Hillary and Me: The 2008 campaign was a nightmare. Will 2016 be as bad? (Politico) What Timothy Geithner Really Thinks (NYT) Rebels declare victory in east Ukraine self-rule vote (Reuters) Race for AIG's Top Job Has Two Favorites (WSJ) America on the Move Becomes Stay-at-Home Nation for Millennials (BBG) Old, Fired at IBM: Trendsetter Offers Workers Arbitration (BBG) Bad luck Jonathan: Pressure Mounts on Nigerian President (WSJ) Iran leader slams West's 'stupid' missile stance before talks (Reuters) Conchita Wurst of Austria Wins Eurovision Song Contest (WSJ) Greek Finance Ministry expects Q1 GDP contraction of less than 1.5 pct (Kathimerini) Why Banks at Wal-Mart Are Among America's Top Fee Collectors (WSJ) Allergan Formally Rejects Valeant's $46 Billion Takeover Bid (WSJ) Xi Says China Must Adapt to ‘New Normal’ of Slower Growth (BBG) Hillshire Brands to Acquire Pinnacle Foods in $6.6 Billion Deal (BBG) Equity research income set for 50% crash (FT) First British shale gas 'to fuel homes next year’ (Telegraph)
Overnight Media Digest
WSJ
* In their search for the next chief executive at AIG , the insurer's directors have narrowed the field of internal candidates to two executives - Peter Hancock and Jay Wintrob, according to people familiar with the matter. The directors are considering external prospects, but going outside isn't likely unless Hancock and Wintrob fall out of favor. (http://r.reuters.com/sub39v)
* British Sky Broadcasting Group PLC confirmed on Monday that it has initiated preliminary discussions with 21st Century Fox Inc over the potential acquisition of its pay TV assets in Germany and Italy. (http://r.reuters.com/wub39v)
* Lee Kun-hee, the 72-year-old chairman of Samsung Electronics Co, had trouble breathing late Saturday and was sent to a hospital emergency room near his home. Lee showed symptoms of cardiac arrest and the hospital staff had to perform cardiopulmonary resuscitation, according to Samsung Medical Center, where Lee was being treated on Sunday. (http://r.reuters.com/nyz29v)
* U.S. pension funds face a dilemma of capital flowing back from private-equity investments. Cash coming back from private-equity investments is upsetting the careful balance of investments that pension funds must maintain to achieve steady returns over decades to pay thousands of retirees. (http://r.reuters.com/xub39v)
* The two main U.S. inflation gauges, the Labor Department's consumer-price index and the Commerce Department's personal consumption expenditures price index, are hovering near the lowest levels ever seen outside of recessions. Both sit poised to drift upward. Wholesale and import prices show signs of picking up, and some items that briefly declined in price over the past year - such as prescription drugs, financial fees and garments - have started climbing again. (http://r.reuters.com/cyb39v)
* J.P. Morgan Chase & Co. is reviewing its relationships with several hundred U.S. clients that use the bank for back-office functions. The bank has been examining its relationships with so-called domestic correspondent banks, for which it clears payments and processes other transactions. (http://r.reuters.com/dyb39v)
FT
The UK fraud office stepped up its probe into British bank Barclays Plc's dealings with Qatar and is set to question Bob Diamond and John Varley, both former chief executives of the bank.
Two easternmost regions of Ukraine held referendums on self-rule that some fear could presage a break-up of the country.
Decreasing resources allocated to fraud-busters such as the UK's Serious Fraud Office has led to a steep decline in the number of financial crimes prosecuted in the UK.
Sebia, the French medical diagnostics group owned by private equity firm Cinven, is ready to be put on the market for an estimated 1 billion euros.
Late payment or non-payment of bills has forced Europe's companies to write of debt worth 360 billion euros despite the pick-up in economic activity in the region.
NYT
* BNP Paribas and Credit Suisse, facing the threat of criminal charges, made last-ditch appeals for leniency to prosecutors and regulators in recent weeks. While the banks proposed more modest guilty pleas from their subsidiaries rather than parent companies, prosecutors appeared to balk at those overtures. (http://r.reuters.com/bab39v)
* In recent years, revenue growth at IBM has been stubbornly elusive, and new technologies like cloud computing have risen to threaten the company's traditional hardware and software businesses. (http://r.reuters.com/vuz29v)
* The phenomenon of music-based television shows, which have dominated the ratings for more than a decade, seems by nearly every measure to be over or in steep decline. (http://r.reuters.com/zyb39v)
* The chairman of Samsung Electronics, Lee Kun-hee, who helped transform the business into a technology giant, was in stable condition Sunday after suffering a heart attack, the company said. (http://r.reuters.com/wyb39v)
* Michael Devine, one of four plaintiffs named in the class action against Apple, Google, Intel and Adobe, has asked the judge in the case to reject the settlement his own lawyers negotiated. (http://r.reuters.com/xyb39v)
* BurgerFuel, a relatively small New Zealand fast-food chain, is undertaking an ambitious expansion plan in the crowded American market through a partnership with Subway restaurants, an industry giant. (http://r.reuters.com/vyb39v)
Canada
* The Conservative government is vowing to fill a Quebec vacancy on the Supreme Court of Canada within weeks. However, confusion remains over how the process will unfold after Prime Minister Stephen Harper's first choice for the bench was rejected. (http://r.reuters.com/nut29v)
* Some trustees at the Toronto District School Board are calling for greater transparency in the wake of revelations that their chairman, Chris Bolton, was investigated for routing donations to his own charity. TDSB staff investigated donations intended for a Toronto elementary school that Bolton directed to his own charity before he was elected a trustee in 2003. (http://r.reuters.com/put29v)
Reports in the business section:
* Magna International Inc is putting the brakes on building new plants in Canada as it takes advantage of better opportunities abroad where vehicle production is growing. "I doubt we'll add any more plants in Canada," Magna Chief Executive Don Walker said at the company's annual meeting in Toronto. (http://r.reuters.com/qut29v)
NATIONAL POST
* U.S. investigators have uncovered a multi-million-dollar synthetic drug ring allegedly operated by a single Canadian family. For five years, father-son team Daniel and Kevin Louie, along with family matriarch Francine, funneled "tens of millions of dollars" in chemical supplies to the U.S. synthetic drug industry, according to a statement by the U.S. Department of the Treasury. (http://r.reuters.com/jyt29v)
* A 36-year-old Suncor employee was killed by a black bear at one of Canada's major oilsands sites. Lorna Weafer, an instrument technician, was doing electrical work at a job site near Fort McMurray, Alberta, when the bear attacked her. Suncor said the employees were working in a busy industrial area and were not carrying bear spray. (http://r.reuters.com/vut29v)
FINANCIAL POST
* Valeant Pharmaceuticals International Inc is slowly ramping up steps to engage the board of Botox-maker Allergan Inc in takeover talks, insisting it is "highly confident" that its efforts will result in a merger between the two companies. (http://r.reuters.com/cyt29v)
* A Unilever PLC plant in Bramalea, Ontario, which makes dry mixes for soups, sauces and other foods, will close and its production capability will be shipped to the United States, the company announced on Thursday. Most production is expected to finish by the end of next year, with the final plant closure expected in March 2016. (http://r.reuters.com/dyt29v)
China
CHINA DAILY
- To lower the risk of terror attacks, Beijing authorities are requiring bulk purchasers of gasoline to provide identification, acquire permits from local police stations and use approved containers, a notification said.
- Proper communication between the local government in the Hangzhou suburb of Yuhang and residents in the area could have prevented a public protest over the planned construction of a garbage incinerator from turning into a riot in which police vehicles were flipped and torched, an editorial said.
CHINA BUSINESS NEWS
- The People's Bank of China (PBOC) will not rashly cut banks' required reserve ratio despite market speculation on such a cut to boost the slowing economy because the central bank is using the reserves to help offset heavy capital inflows into China, said Wu XiaoLing, a former PBOC deputy governor.
SHANGHAI SECURITIES NEWS
- After a pause of 10 years, the State Council, China's cabinet, issued a broad range of capital market reforms on Friday, paving the way for a new phase of quick reforms of the country's markets, a commentary by this newspaper said.
- The China Financial Futures Exchange plans to gradually launch a slew of new products, including stock options and new stock index futures contracts, as part of the government's efforts to push forward capital market reforms, exchange Chairman Zhang Shenfeng told a financial industry forum in Beijing at the weekend.
CHINA SECURITIES JOURNAL
- A total of 1,559 institutions have registered as private equity (PE) management companies since regulators permitted PE firms to operate officially by registration in March. Such firms had previously operated in legal grey areas in China.
SHANGHAI DAILY
- A police officer shot a driver allegedly trying to smash his way through a roadblock on Sunday, the first shots fired since Shanghai police began carrying guns last month. The suspect was said to be part of a gang of fuel thieves, police said.
SECURITIES TIMES
- Nineteen listed firms have suspended their plans to issue corporate bonds so far this year due to high yields resulted from the central bank's relatively tighter liquidity stance.
PEOPLE'S DAILY
- The coming CICA (the Conference on Interaction and Confidence-Building Measures in Asia) summit to be held in Shanghai around May 20 will help promote trust among China and other Asian countries.
Britain
The Telegraph
FIRST BRITISH SHALE GAS 'TO FUEL HOMES NEXT YEAR'
Cuadrilla is preparing to submit planning applications by the end of this month to frack at two sites in Lancashire next year and start supplying fuel to British homes by late 2015. (http://link.reuters.com/vaz29v)
INVESTORS TELL ASTRA TO ENGAGE
Shareholders in AstraZeneca have told the company's management they must engage with Pfizer if and when the U.S. drugs giant returns with a higher offer. (http://link.reuters.com/waz29v)
The Guardian
MPS TO DEMAND PFIZER PROTECT BRITISH SCIENTISTS' JOBS FOR AT LEAST A DECADE
MPs will this week demand that the U.S. drugs company Pfizer guarantee British scientists' jobs for at least 10 years as its boss Ian Read flies in to face parliamentary scrutiny over his proposed 60 billion pound takeover of AstraZeneca. (http://link.reuters.com/xaz29v)
MIDCOUNTIES BACKS CALL FOR URGENT REFORMS IN THE CO-OPERATIVE GROUP
Britain's largest independent Co-operative society, the Midcounties, is to throw its weight behind the urgent reforms of the Co-operative Group that Paul Myners has warned are needed if the 150-year-old mutual organisation is to survive. (http://link.reuters.com/zaz29v)
The Times
HENDERSON SET TO CASH IN ON LAING WITH 1.5 BLN POUND FLOTATION
One of the biggest names in British construction, John Laing, is being prepared for a possible return to the stock market through a flotation that could value the business at as much as 1.5 billion pounds. (http://link.reuters.com/bez29v)
BAT SEEKS TO OFFSET SLOW GROWTH WITH A MEGA-DEAL
Britain's largest tobacco group, British American Tobacco , has hired bankers to advise on multibillion-pound acquisition opportunities in America, including possible deals with Reynolds American and Lorillard. (http://link.reuters.com/gez29v)
The Independent
PFIZER BOSS IAN READ FLIES IN TO PUT ASTRAZENECA TAKEOVER CASE TO MPS
The chief executive of U.S. pharmaceutical giant Pfizer will arrive in the UK on Monday to persuade the government that its 60 billion pound plus hostile takeover of British rival AstraZeneca should be allowed. (http://link.reuters.com/hez29v)
VULTURE FUNDS TIGHTEN THEIR GRIP TO RESCUE CO-OP BANK
The Co-op Bank has completed a 400 million pound cash call in a move that will reduce the Co-operative Group's stake from 30 percent to just over 20 percent and result in the loss of one of its directors from the board. (http://link.reuters.com/jez29v)
Fly On The Wall 7:00 AM Market Snapshot
ECONOMIC REPORTS
Domestic economic reports scheduled today include: Treasury budget for April at 14:00--consensus up $114.0B
ANALYST RESEARCH
Upgrades
Actavis (ACT) upgraded to Top Pick from Outperform at RBC Capital Aircastle (AYR) upgraded to Outperform from Market Perform at Cowen Arotech (ARTX) upgraded to Buy from Neutral at B. Riley Boulder Brands (BDBD) upgraded to Buy from Neutral at SunTrust Callon Petroleum (CPE) upgraded to Outperform from Market Perform at Northland Essent Group (ESNT) upgraded to Outperform from Market Perform at Keefe Bruyette Forest Oil (FST) upgraded to Neutral from Underperform at Macquarie Iridium (IRDM) upgraded to Outperform from Neutral at Macquarie Logitech (LOGI) upgraded to Outperform from Neutral at Credit Suisse M&T Bank (MTB) upgraded to Buy from Neutral at Goldman Nimble Storage (NMBL) upgraded to Strong Buy from Buy at Needham PSEG (PEG) upgraded to Outperform from Market Perform at Wells Fargo Pandora (P) upgraded to Buy from Neutral at MKM Partners Peabody (BTU) upgraded to Overweight from Equal Weight at Morgan Stanley Ranbaxy (RBXLY) upgraded to Buy from Underperform at Jefferies SYNNEX (SNX) upgraded to Buy from Hold at Needham Travelers (TRV) upgraded to Buy from Neutral at Guggenheim Twitter (TWTR) upgraded to Buy from Neutral at SunTrust Williams (WMB) upgraded to Buy from Neutral at ISI Group
Downgrades
AMC Networks (AMCX) downgraded to Market Perform from Outperform at Bernstein Amarin (AMRN) downgraded to Neutral from Buy at Citigroup Apollo Global (APO) downgraded to Neutral from Buy at Goldman Barclays (BCS) downgraded to Neutral from Outperform at Exane BNP Paribas Barclays (BCS) downgraded to Sector Perform from Outperform at RBC Capital Carlyle Group (CG) downgraded to Neutral from Buy at Goldman Cbeyond (CBEY) downgraded to Outperform from Strong Buy at Raymond James Deere (DE) downgraded to Underperform from Neutral at Longbow NetApp (NTAP) downgraded to Market Perform from Outperform at Raymond James Omnicom (OMC) downgraded to Neutral from Conviction Buy at Goldman Ralph Lauren (RL) downgraded to Neutral from Outperform at Credit Suisse
Initiations
Cardiovascular Systems (CSII) initiated with a Buy at BofA/Merrill Endologix (ELGX) initiated with a Neutral at JPMorgan KKR (KKR) reinstated with a Buy at Goldman Media General (MEG) initiated with an Outperform at Wells Fargo Moelis (MC) initiated with a Buy at Goldman Moelis (MC) initiated with a Buy at UBS Moelis (MC) initiated with a Market Perform at Keefe Bruyette Moelis (MC) initiated with an Outperform at JMP Securities Moelis (MC) initiated with an Overweight at JPMorgan Moelis (MC) initiated with an Overweight at Morgan Stanley Opus Bank (OPB) initiated with an Outperform at Credit Suisse Opus Bank (OPB) initiated with an Overweight at JPMorgan Paycom Software (PAYC) initiated with a Buy at Canaccord Paycom Software (PAYC) initiated with a Buy at Stifel Paycom Software (PAYC) initiated with an Outperform at Pacific Crest Paycom Software (PAYC) initiated with an Overweight at Barclays Paycom Software (PAYC) initiated with an Overweight at JPMorgan Sportsman's Warehouse (SPWH) initiated with a Buy at Goldman Sportsman's Warehouse (SPWH) initiated with a Market Perform at Wells Fargo Sportsman's Warehouse (SPWH) initiated with a Neutral at RW Baird Sportsman's Warehouse (SPWH) initiated with an Overweight at Piper Jaffray TriVascular (TRIV) initiated with a Buy at Stifel TriVascular (TRIV) initiated with an Outperform at Credit Suisse TriVascular (TRIV) initiated with an Overweight at JPMorgan Vital Therapies (VTL) initiated with a Buy at BofA/Merrill Vital Therapies (VTL) initiated with an Outperform at Credit Suisse Weibo (WB) initiated with an Overweight at Piper Jaffray
COMPANY NEWS
BSkyB (BSYBY) confirmed talks to buy Fox's (FOX) stakes in Sky Deutschland, Sky Italia Hillshire Brands (HSH) said it would acquire Pinnacle Foods (PF) for $6.6B Amgen (AMGN), AstraZeneca (AZN) reported that a Phase 3 AMAGINE-1 brodalumab study met primary, secondary endpoints Sterling Construction (STRL) 'cautiously optimistic' for sustained turnaround Virgin Media (VMED), Sky (BSYBY) announced a new channel distribution agreement PGT, Inc (PGTI) named Brad West as CFO and Jeff Jackson as president and COO, effective June 1
EARNINGS
Companies that beat consensus earnings expectations last night and today include: Sterling Construction (STRL), Concho Resources (CXO), Garrison Capital (GARS), Enstar Group (ESGR)
Companies that missed consensus earnings expectations include: Ply Gem (PGEM), Inovio (INO), Nordic American Tanker (NAT)
Companies that matched consensus earnings expectations include: Sapiens (SPNS)
NEWSPAPERS/WEBSITES
Twitter (TWTR) could be attractive takeover target for Facebook (FB), Barron's says Goldman Sachs (GS) could reward over long term, Barron's reports Gap (GPS) shares could rise 20%, Barron's reports Whole Foods (WFM) still doesn't look cheap, Barron's says SuperValu (SVU) could be attractive to patient investors, Barron's says IBM (IBM) has turnaround plan, NY Times reports Herbalife (HLF) found listening devices at headquarters, Fox Business reports JPMorgan (JPM) CEO may seek exit from company after latest setbacks, NY Post says U.K. accelerates probe into Barclays' (BCS) dealings with Qatar, FT says Apple's (AAPL) interest in Beats may indicate further acquisitions, Bloomberg reports T-Mobile (TMUS) negotiating fees other demands in Sprint (S) talks, WSJ says (DTEGY) Judge finds RBS (RBS) unit liable in software copyright case, Reuters reports NASDAQ's (NDAQ) new hire may be frontrunner to be next CEO, WSJ reports
SYNDICATE
Aeterna Zentaris (AEZS) announces at the market issuance program Agenus (AGEN) files to sell 3.72M shares of common stock for holders Blackstone Mortgage (BXMT) enters $200M equity distribution agreement Concho Resources (CXO) files to sell 6M shares of common stock The Dixie Group (DXYN) files to sell 2.5M shares of common stock Westmoreland Coal (WLB) files to sell 700,000 shares for holders
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