- Russian markets hit as Putin tightens grip on Crimea (Reuters)
- Ukraine Sees More Russian Incursions as Standoff Worsens (BBG)
- Ukraine Crisis Roils Global Markets (WSJ)
- Cold War Ghosts Haunt East Europe in Moves for Crimea (BBG)
- How Moscow Orchestrated Events in Crimea (WSJ)
- Russia Gas Threat Shows Putin Using Pipes to Press Ukraine (BBG)
- Euro-zone PMI slowed less sharply than estimated (MW)
- Two top Microsoft execs to leave in reshuffle (Reuters)
- Soaring Luxury-Goods Prices Test Wealthy’s Will to Pay (WSJ)
- IQ-Boosting Drugs Aim to Help Down Syndrome Kids Learn (BBG)
Overnight Media Digest
* The U.S. and its European allies vowed Sunday to isolate Russian President Vladimir Putin and punish his nation’s economy, demanding he withdraw what they called an occupation force from Ukraine’s Crimean region.
* Bruce Berkowitz, a prominent mutual-fund investor, sent letters to the boards of Fannie Mae and Freddie Mac late Friday scolding directors for not protecting the rights of shareholders, upping the ante in his bid to let investors share in the spoils of the newly profitable mortgage-finance giants.
* Investors rushed into safe-haven assets and cut their exposure to stocks as an escalating crisis in Ukraine sent a chill through global markets.
* Comcast Corp is near a deal to acquire FreeWheel Media Inc, a Web-video company for about $320 million, a person familiar with the matter said.
* Pfizer Inc hopes to overcome skepticism that consumers can appropriately take an over-the-counter version of cholesterol pill Lipitor without doctor guidance.
* The recent loss of nearly a half-billion dollars from a major bitcoin exchange is forcing U.S. regulators to confront burgeoning questions about their authority-and responsibility-to oversee the fledgling virtual currency.
* Warren Buffett and his business partner Charles Munger have long been bullish on the United States, building a “rock-solid foundation” for Berkshire Hathaway Inc with calculated bets on the country’s economic future. In 2013, those efforts paid off handsomely for Berkshire shareholders as the gigantic conglomerate posted record annual profits, aided by a generous tailwind from the improving U.S. economy.
* Mexican police questioned a Citigroup Inc employee suspected of participating in the alleged theft of $400 million from the bank, according to a person familiar with the matter.
* U.S. aviation regulators want cockpit-automation fixes on nearly 500 Boeing Co 737 planes, seeking to prevent pilot errors that over the years have caused fatal crashes of several jet and turboprop airliners.
The international community condemned Russia’s intrusion into Ukraine and warned that it could face economic isolation.
Concerns are being raised as U.S. stocks reach new highs by investors borrowing a record amount of money to invest in the market.
Citigroup’s Mexican subsidiary is being investigated by the Securities and Exchange commission over the alleged fraud, which caused the bank to revise its earnings last week.
Royal Bank of Scotland plans to cut its assets in the United States in an attempt to circumvent new Federal Reserve rules that would force it to ring-fence a part of its capital to safe guard against any future crisis.
Britain’s tax authority plans to scrap value added tax on Bitcoin trading, only days after the currency’s leading exchange, Mt Gox, collapsed after losing almost $500 million of customer deposits to hackers.
* In the biggest shuffling of Microsoft Corp’s executive ranks since the company’s new chief executive, Satya Nadella, took over, Mark Penn, the former aide to the Clinton family, is becoming the company’s chief strategy officer.
* All good things come to an end, even for the rich, and sometime this month, Forbes will probably pass out of family control and into the hands of a foreign owner.
* American Express Co’s new card, called Amex EveryDay and highlighted in an ad campaign starring Tina Fey, is aimed people who are not big spenders and do not jet around the world for either work or play.
* The challenge for Warren Buffett is whether Berkshire Hathaway Inc can continue to make large acquisitions that will help the company grow at a pace that will sustain his reputation as the nation’s shrewdest investor.
* Mt. Gox, once the largest Bitcoin exchange in the world, filed for bankruptcy protection on Friday and said that it might have lost 750,000 of its customers’ coins in a hacking attack.
* Stephen Schwarzman, the co-founder and chief executive of Blackstone Group, made a total of $374.5 million in 2013, mostly from the cash dividends he received on his partnership units.
THE GLOBE AND MAIL
* Toronto Mayor Rob Ford made a brief cameo on comedian Jimmy Kimmel’s post-Oscars special, even tweeting from the set: “Getting ready to walk on set @JimmyKimmelLive #robfordattheoscars #Toronto #LA,” with a photo of the tuxedoed mayor standing backstage.
* After spending months getting over the shock of the New Democratic Party’s stunning loss in the past British Columbia election, veteran MLA Mike Farnworth had to survey colleagues about what direction his future should take.
Reports in the business section:
* Canadian Natural Resources Ltd has been leaking bitumen to the surface at one of its oil sands sites since last May. In November, the company’s president called the problem “totally solvable.” Canadian Natural this week has another chance to explain to investors and analysts how much progress it has made with the troublesome leaks.
* The vast majority of jobs created last year were part-time positions in what a new report calls a “lackluster” year for Canada’s labor market. Almost 95 percent of net new positions were part-time, according to the Canadian Chamber of Commerce’s analysis of the 2013 labor market, a year that saw the weakest job growth since 2009.
* A judge has ordered a doctor in Hanover, Ontario, to pay C$15 million ($13.5 million) in damages – among the largest malpractice awards ever in Canada – saying that Dr. Richard Edington misdiagnosed the woman’s tell-tale symptoms, delayed treatment she desperately needed and took steps that actually hastened that brain attack.
* Embattled Senator Mike Duffy vowed that if he ever faced trial over his questionable expense claims, he would bring down high-ranking members of the Conservative party, according to a new book.
* The takeover battle between Goldcorp Inc and Osisko Mining Corp is heating up, but not for reasons that have anything to with the terms of the actual bid. The two sides are set to face off in the Quebec Superior Court this week over Osisko’s claim that Goldcorp misused confidential information when it launched the C$2.6 billion ($2.35 billion) hostile offer in January.
– The fact that the Kunming train station attack happened on the eve of the annual session of parliament suggests that the perpetrators intended to sabotage the stability of the country, an editorial said.
– Shanghai has stepped up security at train stations and airports in the wake of the Kunming attacks, with tighter checks at entrances and armed police personnel on patrol. Railway police will put more officers on trains between Beijing and Shanghai this week as the capital hosts the annual session of the National People’s Congress, or parliament.
– People or companies found guilty of polluting Shanghai’s air will face stiff new penalties under revised legislation set to come into force this year, with no upper limit on the penalties in some cases, lawmakers said.
– The evolution of the Ukrainian situation shows us clearly that in the international political arena, principles are decided by power; without its support and blessing, no principle can prevail, an editorial said.
CHINA BUSINESS NEWS
– State Grid Corporation of China, the largest state-owned power distributor in the country, said its investment in 2014 would hit 380 billion yuan, including renovations of substations and construction of new electric networks.
– Securities Association of China will launch a probe into “Yong Jinbao”, an online brokerage product by Sinolink Securities and Tencent, whose ultra-low commission rate has been widely accused of malicious price competition, a source said.
FREE BANKING COULD END, SAYS RBS BOSS
The end of free banking for customers is probably only a matter of time, with direct charges for current accounts almost inevitable, according to Ross McEwan, the chief executive of the Royal Bank of Scotland. McEwan, however, said that he had no plans to begin phasing out free accounts at the moment.
OSBORNE ACCUSED OF DOUBLE TAXATION ON ENERGY BILLS
The British Chancellor has been accused of making tens of millions of pounds in double taxation on energy bills – by charging VAT on top of “green” taxes.
AIR PASSENGERS WILL GO TO SCOTLAND TO AVOID PAYING DUTY – BA BOSS
The boss of British Airways has said he expects hundreds of thousands of people to drive from England to Scotland to avoid air passenger duty if Scotland becomes independent.
UK-SPAIN POLICE SWOOP ON SHARES FRAUD LEADS TO 110 ARRESTS
Criminal gangs blamed for fake-share scams that robbed British victims of millions of pounds in savings have been rounded up in an international crackdown involving UK police.
HALF A MILLION UK HOMES IN NEGATIVE EQUITY
Nearly half a million households in the UK are worth less than the mortgages on them, the newspaper reported citing a BBC report. The figures, released by the mortgage group HML, are based on data from more than one million home loans.
‘UKRAINIAN ASSETS OWNED OR USED BY OUSTED PRESIDENT VIKTOR YANUKOVYCH HIDDEN BEHIND TRAIL OF FIRMS WITH LINKS TO UK’
Hundreds of millions of pounds of state assets believed to have been owned or used by the ousted Ukrainian President Viktor Yanukovych and his circle, including his now-notorious country mansion, are alleged to have been funnelled through London front companies.
VIRGIN MONEY BACKS DOUBLING OF BANK BONUSES
Sir Richard Branson’s banking arm Virgin Money will this week become the latest of Britain’s high street lenders to say that it is supporting the payment of higher bonuses under new European rules.
DEBT COLLECTION GIANT SLASHES BORROWING COSTS
Lowell Group, which is owned by private equity firm TDR Capital, is to unveil a deal that will slash the cost of its own borrowings.
Fly On The Wall 7:00 AM Market Snapshot
Domestic economic reports scheduled for today include:
Personal Income for January at 8:30–consensus 0.2%
Consumer Spending for January at 8:30–consensus 0.1%
ISM manufacturing index for February at 10:00–consensus 51.9
Construction spending for January at 10:00–consensus -0.2%
Access Midstream (ACMP) upgraded to Buy from Hold at Wunderlich
Baytex Energy (BTE) upgraded to Buy from Neutral at BofA/Merrill
Brandywine Realty (BDN) upgraded to Outperform from Market Perform at BMO Capital
Hudson Pacific (HPP) upgraded to Market Perform from Underperform at BMO Capital
Intuit (INTU) upgraded to Buy from Neutral at Citigroup
Kate Spade (KATE) upgraded to Buy from Neutral at Citigroup
Kronos Worldwide (KRO) upgraded to Market Perform from Underperform at Wells Fargo
Nokia (NOK) upgraded to Buy from Hold at Canaccord
Prudential plc (PUK) upgraded to Buy from Neutral at UBS
RF Micro Devices (RFMD) upgraded to Buy from Neutral at BofA/Merrill
RPM (RPM) upgraded to Outperform from Neutral at Credit Suisse
Telephone and Data (TDS) upgraded to Overweight from Neutral at JPMorgan
U.S. Cellular (USM) upgraded to Overweight from Neutral at JPMorgan
Western Gas Partners (WES) upgraded to Buy from Neutral at UBS
AstraZeneca (AZN) downgraded to Underperform from Neutral at BofA/Merrill
Autodesk (ADSK) downgraded to Sell from Neutral at Citigroup
Cobalt (CIE) downgraded to Sector Perform from Outperform at RBC Capital
Embraer (ERJ) downgraded to Neutral from Overweight at HSBC
Emeritus (ESC) downgraded to Market Perform from Outperform at JMP Securities
Forest City Enterprises (FCE) downgraded to Buy from Strong Buy at ISI Group
Infosys (INFY) downgraded to Neutral from Outperform at RW Baird
Intelsat (I) downgraded to Neutral from Overweight at JPMorgan
MarkWest Energy (MWE) downgraded to Neutral from Buy at UBS
Meritor (MTOR) downgraded to Neutral from Buy at Citigroup
NII Holdings (NIHD) downgraded to Market Perform from Outperform at William Blair
NewLink Genetics (NLNK) downgraded to Neutral from Outperform at RW Baird
SodaStream (SODA) downgraded to Equal Weight from Overweight at Barclays
Arc Logistics (ARCX) initiated with a Market Perform at Wells Fargo
Arrowhead Research (ARWR) initiated with an Overweight at Barclays
CA Technologies (CA) initiated with an Equal Weight at Barclays
CM Finance (CMFN) initiated with an Outperform at Oppenheimer
Continental Building (CBPX) initiated with a Buy at BB&T
Continental Building (CBPX) initiated with a Buy at SunTrust
Continental Building (CBPX) initiated with a Hold at Deutsche Bank
Continental Building (CBPX) initiated with a Neutral at Citigroup
Continental Building (CBPX) initiated with an Outperform at Credit Suisse
Egalet (EGLT) initiated with a Buy at Stifel
Egalet (EGLT) initiated with an Outperform at JMP Securities
Eleven Biotherapeutics (EBIO) initiated with a Buy at Citigroup
Genocea (GNCA) initiated with a Buy at Citigroup
Ladder Capital (LADR) initiated with a Neutral at Citigroup
Ladder Capital (LADR) initiated with an Outperform at FBR Capital
Ladder Capital (LADR) initiated with an Outperform at JMP Securities
New York Mortgage (NYMT) initiated with a Neutral at Credit Suisse
Revance Therapeutics (RVNC) initiated with an Overweight at Piper Jaffray
Sequential Brands (SQBG) initiated with a Buy at Canaccord
uniQure (QURE) initiated with a Buy at Jefferies
uniQure (QURE) initiated with an Overweight at Piper Jaffray
Tyco (TYC) to sell security business in South Korea to Carlyle Group (CG) for $1.93B
Tyco (TYC) raised share repurchase authorization to $2B
Roche’s (RHHBY) Genentech says independent data monitoring committee recommends Phase III METLung study be stopped
Berkshire Hathaway’s (BRK.A) Buffett sees “mother lode of opportunity” in America
Pershing Square said it would present information highlighting Herbalife’s (HLF) China practices
Cooper Tire (CTB) forecast positive operating profit in Q4, 2H13
Madison Square Garden (MSG) said Tad Smith to succeed Hank Ratner as CEO
Apple (AAPL) announced auto manufacturers rolling out CarPlay
CommonWealth (CWH) urged shareholders to reject Related/Corvex consent solicitation
UIL Holdings (UIL) to acquire Philadelphia Gas Works assets for $1.86B
Companies that beat consensus earnings expectations last night and today include:
JinkoSolar (JKS), ExlService (EXLS), Rockwood (ROC), Magna (MGA)
Companies that missed consensus earnings expectations include:
Magellan Health (MGLN), Cooper Tire (CTB), Cadence (CADX)
Companies that matched consensus earnings expectations include:
Buffett (BRK.A) warns of public pension ‘tapeworm,’ Bloomberg reports
PayPal co-founder Thiel says ‘not the time’ to split from eBay (EBAY), Forbes reports
Google (GOOG), Samsung (SSNLF) tell China of concerns over Microsoft (MSFT), Nokia (NOK) deal, Bloomberg reports
U.S. oil refiners (VLO, MPC) increasing capacity, WSJ reports
Berkowitz blasts Fannie (FNMA), Freddie (FMCC) for ignoring shareholder rights, WSJ reports
Apple (AAPL) plans to launch in-car operating system, FT reports
Microsoft (MSFT) executives said to leave company, Re/code reports
SEC probes Citigroup (C) over fraudulent Mexican loans, Reuters reports
Pfizer (PFE) looks to sell over-the-counter version of Lipitor, WSJ reports
Home Depot (HD) sets up CEO succession plan, WSJ reports
Novartis (NVS) chairman rules out merger with Roche (RHHBY), Reuters reports
Gap (GPS) plans to expand store count in China, WSJ reports
Las Vegas Sands (LVS) says customer data hacked, Bloomberg reports
Comcast (CMCSA) weighs subscriber spin-off, Bloomberg reports
Gap’s (GPS) Q4 results suggest more good things to come
Lear (LEA) insiders sell shortly after dividend raise
Verizon (VZ) looks appealing, AT&T (T) looks good too, but Verizon could be the better play
Yum! Brands (YUM) could rise 15%
Atwood Oceanics (ATW) could rise nearly 40% in about a year
FTD Cos. (FTD) looks appealing,
Chipotle (CMG) stock could get extra boost from price increase
Noodles & Co. (NDLS) looks expensive
UBS (UBS), AB InBev (BUD) look good
Barnes & Noble (BKS) could rise over 60%
KKR (KKR) files to sell 4.9M common units for holders
Selectica (SLTC) files to sell 2.17M shares of common stock for holders
Wheeler REIT (WHLR) files to sell 2.06M shares of common stock for holders