One in four Germans would back anti-euro party (Reuters) EU Chiefs Seeking to Stave Off Euro Crisis Turn to Cyprus (BBG) Ryan Says His Budget Would Slow Annual Spending Growth to 3.4% (BBG) Goldman leads decline as Wall Street commodity revenues plummet (Reuters) South Korea and US begin military drills (FT) and North Korea cuts off hotline with South Korea (Reuters) Karzai Inflames U.S. Tensions (WSJ) Algorithms Get a Human Hand in Steering Web (NYT) Meeting Is Set to Choose Pope (WSJ) More U.S. Profits Parked Abroad, Saving on Taxes (WSJ) Banks rush to redraft pay deals (FT) Fugitive Fund Manager Stuffed Underwear With Cash, Fled (BBG) Post-Newtown Gun Limits Agenda Narrows in U.S. Congress (BBG) China Hints at Shift in One-Child Policy (WSJ) China to merge maritime patrol units (FT) Overnight Media Digest WSJ * A Wall Street Journal investigation into asbestos trust claims and court cases of roughly 850,000 people filed since the late 1980s found many apparent anomalies. * U.S. companies are keeping more of their profits offshore, a Wall Street Journal analysis of 60 big companies found. The moves shielded more than 40 percent of the companies' annual profits from U.S. taxes. * As Comcast Corp nears completion of its $16.7 billion buyout of General Electric Co's stake in NBCUniversal, it faces a slowdown in what has long been the engine of the business: NBCU's cable channels. * Figuring that the Federal Reserve won't be able to keep a lid on interest rates forever, large money managers such as BlackRock Inc, TCW Group Inc and Pacific Investment Management Co are getting ready for the day when rates take their first turn higher. * Two publishing industry groups, the Authors Guild and the Association of American Publishers, are objecting to Amazon.com Inc's request for ownership of new top-level domain names which include ".book," ".author" and ".read" arguing that Amazon's control over such addresses would be a threat to competition. * February's U.S. employment report was an unambiguously positive set of data, but it remains to be seen whether it signaled the start of a sustained period of healthier job growth. * Once a booming source of bank profit, Wall Street's commodity trading has been hit hard by tougher new rules and subdued markets. Revenue from trading the likes of oil, metals and soybeans dropped 16 percent last year at J.P. Morgan Chase & Co and 20 percent at Morgan Stanley, according to securities filings. * Dell Inc's proposed $24.4 billion buyout by its founder has shareholders on edge. And that anxiety is spreading to the computer maker's customers and others as well. * The technology industry will be paying close attention to Samsung Electronics Co. this week when it lifts the curtains on a new high-end smartphone at an event in New York on Thursday. A lot is riding on the new device as Samsung aims to maintain its lead and boost profits in the increasingly crowded smartphone market. * Economic indicators in the United States this week could determine whether the dollar's recent strength will prove sustainable. The greenback rose to its highest level against the yen in more than three years on Friday. FT UK's banks may have to adhere to tougher leverage ratios than their global rivals. The Parliamentary Commission on Banking Standards has called for the government's proposed new banking legislation to be toughened. European banks are racing to tweak executive pay deals by the end of the month to meet new EU bonus rules and secure shareholder backing at upcoming annual meetings. Private equity firms are highlighting huge sums of cash returned to investors even though the value of their portfolios has risen faster, boosted by trillions of assets that they are struggling to sell. Spain's growing unease with the British Airways-Iberia merger is being watched closely at a time when the financial crisis has left the country's corporate sector more vulnerable to foreign takeovers. AbbVie, the U.S. pharmaceuticals business spun off from Abbott Laboratories, has sought an injunction to block Europe's medicines regulator from releasing detailed data on its blockbuster rheumatoid arthritis drug. The head of Austrian energy group OMV has warned that the European Union must arrive at a common position on shale gas or risk deindustrialisation that would put European companies at a competitive disadvantage to Asian and U.S. rivals. Three key executives that were behind the creation and sale of London-listed Cove Energy have come together again to raise funds to explore once more for oil and gas in waters off Mozambique. A U.S. court has imposed an escalating series of fines on Turkey's biggest mobile operator Turkcell, controlled by the country's best known tycoons Mehmet Karamehmet. NYT * British lawmakers will warn in a report to be published on Monday that proposed legislation to protect Britain's financial services sector from future crises does not go far enough and may fail to stop banks from engaging in risky trading. * Howard Stringer, who fought to bring a divided and struggling Sony Corp together as the company's first foreign president, is retiring as chairman in June. * Former hedge fund manager Florian Homm, who spent five years in hiding, was arrested in Italy and faces extradition to America, where authorities have accused him of defrauding investors of at least $200 million. * CreativeLive and other online companies have tapped into an audience of customers who are motivated to hone skills that might enhance their careers, and investors are noticing the profit potential. * The Commodity Futures Trading Commission announced on Friday that its general counsel, Dan Berkovitz, would soon depart the agency. His departure follows the agency's recent legal crackdown on Wall Street. * With jobs slowly coming back, hopes are that ordinary Americans will finally feel the recovery that the nation's corporations have seen for some time. * Stefan Kaluzny, who started the buyout firm Sycamore Partners just two years ago, has made a couple of splashy purchases, including the $600 million deal for the retail chain Hot Topic. Canada THE GLOBE AND MAIL * The Parti Québécois government is bracing for a passionate debate on its proposed language policy as public hearings begin this week on a bill to reinforce the use of French in Quebec society. * The contenders trailing Philippe Couillard in the race to replace Jean Charest as Quebec Liberal leader are grasping at the Ontario party's recent example for hope their race is not over. With Couillard firmly in the lead and, according to some reports, holding the support of around half of committed delegates, his two opponents are evoking Ontario Premier Kathleen Wynne's come-from-behind victory as they try to rally their troops for next weekend's leadership vote. * As a number of transit systems move toward unstaffed trains, the Toronto Transit Commission is taking a half-step in that direction, laying the groundwork for largely hands-off operation on one of its two lines within a few years. Reports in the business section: * Mortgage brokers are pressing the federal government to make it easier for young people to buy their first homes, just as the spring sales season descends and Ottawa prepares its next budget. * Canada Finance Minister Jim Flaherty has taken his battle against a housing bubble an extraordinary step further, issuing rare praise for the country's banks for not matching Bank of Montreal's cut-rate mortgages, which the lender rolled out a week ago in an attempt to drum up new business. * One of Canada's most productive auto assembly plants is getting a C$250 million ($243 million) boost that likely solidifies about 3,000 jobs well into the 2020s. General Motors Co will invest that amount at its Cami Automotive factory in Ingersoll, Ontario, to respond more quickly to changing consumer tastes by building vehicles off more than one platform or basic underbody. NATIONAL POST * Canada Prime Minister Stephen Harper will travel to Yellowknife on Monday to mark the end of talks granting province-like powers to the Northwest Territories. Harper's office confirmed on Sunday that he will be present at the event, to be held at the territorial legislature. * Toronto Mayor Rob Ford used his radio show on Sunday to hit back at a former election rival who accused him of inappropriate touching and lewd comments, telling his listeners the allegations were "not true" and questioning whether his accuser was "playing with a full deck." * Most Canadians are in favor of restrictions on the number of qualified immigrants accepted into the country each year, a new poll suggests. FINANCIAL POST * Canada's see-sawing labor force swung back into job-creation mode in February, with a net 50,700 people finding work. Most of those new hires were aged 55 or older - continuing a trend from January. * Americans living in Canada have already found themselves in the sights of the Internal Revenue Service, but a Canadian tax expert is warning that they should pay particular attention to their use of investment vehicles such as the Tax Free Savings Account. * The recent surge in demand for air travel in Canada appears to be leaving Porter Airlines Inc behind, with traffic falling precipitously at the Toronto Island-based airline while its rivals consistently report record months of filling their planes. China CHINA SECURITIES JOURNAL -- Yang Maijun, Chairman of the Shanghai Futures Exchange, proposed to lay out legislation in the futures market to regulate and further develop the sector. -- Hong Kong, Macau and Taiwan residents living on the mainland will be allowed to open yuan-denominated A-share accounts in China from April 1, said Guo Shuqing, Chairman of China Securities Regulatory Commision. SECURITIES TIMES -- Song Liping, the general manager of Shenzhen Stock Exchange, said they would firmly promote reform and strengthen regulations on initial public offerings. CHINA DAILY -- The overhaul of the central government, which will see the railway and health ministries demoted, will cut red tape and increase efficiency. PEOPLE'S DAILY -- Chinese government will continue to support railway construction and accelerate financing and pricing reforms, although the Railway Ministry will be coordinated under the broader Ministry of Transport. Fly On The Wall 7:00 AM Market Snapshot ANALYST RESEARCH Upgrades ArcelorMittal (MT) upgraded to Buy from Neutral at UBSAspen Insurance (AHL) upgraded to Outperform from Neutral at Credit SuisseBanco Bilbao (BBVA) upgraded to Hold from Sell at Societe GeneraleBarnes Group (B) upgraded to Buy from Hold at KeyBancBest Buy (BBY) upgraded to Overweight from Neutral at Piper JaffrayBioDelivery Sciences (BDSI) upgraded to Overweight from Neutral at Piper JaffrayCONSOL Energy (CNX) upgraded to Outperform from Market Perform at BMO CapitalCTC Media (CTCM) upgraded to Neutral from Underperform at Credit SuisseCitigroup (C) upgraded to Buy from Neutral at UBSCloud Peak Energy (CLD) upgraded to Outperform from Market Perform at BMO CapitalMain Street (MAIN) upgraded to Outperform from Neutral at RW BairdMasco (MAS) upgraded to Outperform from Sector Perform at RBC CapitalMeritage Homes (MTH) upgraded to Strong Buy from Buy at ISI GroupNXP Semiconductors (NXPI) upgraded to Positive from Neutral at SusquehannaResolute Energy (REN) upgraded to Buy from Hold at WunderlichRovi (ROVI) upgraded to Overweight from Neutral at Piper JaffraySmithfield Foods (SFD) upgraded to Neutral from Underperform at BofA/MerrillTransDigm (TDG) upgraded to Buy from Hold at Deutsche Bank Downgrades Adobe (ADBE) downgraded to Neutral from Buy at BofA/MerrillAltera (ALTR) downgraded to Neutral from Buy at UBSCredicorp (BAP) downgraded to Market Perform from Outperform at Raymond JamesDaVita (DVA) downgraded to Neutral from Buy at SunTrustIntuit (INTU) downgraded to Neutral from Buy at BofA/MerrillManhattan Associates (MANH) downgraded to Market Perform at Raymond JamesMylan (MYL) downgraded to Hold from Buy at CanaccordNVIDIA (NVDA) downgraded to Negative from Neutral at SusquehannaPPL Corp. (PPL) downgraded to Neutral from Buy at UBSPeabody Energy (BTU) downgraded to Market Perform from Outperform at BMO CapitalWalter Energy (WLT) downgraded to Market Perform from Outperform at BMO Capital Initiations EMC (EMC) initiated with a Buy at LongbowFusion-io (FIO) initiated with a Neutral at LongbowInsmed (INSM) initiated with an Outperform at LeerinkJazz Pharmaceuticals (JAZZ) initiated with a Buy at CantorMartin Midstream Partners (MMLP) resumed with a Market Perform at Wells FargoNetApp (NTAP) initiated with a Neutral at LongbowOCZ Technology (OCZ) initiated with a Neutral at LongbowSeagate (STX) initiated with a Neutral at LongbowWestern Digital (WDC) initiated with a Neutral at Longbow HOT STOCKS BP (BP) sees subdued global growth continuing in 2013Eaton (ETN), Cummins (CMI) announced powertrain package for N.A. truck marketNielsen (NLSN) disclosed receipt of FTC request for more information in Arbitron (ARB) dealPublicis (PUBGY) acquired India-based ConvonixChyron Corp. (CHYR) to acquire Hego Group EARNINGS Companies that beat consensus earnings expectations last night and today include:Sunshine Heart (SSH), Renren (RENN) NEWSPAPERS/WEBSITES U.S. companies are making record profits, and more of the money is staying offshore, and lightly taxed. A Wall Street Journal analysis of 60 big U.S. companies found that, together, they parked a total of $166B offshore last yearOn Thursday, Samsung Electronic (SSNLF) will unveil a new high-end smartphone. A lot is riding on the new device as the company aims to maintain its lead and boost profits in the increasingly crowded smartphone market, the Wall Street Journal reportsWall Street commodity revenues fell last year to their lowest on record, as tighter regulation and limited price swings squeezed the once dominant traders of Goldman Sachs (GS), JPMorgan Chase (JPM) and Morgan Stanley (MS). All three reported double-digit percentage declines in revenues for oil, grains and copper trading in 2012, Reuters reportsIn the U.K. the Parliamentary Commission on Banking Standards said all banks should be forced to split routine retail operations from riskier investment activities if a single lender abuses new rules designed to protect taxpayers, Reuters reportsThe sudden slowdown in U.S. inflation has left Treasuries at the cheapest levels in almost two years, aiding the Fed’s efforts to tamp down long-term borrowing costs while the economy improves. Yields on 10-year notes, the benchmark measure for everything from home loans to corporate bonds, reached an 11- month high of 2.08% on March 8, Bloomberg reportsJohnson & Johnson’s (JNJ) DePuy unit, which just lost a $8.3M verdict in the first trial over its recalled metal hip implant, now faces a second jury that will consider whether the design was defective, Bloomberg reports BARRON’S TD Ameritrade (AMTD), Schwab (SCHW), E-Trade (ETFC) products positively reviewed Bed Bath & Beyond (BBY) could rise 25% over the next year, could attract private-equity investors or possibly Berkshire Hathaway (BRK.A) if founders decide to sellRailroads (CP, UNP, KSU, CSX, NSC) profiting from hauling overflow oil productionLive Nation (LYV) may have more upsideIcahn proposal could kill buyout, boost Dell's (DELL) valueGenworth Financial (GNW) undervaluedSkyworks (SWKS), Broadcom (BRCM), LSI (LSI), Cirrus (CRUS) look attractive SYNDICATE Cempra (CEMP) files $100M mixed securities shelfSpark Networks (LOV) files $100M mixed securities shelfSusquehanna (SUSQ) files automatic mixed securities shelfViaSat (VSAT) files automatic mixed securities shelf
Investors may have taken their foot off the gas pedal when it comes to equity income fund flows and many of the dividend-paying stocks they hold, but they certainly have not applied the brakes just yet. The latest data as a February 14, 2013 from Lipper shows a weekly outflow of $156 million, keeping the first two weeks of February slightly positive at a net of $48 million. But February has been a weaker month than January the past two years, seen in the table below, as many investors change and/or add to their fund allocations on a quarterly or annual basis. According to Matthew Lemieux, Sr. Research Analyst at Thomson Reuters Lipper, investors still seem comfortable with finding yield in equity. On a monthly basis since July 2010, Equity Income has seen 31 out of 32 consecutive periods of positive inflows Fund flows stand at $2.57 billion since the beginning of 2013. If flows continue at the same rate, the first quarter should come in at around $5.15 billion. The sole negative month for equity income fund flows was December 2013, amid the uncertainty of 2013 dividend tax rates spooked many dividend investors, presumably with taxable dividend exposure, out of dividend-paying equity income funds. Likewise, Lemieux mentions the lower rate of funds coming into equity income so far this year as possibly some of the remaining impact of the changes in dividend and capital gains starting in 2013. Lemieux also sees a stronger acceptance of a broader equity market, to the point that equity income is no longer the only (domestic) equity strategy in town. Lipper data shows is beginning to show that core equity in the form of mid cap, small cap and multi cap receiving some interest where there hadn’t been much in the past. Seen on a quarterly basis in the table below, Lipper equity income fund flow data show the impact of tax uncertainty showing up in the fourth quarter of 2011, with a slight quarterly withdrawal level of $120 million. Adding up the data shows 2010 was a strong year, with $30.9 billion of inflows. Perhaps without the uncertainty associated with the so-called U.S. ‘fiscal cliff’ one would have seen more of a commitment to equities across the board. According to Lipper Director of Research Tom Roseen, the performance of the larger funds in the past one-year and three-year periods has been in general lower than that of their respective benchmarks, most typically the S&P 500, the Russell 1000 or Russell 1000 Value indices. That seems to matter less to investors, who seem more focused in many cases on replacing the yield they’ve historically received through fixed income products. Dividend Stock Performance Update The chart above shows the total return performance (price change with dividends reinvested) of the S&P 500 (SPY.N) in the blue line, up 11.4% since March 22, 2012 when we published our 2012 Thomson Reuters Dividends List (more on the characteristics of the stocks on the list is below). The Vanguard Dividend Appreciation Fund (VIG.N) in green is up 12.8% and the static TR Dividends List is up 13.9%. Dividend stocks continue to be slightly favored in 2013 through February 15, with the TR Dividends up 7.7%, while the Vanguard VIG is up 7.3%, followed by the S&P 500 up 6.8%. Thomson Reuters Fundamental Research produces a list of dividend paying stocks that contain several potentially attractive investment characteristics: Liquidity – 200,000 shares/day or more trading volume Higher than average S&P 500 dividend yields, though not the highest yields Lower (higher) than average dividend payout (retention) rates – companies with higher than average yields and also lower than average dividend payouts (50% or less) are able to use retained earnings to grow internally and with less dependence on additional external debt or equity financing Earnings Quality threshold – ensure the majority of past earnings are sustainable into the future (eliminates any names with StarMine Earnings Quality scores from 1-20 out of 100 as a filter) Account for Credit Risk – use StarMine SmartRatios Credit Risk model scores (eliminates any names with scores of 1-10 out of 100 as a filter) The resulting list includes the following 59 dividend-paying, higher than average yield and lower than average stock symbols alphabetically: ADM, AFL, ALV, APD, AXS, BBT, BKU, BLK, CA, CCL, CFR, COP, CPB, CSX, CVX, DPS, ETN, FCX, GCI, GD, GES, GIS, GNTX, GPC, HBAN, HLF, HPQ, HUN, INTC, JPM, KLAC, KRO, KSS, LLL, MAT, MMC, MMM, MSFT, MTB, NEE, NOC, NSC, OXU, PFE, PNC, PRE, RTN, SLM, SPLS, STJ, STX, SWY, SXL, TAP, TRV, VR, WAG, WSH, WU. Ticker Company Name TRBC Economic Sector Market Cap (MM $US) FCX Freeport Mcmoran Copper & Gold-A Basic Materials 33,388 APD Air Products & Chemicals Basic Materials 17,922 HUN Huntsman Corp Basic Materials 3,889 KRO Kronos Worldwide Inc Basic Materials 2,325 CCL Carnival Corporation Consumer Cyclicals 29,409 MAT Mattel Inc Consumer Cyclicals 12,627 GPC Genuine Parts Co Consumer Cyclicals 10,107 KSS Kohl’s Corp Consumer Cyclicals 9,709 SPLS Staples Inc Consumer Cyclicals 7,736 ALV Autoliv Consumer Cyclicals 6,554 GCI Gannett Inc Del Consumer Cyclicals 4,249 GNTX Gentex Corp Consumer Cyclicals 2,734 GES Guess ? Consumer Cyclicals 2,119 WAG Walgreen Co Consumer Non-Cyclicals 35,971 GIS General Mills Inc Consumer Non-Cyclicals 26,717 ADM Archer Daniels Midland Co Consumer Non-Cyclicals 18,881 CPB Campbell Soup Company Consumer Non-Cyclicals 11,294 DPS Dr Pepper Snapple Group Inc Consumer Non-Cyclicals 9,490 TAP Molson Coors Brewing Co Consumer Non-Cyclicals 6,923 SWY Safeway Inc Consumer Non-Cyclicals 4,397 HLF Herbalife Ltd Consumer Non-Cyclicals 3,478 CVX Chevron Corp Energy 216,053 COP ConocoPhillips Energy 71,875 OXY Occidental Pete Corp Energy 63,324 SXL Sunoco Logistics Partners Lp Energy 5,396 JPM JPMorgan Chase & Co. Financials 169,771 BLK Blackrock Inc Financials 36,072 PNC PNC Financial Services Financials 31,489 TRV Travelers Cos Inc Financials 27,792 AFL AFLAC Incorporated Financials 25,354 BBT BB&T Corporation Financials 21,038 MMC Marsh & Mclennan Cos Inc Financials 19,337 MTB M & T Bank Corp Financials 12,932 SLM SLM Corp Financials 8,042 WSH Willis Group Holdings Plc Financials 5,925 HBAN Huntington Bancshares Inc Financials 5,621 PRE Partnerre Ltd Financials 4,989 AXS Axis Capital Holdings Ltd Financials 4,338 CFR Cullen Frost Bankers Inc Financials 3,427 VR Validus Holdings Ltd Financials 3,212 BKU Bankunited Inc Financials 2,351 PFE Pfizer Inc Healthcare 190,764 STJ St Jude Medical Inc Healthcare 11,282 MMM 3M Co Industrials 66,426 ETN Eaton Corp Plc Industrials 26,267 GD General Dynamics Corp Industrials 25,142 CSX CSX Corporation Industrials 20,803 NSC Norfolk Southern Corp Industrials 20,002 RTN Raytheon Co Industrials 19,337 NOC Northrop Grumman Corporation Industrials 16,732 WU Western Union Company (The) Industrials 8,209 LLL L-3 Communication Holdings Inc Industrials 7,294 MSFT Microsoft Corp Technology 232,463 INTC Intel Corporation Technology 106,387 HPQ Hewlett Packard Co Technology 29,261 STX Seagate Technology Technology 12,061 CA Ca Inc Technology 10,444 KLAC KLA-Tencor Corporation Technology 8,254 NEE Nextera Energy Inc Utilities 29,844 In a world that continues to thirst for yield, looking in the right places in equities makes all the difference.
Risky Student Debt Is Starting to Sour (WSJ) Political scandal in Spain as PP secret accounts revealed (El Pais) New York Times claims Chinese hackers hijacked its systems (NYT) Spain's Rajoy, ruling party deny secret payment scheme (Reuters) Iran crude oil exports rise to highest since EU sanctions (Reuters) BlackBerry 10’s Debut Fizzles as U.S. Buyers Left Waiting (BBG) Costs drag Deutsche Bank to €2.2bn loss (FT) And the gaming of RWA continues - Deutsche Bank Beats Capital Goal as Jain Shrugs Off Loss (BBG) More fun out of London - Barclays, RBS May Pay Billions Over Improper Derivatives Sales (BBG) Hagel to face grilling by Senate panel on Mideast, budget (Reuters) Overnight Media Digest WSJ * Israel bombed a suspected shipment of anti-aircraft missiles in Syria on Wednesday, according to regional and U.S. officials, in its most ambitious strike inside its neighbor's territory in nearly two chaotic years of civil war there. * Research in Motion Ltd executives excused more than a year of delays by saying they wanted the next BlackBerrys to be just right. But the smartphones that took more than two years to develop won't be available for the key U.S. market until mid-March, when carriers are expected to complete their tests. * The U.S. economy shrank for the first time in more than three years in the fourth quarter, underscoring the halting nature of the recovery. But the strength of consumer spending and business investment suggested that the economy will grow, albeit slowly, this year. * The U.S. Treasury for the first time auctioned holdings in U.S. banks that had missed a series of dividend payments, allowing the government to close out financial-crisis era investments only at steep discounts. * Facebook reported a 40 percent fourth-quarter revenue jump as it ramped up its mobile business and offered new tools to advertisers, but the firm's shares slipped in after-hours trading. * Boeing Co executives said it was business as usual despite the crisis surrounding its 787 Dreamliner, though airlines worldwide made preparations for an extended grounding of the aircraft. * Illinois took the rare step Wednesday of postponing a bond auction just hours before it was expected to launch, as concerns grew among investors over the state's deep pension hole. FT FLEE 'SAFE' SOVEREIGN DEBT, SAYS HASENSTAB - The man who oversees 175 billion dollars in bonds for Californian asset manager, Franklin Templeton, says its time to get out of government debt now before it is too late. UNION REQUESTS IAG MEETING ON IBERIA - The chief executive of International Airlines Group, Willie Walsh will reject a request from a pilots' union to discuss the restructuring of Iberia. MPS ATTACK BARCLAYS OVER BONUS CULTURE - The parliamentary commission on banking standards accused Barclays of empty rhetoric, tearing into the bank's remuneration committee. FACEBOOK MOBILE AD GROWTH DRIVES SALES - An aggressive advertising drive by the Facebook during the U.S. presidential elections and shopping season saw the website post its first quarterly revenue growth since going public. DEUTSCHE BANK CHIEFS MAINTAIN COURSE - To the dismay of analysts and some investors, Deutsche Bank's Anshu Jain and Jurgen Fitschen are firmly rejecting the need for the bank to raise more capital. RIMLESS BLACKBERRY HOPES TO REGAIN TOUCH - The struggling handset maker Blackberry is taking a gamble by launching two touchscreen smartphones in a direct challenge to Apple and Samsung. ÇUKUROVA WINS RIGHT TO CONTROL TURKCELL - A court decision by the UK Privy Council will allow one of Turkey's richest men, Mehmet Karamehmet, the chance to regain control of the country's biggest mobile phone operator, Turkcell. NYT * For the last four months, Chinese hackers have persistently attacked The New York Times, infiltrating its computer systems and getting passwords for its reporters and other employees. * Research in Motion Ltd introduced a new operating system and a new generation of phones, along with a new corporate name, with the hope of restoring its products' status as a symbol of executive cool. * The U.S. government played a role in slowing the economic recovery as cuts in military spending and other factors overwhelmed the Federal Reserve's expanded campaign to spur growth. * Despite two serious safety failures and new questions about the reliability of its lithium-ion batteries, Boeing Co's chief executive said Wednesday that he saw no reason to retreat from using the new but volatile technology on its 787 jets. * Chrysler, the smallest of the American automakers, on Wednesday reported a big increase in 2012 earnings that helped its Italian parent company, Fiat SpA, become profitable for the year as well. * Time Inc joined the many news organizations trying to tighten their belts in a tough advertising climate by announcing layoffs and offering employees buyout packages on Wednesday. * In a legal dispute that had been closely watched by multinational companies and environmental organizations, a Dutch court dismissed most of the claims brought by Nigerian farmers seeking to hold Royal Dutch Shell accountable for damage by oil spilled from its pipelines. China CHINA SECURITIES JOURNAL -- Livzon Pharmaceutical Group Inc said in a statement it will become the third company to move its dollar-denominated B shares to the Hong Kong H-share market. -- Metallurgical Corporation of China Ltd said it expected to book a loss of 7.2 billion yuan ($1.16 billion) in 2012. 21st CENTURY BUSINESS HERALD -- Galaxy Securities could give up its plan for a dual listing of yuan-denominated shares in Shanghai and Hong Kong, but it still expects to list H-shares in May. CHINA DAILY (www.chinadaily.com.cn) -- The State Council, China's cabinet, has approved an energy consumption target as part of efforts to correct overuse and foster greener growth. The government aims to keep total energy consumption below 4 billion metric tonnes of standard coal equivalent by 2015, with electricity consumption below 6.15 trillion kwh. -- Domestic and foreign inbound mergers and acquisition deals by strategic investors fell to a five-year low last year, but activity will rebound in 2013, a report by accounting firm PricewaterhouseCoopers said. Corp Fin * Germany plans a modest reform of its banking sector that would put a cap on risky activities but not lead to the breakup of banks or significantly impair big institutions like flagship lender Deutsche Bank, according to a draft law seen by Reuters. * Prosecutors are investigating the former management of Italy's troubled Monte dei Paschi bank for bribery and fraud, judicial sources said on Wednesday, as pressure grew on the Bank of Italy and bourse watchdog Consob. * Endo Health Solutions Inc has held talks in recent weeks with drugmakers potentially interested in buying the maker of pain relief medication, people familiar with the matter said. * Russian state technology firm Rusnano is planning to sell through a private placing of 10 percent of its shares between March and June, its chief executive Anatoly Chubais said in an interview with the Interfax news agency. * Quintiles Transnational Corp, the largest provider of testing services to drugmakers, has chosen Morgan Stanley, Barclays Plc and JPMorgan Chase & Co as joint bookrunners for a planned initial public offering, people familiar with the matter said. * Germany's second-biggest lender Commerzbank by 2015 plans to shed half of the workforce at its mortgage unit Hypothekenbank Frankfurt, formerly known as Eurohypo, according to an internal paper obtained by Reuters Fly On The Wall 7:00 AM Market Snapshot ANALYST RESEARCH Upgrades Arthur J. Gallagher (AJG) upgraded to Buy from Neutral at BofA/MerrillArthur J. Gallagher (AJG) upgraded to Outperform from Market Perform at Keefe BruyetteAudioCodes (AUDC) upgraded to Outperform from Perform at OppenheimerCitrix Systems (CTXS) upgraded to Buy from Neutral at BofA/MerrillCore Laboratories (CLB) upgraded to Outperform from Market Perform at FBR CapitalMB Financial (MBFI) upgraded to Outperform from Market Perform at Keefe BruyetteVale (VALE) upgraded to Buy from Neutral at BofA/Merrill Downgrades Comerica (CMA) downgraded to Underperform from Market Perform at BernsteinEndo Health (ENDP) downgraded to Perform from Outperform at OppenheimerFacebook (FB) downgraded to Hold from Buy at Stifel NicolausFacebook (FB) downgraded to Market Perform from Outperform at BMO CapitalFacebook (FB) downgraded to Neutral from Buy at CitigroupFusion-io (FIO) downgraded to Neutral from Outperform at Credit SuisseFusion-io (FIO) downgraded to Neutral from Overweight at JPMorganFusion-io (FIO) downgraded to Neutral from Overweight at Piper JaffrayKeyCorp (KEY) downgraded to Underperform from Market Perform at BernsteinNetgear (NTGR) downgraded to Equal Weight from Overweight at BarclaysRegions Financial (RF) downgraded to Underperform from Market Perform at BernsteinSeagate (STX) downgraded to Underweight from Equal Weight at BarclaysVelti (VELT) downgraded to Market Perform from Outperform at Wells FargoZions Bancorp (ZION) downgraded to Underperform from Market Perform at Bernstein Initiations Cubist (CBST) initiated with a Buy at Janney CapitalDepomed (DEPO) initiated with a Buy at Janney CapitalForest Labs (FRX) initiated with a Buy at Janney CapitalNPS Pharmaceuticals (NPSP) initiated with a Buy at Janney CapitalSalix (SLXP) initiated with a Buy at Janney CapitalSantarus (SNTS) initiated with an Outperform at Leerink HOT STOCKS Apollo (APO), Metropoulos acquired majority of Hostess snack cake business for $410MAnnaly Capital (NLY) to acquire CreXus (CXS) for $872MACI Worldwide (ACIW) acquired Online Resources (ORCC) for $3.85 per share or $263M in cashFacebook (FB) said mobile driving greater engagement Said search could be “meaningful” business in the futureSaid more clients using the site for “new launches”Capital Southwest (CSWC) sold Heelys for $2.25 per share to Sequential Brands Las Vegas Sands (LVS) said U.S. market saturated or near saturatedCabot (CBT) remains cautious in near-term, cited mixed results across portfolio Lucas Energy (LEI) cut staff by 40%, to cut 2013 expenses by 40% vs. 2012Cardinal Health (CAH) reorganizing medical segment organizationAstraZeneca (AZN) said no share repurchases will take place in 2013 EARNINGS Companies that beat consensus earnings expectations last night and today include:Dunkin' Brands (DNKN), Time Warner Cable (TWC), Whirlpool (WHR), AstraZeneca (AZN), ConocoPhillips (COP), Ameriprise (AMP), Silicon Graphics (SGI), Quantum (QTM), Owens-Illinois (OI), Facebook (FB), Qualcomm (QCOM), Electronic Arts (EA) Companies that missed consensus earnings expectations include:Destination Maternity (DEST), Aetna (AET), Regis (RGS), Ball Corp. (BLL), Murphy Oil (MUR), Cabot (CBT), Las Vegas Sands (LVS) Companies that matched consensus earnings expectations include:Callaway Golf (ELY), Knight Transportation (KNX) NEWSPAPERS/WEBSITES Investors in Chesapeake Energy (CHK) cheered when it announced that CEO Aubrey McClendon will leave, but its problems won’t end there. Chesapeake cannot count on rising natural prices to help bail it out, and the company still needs to sell at least $4B in assets in 2013 to keep afloat, the Wall Street Journal reports The yen's recent drop is giving hard-hit corporate Japan its biggest break in years, raising hopes of a long-awaited earnings recovery. Daiwa Securities estimates that profit growth at the top 200 Japanese companies will nearly double to 13% for the fiscal year through March, reversing a 16% decline in the previous year, assuming exchange rates remain roughly at current levels for two months, the Wall Street Journal reports Glencore (GLNCY) is becoming a Russian oil trade leader from an outsider by mending fences in just one year with Rosneft, and is extending its grip to a sector where it played second fiddle to companies such as rival trader Vitol or Royal Dutch Shell (RDS.A), Reuters reports Citigroup (C) is looking to pull out of consumer banking in more countries in an effort to lower costs and boost profits, sources say, Reuters reports Diminishing rubber supplies and record car sales are extending a five-month bull market that’s poised to raise costs for tire makers (GT, BRDCY, CTB), Bloomberg reports Johnson & Johnson (JNJ) President Andrew Ekdahl told jurors the company recalled 93,000 all-metal hip implants because they “did not meet the clinical needs for the product” and not because they were unsafe, Bloomberg reports SYNDICATE Adecogro (AGRO) 13.9M share Spot Secondary priced at $8.00AmeriGas (APU) files to sell 29.57M common units for holdersFleetmatics (FLTX) 7M share Secondary priced at $25.00Golar LNG Partners (GMLP) announces offering of 3.9M common unitsIdera Pharmaceuticals (IDRA) files to sell 9.08M shares of common stock for holdersKeryx (KERX) 6.58M share Spot Secondary priced at $8.49TRI Pointe Homes (TPH) 13.689M share IPO priced at $17.00Towerstream (TWER) to offer common stockVanguard Natural (VNR) commences offering of 8M common units
U.S. Wants Criminal Charges for RBS (WSJ) Bernanke Seen Buying $1.14 Trillion in Assets in 2014 (BBG) Irish banks at mercy of international paymasters (Reuters) Do badly, and we will let you do even worse: Rehn Signals EU May Ease Spain Budget Goal in Austerity Retreat (BBG) Too Soon to Celebrate for Europe's Banks (WSJ) Army says political strife taking Egypt to brink (Reuters) Media Firms Probed on Data Release (WSJ) - No Criminal Charges Seen Japan’s Government Proposes First Spending Cut in 7 Years (BBG) Nazi Goebbels’ Step-Grandchildren Are Hidden Billionaires (BBG) Goldman seeks to reduce China exposure (FT) More than 70% of Chinese airports generate losses (People's Daily) Niger gives green light to U.S. drone deployment (Reuters) Bucknell University Inflated SAT Scores Over Seven Years (BBG) Overnight Media Digest WSJ * U.S. authorities are pushing for a settlement of interest-rate-rigging allegations with Royal Bank of Scotland that would result in a unit of the big British bank pleading guilty to criminal charges in addition to paying a penalty. * The United States signed an agreement Monday with the West African country of Niger that clears the way for a stepped-up American military presence on the edges of the conflict in neighboring Mali. * Toyota Motor Corp reclaimed the title of world's largest automaker in 2012 from General Motors rebounding from an earthquake that damaged its factories and embarrassing recalls that dinged its reputation. * Trian Fund Management LP, founded by activist investor Nelson Peltz, has partially sold its stake in State Street Corp , according to people familiar with the decision. * Warren Buffett's Berkshire Hathaway Inc participated in discussions to purchase NYSE Euronext, owner of the Big Board, according to people familiar with the talks. Ultimately, the two sides didn't agree on price, one of the people said. * The U.S. Treasury failed to rein in pay at companies that received federal bailout funds, a watchdog said Monday, in a report that highlights continued friction over the government's oversight of executive pay at companies such as General Motors Co and Ally Financial Inc. * Law-enforcement authorities have conducted a wide-ranging investigation into whether media companies facilitated insider trading on Wall Street by prematurely releasing market-moving government data, according to people familiar with the probe. * Caterpillar Inc Chief Executive Doug Oberhelman on Monday blamed a $580 million write-down in the value of a Chinese company acquired last year on accounting "misconduct" by several former senior managers there who "fabricated documentation to cover their tracks." * In the first case of its type, U.S. authorities have arrested a former senior trader at Jefferies & Co Inc, accusing him of defrauding investors in the mortgage-backed securities market, which had come to a standstill during the financial crisis. FT RBS TIPS UK BACK INTO BONUS DEBATE: State-controlled RBS is preparing to pay as much as 250 million pounds in bonuses to staff at an investment banking division heavily implicated in the Libor-rigging scandal. DRAGHI MEETS MINISTER OVER MPS: The President of the European Central Bank Mario Draghi met Italy's finance minister to discuss the mounting problems at the country's Monte dei Paschi di Siena bank, according to an unnamed government official. EURO PERIPHERY DRAWS BACK 100 BILLION EUROS: Private funds totalling almost 100 billion euros flowed back into Eurozone periphery nations last year according to Dutch bank, ING TOYOTA RECLAIMS GLOBAL TOP SPOT: The Japanese car manufacturer Toyota took back its position as the world's biggest carmaker selling 9.75 million vehicles around the world in 2012. CARNEY CAUTIOUS ON FAILING BANKS: Mark Carney, head of the Financial Stability Board and governor-designate of the Bank of England, said regulators around the world still need to make more progress on how to cope with the failure of a giant bank. AMAZON OPENS NEW ADVERTISING FRONT: Online retailer Amazon will make greater inroads into the digital advertising market, unsettling established businesses such as Google , Yahoo and Facebook. STOCK BENCHMARKS HOVER NEAR HIGHS: A jump in Chinese corporate profits and a strong US durable goods report have helped push global stocks to near recent highs. WARNER BROTHERS ENDS CHIEF EXECUTIVE SAGA: The film and television studio has appointed Kevin Tsujihara as chief executive, beating Television President Bruce Rosenblum and Warner Bros. Pictures President Jeff Robinov to the role. NYT * Yahoo reported a good quarter, increasing revenue for the first time in four years and beating Wall Street expectations by 30 percent. Marissa Mayer's first months as chief executive have impressed investors, and the company's stock, recently at a four-year high, rose after hours. * Investigators say that they have spotted no overt quality-control problems, but that the cause of the recent malfunctions that have grounded Boeing's 787 fleet is still unknown. * Toyota Motor Corp sold a record 9.75 million vehicles last year, the company said on Monday, moving past General Motors and Volkswagen to reclaim its title as the world's top-selling automaker in 2012. * Antigua and Barbuda has threatened to strip copyright protections from American movies and music if a dispute over online gambling isn't resolved. * U.S. federal prosecutors charged a former senior trader at the Jefferies Group on Monday with defrauding his clients - and the government - while selling them mortgage-backed securities after the financial crisis. * Hostess Brands forged ahead with its dismantling plan on Monday, officially picking the maker of Little Debbie snacks as the lead bidder for its Drake's brand. * Kevin Tsujihara will succeed Barry Meyer as chief executive of Warner Brothers, the studio said, ending a disruptive and lingering competition for one of the biggest jobs in Hollywood. But, with two senior Warner executives publicly passed over, disorder at the studio could continue. China SHANGHAI SECURITIES NEWS --The parent company of Chinese distiller Kweichow Moutai Co Ltd cut its sales forecast for 2013 to 41.6 billion yuan ($6.69 billion) from 50 billion yuan earlier. --Twenty-two Chinese B-share listed companies are likely to migrate to H shares, including China Merchants Property Development Co Ltd and Shanghai Jinqiao Export Processing Zone Development Co Ltd, according to a research report from Guotai Junan International. 21st CENTURY BUSINESS HERALD --Combined investment and consumption as a result of China's urbanization could reach 25 trillion yuan, which could add 3.5-6.8 percentage points to economic growth over the next 10 years, said Ma Xiaohe, vice-president of Macroeconomics Research Institute of the National Development and Reform Commission. CHINA DAILY (www.chinadaily.com.cn) --Big increases in spending are unlikely in the future, with the 2013 procurement budget seen around 20 billion yuan, similar to the last year's level, Wang Lida, director of the Central Government Procurement Center, said. Fly On The Wall 7:00 am Market Snapshot ANALYST RESEARCH Upgrades Abercrombie & Fitch (ANF) upgraded to Outperform from Market Perform at BMO CapitalBRE Properties (BRE) upgraded to Neutral from Sell at GoldmanCGG Veritas (CGV) upgraded to Overweight from Neutral at JPMorganCaterpillar (CAT) upgraded to Outperform from Market Perform at BMO CapitalEricsson (ERIC) upgraded to Buy from Hold at Deutsche BankFifth Third Bancorp (FITB) upgraded to Outperform from Market Perform at Wells FargoGenuine Parts (GPC) upgraded to Buy from Hold at BB&TLennar (LEN) upgraded to Buy from Neutral at Compass PointPLX Technology (PLXT) upgraded to Buy from Hold at WunderlichSierra Wireless (SWIR) upgraded to Outperform from Sector Perform at RBC CapitalStandard Pacific (SPF) upgraded to Buy from Neutral at Compass PointTyson Foods (TSN) upgraded to Buy from Underperform at BofA/Merrill Downgrades Digital Realty (DLR) downgraded to Neutral from Buy at BofA/MerrillEquinix (EQIX) downgraded to Neutral from Buy at CitigroupFortinet (FTNT) downgraded to Hold from Buy at WunderlichIllumina (ILMN) downgraded to Equal Weight from Overweight at First AnalysisInterXion (INXN) downgraded to Neutral from Buy at CitigroupMGM Resorts (MGM) downgraded to Hold from Buy at Deutsche BankNCR Corp. (NCR) downgraded to Neutral from Buy at Compass PointNYSE Euronext (NYX) downgraded to Underweight from Neutral at HSBCNetgear (NTGR) downgraded to Sector Perform from Outperform at RBC CapitalPNC Financial (PNC) downgraded to Market Perform from Outperform at Wells FargoRuby Tuesday (RT) downgraded to Neutral from Outperform at Credit SuisseSeagate (STX) downgraded to Equal Weight from Overweight at EvercoreUnilever (UN) downgraded to Hold from Buy at JefferiesVMware (VMW) downgraded to Buy from Conviction Buy at GoldmanVMware (VMW) downgraded to Equal Weight from Overweight at Morgan StanleyVMware (VMW) downgraded to Hold from Buy at WunderlichVMware (VMW) downgraded to Neutral from Buy at Sterne Agee Initiations AXIS Capital (AXS) initiated with a Market Perform at Raymond JamesClean Harbors (CLH) initiated with a Buy at BB&TLabCorp (LH) initiated with a Perform at OppenheimerNorwegian Cruise Line (NCLH) initiated with a Buy at Stifel NicolausPRGX Global (PRGX) initiated with an Outperform at RW BairdQuest Diagnostics (DGX) initiated with an Underperform at OppenheimerVanguard Natural (VNR) initiated with an Outperform at Raymond James HOT STOCKS General Growth (GGP) purchased warrants held by Blackstone (BX) and Fairholme Funds for about $633M. VMware (VMW) cutting 900 jobs, sees total restructuring charges $90M-$110MSees stronger bookings 2H13 compared to 1H Yahoo (YHOO) seeing early positive trends in key focus areas, products“Confident” in ability to achieve at or above market revenue growth Said investment in ad technology is key strategy in 2013, said search a key area of investmentLegg Mason (LM) board may pick CEO today. Interim CEO Sullivan may be the favoriteCelanese (CE) sees 2013 earnings growth of about 12%-14%Seagate (STX) sees maintaining gross margins at lower end of long-term range 27%-32% Optimistic about 2H13 and beyond Potlatch (PCH) provided positive outlook for FY13Sierra Wireless (SWIR) to sell assets of AirCard business to Netgear (NTGR) EARNINGS Companies that beat consensus earnings expectations last night and today include:Tyco (TYC), Danaher (DHR), CIT Group (CIT), Olin Corp. (OLN), Celanese (CE), Plum Creek Timber (PCL), Illumina (ILMN), Yahoo (YHOO), Beazer Homes (BZH), Seagate (STX), VMware (VMW), J & J Snack Foods (JJSF) Companies that missed consensus earnings expectations include:Headwaters (HW), Crane (CR), Rent-A-Center (RCII), Park National (PRK), Zions Bancorp (ZION), BMC Software (BMC) Companies that matched consensus earnings expectations include:Radware (RDWR), Gladstone Investment (GAIN), Werner (WERN), Integrated Device (IDTI) NEWSPAPERS/WEBSITES U.S. authorities want a settlement of interest-rate-rigging allegations with Royal Bank of Scotland (RBS) that would result in a unit of the bank pleading guilty to criminal charges in addition to paying a penalty, sources say. RBS executives are resisting any guilty plea, fearful that it could lead clients to cut off activity with the bank and that it could increase exposure to costly litigation, the sources add, the Wall Street Journal reports Federal law-enforcement authorities conducted a wide-ranging investigation into whether media companies facilitated insider trading on Wall Street by prematurely releasing market-moving government data, sources say. Among the media companies investigated were Bloomberg LP, Thomson Reuters (TRI) and the Dow Jones & Co. unit of News Corp. (NWSA), the Wall Street Journal reports Bugs in widely used networking technology expose tens of millions of personal computers, printers and storage drives to attack by hackers over the regular Internet, according to security software maker Rapid7. The list of devices includes products from manufacturers including Belkin, D-Link, Cisco Systems’ (CSCO) Linksys division and Netgear (NTGR), Reuters reports Google (GOOG) will lobby Washington this year to make it harder for law enforcement authorities to gain access to emails and other digital messages, Reuters reports Fed Chairman Bernanke’s latest round of bond buying will reach $1.14T before he ends the program in the first quarter of 2014, according to median estimates in a Bloomberg survey of economists. He’ll continue with purchases of $40B a month of mortgage bonds and $45B a month of Treasuries, according to the survey of 44 economists, Bloomberg reports The Mexican unit of Wal-Mart Stores (WMT) used a current state governor to facilitate $156,000 in bribes meant to help open stores, an ex-lawyer for the retailer told company officials in 2005, according to documents released by members of the U.S. Congress, Bloomberg reports SYNDICATE Bonanza Creek (BCEI) files to sell 10M shares of common stockGladstone Land (LAND) 3.33M share IPO priced at $15.00Piedmont Natural Gas (PNY) files to sell 4M shares of common stockStemline Therapeutics (STML) 3.317M share IPO priced at $10.00Sunstone Hotel (SHO) files to sell 17.25M shares of common stock