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Frontrunning:

Snowden: 'no relationship' with Russian government (Reuters)
Bond Surge Worldwide Drives Index Yield to One-Year Low (BBG)
Shares flirt with record highs on ECB easing bets (Reuters)
Goldman Shuns Bonds Pimco’s Gross Favors in ‘New Neutral’ (BBG)
Dish to Become Largest Company to Accept Bitcoin (AP)
To Make a Killing on Wall Street, Start Meditating (BBG)
Snapchat CEO ‘Mortified’ by Leaked Stanford Fraternity E-Mails (BBG)
Apple to get Beats, music mogul Iovine for $3 billion (Reuters)
Fink Says Leveraged ETFs May ‘Blow Up’ Industry (BBG)
Porn may be messing with your head (Reuters)
Iranian Hackers Stalked U.S. Officials, Report Says (BBG)
Egypt's Sisi wins presidential election (Reuters)
Billionaire Forrest Sees Fortune in Australian Beef to China (BBG)
FBI’s Wanted List Sends Chinese Tech to First From Worst (BBG)


Overnight Media Digest

WSJ

* Apple Inc said on Wednesday it is buying Beats Electronics LLC for $3 billion to bolster a music business that has lost some of its mojo, as streaming-music services encroached on the downloads dominated by Apple's iTunes service. (http://r.reuters.com/tyt69v)

* One of the General Motors Co engineers at the center of the controversy over the company's handling of a deadly ignition switch defect has met with congressional investigators, indicating lawmakers are accelerating their probe, according to people familiar with the matter. (http://r.reuters.com/vyt69v)

* Valeant Pharmaceuticals International Inc, having so far been spurned by takeover target Allergan Inc, raised its offer to buy the Botox maker to $49.4 billion and sold the rights to some of its skin-care products in an attempt to smooth the antitrust review process if its unsolicited takeover bid is successful. (http://r.reuters.com/zyt69v)

* Hachette Book Group hit back at Amazon.com Inc on Wednesday, rebuffing the retailer's suggestion that the two jointly compensate authors affected by a dispute between the companies. (http://r.reuters.com/dav69v)

* Boeing Co said on Wednesday that U.S. air-safety regulators cleared its 787-8 Dreamliner to operate on a wider range of routes, with the jet able to handle longer oceanic and polar crossings as much as five-and-a-half-hours from a suitable landing field in the event of an emergency. (http://r.reuters.com/gav69v)

* Prominent proxy adviser Institutional Shareholder Services urged the ouster of most Target Corp board members for failing to manage risks and protect the company from a massive data breach at the end of last year, a warning to corporate boardrooms to take cybersecurity more seriously. (http://r.reuters.com/jav69v)



FT

Scottish engineering company Weir Group Plc said it would pursue other acquisitions after its bid for Finnish rival Metso Oyj was rejected by the heavy mining equipment leader.

Britain's biggest drugmaker GlaxoSmithKline is facing protests from Chinese junior employees who claim that the group is refusing reimbursement for bribes they were ordered to pay by senior staff amid a formal criminal probe for bribery in China and four other countries.

Tesco Plc, one of the big four grocers in the UK, is set to report its worst quarter in decades amid rising pressure to slash prices in the face of competition from discount chains, the company's joint brokers said.

Stryker Corp has denied any intention of making a bid for UK rival Smith & Nephew Plc after it emerged that the U.S. medical devices manufacturer was in early stages of preparing an offer.

One of London's most prominent investment bankers, Ian Hannam, lost his appeal against a heavy fine for market abuse, in a case that has fuelled a high-level debate about the rules around deals and the disclosure of information.



NYT

* As renewable energy production has surged in recent years, opponents of government policies that have helped spur its growth have pushed to roll back those incentives and mandates in state after state. (http://r.reuters.com/hav69v)

* Apple Inc is betting that Jimmy Iovine's four decades in the recording industry, his knack for trend-spotting and his credibility with artists will help rejuvenate its music business. (http://r.reuters.com/kav69v)

* William Ackman of Pershing Square Capital Management plans to raise money for a closed-end fund that could list on the London Stock Exchange. (http://r.reuters.com/mav69v)

* Suspended General Motors Co engineer Raymond DeGiorgio, who is at the center of accusations that the company covered up a deadly defect, appeared distraught during lengthy questioning by Congressional investigators, according to people familiar with the session. (http://r.reuters.com/qav69v)

* Amazon.com Inc and Hachette Book Group took their cases to the public on Wednesday as a dispute over contract terms became clashing visions about the distribution of information in the digital age. (http://r.reuters.com/rav69v)



Canada

THE GLOBE AND MAIL

* A promising Canadian stroke drug has received a rare waiver of consent that allows Toronto paramedics to use the drug on patients without their permission. (r.reuters.com/qaw69v)

* Canadians are "stupid" and post far too much information online, a former head of the national electronic spying agency says, leaving the country with "long ways to go" in protecting personal information in an Internet era. (r.reuters.com/waw69v)

Reports in the business section:

* Bank of Nova Scotia has settled on a plan to unload the majority of its stake in asset manager CI Financial , opting to sell shares directly to public investors by way of a bought deal. The bank is selling 72 million shares at C$31.60 each, amounting to a total deal size of about C$2.3 billion, making it one of the largest public offerings in Canada. (r.reuters.com/rew69v)

NATIONAL POST

* The Canadian government is in the process of hammering out a comprehensive new agreement on internal trade with the provinces, aimed at lowering barriers estimated to cost the country C$50 billion a year. (r.reuters.com/tew69v)

* Ontario Premier Kathleen Wynne is not ruling out teaming up with the New Democratic Party to form a government if the Progressive Conservatives win the most seats in the provincial election, but fall short of a majority. (r.reuters.com/cuw69v)

FINANCIAL POST

* Shares in PrairieSky Royalty Ltd, Canada's largest initial public offering in more than a decade, start trading on the Toronto Stock Exchange on Thursday. It will be a C$1.46 billion debut closely watched by the company, a spinoff from Encana Corp, investors who bought the 52 million shares being offered, and by lead underwriters. (r.reuters.com/nuw69v)

* Canadian National Railway Co, Canada's largest rail carrier, said on Wednesday that it was exceeding grain-shipment levels mandated earlier this year by the Canadian government despite a record crop that has squeezed available transportation and infrastructure. (r.reuters.com/quw69v)



China

CHINA SECURITIES JOURNAL

- China is supporting the establishment of crude oil futures and is looking to launch futures of the commodity this year, said Wang Yang, vice-president of the China Securities Regulatory Commision (CSRC).

SHANGHAI SECURITIES NEWS

- Bad loans at Chinese commercial banks rose to 646.1 billion yuan ($103.28 billion) at the end of the first quarter from 592.1 billion yuan at the start of the year, according to official data. This marked 10 straight quarters of rising bad loans.

CHINA DAILY

- Chinese teenagers are starting to smoke young, according to a new nationwide survey. Around 20 percent of kids between the ages 13-15 years have tried smoking, with 7 percent being frequent users, the Global Youth Tobacco Survey on China said.

- The Red Cross Society's Beijing branch signed an agreement with the city's public security bureau on Wednesday to strengthen cooperation on dealing with emergencies such as terrorist attacks.

SHANGHAI DAILY

- Shanghai will offer tax refunds to cruise tourists in specific venues to boost shopping, the city's tourism authority said on Wednesday. The city expects 1.08 million cruise tourists this year, up 44 percent on 2013.

PEOPLE'S DAILY

- China's economy is running smoothly and economic and structural adjustments are showing positive signs, the country's premier Li Keqiang was quoted as saying in the paper which acts as a mouthpiece of the leadership.



Britain

The Telegraph

NATIONWIDE WARNS OF 'UNINTENDED CONSEQUENCES' OF CURBING MORTGAGES

(http://link.reuters.com/fys69v)

Nationwide, Britain's biggest building society, has warned that efforts to curb mortgage lending in an attempt to cool the London housing market could have "unintended consequences" for the rest of the country.

PENSIONS REFORM LOOPHOLE MAY COST OSBORNE 24 BLN STG

(http://link.reuters.com/gys69v)

Treasury officials have been warned that the government could miss out on as much as £24billion because of the pensions freedoms announced by the chancellor in his budget, sources have said.

The Guardian

UNEMPLOYMENT RISING IN GERMANY AND FRANCE, FIGURES SHOW

(http://link.reuters.com/nys69v)

Unemployment is rising in Europe's two largest economies, with a shock jump in Germany and a new record high in France, according to the latest figures.

BANK OF ENGLAND GOVERNOR: CAPITALISM DOOMED IF ETHICS VANISH

(http://link.reuters.com/pys69v)

Capitalism is at risk of destroying itself unless bankers realise they have an obligation to create a fairer society, the Bank of England governor has warned.

The Times

ECB PREPARES STIMULUS PLANS AS DEFLATIONARY PRESSURE RISES

(http://link.reuters.com/rys69v)

Mario Draghi, the ECB president, has dropped clear hints that some form of stimulus would be launched after the governing council meets on Thursday. Interest rate cuts, quantitative easing and a variation of the UK's Funding for Lending scheme to help small businesses to access credit are being considered.

MITCHELLS & BUTLERS PLUCKS RIVAL ORCHID FOR 250 MLN STG

(http://link.reuters.com/sys69v)

Mitchells & Butlers has entered exclusive talks to acquire the rival Orchid pub company for more than 250 million pounds after outbidding the private equity firms Colony Capital and Starwood Capital.

Sky News

BRITISH GAS CHIEFS POISED TO QUIT IN SHAKE-UP

(http://link.reuters.com/vys69v)

The bosses of British Gas and its parent company are close to stepping down as part of a management shake-up at Britain's biggest energy supplier.

LLOYDS STEPS TOWARDS FEMALE EXECUTIVE TARGET

(http://link.reuters.com/hys69v)

The state-backed Lloyds Banking Group has taken a step toward meeting a self-imposed gender target for senior managers with the appointment of another top female executive.



Fly On The Wall 7:00 AM Market Snapshot

ECONOMIC REPORTS
Domestic economic reports scheduled today include:
Jobless claims for the Week of May 24 at 8:30--consensus 317K
Q1 GDP at 8:30--consensus down 0.5% for the quarter
Pending home sales for April at 10:00--consensus up 1.0% for the month

ANALYST RESEARCH

Upgrades

AngloGold (AU) upgraded to Overweight from Neutral at HSBC
Biogen (BIIB) upgraded to Overweight from Neutral at JPMorgan
CoreSite Realty (COR) upgraded to Hold from Sell at Cantor
D.R. Horton (DHI) upgraded to Outperform from Sector Perform at RBC Capital
Diamond Offshore (DO) upgraded to Equal Weight from Underweight at Morgan Stanley
Dollar Tree (DLTR) upgraded to Buy from Neutral at Sterne Agee
Harmony Gold (HMY) upgraded to Neutral from Underweight at HSBC
MercadoLibre (MELI) upgraded to Overweight from Neutral at JPMorgan
Palo Alto (PANW) upgraded to Outperform from Perform at Oppenheimer
Palo Alto (PANW) upgraded to Strong Buy from Outperform at Raymond James
Premier (PINC) upgraded to Buy from Neutral at Citigroup
Prospect Capital (PSEC) upgraded to Equal Weight from Underweight at Evercore
Twitter (TWTR) upgraded to Buy from Hold at Cantor
VMware (VMW) upgraded to Overweight from Neutral at Piper Jaffray
Vantiv (VNTV) upgraded to Outperform from Market Perform at Wells Fargo

Downgrades

Celgene (CELG) downgraded to Neutral from Overweight at JPMorgan
Credit Suisse (CS) downgraded to Neutral from Buy at BofA/Merrill
Digital Realty (DLR) downgraded to Hold from Buy at Cantor
Dollar General (DG) downgraded to Neutral from Buy at Sterne Agee
Energias de Portugal (EDPFY) downgraded to Sell from Neutral at Citigroup
HomeAway (AWAY) downgraded to Neutral from Overweight at JPMorgan
Manchester United (MANU) downgraded to Neutral from Overweight at JPMorgan
MedAssets (MDAS) downgraded to Neutral from Buy at Citigroup
New Jersey Resources (NJR) downgraded to Hold from Buy at Brean Capital

Initiations

Atmel (ATML) initiated with an Outperform at Imperial Capital
Chambers Street Properties (CSG) initiated with an Outperform at Wells Fargo
ExamWorks (EXAM) initiated with a Buy at Deutsche Bank
FairPoint (FRP) initiated with a Market Perform at Wells Fargo
Sabre (SABR) initiated with an Outperform at Bernstein
Stone Energy (SGY) initiated with a Buy at Brean Capital

COMPANY NEWS

Apple (AAPL) said it will acquire Beats Music, Beats electronics for $3B
BlackBerry (BRRY) CEO said he believes the company will be cash flow positive or breakeven end of fiscal year
AmSurg (AMSG) said it will acquire Sheridan Healthcare for $2.35B
Intercept Pharmaceuticals (ICPT) said the FDA granted fast track designation to obeticholic acid
Palo Alto Networks (PANW) reported better than expected Q3 results and announced a $175M settlement agreement with Juniper Networks (JNPR)
AT&T (T) and Uber announced a partnership to deliver Uber access to AT&T customers starting this summer

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Sanderson Farms (SAFM), ReneSola (SOL), Popeyes Louisiana Kitchen (PLKI), Amerco (UHAL), Palo Alto (PANW), EnerSys (ENS)

Companies that missed consensus earnings expectations include:
Tech Data (TECD), Quality Systems (QSII), Costco (COST), MPLX (MPLX), Safe Bulkers (SB), Gordmans Stores (GMAN)

Companies that matched consensus earnings expectations include:
Descartes Systems (DSGX), Tilly's (TLYS)

NEWSPAPERS/WEBSITES

Apple (AAPL) to continue Beat Music on Android (GOOG), Windows Phone (MSFT), TechCrunch says
BlackBerry (BBRY) CEO confident company will be saved, Bloomberg reports
BlackBerry (BBRY) CEO says company to focus again on enterprise roots, Re/code reports
Apple (AAPL) content chief sees best product lineup in 25 years, Re/code says
GM (GM) exec feels Google (GOOG) might be 'serious threat,' Bloomberg reports
BP (BP) approaches Supreme Court to shield Gulf spill payments, Reuters reports
3D Systems (DDD) stock looks overvalued, Barron's says

SYNDICATE

BioCryst (BCRX) 10M share Secondary priced at $10.00
Booz Allen (BAH) announces sale of 10M shares for holders
Fabrinet (FN) announces secondary offering of 3.15M shares for holders
Parkway Properties (PKY) files to sell up to $150M in common stock
RCS Capital (RCAP) announces proposed public offering of Class A Common Stock
Resonant (RESN) 2.25M share IPO priced at $6.00
Rexnord (RXN) 15M share Secondary priced at $25.50
Sophiris Bio (SPHS) files to sell 3.41M shares of common stock for holders
StoneMor Partners (STON) announce public offering of 2.6M common units
Vantiv (VNTV) announces secondary offering of 5.78M shares for holders

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