• Emerging markets pray for Wall Street tumble (Reuters)
• Yellen Faces Test Bernanke Failed: Ease Bubbles (BBG)
• Samsung sets new smartphone sales record in fourth quarter, widens lead over Apple (Reuters)
• China’s Foreign-Reserves Investment Chief Said to Depart Agency (BBG)
• China’s Rescue of Troubled Trust May Stoke Risk-Taking (BBG)
• Ukraine PM Azarov offers to resign 'to help end conflict' (Reuters) ... And Russia says may reconsider aid if this happens
• But... but... it was all gold's fault: India Unexpectedly Raises Rate as Rupee Risks Inflation Goal (BBG)
• Former Belgian king 'boycotting' public events after complaining £760,000 is not enough to live on (Telegraph)
• Greek disposable income tumbles 8% in Q3 (Kathimerini)
• A Suspect Emerges in Stock-Trade Hiccups: Regulation NMS (WSJ)
• Obama to Raise Minimum Wage for Contractors to $10.10 (BBG)
• Government Reaches Deal With Tech Firms on Data Requests (WSJ)

Overnight Media Digest

WSJ

* The Obama administration agreed Monday to let technology companies make more information public about how often the government monitors Internet use, a move that aims to ease public distrust and corporate complaints about snooping.

* Attempts to send convoys of food and medicine to thousands of people under siege in a rebel-held area of Homs failed Monday, lowering hopes about the regime's commitment to confidence-building measures coming out of peace talks in Geneva.

* Apple reported selling fewer iPhones than projected at year-end and said revenue in the current quarter might decline. The results highlighted new dynamics and intensifying competition in the smartphone market. Apple continues to target the market for high-end phones, even as demand accelerates for lower-cost models, particularly in emerging markets. But Apple is resisting the urge to release a truly low-cost phone that could crimp profitability.

* The Securities and Exchange Commission recently released documents related to its probe into the near-collapse of American International Group - with hundreds of redactions to keep information secret.

* Bank branch closures in the United States last year hit the highest level on record so far, a sign that sweeping technological advances in mobile and electronic banking are paying off for lenders but leaving some customers behind.

* Turkey's central bank, beset by political instability, tumbling confidence and one of the world's fastest falling currencies, will convene an emergency meeting Tuesday.

* Sergio Ermotti, chief executive of UBS, has a message for the many critics of the Swiss bank and the entire industry: Back off. Ermotti said he is growing frustrated with what he sees as some regulators, politicians, shareholders, clients, journalists and rival banks holding UBS to a higher standard than they hold themselves.

* Global derivatives trade group International Swaps and Derivatives Association Inc (ISDA) on Monday disclosed sweeping changes to calculations of a key interest-rate benchmark, part of a plan that will diminish the role played by traders in the process by moving to an automated rate-setting system.

* Workers at Ranbaxy's drug plant in Toansa in the northwestern Indian state of Punjab repeatedly fudged test results to make it appear that raw materials and active pharmaceutical ingredients met required standards, according to FDA inspectors.

FT

ADS, a trade organisation for UK aerospace, defence, security and space industries, called for more tax relief for the sector, and warned that UK's exit from the European Union could erode the country's 17 percent share of the aerospace market.

The Lloyds Banking Group has told the Financial Conduct Authority that a technological glitch, which caused the banking group subsidiaries' ATM and debit to stop working for three hours on Sunday, was a "one-off" and payment backlogs were being looked into, an insider at FCA told the Financial Times.

Spain's Santander bank, which is making a big push in the United States, has appointed Sheila Bair, who was head of the Federal Deposit Insurance Corporation from 2006 to 2011, as an independent director.

The large number of initial public offerings scheduled for 2014 could overstretch existing resources of fund managers, who may be forced to sell their underlying holdings in other companies to tap into new investments, according to small cap fund managers.

About 5,000 workers across Ford's six UK factories ballot for a strike as they look at receiving some security against job cuts in Britain. The company said discussions over the dispute are "live and open".

NYT

* The Obama administration will allow Internet
companies to talk more specifically about when they are forced to turn
over customer data to the government, the Justice Department said.

* Marathon Asset Management is starting a new $350 million fund dedicated to distressed debt in Europe.

*
Martin Marietta Materials has agreed to acquire Texas Industries in an
all stock deal worth more than $2 billion, according to people familiar
with the matter. In the deal, Martin Marietta will exchange seven-tenths
of one of its shares, worth about $72, for each Texas Industries share.
A deal is expected to be announced shortly.

* JPMorgan
Chase appears to have settled a dispute with Frank Bisignano, a former
close confidant of its chairman, Jamie Dimon, the latest reminder that
the inner circle that helped the bank weather the financial crisis is no
more.

* Narayana Kocherlakota, president of the
Minneapolis Fed, said the central bank should increase its efforts to
stimulate the economy - a view he conceded had not gained much traction
with his colleagues.

* Apple's blockbuster phone sales
helped the company post a profit of $13.1 billion on revenue of $57.6
billion. The company set record for iPhones sold in the quarter at 51
million devices.

* Tiger Global Management, the New
York-based hedge fund, will invest nearly $520 million in Brazilian
online retailer B2W Companhia Digital, the company said, a sign that it
continues to see promise in Brazil's vibrant Internet sector.

*
United Technologies is considering Sikorsky, the maker of the Black
Hawk helicopter, as a candidate for a tax-free spinoff or potentially a
sale to a rival.

* One of the most prominent players in
the Bitcoin universe, Charles Shrem, was arrested on Sunday, accused of
conspiring to facilitate drug transactions on the now-defunct online
bazaar Silk Road.

* More class-action lawsuits were
filed against public companies in 2013 than in the previous year, but
the filers were seeking billions less in damages than they have on
average.

Canada

THE GLOBE AND MAIL

* Police across Canada have been searching the workplaces and homes of prostitutes to find victims of human trafficking. But some sex workers say the initiative, which comes a month after the Supreme Court struck down Canada's major prostitution laws, is simply an intimidation tactic meant to harass members of their profession in the absence of the ability to lay charges.

* At 9:10 a.m. on Jan. 27, two Russian cosmonauts drifted out of the International Space Station orbiting Earth for a space walk to install two high-tech cameras owned by a Canadian startup. The cameras cost $17 million and are capable of beaming down images and high-definition video from the Russian part of the ISS to UrtheCast, a small Vancouver company that struck a deal with the Russian space agency.

Reports in the business section:

* Two high-ranking Bombardier Commercial Aircraft vice-presidents have departed in a major shakeup in the company's sales network amid slow sales of the new C Series plane and other aircraft. Raphael Haddad, vice-president of sales for the Middle East and Africa, and Steve Aliment, vice-president of sales for Europe, have left the company.

* Just when Air Canada has put its threatening pension deficit behind it, the sudden fall of the Canadian dollar has thrown the airline another curve ball.

NATIONAL POST

* British Columbia's top court has upheld a decision to revoke almost a decade of medicare coverage for an immigrant couple, confirming in a rare judgment that provinces have every right to deny health funding to people who spend too much time living abroad.

* Prime Minister Stephen Harper expressed concern Monday that Ukraine is backsliding toward its communist past under the Soviet Union, a clear dig at Russia as it prepares to host next month's Winter Olympics.

FINANCIAL POST

* BCE Inc is under fire again for its collection and use of wireless customers' data for marketing purposes as two public interest groups have now filed a complaint with Canada's telecom regulator over the practice.

China

SHANGHAI SECURITIES NEWS

- The government's tight liquidity stance in 2013 that decreased cash supply to China's banking system contributed to the slowest annual asset and liability growth in Chinese banks in a decade last year.

- Chinese premier Li Keqiang advocated the use of new energy cars during a trip to Chinese automaker BYD Co Ltd in the central Chinese city of Xi'an, as a means to tackle China's severe pollution problem.

- New rules of the Shanghai and Shenzhen stock exchanges that set daily limits for new listings and order suspension at limits, adopted this year to curb rampant speculation in new listings, have caused many newcomers to trade only a few minutes on their debut day. That reflects defects in the new regulations.

CHINA SECURITIES JOURNAL

- The latest reform by the People's Bank of China to offer cash to smaller banks via the Short-term Lending Facility (SLF) mechanisms has enabled the central bank to adjust liquidity supply in the banking system with precision, a commentary by this major Chinese financial newspaper said.

- Analysts once again propose China's stock market to adopt a T+0 system, or the same-day trading system, to help activate sluggish trading in large-capitalised blue chips.

PEOPLE'S DAILY

- An editorial by this mouthpiece of the ruling Communist Party of China criticised that some government meetings have been too extravagant. The party is launching a sweeping clampdown on official corruption.

CHINA DAILY

- Chinese authorities in the northern-central Chinese city of Xinzhou have taken a man into custody after he posted rumours about H7N9 bird flu on local social media.

- Fu Weimin, the former director and Party chief of the forestry administration of Dongfang, was removed from his post after he took more than 260,000 yuan ($43,000) in cash gifts at his mother's funeral, China National Radio reported. Fu hosted feasts for guests over six days in January.

SHANGHAI DAILY

- An H7N9 bird flu epidemic in China is "unlikely" during the country's week-long Spring Festival holiday in late January and early February, according to the director of the Chinese National Influenza Center. The bid flu virus has killed 19 people in China this year.

- Authorities in Shanghai have jailed four people for using waste oil for cooking, the Changning District People's Court ruled on Monday. China has struggled with food safety issues from chemical-tainted milk to fake donkey meat.

SECURITIES TIMES

- Seven companies will list on the Shenzhen Stock Exchange on Wednesday, bringing the total number debuting in the mainland bourses in the first three days of this week to 24.

Britain

The Telegraph

OFWAT STEMS FLOW OF RETURNS TO WATER INVESTORS Water companies could have to cut dividend payouts to shareholders, analysts said on Monday, after regulator Ofwat said they should they accept a lower rate of return on investment than they had sought for the next five years. The plans could result in lower household bills, although Ofwat declined to estimate the scale of the impact on customers.

FORMER HBOS BANKER'S FIRM COULD NET 45 MILLION POUNDS FROM MCCOLL'S FLOAT

A private equity firm run by a former HBOS banker could net roughly 45 million pounds from the flotation of convenience store business McColl's Retail Group. Cavendish Square Partners owns 20 percent of McColl's and has signalled its intention to sell shares in the company as part of an IPO that was officially unveiled to the stock market on Monday.

The Guardian

GROWTH FIGURE LIKELY TO BOLSTER RECOVERY HOPES

Britain's recovery is expected to have held up over the final months of 2013, helping the economy to clock up its strongest annual growth for six years. While there is still much ground to cover to get back to pre-crisis levels of output, most economists expect official data on Tuesday to confirm that last year ended on a relatively strong note.

FORD WORKERS BALLOTED ON STRIKE ACTION

Thousands of Ford workers are being balloted for strike action in a row over job security and pensions. Members of the Unite and GMB unions will vote on whether to launch a campaign of industrial action aimed at safeguarding jobs after recent cuts led to Ford ending 100 years of vehicle production at its plant in Southampton.

The Times

BRITAIN "CAN GET BETTER VALUE OUT OF THE EU"

Britain should send more civil servants and regulators to spend time inside the European Union machine in order to wield more influence over laws the UK does not like, according to the most powerful British Parliamentarian in Brussels and chair of the European Parliament's Economic and Monetary Affairs Committee, Sharon Bowles.

SIGNIFICANT JUMP IN MINIMUM WAGE IS AFFORDABLE, CLAIMS BUSINESS LEADER

Business can afford an inflation-busting increase in the minimum wage, according to Sir Mike Rake, the President of the CBI. His intervention makes him the most senior business figure so far to support calls for a real improvement in earnings for the lowest-paid.

Sky News

ZOOPLA STEPS UP 1.3 BILLION POUNDS FLOAT PLAN

The online property group which abandoned a sponsorship deal recently is accelerating plans for a flotation valuing it at well over 1 billion pounds. Sky News has learnt that Zoopla, which is terminating its association with the Premier League club West Bromwich Albion at the end of the season, has appointed Jefferies, the investment bank, to work on a stock market listing.

PENSIONS TOP-UP PLAN WOULD INCREASE PAYOUT

People in or nearing retirement are to be given the chance to use their savings to top up their state pension. The new scheme will allow eligible pensioners to pay in lump sums from as little 900 pounds. In return they will see an increase in their state pension by as much as 25 pounds a week.

Fly on the Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Durable Goods Orders for December will be reported at 8:30--consensus up 1.6%
Case-Shiller 20-city home price index for October reported at 9:00--consensus up 13.7% from prior year
Consumer Confidence for January will be reported at 10:00--consensus 79.0

ANALYST RESEARCH

Upgrades

ArcelorMittal (MT) upgraded to Outperform from Sector Perform at RBC Capital
Cambrex (CBM) upgraded to Overweight from Equal Weight at First Analysis
CorEnergy (CORR) upgraded to Buy from Neutral at BofA/Merrill
Fortinet (FTNT) upgraded to Outperform from Market Perform at JMP Securities
Maxim Integrated (MXIM) upgraded to Overweight from Equal Weight at Barclays
Sally Beauty (SBH) upgraded to Buy from Neutral at Sterne Agee
Sally Beauty (SBH) upgraded to Buy from Neutral at Sterne Agee
Sanmina (SANM) upgraded to Buy from Hold at Needham
Sanmina (SANM) upgraded to Market Perform from Underperform at Raymond James
Southwest (LUV) upgraded to Outperform from In-Line at Imperial Capital
Texas Capital (TCBI) upgraded to Buy from Neutral at SunTrust

Downgrades

Apple (AAPL) downgraded to Outperform from Strong Buy at Raymond James
Apple (AAPL) downgraded to Perform from Outperform at Oppenheimer
BioCryst (BCRX) downgraded to Underperform from Neutral at BofA/Merrill
Chef's Warehouse (CHEF) downgraded to Hold from Buy at BB&T
Delek US (DK) downgraded to Neutral from Outperform at Credit Suisse
NVR (NVR) downgraded to Neutral from Positive at Susquehanna
OFS Capital (OFS) downgraded to Underweight from Equal Weight at Barclays
Penn National (PENN) downgraded to Underperform from Buy at BofA/Merrill
Phillips 66 (PSX) downgraded to Neutral from Outperform at Credit Suisse
Synaptics (SYNA) downgraded to Perform from Outperform at Oppenheimer
Tile Shop (TTS) downgraded to Neutral from Outperform at RW Baird
Western Refining (WNR) downgraded to Neutral from Outperform at Credit Suisse

Initiations

Anadarko (APC) initiated with a Market Perform at Cowen
Control4 (CTRL) initiated with an Outperform at Imperial Capital
Devon Energy (DVN) initiated with an Outperform at Cowen
EOG Resources (EOG) initiated with an Outperform at Cowen
Enanta Pharmaceuticals (ENTA) initiated with an Outperform at RW Baird
FireEye (FEYE) initiated with a Hold at Topeka
International Flavors (IFF) initiated with a Buy at Deutsche Bank
Medivation (MDVN) initiated with a Buy at CRT Capital
Noble Energy (NBL) initiated with an Outperform at Cowen
ORBComm (ORBC) initiated with a Buy at Canaccord
Omnicom (OMC) initiated with an Overweight at Barclays
Parkway Properties (PKY) initiated with an Overweight at Barclays
Pioneer Natural (PXD) initiated with a Market Perform at Cowen
Uralkali (URALL) initiated with a Buy at Societe Generale

HOT STOCKS

DOJ reached agreement with tech companies (FB, AAPL, MSFT, GOOG, LNKD, YHOO) on data requests
Casablanca Capital urged Cliffs Natural (CLF) to spin off international assets, Cliffs Natural 'welcomes communications' with Casablanca
General Electric (GE) CEO disclosed 40K share purchase at $25.04
Kansas City Southern (KSU) raised dividend to 28c per share from 21.5c per share
Ashland (ASH) expects 800-1,000 employees to leave in 2014 in restructuring plan
DuPont (DD) announced $5B share repurchase program
Check Point (CHKP) expanded share repurchase program by $1B
ITT Educational (ESI) disclosed receipt of subpoenas and/or civil investigative demands

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Danaher (DHR), DuPont (DD), Radware (RDWR), Check Point (CHKP), MicroStrategy (MSTR), U.S. Steel (X), Ashland (ASH), Apple (AAPL), Swift Transport (SWFT), Rambus (RMBS),  Covenant Transportation (CVTI), Plantronics (PLT), J & J Snack Foods (JJSF)

Companies that missed consensus earnings expectations include:
CIT Group (CIT), Air Products (APD), Polaris Industries (PII), STMicroelectronics (STM), STMicroelectronics (STM), Rent-A-Center (RCII), Park National (PRK), Zions Bancorp (ZION), Graco (GGG), Seagate (STX)

Companies that matched consensus earnings expectations include:
Steel Dynamics (STLD), Olin Corp. (OLN), PLX Technology (PLXT)

NEWSPAPERS/WEBSITES

• Centerview hired by Time Warner Cable (TWC) to advise on Charter (CHTR) bid, FT reports
• Martin Marietta (MLM) to acquire Texas Industries (TXI) for $72 per share, NY Times reports Intel (INTC) may be considering an exit from smartphone market, DigiTimes reports
• Google (GOOG) adds designer frames in hopes of sharpening Glass, AP reports
• Facebook (FB) hiring editors for news app, Re/code reports
• PE firms (APO, CG) compete for Illinois Tool Works' (ITW) packaging unit, WSJ reports
• Rio Tinto (RIO) in talks to sell Quebec aluminum plant, Reuters reports
• Credit Suisse (CS) plans $500M CLO of about $500M, Bloomberg reports
• Nintendo (NTDOY) to announce new strategy, NY Times reports
• Ethanol firms (ADM, GPRE)) look to increase exports, WSJ reports
• U.S. Steel (X) wins Supreme Court labor dispute, Reuters reports  

SYNDICATE

America First (ATAX) files to sell 7M shares representing limited partner interests
Centene (CNC) 800K share Spot Secondary priced at $59.80
Constellium (CSTM) files to sell 37.56M shares for holders
Prothena (PRTA) files to sell 2.77M ordinary shares for holders
XPO Logistics (XPO) files to sell 15M shares of common stock

• EU regulators unveil details of bank stress tests (FT)
• Just use NSAfari: U.S., UK advise avoiding Internet Explorer until bug fixed (Reuters)
• China’s Income Inequality Surpasses U.S., Posing Risk for Xi  (BBG)
• US races to refuel infrastructure fund as revenue dries up (FT)
• New Era Dawns at Nokia as Company Appoints CEO, Plans $1.4 Billion Special Dividend, Share-Repurchase Program (WSJ)
• Obama reassures allies, but doubts over 'pivot' to Asia persist (Reuters)
• Dissent at SEC over bank waivers (FT)
• U.S. Banks to Help Authorities with Tax Evasion Probe (WSJ)
• U.S., Europe Impose New Sanctions on Russia (WSJ)
• Why the U.S. Is Targeting the Business Empire of a Putin Ally (BBG)
• Euro-Area April Economic Confidence Unexpectedly Declines (BBG)
• Bitcoin traders settle class actions over failed Mt. Gox exchange (Reuters)
• China’s Provinces Fail to Meet Lower 2014 Growth Goals (BBG)

Overnight Media Digest

WSJ

* The U.S. and Europe imposed sanctions on a slate of new Russian government officials and business entities in an effort to pressure President Vladimir Putin and his Ukrainian allies to cease their military activity in eastern Ukraine. (http://r.reuters.com/dek88v)

* Nokia on Tuesday named mobile-network veteran Rajeev Suri as its next chief executive and said it would distribute an approximately 1 billion euro ($1.4 billion) special dividend and initiate a share-repurchase program in an effort to return to investment grade. The financial moves come as a result the sale of the company's handset unit to Microsoft Corp. (http://r.reuters.com/bek88v)

* Pfizer Inc's nearly $100 billion offer to buy British rival AstraZeneca Plc, if accepted, would allow the pharmaceutical giant to move its official headquarters overseas, saving the company that started 165 years ago on a Brooklyn, New York, street corner billions in taxes over the next decade. (http://r.reuters.com/hek88v)

* An apparent communications blunder inside Bank of America Corp forced the lender to shelve a plan to buy back shares and boost its dividend for the first time since 2008, another setback for Chief Executive Brian Moynihan's efforts to escape the long shadow of the financial crisis. (http://r.reuters.com/rek88v)

* Energy Future Holdings Corp, the Texas utility at the center of the biggest private-equity buyout ever, was preparing to file for Chapter 11 bankruptcy protection as soon as Tuesday morning, after reaching a restructuring deal with creditors. The utility, formerly TXU Corp, was racing to forge a restructuring deal and file for bankruptcy before a grace period on skipped debt payments expired later this week and put the company in default. (http://r.reuters.com/tek88v)

* The weather phenomenon known as El Niño is poised to return, a development that threatens to drive up prices for food and other staples. El Niño has a reputation for triggering sharp run-ups for prices in markets as diverse as nickel, coffee and soybeans, and commodities investors, traders and analysts are bracing for impact. (http://r.reuters.com/zek88v)

* Toyota Motor Corp will receive $40 million from Texas to consolidate several far-flung units in a new headquarters in the state as the company looks to cut costs and combine its North American sales, manufacturing and financial locations. (http://r.reuters.com/wek88v)

* Lawyers for creditors involved in two proposed class-action lawsuits against Mt. Gox have reached an agreement to support a group of U.S. investors' bid to revive the bankrupt bitcoin exchange, an agreement that would give the creditors a 16.5 percent stake in the prospective future company. (http://r.reuters.com/duk88v)

* Lawmakers pressing Securities and Exchange Commission Chairman Mary Jo White to address worries about rapid-fire trading aren't likely to hear detailed plans for immediate action when she testifies Tuesday on Capitol Hill. (http://r.reuters.com/huk88v)

FT

government in the hopes of winning it over to their rival bids for engineering group Alstom, each arguing that its offer best served the national interest.

Three U.S.-based former Barclays traders will be charged by Britain's Serious Fraud Office as part of its probe into the alleged manipulation of the Libor interbank rate.

The U.S. department of homeland security has told individuals and companies to avoid using Internet Explorer, after a flaw allowing cyber criminals to impersonate known websites and steal user data was found in the popular web browser.

U.S. Securities and Exchange Commission commissioner Kara Stein has accused the agency of having "strayed from its mission" by allowing two banks that pleaded guilty to interest-rate rigging to access capital markets without regulatory scrutiny.

Britain's Financial Conduct Authority has slapped fund manager Invesco Perpetual with a 18.6 million pound ($31.26 million) for breaching investment limits and introducing leverage into funds - including those run by Neil Woodford - without proper disclosure.

NYT

* The Federal Reserve is tiptoeing away from its economic stimulus campaign, and so far the broader economy has barely noticed. The Fed's policy-making committee, which meets on Tuesday and Wednesday, is widely expected to announce another $10 billion cut in its monthly bond purchases, to $45 billion, en route to ending the purchases this autumn. (http://r.reuters.com/vak88v)

* Pfizer Inc proposed on Monday a $99 billion acquisition of its British rival AstraZeneca Plc that would allow it to reincorporate in Britain. Doing so would allow Pfizer to escape the United States corporate tax rate and tap into a mountain of cash trapped overseas, saving it billions of dollars each year and making the company more competitive with other global drug makers. (http://r.reuters.com/wak88v)

* Covington & Burling LLP, the firm where Eric Holder practiced law before becoming attorney general, will announce on Tuesday that Mythili Raman is the latest former senior Justice Department official to join its ranks. Raman, who will be a partner in Covington's white-collar crime and litigation practices, led the Justice Department's criminal division until last month. (http://r.reuters.com/zak88v)

* Bank of America Corp disclosed on Monday that it had made a significant error in the way it calculates a crucial measure of its financial health, suffering another blow to its effort to shake its troubled history. The mistake, which had gone undetected for several years, led the bank to report recently that it had $4 billion more capital than it actually had. After Bank of America reported its error to the Federal Reserve, the regulator required the bank to suspend a share buyback and a planned increase in its quarterly dividend. (http://r.reuters.com/fek88v)

* A new government report suggests that errors made by banks and their agents during foreclosures might have been significantly higher than was previously believed when regulators halted a national review of the banks' mortgage servicing operations. (http://r.reuters.com/jek88v)

* Yahoo Inc Chief Executive Marissa Mayer announced on Monday evening that Yahoo is commissioning two original TV-length comedy series that will be shown exclusively on its websites and mobile apps. (http://r.reuters.com/xek88v)

* Toyota Motor Corp said on Monday that it would move thousands of employees from California and other locations to new North American headquarters in Texas as part of a broad effort to cut costs and streamline operations. (http://r.reuters.com/buk88v)

* As part of a routine effort to identify acquisition targets, the Walt Disney Co last year zeroed in on BuzzFeed, the fast-growing digital media company, but Disney's interest quickly dissipated when BuzzFeed valued itself at nearly $1 billion, according to a person with direct knowledge of the talks. (http://r.reuters.com/fuk88v)

* The Obama administration has begun a wide-ranging search for companies to run the online federal health insurance exchange, seeking new talent to prevent a repeat of problems that immobilized the website last fall. (http://r.reuters.com/nuk88v)

Canada

THE GLOBE AND MAIL

* The Harper government has hired two agencies with relatively little experience in elections monitoring to organize hundreds of Canadian observers for next month's Ukrainian presidential vote. The government has hired the Forum of Federations and CUSO International to replace its longtime Ukraine election partner, the non-governmental organization Canadem. (link.reuters.com/jan88v)

* Ottawa is relenting to external pressure and now promising to speed up the release of a "public report" on the fighter jets pegged to replace Canada's fleet of CF-18s. The document, which has been put together for widespread release, lists the risks and benefits of the four fighter jets that were involved in an "options analysis" overseen by the Canadian Forces. (link.reuters.com/guq42v)

Reports in the business section:

* A spat between Barrick Gold Corp and Newmont Mining Corp erupted into a public war of words, with the companies accusing each other of ruining their $13-billion (U.S.) merger. Barrick said its American rival reneged on their deal and tried to change key provisions, including the location of the head office in Toronto. Newmont disagreed with Barrick's version and faulted the Canadian company's incoming chairman John Thornton for not being constructive. (link.reuters.com/xym88v)

* Canadian Imperial Bank of Commerce's coming leadership shuffle spotlights the need for boards of directors to devote more resources to the crucial task of succession planning, governance experts say. (link.reuters.com/zym88v)

NATIONAL POST

 
* After some tough years of spending restraints, Canada's economy is soon expected to return to normal levels of growth and possibly get back to budget surpluses ahead of schedule. (link.reuters.com/gan88v)

FINANCIAL POST

* Quebecor Inc announced the second surprise change of its leader in little more than a year Monday, leaving the distinct impression of an organization in flux. The Montreal-based telecom and media company cited health reasons for Robert Dépatie's resignation as president and chief executive less than a year after he took over from Pierre Karl Péladeau. (link.reuters.com/guq42v)

* Premier Kathleen Wynne is promising to create a $2.5-billion fund aimed at keeping businesses in Ontario. Details are scant, but officials say companies would be able to apply for government grants. (link.reuters.com/guq42v)

China

CHINA SECURITIES JOURNAL

- The pace of China Securities Regulatory Commission (CSRC) in resuming IPO applications will not overly speed up despite the commission's recent spate of "pre-disclosure" of companies waiting to be listed, with sources expecting four to five companies to be granted per week in the near term. As of April 28, up to 144 companies have submitted the draft version of prospectuses, the CSRC information disclosure shows.

- Members of the China Iron and Steel Association (CISA) have lost 2.329 billion yuan ($372.5 million) in the first quarter of 2014, with 45.45 percent of the association members losing money because of low demand, high inventory stock and declining price.

SECURITIES TIMES

- A total of 2453 A-share listed companies have released their 2013 annual reports so far, with the sum of their net profit reaching 2,240 billion yuan, a 15 percent rise year-on-year.

- In spite of high rates, the number of China's new issuance of quasi-municipal bonds in 2014 has reached 215 so far this year, raising 248.31 billion yuan, a 36.28 percent increase from the same time of last year.

CHINA DAILY

- Chinese stocks saw a sharp drop on Monday after the securities regulator said it will resume reviewing IPO applications following an 18-month moratorium. The Shanghai Composite Index lost 1.6 percent before closing at 2003.49, the Shenzhen Component Index dropped 1.14 percent to 7240.46.

SHANGHAI DAILY

- China's president Xi Jinping visited armed policeman, local residents' homes and a primary school after arriving in the restive Xinjiang autonomous region on Sunday, encouraging local officials to promote harmony among all ethnic groups.

PEOPLE'S DAILY

- Higher quality as well as wider coverage of road constructing in China's rural areas must be achieved to fulfil the goal of modern agriculture, an editorial said, commenting on president Xi Jinping's series of conduct highlighting the significance in rural transportation infrastructure.

Britain

The Telegraph

BANKS TO BE TESTED ON PROPERTY MARKET CRASH

The Bank of England is to test Britain's major banks on their ability to weather a housing market crash that could wipe more than a third off home prices. (http://link.reuters.com/zaj88v)

CITY WATCHDOG SAYS WON'T WASTE RESOURCES ON ROYAL MAIL PROBE

Martin Wheatley, the boss of the Financial Conduct Authority, has told Members of Parliament he saw no reason to investigate the flotation of Royal Mail or the bankers involved pouring water on claims that the historic privatisation was mismanaged. (http://link.reuters.com/gah88v)

SERCO SET TO LAUNCH RESCUE RIGHTS ISSUE

Serco's shares are expected to fall heavily on Tuesday after the embattled outsourcing firm warned that it is looking at launching a rescue rights issue to bolster its finances. (http://link.reuters.com/xaj88v)

ASSET SELL-DOWN LOOMS AS BG OUSTS CHIEF EXECUTIVE

A sell-down of BG Group's assets or even a break-up bid have moved a step closer after the ousting of Chief Executive Chris Finlayson just 16 months into the job. (http://link.reuters.com/jeh88v)

BP 'COMMITTED TO ROSNEFT' AS RUSSIAN ENERGY GIANT'S CHIEF IGOR SECHIN IS PLACED ON U.S. SANCTIONS LIST

BP has said it remains "committed" to Rosneft , after the U.S. placed sanctions on Igor Sechin, the president of the Russian energy giant, in which BP has a 20 percent stake. (http://link.reuters.com/cej88v)

FITNESS FIRST FLEXES ITS MUSCLES IN SOUTHEAST ASIA

Recovering gym chain Fitness First is investing $140 million to get Southeast Asia into shape and is eyeing a further 50 clubs in the region. (http://link.reuters.com/tah88v)

The Guardian

BRITAIN FILES FIRST CRIMINAL CHARGES AGAINST U.S.-BASED LIBOR TRADERS

Britain filed its first criminal charges against U.S.-based Libor traders on Monday, as the UK arm of a complex global investigation into alleged benchmark interest-rate rigging stretches across the Atlantic. (http://link.reuters.com/dej88v)

PFIZER ASTRAZENECA TAKEOVER PROMPTS JOB WARNING FROM VINCE CABLE

Battle lines are being drawn over what would be the biggest foreign takeover of a British company after pharmaceutical company AstraZeneca rejected a 60 billion pound ($100.85 billion) approach from U.S. rival Pfizer, prompting a warning on jobs from UK Business Secretary Vince Cable but receiving a warmer welcome from investors. (http://link.reuters.com/feh88v)

RBS PUT AT 'COMPETITIVE DISADVANTAGE' BY BONUS BLOCKING PLANS

Standard Life, one of London's biggest fund managers, has warned that the British government's decision to block Royal Bank of Scotland's bonus plans would put the bank at a competitive disadvantage. (http://link.reuters.com/heh88v)

HEATHROW CHIEF WARNS STRONG PROFITS WILL NOT BE SUSTAINED IN YEAR AHEAD

Heathrow recorded strong profits and record passenger satisfaction scores over a mild winter but warned it will feel the squeeze in the year ahead. (http://link.reuters.com/fej88v)

The Times

BASKIN-ROBBINS SCOOPS UP CINEWORLD DEAL

Dunkin' Brands, the group that owns Baskin-Robbins ice cream shops, has scored a victory over one of its biggest rivals after securing a franchise deal to replace Ben & Jerry's at 45 Cineworld cinemas across Britain. (http://link.reuters.com/kyg88v)

The Independent

UK ADVERTISING MARKET BUOYED BY MOBILE BOOM

A boom in smartphone and mobile advertising has spurred growth in the UK advertising market as industry forecasters reckon ad revenues should soar 5.5 percent this year and 6.5 percent next year to reach a record 20 billion pounds. (http://link.reuters.com/gej88v)

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled today include:
S&P Case-Shiller 20-city home price index for February at 9:00--consensus up 0.8% m/m, up 13.0% y/y
Consumer confidence index for April at 10:00--consensus 83.2

ANALYST RESEARCH

Upgrades

Barrick Gold (ABX) upgraded to Neutral from Underweight at HSBC
Boardwalk Pipeline (BWP) upgraded to Equal Weight from Underweight at Morgan Stanley
Boardwalk Pipeline (BWP) upgraded to Market Perform at Raymond James
Boardwalk Pipeline (BWP) upgraded to Outperform from Neutral at Credit Suisse
Chegg (CHGG) upgraded to Buy from Neutral at BofA/Merrill
Choice Hotels (CHH) upgraded to Equalweight from Underweight at Barclays
Clarcor (CLC) upgraded to Buy from Hold at BB&T
DSW (DSW) upgraded to Buy from Neutral at Sterne Agee
El Paso Electric (EE) upgraded to Buy from Hold at Jefferies
GP Strategies (GPX) upgraded to Neutral from Sell at B. Riley
HP (HPQ) upgraded to Outperform from Sector Perform at Pacific Crest
Ingram Micro (IM) upgraded to Strong Buy from Outperform at Raymond James
Intuitive Surgical (ISRG) upgraded to Neutral from Underperform at Sterne Agee
Lakeland Bancorp (LBAI) upgraded to Outperform from Market Perform at Keefe Bruyette
Tech Data (TECD) upgraded to Outperform from Market Perform at Raymond James
WSFS Financial (WSFS) upgraded to Outperform from Market Perform at Keefe Bruyette

Downgrades

ABB (ABB) downgraded to Hold from Buy at Societe Generale
Airgas (ARG) downgraded to Neutral from Overweight at Atlantic Equities
Coca-Cola Enterprises (CCE) downgraded to Reduce from Neutral at Nomura
OncoGenex (OGXI) downgraded to Sector Perform from Outperform at RBC Capital
Stage Stores (SSI) downgraded to Neutral from Buy at Northcoast
Tyson Foods (TSN) downgraded to Market Perform from Outperform at BMO Capital

Initiations

AudioCodes (AUDC) initiated with an Outperform at William Blair
Coca-Cola (KO) initiated with a Buy at Nomura
Five9 (FIVN) initiated with a Buy at BofA/Merrill
Five9 (FIVN) initiated with an Outperform at Pacific Crest
Five9 (FIVN) initiated with an Overweight at Barclays
Five9 (FIVN) initiated with an Overweight at JPMorgan
Gentex (GNTX) initiated with a Sector Perform at Pacific Crest
GrubHub (GRUB) initiated with a Buy at Citigroup
GrubHub (GRUB) initiated with an Equal Weight at Morgan Stanley
GrubHub (GRUB) initiated with an Outperform at BMO Capital
Harman (HAR) initiated with an Outperform at Pacific Crest
Opower (OPWR) initiated with a Buy at Goldman
Opower (OPWR) initiated with a Neutral at RW Baird
Opower (OPWR) initiated with an Equal Weight at Morgan Stanley
Opower (OPWR) initiated with an Outperform at Pacific Crest
Royal Caribbean (RCL) initiated with a Buy at Berenberg
Sonus Networks (SONS) initiated with an Outperform at William Blair
TPG Specialty Lending (TSLX) initiated with a Market Perform at JMP Securities
Vince Holding (VNCE) initiated with an Overweight at Piper Jaffray

COMPANY NEWS

Nokia (NOK) appointed Rajeev Suri as CEO, effective May 1
Herbalife (HLF) announced that it would suspend its quarterly dividend and use its cash instead to repurchase stock, and said it plans to repurchase $581M worth of stock in Q2
Yahoo (YHOO) announced first two original comedies in lineup of long-form shows
Yahoo (YHOO), Live Nation (LYV) announced a deal to stream live concerts
Honeywell (HON) announced an agreement in principle with AT&T (T) for AT&T's planned in-flight connectivity services
Novavax (NVAX) reported positive results from a Phase 2 trial of its RSV-F protein nanoparticle vaccine candidate
Heartland Advisors said it plans to enter discussions with Lincoln Educational's (LINC) management regarding potential corporate governance and budget changes

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Spirit Airlines (SAVE), Magellan Health (MGLN), Littelfuse (LFUS), Wolverine World Wide (WWW), World Acceptance (WRLD), Norwegian Cruise Line (NCLH), Pioneer Energy (PES), Huntsman (HUN), United Therapeutics (UTHR), HomeStreet (HMST), BP (BP), Ensco (ESV), Arlington Asset Investment (AI), Ballard Power (BLDP), Hartford Financial (HIG), Wabash (WNC), Cleco (CNL), PartnerRe (PRE), Herbalife (HLF), Kaman (KAMN), Berkshire Hills Bancorp (BHLB), Advent Software (ADVS), Hartford Financial (HIG), Ducommun (DCO), Compass Minerals (CMP), Ameriprise (AMP), NetSuite (N), Intevac (IVAC), CoreLogic (CLGX), OFG Bancorp  (OFG), Luminex (LMNX), Amkor Technology (AMKR), Buffalo Wild Wings (BWLD), STAAR Surgical (STAA), Plum Creek Timber (PCL), Knowles (KN), Ruth's Hospitality (RUTH)

Companies that missed consensus earnings expectations include:
CIT Group (CIT), Portland General Electric (POR), Stock Building Supply (STCK), Chart Industries (GTLS), Provident Financial (PROV), Headwaters (HW), Volaris (VLRS), PRGX Global (PRGX), Bridge Bancorp (BDGE), RockTenn (RKT), Silicon Motion (SIMO), Seaspan (SSW), Owens & Minor (OMI), Range Resources (RRC), Ultra Clean (UCTT), Container Store (TCS), Rudolph Technologies (RTEC), Meru Networks (MERU), Heartland Financial (HTLF), Questcor (QCOR), MainSource Financial (MSFG), Helen of Troy (HELE), J & J Snack Foods (JJSF)

Companies that matched consensus earnings expectations include:
1-800-Flowers.com (FLWS), Check Point (CHKP), Del Frisco's (DFRG), Sensata (ST), Silicon Laboratories (SLAB), German American Bancorp (GABC), STMicroelectronics (STM), NBT Bancorp (NBTB), Flotek (FTK), Denny's (DENN)

NEWSPAPERS/WEBSITES

Disney (DIS) sought to acquire BuzzFeed, Fortune says
Reckitt Benckiser confirms discussions to buy Merck (MRK) unit, WSJ says
Siemens' (SI) Alstom bid likely to occur today (GE), Reuters reports
HP (HPQ) to launch Android-dedicated laptop (GOOG), BGR says
Netflix (NFLX) signs traffic deal with Verizon (VZ), The Verge reports
Sanofi (SNY) CEO says focusing on smaller, 'bolt-on' deals, WSJ reports
Craig Ferguson to leave CBS' (CBS) "Late Late Show," Variety reports

SYNDICATE

Burlington Stores (BURL) files to sell 12M common shares for holders
El Paso Pipeline (EPB) files to sell 6.8M shares for limited partners
Forum Energy (FET) files to sell 10M shares for holders
Media General (MEG) files to sell 9M shares for holders
RAIT Financial (RAS) files 10.1M shares for holders of warrants
TOP Ships (TOPS) files to sell $30M in stock and preferred stock purchase rights
Universal Truckload (UACL) files to sell 1.9M shares, including 1.88M for holders

• Winter Storm Expected to Make Northeast Commutes Harder  (BBG)
•  Invasion of Spanish Builders Angers France Struggling to Compete  (BBG)
• Toronto mayor, caught ranting on video, admits drinking a 'little bit" (Reuters)
• IBM's Hardware Woes Accelerate in Fourth Quarter (WSJ)
• Sharp Divisions Come to Fore as Peace Talks on Syria Begin (NYT)
• Corzine fails to win dismissal of CFTC's MF Global lawsuit (Reuters)
• Afghanistan cracks down on advertising in favor of U.S. troops (Reuters)
• Dots Joins Clothing Retailers Filing for Bankruptcy (BBG)
• Microsoft CEO Search Rattles Boards From Ford to Ericsson (BBG)
• Banks Sit Out Riskier Deals (WSJ)
• Netflix Seen Reporting U.S. Web Users Reach 33.1 Million (BBG)
• Russia hacked hundreds of Western, Asian companies (Reuters)
• Christie's Sales Soar to $7.13 Billion (WSJ)
• Ukraine PM takes hard line on protests, three killed overnight (Reuters)

Overnight Media Digest

WSJ

* Regulatory pressures are pushing many of the biggest banks to pass on financing lucrative deals, as Washington targets excessive borrowing. The guidelines are designed steer banks from deals regulators find too debt-laden.

* U.S. military leaders have presented the White House with a plan that would keep 10,000 U.S. troops in Afghanistan after 2014, but then start drawing the force down to nearly zero by the end of President Barack Obama's term, according to senior officials.

* Dozens of Syrian emergency-aid workers waited hours this weekend for government permission to evacuate hundreds of children, elderly and the sick from among tens of thousands of residents trapped with little food and medicine in a rebel-held neighborhood here sealed off by regime forces.

* The malicious software that infected Target Corp popped up in January 2013 with a price tag of $2,000 and spent nearly a year evolving in the Internet's black markets before an unknown attacker slipped it into the retailer's computer systems.

* Mohamed El-Erian stepped down as the CEO of Pimco, the giant asset-management firm that emerged as one of the winners of the global financial crisis but which has recently been hit by waning investor taste for plain vanilla bonds.

* The Federal Communications Commission will hold its first major auction of wireless airwaves in six years on Wednesday, kicking off tens of billions of dollars of spending by big U.S. carriers.

* BlackBerry Ltd said Tuesday that it intends to sell more than 3 million square feet of real estate holdings in Canada, the "majority" of its space there, raising questions about whether the company will remain based in the country.

* Target Corp on Tuesday said it would stop offering health coverage for part-time employees, citing insurance options available through public exchanges.

* The Secret Service said Tuesday it is working with McAllen, Texas, police to determine if recent arrests in a credit card fraud case have any link to the massive breach over the holidays at Target Corp.

* Sporting goods maker Easton-Bell Sports Inc said Tuesday that data from around 6,000 online shoppers was stolen during the month of December, making it the latest company to fall victim to a cyberattack during the holiday season.

* Activist investor Daniel Loeb is pushing the Dow Chemical Co split itself into two companies, a breakup that would go further than a restructuring now planned by the world's second-largest chemicals maker.

* Amazon.com Inc has approached big entertainment companies about licensing their television channels for a possible new online pay-TV service, in what would be a significant expansion of the company's online video efforts.

* News Corp said Dow Jones Chief Executive Lex Fenwick is leaving the company, naming William Lewis as interim CEO.

* A U.S. regulator, Office of the Comptroller of the Currency, in a letter last fall raised questions about HSBC Holdings' anti-money-laundering controls for its business with correspondent banks, people familiar with the matter said.

* Texas Instruments Inc posted a 94 percent jump in fourth-quarter profit and announced plans to trim about 1,100 jobs, as the big chip maker continues to refine its focus. The Dallas-based company said the reductions will affect employees in the U.S., Japan and India. It had about 32,000 employees before the planned job cuts.

* IBM's hardware business is eroding faster than expected, leading to the company's steepest drop in quarterly revenue in more than four years.

* Shares of Expedia Inc took a 4.3 percent hit Tuesday after its visibility in Google Inc search results declined sharply, triggering concerns that Google may have penalized the online travel site.

* Dots LLC, a discount retailer of women's clothing, filed for bankruptcy protection, while company executives seek a buyer for the chain's roughly 400 stores.

FT

A third of the largest non-financial companies of the world have an unspent cash pile of $2.8 trillion, which has been accumulating since the financial crisis, a study by Deloitte reveals.

Long-term care products for the elderly are currently limited, and would be encouraged, the British care and support minister and the Association of British insurers said in a joint statement on Tuesday. Companies such as Aviva, Aegon , Legal & General however are yet to suggest that there would be any new launches in the market at the moment.

Citigroup Inc has warned against the United Kingdom opting out of the European Union, saying such a move could hurt the British economy and reduce investment from international companies.

British electrical good provider Phones4U is expected to be floated by private equity firm BC Partners for an initial public offering on the London Stock Exchange that would value the company to up to 1 billion pounds.

Alternative lender Wellesley & Co is targeting retail investors to fund small and medium-sized residential builders for new homes along with other peer-to-peer lenders such as Funding Circle and Assetz Capital.

NYT

* The giant asset manager Pimco lost its heir apparent and most prominent spokesman on Tuesday when Mohamed El-Erian unexpectedly announced that he was stepping down from the company.

* Lex Fenwick, the hard-driving chief executive who stumbled in his efforts to transform Dow Jones, the publisher of the Wall Street Journal, has resigned effective immediately as the company rethinks its strategy.

* Investors are piling into the government debt of bailed-out countries like Ireland. But the demand comes despite the problems still plaguing the euro zone.

* Puerto Rico, which is battling a financial crisis of high unemployment and a crushing debt load, is under pressure to show investors and credit rating agencies that it can still borrow money from the capital markets. A group of hedge funds and private equity firms may help it do just that, but at a high price.

* JPMorgan Chase has removed itself from a potential $1 billion share sale by a Chinese chemicals company as an investigation in the United States into hiring practices in China by JPMorgan and other Wall Street banks moves forward, people with direct knowledge of the matter said on Tuesday.

* The global economy might be slowly recovering and consumers gradually gaining confidence. But Unilever, one of the world's largest consumer products companies, remains cautious with slowing growth in emerging markets.

* Reassured by austerity programs, investors are again loading up on European sovereign debt, despite deep recessions across Southern Europe.

* The rest of the country is following North Carolina's lead by sharply cutting the maximum number of weeks of unemployment benefits available.

* Intel Media, Intel Corp's TV business was acquired by Verizon, which wants to add TV everywhere there is an Internet connection.

* Harry's, an Internet shaving start-up, is nine months old and is trying to compete with Gillette and Schick, the titans that together control nearly 85 percent of the market. Harry's and its backers believe that by running everything from the manufacturing of the razors to selling them online directly, the startup will control its entire customer experience, while allowing the company to change its products quickly.

* The World Economic Forum's participants are saying that with the new confidence about the American economy, issues like climate change and the Syrian conflict are likely to get more attention.

Canada

THE GLOBE AND MAIL

* Prime Minister Stephen Harper says Canadians at home support his refusal to publicly criticize Israel - because to do so would be to attack an isolated minority state.

* Toronto Mayor Rob Ford's ability to lead the country's largest city is again in doubt after his admission that he's returned to drinking and the emergence of two new videos - including one showing an incoherent mayor cursing the chief of police.

Reports in the business section:

* Thirteen Canadian companies have made the list of the 100 most sustainable corporations in the world, including several energy firms that often draw criticism from environmentalists.

* BlackBerry Ltd confirmed Tuesday it plans to sell most of its Canadian real estate, but new chief executive John Chen pledged to keep its headquarters in Waterloo, Ontario.

* Bombardier Inc is scaling back operations and cutting 5 percent of its global work force amid a slump in aircraft sales and delays in production of its marquee commercial jet.

NATIONAL POST

* Rob Ford's attempts to reform his image ahead of the mayoral election this year appear to have been shattered after a damaging new video surfaced Tuesday showing the Toronto mayor drunk, swearing and making offensive remarks about the city's police chief.

* At a time of increasing tensions between Israel and Europe over Israel's ongoing construction in areas acquired in the 1967 war, Israelis were happy to welcome Canadian Prime Minister Stephen Harper as one of Israel's staunchest friends among national leaders.

FINANCIAL POST

* Bombardier Inc said Tuesday it would lay off roughly 1,700 of its aerospace employees, after a delay to its CSeries program was announced last week and as declining orders for its other aircraft puts pressure on the company's cash reserves.

* Google Inc is launching a new service designed to evaluate the connection speeds of Internet providers, in the hopes of identifying which companies are delivering the best experience for consumers who want to watch high definition video online.

* BlackBerry is selling the majority of its Canadian real estate holdings in a bid to shore up its cash position and further shrink its sprawling, money-losing operations, as it struggles to refocus the business on its enterprise base.

China

CHINA SECURITIES JOURNAL

- The implementation of property taxes could be slower than previous expected due to the complicated progress in legislation, said a commentary of the newspaper, adding that it could be launched after two years.

CHINA BUSINESS NEWS

- An unexpected exposure of an internal farewell speech confirms the rumor that Li Lihui, vice Chairman of Bank of China is leaving.

CHINA DAILY

- The government is expected to further tighten its grip on the shadow banking sector to "prevent regional risks from spreading nationwide."

- More Chinese companies are considering issuing convertible bonds overseas.

SHANGHAI DAILY

- Nearly 60,000 people suspected of being involved in a total of 173 billion yuan ($28.59 billion) worth of intellectual property rights infringement were arrested by Chinese police in 2013.

PEOPLE'S DAILY

- China should quicken and deepen the judicial reform in order to safeguard social fairness and justice, said a commentary by this mouthpiece of the ruling Communist Party of China.

Britain

The Telegraph

BRITAIN'S BANKS URGE STRONGER TIES WITH BRUSSELS

Britain's
banks have urged the Government to strengthen ties with Brussels, as
the single market is vital to the success of the country's financial
services sector. The British Bankers' Association has sent a paper to
the Treasury's "balance of competences" review, which studies the
balance of power between the EU and Westminster.

IMF ENDORSES CARNEY STIMULUS AS IT UPGRADES UK

The
International Monetary Fund has handed a boost to the Governor of the
Bank of England by pledging its support for continued economic stimulus,
even as it ramped up growth projections for Britain's economy. The
organisation forecast on Tuesday that Britain will grow by 2.4 percent
this year, against the 1.9 percent prediction it made in October.

The Guardian

UNILEVER COULD PULL OUT OF BRITAIN IF IT LEFT EU, WARNS MULTINATIONAL'S BOSS

The
UK would be better off staying inside the European Union "than kicking
against the table" and voting to leave, the boss of one of the world's
largest consumer goods companies has said. Paul Polman, the Dutch chief
executive of the consumer multinational Unilever, said the company could
review its UK investment if Britain left the EU.

LLOYDS BANK - CO-OP DEAL WAS SWAYED BY POLITICS, LORD LEVENE TELLS MPS

State-backed
Lloyds Banking Group was "swayed by political considerations" when it
chose the Co-operative Bank to take over more than 600 branches, the
head of a failed rival bid told MPs.

The Times

UK CHIEFS "AMONG WORLD'S MOST OPTIMISTIC" AT DAVOS

Britain's
bosses are planning a hiring spree and new investment this year after
rediscovering their economic mojo. According to PwC's annual global CEO
survey, UK business leaders started the year among the most optimistic
in the world. Two thirds plan to employ more, against a global average
of half, and half expect to drive growth through "product and service
innovation".

HOBAN NAMED FOR "INTERFERING" IN LLOYDS BRANCH SALE

Mark
Hoban, the former Financial Secretary to the Treasury, has been named
as one of the politicians who appeared to interfere in Lloyds' ill-fated
auction of more than 600 branches by Lord Levene of Portsoken.

Sky News

HUNT PAYDAY DELAYED AS 35 MLN POUNDS SALE COLLAPSES

A
company takeover that would have netted Jeremy Hunt, the Health
Secretary, a 17 million pounds jackpot has collapsed after the
prospective buyer failed to agree the terms of a deal. Sky News
understands that negotiations between Inflexion Private Equity and
Hotcourses, a provider of online education listings, broke down in
recent weeks.

HORSEMEAT SCANDAL FIRM FINDUS PLOTS PAYOUT

One
of the companies at the centre of last year's horsemeat scandal is
plotting a financial restructuring that will lead to a
multimillion-pound payout for its owners. Sky News has learnt that
Findus is planning to launch a bond worth up to 200 million pounds in
the coming weeks to take advantage of attractive financing markets.

Fly On The Wall 7:00 AM Market Summary

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
MBA Purchase Applications for the week of January 17 rose 4.7% due to refis. Mortgage applications dropped

ANALYST RESEARCH

Upgrades

CVS Caremark (CVS) upgraded to Strong Buy from Buy at ISI Group
Cerner (CERN) upgraded to Strong Buy from Neutral at ISI Group
Dow Chemical (DOW) upgraded to Neutral from Reduce at SunTrust
Endeavour (END) upgraded to Buy from Neutral at SunTrust
Informatica (INFA) upgraded to Outperform from Neutral at Credit Suisse
KBR (KBR) upgraded to Overweight from Equal Weight at Barclays
Macerich (MAC) upgraded to Outperform from Market Perform at Cowen
NuVasive (NUVA) upgraded to Outperform from Market Perform at Leerink
PAREXEL (PRXL) upgraded to Strong Buy from Buy at ISI Group
Power Integrations (POWI) upgraded to Outperform from Market Perform at Raymond James
Qlik Technologies (QLIK) upgraded to Hold from Sell at Drexel Hamilton
Red Hat (RHT) upgraded to Outperform from Perform at Oppenheimer
Scripps Networks (SNI) upgraded to Neutral from Sell at Citigroup
Silicon Motion (SIMO) upgraded to Buy from Hold at Needham
Unilever (UL) upgraded to Sector Perform from Underperform at RBC Capital
Walgreens (WAG) upgraded to Neutral from Cautious at ISI Group

Downgrades

Amira Nature Foods (ANFI) downgraded to Hold from Buy at Deutsche Bank
Arcos Dorados (ARCO) downgraded to Neutral from Overweight at JPMorgan
Bemis (BMS) downgraded to Underweight from Equal Weight at Barclays
CAE (CAE) downgraded to Hold from Buy at Canaccord
CBL & Associates (CBL) downgraded to Market Perform from Outperform at Cowen
Dollar Tree (DLTR) downgraded to Neutral from Buy at Sterne Agee
GlaxoSmithKline (GSK) downgraded to Market Perform from Outperform at Cowen
Great Lakes Dredge (GLDD) downgraded to Underweight from Equal Weight at Barclays
Hologic (HOLX) downgraded to Buy from Strong Buy at ISI Group
LogMeln (LOGM) downgraded to Market Perform from Outperform at Cowen
Mosaic (MOS) downgraded to Sell from Neutral at Goldman
Oracle (ORCL) downgraded to Perform from Outperform at Oppenheimer
Plains GP Holdings (PAGP) downgraded to Hold from Buy at Jefferies
Quality Systems (QSII) downgraded to Cautious from Neutral at ISI Group
Superior Energy (SPN) downgraded to Market Perform from Outperform at Wells Fargo
Targa Resources (TRGP) downgraded to Hold from Buy at Jefferies
Towers Watson (TW) downgraded to Neutral from Buy at Citigroup
Travelers (TRV) downgraded to Outperform from Top Pick at RBC Capital
Verizon (VZ) downgraded to Sector Perform from Outperform at Pacific Crest

Initiations

ANI Pharmaceuticals (ANIP) initiated with an Outperform at Oppenheimer
BE Aerospace (BEAV) initiated with a Buy at Topeka
CIT Group (CIT) initiated with a Neutral at Goldman
Callidus Software (CALD) initiated with an Outperform at Credit Suisse
Credicorp (BAP) initiated with an Outperform at Credit Suisse
Electronics for Imaging (EFII) initiated with an Overweight at Barclays
Fidelity & Guaranty Life (FGL) initiated with a Neutral at JPMorgan
Fidelity & Guaranty Life (FGL) initiated with an Outperform at RBC Capital
Isis Pharmaceuticals (ISIS) initiated with a Buy at Deutsche Bank
Physicians Realty Trust (DOC) initiated with a Hold at KeyBanc
SLM Corp. (SLM) initiated with a Buy at Goldman
Triumph Group (TGI) initiated with a Hold at Topeka
Valero Energy Partners (VLP) initiated with a Neutral at Citigroup
Xylem (XYL) initiated with an Outperform at Oppenheimer

HOT STOCKS

Mohamed El-Erian resigned as CEO, co-Chief Investment Officer of PIMCO (AZSEY)
News Corp. (NWSA) said Dow Jones CEO Fenwick to depart
BlackBerry (BBRY) to divest Canadian real estate
Prudential (PRU), Fosun expanded strategic partnership in China
Toll Brothers (TOL), GTIS announced Sienna South acquisition
CIT Group (CIT) announced $300M share repurchase plan
MHR seeks talks with Titan International (TWI) board
Target (TGT) to end health coverage for part-time workers

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Textron (TXT), TE Connectivity (TEL), Renasant (RNST), Xilinx (XLNX), Supertex (SUPX), Super Micro Computer (SMCI), Cree (CREE), CA Technologies (CA), IBM (IBM)

Companies that missed consensus earnings expectations include:
Interactive Brokers (IBKR), Northrim BanCorp (NRIM), Woodward (WWD)

Companies that matched consensus earnings expectations include:
AMD (AMD), Texas Instruments (TXN)

NEWSPAPERS/WEBSITES

• T-Mobile (TMUS) undercuts weakened Verizon (VZ) stock price, NY Post reports
• Teva (TEVA) asks Supreme Court to review Copaxone ruling, Globes reports
• Amazon (AMZN) denies report that it's planning online pay-TV service, USA Today reports
• DBS Group (DBSDY) in talks for Societe Generale's (SCGLY) Asia private bank, Reuters reports
• Fed expected to maintain low rate policy for now, Reuters reports
• Appeals court temporarily blocks Apple (AAPL) e-books monitor, WSJ reports
• Some big banks (BAC, C, JPM) avoid riskier deals as regulatory pressures grow, WSJ reports
• Boeing (BA) 787 transponder failure sparks Air India's London return, Reuters reports
• Feds taking closer look at Mexican Target (TGT) suspects, NY Post reports

SYNDICATE

Ashford Hospitality Prime (AHP) files to sell 8M shares of common stock
Envision Healthcare (EVHC) files to sell 27.5M shares of common stock for holders
Keryx (KERX) files to sell $90M of common stock
NanoString (NSTG) files to sell $55M in common stock
Splunk (SPLK) files to sell 6M shares of common stock
Synaptics (SYNA) files to sell 1.95M shares of common stock for holders
ePlus (PLUS) files to sell 2.87M shares of common stock for holders

• Espirito Santo Financial Suspends Shares, Bonds on ESI Exposure (BBG)
• Europe Stocks Drop for Fifth Day as Espirito Santo Sinks (BBG)
• Espirito Santo Creditors Doubt Containment on Missed Payment (BBG)
• French Stocks Seen Extending Losses on Economy Concern (BBG)
• Stocks Slide With Portugal Bonds as Yen Gains; Oil Drops (BBG)
• U.S. Probes Hacking of Government Computers at Personnel Agency (WSJ)... finds terabytes of porn 
• It's Congress' fault: Obama rejects criticism over border crisis (Reuters)
• Israel Mobilizes 20,000 Troops for Possible Gaza Invasion (BBG)
• Chinese hackers pursue key data on U.S. workers (NYT)
• Donetsk Primed for Siege as Ukraine Army Hems In Rebels (BBG)
• Regulators Ready Money-Fund Rules (WSJ)
• Are Investors Complacent About Risk? Concern Raised in June Fed Meeting (BBG)
• Gaza Rockets Threaten Nuclear Plant as Israel Vows Force (BBG)
• China June trade data misses forecasts, doubts over economy linger (Reuters)

Overnight Media Digest

WSJ

* Federal Reserve officials agreed at June's policy meeting to end their bond-buying program in October, putting an explicit end date on the experiment for the first time. Most officials at the June meeting also indicated that they expect an interest rate hike to come next year. (http://on.wsj.com/VLc1vo)

* IBM on Wednesday pledged to spend $3 billion over five years on semiconductor research. The money will be directed toward two major tasks: tackling technical obstacles to the miniaturization of circuitry on conventional silicon chips and developing alternative materials and technologies to keep boosting computing speed while consuming less energy. (http://on.wsj.com/1nffCfJ)

* The Education Department says it was unaware of the dire state of Corinthian Colleges Inc's finances before it moved June 12 to restrict access to federal student-aid dollars, which made up 80 percent of Corinthian's revenue. The aid freeze was designed to pressure the company to comply with an investigation into recruiting tactics, administration officials say, not to force its closure. (http://on.wsj.com/1szTnRZ)

* Chinese exports grew in June on the back of strengthening U.S. consumer demand, in a positive sign for China's crucial factory sector and for the global outlook. The pace of export growth disappointed some economists, though others blamed the lingering impact of distortions in last year's Chinese trade numbers used to make the comparison. (http://on.wsj.com/1ra3L2H)

* European Union antitrust officials have started questioning rival firms about Facebook Inc's proposed $19 billion acquisition of messaging service WhatsApp, ahead of a formal review that could be a test case for how to apply EU competition law to the new world of social media. (http://on.wsj.com/1n7ifLz)

* U.S. regulators are poised to complete long-awaited rules intended to prevent a repeat of the investor stampede out of money-market mutual funds that threatened to freeze corporate lending during the 2008 financial crisis. The Securities and Exchange Commission is expected to vote on a plan as early as this month that would require certain money funds catering to large, institutional investors to abandon their fixed $1 share price and float in value like other mutual funds, these people said. (http://on.wsj.com/1ol2KkG)

FT

AbbVie Chief Executive Richard Gonzalez was on Wednesday forced to retract comments made by him while discussing shareholder support for the U.S. drugmaker' s 30 billion pound ($51.1 billion) bid for Shire after being caught out by British takeover rules.

Citigroup Inc is close to shelling out more than $7 billion to resolve a long-running investigation by the U.S. government into its sale of mortgage-backed securities, according to people familiar with the matter.

Germany's Lufthansa may launch a no-frills long-haul airline as part of wider plans by the company to stave off competition from low-cost and Middle Eastern carriers.

European Union antitrust regulators fined have fined six drugmakers including France's Servier a whopping 428 million euros ($583.8 million) for blocking the entry of cheaper generic competition to an expensive branded drug.

Britain's financial watchdog is launching a review of competition in the wholesale securities market as it eyes the practices used by high-frequency traders to get ahead on other investors.

Germany's Aldi is the global leader among discount food retailers that offer limited assortment grocery. Schwarz, which owns Lidl, took second place, according to a study by research firm Planet Retail.

A cross-selection of peer-to-peer (P2P) loans has gotten a credit rating from Standard & Poor's, marking the first time that a major credit rating agency has agreed to formally evaluate a securitisation from the fast-growing P2P sector.

NYT

* With countries in the European Union obliged to reduce their debt as a percentage of their economies, the quantifying of vice is expected to make growth rates look rosier. (http://nyti.ms/1ol0Twa)

* Chinese hackers in March broke into the computer networks of the United States government agency that houses the personal information of all federal employees, according to senior American officials. They appeared to be targeting the files on tens of thousands of employees who have applied for top-secret security clearances. (http://nyti.ms/1mL8sRb)

* A growing category in health care promises an alternative to the hospital emergency room and perhaps the family practitioner, with low fees and extended hours. Once derided as "Doc in a Box" medicine, urgent care has mushroomed into an estimated $14.5 billion business. (http://nyti.ms/1mBdPAK)

* Europe's top antitrust enforcer said several drug makers, including Servier, kept more affordable forms of a popular heart treatment off the market. (http://nyti.ms/1mBehix)

* The Taxi and Limousine Commission declared Lyft, a car-summoning start-up, an "unauthorized service" in New York City on Wednesday, two days before its planned debut. The start-up, however, did not come to an operation agreement with New York City regulators beforehand, prompting the commission's action on Wednesday evening. (http://nyti.ms/1xVJoJD)

* In small trials, two drugs go far in soothing symptoms of Eczema and Psoriasis. An experimental drug for eczema relieved severity of symptoms in 85 percent of those who took it. A drug for psoriasis cut severity of symptoms in as many as 82 percent of those who took it. (http://nyti.ms/1mLqVgH)

* A merger of Comcast and Time Warner Cable and a joining of AT&T and DirecTV would both pose competitive threats, Dish said. (http://nyti.ms/1mLnQNn)

* Harley-Davidson is recalling 66,421 Touring and CVO Touring motorcycles from the 2014 model year because their front wheels can lock up without warning. The company said it knew of five crashes and two minor injuries related to the defect, which it discovered last fall through warranty claims.(http://nyti.ms/TU7QMr)

Canada

THE GLOBE AND MAIL

** Heavy rain is not the only reason the Assiniboine River is flooding in the height of summer and threatening a swath of communities across southern Manitoba this week, a new report suggests. The elimination of vast numbers of small ponds and wetlands across the Canadian prairie has removed a crucial buffer that can temporarily store water on the landscape during periods of excessive precipitation. (http://bit.ly/1rawNiP)

** Canada should "come off the sidelines" to take a more active role in South Sudan as that country's humanitarian crisis deepens, the head of Amnesty International's Canadian branch says. Alex Neve made the comments after a 10-day visit to South Sudan, where a violent conflict is causing widespread upheaval in the world's newest country. (http://bit.ly/1ngOQU2)

Reports in the business section:

** Multimillionaire geologist Charles "Chuck" Fipke has sold his remaining stake in Ekati, the first-ever Canadian diamond mine he discovered two decades ago in the Arctic tundra of the Northwest Territories. The native Albertan sold his 10 percent interest to Dominion Diamond Corp for a total of $67 million (http://bit.ly/1nad8KL)

NATIONAL POST

** A father opened fire at a suburban Houston home Wednesday, killing four of his children as well as two adults who were with them, and critically wounding his 15-year-old daughter, authorities said. The suspected gunman eventually surrendered after a three-hour standoff with deputies who had cornered him. (http://bit.ly/1rayexz)

** The Conservative government is examining a whole new business model to effectively buy, sell and use the time and skills of federal employees: Meet the BURO-crat. The government has been planning a pilot project at some federal agencies that would apply "market principles" to more efficiently use federal bureaucrats and help smooth out busy and slow work periods, according to government records. (http://bit.ly/W05QUP)

FINANCIAL POST

** The Canadian arm of China Petrochemical Corp may shelve work on its Northern Lights oil sands lease or sell the property entirely, as Chinese companies begin to rethink future investment prospects in the world's No. 3 crude reserve. Sinopec, as the company is known, could delay efforts to develop the property or seek to sell its interest in the lease entirely as it consolidates its North American assets, a person familiar with board-level discussions in Beijing said. (http://bit.ly/U5bLX7)

** CNOOC Ltd subsidiary Nexen Energy ULC is restructuring its operations and letting go staff despite pledges to Ottawa by China's largest offshore oil producer to keep all employees and senior management and turn the Calgary-based company into a platform for growth, industry sources say. (http://bit.ly/1tquxZ3)

China

CHINA SECURITIES JOURNAL

Qianhai, the special economic zone in China's southern city of Shenzhen, plans to publish new rules that will expedite investment by Hong Kong companies and accelerate financial cooperation between the two neighbouring cities.

SHANGHAI SECURITIES NEWS

China has vowed to improve insurance services to stimulate innovation in social governance, the State Council said in a statement on Wednesday. Competent insurers are encouraged to roll out commercial pension and health care plans, invest in the pension sector, participate in the integration of the health sector and develop new products. Insurance will be incorporated into the disaster prevention system and funds will be encouraged to invest in urbanization, infrastructure and residential renovations.

21st CENTURY BUSINESS HERALD

- A residential land parcel in downtown Shanghai was sold at a record price of nearly 60,000 yuan per square metre, making it the most expensive plot sold in the country so far this year. The 6.885-square metre plot was acquired by a subsidiary of Lai Fung Holdings Ltd, which is the property and investment arm of the Lai Sun Group.

SHANGHAI DAILY

- China's chief climate official, Xie Zhenhua, said the nation should not be subject to the same rules for greenhouse gas emissions as the U.S. and other developed countries, and that Beijing will oppose attempts to impose them on China at next year's world climate conference.

CHINA DAILY

- Bank of China on Wednesday denied helping to launder money for people planning to emigrate by ignoring the annual cap on foreign exchange for individuals. According to a report by broadcaster CCTV, the country's largest foreign exchange bank has frequently allowed wealthy customers to transfer as much money as they want overseas.

Britain

The Times

CABLE HIRES MYNERS TO DEFUSE FLOAT ANGER

Vince Cable has attempted to head off what will be an excoriating attack on him by MPs later this week over the sale of Royal Mail by calling in a former Labour City minister to head an inquiry into government privatisations.

APPLAUSE FILLS AISLES AS KING CHECKS OUT

In the end there was no valedictory, no finger pointing and no barracking from the floor. Justin King stood down as the chief executive of J Sainsbury after ten years and fifteen weeks yesterday with the sound of applause ringing in his ears.

INSURERS PROMISE TO BE MORE OPEN WITH CUSTOMERS ON COSTS

Motorists and householders renewing their annual insurance policies could be told at the same time what their cost of cover was the previous year under an industry drive to be more open with customers.

The Guardian

BANK OF ENGLAND'S NEMAT SHAFIK SIGNALS THAT INTEREST RATE RISE EDGES CLOSER

The Bank of England's new deputy governor has signalled that an interest rate rise is edging closer after telling MPs the amount of spare capacity in the economy is lower than the bank predicted in May.

MONTHLY HOUSE PRICES FOR JUNE DROP 0.6 PCT, HALIFAX REPORTS

House prices experienced a bigger monthly fall than analysts had expected in June, knocking 1,100 pounds ($1,900) off the average property value, according to a survey carried out by mortgage lender Halifax.

The Telegraph

UBS PREDICTS SAVINGS FLIGHT FROM SCOTLAND IN THE EVENT OF 'YES' VOTE

Savers may rapidly move their money south of the border if Scotland were to vote for independence, analysts at one of Europe's biggest banks have predicted.

QATAR CUTS HOLDING IN LONDON STOCK EXCHANGE BY A THIRD

Qatar Holding is to trim its 15 percent stake in the owner of the London Stock Exchange by a third ahead of a $1.6 billion rights issue by the British bourse to fund its acquisition of Russell Investments.

SHALE 'COULD MEET 41 PCT OF UK'S GAS NEEDS', SAYS NATIONAL GRID

Shale gas produced in the UK could provide more than a third of the nation's gas supplies within 20 years, a report has found.

Sky News

RAC OWNER CARLYLE HOLDS TALKS ABOUT 2 BLN STG SALE

The owners of the RAC roadside recovery service have been holding secret talks about a 2 billion pound sale in the wake of a modest stock market debut by the AA, its main rival.

SYRIA 'LIKELY' USED UK CHEMICALS TO MAKE SARIN

Chemicals exported by British firms to Syria in the 1980s are likely to have been used to make the nerve agent sarin, UK Foreign Secretary William Hague said.

Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Jobless claims for week of July 5 at 8:30--consensus 315K
Wholesale trade inventories for May at 10:00--consensus up 0.6%

ANALYST RESEARCH

Upgrades

Alcoa (AA) upgraded to Overweight from Equal Weight at Morgan Stanley
Allscripts (MDRX) upgraded to Strong Buy from Buy at ISI Group
Autodesk (ADSK) assumed with an Overweight from Equal Weight at Barclays
CommonWealth REIT (CWH) upgraded to Buy from Hold at Stifel
MB Financial (MBFI) upgraded to Buy from Neutral at Sterne Agee
MRC Global (MRC) upgraded to Neutral from Underperform at BofA/Merrill
PrivateBancorp (PVTB) upgraded to Buy from Neutral at Sterne Agee
Starwood (HOT) upgraded to Buy from Hold at MLV & Co.
TCF Financial (TCB) upgraded to Buy from Neutral at Sterne Agee
Tractor Supply (TSCO) upgraded to Outperform from Neutral at Credit Suisse

Downgrades

Lumber Liquidators (LL) downgraded to Hold from Buy at Jefferies
Lumber Liquidators (LL) downgraded to Neutral from Outperform at Credit Suisse
T. Rowe Price (TROW) downgraded to Equal-Weight from Overweight at Evercore
UnitedHealth (UNH) downgraded to Hold from Buy at Jefferies
Waddell & Reed (WDR) downgraded to Neutral from Buy at Citigroup

Initiations

American Express (AXP) initiated with an Underperform at Macquarie
Aon plc (AON) initiated with an Overweight at Evercore
Associated Banc-Corp (ASBC) assumed with a Neutral at Sterne Agee
CIT Group (CIT) initiated with an Underperform at Macquarie
Cepheid (CPHD) initiated with an Outperform at Wells Fargo
Discover (DFS) initiated with an Outperform at Macquarie
EZCORP (EZPW) initiated with a Neutral at Macquarie
Envision Healthcare (EVHC) initiated with an Outperform at RW Baird
Exterran Partners (EXLP) initiated with a Neutral at Goldman
FirstMerit (FMER) initiated with a Neutral at Sterne Agee
Foresight Energy (FELP) initiated with an Outperform at Cowen
Freeport McMoRan (FCX) initiated with an Overweight at HSBC
MDU Resources (MDU) initiated with a Market Perform at Wells Fargo
Marsh & McLennan (MMC) initiated with an Overweight at Evercore
Model N (MODN) initiated with an Outperform at Northland
Nexstar (NXST) initiated with a Hold at Noble Financial
NorthStar Asset Management (NSAM) initiated with an Outperform at FBR Capital
QIAGEN (QGEN) initiated with a Market Perform at Wells Fargo
Quidel (QDEL) initiated with a Market Perform at Wells Fargo
Santander Consumer (SC) initiated with a Neutral at Macquarie
ServiceNow (NOW) initiated with a Neutral at BofA/Merrill
Springleaf (LEAF) initiated with a Neutral at Macquarie
TAL International (TAL) initiated with a Neutral at Macquarie
Team Health (TMH) initiated with an Outperform at RW Baird
Textainer (TGH) initiated with a Neutral at Macquarie
Trovagene (TROV) initiated with a Buy at Maxim
Willis Group (WSH) initiated with an Equal-Weight at Evercore
World Acceptance (WRLD) initiated with a Neutral at Macquarie

COMPANY NEWS

Boeing (BA) projected demand for 36,770 new airplanes over the next 20 years valued at $5.2T
IBM (IBM) announced a $3B cloud, big data systems research initiative
Harley-Davidson (HOG) recalled 66,421 motorcycles due to potential wheel lock-up
Google Ventures (GOOG) said it would launch a new venture fund in Europe with initial funding of $100M
Costco (COST) reported June SSS up 6%
Zynga (ZNGA) appointed Google (GOOG) executive Dr. Regina Dugan to the company's board
Regado Biosciences (RGDO) said the FDA placed a clinical hold on the company's ongoing Phase 3 REGULATE-PCI trial
Worldwide PC shipments totaled 75.8M units in Q2, a 0.1% increase from 2Q13. According to IDC's Worldwide Quarterly PC Tracker, worldwide PC shipments totaled 74.4M units in Q2 (HPQ, TOSBF, AAPL, MSFT, IBM)

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
DragonWave (DRWI), CHC Group (HELI)

Companies that missed consensus earnings expectations include:
Helen of Troy (HELE), WD-40 (WDFC)

Lumber Liquidators (LL) sees Q2 EPS 59c-61c, may not compare to consensus 90c
Lumber Liquidators (LL) lowers FY14 EPS view to $2.65-$3.00 from $3.25-$3.60
DragonWave (DRWI) sees Q2 revenue growth 25%-40% relative to Q1
Ventas (VTR) sees Q2 normalized FFO at least $1.09, consensus $1.09
Helen of Troy (HELE) backs 2015 adjusted EPS view $4.30-$4.40, consensus $4.38
Zumiez (ZUMZ) raises Q2 EPS, revenue outlook

NEWSPAPERS/WEBSITES

HP (HPQ) sources deny bid made for Rackspace (RAX), Re/code reports
Holder refuses meeting with BofA (BAC) CEO, Reuters says
News Corp's (NWSA) HarperCollins selling books directly to readers to bypass Amazon (AMZN), FT reports
Shareholders urge Allergan (AGN) to make large acquisition, FT reports
Bank of America (BAC) requests 5c dividend reapproval, WSJ reports
Commerzbank (CRZBD) could resolve U.S. probe by paying $600M-$800M, Reuters says
Investigation into ousted American Apparel (APP) CEO to end soon, Reuters reports
Schlumberger (SLB) can continue higher, Barron's says

SYNDICATE

Crestwood Equity (CEQP) files to sell 26.3M common units for holders
Eros International (EROS) 7M share Secondary priced at $14.50
Kosmos (KOS) files to sell 17M shares of common stock
Malibu Boats (MBUU) 4.8M share Secondary priced at $18.50
Memorial Production (MEMP) files to sell 8.6M common units for partners
Ocera Therapeutics (OCRX) files to sell common stock
Sotherly Hotels (SOHO) announces $23.4M 'at-the-market' equity offering

• EU Works to Punish Russia as MH17 Bodies Leave Rebel Area (BBG)
• Bodies From Malaysia Airlines Flight Begin Long Trip to Netherlands (WSJ)
• Israel pounds Gaza as Kerry arrives (Reuters)
• U.S. judge dismisses Republican lawsuit over Obamacare subsidy for Congress (Reuters)
• Israel Soldier Missing Amid Assault on Hamas in Gaza (WSJ)
• Detroit Retirees Vote in Favor of Pension Cuts (WSJ)
• Russia Axes 1st Bond Sale in 3 Months as Ukraine Drives Up Yield  (BBG)
• Wall Street Cut From Guest List for Jackson Hole Fed Meeting (BBG)
• Credit Suisse to Exit Commodities, Posts Big Quarter Loss (BBG)
• Draghi Cedes Euro Control to Yellen on Fed Rate Wagers (BBG)
• Turkish Businesses Boycotting Israeli Products Because of Gaza (INN)
• Soros Chart Shows Euro-Yen Reaching 2008 High (BBG)
• Next iPhone Will Offer Bigger Screens; Apple Tells Suppliers to Gear Up for 4.7-inch and 5.5-Inch Screen Sizes (WSJ)
• Sterling Trust Could Face Default on Loans if Clippers Aren't Sold, CFO Says (WSJ)
• Saudi to Open Up $531 Billion Stock Market to Foreigners (BBG)

Overnight Media Digest

WSJ

* Separatists in Ukraine released the bodies of victims in the downing of Malaysia Airlines Flight 17 and agreed to hand over the aircraft's data recorders, allowing the focus to tighten on establishing who brought the jetliner down. (http://on.wsj.com/Uoe1bR)

* Workers and retirees approved pension cuts in Detroit's bankruptcy, the city said Monday, a crucial step to emerging from the largest municipal insolvency in U.S. history. The city disclosed results from two months of balloting, which ended July 11. (http://on.wsj.com/1wTrViJ)

* European ministers are expected to approve sanctions that will target Russian oligarchs in response to the suspected downing of a Malaysian jetliner by Moscow-backed rebels in eastern Ukraine. (http://on.wsj.com/1nvUB1w)

* Apple Inc is preparing for its largest initial production run of iPhones this year, betting that larger-screen models will lure consumers now attracted to similar phones from Samsung Electronics Co. The company is asking suppliers to manufacture between 70 million and 80 million units, larger than the initial order last year of 50 million to 60 million versions of the iPhone 5S and 5C. (http://on.wsj.com/1qZBAm3)

* The U.S. owner of a meat supplier in Shanghai apologized and promised a swift response after McDonald's Corp and Yum Brands Inc suspended purchases in China in the wake of allegations it sold expired chicken and beef to restaurants. China's Food and Drug Administration halted on all business activities of Shanghai Husi and launched a nationwide investigation of the company. (http://on.wsj.com/1jSycdP)

* Washington's regulatory machine is altering Wall Street in fundamental ways, four years after the Dodd-Frank financial law became reality. Banks are selling off profitable business lines, pulling back from the short-term funding market, cutting ties with businesses that could attract extra regulatory scrutiny, and building up defenses to help weather future crises. (http://on.wsj.com/1ua2Eoi)

* Spending on mobile ads is expected to jump 83 percent this year, but given how much time Americans spend on their devices, mobile-ad spending could be much higher. (http://on.wsj.com/1loxQqs)

* The family trust that owns the Los Angeles Clippers is in danger of defaulting on loans if a planned sale of the NBA team doesn't go through, an executive testified Monday. (http://on.wsj.com/Wuj8sv)

* Allergan, which is trying to avoid being acquired by Valeant Pharmaceuticals International Inc, said it would cut 13 percent of its work force and reduce drug research, to boost its profits over the next six years. Valeant also had similar plans of restructuring, if it acquired Allergan. (http://on.wsj.com/WzRuuz)

* Netflix Inc said its second quarter earnings more than doubled as it added 1.7 million subscribers world-wide but cautioned that a more aggressive international expansion would hurt profits in third quarter. (http://on.wsj.com/1wTaZc1)

* Venezuela's auto industry, once the third largest in South America, is seizing up as manufacturers struggle to produce a few vehicles a day. Car makers like Ford Motor Co, Fiat Chrysler Automobiles, General Motors and Toyota Motor Corp, have cut output by more than 80 percent in the first six months of the year, due to lack of dollars to pay part suppliers. (http://on.wsj.com/1nv5BMM)

* Activist investor Jana Partners LLC has built a stake worth more than $1 billion in Apache Corp and is calling on the oil and gas producer to sell off its international holdings to drill exclusively on American soil. It also wants the company to exit some projects to free up cash flow. (http://on.wsj.com/UkTOUB)

* Crocs is trimming jobs and reducing the number of stores as the maker of colorful plastic clogs said it needs to get smaller to improve profitability. (http://on.wsj.com/1u9SQuJ)

FT

Time Warner Cable Inc, which owns cable networks TNT and CNN, scrapped a rule that allows investors to call a shareholder meeting in a bid to block a potential hostile takeover by Rupert Murdoch's Twenty-First Century Fox.

Portugal's largest-listed lender, Banco Espirito Santo is to appoint a special financial adviser to help improve its balance sheet days after one of its holding companies filed for creditor protection.

Barclays Plc U.S. dark pool slips from second to 12th place in terms of volumes traded as customers flee following a lawsuit that alleged the lender misled clients about frequency activity in its private trading venue.

China's MMG Ltd shareholders approve purchase of the Las Bambas copper project in Peru from Glencore Plc for $5.85 billion.

British engineering contractor Babcock International's order book for the coming year rose to 13.5 billion pounds ($23.1 billion), helped by recent contract wins and its acquisition of helicopter transport firm Avincis.

NYT

* Netflix Inc reported its business grew in the second quarter thanks to international customers and little adverse effect from an announced price increase. The company said it surpassed 50 million total members for its streaming service, including free trial memberships, in the second quarter of this year. Netflix has announced plans to introduce its service to a number of European markets in September, including Austria, Belgium, France, Germany, Luxembourg and Switzerland. (http://nyti.ms/1lodcae)

* In response to an article about the political connections of some of its shareholders, Alibaba Group Holding Ltd <IPO-BABA.N> discounted the notion that their backgrounds helped drive its business. In a strongly worded statement on Monday in Chinese on its account on Weibo, a Twitter-like social media network, Alibaba said The Times article "mistakenly described" Alibaba's relationship with the investors. (http://nyti.ms/1n7qLzq)

* Yahoo Inc announced Monday that it had agreed to acquire Flurry, a mobile ad and analytics company. Flurry's advertising expertise could help Yahoo as it tries to build a meaningful mobile ad business. Although more than half of Yahoo's monthly audience visits come on mobile devices, revenue from mobile ads is still so small that the company does not break it out. (http://nyti.ms/Ul2utY)

* Time Warner Inc on Monday amended its corporate bylaws and removed a provision that allowed shareholders to call a special board meeting. In a filing with the Securities and Exchange Commission, Time Warner said the change was effective immediately. Without the ability to call a special meeting, shareholders supportive of a Twenty-First Century Fox offer would not be able to replace Time Warner's board of directors before the company's next annual meeting, which would likely come next June. (http://nyti.ms/UodPcn)

* Malaysia Airlines' two crashes in less than five months are sending tremors through the aviation insurance market - not least because the carrier's $2.25 billion overall liability policy is mysteriously missing a standard clause that usually limits insurers' payments for search-and-rescue costs. (http://nyti.ms/1wTlbS7)

* A Senate investigation has found that hedge funds - in particular, James Simons' Renaissance Technologies - used complex financial structures to claim billions of dollars in tax savings. Between 1998 and 2013, more than a dozen hedge funds conducted hundreds of billions of dollars in trades using hundreds of structures, known as "basket options," created by Barclays Plc and Deutsche Bank AG, the Senate Permanent Subcommittee on Investigations said in a report on Monday. (http://nyti.ms/1n7EsOT)

* Goodwill Industries International, a nonprofit agency that operates thrift stores around the country, said on Monday that it was investigating a potential security breach that may have led to the theft of customers' credit card data. (http://nyti.ms/1qZZ5vl)

* Hedge funds are not new to farmland. For nearly a decade they have scoured the corners of the globe for cheap land as food prices have soared, positioning themselves to profit from the growing demand. Hedge funds now have $14 billion invested in farmland, according to the data provider Preqin. With its steady income stream, farmland is proving to be a ripe offering for sophisticated investors. (http://nyti.ms/1nPkbc0)

Canada

THE GLOBE AND MAIL

* A Chinese man accused of being the "directing mind" behind a corporate-espionage conspiracy to steal jet-fighter secrets from Pentagon contractors is a Canadian immigrant who is being stripped of his residency status. (http://bit.ly/1n8LvH3)

* The mysterious shooting death of a respected Florida law professor originally from Toronto took a sinister turn on Monday as investigators revealed that Dan Markel was the victim of a targeted attack. (http://bit.ly/1A0wwEi)

Reports in the business section:

* Mark Brock has been growing corn near London, Ontario, for decades but he has never seen a market quite like this with prices plummeting so fast he may not even try to sell some of his crop this year. Like many farmers, Brock has been trying to protect his profits by forward selling as much of his corn as possible. (http://bit.ly/1uaPR4Z)

NATIONAL POST

* The New Democratic Party is vigorously defending allegations it improperly put parliamentary staff in so-called satellite offices in Quebec before a meeting by the House of Commons panel that monitors spending by members of parliament. (http://bit.ly/WvqFqU)

* Senator Mike Duffy allegedly charged the Senate for personal travel to funerals, and disbursed money to three people for illegitimate expenses under the guise of a consulting contract. The allegations are contained in newly released court documents. The documents were made public on Monday, several days after the Royal Canadian Mounted Police announced that it was charging the suspended senator with 31 criminal counts. (http://bit.ly/1lppSgW)

FINANCIAL POST

* Rogers Publishing announced a small shakeup to its magazine mastheads on Tuesday, with three top editors cut loose, as part of an effort to streamline its editorial structure. According to an internal staff memo, the position of editor-at-large, held by Dianne de Fenoyl, would be eliminated, and de Fenoyl would be leaving after nearly a decade with the company. (http://bit.ly/1n8QZ4q)

* Fashion industry veteran Mario Grauso has been promoted to president of Loblaw Companies Ltd's in-house apparel brand Joe Fresh. The move comes as part of a major management shuffle at the country's biggest grocery chain last week, which saw Galen Weston named president of the retailer and the exit of president Vicente Trius. (http://bit.ly/1kONJqg)

China

SHANGHAI DAILY

- New residential property sales remained sluggish in Shanghai, staying below the 150,000-sq. m. threshold for the second straight week. In the nearby city of Hangzhou, home buyers remain reluctant to buy property even though housing prices have started to fall, as they expect prices to decline further.

CHINA DAILY

- China Mobile Ltd, the world's No. 1 telecom carrier by subscriber numbers, said on Monday it was removing its premium customer lounges at the nation's airports in a bid to cut back on operating expenses. The firms also plans to close down the majority of its customer clubs, a type of value-added service introduced a few years ago to lure new subscribers.

- China's railway track should total more than 200,000 km by 2030, in line with the nation's economic goals, and at least 10 percent of it will be for high-speed rail, the former chairman of China South Locomotive and Rolling Stock Co Ltd, and an adviser to the China Institute for Innovation and Development Strategy, said. China had 103,144 km of track, including 11,028 km for high-speed rail, the longest in the world.

CHINA SECURITIES JOURNAL

- China Financial Futures Exchange Board Chairman Zhang Shenfeng wrote an article advocating further reform and technical improvements to the market interest rate system.

Hong Kong

SOUTH CHINA MORNING POST

-- Hong Kong does not need a controversial HK$30 billion ($3.87 billion) upgrade of its centralised wastewater treatment system as the water in the harbour is clean enough, at least for now, the city's environment officials say. (bit.ly/1rlh3uf)

-- The chief executive of the Hong Kong Monetary Authority, Norman Chan Tak-lam, defended the city's strict banking rules as some of the best in the world, amid a flurry of recent international concern over the territory's banking system. (bit.ly/1jSmZKm)

THE STANDARD

-- Health and wellness products retailer OTO Holdings has been censured by the Hong Kong stock exchange for breaching the bourse's listing rules of twice failing to timely disclose its weaker results, along with its executive directors neglecting their undertaking to the bourse. (bit.ly/1rwQHHv)

-- Electronic books could soon turn a page to greater popularity in Hong Kong, says an e-book provider. Sino United Electronic Publishing content director Ivan Tsoi Yiu-ming said he is optimistic about e-books due to the popularity of tablet computers and smartphones. (bit.ly/UnUCHM)

-- Tissue paper firm Vinda International said net profit fell 21.8 percent in the first half to HK$222.18 ($28.66) million, from a year earlier, due to foreign exchange losses as the yuan weakened against the U.S. dollar. (bit.ly/1qZjEYT)

HONG KONG ECONOMIC JOURNAL

-- Morgan Stanley has raised its stake in Wing Hang Bank to 5.03 percent from 4.84 percent, according to data from the Hong Kong stock exchange.

HONG KONG ECONOMIC TIMES

-- HK Electric Investments Ltd posted a profit of HK$967 million ($124.75 million) for the first half of 2014 while distributable income amounted to HK$1.46 billion.

MING PAO DAILY NEWS

-- The average monthly rental of Hong Kong's 85 major residential developments stood at HK$23.2($2.99) per square foot in June, the highest monthly rental in 19 years, according to a report from property agent Centaline.

Britain

The Times

RBS PAYS 900,000 POUNDS FINE FOR AUSTRALIAN RATE-RIGGING

(http://thetim.es/1pxlC1F) Australian regulators have fined Royal Bank of Scotland nearly 900,000 pounds after the bank admitted its role in attempts to manipulate the country's equivalent of the Libor benchmark borrowing rate.

BANK OF ENGLAND'S COURT OPENS DOOR TO WOMEN CHIEFS

(http://thetim.es/1p3Lpgp)

The female chief executives of the telecoms company TalkTalk and the Yorkshire-based power plant Drax are among the new appointees to the board of the Bank of England, which was heavily criticised for having insufficient women in senior positions.

The Guardian

HEDGE FUNDS USED 'DUBIOUS' MEANS TO BYPASS TAX RULES, SENATORS SAY

(http://bit.ly/1sH5Wh8)

More than a dozen hedge funds, with assistance of Barclays and Deutsche Bank, used "dubious" financial products to claim billions in unjustified tax savings and circumvent rules meant to limit risky bets, a Senate subcommittee investigation has found.

COMPETITION REGULATOR MUST FORCE BANKS TO IMPROVE SERVICE, MPS SAY

(http://bit.ly/1ySroAs)

MPs have called on the competition watchdog to force high street banks to improve standards and the way they treat their customers after the Competition and Markets Authority signalled it would investigate the industry.

The Telegraph

ESPIRITO SANTO CRISIS COULD AFFECT PORTUGAL'S ECONOMY, WARNS PRESIDENT ANIBAL CAVACO SILVA

(http://bit.ly/Wt84vU)

The president of Portugal has warned that the financial crisis gripping the Espirito Santo family could affect the country's economy.

JUNCKER FACES POLITICAL TEST AS FINES LOOM ON ILLEGAL GERMAN TRADE SURPLUS

(http://bit.ly/UnMual)

Germany's current account surplus is the largest ever recorded in proportional terms and far above the threshold for EU sanctions, posing a major political test for the incoming commission of Jean-Claude Juncker.

Sky News

GLENFIDDICH EYES 100 MLN STG DRAMBUIE SCOTCH MERGER

(http://bit.ly/1p8mlrp)

The family-owned business behind Glenfiddich and Grant's is examining a 100 million pound takeover of Drambuie, the liqueur reputed to be made from a recipe concocted by Bonnie Prince Charlie.

BBA IN TALKS ABOUT PAYMENTS COUNCIL MERGER

(http://bit.ly/1wQFvUa)

The banking industry's main lobbying group, British Bankers' Association, is considering proposals to merge with at least two of its peers amid pressure from leading members to reduce costs levied by trade organisations.

Fly On The Wall Pre-Market Buzz

ANALYST RESEARCH

Upgrades

Allergan (AGN) upgraded to Buy from Neutral at UBS
American Axle (AXL) upgraded to Neutral from Underweight at JPMorgan
Diamondback Energy (FANG) upgraded to Buy from Neutral at Roth Capital
Digital Realty (DLR) upgraded to Buy from Hold at Deutsche Bank
Five Below (FIVE) upgraded to Outperform from Market Perform at Wells Fargo
Gas Natural (EGAS) upgraded to Buy from Hold at Wunderlich
Hasbro (HAS) upgraded to Overweight from Equal Weight at Barclays
Huntington Bancshares (HBAN) upgraded to Outperform at Keefe Bruyette
Realogy (RLGY) upgraded to Buy from Neutral at Citigroup
Sanmina (SANM) upgraded to Hold from Sell at Deutsche Bank
Trex Company (TREX) upgraded to Buy from Hold at Stifel
VCA Inc. (WOOF) upgraded to Hold from Sell at Stifel
Valspar (VAL) upgraded to Conviction Buy from Neutral at Goldman

Downgrades

Amazon.com (AMZN) downgraded to Neutral from Buy at Citigroup
Arcos Dorados (ARCO) downgraded to Underweight from Neutral at HSBC
Cadence Design (CDNS) downgraded to Neutral from Overweight at JPMorgan
Matador (MTDR) downgraded to Hold from Buy at Stifel
SunTrust (STI) downgraded to Equal-Weight from Overweight at Evercore

Initiations

Abengoa Yield (ABY) initiated with an Equal Weight at Morgan Stanley
Actinium Pharmaceuticals (ATNM) initiated with a Buy at Canaccord
Chambers Street Properties (CSG) initiated with a Neutral at SunTrust
Minerals Technologies (MTX) initiated with an Outperform at Wedbush
NextEra Energy Partners (NEP) initiated with a Buy at BofA/Merrill
NextEra Energy Partners (NEP) initiated with a Hold at Deutsche Bank
NextEra Energy Partners (NEP) initiated with a Hold at KeyBanc
NextEra Energy Partners (NEP) initiated with a Neutral at Goldman
NextEra Energy Partners (NEP) initiated with a Neutral at UBS
NextEra Energy Partners (NEP) initiated with an Equal Weight at Morgan Stanley
NextEra Energy Partners (NEP) initiated with an Outperform at BMO Capital
QIWI (QIWI) initiated with a Positive at Susquehanna
Quality Systems (QSII) initiated with a Buy at Topeka
Trinseo S.A. (TSE) initiated with a Buy at Deutsche Bank
Trinseo S.A. (TSE) initiated with a Buy at Goldman
Trinseo S.A. (TSE) initiated with a Buy at Jefferies
Trinseo S.A. (TSE) initiated with a Neutral at Citigroup
Trinseo S.A. (TSE) initiated with an Equal Weight at Morgan Stanley
Trinseo S.A. (TSE) initiated with an Outperform at Wells Fargo
Washington Prime Group (WPG) initiated with a Neutral at SunTrust

COMPANY NEWS

Johnson & Johnson (JNJ) announced a $5B share repurchase program
Credit Suisse (CS) said it will exit commodities trading business
CIT Group (CIT) to acquire OneWest Bank for $3.4B in cash and stock
Time Warner (TWX) amended by-laws to block holders ability to call special meeting (FOXA)
TG Therapeutics announced preliminary clinical results from its ongoing Phase I study of TG-1101, and said 100% of CLL/SLL patients had significant nodal reduction with either a normalization of or greater than or equal to 80% reduction in Blood Lymphocyte Count.
Kindred Healthcare (KND) offered to acquire Gentiva Health (GTIV) for $17.25 per share. Kindred said it is willing to consider further increasing its offer for Gentiva
Netflix reported Q2 total streaming net additions of 1.69M. Said policy goal is for DOJ/FCC to block Comcast (CMCSA), TWC (TWC) deal

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Verizon (VZ), Polaris Industries (PII), Signature Bank (SBNY), New Oriental Education (EDU), PLX Technology (PLXT), Crocs (CROX), First Interstate (FIBK), First Defiance Financial (FDEF), Helix Energy (HLX), Crown Holdings (CCK), Ultra Clean (UCTT), Texas Instruments (TXN), Artisan Partners (APAM), Zions Bancorp (ZION), PolyOne (POL), Waste Connections (WCN), Woodward (WWD), Rambus (RMBS), Cadence Design (CDNS), Sanmina (SANM), Trustco Bank (TRST), Chipotle (CMG), MainSource Financial (MSFG)

Companies that missed consensus earnings expectations include:
Carlisle (CSL), Del Frisco's (DFRG), Brown & Brown (BRO), BBCN Bancorp, Inc. (BBCN), Old Line Bancshares (OLBK), AptarGroup (ATR), EMC Insurance (EMCI), TG Therapeutics (TGTX), Wilshire Bancorp (WIBC), Washington Trust Bancorp (WASH), Netflix (NFLX)

Companies that matched consensus earnings expectations include:
Regions Financial (RF), DuPont (DD), BancorpSouth (BXS), Steel Dynamics (STLD), Consumer Portfolio (CPSS), Healthstream (HSTM), Rent-A-Center (RCII), Hexcel (HXL)

NEWSPAPERS/WEBSITES

Apple (AAPL) asking suppliers to produce 80M large-screen iPhones, WSJ reports
JANA investor letter discloses $1B position in Apache (APA), Bloomberg says
China food scandal spreads, drags in Starbucks (SBUX), Burger King (BKW) and McDonald's (MCD) products in Japan, Reuters reports
Yahoo (YHOO) paying over $200M for Flurry, TechCrunch reports
Viacom's (VIA) music group and Spotify form music streaming partnership, WSJ reports
Global notebook shipments to increase 4.3% in Q3, DigiTimes Research says
McDonald's (MCD) stock doesn't look ready for gains, Barron's says

SYNDICATE

Blue Hills Bank (BHBK) 27.8M share Secondary priced at $10.00
Diamondback Energy (FANG) 5M share Secondary priced at $87.00
FBR & Co. (FBRC) announces self-tender offer to purchase up to 1M shares
Pretium Resources (PVG) files to sell $60M in common stock
Regency Energy Partners (RGP) files to sell 8.3M units for limited partners
Tallgrass Energy (TEP) files to sell 7M units representing limited partners

• Here come the gates which we predicted in 2010: SEC Is Set to Approve Money-Fund Rules (WSJ)
• Dick's cuts 400 jobs as golf now less popular (MW)
• Kerry arrives in Israel, pushes for peace (Reuters)
• Pay Penalty Haunts Recession Grads as U.S. Economy Mends (BBG)
• Appeals Courts Issue Conflicting Rulings on Health-Law Subsidies (WSJ)
• Rebel Stronghold Donetsk Holds Breath as Shellfire Mounts (BBG)
• Business executive wins Georgia Republican runoff in U.S. Senate race (Reuters)
• Five held in China food scandal probe, including head of Shanghai Husi Food (Reuters)
• Jobs Hold Sway Over Yellen-Carney as Central Banks Splinter (BBG)
• With sales sputtering, Apple's iPad looks to IBM alliance (Reuters)
• Plane with first coffins of Malaysian airliner victims leaves Ukraine (Reuters)
• Saudi Stock Opening Shut to Some as Hot Money Unwanted (BBG)

Overnight Media Digest

WSJ

* Two U.S. appeals courts issued conflicting rulings on subsidies for health coverage purchased on federal insurance exchanges, clouding a major part of Obama's health law. (http://on.wsj.com/1pb81yo)

* The Federal Reserve Bank of New York found that Deutsche Bank AG's U.S. operations suffer from a litany of serious financial reporting problems that the lender has known about for years but not fixed. (http://on.wsj.com/1jUoOXe)

* The U.S. barred flights to Israel's main international airport outside Tel Aviv for at least 24 hours after a rocket from Gaza landed nearby, angering Israel, which said the ban was a boon to Hamas's efforts to isolate the country. (http://on.wsj.com/1mCogQJ)

* The new rules by Securities and Exchange Commission are likely aimed at avoiding a repeat of investor stampede out of the $2.6 trillion industry that threatened to freeze corporate lending during the 2008 financial crisis. According to the plan, "prime" money funds whose shares are held by corporations and large institutional investors will have to abandon a stable $1-a-share price and float in value like other mutual funds. The plan also would allow all funds to temporarily stop investors from redeeming shares in times of market tumult or impose fees on them to do so. (http://on.wsj.com/1udyPmN)

* A group of cosmetics and fragrances workers at a Macy's store in Massachusetts are a big enough lot to try to unionize, the National Labor Relations Board decided in a ruling that could advance organized labor's quest to unionize subsets of workers in varied industries. (http://on.wsj.com/WAEFQe)

* Apple Inc reported a 12 percent profit growth and strong sales of iPhone. It sold about 35.2 million iPhones in the quarter, up 12.7 percent. But Apple struggled for the second consecutive quarter to sell iPads, with unit sales falling 9.2 percent after a 16 percent drop three months earlier. (http://on.wsj.com/UrjgHL)

* CIT Group Inc agreed to buy OneWest Bank NA's parent company for $3.4 billion in the largest full-bank acquisition announced since 2012. The takeover of IMB Holdco LLC, which is OneWest's parent company, will bump CIT's assets up to $67 billion. (http://on.wsj.com/1na529W)

* Blackstone Group has agreed to buy a majority stake in auto-repair shop chain Service King Collision Repair Centers from Carlyle Group LP with a view to fund the company's future growth. The deal values Service King at about $650 million. (http://on.wsj.com/1rzPuPB)

* Dick's Sporting Goods Inc is cutting hundreds of jobs in its golf division as fewer Americans hit the links. A spokeswoman for the PGA of America said more than 400 of its members who were employed as golf instructors at Dick's were notified Tuesday that they would be laid off. (http://on.wsj.com/WCcYHb)

* J.P Morgan Chase & Co is nearing a deal to sell half its stake in the portfolio of its buyout arm, One Equity Partners. J.P. Morgan is in advanced discussions with investment firms Lexington Partners LP and Carlyle Group LP's AlpInvest Partners unit, to sell half of the roughly $4.5 billion in investments One Equity manages for the bank. (http://on.wsj.com/1jUt9K9)

* William Ackman had promised a "death blow" against Herbalife Ltd, Wall Street instead gave new life to the nutritional-supplement company's stock. Ackman on Tuesday sought to prove once and for all his longstanding allegation that Herbalife is a fraud and a pyramid scheme. In a presentation, Ackman unveiled what he described as new evidence supporting his argument that the company is a "criminal enterprise." (http://on.wsj.com/1qzaUwQ)

FT

Brussels is considering whether to reopen draft antitrust settlement with Google Inc, a move that could pose regulatory challenges to the Internet giant's European operations.

ARM Holdings reported a royalty revenue rise of just 2 percent from chips shipped in products such as Samsung's and Apple's smartphones, and said it expected royalty revenue growth to reaccelerate towards a more normal level in the second half.

Respondents to a UK Treasury review have warned of potential risk to the UK and other non-euro states of losing their influence over financial legislation as a report cited significant benefits from access to the single market in financial services and the free movement of capital.

The Blue Note Milano became the first jazz club to list its shares on a stock exchange, and raised 1.4 million pounds by listing 40 of its shares on the Milan AIM Small-Cap Index.

Secure Trust Bank, which was spun out of the Arbuthnot Banking Group in 2011 and is its retail banking arm, aims to launch an invoice financing business this quarter.

NYT

* President Obama, citing a "skills gap" that prevents many unemployed workers from qualifying for new jobs, signed legislation on Tuesday to strengthen federal job-training programs. The new law seeks to impose more accountability on the federal-state training partnerships by requiring a "job-driven checklist" to ensure that federal money is used effectively and by providing data-driven tools to give workers better information about career prospects. (http://nyti.ms/1sOqeFL)

* On Tuesday, U.S. small-business lender CIT Group Inc said it would acquire the bank that rose from IndyMac's ashes - OneWest Bank Group LLC - paying $3.4 billion in cash and stock to its hedge fund and private equity owners. The deal illustrates how casualties of the financial crisis have moved on, and even prospered. (http://nyti.ms/1udFCNx)

* Despite widespread anger over the Malaysia Airlines plane's downing, European nations have shied away from measures that would further isolate Russia. At a meeting in Brussels, foreign ministers of the European Union's 28 member states agreed to draw up a new, broader list of targets for sanctions, including Russian individuals and entities, said Catherine Ashton, the European Union's foreign affairs chief. (http://nyti.ms/1nSXB2c)

* State attorneys general must investigate, and consider taking legal action against, e-cigarette companies that appear to be using some of the same advertising tactics that once drew young adults into smoking, a Kentucky deputy attorney general told his law enforcement colleagues gathered in Park City, Utah for a retreat to discuss emerging legal issues in states nationwide. (http://nyti.ms/1ty37g8)

* Top properties in Hong Kong are resisting market forces. While cooling measures have affected most real estate, the very rich are holding onto the city's most expensive homes.(http://nyti.ms/1txRxBv)

* For Apple Inc, the iPhone continues to be the device that makes the company tick. While top rivals like Samsung Electronics are starting to show weakness in phone sales, Apple sold 35.2 million iPhones in the third fiscal quarter, up 13 percent from the period a year ago. (http://nyti.ms/1p8NIic)

* Microsoft Corp Chief Executive Satya Nadella said the two most important trends for the company's future are mobile and cloud computing. But it is much better in cloud computing than in mobile. (http://nyti.ms/1lsY4Iv)

* Chrysler Group LLC said on Tuesday that it was recalling an undisclosed number of older Jeep SUVs to correct an ignition-related stalling problem similar to the flaw that has consumed General Motors Co this year. The recall could potentially cover 792,300 Jeep Commanders and Grand Cherokees worldwide that were manufactured between 2005 and 2007. (http://nyti.ms/1nSQK8W)

* Deutsche Bank AG's primary regulator in the United States, the Federal Reserve Bank of New York, has found serious problems with the bank's financial reporting procedures and oversight. (http://nyti.ms/1yZyoLQ)

* LinkedIn Corp made its second acquisition in as many weeks, agreeing to buy the marketing firm Bizo for about $175 million. Last week, LinkedIn bought Newsle, a start-up that searches the Internet for relevant articles. (http://nyti.ms/1rqTEI5)

Canada

THE GLOBE AND MAIL

* U.S. ambassador to Canada Bruce Heyman had little to say on Tuesday about a possible decision on the controversial Keystone XL pipeline project, but that didn't stop Canada's ambassador to the United States from bluntly stating there's no proof that the pipeline shouldn't be built. (http://bit.ly/1A4JPDx)

* U.S. flights to Israel were grounded on Tuesday by the Obama administration, fearing missile strikes at Tel Aviv's airport could imperil U.S. airliners and passengers. Air Canada also canceled its Tuesday evening overnight flight. (http://bit.ly/1p7mrg8)

Reports in the business section:

* Target Corp is pushing its suppliers in Canada to give it a 2 percent cost break to help the U.S. discounter turn around its struggling Canadian operations and win an increasingly tough retail battle. (http://bit.ly/WCzaRw)

NATIONAL POST

* Canadian Prime Minister Stephen Harper does not intend to testify in the trial of suspended senator Mike Duffy because he doesn't have any useful information to offer, his office said on Tuesday. The Royal Canadian Mounted Police laid 31 criminal charges against Duffy last week, and experts say Harper could be called to testify, although he could invoke parliamentary privilege to avoid the witness box. (http://bit.ly/WCAh3y)

* The federal New Democratic Party (NDP) wants the House of Commons to pay for the party's legal costs in a lawsuit it filed against the House board that monitors spendings of members of Parliament. The NDP made the request on Tuesday during a closed-door meeting of the Board of Internal Economy. (http://bit.ly/1x02lIU)

FINANCIAL POST

* Ulyanovsk in Russia will be home to Bombardier Inc's newest factory if a planned joint venture comes to fruition. But the escalating crisis in Ukraine and the threat of additional sanctions against Moscow could halt progress on those talks just as Bombardier gets set to grab a piece of the growing Russian aviation market. (http://bit.ly/Us3VGM)

* Canadian negotiators will meet with their Japanese counterparts next week in Ottawa for another round of talks on a free-trade agreement between the two countries. (http://bit.ly/1ueqe3n)

China

CHINA SECURITIES JOURNAL

- The risk of credit default may increase significantly as the number of bonds due to mature rises, along with the pressure of high yields and a slowdown in economic growth, the newspaper said in a commentary.

SHANGHAI DAILY

- Chinese consumers in Shanghai will be entitled to a no-questions-asked refund for products bought online, according to a new local law approved by the Shanghai People's Congress. China's e-commerce sector has been booming, creating the need for greater consumer protection online.

CHINA DAILY

- In the wake of typhoon Rammasun, the strongest typhoon to hit southern China in four decades, 800,000 people have been resettled and 240,000 are in urgent need of basic necessities, local authorities told the paper.

Hong Kong

SOUTH CHINA MORNING POST

-- A radar station that is sitting on public land at the top of Tai Mo Shan in Hong Kong has been secretly handed to the People's Liberation Army, according to lawmaker Kenneth Chan Ka-lok, who is threatening to take the government to court for keeping the public in the dark. (bit.ly/1pCIKvL)

-- Twelve mainland airports will be hit by widespread delays until the middle of next month because of what are believed to be PLA military exercises. China's civil aviation regulator said that flights in and out of airports, including in Shanghai, Nanjing and Wuhan, would be affected. (bit.ly/Ur1sfT)

-- Confidence among Hong Kong's small and medium-sized enterprises is improving but investment sentiment has fallen for two consecutive quarters, a new survey for the Hong Kong Productivity Council shows. (bit.ly/1pbuQSq)

THE STANDARD

-- Next Media Ltd boss and strident Beijing critic Jimmy Lai Chee-ying said he did nothing wrong in donating some HK$40 million ($5.2 million) to pan-democrats, including five legislators, insisting it was his own personal money to hand out and not received from foreign governments. (bit.ly/1wY2jBc)

-- Retail rents at top-tier districts in Hong Kong may fall up to 8 percent this year amid a slowdown in sales and high rents. Cushman & Wakefield Executive Director Michelle Woo said cautious sentiment and high rents in Central, Causeway Bay and Tsim Sha Tsui are forcing retailers to leave. (bit.ly/1nSz5hP)

-- China Telecom launched its 4G service covering 16 mainland cities, offering monthly plans ranging from 59 yuan ($9.51) to 599 yuan. (bit.ly/1kb3Qnp)

HONG KONG ECONOMIC JOURNAL

-- Macau is expected to post another month of decline in gaming revenue, down 2 to 4 percent year on year in July to between 28.5 billion patacas ($3.57 billion) and 29 billion patacas, according to analyst estimates.

Britain

The Times

RBS IN THE DOCK OVER CLAIMS IT MISLED MPS

(http://thetim.es/1pCr8jw)

Royal Bank of Scotland has been heavily criticised for misleading MPs over its contentious division for struggling businesses.

WEIR'S NOT FINISHED WITH ITS PLANS FOR EXPANSION

(http://thetim.es/UqRKdb)

Weir Group, which tried and failed to tie up with Metso, has since been weighing whether to bid for Outotec , another Helsinki-listed company in much the same market of producing industrial pumps for the mining industry.

The Guardian

MEDIACITY LEADS TO SALFORD BECOMING THE UK'S PROPERTY HOT SPOT

(http://bit.ly/1o7GKgZ)

Property values in the Greater Manchester city of Salford have risen faster than in any other town in Britain since the start of 2014, as the area continues to benefit from the relocation of the BBC and other broadcasters to the waterfront MediaCity development.

EU REPORT FINDS NO EVIDENCE TO SUPPORT SWEEPING IMMIGRATION REFORMS

(http://bit.ly/1nkxfKx)

A government review looking into freedom of movement across the EU has not recommended any sweeping reforms to immigration rules in a report likely to disappoint Conservative Eurosceptics.

The Telegraph

EUROPE BRACED FOR ANY GAS CRISIS AS RUSSIA SANCTIONS ESCALATE

(http://bit.ly/UqRLOs)

Europe has enough spare capacity in liquefied natural gas to meet a large part of the region's needs if Russia retaliates against the latest EU sanctions by restricting gas supplies.

ESPIRITO SANTO HOLDING FIRM PLACED IN RECEIVERSHIP

(http://bit.ly/1rq7fz8)

The Espirito Santo family's holding company has been placed in receivership. Luxembourg's district court said it had agreed to a request from Espirito Santo International that it be placed under "controlled management".

Sky News

UK PREPARES FOR EU RULING ON ENERGY STATE AID

(http://bit.ly/1sMCfeK)

The European Commission is likely to announce its ruling after several months examining a form of subsidy guaranteeing long-term prices to companies for supplying renewable energy sources.

BANKS FACE 1.5 BLN STG HIT FROM PPI CLAIMS DELUGE

(http://bit.ly/1rn55At)

Britain's largest high street banks will announce next week that they are setting aside more than 1 billion pound ($1.71 billion)in additional provisions to compensate customers who were mis-sold payment protection insurance.

The Independent

PAUL FISHER: "THE BANK DELIVERED THE RECOVERY"

(http://ind.pn/1rIk4nK)

Paul Fisher, who has left the Bank of England's Monetary Policy Committee after five years, defends decisions made at the height of the crisis in an interview.

ROYAL MAIL FRETS OVER AMAZON THREAT TO PARCELS BUSINESS

(http://ind.pn/1rIk4nK)

Shares in Royal Mail today touched their lowest level since October's privatisation as it delivered the gloomy news that revenues at its crucial parcel division are being threatened by strong competition from Amazon.

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
MBA mortgage applications for week of July 18 at 7:00

ANALYST RESEARCH

Upgrades

Allscripts (MDRX) upgraded to Buy from Hold at Jefferies
Intuitive Surgical (ISRG) upgraded to Buy from Hold at Stifel
Intuitive Surgical (ISRG) upgraded to Outperform from Market Perform at Raymond James
Kimberly Clark (KMB) upgraded to Equal Weight from Underweight at Barclays
Lennox (LII) upgraded to Buy from Neutral at Goldman
Microsoft (MSFT) upgraded to Neutral from Underperform at BofA/Merrill
Microsoft (MSFT) upgraded to Outperform from Sector Perform at Pacific Crest
Munich Re (MURGY) upgraded to Overweight from Neutral at JPMorgan
Prologis (PLD) upgraded to Hold from Sell at Stifel
Spansion (CODE) upgraded to Buy from Hold at Jefferies

Downgrades

21st Century Fox (FOXA) downgraded to Market Perform from Outperform at Cowen
Brinker (EAT) downgraded to Sector Perform from Outperform at RBC Capital
Cubist (CBST) downgraded to Market Perform from Outperform at JMP Securities
DuPont (DD) downgraded to Neutral from Overweight at JPMorgan
FirstMerit (FMER) downgraded to Neutral from Overweight at JPMorgan
Hexcel (HXL) downgraded to Hold from Buy at Canaccord
Juniper (JNPR) downgraded to Neutral from Buy at BofA/Merrill
King Digital (KING) downgraded to Neutral from Buy at BofA/Merrill
Lexmark (LXK) downgraded to Underperform from Market Perform at Raymond James
Liberty Property (LPT) downgraded to Market Perform from Outperform at Wells Fargo
Liberty Property (LPT) downgraded to Neutral from Buy at UBS
Lufthansa (DLAKY) downgraded to Neutral from Buy at Nomura
McDonald's (MCD) downgraded to Neutral from Outperform at RW Baird
McDonald's (MCD) downgraded to Neutral from Positive at Susquehanna
New Oriental Education (EDU) downgraded to Hold from Buy at Jefferies
New Oriental Education (EDU) downgraded to Perform from Outperform at Oppenheimer
Nintendo (NTDOY) downgraded to Hold from Buy at Jefferies
Time Warner (TWX) downgraded to Market Perform from Outperform at Cowen
Timmins Gold (TGD) downgraded to Market Perform from Outperform at Cowen
United Technologies (UTX) downgraded to Market Perform from Outperform at Wells Fargo
Viacom (VIAB) downgraded to Market Perform from Outperform at Cowen
Xilinx (XLNX) downgraded to Market Perform from Outperform at BMO Capital
Xilinx (XLNX) downgraded to Market Perform from Outperform at William Blair
Xilinx (XLNX) downgraded to Neutral from Buy at BofA/Merrill

Initiations

Actavis (ACT) initiated with a Buy at Deutsche Bank
Aimco (AIV) initiated with a Neutral at Mizuho
American Realty (ARCP) initiated with a Perform at Oppenheimer
AvalonBay (AVB) initiated with a Neutral at Mizuho
Brandywine Realty (BDN) initiated with a Neutral at Mizuho
Columbia Property Trust (CXP) initiated with a Perform at Oppenheimer
Douglas Emmett (DEI) initiated with a Buy at Mizuho
Endo (ENDP) initiated with a Buy at Deutsche Bank
Envision Healthcare (EVHC) initiated with a Market Perform at Wells Fargo
Equity Residential (EQR) initiated with a Neutral at Mizuho
Essex Property Trust (ESS) initiated with a Buy at Mizuho
Gentherm (THRM) initiated with an Overweight at JPMorgan
HCP Inc. (HCP) initiated with a Buy at Mizuho
Health Care REIT (HCN) initiated with a Neutral at Mizuho
Hospira (HSP) initiated with a Hold at Deutsche Bank
Jazz Pharmaceuticals (JAZZ) initiated with a Buy at Deutsche Bank
Mallinckrodt (MNK) initiated with a Buy at Deutsche Bank
Mellanox (MLNX) initiated with an Outperform at Imperial Capital
Mid-America Apartment (MAA) initiated with an Outperform at Oppenheimer
Mylan (MYL) initiated with a Buy at Deutsche Bank
Parkway Properties (PKY) initiated with a Neutral at Mizuho
Perrigo (PRGO) initiated with a Buy at Deutsche Bank
Retail Opportunity Investments (roic) initiated with a Neutral at Citigroup
Salix (SLXP) initiated with a Hold at Deutsche Bank
Teva (TEVA) initiated with a Buy at Deutsche Bank
Trinseo S.A. (TSE) initiated with an Equal Weight at Barclays
Valeant (VRX) initiated with a Hold at Deutsche Bank
Ventas (VTR) initiated with a Buy at Mizuho

COMPANY NEWS

Apple (AAPL) said it sold sold 35.2M iPhones in Q3
Safeway (SWY) received subpoena from U.S. DEA concerning the company’s record keeping, reporting and related practices associated with the loss or theft of controlled substances
Broadcom (BRCM) said it will wind down the cellular baseband chip business
Unwired Planet (UPIP) filed a lawsuit against Microsoft (MSFT) for breach of contract
Ballard Power Systems (BLDP) received a purchase order from New Flyer Industries for the delivery of Ballard's first next-generation FCvelocity-HD7 fuel cell power module to a North American bus manufacturer
Puma Biotechnology (PBYI) reported positive top line results from Phase III PB272 trial
Chrysler (FIATY) recalled older-model SUVs over ignition switch concerns

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Apple (AAPL), Thermo Fisher (TMO), Juniper (JNPR), Broadcom (BRCM), Customers Bancorp (CUBI), MarketAxess (MKTX), Air Products (APD), Evercore Partners (EVR), W.R. Grace (GRA), TE Connectivity (TEL), Check Point (CHKP), BE Aerospace (BEAV), STMicroelectronics (STM), Flagstar Bancorp (FBC), Linear Technology (LLTC), Merchant Bancshares (MBVT), Cathay General (CATY), Rush Enterprises (RUSHA), ViewPoint Financial (VPFG), Trustmark (TRMK), Xilinx (XLNX), FMC Technologies (FTI), ACE Limited (ACE), Vascular Solutions (VASC), Xoom (XOOM), Exponent (EXPO), Meridian Interstate Bancorp (EBSB), ZixCorp (ZIXI), IDEX Corp. (IEX), Discover (DFS), Manhattan Associates (MANH), Covanta (CVA), iRobot (IRBT), Electronic Arts (EA), Hawaiian Holdings (HA), VMware (VMW), Cubist (CBST)

Companies that missed consensus earnings expectations include:

Microsoft (MSFT), Potlatch (PCH), Praxair (PX), Whirlpool (WHR), JAKKS Pacific (JAKK), ClickSoftware (CKSW), Unisys (UIS), Fulton Financial (FULT), Eagle Materials (EXP), Forward Air (FWRD), Intuitive Surgical (ISRG), Bridge Capital Holdings (BBNK)

Companies that matched consensus earnings expectations include:

Pacific Premier (PPBI), First Midwest (FMBI), First Busey (BUSE), F.N.B. Corp. (FNB), UMB Financial (UMBF), Eagle Bancorp (EGBN), Ameris Bancorp (ABCB), Pzena Investment (PZN), Pzena Investment (PZN), Total System (TSS)

NEWSPAPERS/WEBSITES

DuPont (DD) to lay off 'low single digits' of employees, Bloomberg reports
Pepsi (PEP) called on by Calstrs to give Trian place on board, FT reports
GM (GM) for years changed auto ignitions over stalling, WSJ reports
StubHub (EBAY) accounts targeted by cyber thieves, AP reports
YouTube's (GOOG) Chris LaRosa quits as music head, WSJ reports
JPMorgan (JPM) in advanced talks to sell half its stake in buyout arm, WSJ says
Repsol (REPYY) exploring bid for Talisman Energy (TLM), Bloomberg reports
Google (GOOG), Spotify didn't talk about a deal, Re/code says

SYNDICATE

BofI Holding (BOFI) files to sell $50M in common stock
Farmland Partners (FPI) files to sell 3.72M shares of common stock
La Jolla (LJPC) files to sell common stock
Medical Transcription Billing (MTBC) 4.08M share IPO priced at $5.00
MeetMe (MEET) announces proposed public offering of common stock

• The market in one sentence: Buying on Dips Pays Most in Five Years as Stocks Rebound (BBG)
• Europe subdued, Russia shares tumble on new sanctions (Reuters)
• Chinese Data Don’t Add Up (WSJ)
• Argentine Default Drama Nears Critical Stage (WSJ)
• Global Pressure Mounts on Israel to End Gaza Fighting (BBG)
• Ukraine troops advance as experts renew attempt to reach crash site (Reuters)
• Prospects Brighten for Republicans to Reclaim a Senate Majority (WSJ)
• Europe’s banking union faces legal challenge in Germany (FT)
• Investors Bet on China's Large Property Developers (WSJ)
• Hague court orders Russia to pay over $50 billion in Yukos case (Reuters)
• Luxembourg Covets Offshore Trade in China's Yuan (WSJ)
• Time Machine Finds Bulls Run Amok at ’07 Stock-Market Top (BBG)
• Microsoft says government officials make sudden visits to China offices (Reuters)
• Equinox Fitness Is Buying Rest of Millennium’s Gyms (NYT)

Overnight Media Digest

WSJ

* With 100 days to go until the midterm election, unexpectedly strong bids by several Republican candidates and President Barack Obama's continued sagging approval ratings are boosting GOP chances of capturing a Senate majority. (http://on.wsj.com/1l5WnRi)

* The chaos that followed the crash of Malaysian Airline System Bhd's Flight 17 has added to the worry that families will never learn exactly what happened. (http://on.wsj.com/WJaO8L)

* Twenty-First Century Fox Inc is prepared to offer shareholders of Time Warner Inc board representation as part of its bid to acquire the media company, according to a person familiar with the matter. (http://on.wsj.com/1AnuQVn)

* Luxembourg is seeking to be at the heart of a new trend in global finance: the rising use of China's currency outside its home market. (http://on.wsj.com/1kibHzD)

* Regulators have questioned JPMorgan Chase & Co executives in recent months about whether the firm steers private-banking clients to its own investment products, according to people familiar with the matter. (http://on.wsj.com/1ux42Si)

* The fight over Herbalife Ltd has taken on a more personal, distinctly 19th century flavor. Rather than a battle among faceless institutions, as is usually the case today, Herbalife features a handful of financiers - Bill Ackman, Carl Icahn and George Soros - in a high-stakes duel. (http://on.wsj.com/UwjPjT)

* Deutsche Bank co-CEO Anshu Jain has in the past two years made it a top priority to get the lender's investment bank and wealth-management business to work to each other's benefit. (http://on.wsj.com/1rW82qQ)

* Hospira Inc has emerged as a bidder for Danone's medical-nutrition unit in a deal that could be worth about $5 billion and mark the latest in a flurry of so-called inversion deals. (http://on.wsj.com/1xmwTES)

* U.S.-based meat supplier OSI Group Inc said it would withdraw all products manufactured by its embattled Shanghai unit from the marketplace, a move to control damage that has hit fast-food companies across China, in Hong Kong and in Japan.(http://on.wsj.com/1nMmxP0)

* Tencent Holdings Ltd will use its alliance with online retailer JD.com Inc to sell in advance Microsoft Corp's Xbox One consoles in China, as it ramps up efforts to compete with electronic-commerce giant Alibaba Group Holding Ltd <IPO-BABA.N>. (http://on.wsj.com/1rP0RBT)

* Volkswagen AG's Audi on Saturday announced price cuts for spare parts of up to 38 percent in China, the company's largest market, as the Chinese government steps up its scrutiny of foreign luxury-auto makers. (http://on.wsj.com/1pu1wUO)

* The Justice Department indicted FedEx Corp earlier this month, charging conspiracy to distribute controlled substances because of the shipper's alleged role in transporting painkillers and other prescription drugs that had been sold illegally. FedEx is scheduled to be arraigned in the proceeding Tuesday morning in San Francisco. (http://on.wsj.com/1AnXRQO)

FT

French dairy group Danone has been in talks for several weeks to sell its medical nutrition business to U.S. rival Hospira in a deal that would let the buyer move its tax base to Europe.

UBS was in talks with French authorities over a 100 million euro ($134.29 million) settlement to resolve an investigation into how the Swiss wealth manager dealt with some of its rich clients, before discussions collapsed two weeks ago.

Underwriters are reviewing policies for aircraft involved in hostile acts such as the downing of Malaysia Airlines flight MH17 as the airline insurance industry faces its most expensive year since the 9/11 attacks in 2001

Diageo, the world's largest spirits maker, will say when it reports full-year results on Thursday that it is writing down the value of its majority stake in its troubled premium Chinese baijiu brand.

NYT

* About 1,200 fast-food workers from McDonald's, Burger King and other chains crowded over the weekend into an expo center in the suburb west of Chicago to pursue their ambitious goal of creating a $15-an-hour wage floor for the nation's four million fast-food workers. (http://nyti.ms/1AnVLAm)

* The Federal Reserve's policy-making committee, which meets Tuesday and Wednesday, is widely expected to announce another cut in its monthly bond purchases, to $25 billion, in keeping with its declared intention to end the purchases in October.(http://nyti.ms/UEqTuo)

* Reddit, a community-driven site, is trying to jump-start its advertising business and reinforce some smaller moneymaking efforts. Reddit's focus is to figure out how to become a real business without changing the essential nature of the service and alienating its powerhouse constituency of 114 million intensely loyal monthly users. (http://nyti.ms/1nxfj03)

* The British government plans to make more land available for licensing for oil and natural gas exploration in the first such expansion since 2008. The government wants new sources of oil and gas to help replace Britain's declining offshore production in the North Sea, to create jobs and to ease growing dependence on fuel imports, especially from Russia. (http://nyti.ms/X1vvwr)

* The multi-billion dollar dispute over Guidant between Johnson & Johnson and Boston Scientific Corp finally heads for a trial. After virtually no movement in the case for two years, a federal judge has denied a motion for summary judgment that would have put the matter to rest. (http://nyti.ms/1xmzIFV)

* Equinox Fitness said it will buy rest of Millennium's Gyms for about $110 million. The purveyor of expensive workout centers and risqué advertising, Equinox is about to announce on Monday that it had acquired Sports Club/LA gyms in New York and four other cities, as well as the Reebok Sports Club/NY gym on the Upper West Side of Manhattan. All will soon bear the Equinox brand and feature the company's classes and products. (http://nyti.ms/1rt3uqV)

* Hospira, a Midwestern medical device maker is in talks to pay about $5 billion for the medical nutrition business of the French consumer group Danone. The deal, if completed, would allow Hospira to re-incorporate overseas in a so-called inversion, lowering its tax rate and freeing its foreign cash. (http://nyti.ms/1mTmNFz)

* Alan Greenberg, who led Bear Stearns Co through its rise and fall, died on Friday at the age of 86. Greenberg as chief executive of Bear Stearns Co transformed a small bond shop into the fifth-largest U.S. securities firm before it collapsed in 2008 in one of the key events of the global credit crisis. (http://nyti.ms/1uxe31I)

Canada

THE GLOBE AND MAIL

* Canadian diplomatic staff in Tripoli have taken the precaution of working out of an undisclosed location, as Libya faces increasingly intense intermilitia violence that this weekend that cost dozens of civilian lives and prompted the U.S. to temporarily shutter its embassy. (http://bit.ly/1xnw66x)

* Parts of Ontario suffered some severe thunderstorms on Sunday night, including an unconfirmed report of a tornado near the shores of Lake Huron. Environment Canada forecaster Jason Burford says the storm activity stretched across southern Ontario from Windsor to Kingston. (http://bit.ly/1ozti5R)

Reports in the business section:

* Quebecor Inc's management will face further questions about plans for a potential wireless expansion when the company reports second quarter results on Thursday. (http://bit.ly/1o5wktw)

NATIONAL POST

* The Canadian government is not responding to a report that Germany is set to reject Canada's long sought after trade deal between Canada and the European Union. The leading German newspaper Sueddeutsche Zeitung cites diplomats in Brussels as saying Berlin won't sign the deal in its current form. (http://bit.ly/1rKj8BI)

* Two people have been killed in a small plane crash near Nanaimo on Vancouver Island. Transportation Safety Board spokesman Bill Yearwood says the plane, an "amateur built" Avid amphibious aircraft, crashed on takeoff from the Nanaimo Airport in Cassidy. (http://bit.ly/1lLV1LE)

FINANCIAL POST

* PetroChina Co Ltd, the Chinese oil giant rocked by a corruption scandal that has spread to its Canadian unit, is trying to reduce a C$1.23 billion payment to Calgary-based Athabasca Oil Corp for oil sands properties it believes are of poorer than expected quality, a source close to PetroChina said Friday. (http://bit.ly/1uygCAI)

* Airline stocks have often found it hard to win over investors in recent times. But investors are now finding many reasons to love the airlines. Their stocks are soaring, making them one of the best-performing segments on the U.S. and Canadian markets in the past year. (http://bit.ly/1kgzvUt)

Hong Kong

SOUTH CHINA MORNING POST

-- Genetically modified rice, which is illegal to sell or grow commercially on the mainland, has been found on sale in a large supermarket in Wuhan. State television CCTV said there was also evidence that genetically modified rice had been sold in Hunan, Anhui and Fujian. (http://bit.ly/1l5Mvad)

-- McDonald's issued another apology on Sunday for its part in the rotten meat scandal, saying a "lack of clarity" had confused people. McDonald's managing director in Hong Kong, Randy Lai Wai-sze, said the company had "not communicated well" and promised it would never again source from the Shanghai Husi plant at the heart of the scandal. (http://bit.ly/1ptAeOh)

-- Swire Pacific's core property and aviation businesses face major structural shifts, chairman John Slosar said. He said residential property trading operations were at their cyclical peak while the performance at Cathay Pacific would be in line with an industry that had underperformed expectations worldwide. (http://bit.ly/1mT3TyM)

THE STANDARD

-- A group of bloggers has set up a Facebook page for people's commentaries on politics and other issues following the sudden closure of House News, a pro-democracy news site with strong ties to media mogul Jimmy Lai Chee-ying. Within 20 hours of it being set up on Saturday night, the House News Bloggers Group received more than 20,000 likes. (http://bit.ly/WJ7tq7)

-- Hong Kong Airlines, a local budget carrier partly owned by Hainan Airlines, will submit its listing application by next month and is expected to open the retail book in October at the earliest. It plans to raise up to HK$3.9 billion in what could be Hong Kong's first dual-currency float with investors able to subscribe to shares in either yuan or Hong Kong dollars. (http://bit.ly/1rOxKyr)

HONG KONG ECONOMIC JOURNAL

-- Hong Kong Monetary Authority on Saturday injected HK$5.348 billion into the banking system, its fifteenth intervention so far this month, to meet commercial demand for the local currency.

-- Property developer Cheung Kong has generated HK$17.6 billion ($2.27 billion) revenue from flat sales so far this year, representing 58.7 percent of its HK$30 billion annual sales target this year, according to its senior management. It generated HK$5 billion from flat sales last year.

-- Bank of East Asia is expected to post an interim profit of up to HK$3.505 billion, with cross-border loan business leading the growth, while also facing challenges from increasing non-performaning loans, according to analysts.

APPLE DAILY

-- Conglomerate Hutchison Whampoa is expected to post single-digit growth in first-half earnings due to lower contribution from subsidiaries following stake sales of some of its units, according to analysts. Morgan Stanley estimates Hutchison to post a 9 percent growth in earnings at HK$13 billion, the slowest since 2009.

Britain

The Times

RBS COULD CLAW BACK BONUSES FROM TURNAROUND DIVISION

Royal Bank of Scotland could claw back millions of pounds in bonuses from staff working for its controversial turnaround unit after it was revealed that the bank has set aside 17 million pounds ($28.86 million) in pay awards. (http://thetim.es/1rVCtgS)

RECKITT BENCKISER SET TO SPLIT OFF U.S. PHARMA DIVISION

Reckitt Benckiser, the maker of Nurofen and Cillit Bang, is likely to confirm it will spin off RBP, its American pharmaceuticals division, when it announces half-year results this morning. (http://thetim.es/1lKO39G)

The Guardian

U.S. INVESTOR SUES THREE BANKS OVER SILVER PRICE

HSBC, Deutsche Bank and the Bank of Nova Scotia have been accused of attempting to rig the price of silver in the latest price fixing scandal to rock the banking industry. (http://bit.ly/WZxEbY)

STRONG POUND TRIGGERS RISE IN PROFIT WARNINGS

Profit warnings from British companies have hit a three-year high despite the improving economy, with the strong pound a growing problem for businesses with overseas operations. (http://bit.ly/1rOuRxK)

The Telegraph

SMITH & NEPHEW BOSS: 'I DON'T WANT A MEGA-MERGER'

The boss of perennial bid target Smith & Nephew has criticised "defensive" mega-mergers and tax-driven deals that have swept the healthcare sector in the last few months. Chief Executive Olivier Bohuon said he was not interested in striking a deal with another large med tech company. (http://bit.ly/1k2yn6u)

COLLINGWOOD MULLS SALE TO PRIVATE EQUITY FIRM

Learner-driver car insurance firm Collingwood Insurance Services is exploring selling the business to private equity. Sources said that a clutch of mid-market private equity firms had already been sounded out for the business which has earnings before interest, tax, depreciation and amortisation of about 6 million pounds. (http://bit.ly/1ptAEnM)

Sky News

FORMER CBI CHIEF TO AID OSBORNE MARKETS PROBE

Richard Lambert, who ran the Confederation of British Industry until 2011, will this week be appointed to scrutinise a Government-led probe into financial markets launched in the wake of a string of major trading scandals. (http://bit.ly/1prHEBD)

The Independent

VINCE CABLE GOES OFF MESSAGE ON SLOW GROWTH IN WAGES

British Business Secretary Vince Cable, in a series of articles for regional newspapers, warned that wage growth was sluggish and the economy remained stubbornly imbalanced. His comments came after Chief Secretary to the Treasury Danny Alexander and Finance Minister George Osborne trumpeted GDP figures showing growth was now at record levels. (http://ind.pn/1pr1Nrw)

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled include:
Markit U.S. services PMI for July at 9:45--consensus 59.8
Pending home sales index for June at 10:00--consensus up 0.3%

ANALYST RESEARCH

Upgrades

AbbVie (ABBV) upgraded to Buy from Neutral at UBS
Bancolombia (CIB) upgraded to Overweight from Neutral at JPMorgan
CIT Group (CIT) upgraded to Overweight from Equal Weight at Morgan Stanley
Calpine (CPN) upgraded to Conviction Buy from Buy at Goldman
DHT Holdings (DHT) upgraded to Buy from Hold at Jefferies
Dynegy (DYN) upgraded to Buy from Neutral at Goldman
Heritage Commerce (HTBK) upgraded to Outperform from Market Perform at Fig Partners
Lorillard (LO) upgraded to Neutral from Reduce at Nomura
NuStar Energy (NS) upgraded to Outperform from Neutral at Credit Suisse
NuStar GP Holdings (NSH) upgraded to Outperform from Neutral at Credit Suisse
Pitney Bowes (PBI) upgraded to Buy from Hold at Brean Capital
Prosensa (RNA) upgraded to Buy from Neutral at Roth Capital
QR Energy (QRE) upgraded to Buy from Hold at Wunderlich
Reynolds American (RAI) upgraded to Top Pick from Outperform at RBC Capital
Royal Bank of Scotland (RBS) upgraded to Neutral from Underweight at JPMorgan
Safeguard Scientifics (SFE) upgraded to Overweight from Equal Weight at First Analysis
Xerox (XRX) upgraded to Neutral from Underweight at JPMorgan
Zimmer (ZMH) upgraded to Outperform from Perform at Oppenheimer

Downgrades

AcelRx (ACRX) downgraded to Hold from Buy at Canaccord
Cisco (CSCO) downgraded to Sector Perform from Outperform at Pacific Crest
DSW (DSW) downgraded to Underperform from Neutral at Sterne Agee
DuPont Fabros (DFT) downgraded to Neutral from Buy at Citigroup
Enphase Energy (ENPH) downgraded to Hold from Buy at Deutsche Bank
Horizon Technology (HRZN) downgraded to Hold from Buy at Wunderlich
Monster Beverage (MNST) downgraded to Neutral from Buy at UBS
NRG Energy (NRG) downgraded to Buy from Conviction Buy at Goldman
PG&E (PCG) downgraded to Sell from Neutral at Goldman
Pfizer (PFE) downgraded to Market Perform from Outperform at BMO Capital
Post Properties (PPS) downgraded to Neutral from Buy at Citigroup

Initiations

Empire State Realty (ESRT) initiated with a Market Perform at Wells Fargo
FirstService (FSRV) initiated with an Outperform at RBC Capital
Interpublic Group (IPG) initiated with a Neutral at Citigroup
Minerva (NERV) initiated with a Buy at Jefferies
Minerva (NERV) initiated with an Outperform at JMP Securities
Minerva (NERV) initiated with an Outperform at RW Baird
NextEra Energy Partners (NEP) initiated with an Overweight at Barclays
Omnicom (OMC) initiated with a Sell at Citigroup
Seventy Seven Energy (SSE) initiated with a Neutral at Susquehanna
 
COMPANY NEWS
Dollar Tree (DLTR) to acquire Family Dollar (FDO) for $74.50 per share in cash, stock
Berkshire Hathaway Energy (BRK.A) received Canadian approval for AtlaLink acquisition
Tyson Foods (TSN) said Hillshire Brands (HSH) acquisition on track to close in Q4
Tyson Foods (TSN) to close three plants to improve prepared foods performance
Aspen Insurance (AHL) holders overwhelmingly rejected Endurance (ENH) authorization proposals
Federal Reserve did not object to Zions Bancorp (ZION) FY14 capital plan
Husi Shanghai said it would withdraw products from marketplace  (MCD, YUM, SBUX)

EARNINGS

Companies that beat consensus earnings expectations last night and today include:

Cal-Maine Foods (CALM), Changyou.com (CYOU), Sohu.com (SOHU), Lincoln Electric (LECO)

Companies that missed consensus earnings expectations include:

Tyson Foods (TSN), NTELOS (NTLS), TGC Industries (TGE), Blue Capital (BCRH), Hudson Valley (HVB)

NEWSPAPERS/WEBSITES

Goldman (GS) close to settling FHFA suit on faulty mortgage claims, Bloomberg reports
Hospira (HSP) in talks to acquire Danone's (DANOY) medical nutrition business, FT reports
Fox (FOXA) may be willing to give board seats to Time Warner (TWX), Bloomberg reports
GlaxoSmithKline (GSK) could eventually spin off consumer healthcare business, FT reports
JPMorgan (JPM) questioned by regulators for conclicts of interest, WSJ says
J&J (JNJ) dispute with Boston Scientific (BSX) looks set to go to trial, NY Times reports
Apple (AAPL) nears deal to buy Swell radio app for $30M, Re/code reports
Apple (AAPL) acquires book analytic startup BookLamp, TechCrunch reports
Larger iPhone could squeeze iPad sales further, Barron's says
CIT Group (CIT) still looks undervalued, Barron's says
Wal-Mart (WMT) doesn't look cheap, Barron's says
Dow Chemical (DOW) could return 20%, Barron's says
Theravance (THRX) looks overvalued, Barron's says

SYNDICATE

Seabridge Gold (SA) files to sell C$100M of common shares
Teekay LNG (TGP) files to sell $500M of common units representing limited partners
Zions Bancorp (ZION) files to sell $525M in common stock

• It wasn't Obama this time: Pakistani teen, Indian activist win Nobel Peace Prize (Reuters)
• Surging VIX Shakes Bulls as S&P 500 Charts Go Haywire (BBG)
• Global shares hit six-month low as growth worries mount (Reuters)
• Police, protesters clash in St. Louis ahead of weekend of rallies (Reuters)
• We're Sitting on 10 Billion Barrels of Oil! OK, Two (BBG)
• Spain seeks answers as seven more enter Ebola isolation (Reuters)
• Iran will sell its oil to Asia in November at the biggest discount (BBG)
• Redefining honeypot: U.S. DEA 'most interested' in U.S. investors in Canadian marijuana firms (Reuters)
• UKIP Wins First Commons District With Conservative Defector (BBG)
• Fake Ebola Patients Help Hospitals Prepare for Next Case (BBG)
• Johnson Controls Fires Consultant After Affair With CEO (BBG)
• Singapore Condo Builders Brace as $19 Billion Due (BBG)
• Fed Aim Off Target as Inflation Descends Near Danger Zone (BBG)
• IMF Urges BOJ Pragmatism on Meeting Inflation Timeframe (BBG)
• Kurdish Ammo Runs Low in Kobani as Turkey Controls Exit (BBG)
• North, South Korea Exchange Fire as Kim Extends Mystery Absence (BBG)
• Draghi Clashes With Schaeuble Over Steps for Europe (BBG)

Overnight Media Digest

WSJ

* The White House is drafting options that would allow President Obama to close the detention facility in Guantanamo Bay, Cuba, by overriding a congressional ban on bringing detainees to the United States, senior administration officials said. (http://on.wsj.com/1o2wUiP)

* Turkey's unwillingness to intervene in the battle over a predominantly Kurdish Syrian city on its border has earned the country harsh criticism from Washington, exposing a dangerous rift over how the two allies want to tackle Islamic State's rise. (http://on.wsj.com/1pXKGhK)

* With risks growing that Ebola could flare on foreign shores, the United States is calling for nations to dispatch doctors and nurses to West Africa, where thousands of lives are on the line. Few have heeded the call, but one country has responded in strength: Cuba. (http://on.wsj.com/1w8j8Kf)

* Federal investigators believe the same hackers who stole data from JP Morgan Chase & Co computers this summer also plucked some information from Fidelity Investments, according to people close to the case. It is unclear which Fidelity networks were infiltrated or what types of data were taken from the company, the people said. (http://on.wsj.com/1tIgAQx)

* Symantec Corp, which helped pioneer commercial antivirus software, said it plans to split its cybersecurity and information-management businesses into two publicly traded companies. (http://on.wsj.com/1s1wZlb)

* Endo International, which has already completed a tax-inversion deal, said it would buy Auxilium Pharmaceuticals in a $2.6 billion cash-and-stock deal. (http://on.wsj.com/10Yf1ar)

* Distressed Apple Inc supplier GT Advanced Technologies Inc plans to exit the business of manufacturing sapphire after a failed effort to produce material for Apple's smartphone screens, court documents disclosed. A U.S. bankruptcy judge on Thursday allowed GT to keep secret the details of its problems with Apple which preceded its filing for protection from creditors. (http://on.wsj.com/1CZPgnZ)

* The World Bank's international arbitration court awarded Exxon Mobil Corp $1.6 billion on Thursday in its case against the Venezuelan government over assets expropriated in 2007. The unanimous decision by a panel at the International Center for Settlement of Investment Disputes is a far cry from the $16.6 billion that the U.S. oil major had sought for the nationalization of its Cerro Negro project. (http://on.wsj.com/Zun2CO)

FT

Former head of Anglo-Swiss mining company Xstrata PLC, Mike Davis approached BHP Billiton to buy its bundle of mines. However, BHP rebuffed the bid.

Two former executives at the Italian defence company Finmeccanica SpA were sentenced to two years in jail on Thursday for falsifying invoices regarding a 560 million euros contract to supply helicopters to India.

The European Commission conducted unannounced inspections on Tuesday in several energy companies, which are involved in producing and trading ethanol. The commission said that it is just acting on the concerns "that price benchmarks may have been distorted through anti-competetive behaviour."

The UK government has hired Bank of China Ltd, HSBC Holdings PLC and Standard Chartered PLC to look over the country's first sovereign bond issue designated in China's renminbi currency. These banks will arrange the UK's "dim sum" bond debut, soon after an investor meeting on Oct 13.

NYT

* Since Andrea Orcel, a career deal maker, was named sole chief executive of UBS AG's investment bank two years ago, he has been on a mission to transform UBS's sprawling and unfocused investment bank into a financial powerhouse despite UBS's desire to limit its scope as the bank shifts its resources elsewhere. (http://nyti.ms/1siGGNn)

* Ben Bernanke, a former chairman of the Federal Reserve, was not the most cheerful of witnesses on Thursday as he took the stand in the lawsuit over terms of the 2008 bailout of the insurance giant American International Group Inc. (http://nyti.ms/1oWeWJP)

* Symantec Corp on Thursday became the latest technology company to announce plans to split in two. The company, which has a market value of more than $16 billion, will become two publicly traded companies - one focused on security and the other on information management. (http://nyti.ms/ZhiCyZ)

* Carl Icahn, the billionaire activist investor, said on Thursday that Apple Inc is hugely undervalued in the short term and urged the company to use as much as $100 billion of its $133 billion in cash reserves to repurchase shares. (http://nyti.ms/1BZkid4)

* Dave & Buster's Entertainment Inc, the restaurant and arcade chain, is set to make its public market debut after eight years of private ownership. The company priced its initial public offering on Thursday evening at $16 a share, the bottom of an expected range of $16 to $18. It raised $94.1 million and achieved a valuation of $625.4 million. (http://nyti.ms/1qtFG3S)

* Espirito Santo Financial Group SA, which at one point held about 25 percent of the bailed-out Portuguese lender Banco Espirito Santo SA, said on Thursday that it would file for bankruptcy after it was denied creditor protection by a Luxembourg court last week. Espirito Santo Financial is part of a complex web of companies controlled by the Espirito Santo family. (http://nyti.ms/1xwcYoB)

* Endo International Plc agreed on Thursday to acquire Auxilium Pharmaceuticals Inc for $2.6 billion including debt in the latest deal to reshape the drug industry. (http://nyti.ms/1oUIBDb)

* The Tianhe Chemicals Group Ltd, accused of being a fraud by a short-seller research firm last month, lost about $3 billion in market value when its shares resumed trading in Hong Kong on Thursday after a five-week suspension. (http://nyti.ms/1vVA4WE)

Canada

China

CHINA SECURITIES JOURNAL

- China is set to invest a total of 2 billion yuan ($326.27 million) to build monitoring systems and equipment around its water resources between 2015 to 2017.

SHANGHAI SECURITIES NEWS

- China is working on a scheme, called RQDII2, to allow institutions to use Chinese currency to invest abroad rather than having to convert into local tender, according to central bank official Wang Dan. China is also pushing forward to allow individuals to invest in overseas stocks, he said.

CHINA BUSINESS NEWS

- Agricultural Bank of China Ltd has build a team to work with the London Stock Exchange to develop the first yuan-denominated GDR (global depository receipts) product, the bank's vice president Li Zhenjiang said.

SHANGHAI DAILY

- There have been 26,370 cases of dengue fever in southern Guangdong province, according to figures from local authorities. Six people have died in the outbreak.

- Chinese companies raised $29.8 billion through initial public offerings in the third quarter of the year, according to a report from Chinese consultancy Zero2IPO. This was up from under $2 billion in the same period last year when the mainland IPO market was under a freeze.

CHINA DAILY

- Beijing will restrict industrial activity and vehicle use to lower pollution levels when it hosts the APEC Economic Leaders meeting in November, city authorities said on Thursday. The city struggles with severe pollution levels.

- China will strengthen supervision of food and drugs, according to a notice from the State Council on Thursday. The country has been hit by a spate of recent food safety scares.

Britain

The Times

Lagarde warns of 'lost decade' for eurozone

Europe is at risk of a Japan-style lost decade unless members pull together to fend off the threat of recession, according to Christine Lagarde, managing director of the International Monetary Fund. (http://thetim.es/1o21ZDo)

Fall in mortgage lending as housing market cools

Mortgage lending dropped in August, adding to the mounting evidence of a slowdown in the property market. The number of home loans fell 3 percent from July to 65,400 in August, according to latest figures from the Council of Mortgage Lenders (CML). It was the first month-on-month lending decline since February. (http://thetim.es/1oVrTU0)

The Guardian

Germany needs 'small miracle' to avoid recession after exports fall by 5.8 percent.

German exports suffered the biggest monthly fall in more than five and a half years in August, leaving Europe's largest economy in need of "a small miracle" to avoid recession in the third quarter. (http://bit.ly/1s0o1oc)

Tesco ditches plans to build huge superstore on Margate seafront.

Tesco Plc has ditched plans to build a huge superstore on Margate's seafront in the latest sign of the troubled supermarket's retreat from aggressive expansion. The ailing supermarket group has written to the site's landlord, Freshwater Developments, to terminate its contract to operate the 82,000 sq ft store. (http://bit.ly/1slNV7E)

The Telegraph

Carl Icahn: Apple's share price is half what it should be

Carl Icahn, the billionaire activist investor, has re-booted his campaign for Apple Inc to put its massive $133 billion cash pile to use and buy back shares. In an open letter to Tim Cook, Apple's chief executive, he said the tech giant is still "dramatically undervalued", and that "the more shares repurchased now, the more each remaining shareholder will benefit." (http://bit.ly/1CY8Z7q)

George Osborne: Britain's economic recovery at 'critical' juncture as euro zone 'risks slipping back into crisis'

Britain's economic recovery is at a "critical" juncture and remains vulnerable in the event of another euro zone recession, Chancellor George Osborne has warned. He said recent economic data from the euro zone had shown that the single currency bloc could slip back into crisis and that the UK would "not be immune" from the effects. (http://bit.ly/1vTh7DW)

Sky News

Old Mutual sweetens 650 million pound bid for wealth firm

Old Mutual Plc, a London-listed South African financial services group, is in advanced talks about a 650 million pound ($1.05 billion) takeover of the UK's second-biggest independent wealth manager. (http://bit.ly/1vPuR1v)

Lego drops Shell over Greenpeace spill video

Lego has ended a longstanding partnership with Royal Dutch Shell Plc, after a Greenpeace video used Lego toys to illustrate an Arctic oil spill. The decision comes after the slick parody video by the environmental group went viral online, garnering more than 5 million YouTube hits, over the oil giant's plan to drill in the Arctic. (http://bit.ly/1EAoN1O)

The Independent

Royal Mail sets aside 18 million pounds for international fine on IPO anniversary

Royal Mail Plc has marked the anniversary of its 3.3 billion pound privatisation by setting aside 18 million pounds to cover a potential fine for alleged breaches of competition law at its international parcels business. (http://ind.pn/1vPPTx5)

Avengers 2: Disney handed record 31 million pound tax credit for filming in UK

Walt Disney Co has been handed a record 31.9 million pound tax credit by HM Revenue & Customs in return for agreeing to film the next instalment of its Avengers movie series in Britain. (http://ind.pn/1sj9dmo)

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Import prices for September at 8:30--consensus down 0.7%
Treasury budget for September at 14:00--consensus up $72.0B

ANALYST RESEARCH

Upgrades

Aon plc (AON) upgraded to Market Perform from Underperform at BMO Capital
Avon Products (AVP) upgraded to Neutral from Sell at UBS
CIT Group (CIT) upgraded to Neutral from Underperform at Macquarie
Canadian National (CNI) upgraded to Outperform from Market Perform at BMO Capital
Carrefour (CRRFY) upgraded to Neutrall from Conviction Sell at Goldman
DuPont (DD) upgraded to Buy from Hold at Jefferies
Education Management (EDMC) upgraded to Market Perform at Wells Fargo
Endo (ENDP) upgraded to Overweight from Neutral at Piper Jaffray
Fresenius Medical (FMS) upgraded to Buy from Neutral at BofA/Merrill
Halliburton (HAL) upgraded to Buy from Hold at Societe Generale
Johnson & Johnson (JNJ) upgraded to Neutral from Underperform at Credit Suisse
Kindred Healthcare (KND) upgraded to Outperform from Market Perform at Wells Fargo
Liberty Ventures (LVNTA) upgraded to Neutral from Sell at Citigroup
Natural Resource Partners (NRP) upgraded to Outperform at Wells Fargo
Quintiles (Q) upgraded to Buy from Neutral at ISI Group
T-Mobile (TMUS) upgraded to Buy from Hold at Jefferies
Ventas (VTR) upgraded to Buy from Hold at Stifel
Weatherford (WFT) upgraded to Buy from Hold at Societe Generale
Westamerica (WABC) upgraded to Market Perform from Underperform at BMO Capital

Downgrades

BioDelivery Sciences (BDSI) downgraded to Neutral from Buy at Roth Capital
British American Tobacco (BTI) downgraded to Sell from Neutral at Goldman
ICON plc (ICLR) downgraded to Neutral from Buy at ISI Group
Lindsay Corp. (LNN) downgraded to Underweight from Neutral at Piper Jaffray
Manitowoc (MTW) downgraded to Underperform from Market Perform at BMO Capital
Nordson (NDSN) downgraded to Hold from Buy at BB&T
PAREXEL (PRXL) downgraded to Neutral from Buy at ISI Group
Procera Networks (PKT) downgraded to Hold from Buy at Needham
Procera Networks (PKT) downgraded to Hold from Buy at Stifel
Procera Networks (PKT) downgraded to Market Perform from Outperform at William Blair
Procera Networks (PKT) downgraded to Neutral from Buy at Sterne Agee
Sun Communities (SUI) downgraded to Market Perform from Outperform at BMO Capital

Initiations

2U (TWOU) initiated with an Outperform at Pacific Crest
Bloomin' Brands (BLMN) initiated with an Outperform at BMO Capital
Brinker (EAT) initiated with a Market Perform at BMO Capital
Buffalo Wild Wings (BWLD) initiated with an Outperform at BMO Capital
Chipotle (CMG) initiated with a Market Perform at BMO Capital
Chuy's (CHUY) initiated with a Market Perform at BMO Capital
Darden (DRI) initiated with a Market Perform at BMO Capital
EMC (EMC) initiated with a Buy at Jefferies
EPR Properties (EPR) initiated with a Buy at BofA/Merrill
HP (HPQ) initiated with a Hold at Jefferies
IBM (IBM) initiated with an Underperform at Jefferies
McDermott (MDR) initiated with an In-Line at Imperial Capital
Merrimack (MACK) coverage assumed with an Outperform at Oppenheimer
NetApp (NTAP) initiated with a Hold at Jefferies
New Residential (NRZ) initiated with a Neutral at Piper Jaffray
Nimble Storage (NMBL) initiated with a Buy at Jefferies
Noodles & Company (ndls) initiated with an Outperform at BMO Capital
Panera Bread (PNRA) initiated with a Market Perform at BMO Capital
PennyMac Financial (PFSI) initiated with an Outperform at JMP Securities
PennyMac Financial (PFSI) initiated with an Overweight at Piper Jaffray
PennyMac Mortgage (PMT) initiated with a Neutral at Piper Jaffray
Pioneer Natural (PXD) initiated with an Outperform at Imperial Capital
Seagate (STX) initiated with a Buy at Jefferies
Silicon Motion (SIMO) initiated with a Buy at Brean Capital
TE Connectivity (TEL) resumed with a Buy at Citigroup
Texas Roadhouse (TXRH) initiated with a Market Perform at BMO Capital
W.P. Carey (WPC) initiated with a Neutral at BofA/Merrill
Wayfair (W) initiated with a Buy at Janney Capital
Western Digital (WDC) initiated with a Buy at Jefferies
Yelp (YELP) initiated with a Buy at Sterne Agee

COMPANY NEWS

Alaska Air (ALK), flight attendants tentatively agree to five year contract
Amgen (AMGN) blinatumomab granted priority review by FDA
Basic Energy (BAS) reports September well servicing rig count unchanged at 421
Elon Musk says worldwide Tesla (TSLA) fleet has surpassed 500M cumulative miles
General Motors (GM) reports September China sales up 15.2% to 319,936
Greenlight Capital reports 9.99% stake in Civeo Corp. (CVEO), urges CEO change
Infosys (INFY) board approves bonus issue of one share for every share held
Isis Pharmaceuticals (ISIS) reports data from ISIS-SMN Rx Phase 2 study
Liberty obtains competition approval in connection with public offer for Ziggo
MicroStrategy (MSTR) committed to restructuring plan, sees charges $17.0M-$20.0M
Symantec (SYMC) plans to separate into two public companies
Tesla (TSLA) unveils all-wheel-drive version of Model S

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Infosys (INFY), Comtech (CMTL), Barracuda Networks (CUDA), AngioDynamics (ANGO), Helen of Troy (HELE)

Companies that missed consensus earnings expectations include:
VOXX International (VOXX), Family Dollar (FDO), Joe's Jeans (JOEZ)

Companies that matched consensus earnings expectations include:
Performance Sports Group (PSG)

Juniper (JNPR) reports preliminary Q3 adjusted EPS 34c-36c, consensus 38c
Microchip (MCHP) lowers Q2 revenue guidance to $546.2M from $560.0M-$575.9M

NEWSPAPERS/WEBSITES

Ackman added to Fannie (FNMA), Freddie (FMCC) stakes, NY Post reports
Amazon (AMZN) in discussions for Jabong acquisition, Economic Times says
Apple (AAPL) upside potential is 'significant', Barron's says
Berkshire's(BRK.A) Dairy Queen suffers data breach, Bloomberg reports
E-Trade (ETFC) 'touched' by JPMorgan hacking incident, CNBC says
T. Boone Pickens says EXCO (XCO) approached by buyers, Bloomberg says
GT Advanced (GTAT) to ask to wind down sapphire operations, Bloomberg reports
Google (GOOG) allowed to face Rockstar in California court, Reuters says
Netflix (NFLX) spends $150M annually on content recommendations, Gigaom reports
Oracle (ORCL) hires former director of engineering from Google, Re/code reports
Time Warner (TWX) CEO to be questioned on growth plans, NY Post reports
United Continental (UAL) shares could climb 30%, Barron's says

SYNDICATE

Dave & Busters (PLAY) 5.882M share IPO priced at $16.00
Diplomat Pharmacy (DPLO) 13.3M share IPO priced at $13.00
PTC Therapeutics (PTCT) 3M share Spot Secondary priced at $36.25

• CDC says returning Ebola medical workers should not be quarantined (Reuters)
• Sweden’s central bank cuts rates to zero (FT)
• Hacking Trail Leads to Russia, Experts Say (WSJ)
• Discount-Hunting Shoppers Threaten Stores’ Holiday Cheer (BBG)
• Apple CEO fires back as retailers block Pay (Reuters)
• Repeat after us: all China data is fake - China Fake Invoice Evidence Mounts as HK Figures Diverge (BBG)
• FX Traders’ Facebook Chats Said to Be Sought in EU Probe (BBG)
• Euro Outflows at Record Pace as ECB Promotes Exodus (BBG)
• Apple boosts R&D spending in new product hunt (FT)
• China’s Stocks Rise Most in Three Months on Trade-Zone Expansion (BBG)
• BoE demands climate answers from insurers (FT)
• Mercedes Drivers Stung by Shale Boom’s Quirks at the Pump (BBG)
• Russian Brain Drain Saps Talent as Sanctions Hit Financing (BBG)
• China’s ‘new normal’ for consumption (FT)
• Madison Square Garden Explores Plan to Split Into Two (BBG)
• Washington state school gunman texted victims to meet at cafeteria: official (Reuters)
• Wyly Widow Was Insolvent After Billionaire’s Death (BBG)
• Zombie Storms Cause Mayhem Long After They Drop off Maps (BBG)

Overnight Media Digest

WSJ

* The Centers for Disease Control recommended that people deemed to be at high risk of developing Ebola voluntarily isolate themselves from others for 21 days, but stopped short of recommending the mandatory quarantines that at least two states have ordered. (http://on.wsj.com/1wD924O)

* Computer-security experts say they found what they describe as a sophisticated cyberweapon on a network at a U.S. firm harboring military secrets, and that the spy tool was built during Moscow working hours. (http://on.wsj.com/1tC3c62)

* Alibaba Group Holding Ltd, which recently raised $25 billion in the world's biggest initial public offering in the United States, is interested in cooperating with Apple Inc in financial payments, the Chinese company's executive chairman said. (http://on.wsj.com/1sxoI5e)

* The FDA, Interpol and dozens of countries want the Internet's central administrator to help shut down sites suspected of selling drugs without a prescription, but Icann's powers are limited. (http://on.wsj.com/1tBbolL)

* The United States is imposing additional tariffs on Mexican sugar imports next week, but the new fees may be short-lived. (http://on.wsj.com/1pSTOV7)

* Europe's yearlong banking stress tests were to provide the public with reliable, comprehensive data about the finances of the continent's lenders. But some errors and inconsistencies nonetheless crept into the test results. (http://on.wsj.com/1tBbwSb)

* Madison Square Garden said it would explore separating its entertainment businesses from its media and sports operations, and that it was nominating Nelson Peltz and Scott Sperling to its board. (http://on.wsj.com/1yG5yzR)

* An internal disagreement within the Securities and Exchange Commission is threatening potentially lucrative revenue streams at Bank of America Corp, according to people close to the situation. (http://on.wsj.com/1wD94cK)

* General Motors Co - trying to stir some buzz around the next generation Chevrolet Volt plug-in - said Tuesday it would move production of the vehicle's electric drive unit to its home state of Michigan from Mexico. (http://on.wsj.com/1xyuiZH)

FT

The Bank of England has written to about 30 insurance companies to evaluate the risks of climate change to their solvency and earnings, in a concern over the potential financial aftermath of global warming. In his address to the members of parliament, British Prime Minister David Cameron on Monday said Britain would not pay an additional 1.7 billion pounds ($2.74 billion) as part of its contribution to the European Union. The EU says a recent upward revision to Britain's gross national income during 2002-2013 triggered the additional contributions. Scandals in the financial markets are not caused by just a "few bad apples", and financial regulators are set to impose more regulation on the sector to reclaim public trust, Bank of England Deputy Governor of markets and banking, Nemat Shafik said.

Britain's Co-operative Bank named Dennis Holt as its new chairman, as the bank aims to recover from a high-profile drugs scandal, senior management departures and its near collapse.

NYT

* Madison Square Garden Co said on Monday it was exploring a potential breakup of itself, a move that would separate the New York Knicks and Rangers professional sports teams from the company's live entertainment business. (http://nyti.ms/1tBS74T)

* Adding to pressure on the guardrail manufacturer Trinity Industries Inc, Virginia said on Monday it planned to remove the company's products after it failed to meet a state deadline to supply documentation for new crash testing. (http://nyti.ms/1tBRzf9)

* Regal Entertainment Group, which operates the country's largest theater chain, said on Monday it was exploring "strategic alternatives" that may include a sale of the company. (http://nyti.ms/1zCxoB5)

* Sachem Head Capital Management, a $2 billion hedge fund, disclosed on Monday that it had acquired an economic interest in CDK Global Inc equivalent to a 9.8 percent stake. (http://nyti.ms/1DV09rv)

* Private equity firm Warburg Pincus LLC has raised $4 billion for a new fund, its first dedicated to investments in the energy sector. Warburg Pincus said on Monday that the final amount of capital raised for the fund was $1 billion higher than the initial goal, indicating robust demand among investors. (http://nyti.ms/1ze6PRH)

Canada

THE GLOBE AND MAIL

** On a day when the Conservative government tabled new legislation to expand the powers of Canadian Security Intelligence Service, sources say Ottawa is now weighing new tools to deal with citizens who openly support terrorist attacks on Canadians or back groups that urge this goal. (http://bit.ly/1teramw)

** The Canada government is beefing up its blacklist of Canadian employers with a plan to include not only businesses found to have broken temporary foreign worker program rules, but also provincial labour laws. (http://bit.ly/12ZjVVF)

** Toronto has rejected the tumultuous reign of the Ford brothers, choosing as their next mayor John Tory, a buttoned-up former provincial politician who won over voters with his promises of good governance and swift improvements to public transit. (http://bit.ly/1oT2rUT)

NATIONAL POST

** Nearly one year after John Chen took the helm of BlackBerry Ltd, the chief executive touted his turnaround plan on Monday. In a post on networking website LinkedIn, Chen said BlackBerry faced "tremendous challenges" when he was appointed last November and he moved to create a culture "that focuses on fixing things and finding solutions, not on the obstacles before you". (http://bit.ly/10wwTt8)

** Canada's ambassador in the United States Gary Doer says he has been busy since last week's terror attack in Ottawa correcting "alarmist" media reports about the shooting. He has spent years pointing out there are nowhere near 500 Canadians fighting with ISIS, as one politician said. (http://bit.ly/1wDcbRZ)

** Royal Canadian Mounted Police Commissioner Bob Paulson says the video made by the gunman in last week's attack on the National War Memorial contains evidence that the shooting was driven by political and ideological motives. Paulson hopes that it will eventually be released to the public. (http://bit.ly/1tDmN5A)

China

CHINA SECURITIES JOURNAL

- China should select a number of qualified cities to develop free trade zones following the progress made in Shanghai Pilot Free Trade Zone (FTZ), President Xi Jinping said during a meeting on Monday.

- China should be cautious about selling state assets too cheaply if it sells shares through private placement and should also develop supervision systems, State-owned Assets Supervision and Administration Commission of the State Council's Director Chu Xuping said while discussing the main challenges for the ongoing mixed ownership reform.

SHANGHAI SECURITIES NEWS

- China's Shanghai Pilot Free Trade Zone(FTZ) should increase foreign businesses' access by updating the negative list and introduce taxation systems which are in line with international standards for foreign investment, accounting agency PricewaterhouseCoopers said in an assessment report.

- China Banking Regulatory Commission (CBRC) will encourage banks to establish branches in Tibet and will provide preferential credit policy to support its development, said CBRC's President Shang Fulin during a meeting on Tibet's financial development.

CHINA DAILY

- A memorandum of understanding (MoU) has been signed between U.S. pharmaceutical firm Johnson & Johnson and Shanghai Ruijin Hospital, to promote scientific research.

- Evergrande Real Estate Group Ltd plans to set up a dairy manufacturing operation in China, it said on Monday.

PEOPLE'S DAILY

- Meeting the cultural needs of people and promoting well-being are the Chinese Communist Party's governance goals as these will also act as guarantees for the party's sustainable political leadership, the party mouthpiece said in a commentary

Britain

The Times

PRICE OF OIL COULD TUMBLE TO $80 A BARREL AMID GLUT

Goldman Sachs Group Inc said Brent crude could drop to $80 a barrel next year as the slump that has seen oil prices fall 25 percent in the past five months continues. The investment bank said rising production would outstrip demand and slashed its forecasts by 15 percent. It said Brent crude could hit $85 a barrel in the first quarter of next year, falling to $80 a barrel in the second quarter. (http://thetim.es/1zdUugc)

STRUGGLING SALAMANDER ENERGY CONFIRMS TAKEOVER TALKS

The slump in oil prices is set to claim its first corporate casualty as Salamander Energy Plc confirms it is in talks with two companies about a potential takeover. Ophir Energy Plc, the FTSE 250 explorer, is closing in on a possible 275 million pound deal, but Salamander said it was seeking clarity on the terms of the deal. Another suitor, Cepsa, the Spanish group controlled by Ipic, the Abu Dhabi investment fund, is also circling. Salamander says it has not received details of any proposal from the consortium or any confirmation that it will receive a proper offer. (http://thetim.es/1w9mT4B)

The Guardian

DENNIS HOLT NAMED CHAIRMAN OF CO-OP BANK

A former top retail banker, Dennis Holt, has been named chairman of Co-operative Bank Plc after standing in on an interim basis for the past month. The appointment of Holt, who used to run the high street banking operation of Lloyds TSB, takes place immediately and makes him the third chairman of the troubled bank in the last 18 months. (http://bit.ly/1u0qC5T)

ALEX SALMOND WELCOMES FLYBE FLIGHTS BETWEEN LONDON CITY AND SCOTLAND

First Minister of Scotland Alex Salmond has welcomed Flybe Group Plc's launch of new services from Scotland to London City airport, saying they would provide business travellers with an alternative to Heathrow and reduce British Airways overcharging. Flybe launched operations from London City on Monday with six routes connecting Britain and Ireland to the capital's financial district. Scotland is a key beneficiary with multiple daily services to Edinburgh, Aberdeen and Inverness. (http://bit.ly/1wwgi39)

Sky News

CAMERON: UK WILL NOT MEET 1.7 BLN STG EU BILL DEMAND

British Prime Minister David Cameron insists there is "no pressing need" for Britain to pay 1.7 billion pounds ($2.74 billion) to the EU - despite a warning of a substantial fine. The surcharge was made public at an EU summit last week, but the Prime Minister said Britain would not meet the Dec. 1 deadline. (http://bit.ly/ZUr4Vl)

MAJOR BANKS TO TOP UP PPI BILL TO OVER 22 BLN STG

Britain's five biggest banks are poised to take their aggregate bill for miss-selling payment protection insurance (PPI) past 22 billion pounds, underlining its status as the most costly scandal in the industry's history. Barclays Plc, HSBC Holdings Plc, Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc will all use their quarterly results statements during the next week to top up PPI compensation provisions. (http://bit.ly/1rMhxXP)

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Durable goods orders for September at 8:30--consensus up 0.9%
S&P Case-Shiller 20-city home price index for August at 9:00--consensus up 0.2%
Consumer confidence for October at 10:00--consensus 86.8
Richmond Fed manufacturing index for October at 10:00--consensus 10

ANALYST RESEARCH

Upgrades

Buffalo Wild Wings (BWLD) upgraded to Outperform from Neutral at RW Baird
Core Laboratories (CLB) upgraded to Overweight from Equal Weight at Morgan Stanley
Dril-Quip (DRQ) upgraded to Equal Weight from Underweight at Morgan Stanley
DryShips (DRYS) upgraded to Outperform from Underperform at Imperial Capital
GOL Linhas (GOL) upgraded to Outperform from Market Perform at Raymond James
Madison Square Garden (MSG) upgraded to Buy from Hold at ISI Group
STMicroelectronics (STM) upgraded to Neutral from Sell at Citigroup
Trinity Industries (TRN) upgraded to Positive from Neutral at Susquehanna
Twitter (TWTR) upgraded to Hold from Sell at Pivotal Research
Wal-Mart de Mexico (WMMVY) upgraded to Overweight from Equal Weight at Barclays
Wright Medical (WMGI) upgraded to Outperform from Sector Perform at RBC Capital
XL Group (XL) upgraded to Hold from Sell at Deutsche Bank

Downgrades

Armstrong World (AWI) downgraded to Equal Weight from Overweight at Barclays
Basic Energy (BAS) downgraded to Market Perform from Outperform at Wells Fargo
Bunge (BG) downgraded to Neutral from Overweight at JPMorgan
C&J Energy (CJES) downgraded to Market Perform from Outperform at Wells Fargo
Cementos Pacasmayo (CPAC) downgraded to Equal Weight from Overweight at Barclays
Exact Sciences (EXAS) downgraded to Equal Weight from Overweight at Stephens
Forum Energy (FET) downgraded to Equal Weight from Overweight at Morgan Stanley
Helmerich & Payne (HP) downgraded to Market Perform from Outperform at Wells Fargo
Nabors Industries (NBR) downgraded to Market Perform from Outperform at Wells Fargo
Oceaneering (OII) downgraded to Equal Weight from Overweight at Morgan Stanley
PRGX Global (PRGX) downgraded to Neutral from Outperform at RW Baird
Patterson-UTI (PTEN) downgraded to Market Perform from Outperform at Wells Fargo
Pioneer Energy (PES) downgraded to Market Perform from Outperform at Wells Fargo
Plum Creek Timber (PCL) downgraded to Neutral from Buy at BofA/Merrill
Sarepta (SRPT) downgraded to Neutral from Outperform at RW Baird
Thoratec (THOR) downgraded to Equal Weight from Overweight at Barclays
Twitter (TWTR) downgraded to Neutral from Buy at BofA/Merrill
Twitter (TWTR) downgraded to Neutral from Buy at Nomura
Twitter (TWTR) downgraded to Sector Perform from Outperform at RBC Capital
Twitter (TWTR) downgraded to Sell from Hold at Stifel
Washington REIT (WRE) downgraded to Market Perform from Outperform at Wells Fargo
Wright Medical (WMGI) downgraded to Buy from Strong Buy at Needham

Initiations

Dermira (DERM) initiated with a Buy at Citigroup
FMSA Holdings (FMSA) initiated with a Buy at KeyBanc
FMSA Holdings (FMSA) initiated with a Neutral at Goldman
FMSA Holdings (FMSA) initiated with an Outperform at Cowen
GoPro (GPRO) initiated with an Outperform at Wedbush
HSN, Inc. (HSNI) initiated with a Buy at Brean Capital
Kite Pharma (KITE) initiated with a Buy at Canaccord
ValueVision (VVTV) initiated with a Buy at Brean Capital
Vivint Solar (VSLR) initiated with an Equal Weight at Barclays
Yodlee (YDLE) initiated with a Buy at BofA/Merrill
Yodlee (YDLE) initiated with a Buy at Goldman
Yodlee (YDLE) initiated with a Neutral at UBS
Yodlee (YDLE) initiated with an Outperform at Credit Suisse
Yodlee (YDLE) initiated with an Outperform at Pacific Crest

COMPANY NEWS

GM's (GM) Warren Transmission Plant to build electric drive unit for Volt. CEO Mary Barra will announce capital investments of nearly $300M in Michigan between now and the end of the year
Madison Square Garden (MSG) board unanimously approved plan to explore spin-off
Barclays (BCS) said it plans to cut 9,000 jobs across the business by the end of 2017
Lloyds Banking (LYG) said it sees 9,000 job reductions by end of 2017
Gartner said worldwide shipments of 3D printers to reach over 217,000 in 2015 (DDD, XONE, ADSK, MTLS, VJET, SSYS)
Amazon.com (AMZN) to invest $75M and create 1,000 jobs in first Illinois facility
UBS (UBS) said no agreemment reached with DOJ over foreign exchange
Wright Medical (WMGI), Tornier (TRNX) agreed to merge in $3.3B transaction
Receptos (RCPT) said RPC1063 Phase 2 trial met primary and all secondary endpoints
Regal Entertainment (RGC) announced a $1.00 per share special dividend retained Morgan Stanley to explore strategic alternatives, including a potential sale

EARNINGS

Companies that beat consensus earnings expectations last night and today include:

LabCorp (LH), Capella Education (CPLA), Spirit Airlines (SAVE), CIT Group (CIT), Harris (HRS), Sensata (ST), Washington Federal (WAFD), Centene (CNC), Radware (RDWR), Aetna (AET), DuPont (DD), VASCO Data Security (VDSI), BP (BP), Novartis (NVS), HomeStreet (HMST), German American Bancorp (GABC), Kadant (KAI), First Interstate (FIBK), Arlington Asset Investment (AI), Seacor Holdings (CKH), Alliance Holdings (ahgp), Alliance Resource Partners (ARLP), Ferro (FOE), XL Group (XL), Cliffs Natural (CLF), NBT Bancorp (NBTB), HealthSouth (HLS), Seacoast Banking (SBCF), Mavenir Systems (MVNR), Reinsurance Group (RGA), Berkshire Hills Bancorp (BHLB), Compass Minerals (CMP), Advent Software (ADVS), Hartford Financial (HIG), Brixmor (BRX), MicroStrategy (MSTR), Bank of Hawaii (BOH), GigOptix (GIG), PMC-Sierra (PMCS), Intevac (IVAC), Sanmina (SANM), Luminex (LMNX), Cognex (CGNX), Integrated Device (IDTI), Plum Creek Timber (PCL), Denny's (DENN), Allison Transmission (ALSN), Buffalo Wild Wings (BWLD), Amgen (AMGN), Heartland Financial (HTLF), Regal Entertainment (RGC)

Companies that missed consensus earnings expectations include:

CONSOL (CNX), Medidata (MDSO), Bio-Techne (TECH), Independent Bank (IBTX), Stock Building Supply (STCK), Whirlpool (WHR), Portland General Electric (POR), T-Mobile (TMUS), PRGX Global (PRGX), Owens & Minor (OMI), Manitowoc (MTW), Masco (MAS), Hudson Valley (HVB), Orchid Island Capital (ORC), Park National (PRK), Innophos Holdings (IPHS), Artisan Partners (APAM), PartnerRe (PRE), Symetra Financial (SYA), Blue Capital (BCRH), Ducommun (DCO), Amkor Technology (AMKR), Montpelier Re (MRH), Meru Networks (MERU), Knowles (KN)

Companies that matched consensus earnings expectations include:

1-800-Flowers.com (FLWS), First BanCorp (FBP), Universal Health (UHS), Flushing Financial (FFIC), Twitter (TWTR), Monolithic Power (MPWR), TriplePoint Venture (TPVG), ANADIGICS (ANAD)

NEWSPAPERS/WEBSITES

YouTube (GOOG) may charge for new services, Re/code reports
SEC undecided on Bank of America (BAC) business curbs, WSJ reports
More than 1M credit cards registered on Apple Pay (AAPL) in first 72 hours, Re/code reports
Apple CEO (AAPL) says Apple Pay in 220,000 locations already, Business Insider reports
NYC boy with Ebola-like symptoms tests negative for disease, WSJ says (PPHM, TKMR, SRPT, BCRX, CMRX, NLNK, LAKE, APT, SMED)

SYNDICATE

EnLink Midstream (ENLK) files to sell $350M shares of common units
Hannon Armstrong (HASI) 4M share Spot Secondary priced at $13.60
Inogen (INGN) files to sell 2.1M shares of common stock for holders
Pebblebrook Hotel (PEB) files to sell 3.2M common shares of beneficial interest
Regulus Therapeutics (RGLS) files to sell $80M of common stock

• Ruble Sinks to 80 a Dollar Defying Surprise Russia Rate Increase (BBG)
• Oil slumps near $59 for first time since 2009 on oversupply (Reuters)
• Oil sinks, Russian moves fail to quell nerves (Reuters)
• Fed Seen Looking Past Low Inflation to Drop ‘Considerable Time (BBG)
• At least Europe is "fixed" - Eurozone PMI picks up gingerly in December (FT)
• Students Among Dead as Pakistan Gunmen Kill 126 at Army School (BBG)
• Repsol to buy Talisman Energy for $13 billion (Reuters)
• Indonesia’s Rupiah Erases Decline After Central Bank Intervenes (BBG)
• Anti-Islam Rally Grows as Immigrant Backlash Hits Europe (BBG)
• Saudi Arabia is playing chicken with its oil (Reuters)
• China industrial activity shrinks in December, calls grow for more stimulus (Reuters)
• Obama's Surgeon General Pick May Defeat the Gun Lobby (BBG)
• EU funds help Poland build 'ghost' airports (Reuters)
• Billions in German Family Wealth Threatened by Tax Ruling (BBG)

Overnight Media Digest

WSJ

* Google Inc plans to push deeper into online commerce by enhancing its Google Shopping service with features that more directly challenge Amazon.com Inc. (http://on.wsj.com/1uPkFDX)

* NBC is launching a live stream of its broadcast network, part of a broader effort at parent NBCUniversal to make more of its content available online via computers and mobile devices. (http://on.wsj.com/1BRMcMr)

* Two tech startups, Hortonworks Inc and New Relic Inc, have proposed to sell shares to the public at a 25 percent to 50 percent discount to the roughly $1 billion valuations that some venture-capital firms and big mutual funds paid earlier this year. (http://on.wsj.com/1u7sqok)

* U.S. cattle exports have fallen by a third this year, hurting businesses from cattle haulers to the port in Wilmington, Delaware. (http://on.wsj.com/1BO72cJ)

* Repsol SA is preparing an US$8.3 billion bid for Talisman Energy Inc of Canada, a takeover that would roughly double the Spanish company's oil output. (http://on.wsj.com/1GpQYAC)

* InterContinental Hotels Group Plc has agreed to buy Kimpton Hotels & Restaurants for $430 million in cash. (http://on.wsj.com/1BNmbLu)

* U.S. manufacturing output climbed past its prerecession peak this fall, suggesting the American economy is on solid footing despite growing signs of weakness abroad. (http://on.wsj.com/1Gp6tZq)

* Riverbed Technology Inc agreed to be acquired by private-equity firm Thoma Bravo LLC for about $3.6 billion, following more than a year of pressure from activist investor Elliott Management Corp. (http://on.wsj.com/16ofvcG)

* The South Korean government said it plans to impose penalties on Korean Air Lines Co Ltd in response to a recent incident involving an executive who delayed a flight to eject a crew member in a protest at the way she was served macadamia nuts. (http://on.wsj.com/1sxXsuF)

* Dalian Wanda Commercial Properties Co, which is controlled by Chinese billionaire Wang Jianlin, has raised US$3.7 billion in a Hong Kong initial public offering after pricing the deal near the high end of an indicative price range, according to people familiar with the situation. (http://on.wsj.com/1wAIh3x)

* GT Advanced Technologies Inc has won bankruptcy court approval of a settlement with Apple Inc that wards off the threat of litigation over a failed effort to produce large quantities of scratch-and shatter-resistant smartphone screen materials. (http://on.wsj.com/16oLvND)

* Cement companies Holcim Ltd and Lafarge SA cleared a major hurdle toward their planned $43 billion merger after antitrust authorities in Europe said the deal could go ahead, subject to significant asset sales across the region. (http://on.wsj.com/1wUO7P4)

FT

Youth-focused digital content company Vice Media will go ahead with a "deal spree" in 2015, and if market conditions remain favourable, it may also go ahead with an initial public offering, Chief Executive Shane Smith said.

European regulator Dutch Data Protection Agency may slap Google with a 15 million euro ($18.66 million) fine for usage and storage of personal data. The regulator demanded that the Mountain View headquartered-company ask for unambiguous consent for using users' personal data between its services like Google Maps and YouTube.

UK-based company Audioboom has struck a deal with Audible, a subsidiary of Amazon, to offer audiobook snippets. Audioboom, which distributes audio content for media organisations like BBC and Reuters, will receive upfront payment for any new users registering with Audible through the platform and a percentage of the online retail sales.

Bank of Cyprus' shares are set to resume trading, 22 months after the lender was rattled by a financial crisis that struck the mediterranean country.

NYT

* The gunman who seized hostages in downtown Sydney was known as a deeply troubled man with a pending case involving the murder of his former wife. (http://nyti.ms/1wCOhY7)

* Billionaire investor Steven A. Cohen, who managed to fend off a criminal insider trading investigation of himself, if not of his former hedge fund, is looking for a former prosecutor and several agents from the Federal Bureau of Investigation to join his new $10 billion investment firm, Point72 Asset Management, said several people briefed on the matter, who spoke on the condition of anonymity. (http://nyti.ms/1yU3UbZ)

* Risking his political standing, Iran's president has stressed he was determined to clinch a nuclear deal and take on the conservative forces who would prefer not to see an agreement with the West, even if that means continued economic sanctions on Iran. (http://nyti.ms/1GK3YiQ)

* Russia's government is in the middle of an all-out fight to preserve the value of the ruble in the face of plummeting oil prices and Western sanctions over the Ukraine crisis. In the boldest move yet to stanch the bleeding, the Central Bank of Russia has announced a stunning interest rate increase. (http://nyti.ms/13ssQ2l)

* The French government has announced that the company's lower-priced UberPop service would be banned on Jan. 1, the latest in a number of setbacks for Uber, which is facing bans in several cities worldwide. (http://nyti.ms/1wD7fhd)

* Activity in China's factory sector contracted in December for the first time in seven months as new orders declined, a preliminary private survey has showed, fuelling expectations that more stimulus will be needed to avert a sharper economic slowdown. (http://nyti.ms/1305Hn3)

* British Telecom, the former telecommunications monopoly in Britain, which spun off its previous mobile carrier unit in 2001, has said that it had entered into exclusive talks to acquire EE, the British mobile phone business of Orange of France and Deutsche Telekom of Germany, for about 12.5 billion pounds ($19.56 billion). (http://nyti.ms/1yWPrkx)

Canada

THE GLOBE AND MAIL

** Export Development Canada is lending British telecom giant Vodafone Group PLC $850 million, the bulk of which will be used to finance the purchase of BlackBerry Ltd handsets and services. The financing package comes at an opportune time for BlackBerry, which is poised this week to unveil its latest smartphone. (http://bit.ly/1Gq7osL)

** Talisman Energy Inc has agreed to be acquired by Spain's Repsol SA in an $8.3 billion deal that allows Respol to expand in Canada and internationally at a time of weak energy markets. (http://bit.ly/1xoeDzU)

** A report to be released on Tuesday by the Canadian Parks and Wilderness Society says the animals, which roam the northern forests that stretch from British Columbia to Alberta, continue to die off as their ranges are eroded by human activity. (http://bit.ly/1BSDJsv)

NATIONAL POST

** After a year and a half in which the Liberals led in the national polls by six to 10 points, the gap has narrowed appreciably in recent weeks. As of last month, an average of polls compiled by threehundredeight.com put the Grits ahead of the governing Conservatives by just three points, 35-32. The latest Ekos poll has them closer still, just a point apart: effectively, a tie. (http://bit.ly/1svVqFU)

** Canadian heavy crude traded below $40 a barrel for the first time in five years just as a surge of new projects are scheduled to start operation. A total of 14 new oilsands projects are scheduled to start next year, with a combined capacity of 266,240 barrels a day, according to data published by Oilsands Review. That's 36 percent more than was started in 2014. (http://bit.ly/1zkILMd)

China

CHINA SECURITIES JOURNAL

- China is pushing forward with the development of the new free trade zone in Guangdong province, with a new trade and service agreement with neighbouring Hong Kong and Macau likely to be signed soon, the paper said.

SECURITIES TIMES

- China Securities Regulatory Commision (CSRC) fined Ping An Securities 37 million yuan ($5.98 million) for failing to perform due diligence when underwriting Shenzhen Hirisun Technology Inc's IPO.

PEOPLE'S DAILY

- Reform, the country's key task for economic work next year, is also crucial to promote healthy economic development and social harmony, the paper, which acts as a mouthpiece for the ruling Communist Party, said in a commentary.

Britain

The Times

BT IN EXCLUSIVE TALKS TO BUY EE FOR 12.5 BLN STG

The British mobile phone sector is set for its biggest shake-up since the turn of the century after BT Group Plc entered exclusive negotiations to acquire EE for 12.5 billion pounds. (http://thetim.es/1suKoAv)

The Guardian UK FACTORY ORDERS CLIMB TO FOUR-MONTH HIGH, SAYS CBI

Britain's manufacturers have had a decent end to the year, but a tough global economy is making life difficult for UK exporters, the Confederation of British Industry (CBI) said. (http://bit.ly/1Af4WSi) ALISTAIR DARLING'S 5 AM PLEA TO PM IGNORED AFTER SCOTTISH NO VOTE

David Cameron ignored a 5 am plea from Alistair Darling in the immediate aftermath of the Scottish referendum to avoid throwing the Scottish National party a lifeline by announcing plans to restrict the voting rights of Scottish MPs. (http://bit.ly/1sxedpX)

The Telegraph

BGC BUYS BRITISH BROKER RP MARTIN BGC Partners plans to take over rival brokerage RP Martin's British assets before buying out its European offices next year for an undisclosed sum. (http://bit.ly/1wbvnsR)

FINANCIAL FUND MANAGER WHO DODGED THOUSANDS IN TRAIN FARES BANNED FROM FINANCIAL INDUSTRY

The former BlackRock Inc fund manager who exploited a loophole to dodge thousands of pounds in train fares has been banned from working in financial services. The Financial Conduct Authority said Jonathan Burrows had been barred "from performing any function in relation to any regulated activities for not being fit and proper". (http://bit.ly/1GJHluN)

Sky News

EX-JJB SPORTS CEO JAILED OVER 1 MLN STG FRAUD The former boss of JJB Sports Plc has been jailed for four years, after pocketing about 1 million pounds in what was described as a "very greedy fraud". A court heard that Chris Ronnie owed more than 10 million pounds to an Icelandic bank when he diverted funds from suppliers going to the sportswear firm. (http://bit.ly/12YRTcE)

The Independent

ITV AND SATELLITE RIVALS BUTT HEADS OVER PAY-TV FEES FOR FREE CHANNELS

A war of words broke out between ITV and its cable and satellite rivals over the X Factor broadcaster's demand that it receive fees from pay-TV platforms for airing its free channels. (http://ind.pn/1yTTdGv)

Fly On The Wall Pre-Market Buzz

ECONOMIC REPORTS

Domestic economic reports scheduled for today include:
Housing starts for November at 8:30--consensus up 3.1% to 1.04M rate
Housing permits for November at 8:30--consensus down 2.5% to 1.06M rate
Markit flash manufacturing PMI for December at 9:45--consensus 55.2

ANALYST RESEARCH

Upgrades

Apollo Global (APO) upgraded to Buy from Neutral at Citigroup
Camden Property (CPT) upgraded to Buy from Neutral at Citigroup
Cirrus Logic (CRUS) upgraded to Perform from Underperform at Oppenheimer
Equity Residential (EQR) upgraded to Buy from Neutral at Citigroup
Flagstar Bancorp (FBC) upgraded to Outperform from Market Perform at Keefe Bruyette
GrubHub (GRUB) upgraded to Buy from Neutral at Goldman
Parkway Properties (PKY) upgraded to Neutral from Sell at Citigroup
Plexus (PLXS) upgraded to Strong Buy from Buy at Needham
RCS Capital (RCAP) upgraded to Buy from Neutral at Citigroup
Range Resources (RRC) upgraded to Equal Weight from Underweight at Barclays
Rite Aid (RAD) upgraded to Buy from Neutral at UBS
SunPower (SPWR) upgraded to Overweight from Equal Weight at Morgan Stanley
Vulcan Materials (VMC) upgraded to Conviction Buy from Neutral at Goldman

Downgrades

Abraxas Petroleum (AXAS) downgraded to Neutral from Outperform at RW Baird
American Eagle Energy (AMZG) downgraded to Hold from Buy at Wunderlich
Approach Resources (AREX) downgraded to Hold from Buy at Wunderlich
Autodesk (ADSK) downgraded to Underperform from Neutral at BofA/Merrill
Basic Energy (BAS) downgraded to Sell from Hold at Wunderlich
Canadian Oil Sands (COSWF) downgraded to Underweight from Equal Weight at Barclays
Dollar Tree (DLTR) downgraded to Hold from Buy at Deutsche Bank
Douglas Emmett (DEI) downgraded to Neutral from Buy at Citigroup
Eclipse Resources (ECR) downgraded to Equal Weight from Overweight at Barclays
Emerald Oil (EOX) downgraded to Sell from Hold at Wunderlich
Entravision (EVC) downgraded to Hold from Buy at Evercore ISI
Essent Group (ESNT) downgraded to Market Perform from Outperform at Keefe Bruyette
Fifth Street Senior (FSFR) downgraded to Market Perform at JMP Securities
First American (FAF) downgraded to Market Perform from Outperform at Keefe Bruyette
General Motors (GM) downgraded to Sector Perform from Outperform at RBC Capital
Genesee & Wyoming (GWR) downgraded to Neutral from Buy at BofA/Merrill
Jones Energy (JONE) downgraded to Equal Weight from Overweight at Barclays
MGIC Investment (MTG) downgraded to Market Perform from Outperform at Keefe Bruyette
Macerich (MAC) downgraded to Neutral from Buy at Citigroup
Martin Marietta (MLM) downgraded to Buy from Conviction Buy at Goldman
Microsemi (MSCC) downgraded to Perform from Outperform at Oppenheimer
Microsoft (MSFT) downgraded to Underperform from Neutral at BofA/Merrill
Northern Oil and Gas (NOG) downgraded to Hold from Buy at Wunderlich
Oasis Petroleum (OAS) downgraded to Hold from Buy at Wunderlich
Pioneer Energy (PES) downgraded to Hold from Buy at Wunderlich
Priceline (PCLN) downgraded to Buy from Conviction Buy at Goldman
Resolute Energy (REN) downgraded to Hold from Buy at Wunderlich
SandRidge Energy (SD) downgraded to Sell from Hold at Wunderlich
Shutterfly (SFLY) downgraded to Neutral from Buy at Goldman
Tanger Factory (SKT) downgraded to Neutral from Buy at Citigroup
Weingarten Realty (WRI) downgraded to Neutral from Buy at Citigroup

Initiations

Antero Resources (AR) initiated with an Outperform at Oppenheimer
BB&T (BBT) initiated with a Neutral at Guggenheim
Bank of America (BAC) initiated with a Buy at Guggenheim
CIT Group (CIT) initiated with a Buy at Guggenheim
Ciena (CIEN) initiated with a Neutral at Wedbush
Cimarex Energy (XEC) initiated with a Perform at Oppenheimer
Citigroup (C) initiated with a Neutral at Guggenheim
Cooper Companies (COO) initiated with a Perform at Oppenheimer
Coty (COTY) initiated with a Hold at KeyBanc
DURECT (DRRX) initiated with a Hold at Cantor
Escalade (ESCA) initiated with an Outperform at Imperial Capital
Extended Stay America (STAY) initiated with a Market Perform at JMP Securities
F.N.B. (FNB) Corp. initiated with a Neutral at JPMorgan
First Horizon (FHN) initiated with a Buy at Guggenheim
Goldman Sachs (GS) initiated with a Buy at Guggenheim
Green Plains (GPRE) initiated with a Neutral at Goldman
Infinera (INFN) initiated with a Neutral at Wedbush
JPMorgan (JPM) initiated with a Neutral at Guggenheim
Morgan Stanley (MS) initiated with a Buy at Guggenheim
Neff (NEFF) Corporation initiated with a Buy at Jefferies
Neff (NEFF) initiated with an Overweight at Piper Jaffray
Newfield Exploration (NFX) initiated with an Outperform at Oppenheimer
Nike (NKE) initiated with a Market Perform at Cowen
PNC Financial (PNC) initiated with a Neutral at Guggenheim
Peak Resorts (SKIS) initiated with an Outperform at FBR Capital
Peak Resorts (SKIS) initiated with an Outperform at Oppenheimer
Ralph Lauren (RL) initiated with an Outperform at Cowen
Regions Financial (RF) initiated with a Neutral at Guggenheim
Rexnord (RXN) initiated with a Buy at KeyBanc
Santander Consumer (SC) initiated with an Outperform at JMP Securities
ServiceNow (NOW) initiated with a Buy at Goldman
Standex (SXI) initiated with a Buy at Wunderlich
SunTrust (STI) initiated with a Neutral at Guggenheim
Surgical Care Affiliates (SCAI) initiated with a Hold at KeyBanc
U.S. Bancorp (USB) initiated with a Neutral at Guggenheim
Under Armour (UA) initiated with an Outperform at Cowen
Wells Fargo (WFC) initiated with a Neutral at Guggenheim
Whiting Petroleum (WLL) initiated with an Outperform at Oppenheimer

COMPANY NEWS

Repsol (REPYY) to acquire Talisman (TLM) for $8 per share in cash, for a total transaction value of approximately $13B, including debt
Archer Daniels (ADM) to sell global cocoa business to Olam (OLMIY) for $1.3B
Boeing (BA) raised its dividend 25%, authorized $12B share repurchase plan
Sony Pictures Entertainment confirmed a significant system disruption on Monday, November 24. The company believes names, addresses, social security numbers are among the personally identifiable information individuals provided to SPE that potentially may have been obtained by unauthorized individuals
Bank of England said seven of eight banks passed stress test. Royal Bank of Scotland (RBS), Lloyds (LYG) and Co-operative were found to be the most susceptible to a housing crash and spike in unemployment
Prothena (PRTA) received FDA fast track designation for NEOD001
Yamana Gold (AUY) reported new discoveries at Chapada, El Penon
Abraxas Petroleum (AXAS) forecast Q4 volumes 6,700-6,800 Boepd and FY15 production 7,200-7,300 Boepd

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Fifth Street Asset (FSAM), VeriFone (PAY)

Companies that missed consensus earnings expectations include:
Willbros Group (WG), Willbros Group (WG)

Companies that matched consensus earnings expectations include:
FuelCell (FCEL), PolyMet Mining (PLM)

Coca-Cola (KO) forecast FY14 comparable currency neutral EPS growth of 4%-5% and a currency headwind of 7%. The company sees Q4 comparable currency neutral EPS growth to be even to slightly positive, with a 9 point currency headwind on EPS. The company sees  FY15 comparable currency neutral EPS growth similar to FY14
Magellan Health (MGLN) reaffirms FY14 guidance, sees FY 15 adj. EPS $3.28-$3.73, consensus $2.67
3M Company (MMM) backs long-term EPS objective of up 9%-11% per year, sees FY15 EPS $8.00-$8.30, consensus $8.20
Whirlpool (WHR) sees FY14 ongoing EPS $10.90-$11.10, consensus $11.65, sees FY15 ongoing EPS $14.00-$15.00, consensus $14.50
VeriFone (PAY) sees Q1 EPS 40c, consensus 45c, sees FY15 EPS $1.85-$1.90, consensus $1.97

NEWSPAPERS/WEBSITES

Google (GOOG) to step up challenge to Amazon (AMZN) with new shopping features, WSJ reports
Sony (SNE) says film studio's business remains strong, WSJ reports
Regulator finds deficiencies with Ocwen (OCN), NY Times reports
More companies signing up for Apple Pay (AAPL), NY Times reports
Google (GOOG) facing Dutch privacy fine of up to $19M, WSJ reports

SYNDICATE

Exact Sciences (EXAS) files to sell 4M shares of common stock
Millennial Media (MM) files to sell 30.73M shares for holders
Solar Power (SOPW) enters definitive agreements on up to $140M in private placement
bluebird bio (BLUE) files to sell $150M in common stock

Submitted by Nomi Prins via TomDispatch.com,

Money, they say, makes the world go round. So how’s $10 billion for you? That’s a top-end estimate for the record-breaking spending in this 1% presidential election campaign season. But is “season” even the right word, now that such campaigns are essentially four-year events that seem always to be underway? In a political world stuffed with money, it’s little wonder that the campaign season floats on a sea of donations. In the case of Jeb Bush, he and his advisers have so far had a laser-focus on the electorate they felt mattered most: big donors. They held off the announcement of his candidacy until last week (though he clearly long knew he was running) so that they could blast out of the gates, dollars-wise, leaving the competition in their financial dust, before the exceedingly modest limits to non-super PAC campaign fundraising kicked in.

 

And give Jeb credit -- or rather consider him a credit to his father (the 41st president) and his brother (the 43rd), who had Iraq eternally on their minds. It wasn’t just that Jeb flubbed the Iraq Question when a reporter asked him recently (yes, he would do it all over again; no, he wouldn’t... well, hmmm...), but that Iraq is deeply embedded in the minds of his campaign team, too. His advisers dubbed the pre-announcement campaign they were going to launch to pull in the dollars a “shock-and-awe” operation in the spirit of the invasion of Iraq. Now, having sent in the ground troops, they clearly consider themselves at war. As the New York Timesreported recently, the group's top strategist told donors that his super PAC "hopes to 'weaponize' its fund-raising total for the first six months of the year."

 

The money being talked about: $80-$100 million raised in the first quarter of 2015 and $500 million by June. If reached, these figures would indeed represent shock-and-awe fundraising in the Republican presidential race. As of now, there’s no way of knowing whether they’re fantasy figures or not, but here's a clue to Jeb’s money-raising powers: according to the Washington Post, his advisers have been asking donors not to give more than a million dollars now; they are, that is, trying to cap donations for the moment. (As the Post's Chris Cillizza wrote,“The move reflects concerns among Bush advisers that accepting massive sums from a handful of uber-rich supporters could fuel a perception that the former governor is in their debt.”) And having spent just about every pre-announcement day for months doing fundraisers and scouring the country for money, while preserving the fiction that he might not be interested in the presidency, Jeb, according to the New York Times, bragged to a group of donors that “he believed his political action committee had raised more money in 100 days than any other modern Republican political operation.”

 

Let’s not forget, of course, that we’re not talking about anyone; we're talking about a Bush. We’re talking about the possibility of becoming number three (or rather Bush 45) in the Oval Office. We’re talking about what is, by now, a fabled money-shaking, money-making, money-raising machine of a family. We’re talking dynasty and when it comes to money and the Bushes (as with money and that other potential dynasty of our moment), no one knows more on the subject than Nomi Prins, former Wall Street exec and author of All the Presidents' Bankers: The Hidden Alliances That Drive American Power. In her now ongoing TomDispatch series on the political dynasties of our moment, fundraising, and the Big Banks, think of her latest post as an essential backgrounder on the election you have less and less to do with, in which Wall Street, the Koch brothers, Sheldon Adelson, and the rest of the crew do most of the essential voting with their wallets.

All In 
The Bush Family Goes for Number Three (With the Help of Its Bankers) 
By Nomi Prins

[This piece has been adapted and updated by Nomi Prins from her book All the Presidents' Bankers: The Hidden Alliances That Drive American Power, recently out in paperback (Nation Books).] 

It’s happening. As expected, dynastic politics is prevailing in campaign 2016. After a tease about as long as Hillary’s, Jeb Bush (aka Jeb!) officially announced his presidential bid last week. Ultimately, the two of them will fight it out for the White House, while the nation’s wealthiest influencers will back their ludicrously expensive gambit.

And here’s a hint: don’t bet on Jeb not to make it through the Republican gauntlet of 12 candidates (so far). After all, the really big money’s behind him. Last December, even though out of public office since 2007, he had captured the support of 73% of the Wall Street Journal’s “richest CEOs.” Though some have as yet sidestepped declarations of fealty, count on one thing: the big guns will fall into line. They know that, given his family connections, Jeb is their best path to the White House and they’re not going to blow that by propping up some Republican lightweight whose father and brother weren’t president, not when Hillary, with all her connections and dynastic power, will be the opponent. That said, in the Bush-Clinton battle to come, no matter who wins, the bankers and billionaires will emerge victorious.

The issue of political blood and family lines in Washington is not new. There have been four instances in our history in which presidents have been bonded by blood. Our second president John Adams and eighth president John Quincy Adams were father and son. Our ninth president William Henry Harrison and our 23rd president Benjamin Harrison were grandfather and grandson. Theodore and Franklin Delano Roosevelt were cousins. And then, of course, there were our 41st and 43rd presidents, George H.W. and George W.

If Jeb becomes the 45th president, it will be the first time that three administrations share the same blood and “dynastic” will have a new meaning in America.

The Bush Legacy

The Bush political-financial legacy began when President Ronald Reagan chose Jeb’s father, George H.W., as his vice president. Reagan was also the first president to choose a Wall Street CEO, Donald Regan, as Treasury secretary. Then-CEO of Merrill Lynch, he happened to be a Bush family friend. And talk about family tradition: once upon a time (in 1900, to be exact), Jeb’s great-grandfather, George Herbert Walker, founded G.W. Walker & Company. It was eventually acquired by -- you guessed it! -- Merrill Lynch, which was consumed by Bank of America at the height of the 2008 financial crisis.

That merger was pressed by, among others, George W. Bush’s Treasury Secretary (and former Goldman Sachs chairman and CEO), Hank Paulson. It helped John Thain, Paulson’s former number two at Goldman Sachs, who was by then Merrill Lynch’s CEO, out of a tight spot. Now chairman and CEO of CIT Group, Thain is also a prominent member of the Republican Party who sponsored high-ticket fundraisers for John McCain during his 2008 campaign. Expect him to be there for Jeb. Paulson endorsed Jeb for president on April 15th. That’s how these loops go.

As vice president, George H.W. co-ran a task force with Donald Regan dedicated to breaking down the constraints of the 1933 Glass-Steagall Act, so that Wall Street banks could become ever bigger and more complex. Once president, Bush promoted deregulation, while reconfirming Alan Greenspan, who did the same, as the chairman of the Federal Reserve. In 1999, after President Bill Clinton (Hillary!) finished the job that Bush had started by overseeing the repeal of Glass-Steagall, banks began merging like mad and engaging in increasingly risky and opaque practices that led to the financial crisis that came to a head in George W.’s presidency.  In other words, it’s a small world at the top.

The meaning of all this: no other GOP candidate has Jeb's kind of legacy political-financial power. Period. To grasp the interconnections between the Bush family and Wall Street that will put heft and piles of money behind his candidacy, however, it’s necessary to step back in time and see just how his family helped lead us to this moment of his.

Bush Wins

By the time George H.W. Bush became president on January 20, 1989, the economy was limping. Federal debt stood at $2.8 trillion. The savings and loan crisis had escalated. Still, his deregulatory financial policies remained in sync with those of the period’s most powerful bankers, notably Citicorp chairman John Reed, Chase (now JPMorgan Chase) Chairman Willard Butcher, JPMorgan chief Dennis Weatherstone, and Bank of America Chairman Tom Clausen.

With the economic odds stacked against him, Bush also remained surrounded by his most loyal, business-friendly companions in Washington, who either had tight relationships with Wall Street or came directly from there. In a preordained arrangement with President Reagan, Bush retained Nicholas Brady, the former chairman of the board of the blue-blood Wall Street investment bank Dillon, Read & Co., as Treasury secretary.

Their ties, first established on a tennis court, extended to Wall Street and back again. In 1977, after Bush had left the directorship of the CIA, Brady even offered him a position at Dillon, Read & Co. Though he didn’t accept, Bush later enlisted Brady to run his 1980 presidential campaign and suggested him as interim senator for New Jersey in 1982. The press dubbed Brady Bush’s “official confidant.”

The new president appointed another of his right-hand men, Richard Breeden (who had drafted a “Blueprint for Reform” of the banking industry as directed by a task force co-headed by Bush), as his assistant for issues analysis and later as head of the Securities and Exchange Commission (SEC). Then, on February 6, 1989, Bush unveiled his plan to rescue the ailing savings and loan (S&L) banks. Initial bailout estimates for 223 firms were put at $40 billion. It only took the Bush administration two weeks to raise that figure to $157 billion. On the offensive, Brady stressed that this proposal wasn’t a bailout. Instead, it represented “the fulfillment of the Federal Government’s commitment to depositors.”

A few months later, under Alan Greenspan’s Fed, JPMorgan Securities, the investment banking subsidiary of JPMorgan Chase, became the first bank subsidiary since the Great Depression to lead a corporate bond underwriting. Over the next decade, commercial banks would issue billions of dollars of corporate debt on behalf of energy and public utility companies as a result of Greenspan’s decision to open that door and Bush’s deregulatory stance in general. A chunk of it would implode in fraud and default after Bush’s son became president in 2001.

The S&L Blowout

The deregulation of the S&L industry between 1980 and 1982 had enabled those smaller banks, or thrifts -- focused on taking deposits and providing mortgages -- to compete with commercial banks for depositors and to invest that money (and money borrowed against it) in more speculative real estate ventures and junk bond securities. When those bets soured, the industry tanked. Between 1986 and 1989, 296 thrifts failed. An additional 747 would shut down between 1989 and 1995.

Among those, Silverado Banking went bankrupt in December 1988, costing taxpayers $1.3 billion. Neil Bush, George H.W.’s son, was on the board of directors at the time. He was accused of giving himself a loan from Silverado, but denied all wrongdoing.

George H.W.'s second son, Jeb Bush, had already been dragged through the headlines in late 1988 for his real estate relationship with Miguel Recarey Jr., a Cuban-American mogul who had been indicted on one charge of fraud and was suspected of racking up to $100 million worth of Medicare-related fraud charges.

Meanwhile, the president was crafting his bailout plan to stop the S&L bloodletting. On August 9, 1989, he signed the Financial Institution Reform, Recovery, and Enforcement Act, which proved a backdoor boon for the big commercial banks. Having helped stuff the S&Ls with toxic real estate products, they could now profit by selling the bonds that were constructed as part of the bailout plan, while the government subsidized the entire project. Within six years, the Resolution Trust Corporation and the Federal Savings and Loan Insurance Corporation had sold $519 billion worth of assets for 1,043 thrifts that had gone belly up. Key Wall Street banks were involved in distributing those assets and so made money on financial destruction once again. Washington left the public on the hook for $124 billion in losses.

The Bush administration and the Fed’s response to the S&L crisis (as well as to a concurrent third-world debt crisis) was to subsidize the banking system with federal and multinational money. In this way, a policy of privatizing bank profits and socializing their losses and risks became embedded in the American political system.

The New Banking Game in Town: “Modernization”

The S&L trouble sparked a broader credit crisis and recession. Congress was, by then, debating the “modernization” of the financial services industry, which in practice meant breaking down remaining barriers within institutions that had separated deposits and loans from securities creation and trading activities. This also meant allowing commercial banks to expand into nontraditional banking activities, including insurance provision and fund management.

The Bush administration aided the bankers by advocating the repeal of key elements of the Glass-Steagall Act. Related bills to dismantle that Depression-era act won the support of the House and Senate banking committees in the fall of 1991, though they were defeated in the House in a full vote.  Still, the writing was on the wall. What a Republican president had started, a Democratic one would soon complete.

In the meantime, the Bush administration was covering all the bases when it came to the repeal of Glass-Steagall, which would be the nail in the coffin of decades of banking constraint. As commercial bankers pushed to enter non-banking businesses, Richard Breeden, Bush’s SEC chairman, began championing the otherside of the Glass-Steagall divide -- fighting, that is, for the rights of investment banks to own commercial banks. And little wonder, since such a deregulation of the financial system meant a potential expansion of Breeden’s power: the SEC would be tasked with monitoring the growing number of businesses that banks could enter.

Meanwhile, Wendy Gramm, head of the Commodity Futures Trading Commission (CFTC), promoted another goal the bankers wanted: unconstrained derivatives trading. Gramm had first been appointed chair of the CFTC in 1988 by Reagan (who called her his “favorite economist”) and was then reappointed by Bush. She was determined to push for unregulated commodity futures and swaps -- in part in response to lobbying from a Texas-based energy trading company, Enron, whose name would grow far more familiar to Americans in the years to come. While awaiting legislative approval, bankers started sending their trading exemption requests to Gramm and she began granting them.

9/11 Overshadows Enron

In early 2001, in the fading light of the rosy Clinton economy and an election result validated by the Supreme Court, the second President Bush entered the White House. A combination of Glass-Steagall repeal and the deregulation of the energy and telecom sectors under Clinton catalyzed a slew of mergers that consolidated companies and power in those industries upon fabricated books. The true state of the economy, however, remained well hidden, even as it teetered on a flimsy base of fraud, inflated stocks, and bank-created debt. In those years, the corporate and banking world still appeared glorious amid so many mergers. But the bankers’ efforts to support those transactions would soon give way to a spate of corporate bankruptcies.

It was the Texas-based energy-turned-trading company Enron that would emerge as the poster child for financial fraud in the early 2000s. It had used the unregulated derivatives markets and colluded with bankers to create a slew of colorfully named offshore entities through which the company piled up debt, shirked taxes, and hid losses. The true status of Enron’s fictitious books and those of other corporate fraudsters nonetheless remained unexamined in part because another crisis garnered all the attention. The 9/11 attacks at the World Trade Center, blocks away from where many of Enron’s trading partners were headquartered (including Goldman Sachs, where I was working that day), provided the banking industry with a reprieve from probes. The president instead called on bankers to uphold national stability in the face of terrorism.

On September 16, 2001, George W. famously merged financial and foreign policy. “The markets open tomorrow,” he said. “People go back to work and we’ll show the world.” To assist the bankers in this mission, Bush-appointed SEC chairman Harvey Pitt waived certain regulations, allowing corporate executives to prop up their share prices as part of a plan to demonstrate national strength by elevating market levels.

That worked -- for about a minute. On October 16, 2001, Enron posted a $681 million third-quarter loss and announced a $1.2 billion hit to shareholders' equity. The reason: an imploding pyramid of fraudulent transactions crafted with banks like Merrill Lynch. The bankers were now potentially on the hook for billions of dollars, thanks to Enron, a client that had been bulked up through the years with bipartisan support.

Amid this financial turmoil, Bush was focused on retaliation for 9/11. On January 10, 2002, he signed a $317.2 billion defense bill. In his State of the Union address, he spoke of an “Axis of Evil,” of fighting both the terrorists and a strengthening recession, but not of Enron or the dangers of Wall Street chicanery.

In 2001 and again in 2002, however, corporate bankruptcies would hit new records, with fraud playing a central role in most ofthem. Telecom giant WorldCom, for instance, was found to have embellished $11 billion worth of earnings. It would soon supplant Enron as America’s biggest fraud of the moment.

Bush Takes Action

On July 9th, George W. finally unveiled a plan to “curb” corporate crime in a speech given in the heart of New York’s financial district. Taking the barest of swipes at his Wall Street friends, he urged bankers to provide honest information to investors. The signals were now clear: bankers had nothing to fear from their commander in chief. That Merrill Lynch, for example, was embroiled in the Enron scandal was something the president would ignore -- hardly a surprise, since the company’s alliances with the Bush family stretched back decades.

Three weeks later, he would sign the Sarbanes-Oxley Act, purportedly ensuring that CEOs and CFOs would confirm that the information in their SEC filings had been presented truthfully. It would prove a toothless and useless deterrent to fraud.

And then the president acted: on March 19, 2003, he launched the invasion of Iraq with a shock-and-awe shower of cruise missiles into the Iraqi night sky. Two days later, by a vote of 215 to 212, the House approved his $2.2 trillion budget, including $726 billion in tax cuts. Shortly thereafter -- a signal to the banking industry if there ever was one -- he appointed former Goldman Sachs Chairman Stephen Friedman director of the National Economic Council, the same role another Goldman Sachs alumnus, former co-Chairman Robert Rubin, had played for Bill Clinton.

By the end of 2003, grateful bankers were already amassing funds for Bush’s 2004 reelection campaign. A bevy of Wall Street Republicans, including Goldman Sachs Chairman and CEO Henry Paulson, Bear Stearns CEO James Cayne, and Goldman Sachs executive George Herbert Walker IV (the president’s second cousin), became Bush “Pioneers” by raising at least $100,000 each.

The top seven financial firms officially raised nearly three million dollars for George W.’s campaign. Merrill Lynch emerged as his second biggest corporate contributor (after Morgan Stanley), providing more than $586,254. The firm’s enthusiasm wasn’t surprising. Donald Regan had been its chairman and the Bush-founded investment bank G.H. Walker and Company, which employed members of the family over the decades, had been absorbed into Merrill in 1978. Merrill Lynch CEO Earnest “Stanley” O’Neal received the distinguished label of “Ranger” for raising more than $200,000 for Bush’s reelection campaign. It was a sign of the times that O’Neal and Cayne hosted Bush’s first New York City reelection fundraiser in July 2003.

Government by Goldman Sachs for Goldman Sachs

The bankers helped tip the scales in Bush’s favor. On November 3, 2004, he won his second term in a tight election. By now, bankers from Goldman Sachs had saturated Washington. New Jersey Democrat Jon Corzine, a former Goldman Sachs chairman and CEO, was on the Senate Banking Committee. Joshua Bolten, a former executive director at the Goldman Sachs office in London, was director of the Office of Management and Budget. Stephen Friedman, former Goldman Sachs chairman, was one of George W.’s chief economic advisers as the director of the National Economic Council. (He would later become chairman of the New York Federal Reserve Board, only to resign in May 2009 amid conflict of interest charges concerning the pile of Goldman Sachs shares he held while using his post to aid the company during the financial crisis.)

Meanwhile, from 2002 to 2007, under George W.’s watch, the biggest U.S. banks would fashion nearly 80% of the approximately $14 trillion worth of global mortgage-backed securities (MBS), asset-backed securities, collateralized debt obligations, and other kinds of packaged assets created in those years. And subprime loan packages would soon become the fastest-growing segment of the MBS market. In other words, the financial products exhibiting the most growth would be the ones containing the most risk.

George W. would also pick Ben Bernanke to replace Alan Greenspan as chairman of the Federal Reserve. Bernanke made it immediately clear where his loyalties lay, stating, “My first priority will be to maintain continuity with the policies and policy strategies during the Greenspan years.”

In 2006, two years after persuading the SEC to adopt rules that enabled many of the “assets” being created to be undercapitalized and underscrutinized, the president selected former Goldman Sachs CEO Henry Paulson to be his third Treasury secretary. Joshua Bolten, who had by then had become White House Chief of Staff, arranged the pivotal White House meeting between the two men that sealed the deal. As Bush wrote in his memoir, Decision Points, “Hank was slow to warm to the idea of joining my cabinet. Josh eventually persuaded Hank to visit with me in the White House. Hank radiated energy and confidence. Hank understood the globalization of finance, and his name commanded respect at home and abroad.”

Under Bush, Paulson, and Bernanke, the banking sector would buckle and take the global economy down with it.

Goldman Trumps AIG

Insurance goliath AIG stood at the epicenter of an increasingly interconnected financial world deluged with junky subprime assets wrapped up with derivatives. When rating agencies Fitch, S&P, and Moody’s downgraded the company’s credit worthiness on September 15, 2008, they catalyzed $85 billion worth of margin calls. If AIG couldn’t find that money, Paulson warned the president, the firm would not only fail, but “bring down major financial institutions and international investors with it.” According to Bush’s memoir , Paulson convinced him. “There was only one way to keep the firm alive,” he wrote. “The federal government would have to step in.”

The main American recipients of AIG’s bailout would, in fact, be legacy Bush-allied firms: Goldman Sachs ($12.9 billion), Merrill Lynch ($6.8 billion), Bank of America ($5.2 billion), and Citigroup ($2.3 billion). Lehman crashed, but Merrill Lynch and AIG were saved. The bankers with the strongest alliances to the Bush family (and the White House in general) needed AIG to survive. And it did. But the bloodletting wasn’t over.

On September 18, 2008, George W. would tell Paulson, “Let’s figure out the right thing to do and do it.” He would later write, “I had made up my mind: the U.S. government was going all in.”And he meant it.  During his last months in office, the Big Six banks (and marginally other institutions) would thus be subsidized by an “all-in” program designed by Bernanke, Paulson, and Geithner -- and later endorsed by President Barack Obama.

The bankers’ unruliness had, however, already crippled the real economy. Over the next few months, Bank of America, Citigroup, and AIG all needed more assistance. And in that year, the Dow Jones Industrial Average would lose nearly half its value. At the height of the bailout period, $19.3 trillion in subsidies were made available to keep (mostly) American bankers going, as well as government-sponsored enterprises like Fannie Mae and Freddie Mac.

As George W. headed back to Texas, the economy and markets went into free fall.

The Money Behind Jeb

Jump seven years ahead and, with the next Bush on the rise and the money once again flowing in, it’s still the age of bankers. Jeb already has three mega super PACs -- Millennials for Jeb, Right to Rise, and Vamos for Jeb 2016 -- under his belt. His Right to Rise Policy Solutions group, which, as a 501(c)(4) nonprofit, is not even required to disclose the names of its donors, no less the size of their contributions, is lifting his contribution tally even higher. None of these groups have to adhere to contribution limits and the elite donors who contribute to them often prove highly influential. After all, that’s where the money really is. In the 2012 presidential election, the top 100 individual contributors to super PACs and their spouses represented just 1% of all donors, but gave a staggering 67% of the money.

Of those, Republican billionaire Sheldon Adelson and his wife, Miriam, donated $92.8 million to conservative groups, largely through “outside donor groups” like super PACs that have no contribution limits. Texas billionaire banker mogul Harold Simmons and his wife, Annette, gave $26.9 million, and Texas billionaire homebuilder Robert Perry coughed up $23.95 million. Nebraska billionaire (and founder of the global discount brokerage TD Ameritrade) John Joe Ricketts dished out $13.05 million. Despite some early posturing around other candidates with fewer legacy ties, these heavy hitters could all end up behind Bush 45. Dynasties, after all, establish the sort of connections that lie in wait for the next moment of opportune mobilization.

“All in for Jeb” is the mantra on Jeb’s official website and in a sense “all in,” especially when it comes to national bankers, has been something of a mantra for the Bush family for decades. With a nod to his two-term record as Florida governor, Jeb put it this way: “We will take command of our future once again in this country. I know we can fix this. Because I've done it.”

Based on Bush family history, by “we” he effectively meant the family’s billionaire and millionaire donors and its cavalcade of friendly bankers. Topping that list, though as yet undeclared -- give him a minute -- sits Adelson, who is personally and ideologically close to George W. In April, the former president was paid a Clintonian speaking fee of $250,00 for a keynote talk before the Republican Jewish Coalition meeting at Adelson’s Las Vegas resort. While Adelson has expressed concerns about Jeb’s lack of hawkishness on Israel when compared to his brother, that in the end is unlikely to prove an impediment. Jeb is making sure of that.  He recently told a gathering of wealthy New York donors that, when it came to Israel, his top adviser is his brother. (“If you want to know who I listen to for advice, it’s him.”)

Let’s be clear.  The Bush family is all in on Jeb and its traditional banking allies are not likely to be far behind.  There is tradition, there are ties, there is a dynasty to protect.  They are not planning to lose this election or leave the family with a mere two presidents to its name.

The Wall Street crowd began rallying behind Jeb well before his candidacy was official.  Private equity titan Henry Kravis hosted a 25-guest $100,000-per-head gathering at his Park Avenue abode in February, one of six events with the same entry fee. In March, Jeb had his first Goldman Sachs $5,000-per-person event at the Ritz Carlton in New York City, organized by Dina Powell, Goldman Sachs Foundation head and George W. Bush appointee for assistant secretary of state.  A more exclusive $50,000 per head event was organized by Goldman Sachs exec, Jim Donovan, a key fundraiser and adviser for Mitt Romney who is now doing the same for Jeb.

And then there’s the list of moneyed financiers with fat wallets still to get behind Jeb. New York hedge fund billionaire Paul Singer, who donated more than any other conservative in the 2014 election, has yet to swoop in.  Given the alignment of his foreign financial policy views and the Bush family’s, however, it’s just a matter of time.

With the latest total super PAC figures still to be disclosed, we do know that Jeb’s Right to Rise super PAC claims to have raised $17 million from the tri-state (New York, New Jersey, and Connecticut) area alone so far. Its head, Mike Murphy, referred to its donors in a call last week as “killers” he was about to “set loose.” He intimated that the July disclosures would give opponents “heart attacks.” Those are fighting words.

Sure, all dynasties end, but don’t count on the Bush-Banker alliance going belly up any time soon. Things happen in this country when mountains of money begin to pile up. This time around, the Bush patriarchy will call in every chip. And know this: Wall Street will be going “all in” for this election, too. Jeb(!) and Hillary(!) will likely split that difference in the primaries, then duke it out in 2016. Along the way, every pretense of mixing it up with the little people will be matched by a million-dollar check to a super PAC. The cash thrown about in this election will be epic. It’s not the fate of two parties but of two dynasties that’s at stake.

The last time John Thain departed as a CEO under some duress, it was just after Merrill had received a taxpayer bailout (which was used among other things to pay for Thain's bonus) and also after Thain had spent $1.22 million of corporate funds to renovate two conference rooms, a reception area, and his office, $131,000 for area rugs, $68,000 for an antique credenza, $87,000 for guest chairs, $35,115 for a gold-plated commode on legs, and $1,100 for a wastebasket.

Moments ago, the 60-year-old quit for the second time in the past 7 years, this time as CEO of CIT which he joined in February 2010, however without any taxpayer bailouts on deck this time... to the best of our knowledge.

Now: what does the relatively young Thain know that everyone else doesn't?

From the CIT press release:

CIT Announces Senior Management Succession Plan

The Board of Directors of CIT Group Inc. (CIT), a leading provider of commercial lending and leasing services, today announced that Chief Executive Officer John A. Thain will retire effective March 31, 2016, and will continue to serve as Chairman of the Board of Directors, and that CIT Board Member Ellen R. Alemany will become a member of the management team as Vice Chairman effective November 1, 2015, and upon Mr. Thain’s retirement become Chief Executive Officer. The Board also announced that Vice Chairman Steven Mnuchin will step down from Management effective March 31, 2016, and will remain as a member of the Board of Directors. The Company announced the appointment of CIT Corporate Controller Carol Hayles as Chief Financial Officer effective November 1, 2015.

Vice Admiral John Ryan, CIT Lead Director, speaking on behalf of the Board of Directors, said, “John has been a pivotal leader during one of the most challenging times in CIT’s more than 100 year history. Under his leadership he has overseen the successful corporate and financial restructuring of CIT. Since taking the helm in 2010, he returned CIT to profitability; rebuilt its management team; eliminated or refinanced approximately $31 billion of high-cost debt; oversaw the termination of the Company’s Written Agreement with the Federal Reserve; returned more than $1.7 billion to shareholders; established a premier Internet Bank, and completed the acquisition of Direct Capital and OneWest Bank. On behalf of the Board, employees and shareholders we extend our gratitude to John for his success and commitment to CIT.”

Mr. Ryan continued, “As part of our succession planning efforts, we are pleased to announce the appointment of Ellen Alemany as Vice Chairman of CIT as she transitions to her new role as CEO, a position she will assume on April 1, 2016. As an experienced and well respected leader in the commercial banking sector, she is well suited to assume these responsibilities and lead CIT forward. On behalf of the Board we congratulate Ellen on her new position and look forward to working with her in the future.”

Mr. Thain commented, “It’s been a pleasure to lead an outstanding group of employees over the past five years and oversee CIT’s successful restructuring. Their hard work and commitment were critical to our efforts to rebuild and grow CIT and has helped ensure that CIT continues to play an important role in supporting small and middle market businesses, two sectors that remain the backbone of the U.S. economy.”

• Pound struggles to recover after plunging 6% in 2 minutes (FT)
• Flash Crash of the Pound Baffles Traders With Algorithms Being Blamed (BBG)
• Pound Plummets Against Dollar in Chaotic Trading (WSJ)
• Two-Minute Mystery Pound Rout Puts Spotlight on Robot Trades (BBG)
• U.S. nonfarm payroll job growth seen pushing case for Fed hikes (Reuters)
• Qatar won't sell Deutsche Bank shares, might buy more (Reuters)
• Commerzbank Disses Deutsche Bank in Blitz to Lure German Clients (BBG)
• Snapchat Parent Working on IPO Valuing Firm at $25 Billion or More (WSJ)
• IMF, global finance leaders fret over populist backlash (Reuters)
• Foreigners in London ‘Horrified’ by May’s Immigration Vision (BBG)
• Wal-Mart Expects Profit Pressures, Fewer New Stores (WSJ)
• Hurricane Matthew batters Florida as Haiti death toll rises (Reuters)
• Russia Becomes a Grain Superpower as Wheat Exports Explode (BBG)
• Honeywell Cuts Sales Projections (WSJ)
• Deutsche Bank eyes asset management unit IPO (FT)
• Assad offers rebels amnesty if they surrender Aleppo (Reuters)
• Special Report: In Duterte's war on drugs, local residents help draw up hit lists (Reuters)
• Nobel Peace Prize awarded to Colombian President Juan Manuel Santos (CNN)
• Republican Trump says 70 percent of federal regulations 'can go' (Reuters)
• Lynn Tilton Just Can’t Stop Suing the SEC (BBG)
• Hollande demands tough Brexit negotiations (FT)

Overnight Media Digest

WSJ

- Snap Inc is working on an initial public offering that could value the company at $25 billion or more. http://on.wsj.com/2cYjHTt

- Samsung Electronics Co said it expects to report a slight improvement in its operating profit for the third quarter from a year earlier, even as it grapples with a global recall of its Galaxy Note 7 smartphone. http://on.wsj.com/2cYltUt

- Wal-Mart Stores Inc said it would only open about half as many supercenters next year compared with last year, and will instead direct more of its annual capital spending towards boosting e-commerce sales and customer service. http://on.wsj.com/2cYkGTy

- Honeywell International Inc cut its sales projections on Thursday, citing a business slowdown and delays. http://on.wsj.com/2cYn4d8

- Williams Companies Inc said three of its directors will not stand for re-election when their terms expire next month as part of the company's board overhaul. http://on.wsj.com/2cYo0Ov

FT

French President Francois Hollande said on Thursday that Britain must suffer the consequences of leaving the European Union in order to save the institution from an existential crisis.

UK finance minister Philip Hammond moved to reassure Wall Street that Britain will seek a special deal for financial services when it leaves the EU and will ensure the continued flow of international talent to the City of London.

David Richards has been reappointed to board and as chief executive officer of WANdisco Plc with immediate effect, less than a week after he kicked off his battle to return to the helm of the company.

NYT

- The CIT Group Inc, a commercial lender, agreed on Thursday to sell its aircraft leasing business to a Chinese-owned competitor for about $10 billion, signifying a big step by CIT to slim itself down in the face of pressure from investors. http://nyti.ms/2dz5e2N

- Mars Inc has finally taken full control of Wrigley, formally putting M&Ms and Altoids mints in the same division - and cashing out its partner, Warren Buffett, in the process. http://nyti.ms/2dz4Mll

- Deutsche Bank AG said on Thursday that it would eliminate 1,000 full-time positions in Germany as part of job cuts the embattled lender first announced last year. http://nyti.ms/2dz5oHy

- The six-day courtroom confrontation between Maurice Greenberg and lawyers for New York State accusing him of orchestrating sham transactions as chief executive of American International Group Inc 16 years ago ended Thursday without any knockout blows. http://nyti.ms/2dz4CdJ

- In the six weeks since federal agents raided a suburban Maryland home and arrested Harold Martin III on suspicion of stealing classified information from the National Security Agency, another organization has quietly prepared to face the fallout: Booz Allen Hamilton, Martin's employer. http://nyti.ms/2dz5Plf

Canada

THE GLOBE AND MAIL

** Thomson Reuters Corp is undertaking a major expansion to its Canadian operation with a plan to build a technology hub that will add 400 high-tech jobs in downtown Toronto over the next two years. http://bit.ly/2cWzRRV

** Canada will see an upsurge in protests and other direct action from indigenous communities if governments approve pipelines and energy projects without their consent, Assembly of First Nations Grand Chief Perry Bellegarde said on Thursday. http://bit.ly/2cWzmaz

** Quebec's securities regulator presented a "distorted picture" of events in outlining how former Amaya Inc chief executive David Baazov was the source in a sophisticated insider-trading and kickback scheme involving a group of closely knit friends and associates, his lawyer says. http://bit.ly/2cWzxmf

** Ladies Learning Code, a five-year old organization that has taught more than 40,000 women and girls how to program software, announced on Thursday it is spearheading the creation of Canada Learning Code. Its goal is to teach 10 million Canadians how to code over the next decade while it also expects to apply for charitable status and raise C$50 million ($38 million) to fund its goals. http://bit.ly/2cWzk2G

NATIONAL POST

** Millennials will lose up to 20 percent of their purchasing power from new mortgage rules, which will exacerbate affordability issues, says an organization that represents about 20,000 realtors in British Columbia. http://bit.ly/2cWzyXo

** Foreign buyers dropped to 1 percent of the Vancouver resale market after being as high as 19 percent, according to a new report from Canada Mortgage and Housing Corp. http://bit.ly/2cWyJ0E

** When Rick Peterson officially enters the leadership race for the federal Conservatives in a week or so, he will do so with the support and policy advice of Mark Mullins, a former Bay Street chief economist and a former executive director of the Vancouver-based think-tank the Fraser Institute. http://bit.ly/2cWz9nP

Britain

The Times

IMF leader Christine Lagarde has endorsed the British prime minister's concerns about low interest rates and the need to help families left behind by globalisation, as she warned that global growth has been "too low for too long". http://bit.ly/2dQ6LoK

Bank of England Governor Mark Carney has played down suggestions of a rift with the prime minister over the impact of loose monetary policy. http://bit.ly/2dQ7UfZ

The Guardian

Heathrow is hoping an 11th-hour push pegged to Brexit will secure approval to build a third runway, with a final verdict from the government expected within a fortnight. http://bit.ly/2dQ5NZy

Mark Carney has backed the British prime minister's call to rethink Britain's economic policy and rejected the idea that criticism of the side-effects of unconventional measures amounted to an attack on the independence of the Bank of England. http://bit.ly/2dQ6XEt

The Telegraph

Deutsche Bank has announced that it will be cutting a further 1,000 jobs as part of its restructuring plans. http://bit.ly/2dQ7hDb

Saudi Aramco, the world's biggest oil company, is planning to sell shares in its entire business and give investors unprecedented access to its financials ahead of its $2 trillion (1.62 trillion pounds) stock exchange listing. http://bit.ly/2dQ9cra

Sky News

Productivity in the UK workforce is exceeding levels seen before the financial crisis for the first time - but the country is making little progress catching up with G7 rivals. http://bit.ly/2dQ742V

The Government has approved fracking for shale gas at one site in Lancashire but has asked for more information on another. http://bit.ly/2duKzy8

The Independent

Snapchat is putting together an initial public offering that would value the company at $25 billion (20.24 billion pounds) http://ind.pn/2dQ7fv7

Paul Watson, the leader of Sunderland council, said people are worried about Nissan's threat to scrap a potential new investment in the city's car plant, which provides work for 7,000 people. http://ind.pn/2dQ84nw

President-elect Donald Trump doesn't have the traditional group of Washington insiders and donors to pull from for his Cabinet appointments but his transition team has spent the past several months building a list of executives from various industries in the private sector as well as conservative activists who could ultimately comprise one of the more eclectic presidential Cabinets in modern history.  While many Washington "insiders" refused to support his campaign, which probably helped him in the end, Trump is also expected to reward the surrogates who stood by him, including Newt Gingrich, Rudy Giuliani and Chris Christie.

So far, the Trump campaign and transition teams have been quiet about their potential cabinet picks but the speculation is starting to swirl.  Per Politico, here’s some insight, based on conversations with policy experts, lobbyists, academics and congressional staffers on who might be picked for the key jobs:

Secretary of state

Former House Speaker Gingrich, a leading Trump supporter, is a candidate for the job, as is Corker, current chairman of the Senate Foreign Relations Committee. The Tennessee senator has said he’d “strongly consider” serving as secretary of state.

 

Trump is also eyeing former U.S. Ambassador to the United Nations John Bolton.

 

Treasury secretary

Trump himself has indicated that he wants to give the Treasury secretary job to his finance chairman, Mnuchin, a 17-year-veteran of Goldman Sachs who now works as the chairman and chief executive of the private investment firm Dune Capital Management. Mnuchin has also worked for OneWest Bank, which was later sold to CIT Group in 2015.

 

Secretary of defense

Among the Republican defense officials who could join the Trump administration: Sessions (R-Ala.), a close adviser, has been discussed as a potential defense secretary. Former National Security Adviser Stephen Hadley and former Sen. Jim Talent (R-Mo.) have also been mentioned as potential candidates.

 

Top Trump confidant retired Lt. Gen. Mike Flynn, former director of the Defense Intelligence Agency, would need a waiver from Congress to become defense secretary, as the law requires retired military officers to wait seven years before becoming the civilian leader of the Pentagon. But Trump’s chief military adviser is likely to wind up in some senior administration post, potentially national security adviser. And other early endorsers, like Rep. Duncan Hunter (R-Calif.), could be in line for top posts as well.

 

Attorney general

People close to Trump say former New York City Mayor Giuliani, one of Trump’s leading public defenders, is the leading candidate for attorney general. New Jersey Gov. Christie, another vocal Trump supporter and the head of the president-elect’s transition team, is also a contender for the job — though any role in the cabinet for Christie could be threatened by the Bridgegate scandal.

 

Another possibility: Florida Attorney General Pam Bondi, though the controversy over Trump’s donation to Bondi could undercut her nomination.

Interior secretary

Lucas, the 74-year-old co-founder of oil products company Lucas Oil, is seen as a top contender for Interior secretary.

 

Trump’s presidential transition team is also eyeing venture capitalist Robert Grady, a George H.W. Bush White House official with ties to Christie. And Trump’s son Donald Trump Jr., is said to be interested in the job.

 

Meanwhile, a person who spoke to the Trump campaign told POLITICO that the aides have also discussed tapping Sarah Palin for Interior secretary. Trump has said he’d like to put Palin in his cabinet, and Palin has made no secret of her interest.

 

Other possible candidates include former Arizona Gov. Jan Brewer; Oklahoma Gov. Mary Fallin; Wyoming Rep. Cynthia Lummis; and Oklahoma oilman Harold Hamm.

Meanwhile, Kellyanne Conway, who became a near constant television presence in the campaign’s final two months after being named campaign manager in the summer could be White House press secretary.  Per Politico, a source from within the Trump campaign said “I think that job is hers if she wants it.  No one was more effective at carrying our message than her."

Corey Lewandowski, Trump’s original campaign manager who is still working as a CNN contributor, has remained close to the candidate since his firing in June and was spotted leaving Trump Tower on Wednesday afternoon. He, too, is jockeying for a prominent position either in the West Wing or possibly at the RNC if Trump blesses him as his chairman of choice should Priebus move over to the White House, according to sources close to Lewandowski.

While details are still sparse the only thing that is certain is that Trump's cabinet, like his presidential campaign, will be anything but traditional.

While it has yet to be officially confirmed by the Trump transition team, moments ago the NYT reported that - in what had previously been leaked on several occasions on various other outlets most notably the WSJ - former Goldman banker and Soros employee, Steven Mnuchin "a financier with deep roots on Wall Street and in Hollywood but no government experience"is expected to be named Donald J. Trump’s Treasury secretary as soon as Wednesday.

The WSJ has confirmed as much, reporting that "President-elect Donald Trump will name longtime banker and former Goldman Sachs executive Steven Mnuchin as Treasury secretary, turning to a campaign loyalist and fundraiser for the incoming administration’s top economic cabinet post, a transition official said Tuesday."

Steven Terner Mnuchin at Trump Tower in Manhattan this month

From the NYT:

Mnuchin, 53, was the national finance chairman for Mr. Trump’s campaign. He began his career at Goldman Sachs, where he became a partner, before creating his own hedge fund, moving to the West Coast and entering the first rank of movie financiers by bankrolling hits like the “X-Men” franchise and “Avatar.”

 

As Treasury secretary, Mr. Mnuchin would play an important role in shaping the administration’s economic policies, including a package of promised tax cuts, increased spending on infrastructure and changes in the terms of foreign trade. He could also help lead any effort to roll back President Obama’s nuclear deal with Iran and opening to Cuba by reimposing sanctions on Tehran and Havana.

As the NYT adds, his selection fits uneasily with much of Mr. Trump’s campaign rhetoric attacking the financial industry. Mr. Trump, in a campaign ad intended as a closing argument, portrayed the chief executive of Goldman Sachs as the personification of a global elite that the ad said had “robbed our working class.” But, the NYT notes, Mnuchin has said that he agrees with Mr. Trump’s priorities, and he was an early supporter of a candidate who clearly prizes loyalty.

When Mr. Trump won New York’s Republican presidential primary in April, Mr. Mnuchin attended the victory party. The next day, he accepted Mr. Trump’s invitation to become the campaign’s national finance director. A number of Mr. Mnuchin’s friends made comments to various publications expressing shock at the decision. Mr. Mnuchin was unfazed. “Nobody’s going to be, like, ‘Well, why did he do this?’ if I end up in the administration,” he told Bloomberg Businessweek in August.

As the WSJ adds, "Mr. Mnuchin’s Wall Street pedigree presents a contrast with the populist themes Mr. Trump struck in his campaign, railing against big banks and vowing to close tax loopholes that benefit hedge funds. Mr. Trump also repeatedly attacked his rivals in the primary and general elections for their Wall Street ties, especially those connected to Goldman Sachs."

If confirmed by the Senate as Treasury secretary, Mr. Mnuchin will join a list of prominent bankers who made similar moves from Wall Street to Washington, including two of his former bosses at Goldman, Henry Paulson and Robert Rubin, who were both top Goldman executives before running Treasury.

* * *

For those who have missed our previous piece on the career banker, here are some more details on Mnuchin's background from the WSJ:

Despite his successful Wall Street career, Mr. Mnuchin has no experience running a massive organization—the Treasury Department has 86,000 employees—or in economic or financial policy-making. The biggest entity Mr. Mnuchin has run was the technology division of Goldman, which had over 5,000 employees.

 

Mr. Mnuchin’s acquaintances describe him as smart, with several people calling him “nerdy.” He regularly attends New York philanthropic galas. He has long held high-profile positions on charity boards and is a former director of the Whitney Museum of American Art. At an event for New York charity City Harvest in 2006, Mr. Mnuchin and his ex-wife were photographed with Mr. Trump. Mr. Mnuchin is now engaged to Scottish actress Louise Linton.

 

Mr. Mnuchin joined Goldman in 1985. He worked in the fixed-income department, eventually overseeing trading in mortgages, U.S. government, money market and municipal bonds. He made partner in 1994. Mr. Mnuchin later became the firm’s chief information officer.

 

When Goldman converted into a publicly traded company in 1999, Mr. Mnuchin, like other partners, made millions. He later bought a 6,500-square-foot apartment in 740 Park Avenue, a storied Manhattan co-op built by Jackie Kennedy’s grandfather that is known as the “billionaires’ building.”

 

At a recent conference, Goldman CEO Lloyd Blankfein called Mr. Mnuchin a “highflier, a partner at a young age. He did very well. He is a smart, smart guy.”

 

In 2002, Mr. Mnuchin left Goldman and later was hired to run a credit fund set up by billionaire George Soros.

 

In 2004, Mr. Mnuchin and two former Goldman colleagues founded hedge fund Dune Capital Management LP with financial backing from Mr. Soros. Dune soon expanded into the entertainment business, striking up a film-financing deal with a unit of 21st Century Fox. Among the films Dune financed was “Avatar,” one of the all-time box office hits.

 

21st Century Fox and News Corp, parent company of The Wall Street Journal, share common ownership.

 

In 2008, IndyMac Bank in Pasadena, Calif., collapsed in one of the largest bank failures in U.S. history. Mr. Mnuchin led a group of investors, including funds run by Mr. Soros and other hedge-fund and private-equity titans, who bought it from the government for about $1.5 billion. The Federal Deposit Insurance Corporation agreed to cover a portion of any future loan losses, a lucrative arrangement for Mr. Mnuchin and his partners. Regulators who negotiated with Mr. Mnuchin found him to be the kind of detail-oriented person who would “know the cost of every pencil,” according to a person familiar with their thinking.

 

Mr. Mnuchin, who became chairman of the renamed OneWest Bank and CEO of its parent company, relocated to Los Angeles and bought a mansion in the Bel Air neighborhood.

 

The deal soon became controversial. In 2011, community activists descended on Mr. Mnuchin’s Bel Air home to protest over the possible eviction of a homeowner who was behind on her mortgage payments to OneWest.

 

In 2014, OneWest was sold to CIT Group Inc., earning Mr. Mnuchin and Dune hundreds of millions of dollars in profits, according to a person familiar with the matter. He later pocketed $10.9 million in severance payouts when he left the company.

 

Despite the huge profits, OneWest’s legacy continues to trail Mr. Mnuchin, who now sits on CIT’s board and owns more than 1% of its shares.

 

A portion of OneWest’s mortgage business is under investigation by the Department of Housing and Urban Development. Last July, CIT said it was forced to take a $230 million charge as it cleaned up accounting problems at OneWest. And two California housing groups this month accused OneWest of discriminating against minorities by not putting branches in their communities.

 

Meanwhile, 14 years after leaving Goldman, Mr. Mnuchin remains in the firm’s orbit, showing up at alumni events and involving other ex-Goldman executives in his finance deals.

 

He has continued to work those angles as Mr. Trump’s finance chairman, a post he assumed in May. Mr. Mnuchin negotiated a joint fundraising agreement with the Republican National Committee, easing the way for major donors to give both to the party and to Mr. Trump. The committee’s chairman, Lewis Eisenberg, is a Goldman veteran and contemporary of Mr. Mnuchin’s father.

* * *

Even though the nomination is still unofficial, moments ago CBS' reproter Charlie Keye tweeted that it can also confirm that "Trump has chosen financier Steven Mnuchin as his nominee for Treasury Secretary."

Just now. @CBS News has confirmed President-elect Trump has chosen financier Steven Mnuchin as his nominee for Treasury Secretary.

— Charlie Kaye (@CharlieKayeCBS) November 29, 2016

And just like that the swamp feels a little bit more full.

It has been a good day for Trump advisor Anthony Scaramucci.

First, he was named by Bloomberg as this year's surprise Davos star (recall that he is the only member of the Trump team participating unofficially at the Swiss boondoggle.  “I brought a food taster,” Scaramucci joked in an interview on Bloomberg Television when asked about his solo mission).  As a reminder, Scaramucci was recently named an assistant to the president and further told Bloomberg Television Tuesday that he will serve as a liaison between the White House and the business community, and work with local, state and foreign governments and trade associations.

Which brings us to the second reason why Anthony is smiling.

Today, as part of his shedding of potential conflict of interest, Scaramucci sold a majority stake in his SkyBridge Capital fund of funds, which has had prominent cameos in such movies as Wall Street 2, to HNA Capital U.S., which is controlled by Chinese billionaire Chen Feng, and RON Transatlantic EG. While terms of the deal were not disclosed, the deal, which includes the SkyBridge Alternatives Conference, or SALT, is said to be valued at about $200 million according to Bloomberg, and could increase to about $230 million if certain conditions are met. SkyBridge’s senior management and investment teams will remain intact while Scaramucci will step down.

And since Scaramucci owns about 45% of SkyBridge, he is about to pocket $100 million. He will no longer be affiliated with the firm or SALT, according to the transaction press release. Australian investment firm Challenger Ltd. also owns a stake, according to a filing, as does SkyBridge’s Chief Investment Officer Raymond Nolte. 

"SkyBridge and SALT are in great hands and will continue to thrive," Scaramucci said in a statement.

Scaramucci, who started his fund-of-hedge funds firm in 2005, made the deal as the industry bleeds assets and he prepares to work for President-elect Donald Trump. HNA Capital is the New York-based investment arm of Chinese conglomerate HNA Group, which has been on an acquisition spree for U.S. assets under Chen’s leadership. RON Transatlantic is a holding company with interests in financial services, logistics, energy and brewing, according to the statement.

As of last January, SkyBridge managed $9.2 billion in assets. As a fund of funds, SkyBridge has handed out client money to hedge funds including Marathon
Asset Management and York. Confirming that today's deal was a major victory for the "Mooch" is that firms like SkyBridge have
largely lost their luster since the global financial crisis as investors
bypassed them to invest directly in hedge funds, assuming they invest in hedge funds: 2016 was the year of greatest outflows from the 2 and 20 community since the financial crisis. The fund-of-funds
industry manages about $636 billion in assets, down from its 2007 peak
of $799 billion, according to Hedge Fund Research Inc. They returned
about 0.48 percent last year.

Meanwhile SALT, a glitzy hedge fund affair, often compared to Davos itself for its draw of about 2,000 hedge-fund industry attendees each year, will be spun out as a standalone entity. SALT will be owned by Victor Oviedo, head of business development at SkyBridge, and Kelly O’Connor, a director of business development, according to another person briefed on the matter.

So who are the lucky buyers? This is where questions are likely to emerge.

When looking at RON Transatlantic, a holding company with interests in financial services, logistics, energy and brewing, the most interesting thing about this particular group is that Obama's "body man", Reggie Love works there as a Partner and VP:

It was not immediately clear why Reggie Love's firm would boost its stake in Skybridge. As Bloomberg adds, a RON Transatlantic offshore entity already owns between 5 and 10% of SkyBridge.

As for HNA Group, it is among the most active players in what’s shaping up to be a record year for overseas acquisitions by Chinese companies. HNA’s $30 billion in investments announced and completed last year included multi-billion-dollar deals for Hilton Worldwide Holdings Inc., CIT Group Inc.’s aircraft leasing business and Ingram Micro Inc. Now it will own a fund of funds. HNA owner Chen, 63, who two decades ago used to push refreshment trolleys up and down the aisle of the lone Boeing 737 that comprised his startup airline, the SkyBridge acquisition is part of his ambition to make HNA one of the world’s top 100 companies by the end of this decade. In 1995, Chen flew to New York and persuaded George Soros to invest $25 million in his fledgling Hainan Airlines Co. That at least is the stated reason; the less palatable one is simply laundering of hot money through foreign M&A, a practice the PBOC warned it would crack down on in 2017.

It was also not clear as of this writing whether Scaramucci will be exempt from paying capital gains tax on the sale, considering he is joining the Trump administration after the deal.

In what is sure to be one of the fieriest confirmation hearings to date, Steven Mnuchin, Trump's pick for Treasury Secretary, is set to take questions from the Senate Finance Committee starting at 10AM EST.  As the show gets started, Democrats will undoubtedly be looking to score theatrical points with the working class folks of the Midwest by peppering Mnuchin with zingers on his time at Goldman Sachs and demonizing his involvement with foreclosure efforts at IndyMac and OneWest. 

As the political theater get ready to begin, per The Hill, here are some of the things to expect:

1.  Democrats will undoubted try to score populist points with the working class folks of the Midwest by hitting Mnuchin on his banking background.

Democrats have ripped Trump for staffing his administration with several Goldman Sachs alumni and wealthy business figures after campaigning against corporate elites running government.

 

Mnuchin made millions through his private sector career in investing, banking and movie producing. He’s never worked in government, spurring Democrats to raise questions about his preparedness and familiarity with the job.

 

Democrats are putting a target on Mnuchin as they seek to bolster their populist credentials. They’ve already nicknamed him “the foreclosure king” and claimed his lack of government service won’t translate into fighting for middle class Americans.

 

Finance Committee Democrats Sens. Sherrod Brown (Ohio) and Claire McCaskill (Mo.) are up for reelection in 2018 in states that went for Trump. How they approach their questioning of Mnuchin will be something to watch. 

2.  Will Mnuchin weigh in on Dodd-Frank, a controversial piece of legislation that Republicans have been looking to overhaul for years.

Though the Senate Banking Committee has jurisdiction over the issues covered by the Dodd-Frank Act, some Senate Finance members are likely to press Mnuchin on the sweeping financial regulation law passed in 2010.

 

Republicans have been planning a Dodd-Frank overhaul for more than a year and are poised to make major changes to the law, even if it’s piece by piece.

 

Brown, the top Democrat on the Banking Committee, sent Mnuchin a letter in December with several questions on banking and housing regulation that he says Mnuchin didn’t answer. Brown also told reporters Tuesday that he expects such questions to be asked by other senators.

 

Mnuchin’s comments on Dodd-Frank could reveal where the Trump administration wants to start when it comes to changing Dodd-Frank. Trump shed little light during the campaign on how he’d approach the law, so Mnuchin could be the first look into the administration's priorities.

3.  Will Mnuchin be opposed by any Republicans on the Committee?

While most Republicans appear ready to back Mnuchin, one GOP senator could waver: Sen. Dean Heller (Nev.).

 

Heller, a Finance Committee member, is up for reelection in 2018 in a state won by Hillary Clinton in the presidential election. Nevada was also devastated by foreclosures during the housing crisis, making Mnuchin’s record at OneWest a sensitive issue.

 

Heller told The Hill this month that despite his “very positive” conversation with Mnuchin, he still has reservations about supporting him.

4.  What will Mnuchin say regarding a strong-dollar policy?

It’s been a mantra of Treasury secretaries since the mid-1990s. Usually, Republican and Democratic administrations have maintained a policy of backing a strong U.S. currency, speaking neutrally about it, for fear of upsetting the financial markets. But Trump went and changed that.

 

“Our dollar is too strong,” Trump told The Wall Street Journal last week. “And our companies can’t compete with [China] now because our currency is too strong. And it’s killing us.”

 

Will Mnuchin echo Trump’s sentiments or will he maintain a strong-dollar policy tradition? The markets await his answer.

With that, courtesy of WikiPedia, here is a brief bio on Mnuchin:

Steven Terner Mnuchin is a former Goldman Sachs partner and senior manager and hedge fund investor. On November 30, 2016, it was announced that Mnuchin would be nominated as Secretary of the Treasury in the coming administration of President-elect Donald Trump.

 

After he graduated from Yale University, Mnuchin worked for investment bank Goldman Sachs for 17 years, reaching its management committee. After he left the bank in 2002, he worked for and founded a number of hedge funds. During the financial crisis, Mnuchin bought failed house lender IndyMac. He rebuilt the bank as chairman and CEO in the subsequent years under the name OneWest Bank, and sold it in 2015 to CIT Group. Mnuchin joined Trump's presidential campaign in 2016, and was named national finance chairman for his campaign.

And here is a live stream of the festivities: