Saudi Arabia’s New King Probably Will Not Change Current Oil
Policy (
BBG)
Saudi King’s Death Clouds Already Tense Relationship With U.S.
(
WSJ)
Oil Pares Gains as New Saudi King Says Policies Stable (
BBG)
Kuroda Says BOJ to Mull Fresh Options in Case of More Easing (
BBG)
U.S. pulls more staff from Yemen embassy amid deepening crisis
(
Reuters)
Putin Said to Shrink Inner Circle as Hawks Beat Billionaires (
BBG)
A Few Savvy Investors Had Swiss Central Bank Figured Out (
WSJ)
Chinese Chairman of Credit Suisse Venture Is Missing (
BBG)
Dimon, Blankfein Getting Bigger Cash Bonuses Even While U.S.
Bank Rally Fizzles (
BBG)
Oil Drillers ‘Going to Die’ in 2Q on Crude Price Swoon (
BBG)
California Backs Surfers as Billionaire Khosla Risks Property (
BBG)
Islamic State deadline on Japanese captives passes with no word
on fate (
Reuters)
Boston’s Poverty-Fighting Rosengren Pushes Activist Fed Vision
(
BBG)
Overnight Media Digest
WSJ
* King Abdullah bin Abdulaziz al Saud, who insulated Saudi
Arabia from the Islamist and democratic forces roiling the Middle
East in the name of stability, died at about age 90. (
http://on.wsj.com/1CpNU6Y)
* Comcast Corp's proposed merger with Time Warner Cable Inc and
Obama's call for stringent new Internet regulations are testing the
cable giant's lobbying power. (
http://on.wsj.com/1GF2QCh)
* When Switzerland's central bank shocked markets by scrapping a
three-year-old policy limiting the value of the Swiss franc against
the euro, the Swiss investment firm Quaesta Capital was among the
few that benefited. (
http://on.wsj.com/1uoHX3A)
* Carl Icahn joined other activist investors in pushing back
against a trend in recent months in which spun-off companies are
cloaked with tough takeover defenses. (
http://on.wsj.com/1JqtKdf)
* Gas prices appear headed below a nationwide average of $2 a
gallon in coming days, and the rapid plunge is beginning to ripple
through the U.S. economy in ways both familiar and unpredictable. (
http://on.wsj.com/15iQMp2)
* Li Ka-shing's Hutchison Whampoa Ltd said it had agreed to
enter into exclusive talks to buy U.K. mobile-phone operator O2 for
potentially more than $15 billion. (
http://on.wsj.com/1CX5tts)
* Janus Capital Group Inc confirmed that the bulk of the money
flowing into the new bond fund of star manager Bill Gross came from
Gross himself. On a conference call with analysts on Thursday to
discuss the firm's earnings, Janus Chief Executive Dick Weil told
participants that Gross had invested "more than $700 million" in
his Janus Global Unconstrained Bond fund at the end of 2014. (
http://on.wsj.com/1CkJjCT)
* T-Mobile US Inc is giving subprime subscribers another chance
amid an escalating battle for customers in the wireless business.
The country's fourth-largest wireless carrier said it would extend
its best service offers, including financing plans for cellphones
that can cost $650 or more, to any buyer who makes at least 12
payments in a row regardless of credit score. (
http://on.wsj.com/1CI8yNw)
FT
* Telefonica SA is set to agree to a cash deal of 10 billion
pounds ($15 billion) to sell O2, its British mobile company, to one
of Asia's wealthiest men, Li Ka-shing's Hutchison Whampoa Ltd, the
Financial Times reported on Thursday.
* Anglo American is looking to sell a cluster of coal assets in
eastern Australia as it tries to boost shareholder returns amid a
slump in commodities prices.
* The European Central Bank agreed on Thursday to embark on a
quantitative easing programme that will see it buy 60 billion euros
($68.1 billion) worth of government bonds a month from this March
until September next year.
* Swedish group Industrivarden said on Thursday its chairman,
Sverker Martin-Lof, would leave his position at the group and its
companies. The move comes after a jet scandal erupted relating to
liberal use of corporate jets by senior staff.
NYT
* Federal officials vowed to make more of an experimental drug
that showed promise in treating Ebola, but that project has moved
slowly. (
http://nyti.ms/1CX1XPw)
* Bitcoin, the virtual currency that was once the talk of the
financial world, has been taking a beating over the last year with
the price tumbling downward. Now two of the biggest boosters of the
virtual currency, Cameron and Tyler Winklevoss, are trying to firm
up support by creating the first regulated Bitcoin exchange for
American customers - what they are calling the Nasdaq of Bitcoin. (
http://nyti.ms/1Ckuctg)
* President Barack Obama is proposing a radical change to the
529 college savings plans held by millions of families, which would
require those who use them to rethink their approach to college
savings. As part of his plan to simplify the tax code and help the
middle class, one of the 529 plan's most attractive benefits would
be eliminated: Money could no longer be withdrawn tax-free. (
http://nyti.ms/1GEZRKa)
* BMW and Volkswagen AG announced a plan on Thursday to install
100 high-speed charging stations on busy corridors this year on the
East and West Coasts, like Interstate 95 between here and Boston.
The stations will be part of a fast-growing network run by
ChargePoint, the nation's largest, and will be compatible with
nearly all electric vehicles on the road. (
http://nyti.ms/1xHlIah)
* DreamWorks Animation SKG Inc said on Thursday that it would
reduce its movie output and lay off 500 employees, or roughly 19
percent of its staff, a retrenchment that follows a string of
box-office misfires and two failed merger attempts. (
http://nyti.ms/1AWEk7c)
* The Consumer Financial Protection Bureau said that more than
100 former Wells Fargo & Co loan officers and half a dozen from
JPMorgan Chase & Co accepted kickbacks, as part of a scheme to
steer business to a now defunct title insurance company. The banks
agreed to pay about $36 million. (
http://nyti.ms/15DcVzo)
* Online Storage Provider Box Inc will be valued at $1.7 billion
when it begins trading on Friday, but concerns have been raised
within Silicon Valley about the high-flying valuations that some
technology darlings have fetched recently. (
http://nyti.ms/1yPZO7I)
* Hutchison Whampoa Ltd, one of the flagship companies of the
Hong Kong billionaire Li Ka-shing, said on Friday it has agreed to
enter exclusive talks to buy O2, the British cellphone carrier
owned by the Spanish telecom giant Telefonica SA, in a deal worth
roughly $15 billion. (
http://nyti.ms/1GF2njF)
* Amazon.com Inc has agreed to buy Annapurna Labs, an Israeli
chip developer, for about $350 million, a spokeswoman for Amazon
said on Thursday. (
http://nyti.ms/1t4sf23)
* Shareholders in Family Dollar Stores Inc voted on Thursday to
approve the retailer's $8.5 billion merger with Dollar Tree Inc,
leaving the company's unwanted suitor, Dollar General Corp, on the
losing side. (
http://nyti.ms/1JfHvNI)
Canada
THE GLOBE AND MAIL
** Canada's major lenders are so far holding off cutting
mortgage rates in the wake of the Bank of Canada's quarter-point
interest rate cut, but industry officials predict rates will fall
to historic new lows just in time for the all-important spring
housing market. (
http://bit.ly/15wHwxN)
** The Canadian Broadcasting Corp is banning all outside paid
appearances by its on-air journalists, after almost a year of
controversy over allegations of potential conflicts-of-interest. (
http://bit.ly/1GDBUCU)
** The big breweries that own Ontario's Beer Store are facing an
unprecedented threat to their private monopoly. Legal challenges
are piling up, the government is promising reforms and everyone
from craft brewers to restaurateurs is pushing for the end of this
lucrative cartel arrangement. (
http://bit.ly/1yB1wLf)
NATIONAL POST
** The Bank of Canada's surprise rate cut this week could result
in much quicker and surprising economic growth than many are
expecting, market watchers said on Thursday. (
http://bit.ly/1uzUVB2)
** Toronto Mayor John Tory found himself under attack on a most
unexpected front on Thursday: on financial management, and from the
left. The former corporate CEO - who won office by promising a
business-like approach at city hall - had won early left-wing
praise this week for his first budget, which spends C$75 million in
new money on things such as transit and shelters without raising
property taxes beyond the rate of inflation. (
http://bit.ly/15wHPc0)
** After acknowledging the Treaty 1 Metis land on which he
stood, the mayor of Winnipeg took a long, deep breath on Thursday
and said racism against Aboriginal people is a big problem in his
city. (
http://bit.ly/1BjjxgY)
China
CHINA SECURITIES JOURNAL
- The People's Bank of China continued to inject money via
medium-term lending facilities and open market operations, which
means it might not be in a rush to cut reserve requirement ratios
(RRR) and the interest rate in 2015, the newspaper said in its
commentary.
- China Cinda Asset Management Co and Shanghai State-owned
Assets Operation Co said they have jointly issued 200 billion yuan
in funds to promote mixed ownership in state-owned companies.
SECURITIES TIMES
- China Securities Depository and Clearing Corp Ltd said it had
approved Bank of China and Bank of Communications to undertake
settlement business of stock options.
SHANGHAI SECURITIES NEWS
- The New Third Board, China's leading over-the-counter
exchange, has seen the number of firms listed rise by 3.4 times and
investors five times over the year since its launch.
- China Securities Index Co Ltd plans to launch a "one belt, one
road" index on Feb. 16 that will include 79 stocks from sectors
such as infrastructure and transport.
CHINA DAILY
- China Railway Corp expects 289 million trips to be made during
the country's annual Spring Festival travel peak, while the
government will take third-party help to assess the transportation
department's performance.
- China may generate the majority of its total energy needs from
renewable sources by 2050, capping its coal use at 1.5 billion
metric tons by then, Wang Zhongying, director of the China National
Renewable Energy Center, told the newspaper.
Britain
The Times
Eurozone borrowing costs dived to record lows, the euro fell and
shares were pushed higher yesterday in a "textbook reaction" to the
European Central Bank's landmark 1.1 trillion euros ($1.25
trillion) stimulus package. Although prices moved favourably as
traders cheered the bigger-than-expected move, many remained
sceptical that the money-creation splurge would be enough to pull
the 19-nation eurozone out of its economic paralysis. (
http://thetim.es/1CnLkOY)
George Osborne has told corporate bosses that he can transform
Britain into the "go-to western economy" for business if the Tories
are re-elected. At a private breakfast with chief executives in
Davos, the chancellor said he was committed to more structural
reforms, including to the labour market to make it easier for
companies to hire and fire. (
http://thetim.es/1t3BCzh)
The Guardian
The American private equity fund KKR & Co LP has bought the
British train ticket website thetrainline.com, derailing its
planned float on the London stock market. Trainline was one of the
first companies of the year to announce an initial public offering,
which a source familiar with the deal said could have valued the
firm at more than 500 million pounds ($750.30 million). (
http://bit.ly/1CjT6Jn)
The Duke of York has publicly denied allegations he had underage
sex with an American teenager, reiterating and reaffirming previous
Buckingham Palace statements rebutting the claims. Prince Andrew's
first public response to the claims was made as he addressed an
annual reception for 200 guests at the World Economic Forum in
Davos, Switzerland. (
http://bit.ly/1y4JgVq)
The Telegraph
David Cameron has said a radical transfer of tax-raising powers
is the right long-term "resting place" for Scottish devolution as
he dismissed Scottish National Party complaints the plans had been
watered down and did not go far enough. (
http://bit.ly/186PjEe)
Hong Kong tycoon Li Ka-shing is to create a new leader in
Britain's mobile phone industry after agreeing to buy O2 for more
than 10 billion pounds. Telefonica SA, the owner of O2, will
announce a merger with Li's Hutchison Whampoa Ltd on Friday
morning. (
http://bit.ly/1CjXubt)
Sky News
Npower will become the fourth of Britain's six biggest energy
companies to cut gas prices as pressure intensifies on suppliers to
pass on the benefit of falling wholesale prices. Sky News has
learned that Npower, which is owned by the German utility group RWE
AG, will announce that it is cutting its standard gas tariff by
more than 5 percent, making it the largest reduction unveiled
during the current round of cuts. (
http://bit.ly/1Je1GeO)
The furniture chain DFS is to target a valuation of up to 1
billion pounds in a London stock market listing next month that
will include a substantial offering to retail investors. The
company, which is owned by private equity group Advent
International, will say that it wants to raise well over 100
million pounds from the initial public offering and that it will
use the proceeds to redeem a 200 million pound bond. (
http://bit.ly/1yKRpny)
The Independent
The boss of Royal Mail has claimed that 2015 is the year that
"big retailers will realise that quality counts" and opt for its
services after rivals City Link and Yodel struggled in the crucial
run-up to Christmas. Royal Mail delivered unexpectedly decent
festive results, with UK parcels up 4 percent, sending it to the
top of the FTSE 100. (
http://ind.pn/1untO6E)
Boris Johnson has reportedly paid the overdue taxes to the
United States government he previously described as "outrageous"
and said he did not intend to pay. All U.S. citizens, including
those who live and work outside the country, are obliged to file a
tax return and pay US taxes. (
http://ind.pn/1yKYR1M)
Fly On The Wall Pre-Market Buzz
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
Markit manufacturing PMI for January at 9:45--consensus 54.0
Leading indicators for December at 10:00--consensus up 0.4%
Existing home sales for December at 10:00--consensus up 3.0%
to 5.08M rate
ANALYST RESEARCH
Upgrades
AmSurg (AMSG) upgraded to Overweight from Neutral at Piper
Jaffray
Anglo American (AAUKY) upgraded to Neutral from Sell at
Goldman
Cypress Semiconductor (CY) upgraded to Neutral from
Underweight at JPMorgan
DreamWorks Animation (DWA) upgraded to Overweight from
Neutral at Piper Jaffray
E-Trade (ETFC) upgraded to Outperform from Neutral at Credit
Suisse
Kate Spade (KATE) upgraded to Buy from Neutral at Mizuho
LinkedIn (LNKD) upgraded to Strong Buy from Market Perform at
Raymond James
lululemon (LULU) upgraded to Overweight from Neutral at
JPMorgan
Michael Kors (KORS) upgraded to Buy from Neutral at Mizuho
Natural Grocers (NGVC) upgraded to Overweight from Neutral at
Piper Jaffray
Nucor (NUE) upgraded to Buy from Neutral at Goldman
ResMed (RMD) upgraded to Buy from Hold at Needham
Ternium (TX) upgraded to Neutral from Sell at Goldman
Downgrades
Access National (ANCX) downgraded to Market Perform from
Outperform at Keefe Bruyette
Alamos Gold (AGI) downgraded to Neutral from Buy at
BofA/Merrill
Altera (ALTR) downgraded to Market Perform from Outperform at
BMO Capital
Avon Products (AVP) downgraded to Market Perform from
Outperform at Wells Fargo
Cardinal Financial (CFNL) downgraded to Market Perform at
Keefe Bruyette
Century Aluminum (CENX) downgraded to Neutral from Overweight
at JPMorgan
Chevron (CVX) downgraded to Neutral from Outperform at Credit
Suisse
City National (CYN) downgraded to Market Perform from
Outperform at Raymond James
Coca-Cola Femsa (KOF) downgraded to Neutral from Overweight
at JPMorgan
DreamWorks Animation (DWA) downgraded to Sell from Neutral at
Janney Capital
DreamWorks Animation (DWA) downgraded to Underperform from
Market Perform at Cowen
Exxon Mobil (XOM) downgraded to Underperform from Neutral at
Credit Suisse
Hercules Offshore (HERO) downgraded to Underperform at
Raymond James
Hershey (HSY) downgraded to Hold from Buy at Deutsche Bank
PNM Resources (PNM) downgraded to Hold from Buy at Jefferies
Precision Castparts (PCP) downgraded to Neutral from Buy at
Sterne Agee
Precision Castparts (PCP) downgraded to Neutral from
Outperform at Credit Suisse
Rentokil (RTOKY) downgraded to Sell from Neutral at UBS
Sallie Mae (SLM) downgraded to Neutral from Buy at Goldman
Travelers (TRV) downgraded to Neutral from Overweight at
Atlantic Equities
U.S. Steel (X) downgraded to Neutral from Buy at Goldman
Vale (VALE) downgraded to Neutral from Buy at Goldman
Initiations
Arena Pharmaceuticals (ARNA) initiated with a Sector Perform at
RBC Capital
Avolon (AVOL) initiated with an Overweight at JPMorgan
Hortonworks (HDP) initiated with a Market Perform at Cowen
Informatica (INFA) initiated with a Market Perform at Cowen
Kona Grill (KONA) initiated with an Outperform at Oppenheimer
Medivation (MDVN) initiated with a Sector Perform at RBC
Capital
Natural Grocers (NGVC) initiated with an Underperform at
Wedbush
Orexigen (OREX) initiated with an Outperform at RBC Capital
PTC Therapeutics (PTCT) initiated with an Outperform at RBC
Capital
Puma Biotechnology (PBYI) initiated with an Outperform at RBC
Capital
Qlik Technologies (QLIK) initiated with an Outperform at
Cowen
Rice Energy (RICE) initiated with an Outperform at Imperial
Capital
Salesforce.com (CRM) initiated with an Outperform at Cowen
Sarepta (SRPT) initiated with a Sector Perform at RBC Capital
ServiceNow (NOW) initiated with an Outperform at BMO Capital
Sprouts Farmers Markets (SFM) initiated with a Neutral at
Wedbush
Stemline (STML) initiated with an Outperform at Cowen
Tableau (DATA) initiated with a Market Perform at Cowen
Teradata (TDC) initiated with a Market Perform at Cowen
The Fresh Market (TFM) initiated with a Neutral at Wedbush
United Natural Foods (UNFI) initiated with an Outperform at
Wedbush
United Technologies (UTX) initiated with a Buy at Citigroup
VIVUS (VVUS) initiated with an Outperform at RBC Capital
Whole Foods (WFM) initiated with an Outperform at Wedbush
Workday (WDAY) initiated with an Outperform at Cowen
Zafgen (ZFGN) initiated with an Outperform at RBC Capital
COMPANY NEWS
DreamWorks Animation (DWA) said it will focus its feature
production from three films per year down to two. The overall
reduction of DreamWorks' feature production output will result in a
loss of approximately 500 jobs across all locations and all
divisions of the studio. DreamWorks also announced the departure of
COO Mark Zoradi
Starbucks (SBUX) named Kevin Johnson as president and COO and
said A1 performance was 'exceptional'
Merrimack (MACK) announced resignation of Chief Scientific
Officer Ulrik Nielsen, effective January 30
Telefonica (TEF) entered into talks to sell O2 UK to
Hutchison Whampoa (HUWHY) for GBP10.25B
Sony (SNE) to delay earnings report due to last year's
cyberattack
J. Crew CEO Mickey Drexler to retire from Apple (AAPL) board
Intuitive Surgical (ISRG) sees 2015 procedural growth
7%-10%
EARNINGS
Companies that beat consensus earnings expectations last
night and today include:
General Electric (GE), Prosperity Bancshares (PB), Raymond
James (RJF), State Street (STT), Western Alliance (WAL), Celanese
(CE), BancFirst (BANF), SVB Financial (SIVB), First Internet
Bancorp (INBK), Altera (ALTR), Skyworks (SWKS), Infinera (INFN),
KLA-Tencor (KLAC), Bryn Mawr Bank (BMTC), Independent Bank (INDB),
ResMed (RMD), Polycom (PLCM), Intuitive Surgical (ISRG)
Companies that missed consensus earnings expectations include:
BNY Mellon (BK), Heritage Commerce (HTBK), LeapFrog (LF),
Hancock Holding (HBHC), OceanFirst Financial (OCFC), Old Line
Bancshares (OLBK), First Financial (FFIN), Digi International
(DGII), Capital One (COF), American National Bankshares (AMNB),
Uroplasty (UPI)
Companies that matched consensus earnings expectations include:
Starbucks (SBUX), 8x8, Inc. (EGHT), Hexcel (HXL), Microsemi
(MSCC), Federated Investors (FII)
Starbucks (SBUX) sees FY15 EPS outlook $3.09-$3.13, consensus
$3.13, sees 1H15 EPS at lower end of range. Starbucks sees Q2 EPS
64c-65c, consensus 68c
Skyworks (SWKS) sees Q2 EPS $1.12, consensus $1.04, sees Q2
revenue $750M, consensus $708.72M
Microsemi (MSCC) sees Q2 EPS 64c-68c, consensus 67c
LeapFrog (LF) withdraws guidance for FY15, CFO sees Q4 sales
declining
NEWSPAPERS/WEBSITES
NIH, GlaxoSmithKline (GSK), Merck (MRK) launch joint Ebola
vaccine test in Liberia, WSJ reports
Google's (GOOG) entrance into telecommunications may not be
beneficial, Re/code says
Amazon (AMZN) acquires Annapurna Labs, Re/code reports
Microsoft's (MSFT) Windows 10 unlikely to bring dramatic
changes to mobile market, DigiTimes says
Hutchison (HUWHY) could bring in PE firms as minority
partners in O2 (TEF) deal, Reuters reports
Airlines unlikely to cut fares despite 'enormous' savings,
Reuters reports (JBLU, DAL, UAL, AAL, LUV)
SYNDICATE
Box, Inc. (BOX) 12.5M share IPO priced at $14.00
Dave & Busters (PLAY) files to sell 6M shares for holders
Euronav NV (EURN) IPO raised to 16.26M shares, priced at
$12.25
Horsehead Holding (ZINC) 5M share Secondary priced at $12.75
Michaels (MIK) Secondary increased to 18.8M shares, priced at
$23.52
Otonomy (OTIC) Secondary increased to 2.55M shares, priced at
$29.25
Radius Health (RDUS) 4M share Secondary priced at $36.75
Verastem (VSTM) Secondary increased to 7.25M shares, priced
at $6.50
Vitae Pharmaceuticals (VTAE) 3M share Secondary priced at
$11.90
