Falling Prices Spread Pain Far Across The Oil Patch (
WSJ)
ISIS Group Claims Responsibility for Attacks That Killed 27 in
Egypt (
NBC)
Russia Unexpectedly Cuts Key Rate as Economy Eclipses Ruble (
BBG)
Greece’s Feisty Finance Minister Tries a More Moderate Message
(
NYT)
U.S. homeownership hits 20-year low, but new households growing
(
Reuters)
Indian Banks’ Shares Plunge as Bad-Loan Provisions Surge (
BBG)
Underground Terror Network Said to Benefit Would-Be Jihadists
in Europe (
WSJ)
Russia warns West support for Kiev could lead to 'catastrophe'
(
Reuters)
Battle Brews Over Bids for Broker GFI Group (
WSJ)
BofA Said to Cut Bonus Pool for Equities Traders Up to 10% (
BBG)
Cheap Oil Burns $390 Billion Hole in Investors' Pockets (
BBG)
South Korea Stares Into the Deflationary Abyss (
BBG)
Monte Paschi Falls on Report Bank Plans Larger Capital Increase
(
BBG)
Overnight Media Digest
WSJ
* Trouble has been looming over the oil patch since crude prices
began falling last summer. But only now are the long-feared effects
of a bust starting to ripple through the energy ecosystem. (
http://on.wsj.com/1uHDPfg)
* Would-be attackers no longer need to be part of a terror
group's rank-and-file to benefit from its resources, according to
Western counterterrorism officials and people close to militant
networks. (
http://on.wsj.com/1ySxu5J)
* Uber Technologies Inc has followed a pugnacious expansion
strategy as it rolled into 277 cities around the world, sometimes
skirting local laws and daring regulators to stop the
smartphone-based car service. (
http://on.wsj.com/1uHALzy)
* A surging dollar is pummeling currencies around the globe amid
efforts to boost economic growth, prompting a wave of investor bets
to profit from the upheaval. (
http://on.wsj.com/1uHE9dP)
* A takeover fight between hard-charging rivals over a broker to
Wall Street's biggest banks is coming to a head, a showdown that
has split the firm's board amid dueling claims about management
conflicts and the hostile bidder's motivations.(
http://on.wsj.com/1KdQCgD)
* Restaurant chain Shake Shack Inc, known for its burgers and
crinkle-cut fries, priced its initial public offering above
expectations at $21 apiece late Thursday. (
http://on.wsj.com/1Lov7gu)
* Chevron Corp's big-budget exploration projects, conceived
during an era of high energy prices, are starting to produce their
first barrels of oil as a global glut is making the payoff from
such projects less certain. (
http://on.wsj.com/1zFOqPh)
* Ally Financial Inc's chief executive Thursday reacted angrily
to General Motors Co's decision to squeeze the lender out of a
lucrative leasing business and vowed to overcome getting jilted by
the firm's former parent. (
http://on.wsj.com/1CiwPNu)
* Federal prosecutors in New York said they would drop charges
against five men they previously accused of insider trading
Thursday, the latest casualty of an appeals court ruling last month
that upended the government's ability to bring such charges. (
http://on.wsj.com/1vcNMaa)
* Music streaming service Spotify AB is working with Goldman
Sachs Group Inc on a new round of private fundraising, potentially
putting off an initial public stock offering for another year, said
people familiar with the matter. (
http://on.wsj.com/1BvLmjF)
* The Federal Reserve proposed allowing more small banks to
exceed debt limits when financing mergers and acquisitions,
implementing a law Congress passed in December. (
http://on.wsj.com/1yGgM4H)
* Du Pont plans to cut bonus payments and delay raises for this
year, said a person familiar with the matter, as the chemical
company grapples with slower-than-expected growth and an activist
investor's push to split the company. (
http://on.wsj.com/1A51Bc2)
* Cablevision Systems Corp is suing Verizon Communications Inc,
accusing Verizon of falsely advertising the "fastest Wi-Fi
available" in New York in an attempt to undercut Cablevision's
competitive advantage. (
http://on.wsj.com/1zFP3s9)
* One of Malaysia's richest men has agreed in principle to lend
funds to 1 Malaysia Development Bhd, or 1MDB, to help settle a $560
million loan due Saturday, people familiar with the matter said. (
http://on.wsj.com/1Bx5OAJ)
FT
* Online music streaming service Spotify is working with Goldman
Sachs for a new round of private fundraising which is expected to
value the company at $8 billion. This move is expected to delay the
company's public listing, which many thought would occur this
year.
* Plunging crude prices have made Royal Dutch Shell Plc and
ConocoPhillips cut their investment programmes by billions of
dollars. Shell said it would "curtail" its capital spending by $15
billion over 2015-17 and Conoco said it planned a much steeper 33
percent cut in its capital spending this year to $11.5 billion.
* Atlas Genetics, a UK-based molecular diagnostics company, has
raised $20 million from investors that include the likes of
Novartis AG and Johnson & Johnson. Atlas is developing a
30-minute test for sexually transmitted diseases and is also
planning to launch its first test for chlamydia this year.
NYT
* With the latest earnings reports from Microsoft Corp and Apple
Inc, the once-unthinkable became reality: Apple's market
capitalization hit $683 billion, more than double Microsoft's $338
billion. (
http://nyti.ms/15ZuZD9)
* Some cardiologists are reaping huge reimbursements for
operating to relieve blockages in peripheral veins and arteries, a
treatment many may not need. (
http://nyti.ms/1yHLuuo)
* Because Venezuela is so dependent on oil sales to buy imports
of food, medicine and many other basics, the drop in oil prices
means that there is even less hard currency to buy what the country
needs. (
http://nyti.ms/1wGyBjs)
* Shake Shack Inc, a burger-and-crinkle-fries empire with
outposts in London, Dubai, Istanbul and Las Vegas, will begin
trading on the New York Stock Exchange on Friday, with a valuation
of about $745 million, and will increase restaurateur Danny Meyer's
net worth by about $155 million. (
http://nyti.ms/1tBEqDS)
* After years of making record profits as oil prices soared,
America's oil giants are beginning to lose money. For the first
time since the 2008 financial crisis, ConocoPhillips reported that
it had lost money - $39 million in the fourth quarter in contrast
to a profit of $2.5 billion the year before. Occidental Petroleum,
another large producer in United States shale fields and the Middle
East, said it lost $3.4 billion in the quarter, in contrast to a
$1.6 billion gain in the same quarter in 2013. (
http://nyti.ms/1uHC9Cg)
* Amazon Inc's profits fell in the fourth quarter. Revenue did
not meet expectations. The company said it might lose money in the
current quarter. For years, Amazon was a story about growth. It
invested in warehouses and faster delivery systems, in making
movies and building devices. Wall Street was willing to dismiss
profits as long as sales continued to jump. If Amazon achieved the
kind of domination it was striving for, the results would be worth
it. (
http://nyti.ms/15Nxj0c)
* Everybody knows Google Inc is working on a lot of things
besides search. Wall Street wants to know when all those projects
will start making a lot of money. In the last three months of 2014,
Google's net revenue growth slowed to 10 percent when compared with
the same quarter a year ago. (
http://nyti.ms/1A54NV8)
Canada
THE GLOBE AND MAIL
** Canada's spy agency will be granted the authority to
intervene and disrupt threats to national security in a massive
expansion of its powers as the federal government tries to make it
easier to thwart terror plots at home and abroad, sources say. (
http://bit.ly/1ETcOLQ)
** Keystone XL backers in the Senate voted decisively Thursday
to strip U.S. President Barack Obama of decision-making authority
over the controversial Canadian oil sands pipeline, triggering a
political confrontation between the Republican-controlled Congress
and the Democratic president. (
http://bit.ly/1zcErPD)
** School boards across Ontario are spending C$1 billion a year,
5 percent of their provincial operating budgets, on buildings with
an excess of empty space, money that should be used for student
programs, Ontario Education Minister Liz Sandals says. (
http://bit.ly/1zFVsDx)
NATIONAL POST
** The most revealing thing about Thursday's ministerial update
on Canada's role in the fight against ISIS was that it took place
at all. Rob Nicholson, the defence minister, John Baird, the
foreign affairs minister, and General Tom Lawson, the chief of the
defence staff, were grilled Thursday on the mission in Iraq by MPs
at a joint sitting of the defence and foreign affairs committees. (
http://bit.ly/1Lp6NLs)
** Canadian Oil Sands Ltd slashed its dividend by 75 percent on
Thursday, trimmed its capital budget and announced an intensified
effort to control costs, as the company reported
lower-than-expected year-end results. (
http://bit.ly/1CiJL6b)
** Prime Minister Stephen Harper is expected to unveil on Friday
details of a bill that would provide Canada's government with new
powers to fight terrorism, according to several news reports. (
http://bit.ly/1ySZSEQ)
China
CHINA SECURITIES JOURNAL
- China plans to restrict land use and approve fewer housing
projects in cities where real estate markets have high inventories,
the newspaper reported citing industry sources.
SECURITIES TIMES
- China is still facing pressure from its economic downturn, and
the central government may adopt policies including lowering
financing costs, increasing investments in infrastructure, and
easing property restrictions, said Li Huiyong, a Shanghai-based
economist at Shenyin & Wanguo Securities.
- The New Third Board, China's leading over-the-counter
exchange, saw its financing ability rise 1218 percent to touch 13.2
billion yuan ($2.11 billion) last year.
SHANGHAI SECURITIES NEWS
- Five Chinese provinces - Guangxi, Shandong, Shaanxi, Gansu and
Henan - are proposing to set up free trade zones, the newspaper
reported citing statements from each province's government.
- State-owned China Railway Materials has listed for sale its
stake in a loss-making Inner Monoglia-based iron unit, according to
a filing with the China Beijing Equity Exchange, paving the way for
the firm to restart stock listing plans.
CHINA DAILY
- Twenty-six out of 28 provincial-level governments that have
announced annual economic growth targets have cut their goals.
- China plans to build and test a new "Chinese standard" bullet
train this year with a maximum speed of 350 kilometers per hour,
state-owned railway operator China Railway Corporation's general
manager, Sheng Guangzu, said on Thursday.
Britain
The Times
Thousands of small businesses will be told that they may have
been mis-sold interest rate caps by their lenders, potentially
putting the country's largest banks on the hook for at least 1
billion pounds ($1.51 billion) in new compensation payouts. The
Financial Conduct Authority is expected to say that between 5,500
and 6,000 businesses will be allowed to join its redress scheme for
swap mis-selling. (thetim.es/1JQ04sc)
Soaring iPhone sales pushed the shares in a British microchip
designer to their highest level in more than a year. ARM Holdings
benefited from a knockout quarterly earnings report from Apple, in
which the Californian technology group announced the biggest
quarterly profit in corporate history. (thetim.es/1612C8t)
The Guardian
England's biggest hospitals are refusing to sign off their
annual budget deal with the NHS, claiming that the 1.7 billion
pounds of cuts involved will mean they can no longer guarantee the
safe care of patients. In an unprecedented move, hospitals that
provide 75 percent of all NHS hospital care, have vetoed plans
drawn up by Monitor, the NHS's financial regulator, to reduce their
income to help the service balance its books. (bit.ly/1ESbFUA)
Ed Miliband has stressed that the new Scottish Labour leader,
Jim Murphy, has his full backing to make his own decisions for his
party north of the border, as polls suggest a potentially
devastating swing from Labour to the SNP. (bit.ly/1DjU3jt)
The Telegraph
The yields on 10-year Government bonds have hit record lows, as
the returns on sovereign debt have fallen across the globe. The
returns offered on the UK instruments, also known as Gilts, fell
below 1.4 percent for the first time in
history.(bit.ly/1wFHxWl)
A British grandmother who tried to kill herself rather than face
extradition to the U.S. was today spared prison after she and her
husband admitted to fraud charges. The Northamptonshire couple
admitted to defrauding their U.S. company of $1 million, which they
used to fund a lavish lifestyle of holidays in Barbados and
furniture for their dog. (bit.ly/1BANQzL)
Sky News
Sky, the owner of Sky News, has announced it is entering the
mobile market for the first time in a partnership with O2, allowing
it to become a so-called 'quad player'. The wholesale deal, which
will not affect O2's existing customers, means Sky can offer mobile
services to Sky customers on Sky bills from 2016.
(bit.ly/1KaToTJ)
Argos has stepped up its digital transformation by confirming
plans for 10 concession outlets within Sainsbury's stores. The 10
Argos stores, to be open by the summer, would be spread across the
UK. (bit.ly/1uEuVPo)
The Independent
A London start-up that delivers Nando's and Gourmet Burger
Kitchen to your door has raised $25 million (16.59 million pounds)
to bring its upmarket takeaway service to more cities across the
UK. (ind.pn/1HiaLpw)
Shell has announced a $15 billion spending cut over a three-year
period after the company responds to sliding oil prices. However,
the Anglo-Dutch oil and gas giant pledged not to over-react to the
falling prices, which it said created opportunities to reduce its
own costs. (ind.pn/1Bzjm12)
Fly On The Wall Pre-Market Buzz
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
Q4 real GDP at 8:30--consensus up 3.0%
Employment Cost Index for Q4 at 8:30--consensus up 0.6%
Chicago PMI Business Barometer Index for January at
9:45--consensus 57.7
Consumer Sentiment Index for January at 10:00--consensus
98.2
ANALYST RESEARCH
Upgrades
Abbott (ABT) upgraded to Buy from Neutral at BofA/Merrill
Boston Scientific (BSX) upgraded to Outperform from Market
Perform at BMO Capital
Chico's FAS (CHS) upgraded to Buy from Neutral at Janney
Capital
Foot Locker (FL) upgraded to Overweight from Equal Weight at
Barclays
JA Solar (JASO) upgraded to Outperform from Sector Perform at
RBC Capital
K12 (LRN) upgraded to Outperform from Market Perform at Wells
Fargo
PolyOne (POL) upgraded to Outperform from Neutral at RW Baird
QLogic (QLGC) upgraded to Outperform from Market Perform at
BMO Capital
Stanley Black & Decker (SWK) upgraded to Equal Weight
from Underweight at Barclays
SunPower (SPWR) upgraded to Outperform from Sector Perform at
RBC Capital
TCF Financial (TCB) upgraded to Buy from Neutral at DA
Davidson
Textron (TXT) upgraded to Buy from Neutral at BofA/Merrill
Trina Solar (TSL) upgraded to Outperform from Sector
Perform at RBC Capital
Umpqua Holdings (UMPQ) upgraded to Outperform from Market
Perform at Keefe Bruyette
Valero Energy Partners (VLP) upgraded to Outperform from
Neutral at Credit Suisse
Yahoo (YHOO) upgraded to Buy from Hold at Evercore ISI
Zimmer (ZMH) upgraded to Outperform from Neutral at RW
Baird
Downgrades
Advanced Emissions (ADES) downgraded to Market Perform from
Outperform at Cowen
Albemarle (ALB) downgraded to Neutral from Outperform at RW
Baird
Align Technology (ALGN) downgraded to Market Perform from
Outperform at JMP Securities
Bank of Montreal (BMO) downgraded to Underweight from Equal
Weight at Barclays
Broadcom (BRCM) downgraded to Market Perform from Outperform
at JMP Securities
CEMEX (CX) downgraded to Neutral from Buy at Longbow
Cameron (CAM) downgraded to Sector Perform from Outperform at
RBC Capital
Computer Programs (CPSI) downgraded to Sell from Hold at
Deutsche Bank
DCP Midstream (DPM) downgraded to Market Perform from
Outperform at Wells Fargo
Delhaize (DEG) downgraded to Neutral from Overweight at
JPMorgan
Dr. Reddy's Labs (RDY) downgraded to Neutral from Outperform
at Credit Suisse
Greenhill & Co. (GHL) downgraded to Sell from Neutral at
UBS
PulteGroup (PHM) downgraded to Market Perform from Outperform
at Wells Fargo
Quest Diagnostics (DGX) downgraded to Underperform from
Market Perform at Wells Fargo
Reliance Steel (RS) downgraded to Neutral from Buy at
BofA/Merrill
Royal Bank of Canada (RY) downgraded to Underweight from
Equal Weight at Barclays
Silicon Graphics (SGI) downgraded to Neutral from Buy at
Sterne Agee
Teradyne (TER) downgraded to Neutral from Positive at
Susquehanna
Toronto-Dominion (TD) downgraded to Underweight from Equal
Weight at Barclays
Triumph Group (TGI) downgraded to Underperform from
Outperform at Cowen
Visa (V) downgraded to Market Perform from Outperform at FBR
Capital
West Corp. (WSTC) downgraded to Sector Perform from
Outperform at RBC Capital
Zimmer (ZMH) downgraded to Buy from Strong Buy at Needham
Initiations
Acuity Brands (AYI) coverage resumed with a Buy at Stifel
Aflac (AFL) initiated with a Hold at Jefferies
American Equity (AEL) initiated with a Hold at Jefferies
Ameriprise (AMP) initiated with a Hold at Jefferies
Assurant (AIZ) initiated with a Hold at Jefferies
Badger Meter (BMI) initiated with a Neutral at Sterne Agee
CDK Global (CDK) initiated with an Underweight at JPMorgan
CNO Financial (CNO) initiated with a Buy at Jefferies
FBL Financial (FFG) initiated with a Hold at Jefferies
Franklin Electric (FELE) initiated with a Buy at Sterne Agee
Genworth (GNW) initiated with a Buy at Jefferies
Lincoln National (LNC) initiated with a Hold at Jefferies
Neptune Technologies (nept) coverage resumed with a Buy at
Roth Capital
Pentair (PNR) initiated with a Neutral at Sterne Agee
Principal Financial (PFG) initiated with a Buy at Jefferies
Rexnord (RXN) initiated with a Buy at Sterne Agee
Rockwell Medical (RMTI) initiated with a Buy at BofA/Merrill
StanCorp (SFG) initiated with a Hold at Jefferies
Torchmark (TMK) initiated with a Hold at Jefferies
COMPANY NEWS
Costco (COST) announced a special cash dividend of $5.00 per
share
The Manitowoc Company (MTW) announced that its Board of
Directors has approved a plan to pursue a separation of the
Company's Cranes and Foodservice businesses into two independent,
publicly-traded companies
VMware (VMW) announced an expanded agreement with Google
(GOOG) to deliver greater enterprise access to public cloud
services via VMware vCloud Air
Intercept Pharmaceuticals (ICPT) received breakthrough
designation from FDA for steatohepatitis treatment
Books-A-Million (BAMM) announced the receipt of a non-binding
proposal from Clyde B. Anderson, executive chairman of the company,
on behalf of the Anderson family, to acquire certain outstanding
shares of the common stock of Books-A-Million, at a cash purchase
price of $2.75 per share
Advanced Emissions (ADES) said it is unlikely to meet SEC
filing requirements for NASDAQ listing
Amazon.com (AMZN) reported worldwide paid Prime memberships
up 53% in 2014
Google (GOOG) mobile advertising on YouTube is up more than
100%
EARNINGS
Companies that beat consensus earnings expectations last night
and today include:
Amazon.com (AMZN), Magic Software (MGIC), ImmunoGen (IMGN),
Newell Rubbermaid (NWL), Eli Lilly (LLY), Investors Bancorp (ISBC),
Robert Half (RHI), Eastman Chemical (EMN), National Fuel (NFG),
Minerals Technologies (MTX), NewMarket (NEU), Fair Isaac (FICO),
Callaway Golf (ELY), Synaptics (SYNA), Emulex (ELX), Selective
Insurance (SIGI), Aviat Networks (AVNW), Unisys (UIS), Validus
(VR), First Bancorp (fbnc), Matthews (MATW), SurModics (SRDX), Key
Technology (KTEC), SolarWinds (SWI), Cavco Industries (CVCO), Mitek
Systems (MITK), Cepheid (CPHD), Bottomline Technologies (EPAY),
Lantronix (LTRX), Microchip (MCHP), PerkinElmer (PKI), Gigamon
(GIMO), PC Connection (PCCC), Kofax (KFX), QLogic (QLGC), Chubb
(CB), Constant Contact (CTCT), C.R. Bard (BCR), Scansource (SCSC),
Natural Grocers (NGVC), Hanesbrands (HBI), Proofpoint (PFPT),
Harmonic (HLIT), Riverbed (RVBD), Micrel Semiconductor (MRCL),
Biogen (BIIB), National Instruments (NATI), Visa (V), Coherent
(COHR), Principal Financial (PFG), FCB Financial (FCB), Werner
(WERN), Abaxis (ABAX)
Companies that missed consensus earnings expectations
include:
Google (GOOG), Beazer Homes (BZH), Mattel (MAT), MB Financial
(MBFI), Bridge Bancorp (BDGE), Bridge Bancorp (BDGE), Bankwell
Financial (BWFG), First Business Financial (FBIZ), Glacier Bancorp
(GBCI), Majesco (COOL), Computer Programs (CPSI), First Financial
Bancorp (FFBC), First Community (FCBC), Green Bancorp (GNBC), Green
Dot (GDOT), Leggett & Platt (LEG), Deckers Outdoor (DECK), JDSU
(JDSU), Merchant Bancshares (MBVT), Manitowoc (MTW), Tuesday
Morning (TUES), Align Technology (ALGN)
Companies that matched consensus earnings expectations
include:
Quantum (QTM), NetSuite (N), Credit Acceptance (cacc),
Electronics for Imaging (EFII), TFS Financial (TFSL),
PMC-Sierra (PMCS), Hawaiian Holdings (HA)
Amazon.com (AMZN) sees Q1 revenue $20.9B-$22.9B, consensus
$23.05B
Broadcom (BRCM) sees Q1 revenue about $2B, plus or minus
$75M, consensus $2.01B
Visa (V) sees FY15 annual diluted class A common stock EPS
growth in mid-teens, sees FY15 annual net revenue growth low double
digits, consensus $13.86B
Boston Properties (BXP) raises 2015 FFO view to $5.28-$5.43
from $5.22-$5.42
NetSuite (N) sees Q1 revenue $160M-$162M, consensus $162.61M,
backs FY15 revenue view $715M-$725M, consensus $722.92M
Eli Lilly (LLY) backs FY15 EPS view of $3.10-$3.20, consensus
$3.18
NEWSPAPERS/WEBSITES
GM (GM) will suspend production at its Russian plant for two
months, Reuters reports
DuPont (DD) plans to cut bonuses, delay raises for year, WSJ
reports
Cablevision (CVC) suing Verizon (VZ) for false advertising
over Wi-Fi service, WSJ reports
TransCanada (TRP) Keystone pipeline bill passed by Senate,
Bloomberg reports
Philips (PHG): Smart LED lighting to drive demand in 3-4
years, DigiTimes reports (SSNLF, GE, CREE, API, LEDS)
SYNDICATE
Ashford Hospitality (AHT) files to sell 9.5M shares of common
stock
Avinger (avgr) 5M share IPO priced at $13.00
India Globalization Capital (IGC) files to sell 1.2M shares
of common stock
InfraREIT (HIFR) 20M share IPO priced at $23.00
Performant Financial (PFMT) withdraws common stock and
covertible offering
Shake Shack (SHAK) 5M share IPO priced at $21.00
Spark Therapeutics (ONCE) 7M share IPO priced at $23.00
TRACON Pharmaceuticals (TCON) 3.6M share IPO priced at $10.00
Unilife (UNIS) announces common stock offering, no amount
given