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FRIDAY 12/19 Frontrunning:~~~~

by Tyler Durden on 12/19/2014 07:45 -0500

http://www.zerohedge.com/news/2014-12-19/frontrunning-december-19


Icahn, Paulson Suffer Large Losses as Energy-Related Bets Sour (WSJ)
Oil Investors Keep Betting Wrong on When Market Will Bottom (BBG)
U.S. to sell final $1.25 billion shares of Ally Financial from bailout (Reuters)
Ally Financial Gets Subpoena Related to Subprime Automotive Finance (WSJ)
Russia's parliament rushes through bill boosting banking capital (Reuters)
How a Memo Cost Big Banks $37 Billion (WSJ)
ECB considers making weaker euro zone states bear more quantitative easing risk (Reuters)
How the U.S. Could Retaliate Against North Korea (BBG)
U.S. backed talks with ISIS over American hostage (Reuters)
Oil Crash Exposes New Risks for U.S. Shale Drillers (BBG)
Exxon Mobil Shows Why U.S. Oil Output Rises as Prices Plunge (BBG)
Eight children killed in Australia in reported mass stabbing (Reuters)
No Selfies, Tweets or Leaks: Why Cuba Talks Had to Be Kept Top Secret (BBG)
Sony Hackers Seen Having Snooped for Months, Planted Bomb (BBG)
Oil-Led Slump Spurring Fastest Investor Exit From Commodities Since 2008 (BBG)
Despite billions in aid, U.S. unable to get Pakistan to confront militants (Reuters)



Overnight Media Digest

WSJ

* Ripples from Sony Pictures' decision not to release its controversial comedy "The Interview" immediately reached other entertainment projects in the works as producers and studios sought to distance themselves from productions involving North Korea. (http://on.wsj.com/1xtc4g3)

* If the Obama administration's move to normalize ties with Cuba does lead to an end to the U.S. embargo, it could reignite battles over the U.S. rights to sell two of the island's most prized exports: cigars and rum. (http://on.wsj.com/13FSjFJ)

* Car makers are not pulling out of Russia yet, but they are growing increasingly nervous and moving to control the damage from plunging consumer demand and exposure to Russia's swooning currency. (http://on.wsj.com/1AlBM5G)

* Deezer, the French music streaming service, has appointed a new boss as it prepares for a full-scale launch in the already crowded U.S. market. (http://on.wsj.com/1C6d2R5)

* Madison Square Garden Co, which said in October that it would explore separating its entertainment businesses from its media and sports operations, added on Thursday that it would consider breaking up further. (http://on.wsj.com/1wRAPQh)

* Computer-services company Atos will buy Xerox's information technology outsourcing business for $1.05 billion in cash, a deal that would bolster the French company's position in the U.S. (http://on.wsj.com/1AlCyQa)

* Luxembourg agreed Thursday to share with the European Commission information on tax deals secured by multinational companies with operations in the small nation. (http://on.wsj.com/1DQYVRq)

* RadioShack Corp said its head of marketing is leaving the company, the second top level executive departure in the middle of its all-important holiday sales drive, as the electronics chain tries to stave off bankruptcy. (http://on.wsj.com/1AlCAHY)

* Liberty Media Corp's CommerceHub is set to announce it has agreed to acquire e-commerce advisory firm Mercent as it seeks to broaden its clients' reach online, particularly through Amazon.com Inc and Google Inc . (http://on.wsj.com/1x3VjbL)

* American Apparel Inc has been approached by Irving Place Capital about a possible takeover, according to people familiar with the matter. (http://on.wsj.com/1sMC70C)

* Unilever Plc on Thursday said it was withdrawing a high-profile lawsuit it filed against a California food startup over the marketing of mayonnaise. (http://on.wsj.com/1GwXqpz)

* Hulu has won the rights to a large trove of FX Networks shows like "The Strain" and "Tyrant" in a deal designed to minimize the damage many media executives fear streaming services are wreaking on traditional cable TV. (http://on.wsj.com/1w4B6vv)



FT

Germany's BASF and Russia's Gazprom neft' OAO have decided to call off an energy asset swap due to "difficult political environment", the chemical producing company said on Thursday.

Hampton Creek, maker of Just Mayo spread, has raised $90 mln from Horizons Ventures, Li Ka-shing's investment fund, and Khosla Ventures, a Silicon Valley venture-capital firm, both of which are already investors in the company.

France's competition authority has issued a 951 million euros ($1.17 billion) fine to companies including L'Oreal and Unilever after finding them guilty of secretly fixing prices of household and personal care products.

Ireland's former flag carrier Aer Lingus said on Thursday that it rejected a takeover bid from British Airways owner IAG as it "fundamentally undervalued" the business.



NYT

* Within hours of President Obama's historic move to restore full diplomatic relations with Cuba, companies in the United States are already developing strategies to introduce their products and services to a market they have not been in for the better part of 50 years - if ever. (http://nyti.ms/1AlCu2O)

* Switzerland is introducing a negative interest rate on deposits held by lenders at its central bank, moving to hold down the value of the Swiss franc amid turmoil in global currency markets and expectations that deflation is at hand. (http://nyti.ms/1zCKcEG)

* The European Union announced new sanctions over Ukraine on Thursday, outlawing European investment in Crimea, the Black Sea peninsula annexed by Russia in March, as leaders of the 28-nation bloc gathered in Brussels to review their strategy toward Russia. (http://nyti.ms/1uYtB97)

* A White House official said the administration was considering a "proportional response" against those who hacked into Sony Pictures computers, a retaliation that could thrust the United States into a direct confrontation with North Korea. (http://nyti.ms/1sF66lr)

* A European Union investigation into possible price fixing by Europe's largest truck manufacturers appeared to be gathering momentum after Daimler of Germany said it had set aside 600 million euros to cover possible costs resulting from the inquiry. (http://nyti.ms/1wRxT69)

* Under pressure from regulators, Ford Motor Co is expanding nationwide the recall of vehicles with airbags manufactured by the Japanese supplier Takata Corp, the automaker said. (http://nyti.ms/1DQYcjh)

* The private equity firm Westbrook Partners has thrown in the towel and says it will sell the New Era Estate, a London housing block whose tenants protested its plans to raise rents. (http://nyti.ms/13jhFs4)

* Ally Financial Inc said it had received a Justice Department subpoena as part of an investigation "related to subprime automotive finance and related securitization activities." (http://nyti.ms/1sNaYuG)

* Xerox Corp has agreed to sell its information technology outsourcing business to Atos, the French technology company, for just over $1 billion. (http://nyti.ms/1wpZaOm)

* Goldman Sachs Group Inc named John E. Waldron as one of its co-heads of investment banking, succeeding John S. Weinberg, a vice chairman and a member of one of the firm's most prominent families. (http://nyti.ms/1AN8meT)



Canada

THE GLOBE AND MAIL

** In its continuing bid to boost competition in the wireless industry, Ottawa confirmed it will reserve the majority of cellular airwaves in a coming public auction for small carriers. At the same time, the federal government, which has pushed pro-consumer policy, assured Canadians in rural areas they will not lose what Internet access they already have and revealed plans to hold another auction of valuable low-band airwaves. (http://bit.ly/1x4qJi4)

** Grupo Bimbo SAB de CV is buying the Vachon family of snack cakes from Saputo Inc for C$120 million ($103.55 million) as the Mexican baked-goods company widens its footprint in Canada. (http://bit.ly/1GvrK3O)

** U.S. ambassador Bruce Heyman is urging Canada to continue sharing security information with the United States in the wake of a damning report on the CIA's brutal interrogation methods. In a recent interview with The Globe and Mail, Heyman said co-operation between the two countries is critical to keeping citizens safe. (http://bit.ly/1xtt5Xx)

NATIONAL POST

** BlackBerry Ltd unveiled a new phone that harks back to the company's glory days of being the world's leading smartphone maker, capping a year dedicated to stabilizing finances and winning back investor confidence. Earnings on Friday will shed light on how successful the turnaround has been. (http://bit.ly/1wrzGQL)

** The Ontario government wants Ottawa to pony up C$1 billion for the massive "Ring of Fire" mineral belt, but the federal natural resources minister is warning that key structural challenges still need to be overcome. The Ring of Fire, named after the famous Johnny Cash song, is a vast but very remote mineral belt located in Ontario's James Bay Lowlands. (http://bit.ly/1wKeYvr)

** Court documents allege the Ontario Liberal party paid the spouse of a top aide to Dalton McGuinty C$10,000 to wipe computer hard drives in the premier's office. The allegation is contained in police documents used to obtain a search warrant that was executed in November at an Ontario government cyber security office in downtown Toronto. (http://bit.ly/1wIC45o)



China

CHINA SECURITIES JOURNAL

- Corn starch futures would start trading on Dec. 19 in Dalian Commodity Exchange (DCE), which would be the 44th commodity futures in China, the Dalian Futures Exchange said.

CHINA DAILY

- China is to set up an offshore observation network by 2020 to cope with disasters, guarantee development of the coastal economy and protect the country's maritime interest, according to a guideline released by the State Oceanic Administration.

- Domestic solar panel producers are looking to emerging markets to offset mounting difficulties they face in the United States, where they fear they may be squeezed out completely by a new ruling on dumping duties.

SHANGHAI DAILY

- A former housing official has been sentenced to 25 years in prison for bribery, corruption and embezzlement by a court in Zhengzhou, capital of central China's Henan Province. The Zhengzhou court said Zhai illegally owned 20 properties, of which 11 were registered under his daughter's names and nine under his son's.



Britain

The Times

JOHN LAING BUILDS HEAD OF STEAM TO BE FIRST BIG 2015 LONDON FLOAT

John Laing is on the verge of being brought back to the stock market seven years after it was taken private. The infrastructure investor and construction project management firm is likely to be one of the first big London floats of 2015. John Laing's owner, Henderson, the international investment house and private equity firm, has hired HSBC Holdings Plc and Barclays Plc to marshal an initial public offering. (http://thetim.es/1sEGLrV)

The Guardian

FRANCE FINES 13 CONSUMER GOODS FIRMS 951 MLN EUROS FOR PRICE-FIXING

Some of the world's biggest consumer products companies, including Unilever , Reckitt Benckiser, Procter & Gamble and Gillette, have been fined a combined 951 million euros ($1.17 billion) by the French competition watchdog for price fixing in supermarkets. (http://bit.ly/1w3W4ug)

ROYAL MAIL SELL-OFF UNDERVALUED FIRM BY 180 MLN STG, REPORT FINDS

The government could have made 180 million pounds ($281.97 million) more from the 2 billion pounds sale of Royal Mail Plc last year but this would have involved "considerable risk," a report commissioned by business secretary Vince Cable concluded. (http://bit.ly/1w1Rlt2)

The Telegraph

UK GOVERNMENT RECOVERS 1.36 BLN STG OF MONEY USED TO BAIL OUT SAVERS IN ICELANDIC BANK

The government has now recovered 85 percent of the money it spent bailing out hundreds of thousands of British consumers who risked seeing their savings wiped out when Icesave collapsed. The Treasury announced on Thursday that it had recovered another 1.36 billion pounds from the estate of Landsbanki, which went bust in 2008. (http://bit.ly/16wSnbR)

Sky News

MOBILE NETWORKS AGREE DEAL TO BOOST UK COVERAGE A 5 billion pound project to guarantee mobile phone voice and text coverage to 90 percent of the UK geographical area by 2017 will go ahead. The deal means the four mobile networks - EE, O2, Three and Vodafone Group Plc - have all agreed to tackle poor coverage in so-called partial "not spots." (http://bit.ly/1w3LyDk)

The Independent

NORTH SEA JOBS TO BE AXED AS OIL PRICE DIVES

Aberdeen could suffer devastating employment cuts say analysts, after warnings that the North Sea oil industry is "close to collapse" because of the dramatic fall in oil prices. (http://ind.pn/1x3k7k9)

AER LINGUS REJECTS TAKEOVER BID FROM BRITISH AIRWAYS OWNER IAG

Irish airline Aer Lingus Group Plc has rejected a takeover bid by the International Consolidated Airlines Group , the parent company of British Airways. (http://ind.pn/1wQqWCm)

Fly On The Wall Pre-market Buzz

ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
Kansas City Fed manufacturing index for December at 11:00--consensus 7

ANALYST RESEARCH

Upgrades

CVS Health (CVS) upgraded to Buy from Neutral at SunTrust
EPR Properties (EPR) upgraded to Hold from Underweight at KeyBanc
First Marblehead (FMD) upgraded to Buy from Neutral at Compass Point
Medical Properties Trust (MPW) upgraded to Hold from Underweight at KeyBanc
Orange SA (ORAN) upgraded to Buy from Hold at Deutsche Bank
Potash (POT) upgraded to Buy from Neutral at UBS
Ryanair (RYAAY) upgraded to Outperform from In-Line at Imperial Capital
Unum Group (UNM) upgraded to Buy from Neutral at Compass Point
WPP PLC (WPPGY) upgraded to Buy from Neutral at Citigroup

Downgrades

Actuant (ATU) downgraded to Hold from Buy at Jefferies
EastGroup Properties (EGP) downgraded to Neutral from Buy at Goldman
Hartford Financial (HIG) downgraded to Neutral from Buy at Citigroup
Healthcare Realty Trust (HR) downgraded to Hold from Buy at KeyBanc
Kinross Gold (KGC) downgraded to Neutral from Buy at UBS
Maxim Integrated (MXIM) downgraded to Neutral from Buy at Goldman
OGE Energy (OGE) downgraded to Hold from Buy at Wunderlich
Otonomy (OTIC) downgraded to Underperform from Neutral at BofA/Merrill
RPC, Inc. (RES) downgraded to Neutral from Buy at Citigroup
STAG Industrial (STAG) downgraded to Hold from Buy at MLV & Co.
Teekay Tankers (TNK) downgraded to Neutral from Buy at UBS
The Pantry (PTRY) downgraded to Underperform from Sector Perform at RBC Capital
Wesco Aircraft (WAIR) downgraded to Sell from Hold at Deutsche Bank
Worthington (WOR) downgraded to Hold from Buy at KeyBanc

Initiations

Adept Technology (ADEP) initiated with an Overweight at Piper Jaffray
AeroVironment (AVAV) initiated with a Neutral at Piper Jaffray
Anadarko (APC) initiated with a Buy at Guggenheim
Ashford (AINC) initiated with a Buy at MLV & Co.
BE Aerospace (BEAV) resumed with a Buy at Citigroup
Capitala Finance (CPTA) initiated with a Buy at UBS
Clean Harbors (CLH) initiated with a Neutral at Macquarie
Continental Resources (CLR) initiated with a Buy at Guggenheim
Corrections Corp. (CXW) initiated with a Market Perform at Wells Fargo
Customers Bancorp (CUBI) initiated with a Market Perform at Keefe Bruyette
Demandware (DWRE) initiated with an Outperform at RBC Capital
Ellie Mae (ELLI) initiated with an Outperform at RBC Capital
Ellington Residential (EARN) initiated with a Market Perform at JMP Securities
Geo Group (GEO) initiated with a Market Perform at Wells Fargo
GrubHub (GRUB) initiated with an Outperform at Oppenheimer
Intermolecular (IMI) initiated with a Market Perform at Northland
Internap (INAP) initiated with a Buy at Stifel
iRobot (IRBT) initiated with an Overweight at Piper Jaffray
Jumei (JMEI) initiated with a Hold at Brean Capital
KLX Inc. (KLXI) initiated with a Hold at Deutsche Bank
Microchip (MCHP) reinstated with a Neutral at Goldman
Newfield Exploration (NFX) initiated with a Buy at Guggenheim
Oasis Petroleum (OAS) initiated with a Buy at Guggenheim
Opco unsure if Twitter (TWTR) has mass market appeal, starts at Perform
RSP Permian (RSPP) initiated with a Neutral at Guggenheim
Rackspace (RAX) coverage resumed with a Buy at Stifel
Rexford Industrial (REXR) initiated with a Hold at Jefferies
SM Energy (SM) initiated with a Neutral at Guggenheim
Sotherly Hotels (SOHO) initiated with an Outperform at JMP Securities
Southwestern Energy (SWN) initiated with a Neutral at Guggenheim
Stericycle (SRCL) initiated with an Outperform at Macquarie
Telefonica (TEF) reinstated with a Sell at Deutsche Bank
Travelport (TVPT) initiated with a Perform at Oppenheimer
Ubiquiti Networks (UBNT) initiated with a Sell at Goldman
Wabtec (WAB) initiated with a Neutral at Macquarie
Whiting Petroleum (WLL) initiated with a Neutral at Guggenheim
Wright Medical (WMGI) initiated with a Market Perform at Wells Fargo

COMPANY NEWS

Ally Financial (ALLY) received DOJ subpoena over subprime automotive finance
Ally Financial (ALLY) to exit Troubled Asset Relief Program
Atos to buy Xerox's (XRX) IT outsourcing business for $1.05B
Carnival (CCL) announces two new ship orders with Fincantieri
DuPont (DD) announces restructuring, spinoff of chemicals company
Eli Lilly (LLY), Adocia to co-develop BioChaperone Lispro
FMC Technologies (FTI) awarded $393M subsea systems contract
ImmunoGen reports Phase III MARIANNE study met non-inferiority endpoint
Journal Communications (JRN) and DISH reach retransmission agreemnt
Madison Square Garden (MSG) board directs management to consider additional spin-offs
Maximus (MMS) awarded North East Yorkshire, Humber work Work Programme contract
Men's Wearhouse (MW), Eminence in standstill agreement amendment
MetLife (MET) says 'disappointed' in FSOC decision
NQ Mobile (nq) to sell FL Mobil to Tack Fiori International
RCS Capital (RCAP) issues statement regarding recent market developments
Red Hat (RHT) CFO to retire in next 12 months
Roche (RHHBY) says breast cancer study did not meet PFS superiority endpoint
Roche (RHHBY) to discontinue Phase III study of Alzheimer's disease drug
Solazyme (SZYM) begins restructuring plan to reduce 2015 operating expenses by $18.0M
Stadium Capital Management urges Big 5 Sporting (BGFV) to eliminate 'staggered board'
Transocean (RIG) to scrap seven floaters, sees Q4 charge of $100M-$140M
Wabash (WNC) authorizes stock repurchase program for up to $60M
Xerox (XRX) to sell IT outsourcing business to Atos for $1.05B

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Cintas (CTAS), Nike (NKE), AAR Corp. (AIR), Red Hat (RHT)

Companies that matched consensus earnings expectations include:
Pier 1 Imports (PIR)

Xerox (XRX) lowers FY14 adjusted EPS to $1.04-$1.06 from $1.11-$1.13, consensus $1.12
Xerox (XRX) lowers Q4 adjusted EPS view to 28c-30c from 30c-32c, consensus 31c
Xerox (XRX) lowers FY15 adjusted EPS to $1.05-$1.11 from $1.11-$1.17, consensus $1.17

Nike (NKE) sees Q3 constant dollar revenue growth in low teens
Nike (NKE) backs FY15 constant dollar revenue growth view
Nike (NKE) sees FY15 China revenue growth in mid teens range

Red Hat (RHT) sees Q4 EPS 40-41c, consensus 41c
Red Hat (RHT) raises FY15 EPS to $1.57-$1.58, consensus $1.55

NQ Mobile (NQ) raises FY14 revenue view to $325M-$326M from $320M-$325M

Cintas (CTAS) sees FY15 EPS ex-tems $3.20-$3.25, consensus $3.15

Pier 1 Imports (PIR) backs FY15 EPS view 95c-$1.05, consensus 98c

NEWSPAPERS/WEBSITES

Fortress (FIG) looks to sell TRAC Intermodal, Reuters says
Google's (GOOG) next version of Android to be built directly into cars, Reuters says
Obama administration to ease many parts of Cuba embargo, NY Times says
Oracle (ORCL) looks like a 'buy', Barron's says
Sony (SNE) loss on 'Interview' may not be covered by insurance, NY Post says
Sony (SNE) shares could climb 50%, Barron's says
Sony (SNE) unable to find outlet for film as relationships damaged, NY Times reports
Toyota (TM) to consolidate seat-making operations, Nikkei reports

SYNDICATE

Alcoa (AA) files to sell 36.52M shares of common stock for holders
Ally Financial (ALLY) files automatic common stock shelf
Juno Therapeutics (JUNO) 11M M share IPO priced at $24.00
PlasmaTech (PTBI) 3.5M share Secondary priced at $4.00
Teekay Tankers (TNK) files to sell 20M shares of Class A common stock