- Obama urges China to be partner in ensuring world order (Reuters)
- China Sees Itself at Center of New Asian Order (WSJ)
- Xi Dangles $1.25 Trillion as China Counters U.S. Refocus (BBG)
- China's Xi, Japan's Abe hold landmark meeting after awkward handshake (Reuters)
- Revenue Softness Worries Stock Investors (WSJ)
- Dendreon Files for Ch 11 Bankruptcy Reorganization (AP)
- How BOJ’s Kuroda Won the Vote for Stimulus Expansion (WSJ)
- Bonus Season Brings More Pain for Traders (WSJ)
- Russia’s Military Encounters Risk Clash in Europe (BBG)
- Mexican president condemns violent protests after attack on palace (Reuters)
- China Factory-Gate Prices Decline for Record 32nd Month (BBG)
- Qatar bid for Canary Wharf deemed 'too low' and is 'unanimously' rejected (Independent)
- China’s $9 Trillion Untapped Market Spurs U.S. ETF Frenzy (BBG)
- New rules proposed to put an end 'too big to fail' banks (Reuters)
- Newest Toy for China’s Rich Is the SUV Lined in Sharkskin (BBG)
- BlackBerry CEO sees fewer new devices, focus on profitability (Reuters)
- Who’s Afraid of Fed Raising Rates? Not These Bond Buyers (BBG)
- The master who teaches the Merrill herd to graze on wheatgrass and chia (Reuters)
Overnight Media Digest
WSJ
* General Motors Co ordered a half-million replacement ignition switches to fix Chevrolet Cobalts and other small cars almost two months before it alerted federal safety regulators to the problem. (http://on.wsj.com/1xkn1xI)
* Wal-Mart Stores Inc said it was feeling the effect of China's austerity campaign that has taken a toll on sales of high-end handbags and expensive jewelry. (http://on.wsj.com/10JfwEo)
* E-commerce company Alibaba Group Holding Ltd for weeks has been offering rock-bottom prices on everything from coats to couches on its websites, in preparation for this Tuesday, which is China's biggest day of the year for online sales. (http://on.wsj.com/1tZyjaQ)
* China's vision for a reconfigured Asian order, centered on Beijing and underpinned by new infrastructure, forms the backdrop to a regional summit in Beijing this week. (http://on.wsj.com/1xcDI0k)
* Iran sent signals that it was open to overtures in a recent letter from U.S. President Barack Obama as talks kicked off, but tensions in both nations' capitals are complicating attempts to rein in Tehran's nuclear program as a diplomatic deadline approaches. (http://on.wsj.com/1yoguRZ)
* The Commodity Futures Trading Commission plans to start steering some of its cases against trading firms, brokers and others to administrative law judges appointed by federal agencies, instead of trials in federal court. (http://on.wsj.com/10Jhuol)
* China's central bank has said it had tapped Industrial and Commercial Bank of China Ltd as the clearing bank for Chinese currency transactions in the Canadian market. (http://on.wsj.com/1tZe5hx)
* Flight attendants from the former US Airways Inc and American Airlines Group Inc have narrowly rejected a joint labor contract covering the combined workforce of nearly 24,000 cabin-crew workers, giving the merged American Airlines an unexpected setback in its massive integration process. (http://on.wsj.com/10Jiysn)
* Sumitomo Mitsui Banking Corp has emerged as the strongest contender among the bidders in the second round of an auction for Citigroup Inc's Japan retail unit and its credit-card business. (http://on.wsj.com/1xA2yUA)
* Uber Technologies Inc, already one of the world's most highly valued ride-sharing startups, has informed investors it is preparing to raise more than $1 billion in funding. (http://on.wsj.com/1xkrQqL)
* Dollar Tree Inc has agreed not to close its planned purchase of Family Dollar Stores Inc for $8.5 billion before Dec. 30 to facilitate a Federal Trade Commission review, unless the FTC completes the review and ends a waiting period earlier. (http://on.wsj.com/1z9wY12)
* Investors and regulators are burrowing into the causes of the plunge in yields to try to understand whether electronic trading and new regulations are fueling sudden price swings in a market that acts as a key benchmark for interest rates, investments and U.S. home loans. (http://on.wsj.com/1tZFtvD)
FT
More than 5,000 investors have decided to join a class-action lawsuit against Lloyds Banking Group PLC, claiming that the ill-fated takeover of HBOS in 2008 made them lose 400 million pounds (635.44 million US dollar).
Swiss banker UBS AG is expected to strike a settlement over allegations of trader misbehaviour at its precious metals trading desk with at least one regulatory authority from the UK or US, people familiar with the matter said.
The UK is facing its worst driver shortage crisis in a year where e-commerce deliveries are expected to be a record 180 million for November and December. The Freight Transport Association, a body which represents the transport industry, said that 20,000 drivers have quit since the EU regulation, the Driver Certificate of Professional Competence, was introduced to standardise safety training procedures across the region. It requires that drivers undergo an additional 35 hours of training at a cost of about 500 pounds.
Despite a court ruling to suspend the exercise, more than 2 million Catalans participated in a symbolic voting on the political future of northern Spain's Catalonia region on Sunday. According to results released by the regional government, more than 80 percent of Catalans voted for an independent Catalonia.
NYT
* The year-end payouts could drop as much as 10 percent for the trading desks and hedge funds on Wall Street, according to a survey by the compensation consulting firm Johnson Associates. But investment bankers and employees at private equity firms involved in mergers and acquisitions will see their bonuses rise 10 to 15 percent, the survey found. (http://nyti.ms/1xcwJED)
* Lawrence Baldwin, the owner of the cyber investigations firm myNetWatchman is one of the well-known and valuable allies of financial institutions in their fight against online crime, but the nature of his work means he keeps a very low profile. Those familiar with his work say he is one of the consultants used by banks like JPMorgan Chase & Company, which is still dealing with the fallout from an intrusion that compromised some information for 76 million households and seven million small businesses. (http://nyti.ms/1pGrMSo)
* President Xi Jinping told a gathering of Asia-Pacific business executives not to worry about the Chinese economy, saying there were risks but not so many as to lose sleep over. Jinping described a lower growth rate as the "new normal" saying that annual growth above 7 percent still placed China among the world's top-performing countries in speed and size. (http://nyti.ms/1oAuLuJ)
* U.S. President Barack Obama is returning to Asia as Russia pulls closer to China, presenting a profound challenge to the United States and Europe. President of Russia Vladimir Putin has been strengthening ties with the East and will be in Beijing this coming week, as will President Obama. (http://nyti.ms/142vCLS)
* The British government said it would create a sovereign wealth fund to invest future proceeds from oil and gas extracted from shale deposits. The announcement is a step by the government of Prime Minister David Cameron to encourage development of a shale gas industry and to overcome public opposition to hydraulic fracturing. (http://nyti.ms/1udLwwt)
* Australia, much like the United States, is about to test how much employers can ask young workers to do without paying them before facing fines for breaching Australia's labor laws. A benefit test showing whether the intern or the employer gains the most from the work completed is one factor that determines whether a worker should be paid. (http://nyti.ms/1yodCnU)
* With heads of state and corporate chieftains in Beijing for a major economic summit this week, China's increasing economic nationalism is expected to be heavily debated. The squeeze on multinationals has coincided with President Xi Jinping's consolidation of power and his increasingly nationalistic and sometimes confrontational stance toward China's neighbors and the West. (http://nyti.ms/1qzdrSI)
* Though Ireland has been under international pressure to close loopholes that have drawn companies like Google Inc and Microsoft Corp, the country is still touting its low-tax appeal. (http://nyti.ms/11a27GT)
Canada
THE GLOBE AND MAIL
** Stephen Harper, Barack Obama and the leaders of 10 other countries bordering the Pacific Ocean have announced they are nearing a major agreement to liberalize trade between their economies - an agreement expected to eclipse the North American Free Trade Agreement (NAFTA) in importance for Canada. (http://bit.ly/1xqPzql)
** Federal authorities have taken steps to impose 'preventive' conditions on two suspected extremists in Canada as security officials resort to an array of seldom-used legal methods to fight domestic terrorism. (http://bit.ly/10KJcRF)
** Photo-sharing service Instagram, owned by Facebook Inc , is bringing advertising to its Canadian users, starting on Monday. (http://bit.ly/1uRQP6u)
NATIONAL POST
** Prime Minister Stephen Harper met current China President Xi Jinping on Sunday for the first time in private, and raised "every single" issue in the areas of "consular issues, human rights, governance, the rights of minorities", including the case of Kevin and Julia Garratt, a Canadian couple imprisoned in China since August without charge on suspicion of espionage. (http://bit.ly/1tSMz3t)
** Last week's federal government announcement contained various measures that will put more money into the hands of families with kids under the age of 18. While much of the attention and discussion has focused on the "income splitting" proposal, there were a few other measures of some significance, such as family tax cut credit, enhanced universal child care benefit and child care expenses. (http://bit.ly/1qzRp2b)
** One person is dead and at least eight injured following a collision between a public transit bus and a car in west-end Toronto. (http://bit.ly/1u0CNhi)
Hong Kong
SOUTH CHINA MORNING POST
-- The mainland is struggling with a horrid pollution problem but the crisis may provide new opportunities in green bonds issued in yuan, according to Credit Agricole, the world's largest green bond arranger. (bit.ly/1xpOYoK)
-- The "Singles Day" promotions of Alibaba Group Holding's Taobao and other e-commerce giants have boosted express parcel volumes this month, but also opened a loophole for tax avoidance that presents a challenge to customs authorities in the region. (bit.ly/1xzI6mY)
-- Landlords in the prime districts of Central and Admiralty are being urged by Italian brands to offer short-term rent cuts as foot traffic has been hit by the prolonged Occupy Central protests, according to Fabio De Rosa, the president of the Italian Chamber of Commerce. (bit.ly/1ynOSw2)
THE STANDARD
-- Chinese President Xi Jinping's apparent support for Hong Kong Chief Executive Leung Chun-ying puts the next move in the political impasse firmly in the court of students, said a political analyst. City University's James Sung Lap-kung said that by praising the Hong Kong government's response to Occupy Central, Xi had sent a clear message to Leung's opponents. (bit.ly/1tZ01V3)
-- Many foreign investors are worried about the unrest caused by Occupy Central, said Trade Development Council Chairman Jack So Chak-kwong, warning it may have a significant impact on the economy if it continues. So said there were no substantial indications of withdrawal of foreign investment since Occupy Central began. (bit.ly/1xpVoUP)
-- Hong Kong has asked Beijing for expanded quotas to invest in China, receiving a "positive response," Financial Secretary John Tsang Chun-wah said, as all 270 billion yuan ($44.10 billion) had basically been allotted to Hong Kong's 79 institutional investors as of Sept. 30. (bit.ly/1EtF4ov)
HONG KONG ECONOMIC TIMES
-- Lai Sun Garment International and Lai Sun Development said they would buy an office property in the financial district of the City of London for HK$1.32 billion
Britain
The Times
UBER FACES DRIVER MUTINY OVER PAY
A group of drivers, styled the Uber Drivers Network, held protests two weeks ago against Uber in several cities, including London, and briefly went on strike. Uber is now guaranteeing earnings of 3,500 pounds (5,559.75 US dollar) per month to those who work about 50 hours a week and accept more than 85 percent of jobs, which equates to 42,000 pounds a year. The earnings are before any petrol and other car-related costs the drivers incur.
STORES CUT PETROL PRICES AFTER TREASURY WARNING
Britain's biggest petrol retailers cut prices on Sunday after the government warned that they would be monitored to ensure that benefits of falling oil prices were passed on to motorists.
The Guardian
OSBORNE CRITICISED FOR CLAIMS OVER EU 1.7 BLN POUND BILL
UK Chancellor George Osborne's claim that he had halved the 1.7 billion pound (2.70 billion US dollar) bill that Britain owed the EU was challenged by the European Commission saying that the UK has long enjoyed a system of budgetary rebates, so a discount on the controversial surcharge was always going to be applied.
TESCO HOPES SPARKLY TV AD WILL LIGHT UP ITS FESTIVE FORTUNES
UK's biggest retailer Tesco has pinned high hopes on its Christmas advert, which debuts on the finale of Downtown Abbey on ITV, aiming to attract holiday shoppers. Tesco will join other UK companies in spending as much as 1.5 bln pounds on advertising campaigns, which will see social media targeted heavily as well as TV and print.
The Telegraph
TESCO LOSES TOP SPOT IN ENTERTAINMENT SALES TO AMAZON
According to retail data provider Kantar Worldpanel, Tesco's share of the multibillion-pound entertainment market plunged from 20.6 pct between June and Sept 2013 to 15.1 pct in the same period this year. In a further setback, Tesco surrendered the number one spot to U.S. retail juggernaut Amazon, which saw its share leap from 17.6 pct to 22.5 pct year-on-year, as customers continue to buy more items online.
SAINSBURY'S TO CUT STORES AND DIVIDEND
J Sainsbury is to scrap a giant programme of store openings and slash its dividend, as part of a dramatic overhaul drawn up to fight falling sales. The supermarket giant will this week unveil the results of a strategic review, which is expected to reveal that Sainsbury's is reining in costs in an effort to save cash and shore up its balance sheet.
Sky News
ARCULUS TO CHAIR LOBBYING GROUP ENERGY UK
Sir David Arculus may replace Lord Spicer as the chairman of energy sector's main lobbying group Energy UK, just months before a general election campaign in which the industry will come under fire from across the political spectrum. His appointment is understood to have been approved at a board meeting of the industry body last Thursday, and could be announced as soon as this week.
ROYAL MAIL IN STAND-OFF OVER MPS' INQUIRY
Royal Mail has been secretly resisting pressure from MPs for it to appear alongside rival postal operators as part of a new probe into competition in the industry. Royal Mail made representations to the Business, Innovation and Skills (BIS) Select Committee requesting that it should not be forced to give evidence during the same session as Whistl and UK Mail. (http://bit.ly/1xcXdU5)
The Independent
QATAR BID FOR CANARY WHARF REJECTED
Songbird Estates, the owners of Canary Wharf, have "unanimously" rejected a takeover bid from Qatar, saying it undervalues the company. Qatar already owns a 28.6 percent stake in Songbird but the joint venture's opening 295p a share pitch was immediately dismissed by the Songbird board and the City.
Fly On The Wall Premarket Buzz
ECONOMIC REPORTS
No major domestic economic reports scheduled for today.
ANALYST RESEARCH
Upgrades
ASML (ASML) upgraded to Positive from Neutral at Susquehanna
AuRico Gold (AUQ) upgraded to Buy from Hold at Canaccord
BioMarin (BMRN) upgraded to Buy from Neutral at Goldman
Boulder Brands (BDBD) upgraded to Overweight from Neutral at Piper Jaffray
Nationstar (NSM) upgraded to Market Perform from Underperform at Keefe Bruyette
Natural Gas Services (NGS) upgraded to Buy from Accumulate at Global Hunter
Newfield Exploration (NFX) upgraded to Buy from Hold at Deutsche Bank
PulteGroup (PHM) upgraded to Buy from Neutral at BofA/Merrill
Royal Dutch Shell (RDS.A) upgraded to Outperform from Market Perform at Cowen
Spirit AeroSystems (SPR) upgraded to Outperform from Sector Perform at RBC Capital
Target (TGT) upgraded to Buy from Hold at Stifel
Downgrades
Abercrombie & Fitch (ANF) downgraded to Neutral from Buy at Janney Capital
Abercrombie & Fitch (ANF) downgraded to Perform from Outperform at Oppenheimer
American Eagle (AEO) downgraded to Equal Weight from Overweight at Barclays
American Eagle (AEO) downgraded to Neutral from Buy at B. Riley
BP (BP) downgraded to Neutral from Overweight at JPMorgan
Callon Petroleum (CPE) downgraded to Neutral from Buy at SunTrust
EP Energy (EPE) downgraded to Hold from Buy at Deutsche Bank
Eaton Vance (EV) downgraded to Neutral from Buy at Sterne Agee
General Mills (GIS) downgraded to Sector Perform from Outperform at RBC Capital
Genworth (GNW) downgraded to Market Perform from Outperform at Keefe Bruyette
Grainger (GWW) downgraded to Sell from Hold at Deutsche Bank
Ocean Rig UDW (ORIG) downgraded to Neutral from Buy at Guggenheim
Performant Financial (PFMT) downgraded to Equal Weight from Overweight at Morgan Stanley
Petrobras (PBR) downgraded to Market Perform from Outperform at Cowen
Rex Energy (REXX) downgraded to Market Perform from Outperform at BMO Capital
Salix (SLXP) downgraded to Neutral from Buy at Mizuho
Siemens (SIEGY) downgraded to Neutral from Overweight at JPMorgan
Solazyme (SZYM) downgraded to Equal Weight from Overweight at Morgan Stanley
ViaSat (VSAT) downgraded to Hold from Buy at Needham
Walter Investment (WAC) downgraded to Neutral from Buy at Sterne Agee
WesBanco (WSBC) downgraded to Market Perform from Outperform at Keefe Bruyette
Whiting USA Trust II (WHZ) downgraded to Underperform at Raymond James
Wipro (WIT) downgraded to Sell from Buy at UBS
Yanzhou Coal (YZC) downgraded to Sell from Hold at Deutsche Bank
Initiations
Atara Biotherapeutics (ATRA) initiated with a Buy at Citigroup
Atara Biotherapeutics (ATRA) initiated with a Buy at Jefferies
Atara Biotherapeutics (ATRA) initiated with a Neutral at Goldman
CoStar Group (CSGP) initiated with an Overweight at JPMorgan
Dominion Midstream (DM) initiated with a Buy at Citigroup
Dominion Midstream (DM) initiated with a Buy at UBS
Dominion Midstream (DM) initiated with a Neutral at Goldman
Dominion Midstream (DM) initiated with an Overweight at Barclays
Dominion Midstream (DM) initiated with an Overweight at JPMorgan
Dominion (D) resumed with an Overweight at Barclays
Forward Pharma (FWP) initiated with a Buy at Jefferies
Forward Pharma (FWP) initiated with an Outperform at JMP Securities
Forward Pharma (FWP) initiated with an Outperform at JMP Securities
Great Western (GWB) initiated with an Outperform at Keefe Bruyette
Great Western (GWB) initiated with an Outperform at Macquarie
Great Western (GWB) initiated with an Outperform at RBC Capital
Inogen (ingn) initiated with a Strong Buy at Needham
Myriad Genetics (MYGN) initiated with an Underweight at Morgan Stanley
NanoString (NSTG) initiated with an Overweight at Morgan Stanley
PolyOne (POL) initiated with a Neutral at RW Baird
Veracyte (VCYT) initiated with an Equal Weight at Morgan Stanley
COMPANY NEWS
Dendreon (DNDN) filed for Chapter 11 bankruptcy
Campus Crest (CCG) announced resignation of CEO Ted Rolling and CFO Donald Bobbitt, Jr. The board of the company appointed Richard S. Kahlbaugh, the company’s lead independent director, as executive chairman and interim CEO, and named Scott R. Rochon, the company’s Chief Accounting Officer, as acting CFO.
AT&T (T) said it would acquire lusacell for $2.5B and reaffirmed FY14 capex guidance in $21B range
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
EV Energy (EVEP), Motorcar Parts (MPAA), Cheetah Mobile (CMCM), ImmunoCellular (IMUC), Inovio (INO), Nordic American Tankers (NAT), Transocean (RIG), Kronos Worldwide (KRO)
Companies that missed consensus earnings expectations include:
Hydrogenics (HYGS), Sterling Construction (STRL), Hawaiian Telcom (HCOM), Magic Software (MGIC), GAMCO Investors (GBL), Conversant (CNVR), Ignyta (RXDX)
Companies that matched consensus earnings expectations include:
Berkshire Hathaway (BRK.A), CorEnergy (CORR)
NEWSPAPERS/WEBSITES
GM (GM) ordered new switches months before recall, WSJ reports (DLPH)
RadioShack (RSH) said to add DW Investment as white knight lender, Bloomberg reports
GT Advanced (GTAT) accuses Apple (AAPL) of 'bait-and-switch' in unsealed documents, WSJ says
UBS (UBS) to settle misconduct allegations at precious metals trading unit, FT reports
Petrobras (PBR) being probed by U.S. authorities, FT says
BlackBerry (BBRY) plans few devices as it focuses on profitability, Reuters reports
BofA (BAC) looks for additional SEC sanctions to be waved, Bloomberg reports
J.C. Penney (JCP) could drop 35%, Barron's says
Norfolk Southern (NSC) shares could climb 12%, Barron's says
Kellogg (K) shares could underperform for a while, Barron's says
SYNDICATE
DexCom (DXCM) files to sell 89,300 shares for holders
Endurance (EIGI) files to sell 11.95M shares of common stock for holders
General Electric (GE) files to sell 75M shares of common stock
Inphi (IPHI) files to sell 5.28M shares of common stock for holders
Moelis (MC) files to 1.5M shares, 2.5M shares for shareholders
Pernix Therapeutics (PTX) files to sell 17.61M shares for holders
Sagent Pharmaceuticals (SGNT) files to sell 12.57M shares for holders
TransEnterix (TRXC) files to sell 19.52M shares for holders