Republicans expect gains, but many races close on election day (Reuters) Ahead of tough election, White House blames dismay with Washington (Reuters) On Election Day, a Tale of the Young and the Old (WSJ) Because the recovery: Sprint to Cut 2,000 Jobs as Mobile Customers Keep Leaving (BBG) Ukraine's rebel leader is sworn in, crisis deepens (Reuters) Brilliant: Burkina Faso Army Promises Religious Leaders It Will Step Down (BBG) More Unknowns Leave Central Banks Facing Greater Internal Strife (BBG) Scapegoat found: IBM to Change Leadership at Global Services Unit (WSJ) Explains why Europe just slashed its GDP forecast: Don’t Be Fooled by Warm Spell as Cold Air About to Return (BBG) China Jumps Into Mexico With $4.3 Billion Rail Deal (BBG) Woman Sets Herself On Fire in Bulgaria (Novinite) Portugal Finds Chinese Make 90% of Bids at Property Sale (BBG) Another Deutsche Rat leaving the sinking ship? Deutsche Bank’s Amrolia Said Stepping Down (BBG) Xiaomi Said to Seek Funds at About $50 Billion Valuation (BBG) U.S. soda makers headed for tax showdown in California (Reuters) China Said to Plan $16.3 Billion Fund for ‘New Silk Road’ (BBG) Peshmerga, Syrian rebels battle Islamic State in besieged Kobani (Reuters) Gunmen kill five in Saudi Arabia, six suspects arrested (Reuters)
Overnight Press Digest
WSJ
* JPMorgan Chase & Co said the Justice Department is conducting a criminal investigation of its foreign-exchange-related matters and bumped up a figure measuring the bank's potential legal costs by $1.3 billion, according to a regulatory filing that the bank released Monday. (http://on.wsj.com/1GijzIS)
* South Korean auto makers Hyundai Motor Co and Kia Motors Corp agreed to pay a combined penalty of $300 million for overstating fuel-economy claims, the largest such punishment ever, in a settlement that could create a pricey precedent for other car companies. (http://on.wsj.com/1s88jFB)
* International Business Machines Corp plans to replace the head of its struggling technology-services unit, the latest move by Chief Executive Virginia Rometty to get Big Blue growing again. Martin Jetter, who has been leading IBM operations in Japan, has been named a senior vice president and will become head of IBM Global Technology Services. (http://on.wsj.com/1qmQzWn)
* Time Warner Inc's Turner Broadcasting cable-TV unit will tap a former executive of Twenty-First Century Fox Inc and NBC, Kevin Reilly to oversee two of the company's biggest channels, according to people familiar with the matter. (http://on.wsj.com/1x1G3Yr)
* Google Inc, which fell behind Amazon.com Inc in the fast-growing business of renting out computing horsepower to others, is now making a renewed effort to catch Amazon. At a conference on Tuesday, Google will highlight new offerings that make it easier for customers to set up so-called cloud services more quickly. (http://on.wsj.com/1vDi13Y)
* Federal antitrust regulators sued to stop the proposed $375 million merger of the country's two leading movie-theater advertising firms, National CineMedia Inc and Screenvision LLC, hitting pause on a major deal in the exhibition industry that many said would further consolidate power in a top-heavy marketplace. (http://on.wsj.com/1rW4m5T)
FT
A Florida court has acquitted Raoul Weil, former head of wealth management at UBS, of helping rich U.S. clients in evading as much as $20 billion in taxes. In 2009, Switzerland-based UBS paid $780 million to settle allegations of abetting tax evasion and also handed over 4,450 names of U.S. clients.
The Royal Bank of Scotland will appoint Ernst & Young as its new auditor, putting an end to a 14-year old relationship with its current auditor, Deloitte. The RBS contract will enable EY to overtake Deloitte in market share by number of FTSE 100 audits, behind PwC and KPMG.
Pop star Taylor Swift's record label Big Machine has removed the singer's entire catalogue of music from Sweden-based music streaming service Spotify, saying the star can make more money selling recordings than streaming. The removal is a big setback to the world's largest music streaming service, which is currently valued at $4 billion (2.50 billion British pounds).
Leaders of the European Union are considering a plan to allow Greece to exit its four-year-old bailout by the end of 2014, by converting about 11 billion euros ($13.74 billion) of unused funds into a backstop for Greece, when it raises funds from its own markets. (1 British pound = 1.5981 US dollar)
NYT
* Korean automakers Hyundai Corp and Kia Motors Corp, owned by the Hyundai Motor Group, will pay a combined penalty of $300 million to the U.S. government for overstating vehicle fuel-economy standards on 1.2 million cars. (http://nyti.ms/1rVD5QM)
* Chrysler Group posted an October sales increase of 22 percent on robust sales of its Jeep and Ram pickup brands due to American car buyers' increasing affinity for trucks and sport utility vehicles spurred by falling gas prices. (http://nyti.ms/1xVrYw3)
* The benchmark American oil price fell below the symbolic $80-a-barrel threshold on Monday, plummeting to two-year lows, after Saudi Arabia aimed to shore up its dwindling exports to the United States by cutting its selling price for the American market. (http://nyti.ms/1x2Om7r)
* JP Morgan Chase & Co added $2.4 billion to its estimate of the amount of legal costs it may face for current investigations into the possible manipulation of the currency market. (http://nyti.ms/1wZ0BEo)
* Two recent accidents, one of them fatal, involving commercial rockets have underscored the high risks and soaring costs involved in any spaceflight. (http://nyti.ms/1sb2Q0N)
* Virgin America Inc <IPO-VA.O>, the low-cost airline, partially owned by Richard Branson's Virgin Group, has moved a step closer to a Wall Street debut, filing a price range on Monday for its planned initial public offering. (http://nyti.ms/1yRb4jc)
* Nearly nine months after General Motors began recalling millions of its cars for a dangerously defective ignition switch, almost half of the vehicles still have not been fixed. (http://nyti.ms/13C47sb)
Canada
THE GLOBE AND MAIL
** Acknowledging "security gaps" that could leave airliners vulnerable to a terrorist attack, the federal government is moving ahead with a new system that would allow shippers to screen cargo before it gets to the airport. Transport Canada says the system will bring air cargo screening up to the standards of key trading partners and result in a net benefit to Canadians of C$202 million ($177.6 million) over 10 years. (http://bit.ly/1oeYetW)
** Voters in three ridings in Newfoundland will be casting ballots this month after two byelections were called on Monday. Elections Newfoundland and Labrador says byelections will take place on Nov. 25 in Trinity-Bay de Verde and Humber East. Those two ridings became vacant after the resignations of former cabinet ministers Charlene Johnson and Tom Marshall. (http://bit.ly/1x2ZzVq)
** Bank of Nova Scotia, Canada's third-largest lender by assets, said it would take a charge of C$451 million as it cuts about 1,500 jobs, writes down its investment in Venezuela and loans sour in the Caribbean. (http://bit.ly/1tWcgS0)
NATIONAL POST
** French President Francois Hollande told Parliament on Monday that Western nations must not show "weakness" in the face of domestic terrorism and must battle Islamic terrorists in Iraq - a message that appeared to bolster the agenda of Canada's Conservative government. (http://bit.ly/1rXtEAy)
** It's billed as a "breathtaking" display of Tibet's culture, but Canadian-Tibetans are denouncing programs about the contested region as an "insulting" and "deeply disrespectful" display of propaganda. The Canada China Tibetan Culture Week opens in Toronto on Tuesday at the TIFF Bell Lightbox with a documentary screening, followed by traditional song and dance performances by a Tibet-based troupe at the Bluma Appel Theatre. Events are also being held in Vancouver. (http://bit.ly/1x2DpUr)
** Barrick Gold Corp is in talks with state-owned Chinese miner Zijin Mining Group Co Ltd to form a partnership on the botched Pascua-Lama project, according to a government official in Argentina. (http://bit.ly/1tvXG22)
China
CHINA SECURITIES JOURNAL
- China's government departments are drafting policy to support financial institutions, particularly banks, to quicken the write-off of non-performing loans, the newspaper reported.
- The Ministry of Industry and Information Technology will formulate a five-year plan for the robotics industry to boost development of this emerging sector.
SHANGHAI SECURITIES NEWS
- Chinese banks, which halted the sales of private-equity products in 2013 due to a slump in China's stock market, restarted the sales following the recent rally, accelerating financial funds from banks enter the market.
- Non-financial institutions with real fund-raising needs are qualified to enter China's interbank bond market by conducting trade in the Beijing Financial Assets Exchange, the newspaper reported.
SHANGHAI DAILY
- Beijing is setting up more checkpoints, rural roadblocks and police stations to ensure security during the upcoming Asia-Pacific Economic Cooperation (APEC) week, according to an official with the Beijing Municipal Security Bureau.
- The Shanghai People's Procuratorate issued the first judicial guidelines for criminal cases involving Shanghai's Pilot Free Trade Zone (FTZ) recently, the newspaper reported.
CHINA DAILY
- Pro-democracy protests in Hong Kong will jeopardize the launch of the Shanghai-Hong Kong Stock Connect programme, said an official of a top think tank on Monday.
- Sony Mobile Communication Inc, a subsidiary of Sony Corp , will cut about 15 percent of its jobs in China and stop producing smartphones only targeted at the Chinese customer.
- Lei Chunian, a hero of the 2008 Wenchuan earthquake, was charged by a local court for cheating more than 460,000 yuan ($75,190) from 21 people on Monday.
Britain
The Times
* HSBC misses forecasts as it sets aside $387 mln for forex investigation
Bills for past misconduct including rigging of foreign exchange markets dashed the cost-cutting plans of HSBC Holdings Plc in the third quarter, sending underlying profits 12 per cent lower to $4.4 billion. (http://thetim.es/1x34xAH)
* UK demand helps manufacturers defy slowing eurozone
Strong domestic demand led to a rebound in UK manufacturing activity last month despite the slowing eurozone dragging down export orders. A closely-watched purchasing managers' index beat economists' expectations, rising to a three-month high of 53.2 in October from 51.5 in September. (http://thetim.es/1x2NKyz)
The Guardian
* Osborne accused of using new tax statements as 'political propaganda'
Britain's finance minister George Osborne has been criticised for sending millions of households annual tax statements that show the biggest chunk of their contribution going towards welfare, with trade unions describing it as "political propaganda masquerading as neutral information". (http://bit.ly/1tB9ba3)
* Ryanair puts 32 pct jump in profits down to being nicer
Ryanair Holdings Plc announced a 32 percent jump in first-half profits a year after its pledge to transform its customer service. Ryanair's chief executive, Michael O'Leary, said business was booming since a decision in late 2013 to change its image and stop "unnecessarily pissing people off".(http://bit.ly/1qmIXmB)
The Telegraph
* JP Morgan sets aside $6 bln for legal costs after revealing US forex probe
JPMorgan Chase & Co has raised the amount it has set aside to cover legal costs to almost $6 billion, after revealing it faces a US criminal probe over its foreign-exchange business. The US bank said on Monday night that it is cooperating with the Department of Justice as well as the Commodity Futures Trading Commission and the UK's Financial Conduct Authority. (http://bit.ly/10PCHy4)
* Struggling supermarkets face huge increase in business rates bill
Britain's under-pressure supermarkets are facing the prospect of a huge increase in business rates, adding to the challenges facing the industry. The rates bill for supermarkets could grow by as much as 40 percent on the back of a revaluation of Britain's property scheduled for next year, according to new research. (http://bit.ly/1x2NRKt)
Sky News
* Virgin Money Revives IPO after Carney Boost
Sir Richard Branson's banking arm is to revive plans to list on the stock market just days after receiving a boost from new Bank of England rules dictating the amount of capital that lenders must hold to protect them against losses. (http://bit.ly/1GgB64d)
* Emirates ends FIFA world cup sponsorship
Airline Emirates will not renew its sponsorship of the 2018 or 2022 FIFA World Cup tournaments, it has emerged. The decision comes after a slew of corruption allegations against football's world governing body, and ends an association that dates back to the 2006 tournament in Germany. (http://bit.ly/13BbWOV)
The Independent
* Diageo swaps tequila for whiskey in $1 bln deal
Diageo Plc,the owner of Guinness and Johnnie Walker whisky, has stirred up its drinks cabinet by swapping Irish whiskey for Mexican tequila in a $1 billion. The spirits giant has agreed with Mexico's Casa Cuervo to gain control of tequila brand Don Julio in return for Irish whiskey Bushmills. (http://ind.pn/1pgMIzf)
* Dunkin' Donuts unveils calorie-packed snickerdoodle and sugar cookie latte ahead of Christmas
The battle for Christmas drink sales is heating up with Dunkin' Donuts launching a snickerdoodle and sugar-cookie latte as it takes on Starbucks Corp. Dunkin' Donuts is hoping to replicate the success of last year's Christmas red velvet lattes and salted-caramel hot chocolates, which helped boost revenue 27 per cent in the fourth quarter. (http://ind.pn/1wYCPZh)
Fly On The Wall Pre-Market Buzz
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
International trade balance for September at 8:30--consensus ($40.7B)
Factory orders for September at 10:00--consensus down 0.7%
ANALYST RESEARCH
Upgrades
Anadarko (APC) upgraded to Outperform from Market Perform at Bernstein
AngloGold (AU) upgraded to Overweight from Neutral at HSBC
Cytokinetics (CYTK) upgraded to Buy from Hold at MLV & Co.
Eastman Chemical (EMN) upgraded to Buy from Neutral at SunTrust
Genesis Energy (GEL) upgraded to Outperform from Neutral at RW Baird
Kite Realty Trust (KRG) upgraded to Buy from Hold at Stifel
Leidos (LDOS) upgraded to Outperform from Market Perform at Cowen
Level 3 (LVLT) upgraded to Buy from Neutral at Citigroup
McCormick (MKC) upgraded to Outperform from Market Perform at Bernstein
Penn National (PENN) upgraded to Neutral from Underperform at BofA/Merrill
STMicroelectronics (STM) upgraded to Neutral from Underweight at HSBC
Sallie Mae (SLM) upgraded to Buy from Neutral at Goldman
Shire (SHPG) upgraded to Buy from Neutral at UBS
Downgrades
Agilent (A) downgraded to Market Perform from Outperform at Wells Fargo
Agilent (A) downgraded to Neutral from Outperform at RW Baird
ArcelorMittal (MT) downgraded to Hold from Buy at Deutsche Bank (yesterday)
Cintas (CTAS) downgraded to Sector Perform from Outperform at RBC Capital
IDACORP (IDA) downgraded to Hold from Buy at KeyBanc
LeapFrog (LF) downgraded to Neutral from Overweight at Piper Jaffray
Lumber Liquidators (LL) downgraded to Hold from Buy at Canaccord
Midcoast Energy (MEP) downgraded to Underweight from Equal Weight at Morgan Stanley
MoneyGram (MGI) downgraded to Sell from Hold at Evercore ISI
Navient (NAVI) downgraded to Neutral from Buy at Goldman
Navios Maritime Partners (NMM) downgraded to Underweight at Morgan Stanley
Nokia (NOK) downgraded to Underperform from Market Perform at Bernstein
Nokia (NOK) downgraded to Underperform from Market Perform at Bernstein
QTS Realty Trust (QTS) downgraded to Equal Weight from Overweight at Morgan Stanley
RCS Capital (RCAP) downgraded to Neutral from Buy at Citigroup
RetailMeNot (SALE) downgraded to Neutral from Buy at Goldman
Ultra Petroleum (UPL) downgraded to Underweight from Equal Weight at Barclays
Valley National (VLY) downgraded to Neutral from Buy at Guggenheim
Xcel Energy (XEL) downgraded to Hold from Buy at Evercore ISI
Initiations
Achaogen (AKAO) initiated with a Buy at SunTrust
Achaogen (AKAO) initiated with a Neutral at Wedbush
Avanir (AVNR) initiated with a Buy at Deutsche Bank
Cempra (CEMP) initiated with a Buy at SunTrust
Cubist (CBST) initiated with a Buy at SunTrust
Cubist (CBST) initiated with a Neutral at Wedbush
Datawatch (DWCH) initiated with a Buy at Drexel Hamilton
Dave & Busters (PLAY) initiated with a Buy at Jefferies
Dave & Busters (PLAY) initiated with a Buy at Stifel
Dave & Busters (PLAY) initiated with an Outperform at William Blair
Dave & Busters (PLAY) initiated with an Overweight at Piper Jaffray
Halyard Health (HYH) initiated with an Equal Weight at Morgan Stanley
ImmunoGen (IMGN) initiated with a Market Perform at Cowen
Nordstrom (JWN) initiated with a Hold at Brean Capital
PDF Solutions (PDFS) initiated with an Outperform at Northland
PennyMac Financial (PFSI) initiated with an Outperform at Keefe Bruyette
Seattle Genetics (SGEN) initiated with a Market Perform at Cowen
Smart & Final Stores (SFS) initiated with a Neutral at Citigroup
Smart & Final Stores (SFS) initiated with a Neutral at Credit Suisse
Tetraphase (TTPH) initiated with an Outperform at Wedbush
Travelport (TVPT) initiated with a Buy at Deutsche Bank
Travelport (TVPT) initiated with a Buy at Jefferies
Travelport (TVPT) initiated with a Buy at UBS
Travelport (TVPT) initiated with an Outperform at Credit Suisse
Travelport (TVPT) initiated with an Overweight at Morgan Stanley
Travelport (TVPT) re-initiated with an Outperform at Imperial Capital
Wal-Mart (WMT) initiated with a Neutral at Sterne Agee
COMPANY NEWS
JPMorgan (JPM) said DOJ conducting criminal investigation of firms FX trading, sees possibility of up to $5.9B in legal losses as of September 30
Stryker (SYK) agreed to pay $1B to settle hip lawsuits, said it has recorded charges to earnings of $1.425B related to the issue
Avon Products (AVP) downgraded by S&P to BB+, outlook stable
Sprint (S) said it will cut an additional 2,000 jobs and said it expects FY15 adjusted EBITDA to be 'neutral to modestly higher' vs. FY14
RetailMeNot (SALE) CFO Douglas Jefferies said he will step down, effective November 30
Burger King (BKW) to accept PayPal (EBAY) to pay at U.S. locations
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Achillion (ACHN), Targa Resources (TRGP), CytRx (CYTR), Northwest Natural Gas (NWN), Northern Tier (NTI), Western Refining (WNR), Headwaters (HW), Becton Dickinson (BDX), HMS Holdings (HMSY), Time Inc. (TIME), Talisman Energy (TLM), Allot Communications (ALLT), Agrium (AGU), Aqua America (WTR), Atlas Pipeline Partners (APL), EPAM Systems (EPAM), Otter Tail (OTTR), RockTenn (RKT), Tidewater (TDW), Seaspan (SSW), Skilled Healthcare (SKH), EarthLink (ELNK), Mindray Medical (MR), Albany International (AIN), Marathon Oil (MRO), Emerald Oil (EOX), Protective Life (PL), Acura Pharma (ACUR), Chesapeake Lodging (CHSP), Alleghany (Y), West Corp. (WSTC), Checkpoint Systems (CKP), Galena (GALE), Black Hills (BKH), Chegg (CHGG), Black Diamond (BDE), Fabrinet (FN), Greenlight Capital (GLRE), Vanguard Natural (VNR), Integra LifeSciences (IART), Douglas Dynamics (PLOW), Mid-Con Energy (MCEP), Nutrisystem (NTRI), Prothena (PRTA), Advanced Energy (AEIS), Ruckus Wireless (RKUS), Corrections Corp. (CXW), Lannett (LCI), RetailMeNot (SALE), Rudolph Technologies (RTEC), Alder Biopharmaceuticals (ALDR), RealD (RLD), Qualys (QLYS), Continental Building (CBPX), Sykes Enterprises (SYKE), Navigator Holdings (NVGS), Nautilus (NLS), AIG (AIG), Interactive Intelligence (inin), Frontier Communications (FTR), DXP Enterprises (DXPE), Sykes Enterprises (SYKE)
Companies that missed consensus earnings expectations include:
Sprint (S), Tesco (TESO), Tesco (TESO), Triple-S (GTS), Regeneron (REGN), United Fire & Casualty (UFCS), Santander Consumer (SC), Westlake Chemical Partners (WLKP), Hi-Crush Partners (HCLP), State Auto Financial (STFC), Vitamin Shoppe (VSI), Western Refining Logistics (WNRL), DISH (DISH), Regis (RGS), CyrusOne (CONE), Quotient (QTNT), Northwest Pipe (NWPX), TPG Specialty Lending (TSLX), RLJ Lodging Trust (RLJ), Nortek (NTK), Rosetta Resources (ROSE), MDU Resources (MDU), Allied Nevada Gold (ANV), Sun Hydraulics (SNHY), Herbalife (HLF), Apollo Residential Mortgage (AMTG), Community Health (CYH), Endurance Specialty (ENH), Correction: Black Diamond (BDE), U.S. Auto Parts (PRTS), xG Technology (XGTI), Borderfree (BRDR), Macrocure (MCUR), Procera Networks (PKT), LeapFrog (LF), Imprivata (IMPR), Texas Roadhouse (TXRH), Kaman (KAMN), Cutera (CUTR), eGain (EGAN), Superior Industries (SUP), Stone Energy (SGY), PetroQuest (PQ)
Companies that matched consensus earnings expectations include:
Regal-Beloit (RBC), ONE Gas (OGS), Tenet (THC), Neurocrine (NBIX)
NEWSPAPERS/WEBSITES
Apple (AAPL) may stop making iPad mini as 12-inch iPad is introduced, Phone Arena says
Many GM (GM) faulty ignition switches still not repaired, NY Times reports
Sony (SNE) to stay active in Chinese smartphone market, China Daily reports
Blackstone (BX) allegedly close to $8B agreement for IndCor division, Bloomberg reports
Good chance Petrobras (PBR) CEO remains at the helm during Rousseff's term, WSJ reports
NHTSA investigates Honda (HMC) communication of faulty Takata airbags, Reuters reports
BlackRock (BLK) looks like a 'buy', Barron's says
SYNDICATE
Aerie Pharmaceuticals (AERI) files to sell 8.75M shares for holders
Apple (AAPL) to offer bonds in euros via Goldman, Deutsche Bank
DCT Industrial (DCT) files to sell 13.5M shares of common stock
Healthcare Trust (HTA) files to sell 8M shares of common stock
Hilton (HLT) 90M share Secondary priced at $25.00
Intercloud Systems (ICLD) files to sell 2.4M shares for selling stockholders
Newtek Business Services (NEWT) files to sell 2M shares of common stock
NorthWestern (NWE) files to sell $348M of common stock
Platform Specialty Products (PAH) fies to sell $402.5M shares of common stock
StoneCastle (BANX) plans to offer 1.6M shares of common stock
Umpqua Holdings (UMPQ) files to sell 31.2M shares for stockholders
