15
EARNINGS
Companies that missed consensus earnings expectations include:
Trina Solar (TSL)
NEWSPAPERS/WEBSITES
BT Group (BT) in talks to buy Telefonica's (TEF) O2, Reuters reports
Google (GOOG) may plan to shut down Glass Basecamps, 9to5Google reports
Wireless carriers bid up prices at U.S. spectrum auction, WSJ reports (VZ, T, DISH)
Lionsgate's (LGF) "Hunger Games" sequel falls short of expectations, Bloomberg reports
Tetraphase (TTPH) said to explore sale, Bloomberg reports (RHHBY, ALIOF)
Faith-based investors ask BofA (BAC) to split chairman, CEO roles, WSJ reports
Samsung (SSNLF) may reshuffle its leadership organization next week, WSJ reports
Microsoft (MSFT) remains a Buy, Barron's says
Schlumberger (SLB) could be a good value, Barron's says
Intel (INTC), Qualcomm (QCOM) look like "excellent" investments, Barron's says
SYNDICATE
Adamis Pharmaceuticals (ADMP) files to sell 1.77M shares for holders
Buckeye Partners (BPL) files to sell $1B limited partnership unit shelf
CTI BioPharma (CTIC) files to sell 9M shares for holders
Franklin Covey (FC) files to sell 3.2M shares for holders
JD.com (JD) files to sell $500M of American Depositary Shares for holders
Oculus (OCLS) files automatic common stock, warrant shelf
Paylocity (PCTY) files to sell 4M shares of common stock
