- Trade Slows Around World (WSJ)
- Debt limit lurks in fiscal cliff talks (FT)
- Welcome back to the eurozone crisis (FT, Wolfgang Munchau)
- Euro Leaders Face October of Unrest After September Rally (Bloomberg)
- Dad, you were right (FT)
- 25% unemployment, 25% bad loans, 5% drop in Industrial Production, and IMF finally lowers its 2013 Greek GDP forecast (WSJ)
- Global IPOs Slump to Second-Lowest Level Since Financial Crisis (Bloomberg)
- France's Hollande faces street protest over EU fiscal pact (Reuters)
- EU Working to Resolve Difference on Bank Plan, Rehn Says (Bloomberg)
- China manufacturing remains sluggish (FT)
- Samaras vows to fight Greek corruption (FT) ... and one of these days he just may do it
- Leap of Faith (Hssman)
- Germany told to 'come clean’ over Greece (AEP)
Overnight Media Digest
WSJ
* Xstrata Plc's board of directors recommended Monday that its shareholders vote in favor of Glencore International Plc's revised merger proposal after making several revisions aimed at breaking a logjam over executive pay that has threatened to derail the historic tie-up.
* Energy producer Dynegy Inc is set to leave bankruptcy protection on Monday as a much leaner company, but perhaps one more vulnerable to a takeover.
* Nokia Oyj, looking to increase use of its mapping software, will unveil a new deal with Oracle Corp intended to give Oracle's customers access to Nokia's growing vault of map data and location services.
* Global trade is stalling, dimming prospects that exports will buoy the U.S. economy in the coming months.
* Accounting rule makers are on the verge of rolling back a widely assailed provision that counterintuitively adds to U.S. banks' profits when their debt looks riskier to investors and penalizes them when it looks safer.
* LG Electronics Inc and Whirlpool Corp have agreed to settle patent infringement disputes related to refrigerators, concluding years of patent litigation between the two companies.
* A start-up called FreedomPop, backed by a founder of Skype, is set to launch a wireless data service that promises to save customers hundreds of dollars a year, at a time when cellphone bills are chewing up a growing share of the household budget.
* Private-equity firm First Reserve Corp has formed a new venture to build pipelines throughout the booming oil fields of North Dakota, an investment aimed at resolving transportation bottlenecks plaguing energy producers in the region.
FT
XSTRATA CLOSE TO BACKING GLENCORE OFFER
Xstrata is preparing to recommend the latest merger offer from Glencore on Monday.
BERLIN AND PARIS UNITE ON EADS HOLDINGS
Germany and France have agreed a common position on the tie-up of EADS and BAE Systems.
GRADUATES TURN AWAY FROM WALL ST
More graduates are opting for careers outside investment banking as the pull of big bonuses is replaced by job insecurity in the industry.
PRIVATE EQUITY MANAGERS FEAR TAX HIT
Private equity fund managers are so worried about changes to the way their income is taxed in the US that some are trying to rewrite agreements with investors.
NEWS CORP BOOSTS COMPLIANCE TEAMS
News Corp has hired a senior official from the Securities and Exchange Commission and a former federal prosecutor to lead new compliance units.
CASTLE TRUST EYES CASH-STRAPPED HOMEBUYERS
The former head of the City of London watchdog is to chair a new company that offers cash-strapped homebuyers interest-free loans.
GLOBAL ETF SECTOR IN LINE FOR RECORD YEAR
Investors are on course to put a record amount of money into exchange-traded funds.
OIL GROUPS TUSSLE FOR COLOMBIA LICENCES
Some of the world's largest oil companies are jostling for licences to explore for shale gas in Colombia.
MILIBAND SOUNDS WARNING NOTE ON BANKS
Ed Miliband caused concern in the City of London on Sunday when he warned that a future Labour government might split Britain's biggest banks.
US CANDIDATES' FUTURES UP FOR DEBATE
Barack Obama is scheduled to spend Monday holed up in Nevada for intensive debate practice.
PENSION INJECTIONS FIGHT TO TRIM SHORTFALLS
Britain's largest employers have poured roughly 175 billion pounds ($282.59 billion) into their underfunded pension schemes over the past decade.
NYT
* A tax break for wage earners for which the White House campaigned hard last winter now finds little support in Washington, as Congress struggles with deficits.
* Six major American banks were hit in a wave of computer attacks last week, by a group claiming Middle Eastern ties, that caused Internet blackouts and delays in online banking.
* While Greece agreed last week to cut pensions, Spain said it would raise its payouts, a stark example of why Europe's debt and deficit problems have proved so difficult to resolve.
* Canadian auto workers at Chrysler Group ratified a new contract with the company, the auto union said Sunday.
* Many auto executives were not that enthusiastic about battery-powered cars at their outset, and now that sales of electric vehicles made by Tesla Motors Inc and Renault have been disappointing, some car manufacturers are playing down the technology.
* A few months after Governor Andrew Cuomo was poised to approve hydraulic fracturing in several struggling New York counties, his administration is reversing course and starting the regulatory process over, garnering praise from environmental groups and stirring anger among industry executives and upstate landowners.
* A special media court on Sunday found the Tehran bureau chief of the Thomson Reuters news agency guilty of "spreading lies" against the Islamic system for a video script that briefly described a group of women involved in martial arts training as killers.
Canada
THE GLOBE AND MAIL
* A research paper written for the Center for Security and Defence Studies at Carleton University estimates the cumulative effect of the Harper government's strategic review and the overlapping deficit reduction action plan will carve up to $2.5-billion out of the nearly C$21-billion National Defence budget by 2014-2015.
* The federal government has issued a tender calling for the design of low-emission Canadian Coast Guard ships that would incorporate hydrogen fuel cell technology.
* The fallout from an E. coli contamination at an Alberta slaughterhouse continues to spread, with more than 1,100 products now being recalled as Premier Alison Redford urges consumers to keep buying her province's beef.
Reports in the business section:
* Unionized workers at Chrysler's Ontario plants voted to accept a new contract on Sunday, marking the Canadian Auto Workers' successful negotiation of fresh agreements with the three big U.S. auto makers.
* British Columbia's softwood lumber industry is finally on the comeback trail, fueled by a recovery in U.S. housing starts and steady demand from China, according to analysts.
NATIONAL POST
* Theater and art impresario David Mirvish says he plans to tear down Toronto's Princess of Wales Theater and replace it with three condo towers.
* The Toronto Transit Commission has voted to contract out a segment of its cleaning force in order to save money, angering existing transit employees.
FINANCIAL POST
* Federal NDP Leader Thomas Mulcair told Toronto's business community that he would support the establishment of a West-East pipeline provided that project developer Enbridge pay for the environmental costs.
European economic update:
- Sweden Manufacturing PMI 44.7 – lower than expected. Consensus 46.4. Previous 45.1.
- Norway PMI 48.9 – lower than expected. Consensus 49.5. Previous 48.7.
- Hungary Manufacturing PMI 52.5. Previous 49.6.
- Poland Manufacturing PMI 47.0. Previous48.3.
- Spain Manufacturing PMI 44.5 – higher than expected. Consensus 44.2. Previous 44.0.
- Czech Republic Manufacturing PMI 48.0. Previous 46.7.
- Switzerland Manufacturing PMI 43.6 – lower than expected. Consensus 47.5. Previous 46.7.
- Italy Manufacturing PMI 45.7 – higher than expected. Consensus 44.0. Previous 43.6.
- France Manufacturing PMI 42.7. Previous 42.6.
- Germany Manufacturing PMI 47.4 – higher than expected. Consensus 47.3. Previous 47.3
- UK Manufacturing PMI 48.4 – lower than expected. Consensus 49.0. Previous 49.5.
Fly on the Wall 7:00 AM Market Snapshot
ANALYST RESEARCH
Upgrades
Allscripts (MDRX) upgraded to Buy from Hold at ISI Group
Brightcove (BCOV) upgraded to Top Pick from Outperform at RBC Capital
Callaway Golf (ELY) upgraded to Strong Buy from Market Perform at Raymond James
Coldwater Creek (CWTR) upgraded to Overweight from Neutral at Piper Jaffray
DreamWorks (DWA) upgraded to Buy from Neutral at Janney Capital
Finish Line (FINL) upgraded to Neutral from Underperform at Sterne Agee
InterActiveCorp (IACI) upgraded to Buy from Hold at Needham
Myriad Genetics (MYGN) upgraded to Overweight from Neutral at Piper Jaffray
Rudolph Tech (RTEC) upgraded to Outperform from Neutral at Credit Suisse
Downgrades
Alliant Techsystems (ATK) downgraded to Hold from Buy at Jefferies
Allstate (ALL) downgraded to Market Perform from Outperform at FBR Capital
Baidu (BIDU) downgraded to Hold from Buy at Jefferies
Boston Beer (SAM) downgraded to Sell from Neutral at UBS
Brooks Automation (BRKS) downgraded to Underperform from Neutral at Credit Suisse
Check Point (CHKP) downgraded to Sector Perform from Outperform at RBC Capital
Citigroup (C) downgraded to Neutral from Buy at Sterne Agee
CommVault (CVLT) downgraded to Sector Perform from Outperform at RBC Capital
Fifth Third (FITB) downgraded to Market Perform from Outperform at Keefe Bruyette
Fortinet (FTNT) downgraded to Sector Perform from Outperform at RBC Capital
Forum Energy (FET) downgraded to Market Perform from Outperform at FBR Capital
Gilead (GILD) upgraded to Outperform from Market Perform at Bernstein
M.D.C. Holdings (MDC) downgraded to Underperform from Neutral at Credit Suisse
Mercury Computer (MRCY) downgraded to Hold from Buy at Jefferies
Microsoft (MSFT) downgraded to Sector Perform from Outperform at RBC Capital
Molson Coors (TAP) downgraded to Underweight from Equal Weight at Morgan Stanley
PulteGroup (PHM) downgraded to Neutral from Outperform at Credit Suisse
Quality Systems (QSII) downgraded to Underweight from Equal Weight at Morgan Stanley
RealPage (RP) downgraded to Outperform from Top Pick at RBC Capital
Sprint (S) downgraded to Market Perform from Outperform at Raymond James
Texas Instruments (TXN) downgraded to Neutral from Positive at Susquehanna
VMware (VMW) downgraded to Sector Perform from Outperform at RBC Capital
Wendy's (WEN) downgraded to Neutral from Buy at Janney Capital
Initiations
ITT Exelis (XLS) initiated with a Buy at Jefferies
Yelp (YELP) initiated with an Equal Weight at Barclays
Zillow (Z) initiated with an Equal Weight at Barclays
HOT STOCKS
Glencore (GLNCY), Xstrata (XSRAY) reach agreement on final terms of merger
Olympus (OCPNY) and Sony (SNE) to form business and capital alliance
Transocean (RIG) said Brazil injunction order partially suspended
Sears (SHLD) announced tax services agreement with Jackson Hewitt
U.S. Steel (X) reached collective bargaining agreements with United Steelworkers
Canadian Pacific (CP) reached tentative agreement with United Steelworkers
First Reserve sold majority interest in Acteon to KKR (KKR)
Ball (BLL) to acquire extruded aluminum packaging business in Mexico
DOJ cleared SAP (SAP) acquisition of Ariba (ARBA)
Caterpillar (CAT) to raise prices on most machines by 0%-3%, effective January 2013
Abbott (ABT) confirmed FDA approval of HUMIRA for treatment of ulcerative colitis
FDA approved heart defibrillator from Boston Scientific (BSX)/Cameron Health
Sunshine Heart (SSH) announced conditional approval of IDE from the FDA
Hertz (HTZ) franchised Swiss business to Emil Frey Group
Saks (SKS) opened store in Almaty, Kazakhstan
Hillenbrand (HI) subsidiary acquired software solutions provider HMIS
Informatica (INFA) announced public takeover offer for Heiler Software AG
Wi-LAN (WILN) acquired a global portfolio of over 150 patents and patent applications from Alvarion (ALVR) for $19M.
Cal-Maine Foods (CALM) sees FY13 feed costs near record high levels
EARNINGS/GUIDANCE
Companies that beat consensus earnings expectations last night and today include:
Cal-Maine Foods (CALM)
Companies that matched consensus earnings expectations include:
Synergetics (SURG)
NEWSPAPERS/WEBSITES
Global trade is stalling, dimming prospects that exports will help the U.S. economy in the coming months. The World Trade Organization projected the global volume of trade in goods would expand only 2.5% this year, down from 5% last year and nearly 14% growth in 2010. A Dutch government agency, the CPB Netherlands Bureau for Economic Policy Analysis, estimates it fell outright in June and July, the Wall Street Journal reports
Euro zone manufacturing put in its worst performance in the three months to September since the depths of the recession, pointing to a new recession. Markit's Eurozone Manufacturing Purchasing Managers' Index (PMI) rose to 46.1 in September from 45.1 in August and above the preliminary reading of 46.0. But that was its 14th month below the 50 mark that divides growth from contraction. The output index rose to 45.9 from August's 44.4 but that was the seventh month of decline, Reuters reports
Banks are charging U.S. consumers the lowest interest rates on new car loans since the Fed began surveying them in 1971. That rates helped ignite a 9.5% jump in light-vehicle sales last month and maintained the fastest pace since the U.S. government’s “cash for clunkers” program three years ago, according to analysts surveyed by Bloomberg.
European Aeronautic, Defence & Space Co.’s (EADSY) major shareholder Lagardere SCA called the terms of the proposed merger with BAE Stystems (BAESY) “unsatisfactory,” Bloomberg reports
BARRON’S
Goldman Sachs (GS) shares could rally 25% in the next year
Opko (OPK) shares are pinned to success with new diagnostic tests
Kraft's (KFT) Mondelez spin-off is probably a better buy
Nike (NKE) shares should continue to underperform
Steelcase (SCS) shares could rise 15% or more in the next year
Transocean (RIG): Brazilian judicial waters need to calm down
RIM (RIMM) shows signs of life but still faces a difficult road
SYNDICATE
B&G Foods (BGS) files to sell 3.63M shares of common stock
Infinity Pharmaceuticals (INFI) files to sell 11.42M shares of common stock for holders
Navidea (NAVB) files to sell 300K shares of common stock for holders
Mattress Firm (MFRM) files to sell 4.73M shares for holders
Uranium Resources (URRE) files to sell 53.11M shares of common stock for holders
Vista Gold (VGZ) files to sell 8.3M shares of common stock for holders
ACTIVIST/PASSIVE FILINGS
Gabelli reports 5.01% stake in Nabi Biopharmaceuticals (NABI)
Peltz's Trian lowers stake in Legg Mason (LM) to 9.54% after transfer of shares