- Obama Targets Income Gap in Address That Shapes 2016 Election (BBG)
- Republicans Reject Obama’s Main Economic Proposals (WSJ)
- Senate’s Shelby Says White House Bank Tax Is Dead on Arrival (BBG)
- Is Dollar Next? Investors Reassess After Swiss Shock: Currencies (BBG)
- Bank of Japan Cuts Price Forecast, Maintains Record Stimulus (BBG)
- Pound Weakens After BOE Policy Makers Drop Call to Raise Rates (BBG)
- Putin not flinching on Ukraine despite economic crisis (Reuters)
- Indonesia will not make public full preliminary AirAsia crash report (Reuters)
- Party Hasn't Stopped for Russians at Davos Even With Ukraine Sanctions (BBG)
- Dollar’s Rise Squeezes U.S. Firms (WSJ)
- Druckenmiller Alums at PointState Make $1 Billion on Oil (BBG)
- BlueCrest Said to Shut Trader’s Book on Losses Tied to Franc (BBG)
- Venezuela-owned refiner Citgo seeks $2.5 bln in loans, bonds (Reuters)
- Interactive Brokers Unlikely to Recoup Losses From Franc Trades (WSJ)
- Asian Stocks Rise to Six-Week High; China Shares Surge (BBG)
Overnight Media Digest
WSJ
* President Obama on Tuesday declared an end to the U.S. economic crisis as he made the case to Americans, and a skeptical Congress, that now is time to focus on resolving lagging progress among the middle class. (http://on.wsj.com/1xUOaUV)
* Congressional Republicans rejected the central economic proposals underpinning President Obama's State of the Union address, saying they want to advance their own solutions aimed at spurring economic growth. (http://on.wsj.com/1xUOhzW)
* President Barack Obama said Tuesday that his approach to foreign policy was "making a difference," wading into new rounds of disputes with lawmakers by saying his strategy has paid dividends while countering the advances of extremists in Iraq and Syria. (http://on.wsj.com/1KZxkyx)
* In State of the Union Speech, President Barack Obama asked Congress to pass tough new legislation to combat what he called "the evolving threat of cyber-attacks," warning the U.S. faces heightened risks if policy makers don't act. (http://on.wsj.com/1xwgSga)
* The stronger dollar makes U.S. companies' overseas earnings look smaller. But it also sets off a host of operational challenges that can have a real effect on their underlying businesses. (http://on.wsj.com/1ypfCiM)
* Investors and bankers are bracing for another wave of giant corporate-debt sales this year, as companies rush to tap abundant demand while rates stay low. (http://on.wsj.com/157xiDy)
* The National Futures Association said it is considering whether to alter a cap on borrowed money, or leverage, for currency bets in response to last week's market tumult. (http://on.wsj.com/1uqAqqr)
* A federal judge signaled Tuesday that he may allow BP Plc to pay pollution fines over time rather than in a lump sum, as the company and government lawyers sparred over billions of dollars in possible penalties for the Deepwater Horizon oil spill in 2010. (http://on.wsj.com/1xwh7aM)
* The Securities and Exchange Commission's push to step up its policing of accounting fraud has led to a surge of cases and investigations, new agency figures show, as officials again target cooking-the-books offenses that were once a staple of its workload. (http://on.wsj.com/1ypfTlN)
* Volvo AB is moving its top product executive to the U.S. in a shake-up designed to lay the groundwork to break ground on a factory on American soil before the end of the decade. (http://on.wsj.com/1xUvaWE)
* Chevron Corp agreed to sell output from its $54-billion Gorgon gas-export project in Australia to a division of South Korea's SK Group. (http://on.wsj.com/15t5Fp6)
* Hedge fund Starboard Value, which owns stakes in both Staples Inc and Office Depot Inc, is calling for the office-supply chains to merge. (http://on.wsj.com/1Cfdone)
* Elon Musk's Space Exploration Technologies said it has raised $1 billion from two new investors, Google Inc and Fidelity Investments. (http://on.wsj.com/1KZxV3j)
* Bristol-Myers Squibb Co said Tuesday that Chief Operating Officer Giovanni Caforio will become its next chief executive, as the leaders who turned the pharmaceutical company into an immunotherapy powerhouse exit. (http://on.wsj.com/1uqBBpV)
FT
* French oil and gas group Total plans to reduce capital spending by 10 per cent this year under a cost-cutting plan led by new chief executive Patrick Pouyanne.
* Damon Buffini, a partner in private equity firm Permira, is stepping down by the end of the year. He will continue as a senior adviser and will also remain a board member of Hugo Boss, the fashion house in which Permira has a 32 percent stake.
* Chinese billionaire Wang Jianlin has agreed to buy a 20 percent stake in La Liga champions Atletico Madrid. The deal with Wang, who is chairman of the Wanda Group conglomerate, will be announced in Beijing on Wednesday.
* BHP Billiton , the world's largest miner, is cutting its shale oil production due to the slump in oil prices. The company said it will reduce the number of rigs it operates onshore in the United States by 40 per cent and that its shale investment programme remains under review.
NYT
* President Obama claimed credit on Tuesday for an improving economy and defiantly told his Republican adversaries in Congress to "turn the page" by supporting an expensive domestic agenda aimed at improving the fortunes of the middle class. (http://nyti.ms/157n5qP)
* Google Inc, along with Fidelity, has invested $1 billion in Space Exploration Technologies (SpaceX), the private rocketry company founded by Elon Musk. The move could help Google achieve its aim of bringing satellite Internet to remote corners of the world while giving SpaceX more money for its founder to pursue dreams of going to Mars. (http://nyti.ms/1xUEaLo)
* Netflix Inc is hoping that it will define Internet TV in Swahili, Spanish, Vietnamese, Filipino and dozens more languages within just two years. (http://nyti.ms/1BCPgfJ)
* A week after the nation's top auto regulator warned automakers that he would be more vigilant on safety, his agency has taken the unusual move of revisiting the 2013 recall of Ford Motor Corp's biggest pickup trucks. (http://nyti.ms/1EpdN6i)
* In Wal-Mart Stores Inc's latest move to offer financial services, it will make customers' tax refunds available in cash at about 3,000 stores. Walmart, the world's largest retailer, will not charge a fee for the cash pickup, but does charge for cashing checks. It acknowledged that it could get a boost by helping to put cash in customers' wallets at a time of sluggish sales and customer traffic declines. (http://nyti.ms/1xw7Mjp)
* Work crews burrowed through thick ice and set up containment booms Tuesday in a struggle to vacuum up 50,000 gallons of oil that spilled into the Yellowstone River from a ruptured pipeline, contaminating drinking water. The 12-inch steel pipeline, which burst Saturday morning near Glendive, Montana, about 400 miles east of here, sent light crude oil flowing downstream as far as the confluence with the Missouri River, 60 miles away in North Dakota. (http://nyti.ms/1xUEZ77)
* Moving a potential market debut further along the line, the premium burger chain Shake Shack on Tuesday priced the range of its initial public offering at $14 to $16 a share. (http://nyti.ms/1zvyChc)
* The Verge, a technology website owned by the online media company Vox, said on Tuesday that it would be airing a Super Bowl advertisement, before revealing that it would in fact be spending just $700 on a regional spot in Helena, Montana. (http://nyti.ms/1ultDJ5)
* Standard & Poor's, the giant credit ratings agency, is closing in on a series of settlements with the government that will erode its profit and may damage its credibility as a major player on Wall Street. (http://nyti.ms/1J6hfVX)
* On Thursday, Family Dollar Stores Inc shareholders will finally vote on a proposed $8.5 billion acquisition by Dollar Tree Inc, which is offering about $76 a share. If they vote yes, as it appears they are leaning, it will be the death knell for a competing bid by Dollar General Corp that is about $4 a share higher. (http://nyti.ms/1CfDExO)
* BGC Partners Inc has increased its offer for the GFI Group Inc, the New York brokerage firm and clearinghouse, in an effort to wrest the company from the arms of its chosen suitor, the operator of the Chicago Mercantile Exchange and the Chicago Board of Trade. (http://nyti.ms/1xUFPkf)
* The prominent activist investment firm Starboard Value is still trying to push Staples into buying one of its best-known rivals in the office supplies world. The hedge fund plans to release a public letter urging the company to pursue a takeover of Office Depot Inc, people briefed on the matter said on Tuesday. If Staples does not make a move to do so, Starboard will threaten to seek a fight for representation on the board. (http://nyti.ms/1yHgtvx)
* Li Ka-shing, Asia's richest man, has added a major passenger train provider in Britain to his vast empire of corporate holdings, which includes ports, utilities and retail stores. (http://nyti.ms/1JbAjjK)
* The private equity firm Sycamore Partners has given up a monthslong effort to acquire Express Inc, the clothing retailer focused on young adults, after failing to secure financing. (http://nyti.ms/1J6jFE1)
* Twitter Inc said on Tuesday that it had acquired ZipDial, a nearly five-year-old Indian start-up that aims to help businesses connect with customers in emerging markets who may not have access to the Internet. (http://nyti.ms/1CNymbn)
* Coinbase, one of the most popular Bitcoin wallet providers, announced on Tuesday that it had closed a $75 million financing round, the biggest yet for a virtual currency start-up. (http://nyti.ms/1woqzM1)
Canada
THE GLOBE AND MAIL
** The state of Alaska is pushing ahead with a project to rebuild a British Columbia ferry terminal with U.S. steel, undaunted by Ottawa's vow to punish companies that bend to "Buy America" rules. (http://bit.ly/1J75wGL)
** The growing price gap between condominiums and houses hit a record high last year in the Toronto area, as the market saw a huge jump in the number of newly built condos and buyers battled over a persistent shortage of houses. (http://bit.ly/1J33HdK)
** Toronto Mayor John Tory is faced with the unusual situation of relying on a provincial loan to balance the city's books and help deliver a budget that provides better services and holds the residential property tax increase at 2.75 percent. (http://bit.ly/1woz7CJ)
NATIONAL POST
** Security officials are monitoring the latest terror threat made against Canada, this one by the same senior Al Qaeda official who last week claimed responsibility for the shooting attack at the Charlie Hebdo office in Paris. In a video distributed online on Tuesday, Nasser bin Ali al-Ansi, a leader of the Yemen-based Al Qaeda in the Arabian Peninsula, turned his sights on Canada in an attempt to provoke "lone wolf" terror attacks in the country. (http://bit.ly/1xTcQgF)
** As Bombardier Inc grapples with project delays and suspensions, it is rapidly approaching its next big challenge: raising capital. Turan Quettawala, an analyst with Scotia Capital, estimates that Bombardier will need to raise about C$1.75 billion worth of capital over the next 12-15 months. (http://bit.ly/1ulLkIr)
** The Canadian dollar fell almost a full U.S. cent on Tuesday morning to its weakest level since late April 2009 amid a weaker-than-expected manufacturing report and a day ahead of the Bank of Canada's next announcement on interest rates. (http://bit.ly/1E1eEN3)
China
SHANGHAI SECURITIES NEWS
- China Insurance Regulatory Commission said it expected the insurance industry could invest up 450 billion yuan into pension funds by 2020.
CHINA DAILY
- Losing speed in GDP growth is not necessarily a bad thing for China said an editorial in the official paper. The slowdown, as the beginning of a transition, will strengthen the economy and sharpen competitiveness, the editorial said.
Hong Kong
SOUTH CHINA MORNING POST
-- Hong Kong's unwelcoming attitude has been highlighted as one reason why it is becoming a less attractive destination for mainland tourists as they head to Japan, France, South Korea and Britain instead. A CLSA report predicts that mainland tourists will embrace new favourites in northern Asia and western Europe. (bit.ly/1upDRO4)
-- Lenovo has tapped Cyberport in Hong Kong to serve as its research and development base for new "cloud computing" products and services. Lenovo Chairman Yang Yuanqing and chairman of landlord Hong Kong Cyberport Management, Paul Chow, signed a memorandum of understanding to collaborate on cloud development initiatives. (bit.ly/1yHUUg7)
THE STANDARD
-- BYD Co Ltd Chairman Wang Chuanfu vowed to produce electric vehicles. Along with buses, taxis and private cars, the firm will also make electric vehicles for the mining industry, airports and logistics industry, Wang said. (bit.ly/1zvaM5b)
-- The Shanghai and local bourses are eager to expand the range of products permitted to be traded under the stock connect scheme, said Hong Kong Exchanges and Clearing Ltd Chief Executive Charles Li Xiaojia. Li said stock index futures will be launched under the dual trading scheme within a few months. (bit.ly/1upGz6h)
HONG KONG ECONOMIC TIMES
-- Professional recruitment consultancy Robert Walters Plc says in its latest survey that Hong Kong companies are set to raise wages of their staff by 3 to 5 percent this year, more or less in line with inflation, but was lower than 4 to 7 percent last year.
Britain
The Times
William Hill Plc suffered an embarrassing false start, accidentally releasing Wednesday's scheduled trading update almost 12 hours early. Instead of putting its full-year numbers out as normal at 7 a.m., before the stock market opening, the bookmaker sent out the press release at about 8 p.m. Tuesday. (http://thetim.es/181PnVM)
A flotation of John Laing Infrastructure Fund Ltd will generate 130 million pounds ($196.89 million) for it to invest in transport, energy and construction projects worldwide. John Laing is being sold by Henderson, the fund management firm, at a valuation likely to be between 750 million pounds and 1 billion pounds. (http://thetim.es/1yFCcm1)
The Guardian
Ministers have approved an emergency injection of 25 million pounds for social care for older people in areas where hospitals are facing the biggest problems of delayed patient discharges. The new cash is going to 65 councils in England this week and must be spent by the end of March. (http://bit.ly/1CekLeS)
A further 300 jobs are being cut in the oil and gas industry by Talisman Sinopec. Last week, BP Plc announced a similar number of jobs were being cut in the sector. (http://bit.ly/1yH3Dh0)
The Telegraph
Sports Direct founder Mike Ashley is cutting his stake in the sports retailer. Goldman Sachs Group Inc said it was placing up to 15.4 million ordinary shares in the retailer on behalf of Ashley, which at Tuesday's closing share price would be worth 117 million pounds. (http://bit.ly/181L9xx)
BHP Billiton Plc is to cut its shale drilling budget over the next six months as it looks to meet its promise not to cut dividends in the face of a collapse in iron ore, copper and oil prices. (http://bit.ly/1KZ8vCO)
Sky News
Scottish Power has become the latest of the so-called "Big Six" energy firms to cut its standard gas price. Like its rival British Gas, the company said it would be waiting a month before implementing the reduction. The 4.8 percent cut will come into force on Feb. 20 benefiting 1.1 million customers. (http://bit.ly/1sVPOtR)
Findus, the frozen-food company at the centre of the horsemeat scandal which engulfed the industry in 2013, is being prepared for a sale that will value its UK arm at hundreds of millions of pounds. In a statement issued to Sky News, Findus insisted that there was "no sale process underway for the UK business, or any part of the Findus Group at this time". (http://bit.ly/1KZ4PRN)
The Independent
The European Union has lifted a ban on the importation of mangoes from India. Alphonso mangoes were barred from the United Kingdom and other member states in April 2014, after authorities in Brussels found consignments infested with fruit flies that they feared could damage European salad crops. (http://ind.pn/1unhusP)
British manufacturer McLaren Automotive has landed a 120 million pound loan to fuel its expansion, as it is poised to push the button on its Batmobile-esque P1 GTR supercar. The manufacturer revealed that a syndicate of banks, led by the Royal Bank of Scotland, has agreed the loan. (http://ind.pn/15rTt80)
Fly On The Wall Pre-market Buzz
ECONOMIC REPORTS
Domestic economic reports scheduled for today include:
Housing starts for December at 8:30--consensus up 1.2% to 1.04M rate
Housing permits for December at 8:30--consensus up 0.8% to 1.06M rate
ANALYST RESEARCH
Upgrades
Bazaarvoice (BV) upgraded to Outperform from Market Perform at Cowen
CVS Health (CVS) upgraded to Buy from Neutral at Goldman
Esperion (ESPR) upgraded to Buy from Neutral at BofA/Merrill
Exxon Mobil (XOM) upgraded to Outperform from Market Perform at Wells Fargo
FXCM (FXCM) upgraded to Market Perform from Underperform at Keefe Bruyette
Fair Isaac (FICO) upgraded to Overweight from Equal Weight at Barclays
Gran Tierra (GTE) upgraded to Buy from Hold at Canaccord
J.M. Smucker (SJM) upgraded to Overweight from Neutral at JPMorgan
Level 3 (LVLT) upgraded to Outperform from Market Perform at Wells Fargo
Michael Kors (KORS) upgraded to Outperform from Market Perform at Cowen
Netflix (NFLX) upgraded to Buy from Neutral at Nomura
Scorpio Tankers (STNG) upgraded to Buy from Hold at Canaccord
Sprouts Farmers Markets (SFM) upgraded to Buy from Neutral at BofA/Merrill
Downgrades
AutoNation (AN) downgraded to Neutral from Buy at Goldman
Bellatrix Exploration (BXE) downgraded to Neutral from Outperform at Macquarie
Chevron (CVX) downgraded to Market Perform from Outperform at Wells Fargo
Church & Dwight (CHD) downgraded to Neutral from Buy at UBS
Colgate-Palmolive (CL) downgraded to Neutral from Buy at UBS
Dun & Bradstreet (DNB) downgraded to Underweight from Equal Weight at Barclays
Eldorado Gold (EGO) downgraded to Neutral from Outperform at Credit Suisse
Estee Lauder (EL) downgraded to Neutral from Buy at Citigroup
Forestar Group (FOR) downgraded to Market Perform from Outperform at JMP Securities
Fresenius Medical (FMS) downgraded to Neutral from Buy at UBS
Gran Tierra (GTE) downgraded to Neutral from Overweight at HSBC
H&E Equipment (HEES) downgraded to Neutral from Buy at UBS
Hershey (HSY) downgraded to Neutral from Overweight at JPMorgan
Houghton Mifflin (HMHC) downgraded to Equal Weight from Overweight at Morgan Stanley
McDermott (MDR) downgraded to Neutral from Buy at UBS
Regions Financial (RF) downgraded to Hold from Buy at Wunderlich
*Sarepta downgraded to Neutral from Outperform at Wedbush
Verizon (VZ) downgraded to Equal Weight from Overweight at Barclays
Vishay (VSH) downgraded to Neutral from Buy at Longbow
Initiations
Horizon Pharma (HZNP) initiated with a Buy at Citigroup
Metaldyne Performance (MPG) initiated with a Buy at Goldman
Metaldyne Performance (MPG) initiated with an Outperform at RBC Capital
Metaldyne Performance (MPG) initiated with an Outperform at RW Baird
Metaldyne Performance (MPG) initiated with an Overweight at Barclays
Paycom (PAYC) initiated with an Outperform at Credit Suisse
Receptos (RCPT) initiated with a Buy at Evercore ISI
COMPANY NEWS
Netflix (NFLX) said 'looking good' to reach 60M-90M U.S. subscriptions, sees continuning to grow spending dedicated to originals
Dana Holding (DAN) to replace Cubist (CBST) in S&P 400 as of 1/22 close
IBM (IBM) said revenue as reported in 2015 will not grow, said Cloud investments continue to impact margins
BHP Billiton (BHP) to reduce U.S. rigs by about 40% by end of current fiscal year
Insperity (NSP) holder Starboard urged company to explore opportunities including sale
EARNINGS
Companies that beat consensus earnings expectations last night and today include:
Fifth Third Bancorp (FITB), UnitedHealth (UNH), ADTRAN (ADTN), First Midwest (FMBI), Preferred Bank (PFBC), Southwest Bancorp (OKSB), Woodward (WWD), Netflix (NFLX), Super Micro Computer (SMCI), IBM (IBM), CA Technologies (CA), Interactive Brokers (IBKR), ServisFirst (SFBS), Cree (CREE)
Companies that missed consensus earnings expectations include:
Pacific Premier (PPBI), AMD (AMD), Celestica (CLS)
Companies that matched consensus earnings expectations include:
United Community Banks (UCBI), Pinnacle Financial (PNFP), Renasant (RNST)
UnitedHealth (UNH) sees FY15 EPS $6.00-$6.25, consensus $6.17
Netflix (NFLX) sees Q1 EPS 60c, consensus 77c, sees FY15 operating income down from FY14
AMD (AMD) sees Q1 revenue down 15%, plus or minus 3%, consensus $1.2B
IBM (IBM) sees FY15 EPS $15.75-$16.50, consensus $16.53
NEWSPAPERS/WEBSITES
Overstock (OSTK) to introduce streaming-video service later this year, WSJ reports
United (UAL) may switch Boeing 787 Dreamliner (BA) order to larger 777-300ERs, WSJ says
Sony (SNE) probed Indian operations for corruption, Bloomberg reports
Spacex has raised $1B, Google (GOOG) and Fidelity to own slightly under 10%, Bloomberg reports (TSLA)
Samsung (SSNLF) drops Qualcomm (QCOM) chip from next Galaxy smartphone, Bloomberg reports
Apple's (AAPL) rumored iPhone 6S could feature 'radical' changes, Forbes reports
SYNDICATE
Alnylam (ALNY) 4.737M share Secondary priced at $95.00
Arena Pharmaceuticals (ARNA) files to sell common stock
Diamondback Energy (FANG) files to sell 1.5M shares
Horsehead Holding (ZINC) files to sell 5M shares of common stock
Intrexon (XON) files to sell $150M in common stock
Keryx (KERX) files to sell $100M in common stock
Mobileye (MBLY) files to sell $500M in ordinary shares for holders
Puma Biotechnology (PBYI) files to sell 1M shares of common stock
Radius Health (RDUS) files to sell 3.5M shares of common stock
The Advisory Board (ABCO) announces proposed offering of 4.7M shares
Verastem (VSTM) files to sell $40M in common stock