- Russia says expects answers on NATO troops in eastern Europe (Reuters)
- Dealers say GM customer anxiety rising, sales may take hit (Reuters)
- China Unveils Mini-Stimulus Measure (WSJ)
- Londoners Priced Out of Housing Blame Foreigners (BBG)
- New earthquake in Chile prompts tsunami alerts (Reuters)
- Ukrainian Billionaire Charged by U.S. With Bribe Scheme (BBG)
- Chinese Investments in U.S. Commercial Real Estate Surges (BBG)
- Old Math Casts Doubt on Accuracy of Oil Reserve Estimates (BBG)
- US secretly created ‘Cuban Twitter’ to stir unrest (AP)
- Gazprom’s $910 Billion Gaffe Shows Putin Economy Waning (BBG)
- Same old song: Apple Bulls Bet New Products Will Bring Stock Revival (BBG)
- ECB seen as unlikely to act despite deflation fears (FT)
Overnight Media Digest
* General Motors Co Chief Executive Mary Barra withstood a second day of withering attacks from lawmakers, with one senator saying the nation’s largest auto maker should face criminal liability and another saying she needed to fix its “culture of coverup.” (http://link.reuters.com/sys28v)
* Mary Barra learned late about faulty ignition switches. The larger an organization gets, the less likely it is that bad news will travel smoothly up the chain. At big corporations, say organizational experts, doing the right thing is often incompatible with pleasing the boss. (http://r.reuters.com/pys28v)
* Boeing Co said it will try to sell its new aerial refueling tanker to South Korea as its long-running battle with Airbus Group NV expands from commercial jets into specialized military aircraft. (http://link.reuters.com/wys28v)
* Investors are snapping up low-rated securities backed by companies, home mortgages and car loans at a clip rarely seen since the financial crisis, as fund managers and others tire of paltry yields on safer assets. (http://link.reuters.com/tys28v)
* Juniper Networks Inc is slashing its global workforce by 6 percent. The job cuts that will mostly occur immediately and largely affect middle-management roles. Activist shareholders Jana Partners and Elliott Management Corp have pushed for the network-gear company to make large cuts to costs and enact programs to return capital to shareholders. (http://link.reuters.com/bat28v)
* The Internal Revenue Service’s plan to tax virtual currencies could crimp their use as an alternative to cash or credit for retail transactions. The IRS, in a ruling last week, said under existing law bitcoin and its brethren are property, not currency. That means anyone who spends bitcoin, even on a $2 cup of coffee, may have to pay taxes based on any “gain” over that bitcoin’s original value. (http://link.reuters.com/hat28v)
* Wausau Paper Corp said President and CEO Henry Newell has stepped down and Chairman Thomas Howatt plans to retire as the tissue company faces pressure from activist investors. (http://link.reuters.com/jat28v)
* Frank Perkins Hixon pleaded guilty to insider trading on Wednesday, punctuating the downfall of the former senior deal maker at Evercore Group Llc. Hixon admitted he used confidential information from his job working on mergers and acquisitions at the investment bank in trades that netted himself more than $700,000. (http://r.reuters.com/kat28v)
* Pacific Investment Management Co’s mutual funds suffered a 10th straight month of redemptions in March, although Pimco’s chief executive said there is no link between the firm’s management turmoil and the outflows. Investors pulled $7.3 billion out of Pimco last month, following outflows of $2.5 billion in February and $5.7 billion in January, to lift the first-quarter total to more than $15 billion, according to fund tracker Morningstar Inc. (http://link.reuters.com/pat28v)
* Accounting giant PricewaterhouseCoopers is expected to complete its acquisition of management-consulting firm Booz & Co Thursday and is renaming Booz “Strategy&.” The deal, announced last fall, is among the most prominent acquisitions by an accounting firm in years, and it furthers PwC’s recent push into the consulting field. (http://link.reuters.com/qat28v)
* Zillow Inc said it would begin providing real-estate listings for a Chinese real-estate portal, giving Chinese investors more access to the U.S. housing market. (http://link.reuters.com/sat28v)
The first quarterly figures show London’s house rates rose twice as fast as the rest of UK according to a property survey by Nationwide.
A study by Deloitte shows management shareholding in listings over the last three years was much higher than established listed companies.
A legal opinion by law firm Slaughter and May says that the Financial Conduct Authority could face three potential allegations of market abuse in the wake of a controversy over the leak of market sensitive probe by the regulator that led to a sell-off of insurers’ shares.
Danish bank Saxo Bank is set to back social trading, and argue that investors in the UK want to interact with others and share information.
U.S. investment bank Goldman Sachs Group Inc was fined 37 million euros ($50.94 million) by European regulators for running a cartel along with 11 other subsea power cable firms.
* Just as Citigroup Inc was putting a troubled past of taxpayer bailouts and risky investments behind it, the bank now finds itself in the government’s cross hairs again. Federal authorities have opened a criminal investigation into a recent $400 million fraud involving Citigroup’s Mexican unit, according to people briefed on the matter. (http://link.reuters.com/rat28v)
* After facing a House subcommittee investigating General Motors Co’s ignition-switch recall a day earlier, GM’s Chief Executive Mary Barra was bombarded with a more aggressive line of questioning by senators on Wednesday. (http://link.reuters.com/tat28v)
* Amazon.com Inc is a retailer that makes and sells entertainment. On Wednesday, it took a big step toward a future in which shopping and video are tightly linked, perhaps even inseparable. The company began selling a device, Amazon Fire TV, that lets consumers watch Amazon’s extensive video library as well as play a wide array of games on their television sets. (http://link.reuters.com/wat28v)
* A prominent executive is leaving JPMorgan Chase & Co as her powerful trading operation has stopped performing up to expectations. The departure of Blythe Masters, the head of JPMorgan’s giant commodities unit, comes as the bank completes a sale of crucial parts of that business. (http://link.reuters.com/xat28v)
* Chrysler, a unit of Fiat Chrysler Automobiles, is recalling more than 850,000 sport utility vehicles because of a possible braking problem. The recall covers the 2011 to 2014 Jeep Grand Cherokee and Dodge Durango models, including about 644,000 in the United States. (http://link.reuters.com/bet28v)
THE GLOBE AND MAIL
* The political future of Toronto-area Conservative MP Eve Adams is uncertain after Prime Minister and Conservative party leader Stephen Harper ordered a party investigation into the power struggle that went behind an Ontario nomination. (http://link.reuters.com/qyt28v)
* Two new cases of measles in Calgary area have taken the total number of infected people to five. The two individuals are from the Western Canada High School in Calgary, which was warned in late January of a measles exposure. (http://link.reuters.com/fuv28v)
Reports in the business section:
* In an effort to block Goldcorp Inc’s hostile bid, Osisko Mining Corp cut a complicated deal with Yamana Gold Inc and two Canadian pension funds. Toronto-based Yamana will use cash and its stock to buy a 50 percent interest in Osisko’s mining and exploration assets. (http://link.reuters.com/vyt28v)
* Toronto mayor Rob Ford was the sole vote against the city council’s motion on naming a city street in honor of Nelson Mandela. The decision surprised many members of the Toronto city council and ensued a huge commotion on social media. When reporters approached Ford on his surprising decision, he stood up in city council to say he voted the wrong way and asked for a re-vote. (http://link.reuters.com/cav28v)
* An Alberta court has ruled against a constitutional challenge that opposes the provincial government’s monopoly on health care. Alberta Court of Queen’s bench ruled against a claim to obtain private health insurance, saying that an Albertan can’t rely on the Supreme Court’s 2005 Chaoulli decision because provincial law bans private health insurance. (http://link.reuters.com/jav28v)
* Imperial Oil Ltd is struggling to work out manufacturing and installation-related defects at its $12.9 billion Kearl oil sands mine nearly one year after production began. (http://link.reuters.com/tav28v)
* Home sales in the Vancouver region picked up in March compared to a year earlier. However, they were still well below the long-term average for the month, according to the city’s real estate board. (http://link.reuters.com/xav28v)
CHINA SECURITIES JOURNAL
– China will accelerate urbanisation in shanty towns to promote investment and consumption, Premier Li Keqiang said in the weekly State Council meeting. The move also aims to help boost the broader economy.
– Local securities firm Sealand Securities Co announced it will raise under 5 billion yuan ($805.72 million) via private placements. It will also issue corporate bonds for under 2 billion yuan.
– Shanghai will become the second city in the country after Beijing to introduce the China V-emission standards for new vehicles, starting April 30, in a bid to tackle air pollution.
21st CENTURY BUSINESS HERALD
– The National Development and Reform Commission has approved raising of transport fees by private-owned commercial rail operators such as Shenhua Energy. Shenhua will be able to charge a fee of 0.20 yuan per tonne, from 0.15 yuan per tonne, from April 1 for its Inner Mongolia-Shaanxi rail road.
– China lacks a new engine of economic growth and is still in the process of developing news ways to stimulate the economy, said Guo Tianyang, director of the Research Center of the Chinese Banking Industry at the Central University of Finance and Economics in Beijing, while other analysts said the country’s bad debt is expected to increase.
– China may sell debt and is considering other ways to raise funds for combating climate change, an official at the country’s top economic planner said on Tuesday.
SSE BOSS ATTACKS ‘SCAREMONGERING’ OVER ENERGY COMPETITION PROBE
Energy companies should not “scaremonger” over the impact of a competition probe, the chief executive officer of SSE has said, in a thinly veiled attack on rival Centrica Plc .
BIDS FOR CHANNEL 5 EXPECTED TO BE LESS THAN HALF 700 MLN STG ASKING PRICE
The sale of Channel 5 is expected to attract bids of less than half the 700-million pound price tag attached to the broadcaster by its owner Richard Desmond, it can be disclosed.
MONEY SHOP OWNER DOLLAR FINANCIAL TO BE SOLD TO LONE STAR FOR $1.3 BLN
Dollar Financial, the U.S. short-term lending specialist behind the Money Shop, Britain’s largest high-street payday lender, is to be sold to private equity house Lone Star for $1.3 billion.
LORD MYNERS FACES STRUGGLE TO OVERHAUL CO-OPERATIVE GROUP BOARD
Lord Myners is facing an uphill struggle in the coming days to persuade members of the loss-making Co-operative Group Ltd to endorse his plans to overhaul its board and replace it with a plc-style structure.
GOOD NEWS AS ACCENTURE GOES ON HIRING SPREE
One of the world’s biggest management consultants, Accenture Plc, is to hire 2,000 people in the United Kingdom this year in a move hailed by the prime minister as “more good news for the British economy.”
GLENCORE, GERTLER AND CONGO’S LOST MILLIONS
Glencore Xstrata helped to pave the way for a cut-price deal that has led to $71 million in mining royalties going to its joint venture partner instead of the world’s poorest country.
COWDERY NETS 200,000 STG PROFIT AFTER FCA FIASCO
The founder of the closed life insurer Resolution has netted a profit of almost 200,000 pound on shares he bought after last week’s botched launch of a probe into the sector by the City regulator.
NATIONWIDE – HOME PRICES UP 10 PCT IN LAST YEAR
Average house prices have risen by nearly 10 percent in the last year, according to a property survey. Nationwide said year-on-year prices were up 9.5 percent in March, the biggest annual jump since mid-2010
Fly On The Wall 7:00 AM Market Snapshot
Domestic economic reports scheduled today include:
Jobless claims for week of March 29 at 8:30–consensus 320K
International Trade Balance for February at 8:30–consensus -$38.8B
March ISM non-manufacturing index for March at 10:00–consensus 53.3
Acuity Brands (AYI) upgraded to Buy from Hold at Canaccord
Eli Lilly (LLY) upgraded to Outperform from Market Perform at Cowen
Intel (INTC) upgraded to Overweight from Neutral at Piper Jaffray
Monsanto (MON) upgraded to Overweight from Neutral at JPMorgan
Newfield Exploration (NFX) upgraded to Buy from Neutral at UBS
OpenTable (OPEN) upgraded to Buy from Neutral at Citigroup
Sun Bancorp (SNBC) upgraded to Neutral from Underperform at Sterne Agee
Willis Group (WSH) upgraded to Buy from Neutral at Nomura
BB&T (BBT) downgraded to Outperform from Strong Buy at Raymond James
Broadcom (BRCM) downgraded to Neutral from Overweight at Piper Jaffray
CF Industries (CF) downgraded to Neutral from Buy at Citigroup
CSX (CSX) downgraded to Equalweight from Overweight at Barclays
Cheniere Energy (LNG) downgraded to Neutral from Outperform at Credit Suisse
Citigroup (C) downgraded to Neutral from Buy at Sterne Agee
Deutsche Bank (DB) downgraded to Neutral from Overweight at JPMorgan
G&K Services (GK) downgraded to Neutral from Outperform at RW Baird
Marcus (MCS) downgraded to Neutral from Buy at B. Riley
National Retail Properties (NNN) downgraded to Sell from Neutral at UBS
Norfolk Southern (NSC) downgraded to Neutral from Overweight at Atlantic Equities
Orion Energy (OESX) downgraded to Hold from Buy at Ascendiant
VIVUS (VVUS) downgraded to Underweight from Neutral at Piper Jaffray
Altera (ALTR) assumed with an Overweight at Piper Jaffray
Apollo Global (APO)initiated with an Outperform at Bernstein
BP (BP) initiated with a Market Perform at Cowen
Blackstone (BX) initiated with an Outperform at Bernstein
Cavium (CAVM) assumed with a Neutral at Piper Jaffray
Chevron (CVX) initiated with a Market Perform at BMO Capital
Chevron (CVX) initiated with an Outperform at Cowen
China Mobile Games (CMGE) initiated with an Overweight at Barclays
ConAgra (CAG) initiated with an Equal Weight at Morgan Stanley
ConocoPhillips (COP) initiated with a Market Perform at BMO Capital
ConocoPhillips (COP) initiated with a Market Perform at Cowen
Dollar General (DG) initiated with a Hold at Jefferies
Exxon Mobil (XOM) initiated with an Outperform at Cowen
Exxon Mobil (XOM) initiated with an Underperform at BMO Capital
J.M. Smucker (SJM) initiated with an Equal Weight at Morgan Stanley
KKR (KKR) initiated with an Outperform at Bernstein
Occidental Petroleum (OXY) initiated with an Outperform at Cowen
Petrobras (PBR) initiated with a Market Perform at BMO Capital
Royal Dutch Shell (RDS.A) initiated with a Market Perform at Cowen
Royal Dutch Shell (RDS.A) initiated with an Outperform at BMO Capital
Total (TOT) initiated with an Outperform at BMO Capital
Total (TOT) initiated with an Outperform at Cowen
Yahoo (YHOO) said all traffic between data centers now encrypted
Novartis (NVS) appointed Dirk Koshce as head of Novartis Pharmaceuticals, announced a third-party internal review of IITs, placed a temporary moratorium on all IIT funding in Japan
Credit Suisse (CS) announced charge of CHF 468M for litigation provision
Plug Power (PLUG) acquired ReliOn, which develops hydrogen fuel cell stack technology and fuel cell systems, for $4M
Fusion-io (FIO) announced a collaboration with Oracle (ORCL) on the development of flash-aware interfaces for MySQL
Cypress Semiconductor (CY) announced that CFO Brad Buss will retire later this year and said it sees Q1 revenue exceeding the high end of its previous $169M-$171M range
Companies that beat consensus earnings expectations last night and today include:
Resources Connection (RECN)
Companies that missed consensus earnings expectations include:
Greenbrier (GBX), Texas Industries (TXI), Dominion Diamond (DDC), Mitcham Industries (MIND), National American University (NAUH)
Federal authorities open up criminal probe of Citigroup’s (C) Mexican unit, NY Times reports
Boeing (BA) to cut as many as 300 Australian contrators, WSJ reports
RBS (RBS) to close 44 branches, Reuters says
Yelp (YELP) receives subpoenas monthly over users, WSJ reports
Sanofi (SNY) on lookout for acquisitions, expects growth in Africa, Reuters says
Google (GOOG) could ship up to 11M Chromebooks worldwide by 2019, DigiTimes says
Yahoo’s (YHOO) goal of raising encryption could clash with advertising, WSJ reports
Google’s (GOOG) LeBeau hired by Facebook (FB), TechCrunch reports
BG Medicine (BGMD) files to sell common stock
Catalyst Pharmaceutical (CPRX) files to sell common stock
Exact Sciences (EXAS) files to sell $125M in common stock
Kindred Biosciences (KIN) 3M share Secondary priced at $18.00
LDR Holding (LDRH) to sell 3.8M shares for holders
Tarena (TEDU) 15.3M share IPO priced at $9.00
Venaxis (APPY) files to sell common stock